Registration No. 333-135492
                                                                                                 File No. 811-21918

                                  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.                                                                                   [   ]
Post-Effective Amendment No. 1                                                                                [ X ]

                                     and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940                                               [ X ]
         Amendment No. 3                                                                                      [ X ]


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                        OPPENHEIMER ABSOLUTE RETURN 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)

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

                              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):
       [ X ]   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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Oppenheimer
Absolute Return Fund

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Prospectus dated September 27, 2007


     Oppenheimer Absolute Return Fund is a mutual fund that seeks total return.

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









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

         ABOUT THE FUND

         The Fund's Investment Objective and Principal Investment Strategies

         Main Risks of Investing in the Fund

         The Fund's Past Performance

         Fees and Expenses of the Fund

         About the Fund's Investments

         How the Fund is Managed

         ABOUT YOUR ACCOUNT

         How to Buy Shares
         Class A 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






ABOUT THE FUND

The Fund's Investment Objective and Principal Investment Strategies

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund's objective is to seek total return.

WHAT DOES THE FUND MAINLY INVEST IN?  The Fund employs a variety of strategies
to seek its objective.   Mainly, these include:
o       Equity securities.  Primarily common stocks of U.S. and foreign companies.
        Equity investments may include securities of companies of any market
        capitalization.
o       Fixed Income securities. Including bonds and notes or other debt
        securities issued by U.S. and foreign companies and governments, high
        yield securities (or "junk bonds") and money market instruments.
o       Hedging Strategies. The Fund may use derivative investments for hedging
        purposes or speculative purposes (to seek higher investment returns)
        including, futures on equity and commodities indices and interest rate
        and currency futures, forward rate agreements on currencies, interest
        rate swaps, total return swaps, and credit default swaps. The Fund may
        also sell securities short.

The Fund may invest a substantial portion of its assets (generally, more than
half its total assets) in foreign securities, including securities in developing
or emerging markets. The Fund's investments are more fully explained in "About
the Fund's Investments," below.

HOW DOES THE PORTFOLIO MANAGER DECIDE WHAT SECURITIES TO BUY OR SELL? The Fund
seeks to meet its objective by using a variety of investment strategies over a
broad array of securities to seek to produce returns that are not closely
correlated to major markets. OppenheimerFunds, Inc. (the "Manager") exercises a
flexible strategy in the selection of securities, and the Fund is not required
to allocate its investments among stocks and bonds in any fixed proportion or
limited by investment style or by the issuer's location, size, market
capitalization or industry sector. The Fund may have none or some of its assets
invested in each asset class in relative proportions that change over time based
on market and economic conditions.

The Fund seeks to meet its objective by using an investment process that
primarily relies on quantitative models to determine security selection, hedging
and asset allocation. 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 security selection, hedging and asset allocation
processes currently involve:
o        Bottom Up. The Manager uses "bottom up" models to analyze a wide range
         of valuation and market factors to determine the relative value of the
         securities. The models assist the Manager in identifying the most
         attractive set of securities within each asset class or sector in which
         the Fund invests.
o        Hedging. The Manager uses risk management models to estimate the Fund's
         level of risk exposures to major markets. The Manager uses derivatives
         and other strategies, such as short sales, to hedge the Fund's exposure
         to these risks.
o        Top Down. The Manager uses "top down" models to enable the Fund to
         tactically adjust the hedges to seek to take advantage of investment
         opportunities at the asset and sector level.

     The Fund may use some of the investment techniques and strategies only at
some times or not at all.

WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors seeking total
return over the long term. Those investors should be willing to assume the risks
of short-term price fluctuations that are typical for a fund that includes
equity, debt securities, particularly high yield, foreign securities, and
derivative investments. Because of its focus on total return over the long term,
the Fund may be appropriate for a portion of a retirement plan investment. The
Fund is not a complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in equity and
fixed income securities are subject to changes in their value from a number of
factors, as described below. The Manager may use various investment techniques
for hedging and speculative (non-hedging) purposes. The use of these techniques
may be an integral part of the Fund's investment program, and involves certain
risks to the Fund.

MANAGEMENT RISK. There is risk that the investment strategies, techniques and
risk analyses, including the quantitative models that may be employed by the
Manager, while designed to enhance potential returns, may not produce the
desired results. The Manager may be incorrect in its assessment of the value of
securities or assessment of market or interest rate trends, which can result in
losses to the Fund. There is also the risk that poor security selection by the
Manager will cause the Fund to under-perform other funds having a similar
objective.

ASSET ALLOCATION RISK. There is risk that the Fund may allocate assets to an
asset category that under-performs other asset categories. For example, the Fund
may be over-weighted in equity securities when the value of the stock market is
declining.

HEDGING RISK. The Manager may engage in a wide range of investment and trading
strategies described below. Many of these strategies are sometimes referred to
as "hedging" strategies, because they use short sales, futures and other
derivatives in an effort to protect assets from losses due to declines in the
value of the Fund's portfolio. The Manager seeks to use hedging strategies in an
attempt to reduce the Fund's exposure to the volatility of the markets in which
it invests. There are risks in the use of these investment and trading
strategies. There can be no assurances that the hedging strategies used by the
Manager will be successful in avoiding losses, and hedged positions may perform
less favorably in generally rising markets than unhedged positions. If the
Manager used a hedging strategy at the wrong time or judged market conditions
incorrectly, the strategy could reduce the Fund's return. Also, in some cases,
derivatives or other investments may be unavailable or the Manager may choose
not to use them under market conditions when their use, in hindsight, may be
determined to have been beneficial to the Fund. No assurance can be given that
the Manager will employ hedging strategies with respect to all or any portion of
the Fund's assets.

RISKS OF INVESTING IN STOCKS

MARKET RISK.  Stocks fluctuate in price and their short-term  volatility at
times may be great. Because the Fund may have substantial  investments in equity
securities, the value of the Fund's portfolio will be affected by changes in the
stock markets in which it invests.  Market risk will affect the valuation of the
Fund's net asset  values per share,  which will  fluctuate  as the values of the
Fund's portfolio securities change. A variety of factors can affect the price of
a particular  stock and the prices of  individual  stocks do not all move in the
same direction uniformly or at the same time. Different stock markets may behave
differently from each other.

     Other factors can affect a particular  stock's price, such as poor earnings
reports by the issuer,  loss of major customers,  major  litigation  against the
issuer, or changes in government regulations affecting the issuer.  Although the
Fund can invest in securities of companies of any capitalization,  securities of
companies of smaller  capitalization  may have more  volatile  stock prices than
larger companies.

RISKS OF INVESTING IN BONDS

     INTEREST RATE RISK. Interest rate risk is the risk that changing interest
     rates may adversely affect the value of an investment. When interest rates
     fall, the value 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 value.
     The magnitude of these fluctuations will often be greater for longer-term
     debt securities than shorter-term debt securities. The Fund's share prices
     can go up or down when interest rates change because of the effect of the
     changes on the value of the Fund's investments in debt securities. Also, if
     interest rates fall, the Fund's investment in new securities at lower
     yields will reduce the Fund's income.

     CREDIT RISK. Credit risk is the risk that the issuer of a security might
     not make interest and/or principal payments on the security as they become
     due. If the issuer fails to pay interest, the Fund's income may be reduced
     and if the issuer fails to repay principal, the value of that security and
     that of the Fund's shares may be reduced. While the Fund's investments in
     U.S. Government securities are subject to little credit risk, the Fund's
     other investments in debt securities are subject to risks of default. A
     downgrade in an issuer's credit rating or other adverse news about an
     issuer can reduce a security's market value. Lower-rated bonds are more
     likely to be subject to an issuer's default or downgrade than investment
     grade (higher-rated) bonds.

     PREPAYMENT OR CALL RISK. There is risk that issuers will prepay fixed rate
     obligations when interest rates fall, forcing the Fund to reinvest in
     obligations with lower interest rates than the original obligations; or if
     a call were exercised by the issuer during a period of declining interest
     rates, for example, the Fund likely would have to replace such called
     security with a lower yielding security, thus decreasing the net investment
     income to the Fund and any dividend to investors.


U.S. GOVERNMENT AGENCY OBLIGATIONS RISK. Government agency obligations have
different levels of credit support, and therefore, different degrees of credit
risk. Securities issued by agencies and instrumentalities of the U.S. Government
that are supported by the full faith and credit of the United States, such as
the Government National Mortgage Association ("Ginnie Mae(R)"), present little
credit risk. Other securities issued by agencies and instrumentalities sponsored
by the U.S. Government that are supported only by the issuer's right to borrow
from the U.S. Treasury, subject to certain limitations, such as securities
issued by Federal National Mortgage Association ("Fannie Mae"), Federal Home
Loan Mortgage Corporation ("Freddie Mac"), and others, are subject to a greater
degree of credit risk than those supported by the full faith and credit of the
United States, but less risk than those that are supported only by the credit of
the issuing agencies.


BELOW INVESTMENT GRADE BONDS. Lower-rated bonds are bonds rated in the lower
rating categories of Moody's Investors Service ("Moody's") and Standard & Poors
("S&P"), including securities rated Ba or lower by Moody's and BB or lower by
S&P. Securities rated in these categories are considered to be of poorer quality
and predominantly speculative. Bonds in these categories may also be called
"high yield bonds" or "junk bonds."

The Fund may also invest in debt securities on which the return is derived
primarily from other instruments, such as interest rate swap contracts and
currency swap contracts. The Fund may also invest in Eurodollar securities,
which are fixed income securities of a U.S. issuer or a foreign issuer that are
issued outside the United States.

FOREIGN INVESTING AND EMERGING MARKETS RISKS. Prices of the Fund's investments
in foreign securities may decline because of unfavorable foreign government
actions, political instability or the absence of accurate information about
foreign issuers. Also, a decline in the value of foreign currencies relative to
the U.S. dollar will reduce the value of securities denominated in those
currencies. Also, foreign securities are sometimes less liquid and more
difficult to sell and to value than securities of U.S. issuers. Each of these
risks is more severe for securities of issuers in emerging market countries. As
these markets change and other countries' markets develop, the Fund expects the
countries in which it invests to change. Emerging market countries generally
include every nation in the world except the U.S., Canada, Japan, Australia, New
Zealand and most nations located in Western Europe.

RISKS OF DERIVATIVE INVESTMENTS. In general terms, a derivative investment is an
investment contract whose value depends on (or is derived from) the value of an
underlying asset, interest rate or index. Options, futures, forward contracts
and swaps are some of the derivatives the Fund may use.

         If the issuer of the derivative does not pay the amount due, the Fund
can lose money on the investment. Also, the underlying security or investment on
which the derivative is based, and the derivative itself, may not perform the
way the Manager expected it to perform. If that happens, the Fund's share prices
may fall, and the Fund may receive less income than expected, or its hedge might
be unsuccessful. Some derivatives may be illiquid, making it difficult to value
or sell them at an acceptable price or time. Using derivatives can increase the
volatility of the Fund's share prices. For some derivatives, it is possible for
the Fund to lose more than the amount invested in the derivative instrument.

SHORT SALES. The Fund may engage in short selling for hedging and non-hedging
purposes. Short selling involves selling securities not owned by the Fund and
borrowing the same securities for delivery to the purchaser, with an obligation
to replace the borrowed securities at a later date. Short selling allows an
investor to profit from declines in market prices to the extent such declines
exceed the transaction costs and the costs of borrowing the securities. A short
sale of an equity security creates the risk of an unlimited loss, as the price
of the underlying security could theoretically increase without limit, thus
increasing the cost of buying those securities to cover the short position.
There can be no assurance that the securities necessary to cover a short
position will be available for purchase. Purchasing securities to close out the
short position can itself cause the price of the securities to rise further,
thereby increasing the loss. For these reasons, short selling is considered a
speculative investment practice. Short selling may increase the Fund's portfolio
turnover rate, thereby increasing its brokerage and other transaction expenses.
The Fund will limit its total short positions to no more than 25% of its net
assets at the time the short sale contract is entered into.

SMALL AND INTERMEDIATE CAPITALIZATION COMPANY RISK. The risk that investments in
small and intermediate capitalization sized companies may be more volatile than
investments in larger companies, as small and intermediate capitalization sized
companies generally experience higher growth and failure rates. The trading
volume of these securities is normally lower than that of larger companies. Such
securities may be less liquid than others which could make it difficult to sell
a security at a desired time or price. Changes in the demand for these
securities generally have disproportionate effect on their market price, tending
to make prices rise more in response to buying demand and fall more in response
to selling pressure.

OTHER INFORMATION

COMMODITY POOL OPERATOR EXEMPTION. The Fund has claimed an exclusion from the
definition of the term "commodity pool operator" under the Commodity Exchange
Act ("CEA"), and, therefore, is not subject to registration or regulation as a
pool operator under the CEA.

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form the
risk profile of the Fund, and can affect the value of the Fund's investments,
its investment performance and its prices per share. Particular investments and
investment strategies also have risks. These risks mean that you can lose money
by investing in the 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 Fund will
achieve its investment objective. In the short term, the stock markets can be
volatile, and the prices of the Fund's shares can go up and down substantially.
The Fund's income-oriented investments may help cushion the Fund's total return
from changes in stock prices, but fixed-income securities have their own risks.
In the OppenheimerFunds spectrum, the Fund is more conservative than aggressive
growth stock funds, but has greater risk than investment-grade bond funds.

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

The Fund's Past Performance


Because the Fund commenced operations on March 5, 2007, prior performance
information for a full calendar year is not yet available. Please remember that
the Fund is intended to be a long-term investment, and that performance results
are historical, and that past performance (particularly over a short-term
period) is not necessarily predictive of future results.


Fees and Expenses of the Fund


The following tables are provided to help you understand the fees and expenses
you may pay if you buy and hold shares of the Fund. The Fund pays a variety of
expenses directly for management of its assets, administration, distribution of
its shares and other services. Those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset values per share. All shareholders will
therefore pay those expenses indirectly. Shareholders pay other transaction
expenses directly, such as sales charges. "Other Expenses" and "Total Operating
Expenses" below are based on the Fund's estimated expenses for its first full
fiscal year.


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Shareholder Fees (charges paid directly from your investment):
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                                                        Class A Shares
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Maximum Sales Charge (Load) on purchases                       5.75%
(as % of offering price)
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Maximum Deferred Sales Charge (Load) (as %
of the lower of the original offering price                   None(1)
or redemption proceeds)
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Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
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-------------------------------------------- -----------------------------------------
                                                        Class A Shares
-------------------------------------------- -----------------------------------------
-------------------------------------------- -----------------------------------------
Management Fees(2)                                            1.00%
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-------------------------------------------- -----------------------------------------
Service (12b-1) Fees                                          0.25%
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-------------------------------------------- -----------------------------------------
Other Expenses(3)                                             0.25%
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-------------------------------------------- -----------------------------------------
Total Annual Operating Expenses                               1.50%
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Expenses may vary in future years. "Total Annual Operating Expenses" shown above
are the Fund's anticipated expenses during its first full fiscal year based on
estimated average daily net assets of $25 million. "Other Expenses" include
estimated transfer agent fees, custodial fees, and accounting and legal
expenses. The "Other Expenses" in the table are based on, among other things,
the fees the Fund would pay if the transfer agent had not agreed to waive a
portion of its fee under a voluntary undertaking to limit these fees to 0.35% of
average daily net assets per fiscal year. That undertaking may be amended or
withdrawn at any time.

     1. A Class A contingent  deferred  sales charge may apply to redemptions of
investments of $1 million or more or to certain retirement plan redemptions. See
"How to Buy Shares" for details.
     2. Because the Fund has recently commenced  operations,  the rate shown for
the management fee is the maximum rate that can be charged.

     3. "Other  expenses" are estimates of transfer agent fees,  custodial fees,
and  accounting  and  legal  expenses,  among  others,  based  on the  Manager's
projections of what those expenses will be during the Fund's first fiscal year.

     4. The Fund has not projected  expenses  beyond the three year period shown
because the Fund does not have six months of financial  information  included in
this prospectus.

EXAMPLE. The following example is intended to help you compare the cost of
     investing in the Fund with the cost of investing in other mutual funds. The
     example assumes that you invest $10,000 in Class A shares of the Fund for
     the time periods indicated and reinvest your dividends and distributions.

         The example also assumes that your investment has a 5% return each year
and that the operating expenses remain the same. Your actual costs may be higher
or lower because expenses will vary over time. Based on these assumptions, your
expenses would be as follows, whether or not you redeemed your shares:


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

     If shares are redeemed:              1 Year               3 Years

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

Class A Shares*                            $720                $1,025

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* Expenses include the initial sales charge for Class A.


About the Fund's Investments

THE FUND'S PRINCIPAL INVESTMENT POLICIES AND RISKS. The allocation of the Fund's
portfolio among different types of investments will vary over time based upon
the evaluation of economic and market trends. The Fund's portfolio might not
always include all of the different types of investments described below. The
statement of additional information contains more detailed information about the
Fund's investment policies and risks.

         The Manager tries to reduce risks by carefully researching securities
before they are purchased. The Fund attempts to reduce its exposure to market
risks by diversifying its investments, that is, by not holding a substantial
amount of securities of any one company and by not investing too great a
percentage of the Fund's assets in any one company. Also, the Fund does not
intend to concentrate more than 25% of its total assets in investments in any
one industry or group of industries. 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.

         Changes in the overall market prices of securities, however, can occur
at any time. The share prices of the Fund will change daily based on changes in
market prices of securities and market conditions and in response to other
economic events.

Hedging. The Fund may use derivative instruments to attempt to protect against
         declines in the market value of the Fund's portfolio, to tactically
         adjust the hedges to take advantage of investment opportunities at the
         asset and sector level, or to facilitate selling securities for
         investment reasons. The Fund can buy and sell futures contracts, put
         and call options, forward contracts and other derivatives for hedging
         purposes, subject to the guidelines established by the Securities and
         Exchange Commission ("SEC") and other regulatory bodies. These are all
         referred to as "hedging instruments." Underlying investments for these
         hedging instruments include securities, securities indices and
         currencies.

         Some of these strategies would hedge the Fund's portfolio against price
         fluctuations. Other hedging strategies, such as buying futures and call
         options, would tend to increase the Fund's exposure to the securities
         market. Forward contracts can be used to try to manage foreign currency
         risks on the Fund's foreign investments. Foreign currency options can
         be used to try to protect against declines in the dollar value of
         foreign securities the Fund owns, or to protect against an increase in
         the dollar cost of buying foreign securities.

         There are also special risks in particular hedging strategies. Options
         trading involves the payment of premiums and can increase portfolio
         turnover, and can have special tax effects on the Fund. If the Manager
         used a hedging instrument at the wrong time or judged market conditions
         incorrectly, the strategy could reduce the Fund's return. The Fund
         could also experience losses if the prices of its futures and options
         positions were not correlated with its other investments or if it could
         not close out a position because of an illiquid market for the future
         or option.

Stock and Other Equity Investments. Equity securities include common stocks,
         preferred stocks, warrants and debt securities convertible into common
         stock. The Fund may invest in securities of companies of any market
         capitalization.

         Although convertible securities are debt securities, in some cases
         convertible securities can be considered "equity equivalents" because
         of the conversion feature. Their rating must meet the Fund's credit
         criteria for debt securities, described below under "Debt Securities,"
         but the credit rating has less impact on the investment decision than
         in the case of other debt securities.

Debt Securities. The Fund can also invest in debt securities, such as U.S.
         Government securities and mortgage-backed securities, as more fully
         described below, and domestic and foreign corporate bonds, notes and
         debentures. The Fund will make these investments when the portfolio
         manager believes they present opportunities for seeking the Fund's
         objective of total return, as discussed above. The Fund can also buy
         short-term high-quality debt securities for liquidity pending the
         purchase of new investments or to have cash to pay for redemptions of
         Fund shares. The Fund may invest high yield securities that are rated
         below-investment grade (i.e. junk bonds).

o        U.S. Government Securities. The Fund can invest in U.S. Government
         securities that are U.S. Treasury securities and securities issued or
         guaranteed by agencies or federally-chartered corporate entities
         referred to as "instrumentalities" of the U.S. Government. They can
         include collateralized mortgage obligations (CMOs) and other
         mortgage-related securities. U.S. Treasury securities are backed by the
         full faith and credit of the U.S. Government and are subject to minimal
         credit risk.


         Government agency obligations have different levels of credit support,
         and therefore, different degrees of credit risk. Securities issued by
         agencies and instrumentalities of the U.S. Government that are
         supported by the full faith and credit of the United States, such as
         Ginnie Mae, present little credit risk. Other securities issued by
         agencies and instrumentalities sponsored by the U.S. Government that
         are supported only by the issuer's right to borrow from the U.S.
         Treasury, subject to certain limitations, such as Fannie Mae, Freddie
         Mac, and others are subject to a greater degree of credit risk than
         those supported by the full faith and credit of the United States, but
         less risk than those that are supported only by the credit of the
         issuing agencies.


o        Mortgage-Related  Securities.  Investments in mortgage-related securities
         are subject to special risks of unanticipated prepayment.  The risk is
         that when interest   rates  fall,   borrowers   under  the   mortgages
         that  underlie  a mortgage-related security the Fund owns will prepay
         their mortgages more quickly than expected, causing the issuer of the
         security to prepay the principal to the Fund prior to the security's
         expected maturity. Securities subject to prepayment risk, including the
         CMOs and other mortgage-related securities that the Fund can buy,
         generally  offer less potential for gains when  prevailing  interest rates
         fall, and have greater  potential for loss when interest rates rise.
         The impact of  prepayments  on the price of a security  may be difficult
         to predict and may increase  the  volatility  of  the  price.
         Additionally,  the  Fund  may  buy mortgage-related  securities  at a
         premium.  Accelerated  prepayments  on those securities  could cause the
         Fund to lose a portion of its  principal  investment represented by the
         premium the Fund paid.

         If interest rates rise rapidly, prepayments may occur at slower rates
         than expected, which could have the effect of lengthening the expected
         maturity of a short- or medium-term security. That could cause its
         value to fluctuate more widely in response to changes in interest
         rates. In turn, this could cause the value of the Fund's shares to
         fluctuate more.

o        Money Market Instruments. The Fund can also invest in "money market
         instruments." These include U.S. Government securities and high-quality
         corporate debt securities having a remaining maturity of one year or
         less. They also include commercial paper, other short-term corporate
         debt obligations, certificates of deposit, bankers' acceptances and
         repurchase agreements. They do not generate capital growth if held to
         maturity.

Foreign Investing. The Fund has no limits on the amounts it can invest in
         foreign securities, and it may invest a substantial portion of its
         assets in foreign securities. The Fund can buy foreign securities that
         are listed on a domestic or foreign stock exchange, traded in domestic
         or foreign over-the-counter markets, or represented by depository
         receipts. The Fund also can invest in emerging markets, which have
         greater risks than developed markets.

o        Risks of Foreign Investing. While foreign securities offer special
         investment opportunities, there are also special risks. 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 that
         foreign currency. Foreign issuers are not subject to the same
         accounting and disclosure requirements to which U.S. companies are
         subject. The value of foreign investments may be affected by exchange
         control regulations, expropriation or nationalization of a company's
         assets, foreign taxes, delays in settlement of transactions, changes in
         governmental, economic or monetary policy in the U.S. or abroad, or
         other political and economic factors.


         Additionally, if the Fund invests a significant amount of its assets in
         foreign securities, it may 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 after 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 Fund's net asset value is calculated. If such
         time-zone arbitrage were successful, it might dilute the interests of
         other shareholders. However, the Fund's use of "fair value pricing" to
         adjust the closing market prices of foreign securities under certain
         circumstances, to reflect what the Manager and the Board believe to be
         their fair value may help deter those activities.

Derivative Investments. The Fund can invest in a number of different kinds of
         "derivative" investments. In general terms, a derivative investment is
         an investment contract whose value depends on (or is derived from) the
         value of an underlying asset, interest rate or index. Options, futures
         contracts, forward contracts, swaps and structured notes are some of
         the derivatives the Fund may use. In addition to using derivatives for
         hedging, the Fund might use other derivative investments because they
         offer the potential for increased value (i.e. for speculative
         purposes). The Fund may invest in derivatives for hedging and
         non-hedging purposes subject to the guidelines established by the SEC
         and other regulatory bodies.

         Derivatives have special risks. If the issuer of the derivative
         investment does not pay the amount due, the Fund can lose money on the
         investment. The underlying security or investment on which the
         derivative is based, and the derivative itself, may not perform the way
         the Manager expected it to perform. Interest rate and stock market
         changes in the U.S. and abroad may also influence the performance of
         derivatives. As a result of these risks the Fund could realize less
         principal or income from the investment than expected. If that happens,
         the Fund's share prices could fall. Certain derivative investments held
         by the Fund may be illiquid. Using derivatives can increase the
         volatility of the Fund's share prices. For some derivatives, it is
         possible for the Fund to lose more than the amount invested in the
         derivative instrument.

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

OTHER INVESTMENT STRATEGIES. To seek its investment objective, the Fund may also
use the non-principal investment techniques and strategies described below. The
Fund may not always use all or some of them and is not required to use them to
achieve its objective. These techniques have certain risks, although some are
designed to help reduce overall investment or market risks.

"When-Issued" and "Delayed-Delivery" Transactions. The Fund can purchase
         securities on a "when-issued" basis and can purchase or sell securities
         on a "delayed-delivery" basis. Between the purchase and settlement, no
         payment is made for the security, and no interest accrues to the buyer
         from the investment. There is a risk of loss to the Fund if the value
         of the when-issued security declines prior to the settlement date.

Investing in Small, Unseasoned Companies. The Fund can invest in securities of
         small, unseasoned companies. These are companies that have been in
         continuous operation for less than three years, counting the operations
         of any predecessors. These securities may have limited liquidity, which
         means that the Fund could have difficulty selling them at an acceptable
         price and time when it wants to. Their prices may be very volatile,
         especially in the short term.


Investment in Other Investment Companies. The Fund can also invest in the
         securities of other investment companies, which can include open-end
         funds, closed-end funds and unit investment trusts, subject to the
         limits set forth in the Investment Company Act that apply to those
         types of investments. For example, the Fund can invest in
         exchange-traded funds, which are typically open-end funds or unit
         investment trusts, listed on a stock exchange. The Fund might do so as
         a way of gaining exposure to the segments of the equity or fixed-income
         markets represented by the exchange-traded funds' portfolio, at times
         when the Fund may not be able to buy those portfolio securities
         directly.

         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 of 1940 (the "Investment Company Act"). The Fund does not
         intend to invest in other investment companies unless the Manager
         believes that the potential benefits of the investment justify the
         payment of any premiums or sales charges. As a shareholder of an
         investment company, the Fund would be subject to its ratable share of
         that investment company's expenses, including its advisory and
         administration expenses. The Fund does not anticipate investing a
         substantial amount of its net assets in shares of other investment
         companies.

Illiquid and Restricted Securities. Investments may be illiquid because they do
         not have an active trading market, making it difficult to value them or
         dispose of them promptly at an acceptable price. 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. The Fund cannot invest more than 15% of its net
         assets in illiquid or restricted securities. Certain restricted
         securities that are eligible for resale to qualified institutional
         purchasers may not be subject to that limit. The Manager monitors
         holdings of illiquid securities on an ongoing basis to determine
         whether to sell any holdings to maintain adequate liquidity.


Portfolio Turnover. The Fund's use of short selling and hedging strategies may
         increase the Fund's portfolio turnover rate in excess of 100% annually.
         The Fund may use these investment strategies among other strategies
         over a broad array of securities to seek to produce returns that are
         not closely correlated to major markets. A change in the securities
         held by the Fund is known as "portfolio turnover." Increased portfolio
         turnover may increase brokerage and transaction costs for the Fund (and
         may reduce performance). If the Fund realizes capital gains when it
         sells its portfolio investments, it must generally pay those gains out
         to shareholders, increasing their taxable distributions.

Investments in Oppenheimer Institutional Money Market Fund. The Fund can invest
         its free cash balances in Class E shares of Oppenheimer Institutional
         Money Market Fund, to provide liquidity or for defensive purposes. The
         Fund invests in Oppenheimer Institutional Money Market Fund rather than
         purchasing individual short-term investments to try to seek a higher
         yield than it could obtain on its own. Oppenheimer Institutional Money
         Market Fund is a registered open-end management investment company,
         regulated as a money market fund under the Investment Company Act and
         is part of the Oppenheimer Family of Funds. It invests in a variety of
         short-term, high-quality, dollar-denominated money market instruments
         issued by the U.S. Government, domestic and foreign corporations, other
         financial institutions, and other entities. Those investments may have
         a higher rate of return than the investments that would be available to
         the Fund directly. At the time of an investment, the Manager cannot
         predict what the yield of the Oppenheimer Institutional Money Market
         Fund will be because of the wide variety of instruments that fund holds
         in its portfolio. The return on those investments may, in some cases,
         be lower than the return that would have been derived from other types
         of investments that would provide liquidity. As a shareholder, the Fund
         will be subject to its proportional share of the expenses of
         Oppenheimer Institutional Money Market Fund's Class E shares, including
         its advisory fee. However, the Manager will waive a portion of the
         Fund's advisory fee to the extent of the Fund's share of the advisory
         fee paid to the Manager by Oppenheimer Institutional Money Market Fund.

Temporary Defensive and Interim Investments. For temporary defensive purposes in
         times of adverse or unstable market, economic or political conditions,
         the Fund can invest up to 100% of its assets in investments that may be
         inconsistent with the Fund's principal investment strategies. Generally
         the Fund would invest in shares of Oppenheimer Institutional Money
         Market Fund or in the types of money market instruments described above
         or in other short-term U.S. Government securities. The Fund might also
         hold these types of securities as interim investments pending the
         investment of proceeds from the sale of Fund shares or the sale of Fund
         portfolio securities or to meet anticipated redemptions of Fund shares.
         To the extent the Fund invests in these securities, it might not
         achieve its investment objective.

Loans of Portfolio Securities. The Fund may make loans of its portfolio
         securities, with a value not to exceed 25% of its net assets, in
         accordance with policies approved by the Fund's Board. The Fund has
         entered into a securities lending agreement with JPMorgan Chase Bank,
         N.A. ("JPMorgan Chase") for that purpose. Under the agreement, the
         Fund's portfolio securities may be loaned to brokers, dealers and
         financial institutions, provided that such loans comply with the
         collateralization and other requirements of the securities lending
         agreement, the Fund's policies and applicable government regulations.
         JPMorgan Chase has agreed, in general, to bear the risk that a borrower
         may default on its obligation to return loaned securities. However, the
         Fund will be responsible for risks associated with the investment of
         cash collateral, including the risk of a default by the issuer of a
         security in which cash collateral has been invested. If that occurs,
         the Fund may incur additional costs in seeking to obtain the collateral
         or may lose the amount of the collateral investment. The Fund may also
         lose money if the value of the investments purchased with cash
         collateral decreases.


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

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



How the Fund is Managed

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


The Manager has been an investment adviser since 1960. The Manager and its
subsidiaries and controlled affiliates managed more than $250 billion in assets
as of June 30, 2007, 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.

The Manager's Fees. The Fund pays the Manager a management fee at an annual
         rate of 1.00% calculated on the average daily net assets of the Fund.
         The Fund's advisory fee for the period ended May 31, 2007 was 1.00% of
         average annual net assets for Class A shares.


         A discussion regarding the basis for the Board of Trustees' approval of
         the Fund's investment advisory contract is available in the Fund's
         Annual Report to shareholders for the fiscal period ended May 31, 2007.


Portfolio  Manager.  The Fund's  portfolio  is managed by Caleb  Wong,  the
person who is primarily  responsible for the day-to-day management of the Fund's
investments.

         Mr. Wong has been a Vice President and portfolio manager of the Fund
         since inception. He has been a Vice President of the Manager since June
         1999 and has held a variety of roles, including fixed-income and asset
         allocation portfolio management, quantitative research and risk
         management for the Manager since July 1996. He is an officer of one
         other portfolio in the OppenheimerFunds complex.

         The statement of additional information provides additional information
         about the Portfolio Manager's compensation, other accounts he manages
         and his ownership of Fund shares.


ABOUT YOUR ACCOUNT

How to Buy Shares


     The Fund's  Distributor,  OppenheimerFunds  Distributor,  Inc., may appoint
servicing agents to accept purchase (and redemption)  orders.  The Fund does not
currently offer its shares for sale.

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. Your account information will be shared with the dealer you
         designate as the dealer of record for the account.
Buying 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. Class A shares are the 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 adviser
         before you make a purchase to be sure that the Fund is appropriate for
         you.
o        Paying by Federal Funds Wire. Shares purchased through the Distributor
         may be paid for by Federal Funds wire. The minimum 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 Asset Builder Plans. You may purchase shares of
         the Fund automatically from your account at a bank or other financial
         institution under an Asset Builder Plan with AccountLink. Details are
         in the Asset Builder application and the Statement of Additional
         Information.

WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
o        If you establish one of the many types of retirement plan accounts that
         OppenheimerFunds offers, more fully described below under "Special
         Investor Services," you can start your account with as little as $500.
o        By using an Asset Builder Plan or Automatic Exchange Plan (details are
         in the Statement of Additional Information), or government allotment
         plan, you can make an initial investment for as little as $500. The
         minimum subsequent investment is $50, except that for any account
         established under one of these plans prior to November 1, 2002, the
         minimum additional investment will remain $25.

o        A minimum initial investment of $250 applies to certain fee based
         programs that have an agreement with the Distributor. The minimum
         subsequent investment for those programs is $50.

o        The minimum investment requirement does not apply to reinvesting
         dividends from the Fund or other Oppenheimer funds (a list of them
         appears in the Statement of Additional Information, or you can ask your
         dealer or call the Transfer Agent), or reinvesting distributions from
         unit investment trusts that have made arrangements with the
         Distributor.

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. The Fund calculates the net asset value of each class of
         shares as of the close of 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."

         The net asset value per share for a class of shares on a "regular
         business day" is determined by dividing the value of the Fund's net
         assets attributable to that class by the number of shares of that class
         outstanding on that day. To determine net asset values, the Fund assets
         are valued primarily on the basis of current market quotations. If
         market quotations are not readily available or do not accurately
         reflect fair value for a security (in the Manager's judgment) 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 Board of
         Trustees believes accurately reflects the 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 Fund's foreign
         investments may change on days when investors cannot buy or redeem Fund
         shares.

         The Board has adopted valuation procedures for the Fund and has
         delegated the day-to-day responsibility for fair value determinations
         to the Manager's Valuation Committee. Fair value determinations by the
         Manager are subject to review, approval and ratification by the Board
         at its next scheduled meeting after the fair valuations are 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
         significant events that it believes in good faith will affect the
         market prices of the securities of issuers held by the Fund. 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 securities markets (for example, a
         foreign securities market closes early because of a natural disaster).
         The Fund uses fair value pricing procedures to reflect what the Manager
         and the Board believe to be more accurate values for the Fund's
         portfolio securities, although it may not always be able to accurately
         determine such values. There can be no assurance that the Fund could
         obtain the fair value assigned to a security if it were to sell the
         security at the same time at which the Fund determines its net asset
         value per share. In addition, the discussion of "time-zone arbitrage"
         describes effects that the Fund's fair value pricing policy is intended
         to counteract.


         If, after the close of the principal market on which a security held by
         the Fund is traded and before the time as of which the 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.

         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 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 an authorized dealer, your
         dealer must receive the order by the close of the NYSE for you to
         receive that day's offering price. If your order is received on a day
         when the NYSE is closed or after it is closed, the order will receive
         the next offering price that is determined.

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

WHAT CLASSES OF SHARES DOES THE FUND OFFER? All of the Fund's shares are
designated Class A shares. The Fund does not offer its shares for sale at this
time.
---------------------------------------------------------------------------------------------------------------------------------------

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

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.

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

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


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

  ------------------------------------ ------------------------------------------------------------------------------
  Amount of Purchase                   Front-End Sales          Front-End Sales           Concession As a
                                       Charge As a              Charge As a
                                       Percentage of            Percentage of Net         Percentage of
                                       Offering Price           Amount Invested           Offering Price
  ------------------------------------ ------------------------------------------------------------------------------
  ------------------------------------ ------------------------------------------------------------------------------
  Less than $25,000                             5.75%                    6.10%                     4.75%
  ------------------------------------ ------------------------------------------------------------------------------
  ------------------------------------ ------------------------------------------------------------------------------
  $25,000 or more but less 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 B to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified retirement
plan arrangements or in other special types of transactions. To receive a waiver
or special sales charge rate, you must advise the Distributor when purchasing
shares or the Transfer Agent when redeeming shares that a special condition
applies.

CAN YOU REDUCE CLASS A SALES CHARGES? You and your spouse may be eligible to buy
Class A shares of the Fund at reduced sales charge rates set forth in the table
above under the Fund's "Right of Accumulation" or a "Letter of Intent." The Fund
reserves 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 shares of the Fund or
Class A, Class B or Class C shares of 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 Fund, you must inform the Distributor of
your  eligibility  and holdings at the time of your purchase in order to qualify
for the Right of  Accumulation.  If you are buying shares through your financial
intermediary you must notify your intermediary of your eligibility for the 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 all  account
statements  showing  your  current  holdings  of  the  Fund  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 calculate the value of your eligible  Oppenheimer fund shares, based
on the current  offering price, to determine which Class A sales charge rate you
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
shares of the Fund or Class A,  Class B or Class C shares  of 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 Fund during that period.
Purchases  made up to 90 days before the date that you submit a Letter of Intent
will be included  in that  determination.  Your Class N shares,  and any 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 purchases  outlined in 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 Fund's  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 Fund and the
Distributor offer other opportunities to purchase shares without front-end or
contingent deferred sales charges under the programs described below. The Fund
reserves 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 the Fund may be
              reinvested in shares of the 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 Fund can not be purchased by
              exchange of shares of other Oppenheimer funds at the current time.

o             Reinvestment Privilege. Within six months of a redemption of
              certain Class A shares, the proceeds may be reinvested in Class A
              shares of the Fund, or any of the other Oppenheimer funds into
              which shares of the 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 shares that were
              subject to a contingent deferred sales charge when redeemed. The
              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 Fund 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 B to the  Statement of Additional
              Information.  The Fund's   Statement  of  Additional   Information
              may  be  ordered  by  calling 1.800.225.5677.  A  description  of
              these  waivers  and  special  sales  charge arrangements  is also
              available  for  viewing on the  OppenheimerFunds  website (under
              the heading  "Fund  Information,"  click on the  hyperlink "Sales
              Charge Waivers").  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 must
              notify the Transfer  Agent at the time of  redeeming  shares for
              waivers that apply to contingent deferred sales charges.

Class A Contingent Deferred Sales Charge. There is no initial sales charge on
         Class A share purchases totaling $1 million or more of one or more of
         the Oppenheimer funds. However, those Class A shares may be subject to
         a 1.0% contingent deferred sales charge if they are redeemed within an
         18-month "holding period" measured from the beginning of the calendar
         month of their purchase (except for shares in certain retirement plans,
         described below). That sales charge will be calculated on the lesser of
         the original net asset value of the redeemed shares or the aggregate
         net asset value of the redeemed shares at the time of redemption.

The Class A  contingent  deferred  sales  charge does not apply to shares
purchased by the  reinvestment  of dividends or capital gain  distributions  and
will not exceed the aggregate  amount of the concessions the Distributor pays on
all of your  purchases of Class A shares,  of all  Oppenheimer  funds,  that are
subject to the contingent deferred sales charge.

The Distributor pays concessions from its own resources equal to 1.0% of Class A
purchases of $1 million or more (other than purchases by certain retirement
plans). The concession will not be paid on shares purchased by exchange of
shares that were previously subject to a front-end sales charge and dealer
concession.

o             Class A Purchases by Certain Retirement Plans. There is no initial
              sales charge on purchases of Class A shares of the Fund by
              retirement plans that have $1 million or more in plan assets.
              There is also no contingent deferred sales charge on any group
              retirement plan shares purchased after March 1, 2007.

              Until March 1, 2007, the Distributor paid a concession from its
              own resources on purchases by certain group retirement plans that
              were established prior to March 1, 2001 ("grandfathered retirement
              plans"). Shares purchased in grandfathered retirement plans prior
              to March 1, 2007 will continue to be subject to the contingent
              deferred sales charge if they are redeemed within 18 months after
              purchase. Beginning March 1, 2007, the distributor will not pay a
              concession on new share purchases by retirement plans (except
              plans that have $5 million or more in plan assets) and no new
              group retirement plan purchases will be subject to the contingent
              deferred sales charge, including purchases in grandfathered
              retirement plans. For shares purchased prior to March 1, 2007, the
              concession for grandfathered retirement plans was 0.75% of the
              first $2.5 million of purchases plus 0.25% of purchases in excess
              of $2.5 million. Effective March 1, 2007, the concession for
              grandfathered retirement accounts is 0.25%.


SERVICE (12b-1) PLAN


Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
          A shares that reimburses the Distributor for a portion of the costs of
          providing services to Class A shareholder accounts. The Fund makes
          these payments quarterly, based on an annual rate of up to 0.25% of
          the average annual net assets of Class A shares of the Fund. The
          Distributor currently uses all of those fees to pay dealers, brokers,
          banks and other financial institutions for providing personal service
          and maintenance of accounts of their customers that hold Class A
          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 Fund. 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
Fund 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 Fund.

       "Financial intermediaries" are firms that offer and sell Fund shares to
their clients, or provide shareholder services to the Fund, 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
Fund's 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 Fund 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 Fund 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 Fund 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 Financial Industry Regulatory
Authority (FINRA), formerly known as 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 Fund 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 the Fund to pay for these
         purchases.

Selling Shares. You can redeem shares by telephone automatically by calling the
         PhoneLink number and the Fund will send the proceeds directly to your
         AccountLink bank account. Please refer to "How to Sell Shares," below
         for details.


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

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


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

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

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

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


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

o Any special documents requested by the Transfer Agent to assure proper
authorization of the person asking to sell the shares.

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

HOW DO YOU SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption price
calculated on a particular regular business day, your call must be received by
the Transfer Agent by the close of the 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
         Fund to sell securities to pay the redemption proceeds. No dividends
         are accrued or paid on the proceeds of shares that have been redeemed
         and are awaiting transmittal by wire.

CAN YOU SELL SHARES THROUGH YOUR DEALER? The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their customers.
Brokers or dealers may charge 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 contingent deferred sales charge and redeem any of those
shares during the applicable holding period, the contingent deferred sales
charge will be deducted from the redemption proceeds (unless you are eligible
for a waiver of that sales charge based on the categories listed in Appendix B
to the Statement of Additional Information and you advise the Transfer Agent or
your financial intermediary of your eligibility for the waiver when you place
your redemption request.)

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

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


         Contingent deferred sales charges are not charged when you exchange
shares of the Fund for shares of other Oppenheimer funds. However, if you
exchange them within the applicable contingent deferred sales charge holding
period, the holding period will carry over to the fund whose shares you acquire.


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. For example, you can
exchange Class A shares of the Fund 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. After your account is
         open for seven days, you can exchange shares on any regular business
         day, subject to the limitations described below.
     o   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 a fund, you must obtain its prospectus and should
         read it carefully.

         For tax purposes, an exchange of shares of the 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.

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 the
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, the 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 Fund's Board 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 Fund and the
         Transfer Agent permit dealers and financial intermediaries to submit
         exchange requests on behalf of their customers (unless that authority
         has been revoked). A fund or the Transfer Agent may limit or refuse
         exchange requests submitted by 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 Fund 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 the 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 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 Fund, the Distributor, the Manager and the Transfer Agent encourage
financial intermediaries to apply the Fund's policies to their customers who
invest indirectly in the 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 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 Fund's Board has 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 the Fund held in his or her account to another eligible Oppenheimer
         fund once in a 30 calendar-day period. When shares are exchanged into a
         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   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 Fund's  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 each Fund account
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  to learn how you can  avoid  this fee and for  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 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 Fund at any time. The Fund
         will provide you notice whenever it is required to do so by applicable
         law. If an account has more than one owner, the Fund and the Transfer
         Agent may rely on the instructions of any one owner. Telephone
         privileges apply to each owner of the account and the dealer
         representative of record for the account unless the Transfer Agent
         receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data
         concerning transactions and has adopted other procedures to confirm
         that telephone instructions are genuine, by requiring callers to
         provide tax identification numbers and other account data or by using
         PINs, and by confirming such transactions in writing. The Transfer
         Agent and the Fund will not be liable for losses or expenses arising
         out of telephone instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
         receives all required documents in proper form. From time to time, the
         Transfer Agent in its discretion may waive certain of the requirements
         for redemptions stated in this prospectus.

Dealers that perform account transactions for their clients by participating in
         NETWORKING through the National Securities Clearing Corporation are
         responsible for obtaining their clients' permission to perform those
         transactions, and are responsible to their clients who are shareholders
         of the Fund if the dealer performs any transaction erroneously or
         improperly.
The redemption price for shares will vary from day to day because the value
         of the securities in the Fund's portfolio fluctuates. The redemption
         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 Fund if the account
         value has fallen below $500 for reasons other than the fact that the
         market value of shares has dropped. In some cases, involuntary
         redemptions may be made to repay the Distributor for losses from the
         cancellation of share purchase orders.

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

Federal regulations may require the Fund 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 Fund or the Transfer
         Agent may use this information to attempt to verify your identity. The
         Fund may not be able to establish an account if the necessary
         information is not received. The Fund may also place limits on account
         transactions while it is in the process of attempting to verify your
         identity. Additionally, if the Fund is unable to verify your identity
         after your account is established, the Fund may be required to redeem
         your shares and close your account.

To avoid sending duplicate copies of materials to households, the Fund
         will mail only one copy of each prospectus, annual and semi-annual
         report and annual notice of the Fund's privacy policy to shareholders
         having the same last name and address on the Fund's records. The
         consolidation of these mailings, called householding, benefits the Fund
         through reduced mailing expense.


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

Dividends, Capital Gains and Taxes


DIVIDENDS. The Fund intends to declare and pay dividends from net investment
income on an annual basis. The Fund has no fixed dividend rate and cannot
guarantee that it will pay any dividends or distributions.


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

WHAT CHOICES 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 the Fund. You can elect to reinvest all dividends
         and capital gains distributions in additional shares of the Fund.

Reinvest Dividends or Capital Gains. You can elect to reinvest some
         distributions (dividends, short-term capital gains or long-term capital
         gains distributions) in the Fund while receiving the other types of
         distributions by check or having them sent to your bank account through
         AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
         dividends and capital gains distributions or have them sent to your
         bank through 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 the Fund.
Distributions are subject to federal income tax and may be subject to state or
local taxes. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Long-term capital gains are taxable as
long-term capital gains when distributed to shareholders. It does not matter how
long you have held your shares. Whether you reinvest your distributions in
additional shares or take them in cash, the tax treatment is the same.

         Although dividends are generally taxable as ordinary income, individual
shareholders who satisfy certain holding period and other requirements are taxed
on such dividends at long-term capital gain rates to the extent that the
dividends are attributable to "qualified dividend income" received by the Fund.
"Qualified dividend income" generally consists of dividends received from U.S.
corporations (other than dividends received from tax-exempt organizations and
certain dividends from real estate investment trusts and other regulated
investment companies) and from certain foreign corporations.

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


         The Fund intends to qualify each year as a "regulated investment
company" under the Internal Revenue Code, but reserves the right not to qualify.
The Fund itself, as a regulated investment company, will not be subject to
federal income taxes on any of its income, provided that it satisfies certain
income, diversification and distribution requirements.

"Backup withholding" of federal income tax may be applied against taxable
         dividends, distributions and redemption proceeds (including exchanges)
         if you fail to furnish the Fund your correct, certified Social Security
         or Employer Identification Number when you sign your application, or if
         you under-report your income to the Internal Revenue Service.

Avoid "Buying a Distribution." If you buy shares on or just before the
         ex-dividend date, or just before the 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 Fund's share price
         fluctuate, you may have a capital gain or loss when you sell or
         exchange your shares. A capital gain or loss is the difference between
         the price you paid for the shares and the price you received when you
         sold them. Any capital gain is subject to capital gains tax.


Returns of Capital Can Occur. In certain cases, distributions made by the Fund
         may be considered a non-taxable return of capital to shareholders. If
         that occurs, it will be identified in notices to shareholders.


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


Financial Highlights


The Financial Highlights Table is presented to help you understand the Fund's
financial performance since inception. Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions). This information has
been audited by KPMG LLP, the Fund's independent registered public accounting
firm, whose report, along with the Fund's financial statements, is included in
the Statement of Additional Information, which is available upon request.


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

FINANCIAL HIGHLIGHTS

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

                                                                                                   Class A
Period Ended May 31, 2007(1)

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

Per Share Operating Data
Net asset value, beginning of period                                                                 $ 30.00

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

Income (loss) from investment operations:
Net investment income (2)                                                                                .20
Net realized and unrealized gain                                                                         .27

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

Total from investment operations                                                                         .47

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

Net asset value, end of period                                                                       $ 30.47

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

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

Total Return, At Net Asset Value (3)                                                                   1.57%


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

Ratios/Supplemental Data
Net assets, end of period (in thousands)                                                             $20,412

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

Average net assets (in thousands)                                                                    $20,264

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

Ratios to average net assets: (4)
Net investment income                                                                                  2.65%
Total expenses                                                                                      1.62% (5,6,7)

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

Portfolio turnover rate                                                                                 75%


1.       For the period from March 5, 2007 (commencement of operations) to May
         31, 2007.
2.       Per share amounts calculated based on the average shares outstanding
         during the period.
3.       Assumes an initial investment on the business day before the first day
         of the fiscal period, with all dividends and distributions reinvested
         in additional shares on the reinvestment date, and redemption at the
         net asset value calculated on the last business day of the fiscal
         period. Total returns are not annualized for periods of less than one
         full year. Returns do not reflect the deduction of taxes that a
         shareholder would pay on fund distributions or the redemption of fund
         shares.
4.       Annualized for periods of less than one full year.
5.       Total expenses including indirect expenses from affiliated fund were as
         follows: Period Ended May 31, 2007 1.62%
6.       Reduction to custodian expenses less than 0.005%.
7.       Voluntary waiver or reimbursement of indirect management fees less than
         0.005%.






INFORMATION AND SERVICES

For More Information on Oppenheimer Absolute Return Fund
The following additional information about the Fund is available without charge
upon request:


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

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's
investments and performance is 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 the Fund's
performance during its last fiscal year.


How to Get More Information

You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Fund's privacy policy and other
information about the Fund or your account:


------------------------------------------- ---------------------------------------------------------------------
By Telephone:                               Call OppenheimerFunds Services toll-free:
                                            1.800.CALL OPP (225.5677)
------------------------------------------- ---------------------------------------------------------------------
------------------------------------------- ---------------------------------------------------------------------
By Mail:                                    Write to:
                                            OppenheimerFunds Services
                                            P.O. Box 5270
                                            Denver, Colorado 80217-5270
------------------------------------------- ---------------------------------------------------------------------
------------------------------------------- ---------------------------------------------------------------------

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


Information about the Fund including the Statement of Additional Information can
be reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1.202.551.8090. Reports and other information about the Fund are available on
the EDGAR database on the Securities and Exchange Commission's Internet website
at www.sec.gov. Copies may be obtained after payment of a duplicating fee by
electronic request at the Securities and Exchange Commission's e-mail address:
publicinfo@sec.gov or by writing to the Securities and Exchange Commission 's
Public Reference Section, Washington, D.C. 20549-0102. No one has been
authorized to provide any information about the Fund or to make any
representations about the Fund other than what is contained in this prospectus.
This prospectus is not an offer to sell shares of the Fund, nor a solicitation
of an offer to buy shares of the Fund, to any person in any state or other
jurisdiction where it is unlawful to make such an offer.

The Fund's shares are distributed by:                 [logo] OppenheimerFunds Distributor, Inc.
The Fund's SEC File No.: 811-21918
PR0853.001.0907
Printed on recycled paper




Oppenheimer Absolute Return FundSM

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


Statement of Additional Information dated September 27, 2007

This Statement of Additional Information is not a Prospectus. This document
contains additional information about the Fund and supplements information in
the Prospectus dated September 27, 2007. It should be read together with the
Prospectus. You can obtain the Prospectus by writing to the Fund's Transfer
Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217, or
by calling the Transfer Agent at the toll-free number shown above, or by
downloading it from the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.


Contents                                                                                                    Page

About the Fund

Additional Information About the Fund's Investment Policies and Risks.....................................
     The Fund's Investment Policies.......................................................................
     Other Investment Techniques and Strategies...........................................................
     Other Investment Restrictions........................................................................
     Disclosure of Portfolio Holdings.....................................................................
How the Fund is Managed ..................................................................................
     Organization and History.............................................................................
     Board of Trustees and Oversight Committees...........................................................
     Trustees and Officers of the Fund....................................................................
     The Manager..........................................................................................
     Brokerage Policies of the Fund.......................................................................
Service Plan..............................................................................................
Payments to Fund Intermediaries...........................................................................
Performance of the Fund...................................................................................


About Your Account

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


Financial Information About the Fund

Independent Registered Public Accounting Firm's Report....................................................
Financial Statements......................................................................................


Appendix A: Ratings Definitions...........................................................................   A-1
Appendix B: Special Sales Charge Arrangements and Waivers.................................................   B-1





ABOUT THE FUND

Additional Information About the Fund's Investment Policies and Risks

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

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

         The Fund seeks to meet its objective by using an investment process
that primarily relies on quantitative models to determine security selection,
hedging and asset allocation. While this process and the inter-relationship of
the factors used may change over time and its implementation may vary in
particular cases, currently the general security selection, hedging and asset
allocation processes involve: o Bottom Up. The Manager uses "bottom up" models
to analyze a wide range of valuation and market factors to determine the relative
value of the securities. The models assist the Manager in identifying the most
attractive set of securities within each asset class or sector in which the Fund
invests.
o        Hedging. The Manager uses risk management models to estimate the Fund's
         level of risk exposures to major markets. The Manager uses derivatives
         and other strategies, such as short sales, to hedge the Fund's exposure
         to these risks.
o        Top Down. The Manager uses "top down" models to enable the Fund to
         tactically adjust the hedges to take advantage of investment
         opportunities at the asset and sector level.

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

o Preferred Stocks. Preferred stocks are equity securities but have certain
attributes of debt securities. Preferred stocks are equity securities because
they do not constitute a liability of the issuer and therefore do not offer the
same degree of protection of capital as debt securities and may 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 its
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 its
liquidation.

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, participating, or auction rate. "Cumulative" dividend provisions
require all or a portion of prior unpaid dividends to be paid before the issuer
can pay dividends on common shares.

         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 for
their call or redemption prior to maturity which can have a negative effect on
their prices when interest prior to maturity rates decline. Preferred stock may
be "participating" stock, which means that it may be entitled to a dividend
exceeding the stated dividend in certain cases.

o Rights and Warrants. The Fund can invest in rights and warrants. Warrants 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.

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

         The value of a convertible security is a function of its "investment
value" and its "conversion value." If the investment value exceeds the
conversion value, the security will behave more like a debt security, and the
security's price will likely increase when interest rates fall and decrease when
interest rates rise. If the conversion value exceeds the investment value, the
security will behave more like an equity security: 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. Convertible securities are subject to
credit risks and interest rate risk as discussed below under "Investments in
Debt Securities."

         While some convertible securities are a form of debt security in many
cases, their conversion feature (allowing conversion into equity securities)
causes them to be regarded by the Manager more as "equity equivalents." In those
cases, the credit rating assigned to the security has less impact on the
Manager's investment decision than in the case of non-convertible fixed-income
securities. To determine whether convertible securities should be regarded as
"equity equivalents," the Manager examines the following factors:
(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| Investments in Debt Securities. The Fund can invest in a variety of domestic
and foreign debt securities, including mortgage-backed securities,
investment-grade corporate debt securities and U.S. and foreign government
securities. The Fund can also invest in those debt securities and other
high-quality short-term debt securities including money market instruments for
liquidity or defensive purposes. Foreign debt securities are subject to the
risks of foreign investing described below. In general, domestic and foreign
debt securities are also subject to two additional types of risks: credit risk
and interest rate risk.

o Credit Risk. Credit risk relates to the ability of the issuer to meet interest
or principal payment obligations as they become due. In making investments in
debt securities, the Manager may rely to some extent on the ratings of rating
organizations or it may use its own research to evaluate a security's
creditworthiness. Investment-grade bonds are bonds rated at least "Baa" by
Moody's Investors Service, Inc. ("Moody's"), at least "BBB" by Standard & Poor's
Rating Service ("S&P's") or Fitch Inc. ("Fitch"), or that have comparable
ratings by another nationally recognized statistical rating organization. If
securities the Fund buys are unrated, to be considered part of the Fund's
holdings of investment-grade securities, they must be judged by the Manager to
be of comparable quality to bonds rated as investment-grade by a rating
organization. The debt security ratings definitions of the Moody's, S&P's and
Fitch are included in Appendix A of this SAI.

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

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

o 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. The Fund 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.

         In periods of declining interest rates, mortgages are more likely to be
prepaid. Therefore, 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 Fund's
shares. If a mortgage-related security has been purchased at a premium, all or
part of the premium the 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, the Fund may fail to recoup its initial investment on the
security.

         If interest rates rise rapidly, prepayments may occur at a slower rate
than expected and the expected maturity of long-term or medium-term securities
could lengthen as a result. Generally, that would cause their value and the
prices of the Fund's share to fluctuate more widely in response to changes in
interest rates.

         As with other debt securities, the values of mortgage-related
securities may be affected by changes in the market's perception of the
creditworthiness of the entity issuing the securities or guaranteeing them.
Their values may also be affected by changes in government regulations and tax
policies.

o Collateralized Mortgage Obligations.  CMOs are multi-class bonds that are
backed by pools of mortgage loans or mortgage  pass-through  certificates.  They
may be collateralized by:
(1) pass-through certificates issued or guaranteed by Ginnie Mae, Fannie Mae, or
Freddie Mac,
(2) unsecuritized mortgage loans insured by the Federal Housing Administration
or guaranteed by the Department of Veterans' Affairs,
(3) unsecuritized conventional mortgages,
(4) other mortgage-related securities, or
(5) 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.


Below Investment-Grade Debt Securities. Lower-rated bonds are bonds rated in the
lower rating categories of Moody's and S&P, including securities rated Ba or
lower by Moody's and BB or lower by S&P. Securities rated in these categories
are considered to be of poorer quality and predominantly speculative. Bonds in
these categories may also be called "high yield bonds" or "junk bonds." If they
are unrated, and are determined by the Fund's manager to be of comparable
quality to debt securities rated below investment grade, they are considered
part of the Fund's portfolio of lower-grade securities. A description of various
corporate debt ratings appears in Appendix A to this SAI.



         Lower-rated securities may be issued as a consequence of corporate
restructurings, such as leveraged buy-outs, mergers, acquisitions, debt
recapitalizations or similar events. Also, lower-rated securities are often
issued by smaller, less creditworthy companies or by highly leveraged (indebted)
firms, which are generally less able than more financially stable firms to make
scheduled payments of interest and principal. The risks posed by securities
issued under such circumstances may be substantial.


         In the past, the high yields from lower-rated securities have, at
times, adequately compensated for the higher default rates on such securities.
However, there can be no assurance that diversification will protect the Fund
from widespread bond defaults brought about by a sustained economic downturn, or
that yields will continue to offset default rates on lower rated securities in
the future. Issuers of these securities are often highly leveraged, so that
their ability to service their debt obligations during an economic downturn or
during sustained periods of rising interest rates may be impaired. In addition,
such issuers may not have more traditional methods of financing available to
them and may be unable to repay debt at maturity by refinancing. The risk of
loss due to default by the issuer is significantly greater for the holders of
lower rated securities because such securities may be unsecured and may be
subordinated to other creditors of the issuer. Further, an economic recession
may result in default levels with respect to such securities in excess of
historic averages.

         The value of lower-rated securities will be influenced not only by
changing interest rates, but also by the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, lower-rated securities may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates.

         Especially at such times, trading in the secondary market for
lower-rated securities may become thin and market liquidity may be significantly
reduced. Even under normal conditions, the market for lower-rated securities may
be less liquid than the market for investment-grade corporate bonds. There are
fewer securities dealers in the high yield market and purchasers of lower-rated
securities are concentrated among a smaller group of securities dealers and
institutional investors. In periods of reduced market liquidity, lower-rated
securities prices may become more volatile and the Fund's ability to dispose of
particular issues when necessary to meet the Fund's liquidity needs or in
response to a specific economic event such as deterioration in the
creditworthiness of the issuer may be adversely affected.

         Lower-rated securities frequently have call or redemption features that
would permit an issuer to repurchase the security from the Fund. If a call were
exercised by the issuer during a period of declining interest rates, the Fund
likely would have to replace such called security with a lower yielding
security, thus decreasing the net investment income to the Fund and any
dividends to investors.

         Securities issued by foreign issuers rated below investment grade
entail greater risks than higher rated securities, including risk of untimely
interest and principal payment, default, price volatility and may present
problems of liquidity, valuation and currency risk. The Fund may also invest in
Eurodollar securities, which are fixed income securities of a U.S. issuer or a
foreign issuer that are issued outside the United States. The Fund does not
intend to limit investments in lower rated securities.

o Special Risks of 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.

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

         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.

         The value of lower rated securities will be influenced not only by
changing interest rates, but also by the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, lower rated securities may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates.

         Especially at such times, trading in the secondary market for lower
rated securities may become thin and market liquidity may be significantly
reduced. Even under normal conditions, the market for lower rated securities may
be less liquid than the market for investment-grade corporate bonds. There are
fewer securities dealers in the yield market and purchasers of lower rated
securities are concentrated among a smaller group of securities dealers and
institutional investors. In periods of reduced market liquidity, lower rated
securities prices may become more volatile and the Fund's ability to dispose of
particular issues when necessary to meet the Fund's liquidity needs or in
response to a specific economic event such as deterioration in the
creditworthiness of the issuer may be adversely affected.


         Besides credit and liquidity concerns, prices for lower rated
securities may be affected by legislative and regulatory developments. For
example, from time to time, Congress has considered legislation to restrict or
eliminate the corporate tax deduction for interest payments or to regulate
corporate restructurings such as takeovers or mergers. Such legislation may
significantly depress the prices of outstanding lower rated securities.


         Securities issued by foreign issuers rated below investment-grade
entail greater risks than higher rated securities, including risk of untimely
interest and principal payment, default, price volatility and may present
problems of liquidity, valuation and currency risk.

         While securities rated "Baa" by Moody's or "BBB" by S&P's or Fitch are
investment grade and are not regarded as junk bonds, those securities may be
subject to special risks, and have some speculative characteristics. A
description of the debt security ratings categories of the principal rating
organizations is included in Appendix A to this SAI.

|X| U.S. Government Securities. These are securities issued or guaranteed by the
U.S. Treasury or other U.S. government agencies or federally-chartered entities
referred to as "instrumentalities." The obligations of U.S. government agencies
or instrumentalities in which the Fund 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.
The Fund will invest in securities of U.S. government agencies and
instrumentalities only if the Manager is satisfied that the credit risks with
respect to the agency or instrumentality is minimal.

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

o Treasury Inflation-Protection Securities. The Fund can buy these U.S. Treasury
  securities, called "TIPS," that are designed to be an investment vehicle not
  vulnerable to inflation. The interest rate paid by TIPS is fixed. The
  principal value rises or falls semi-annually based on changes in the published
  Consumer Price Index. If inflation occurs, the principal and interest payments
  on TIPS are adjusted to protect investors from inflationary loss. If deflation
  occurs, the principal and interest payments will be adjusted downward,
  although the principal will not fall below its face amount at maturity.


o Obligations Issued or Guaranteed by U.S. Government Agencies or
  Instrumentalities. These include direct obligations and mortgage-related
  securities that have different levels of credit support from the government.
  Some 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") bonds, Federal Home Loan Mortgage
  Corporation ("Freddie Mac") obligations and certain other obligations.


o U.S. Government Mortgage-Related Securities. The Fund can invest in a variety
  of mortgage-related securities that are issued by U.S. government agencies or
  instrumentalities, some of which are described below.

o Ginnie Mae Certificates. The Ginnie Mae is a wholly-owned corporate
  instrumentality of the United States within the U.S. Department of Housing and
  Urban Development. Ginnie Mae's principal programs involve its guarantees of
  privately-issued securities backed by pools of mortgages. Ginnie Mae
  certificates 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 Mae certificates in which the Fund can 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 Mae, whether or not the interest on the underlying mortgages has been
collected by the issuers.

         The Ginnie Mae certificates purchased by the Fund are guaranteed as to
timely payment of principal and interest by Ginnie Mae. In giving that guaranty,
Ginnie Mae expects that payments received by the issuers of Ginnie Mae
certificates on account of the mortgages backing the Ginnie Mae certificates
will be sufficient to make the required payments of principal of and interest on
those Ginnie Mae certificates. However, if those payments are insufficient, the
guaranty agreements between the issuers of the certificates and Ginnie Mae
require the issuers to make advances sufficient for the payments. If the issuers
fail to make those payments, Ginnie Mae 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 Ginnie Mae 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." Ginnie Mae 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 Mae certificates 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 Mae certificates do not constitute a liability of those
issuers, nor do they evidence any recourse against those issuers. Recourse is
solely against Ginnie Mae. Holders of Ginnie Mae certificates (such as the Fund)
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 Fund with respect to the mortgages underlying
the Ginnie Mae certificates held by the Fund. All of the mortgages in the pools
relating to the Ginnie Mae certificates in the Fund 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 Mae
certificates have a stated maturity of up to 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.


o Freddie Mac Certificates. Freddie Mac, a corporate instrumentality of the
 United States, issues Freddie Mac certificates representing interests in
 mortgage loans. Freddie Mac guarantees to each registered holder of a Freddie
 Mac certificate timely payment of the amounts representing a holder's
 proportionate share in:
(i)                       interest payments less servicing and guarantee fees,
(ii)                      principal prepayments and

(iii)                     the ultimate collection of amounts representing the
                          holder's proportionate interest in principal payments
                          on the mortgage loans in the pool represented by the
                          Freddie Mac certificate, in each case whether or not
                          such amounts are actually received.


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

o 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 U.S. or any of its agencies or instrumentalities other than
 Fannie Mae.

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

         Securities of foreign issuers that are represented by American
Depository Receipts or that are listed on a U.S. securities exchange or traded
in the U.S. over-the-counter markets are considered "foreign securities" for the
purpose of the Fund's investment allocations. That is because they are subject
to many of the special considerations and risks, discussed below, that apply to
foreign securities traded and held abroad.

         Because the Fund can purchase securities denominated in foreign
currencies, a change in the value of a foreign currency against the U.S. dollar
could result in a change in the amount of income the Fund has available for
distribution. Because a portion of the Fund's investment income may be received
in foreign currencies, the Fund will be required to compute its income in U.S.
dollars for distribution to shareholders, and therefore the Fund will absorb the
cost of currency fluctuations. After the Fund has distributed income, subsequent
foreign currency losses may result in the Fund's having distributed more income
in a particular fiscal period than was available from investment income, which
could result in a return of capital to shareholders.

         Investing in foreign securities offers potential benefits not available
from investing solely in securities of domestic issuers. They include the
opportunity to invest in foreign issuers that appear to offer growth potential,
or in foreign countries with economic policies or business cycles different from
those of the U.S., or to reduce fluctuations in portfolio value by taking
advantage of foreign stock markets that do not move in a manner parallel to U.S.
markets.

o Foreign Debt Obligations. The debt obligations of foreign governments and
 their agencies and instrumentalities may or may not be supported by the full
 faith and credit of the foreign government. The Fund can buy securities issued
 by certain "supra-national" entities, which include entities designated or
 supported by 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.

o Emerging Markets. The Fund intends to invest in securities in emerging market
  countries. As these markets change and other countries' markets develop, the
  Fund expects the countries in which it invests to change. Emerging market
  countries generally include every nation in the world except the U.S., Canada,
  Japan, Australia, New Zealand and most nations located in Western Europe.

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

     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.

o Special Risks of Emerging Markets. Emerging and developing markets abroad may
 also offer special opportunities for growth 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.


|X| Passive Foreign Investment Companies. Some securities of corporations
domiciled outside the U.S. which the Fund 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 Internal Revenue Code ("IRC")
ss.954.


         Investing in PFICs involves the risks associated with investing in
foreign securities, as described above. There are also the risks that the 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
Fund makes every effort to ensure compliance with federal tax reporting of these
investments. PFICs are considered foreign securities for the purposes of the
Fund's 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 Fund 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| Money Market Instruments. The following is a brief description of the types
of money market securities the Fund can invest in. Those 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.

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

o Bank Obligations. The Fund can buy time deposits, certificates of deposit and
bankers' acceptances. Time deposits, other than overnight deposits, may be
subject to withdrawal penalties, and if so, they are deemed to be "illiquid"
investments.

         The Fund can purchase bank obligations that are fully insured by the
Federal Deposit Insurance Corporation. The FDIC insures the deposits of member
banks up to $100,000 per account. Insured bank obligations may have a limited
market and a particular investment of this type may be deemed "illiquid" unless
the Board of Trustees of the Fund determines that a readily-available market
exists for that particular obligation, or unless the obligation is payable at
principal amount plus accrued interest on demand or within seven days after
demand.

o Commercial Paper. The Fund can invest in commercial paper if it is rated
 within the top two rating categories of S&P's and Moody's. If the paper is not
 rated, it may be purchased if issued by a company having a credit rating of at
 least "AA" by S&P's or "Aa" by Moody's.

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

o Variable Amount Master Demand Notes. Master demand notes are corporate
 obligations that permit the investment of fluctuating amounts by the Fund at
 varying rates of interest under direct arrangements between the Fund, as
 lender, and the borrower. They permit daily changes in the amounts borrowed.
 The 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, the Fund's right to redeem such
notes is dependent upon the ability of the borrower to pay principal and
interest on demand.

         The Fund has 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 are subject to the limitation
on investments by the Fund in illiquid securities, described in the Prospectus.
The Fund does not intend that its investments in variable amount master demand
notes will exceed 5% of its total assets.

|X| Portfolio Turnover. "Portfolio turnover" describes the rate at which a fund
traded its portfolio securities during its last fiscal year. For example, if a
fund sold all of its securities during the year, its portfolio turnover rate
would have been 100% annually. The Fund's portfolio turnover rate will fluctuate
from year to year, but the Fund expects to have a portfolio turnover rate in
excess of 100% annually as a result of the Fund's use of short selling and
hedging strategies. Increased portfolio turnover creates higher brokerage and
transaction costs for the Fund, which may reduce its overall performance.
Additionally, the realization of capital gains from selling portfolio securities
may result in distributions of taxable long-term capital gains to shareholders,
since the Fund will normally distribute all of its capital gains realized each
year, to avoid excise taxes under the Internal Revenue Code.

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

|X| Short Sales. The Fund may make short sales of securities, either as a hedge
against potential declines in value of a portfolio security or to realize
appreciation when a security that the Fund does not own declines in value. When
the Fund makes a short sale, it borrows the security sold short and delivers it
to the broker-dealer through which it made the short sale. The Fund may have to
pay a fee to borrow particular securities and is often obligated to turn over
any payments (including dividends and interest) received on such borrowed
securities to the lender of the securities.

            A Fund may also make short sales "against the box" without being
subject to such limitations imposed on other short sale transactions. In this
type of short sale, at the time of the sale, the Fund owns or has the immediate
and unconditional right to acquire the identical security at no additional cost.
This kind of short sale, which is described as "against the box," will be
entered into by a fund for the purpose of receiving a portion of the interest
earned by the executing broker from the proceeds of the sale. The proceeds of
the sale will be held by the broker until the settlement date when the fund
delivers the identical security to close out its short position. Although prior
to delivery the Fund will have to pay an amount equal to any dividends paid on
the common stock sold short, the Fund will receive the dividends from the
preferred stock or interest from the debt securities convertible into the stock
sold short, plus a portion of the interest earned from the proceeds of the short
sale. The Fund will deposit, in a segregated account with their custodian,
identical security in connection with short sales "against the box".

            No securities will be sold short if, after the effect is given to
any such short sale, the total market value of all securities sold short would
exceed 25% of the Fund's net assets.

            Because making short sales in securities that it does not own
exposes a Fund to the risks associated with those securities, such short sales
involve speculative exposure risk. As a result, if a Fund makes short sales in
securities that increase in value, it will likely under-perform similar mutual
funds that do not make short sales in securities they do not own. A Fund will
incur a loss as a result of a short sale if the price of the security increases
between the date of the short sale and the date on which the Fund replaces the
borrowed security. A Fund will realize a gain if the security declines in price
between those dates. The amount of gain will be decreased and the amount of loss
increased by the amount of premium, dividends, interest or expenses the Fund may
be required to pay in connection with a short sale. There can be no assurance
that a Fund will be able to close out a short sale position at any particular
time or at an acceptable price. Although a Fund's gain is limited to the price
at which it sold the security short, its potential loss is limited only by the
maximum attainable price of the security, less the price at which the security
was sold and may, theoretically, be unlimited.

Derivatives. The Fund is permitted to utilize various exchange-traded and
over-the-counter derivative instruments and derivative securities, for hedging
and non-hedging purposes (i.e. speculative purposes) (such as to tactically
adjust existing hedges or to seek to enhance return). Permitted derivative
products include, but are not limited to, futures contracts ("futures"); forward
contracts ("forwards"); options; swaps, caps, collars and floors; structured
notes; and other derivative products yet to be developed, so long as these new
products are used in a manner consistent with the investment objective and
policies of the Fund. These derivative products may be based on a wide variety
of underlying rates, indices, instruments, securities and other products, such
as interest rates, foreign currencies, foreign and domestic fixed income and
equity securities, groups or "baskets" of securities and securities indices (for
each derivative product, the "underlying").

          The Fund may use derivative products under a number of different
circumstances to further their investment objectives. For example, the Fund may
purchase derivatives to gain exposure to a market or currency quickly in
response to changes in the Fund's investment strategy, upon the inflow of cash
available for investments or when the derivative provides greater liquidity than
the underlying market. The Fund may also use derivatives when it is restricted
from directly owning the "underlying" or when derivatives provide a pricing
advantage or lower transaction costs. The Fund also may purchase combinations of
derivatives in order to gain exposure to an investment in lieu of actually
purchasing such investment. Derivatives may also be used by the Fund for hedging
or risk management purposes and in other circumstances when the Manager believes
it advantageous to do so consistent with the Fund's investment objectives and
policies.

     The use of derivative products is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. If the Manager is incorrect in
forecasts of market values, interest rates, and currency exchange rates, the
investment performance of the Fund will be less favorable than it would have
been if these investment techniques had not been used.


|X| Hedging.  The Fund intends to use derivative  instruments to attempt to
protect  against  declines  in the  market  value of the  Fund's  portfolio,  to
tactically  adjust the hedges to take advantage of investment  opportunities  at
the asset and sector level, or to facilitate  selling  securities for investment
reasons. The Fund could, for example,  sell futures contracts,  buy puts on such
futures or on  securities,  or write  covered  calls on securities or futures to
attempt to protect against  declines in the market value of the Fund's portfolio
or to facilitate  selling securities for investment  reasons.  Covered calls may
also be used to seek return.


     The Fund can use hedging to establish a position in the  securities  market
as a temporary substitute for purchasing particular securities. This is known as
anticipatory  hedging.  In the case of  anticipatory  hedging,  the  Fund  would
normally  seek to  purchase  the  securities  and then  terminate  that  hedging
position. Anticipatory hedging is a strategy in which the Fund uses a derivative
to offset the risk that  securities  in which the Fund  intends  to invest  will
increase in value before the Fund has an  opportunity to purchase them. The Fund
may  use  derivatives  for  anticipatory  hedging  in  order  to  gain  exposure
efficiently  to its market  segment in the event the Fund receives cash inflows.
The Fund may also use  derivatives in connection  with the  investment  strategy
that  seeks to profit  from  differences  in price  when the same (or a similar)
security,  currency or commodity is traded in two or more markets.  To do so the
Fund could buy futures, or buy calls on such futures or on securities.

         The particular derivative instruments the Fund can use are described
below. The Fund may employ new derivative instruments and strategies when they
are developed, if those investment methods are consistent with the Fund's
investment objective and are permissible under applicable regulations governing
the Fund. There can be no assurance that the hedging strategies used by the
Manager will be successful in avoiding losses, and hedged positions may perform
less favorably in generally rising markets than unhedged positions. If the
Manager used a hedging strategy at the wrong time or judged market conditions
incorrectly, the strategy could reduce the Fund's return. Also, in some cases,
derivatives or other investments may be unavailable or the Manager may choose
not to use them under market conditions when their use, in hindsight, may be
determined to have been beneficial to the Fund. No assurance can be given that
the Manager will employ hedging strategies with respect to all or any portion of
the Fund's assets.


|X| Futures. The Fund can buy and sell futures contracts that relate to (1)
broadly based stock indices (these are referred to as "stock index futures"),
(2) an individual stock ("single stock futures"), (3) bond indices (these are
referred to as "bond index futures"), (4) debt securities (these are referred to
as "interest rate futures"), (5) foreign currencies (these are referred to as
"forward contracts"), (6) commodities (these are referred to as "commodity
futures") and commodities indices and (7) indices of implied option volatility
measures.


         A broadly-based stock index is used as the basis for trading stock
index futures. They may in some cases be based on stocks of issuers in a
particular industry or group of industries. A stock index assigns relative
values to the common stocks included in the index and its value fluctuates in
response to the changes in value of the underlying stocks. A stock index cannot
be purchased or sold directly. 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.

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

         No money is paid or received by the Fund on the purchase or sale of a
future. Upon entering into a futures transaction, the Fund will be required to
deposit an initial margin payment with the futures commission merchant (the
"futures broker"). As the future is marked to market (that is, its value on the
Fund's books is changed) to reflect changes in its market value, subsequent
margin payments, called variation margin, will be paid to or by the futures
broker daily.

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

|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.  The Fund  uses  them to "lock  in" the U.S.  dollar  price of a
security  denominated in a foreign currency that the Fund has bought or sold, or
to protect  against  possible  losses from changes in the relative values of the
U.S. dollar and a foreign currency.  The Fund may also use "cross-hedging" where
the Fund hedges against changes in currencies other than the currency in which a
security it holds is denominated.

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

         The Fund 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
the Fund owns or intends to acquire, but it does fix a rate of exchange in
advance. Although forward contracts may reduce the risk of loss from a decline
in the value of the hedged currency, at the same time they limit any potential
gain if the value of the hedged currency increases.

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

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

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

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

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

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

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

|X| Swaps.  The Fund may enter  into swap  agreements  including,  interest
rate, equity and debt (of U.S. and foreign issuers), index, total return, credit
and currency rate swaps without  limit.  The Fund also may invest in other types
of  securities  that  are  or may  become  available  that  are  similar  to the
foregoing.  The Fund may enter into a swap  agreement  in order to, for example,
attempt to obtain or preserve a particular return or spread at a lower cost than
obtaining a return or spread through the purchase and/or sales of instruments in
other markets; protect against currency fluctuations; attempt to manage duration
to protect against any increase in the price of securities the Fund  anticipates
purchasing at a later date;  reduce risk arising from  ownership of a particular
security  or  instrument,  or gain  exposure  to  certain  markets  in the  most
economical way possible.

         Swap agreements are two-party contracts entered into primarily by
institutional investors for a specified period of time typically ranging from a
few weeks to more than one year. In a standard swap transaction, two parties
agree to exchange the returns (or differentials in rates of returns) earned or
realized on particular predetermined investment, instrument, index, or currency.
The gross returns to be exchanged or swapped between the parties are generally
calculated with respect to a notional amount, that is, the return on or increase
in value of a particular dollar amount invested at a particular interest rate,
in a particular foreign currency, or in a basket of securities representing a
particular index or other investments or instruments. The obligations may extend
beyond one year.

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

o Interest  Rate Swap  Transactions.  The Fund can enter into interest rate
swap  agreements.  In an interest rate swap, the 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.

o        Index Swap Transactions. The Fund may enter into a swap on an index,
under which involve the exchange by the Fund with another party of the
respective amounts payable with respect to a notional principal amount related
to one or more indices.

o        Total Return Swap Transactions.  The Fund may enter into total return
swap transactions, under which one party agrees to pay the other the total
return of a defined underlying asset which may include a specified security,
basket of securities or securities indices, during the specified period, in
return for periodic payments based on a fixed or variable interest rate or the
total return from other underlying assets. A total return swap gives the Fund
the right to receive the appreciation in value of an underlying asset in return
for paying a fee to the counterparty. The fee paid by the Fund will typically be
determined by multiplying the face value of the swap agreement by an agreed-upon
interest rate. If the underlying asset declines in value over the term of the
swap, the Fund would also be required to pay the dollar value of that decline to
the counterparty. Total return swap agreements may be used to obtain exposure to
a security or market without owning or taking physical custody of such security
or market.

o        Credit Default Swap Transactions.  The Fund also may enter into credit
default swaps to hedge an existing position or to obtain exposure to a security
or market by purchasing or selling credit protection. A credit default swap is a
bilateral contract that enables an investor to buy or sell protection against a
defined-issuer credit event. The Fund may seek to enhance returns by selling
protection or attempt to mitigate credit risk by buying protection against a
defined-issuer credit event. The seller of credit protection against a security
or basket of securities receives an up-front or periodic payment to compensate
against potential default event(s). The Fund may enter into credit default
swaps, both (i) directly ("unfunded swaps") and (ii) indirectly ("funded swaps")
in the form of a swap embedded within a structured security to protect against
the risk that a debt security will default. The 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 Fund either delivers the defaulted bond (if the 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 Fund had taken
the long position in the credit default swap, also know as "selling credit
protection").

o        Variance and Volatility Swap Transactions.  The Fund may enter into
variance or volatility swap transactions to hedge the direction of volatility or
the variance in a particular currency, index or security, or for other
speculative or non-speculative purposes. In variance swaps counterparties agree
to buy or sell the measured variance of a specified underlying asset, and in or
volatility swaps counterparties agree to buy or sell volatility at a specific
volatility level, over a fixed period. Because the principal amount is not
exchanged, it represents neither an asset nor a liability to either counterparty
and is referred to as a notional principal amount. The Fund records a daily
increase or decrease to unrealized gain (loss) based on changes in the amount
due to or owed by the Fund at the expiration date of the swap.

o Swap Options and Swap Forwards. The Fund also may enter into options on swap
agreements ("swap options") on the types of swaps listed above as well as swap
forwards. A swap option is a contract that gives a counterparty the right (but
not the obligation) to enter into a new swap agreement or to shorten, extend,
cancel, or otherwise modify an existing swap agreement at some designated future
time on specified terms. The Fund may write (sell) and purchase put and call
swap options. A swap forward is an agreement to enter into a swap agreement at
some point in the future, usually three to six months forwarded.


o Swaption Transactions. The Fund 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 Fund's statement of
financial condition.


|X| Risks of Swaps.  The use of swap agreements by the Fund entails certain
risks. The swaps market is generally  unregulated.  There is no central exchange
or market for swap  transactions and therefore they are less liquid  investments
than exchange-traded  instruments.  If the Fund was to sell a swap it owned to a
third party,  the Fund would still remain  primarily  liable of the  obligations
under the swap contract.  Because swaps are two-party contracts and because they
may have terms of greater than seven days,  swap agreements may be considered to
be illiquid.  Because  swaps are two-party  contracts,  it may take some time to
negotiate  and receive  completed  confirms  from  counterparties.  Delaying the
completion  of a  confirm  and  settlement  of a trade  may  entail  the risk of
creating  uncertainty  in a highly  volatile  market  or if a market  disruption
occurs.  The Fund's  successful  use of swap  agreements  is dependent  upon the
Manager's  ability to predict correctly whether certain types of investments are
likely to produce greater returns than other investments.

         Swap agreements entail both interest rate risk and credit risk. There
is a risk that based on movements of interest rates in the future; the payments
made by the Fund under a swap agreement will be greater than the payments it
received. Interest rate and currency swaps could result in losses if interest
rate or currency changes are not correctly anticipated by the Manager. Total
return swaps could result in losses if the reference index, security, or
investments do not perform as anticipated by the Manager. Total return swap
agreements may effectively add leverage to the Fund's portfolio because, in
addition to its total net assets, the Fund would be subject to investment
exposure on the notional amount of the swap. Variance and volatility swaps are
subject to credit risks (if the counterparty fails to meet its obligations), the
risk that the Manager is incorrect in forecasts of market values, interest
rates, and currency exchange rates and as with all derivatives, the risks
associated with the currency, index or security underlying the swap.

         Credit risk arises from the possibility that the counterparty will
default. If the counterparty defaults, the Fund's loss will consist of the net
amount of contractual interest payments that the Fund has not yet received. Swap
agreements also bear the risk that the Fund will not be able to meet its
obligation to the counterparty. Swaps could result in losses if the Manager does
not correctly evaluate the creditworthiness of the issuer in which the swap is
based. The Manager will monitor the creditworthiness of counterparties to the
Fund's swap transactions on an ongoing basis. The Fund will enter into swaps
only with counterparties meeting certain creditworthiness standards. Certain
restrictions imposed on the Fund by the Internal Revenue Code may limit the
Fund's ability to enter into swap agreements.

         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, adverse pricing when
purchasing bonds to satisfy its delivery obligation, and the need to fund the
delivery obligation (either cash or the defaulted bonds), depending on whether
the Fund is selling or buying credit protection, respectively. If the Fund is
buying credit protection, and if there is a credit event (including bankruptcy,
failure to timely pay interest or principal, or a restructuring), the Fund will
deliver the defaulted bonds and the swap counterparty will pay the par amount of
the bonds. A credit default swap may become worthless if a bond is ineligible
for delivery because the issuer is restructured or acquired. With the rise of
credit derivatives markets, the possibility of a "bond squeeze" has increased. A
protection buyer is susceptible to a bond squeeze in the instance that they do
not actually own the bond, and need to purchase the bond on the open market to
deliver to the protection seller. While market participants have drafted
measures to minimize the potential for bond squeezes, there are at present no
binding rules to prevent such market manipulation. Thus, the protection buyer
could be potentially subject to such a bond squeeze. 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.

         Selling credit protection by purchasing a credit default swap note
(i.e., funded swap) or credit default swap (i.e., unfunded) would increase the
Fund's exposure to specific 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.

          The Fund generally will incur a greater risk when it writes a swap
option than when it purchases a swap option. When the Fund purchases a swap
option it risks losing only the amount of the premium they have paid should the
Manger decide to let the option expire unexercised. When the Fund writes a swap
option it will become obligated, upon exercise of the option, according to the
terms of the underlying agreement.

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

o Writing Covered Call Options. The Fund can write (that is, sell) covered
calls. The Fund generally will write call options on a covered basis. That means
the Fund must own the security subject to the call while the call is
outstanding, or, for certain types of calls, the call may be covered by
segregating liquid assets to enable the Fund to satisfy its obligations if the
call is exercised.

         From time to time, the Fund will write a call option that is not
covered as indicated above but where the Fund will maintain, with its custodian
for the term of the option, segregated liquid assets in a segregated account
having a value equal to the fluctuating market value of the optioned securities
or currencies. While such an option would be "covered" with sufficient
collateral to satisfy SEC prohibitions on issuing senior securities, this type
of strategy would expose the funds to the risks of writing uncovered options.
When writing uncovered call options, the Fund is subject to the risk of having
to purchase the security or currency subject to the option at a price higher
than the exercise price of the option. As the price of a security or currency
could appreciate substantially, the Fund's loss could be significant.

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

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

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

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

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

         The Fund 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 Fund must cover the call by segregating an
equivalent dollar amount of liquid assets. The Fund will segregate additional
liquid assets if the value of the segregated assets drops below 100% of the
current value of the future. Because of this segregation requirement, in no
circumstances would the Fund's receipt of an exercise notice as to that future
require the Fund to deliver a futures contract. It would simply put the Fund in
a short futures position, which is permitted by the Fund's hedging policies.

o Writing Put Options. The Fund can sell put options. A put option on securities
gives the purchaser the right to sell, and the writer the obligation to buy, the
underlying investment at the exercise price during the option period.

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

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

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

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

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

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

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

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

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

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

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

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

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

|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 Fund's  return.  The Fund could
also experience  losses if the prices of its futures and options  positions were
not correlated with its other investments.

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

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

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

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

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

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

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

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

o Regulatory Aspects of Hedging 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 Fund claims an exclusion from regulation as a
commodity pool operator. The Fund has claimed such an exclusion from
registration as a commodity pool operator under the Commodity Exchange Act
("CEA"). The Fund may use futures and options for hedging and non-hedging
purposes to the extent consistent with its investment objective, internal risk
management guidelines adopted by the Fund's investment adviser (as they may be
amended from time to time), and as otherwise set forth in the Fund's Prospectus
or this SAI.

         Transactions in options by the Fund are subject to limitations
established by the option exchanges. The exchanges limit the maximum number of
options that may be written or held by a single investor or group of investors
acting in concert. Those limits apply regardless of whether the options were
written or purchased on the same or different exchanges or are held in one or
more accounts or through one or more different exchanges or through one or more
brokers. Thus, the number of options that the Fund may write or hold may be
affected by options written or held by other entities, including other
investment companies having the same adviser as the Fund (or an adviser that is
an affiliate of the Fund's adviser). 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 interpretations of the staff of the Securities and Exchange
Commission ("SEC") regarding applicable provisions of the Investment Company
Act, when the Fund purchases a future, it must identify liquid assets on its
books in an amount equal to the purchase price of the future, less the margin
deposit applicable to it.

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

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

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

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

|X|      Asset Coverage for Forward Contracts, Options, Futures, Options on
Futures, Swaps and Short Sales. The Fund will comply with guidelines established
by the SEC and other applicable regulatory bodies with respect to coverage of
options written by the Fund on securities and indexes, currency, interest rate
and security index futures contracts and options on these futures contracts,
forward currency contracts and short sales. These guidelines may, in certain
instances, require segregation by the Fund of cash or liquid securities with its
custodian or a designated sub-custodian to the extent the Fund's obligations
with respect to these strategies are not otherwise "covered" through ownership
of the underlying security or financial instrument or by other portfolio
positions, or by other means consistent with applicable regulatory policies.
Segregation of a large percentage of the Fund's assets could impede the
Manager's ability to manage the Fund's portfolio. Except under circumstances
where a segregated account is not required under the Investment Company Act or
the rules adopted thereunder, the Fund will earmark cash or liquid assets or
place them in a segregated account in an amount necessary to cover the Fund's
obligations under such derivative transactions.

         Most swap agreements entered into by the Fund would calculate the
obligations of the parties to the agreement on a "net basis" (i.e., the two
payment streams are netted out with the Fund receiving or paying, as the case
may be, only the net amount of the two payments). Consequently the Fund's
current obligations (or rights) under a swap agreement will generally be equal
only to the net amount to be paid or received under the agreement based on the
relative values of the positions held by each party to the agreement (the "net
amount"). The Fund's current obligations under a swap agreement will be accrued
daily (offset against any amounts owed to the Fund) and any accrued but unpaid
net amounts owed to a swap counterparty will be covered by the segregation of
liquid assets having an aggregate net asset value at least equal to the accrued
unpaid net amounts owed.

         To the extent that the Fund enters into swaps on other than a net
basis, the amount maintained in a segregated account will be the full amount of
the Fund's obligations, if any, with respect to such swaps, accrued on a daily
basis in an amount equal to or greater than the market value of the liabilities
under the swap agreement or the amount it would have cost the Fund initially to
make an equivalent direct investment, plus or minus any amount the Fund is
obligated to pay or is to receive under the swap agreement. Inasmuch as
segregated accounts are established for these hedging transactions, the
investment adviser and the Fund believe such obligations do not constitute
senior securities and, accordingly, will not treat them as being subject to its
borrowing restrictions. If there is a default by the other party to such a
transaction, the Fund will have contractual remedies pursuant to the agreement
related to the transaction. Since swaps are individually negotiated, the Fund
expects to achieve an acceptable degree of correlation between its rights to
receive a return on its portfolio securities and its rights and obligations to
receive and pay a return pursuant to swaps.

            The Fund's obligation to replace the securities borrowed in
connection with a short sale will be secured by collateral deposited in a
segregated account with the Fund's custodian on behalf of the broker that
consists of cash or U.S. government securities. In addition, the Fund will
either (i) place in a segregated account with its custodian an amount of cash or
U.S. government securities equal to the difference, if any, between (a) the
market value of the securities sold at the time they were sold short and (b) any
cash or U.S. government securities deposited as collateral on behalf of the
broker in connection with the short sale (not including the proceeds of the
short sale) or (ii) otherwise cover its short position. Until it replaces the
borrowed securities, the Fund will maintain the segregated account daily at a
level so that the amount deposited in the account plus the amount deposited on
behalf of the broker (not including the proceeds from the short sale) (a) will
equal the current market value of the securities sold short and (b) will not be
less than the market value of the securities at the time they were sold short.
No segregation is required, however, if the sale is "covered" (i.e., the fund
owns the security sold short or holds a convertible bond, call option or warrant
it can convert to the security sold short at a price no greater than the price
the security was sold short - a "short-against-the-box").

            Depending on arrangements made with the broker-dealer from which the
Fund borrowed the security, a Fund may not receive any payments (including
interest) on its collateral deposited on behalf of such broker-dealer.

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

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

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

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

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

         When the 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 for its portfolio or for delivery pursuant
to options contracts it has entered into, and not for the purpose of investment
leverage. Although the Fund will enter into delayed-delivery or when-issued
purchase transactions to acquire securities, it may dispose of a commitment
prior to settlement. If the Fund chooses to dispose of the right to acquire a
when-issued security prior to its acquisition or to dispose of its right to
delivery or receive against a forward commitment, it may incur a gain or loss.

         At the time the Fund makes the commitment to purchase or sell a
security on a when-issued or delayed-delivery basis, it records the transaction
on its books and reflects the value of the security purchased in determining the
Fund's net asset value. In a sale transaction, it records the proceeds to be
received. The Fund will identify on its books liquid assets at least equal in
value to the value of the Fund's purchase commitments until the Fund pays for
the investment. The Fund will not enter into when-issued commitments if more
than 15% of the Fund's net assets would be committed under these transactions.

         When-issued and delayed-delivery transactions can be used by the Fund
as a defensive technique to hedge against anticipated changes in interest rates
and prices. For instance, in periods of rising interest rates and falling
prices, the Fund might sell securities in its portfolio on a forward commitment
basis to attempt to limit its exposure to anticipated falling prices. In periods
of falling interest rates and rising prices, the 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| Repurchase Agreements. The Fund can acquire securities subject to repurchase
agreements. It might do so for liquidity purposes to meet anticipated
redemptions of Fund shares, or pending the investment of the proceeds from sales
of Fund shares, or pending the settlement of portfolio securities transactions,
or for temporary defensive purposes.

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

         The majority of these transactions run from day to day, and delivery
pursuant to the resale typically occurs within one to five days of the purchase.
Repurchase agreements having a maturity beyond seven days are subject to the
Fund's limits on holding illiquid investments. There is no limit on the amount
of the Fund's net assets that may be subject to repurchase agreements having
maturities of seven days or less.

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

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

o Reverse Repurchase Agreements. The Fund can use reverse repurchase agreements
on debt obligations it owns. Under a reverse repurchase agreement, the Fund
sells an underlying debt obligation and simultaneously agrees to repurchase the
same security at an agreed-upon price at an agreed-upon date. The 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 Fund under a reverse repurchase agreement could decline
below the price at which the Fund is obligated to repurchase them. These
agreements are considered borrowings by the Fund and will be subject to the
asset coverage requirement under the Fund's policy on borrowing discussed below.

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

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

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

|X| Real Estate Investment Trusts ("REITs"). The Fund may invest in REITs, which
pool investors' funds for investment, primarily in income producing real estate
or real estate-related loans or interests. A REIT is not taxed on income
distributed to its shareholders or unitholders if it complies with regulatory
requirements relating to its organization, ownership, assets and income, and
with a regulatory requirement that it distribute to its shareholders or
unitholders at least 90% of its taxable income for each taxable year. Generally,
REITs can be classified as Equity REITs, Mortgage REITs or Hybrid REITs. Equity
REITs invest the majority of their assets directly in real property and derive
their income primarily from rents and capital gains from appreciation realized
through property sales. Equity REITs are further categorized according to the
types of real estate securities they own, e.g., apartment properties, retail
shopping centers, office and industrial properties, hotels, health-care
facilities, manufactured housing and mixed-property types. Mortgage REITs invest
the majority of their assets in real estate mortgages and derive their income
primarily from interest payments. Hybrid REITs combine the characteristics of
both Equity REITs and Mortgage REITs.

            A shareholder in the Fund, by investing in REITs indirectly through
the Fund, will bear not only the shareholder's proportionate share of the
expenses of the Fund, but also, indirectly, the management expenses of the
underlying REITs. REITs may be affected by changes in the value of their
underlying properties and by defaults by borrowers or tenants. Mortgage REITs
may be affected by the quality of the credit extended. Furthermore, REITs are
dependent on specialized management skills. Some REITs may have limited
diversification and may be subject to risks inherent in investments in a limited
number of properties, in a narrow geographic area, or in a single property type.
REITs depend generally on their ability to generate cash flow to make
distributions to shareholders or unitholders, and may be subject to defaults by
borrowers and to self-liquidations. In addition, the performance of a REIT may
be affected by its failure to qualify for tax-free pass-through of income, or
the REIT's failure to maintain exemption from registration under the Act.


Investment in Other Investment  Companies.  The Fund can also invest in the
securities of other  investment  companies,  which can include  open-end  funds,
closed-end funds and unit investment trusts,  subject to the limits set forth in
the  Investment  Company Act that apply to those types of  investments,  and the
following  additional  limitation:  the Fund cannot 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. For example,  the Fund can invest in  exchange-traded  funds, which
are  typically  open-end  funds or unit  investment  trusts,  listed  on a stock
exchange.  The Fund might do so as a way of gaining  exposure to the segments of
the equity or fixed-income  markets  represented by the  exchange-traded  funds'
portfolio,  at  times  when  the  Fund  may not be able to buy  those  portfolio
securities directly.


            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
Fund does not intend to invest in other investment companies unless the Manager
believes that the potential benefits of the investment justify the payment of
any premiums or sales charges. As a shareholder of an investment company, the
Fund would be subject to its ratable share of that investment company's
expenses, including its advisory and administration expenses. The Fund does not
anticipate investing a substantial amount of its net assets in shares of other
investment companies.

|X| Temporary Defensive and Interim Investments. When market, economic or
political conditions are unstable, or the Manager believes it is otherwise
appropriate to reduce holdings in stocks, the Fund can invest in a variety of
debt securities for defensive purposes and the types of money market instruments
described above. The Fund can also purchase these securities for liquidity
purposes to meet cash needs due to the redemption of Fund shares, or to hold
while waiting to reinvest cash received from the sale of other portfolio
securities. The Fund's temporary defensive investments can include the following
short-term (maturing in one year or less) dollar-denominated debt obligations:
o        obligations issued or guaranteed by the U.S. government or its
         instrumentalities or agencies,
o        commercial paper (short-term, unsecured, promissory notes of domestic
         or foreign companies) rated in the top two rating categories of a
         nationally-recognized rating organization,
o        short-term debt obligations of corporate issuers, rated investment grade
         (rated at least Baa by Moody's or at least BBB by S&P's, or a comparable
         rating by another rating organization), or unrated securities judged by
         the Manager to have a comparable quality to rated securities in those
         categories,
o        money market securities issued by the U.S. government, corporations,
         banks or other entities that may have fixed, variable or floating
         interest rates, and
o        repurchase agreements.

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

|X| Event-Linked Bonds. The Fund may invest in "event-linked" bonds.
Event-linked bonds, which are sometimes referred to as "catastrophe" bonds, are
fixed income securities for which the return of principal and payment of
interest is contingent on the non-occurrence of a specific trigger event, such
as a hurricane, earthquake, or other occurrence that leads to physical or
economic loss. In some cases, the trigger event will not be deemed to have
occurred unless the event is of a certain magnitude (based on scientific
readings) or causes a certain measurable amount of loss to the issuer, a
particular industry group or a reference index. If the trigger event occurs
prior to maturity, the Fund may lose all or a portion of its principal and
additional interest. The Fund may also invest in similar bonds where the Fund
may lose all or a portion of its principal and additional interest if the
mortality rate in a geographic area exceeds a stated threshold prior to maturity
whether or not a particular catastrophic event has occurred.

Event-linked bonds may be issued by government agencies, insurance companies,
re-insurers, and financial institutions, among other issuers, or special purpose
vehicles associated with the foregoing. Often event-linked bonds provide for
extensions of maturity in order to process and audit loss claims in those cases
when a trigger event has occurred or is likely to have occurred. An extension of
maturity may increase a bond's volatility.

Event-linked bonds may expose the Fund to certain other risks, including issuer
default, adverse regulatory or jurisdictional interpretations, liquidity risk
and adverse tax consequences. Lack of a liquid market may result in higher
transaction costs and the possibility that the Fund may be forced to liquidate
positions when it would not be advantageous to do so. Event-linked bonds are
typically rated by one or more nationally recognized statistical rating
organization and the Fund will only invest in event-linked bonds that meet the
credit quality requirements for the Fund.

|X| Borrowing for Leverage. The 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 Fund, as such statute,
rules or regulations may be amended or interpreted from time to time. Borrowing
may entail "leverage," and may be a speculative investment strategy. Any
borrowing will be made only from banks and, pursuant to the requirements of the
Investment Company Act, will be made only to the extent that the value of the
Fund's assets, less its liabilities other than borrowings, is equal to at least
300% of all borrowings including the proposed borrowing. If the value of the
Fund's assets, when computed in that manner, should fail to meet the 300% asset
coverage requirement, the Fund is required within three days to reduce its bank
debt to the extent necessary to meet that coverage requirement. To do so, the
Fund may have to sell a portion of its investments at a time when it would
otherwise not want to sell the securities. Interest on money the Fund borrows is
an expense the Fund would not otherwise incur, so that during periods of
substantial borrowings, its expenses may increase more than the expenses of
funds that do not borrow. The use of leverage also may make the Fund's share
prices more sensitive to interest rate changes.

|X| Loans of Portfolio Securities. The Fund may lend its portfolio securities
pursuant to a Securities Lending Agreement (the "Securities Lending Agreement")
with JPMorgan Chase Bank, N.A. ("JPMorgan Chase"). Under the Securities Lending
Agreement and applicable regulatory requirements (which are subject to change),
the collateral for such loans 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 the Fund is permitted to
invest. To be acceptable as collateral, a bank letter of credit must obligate
the bank to pay to JPMorgan Chase, as agent, amounts demanded by the Fund if the
demand meets the terms of the letter. Both the issuing bank and the terms of the
letter of credit must be satisfactory to JPMorgan Chase and the Fund. The terms
of the loans must also meet applicable tests under the Internal Revenue Code and
permit the Fund to reacquire loaned securities on five business days' notice or
in time to vote on any material matters. The Securities Lending Agreement may be
terminated by either JPMorgan Chase or the Fund on 30 days' written notice.

         Pursuant to the Securities Lending Agreement, the Fund will receive a
percentage of all annual net income (i.e., net of rebates to the borrower and
certain other approved expenses) from securities lending transactions. Such net
income includes earnings from the investment of any cash collateral received
from a borrower and loan fees paid or payable by a borrower in connection with
loans secured by collateral other than cash.

         There are some risks in connection with securities lending, including
possible delays in receiving additional collateral from the borrower to secure a
loan or delays in recovering the loaned securities if the borrower defaults.
JPMorgan Chase has agreed, in general, to guarantee the obligations of borrowers
to return loaned securities to the Fund and to be responsible for expenses
relating to securities lending. The Fund, however, will be responsible for risks
associated with the investment of cash collateral, including the risk of a
default by the issuer of a security in which cash collateral has been invested.
If that occurs, the Fund may incur additional costs in seeking to obtain the
collateral or may lose the amount of the collateral investment. The Fund may
also lose money if the value of the investments purchased with cash collateral
decreases.

Other Investment Restrictions

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

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

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

o The Fund cannot 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
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 The 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 The 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 Fund, as such statute, rules or regulations
may be amended or interpreted from time to time.

o The 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 The 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 The Fund 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 The 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.

         Currently, under the Investment Company Act, a mutual fund may borrow
only from banks and the maximum amount it may borrow is up to one-third of its
total assets (including the amount borrowed less 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 the Fund may lend its portfolio securities in an amount
not to exceed 33 1/3 percent of the value of its total assets. In addition,
currently the Investment Company Act requires a mutual fund to have fundamental
investment policies governing investments in real estate and commodities.
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 its total assets.

|X| Does the Fund Have Any Restrictions That Are Not Fundamental? The Fund has a
number of other investment restrictions that are not fundamental policies, which
means that they can be changed by the Board of Trustees without shareholder
approval.

o The Fund cannot invest in 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.

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


Disclosure  of  Portfolio  Holdings.  The Fund  has  adopted  policies  and
procedures  concerning  the  dissemination  of  information  about its portfolio
holdings by employees,  officers and/or directors of the Manager Distributor and
Transfer   Agent.   These  policies  are  designed  to  assure  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 the Fund's  investment  program or enable
third parties to use that information in a manner that is harmful to the Fund.

o Public  Disclosure.  The  Fund's  portfolio  holdings  are made  publicly
available  no later than 60 days  after the close of each of the  Fund's  fiscal
quarters  in its  semi-annual  report  to  shareholders,  its  annual  report to
shareholders,  or its Statements of Investments on Form N-Q. Those documents are
publicly available at the SEC. In addition, the top 20 month-end holdings may be
posted on the OppenheimerFunds' website at www.oppenheimerfunds.com  (select the
Fund's name under the "View Fund Information  for:" menu) with a 15-day lag. The
Fund may release a more  restrictive list of holdings (e.g., the top five or top
10  portfolio  holdings)  or may  release  no  holdings  if that is in the  best
interests of the Fund and its shareholders.  Other general information about the
Fund's  portfolio  investments,  such as portfolio  composition  by asset class,
industry, country, currency, credit rating or maturity, may also be posted.


               Until publicly disclosed, the Fund's portfolio holdings are
      proprietary, confidential business information. While recognizing the
      importance of providing Fund shareholders with information about their
      Fund's investments and 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 Fund's portfolio
      holdings information could attempt to use that information to trade ahead
      of or against the Fund, which could negatively affect the prices the Fund
      is able to obtain in portfolio transactions or the availability of the
      securities that portfolio managers are trading on the Fund's 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 Fund 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
      Fund's 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 the Fund's 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 Fund.

      A list of the top 20 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 Fund's complete portfolio holdings may be disclosed no sooner
      than 30-days after the relevant month-end, subject to the procedures
      below. If the Fund's 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 Fund portfolio 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 Fund portfolio 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 Fund's holdings confidential and agreeing not to
                  trade directly or indirectly based on the information.

      The Fund's 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 the
      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 the Fund's Manager, Distributor and Transfer
                  Agent who need to have access to such information (as
                  determined by senior officers of such entity),
o                 The Fund's independent registered public accounting firm,
o                 Members of the Fund's Board and the Board's legal counsel,
o                 The Fund's custodian bank,
o                 A proxy voting service designated by the Fund and its Board,
o                 Rating/ranking organizations (such as Lipper and Morningstar),
o                 Portfolio 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 the Fund's regular pricing services).


      Portfolio holdings information of the Fund may be provided, under limited
      circumstances, to brokers and/or dealers with whom the Fund trades and/or
      entities that provide investment coverage and/or analytical information
      regarding the Fund's portfolio, 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 Fund, 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 Fund. 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  Fund  are not  priced  by the  Fund's  regular  pricing services)
o Dealers to obtain price quotations where the Fund is not identified as the
owner.


      Portfolio holdings information (which may include information on the
      Fund's 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
                  Fund 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,
                  Financial Industry Regulatory Authority ("FINRA"), formerly
                  known as the 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-advisers 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
      Fund shares or their financial intermediary representatives.

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

      Any permitted release of otherwise non-public portfolio holdings
      information must be in accordance with the Fund's then-current policy on
      approved methods for communicating confidential information, including but
      not limited to the Fund's policy as to use of secure e-mail technology.

      The Chief Compliance Officer (the "CCO") of the Fund and the Manager,
      Distributor, and Transfer Agent shall oversee the compliance by the
      Manager Distributor, Transfer Agent, and their personnel with these
      policies and procedures. At least annually, the CCO shall report to the
      Fund's Board on such compliance oversight and on the categories of
      entities and individuals to which disclosure of portfolio holdings of the
      Fund has been made during the preceding year pursuant to these policies.
      The CCO shall report to the Fund's Board any material violation of these
      policies and procedures 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 Fund have entered into ongoing arrangements to make
      available information about the Fund's portfolio holdings. One or more of
      the Oppenheimer funds may currently disclose portfolio holdings
      information based on ongoing arrangements to the following parties:

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


How the Fund is Managed

Organization and History. The Fund is an open-end, diversified management
investment company with an unlimited number of authorized shares of beneficial
interest. The Fund was organized as a Massachusetts business trust 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 Fund. Shares do not
have cumulative voting rights, preemptive rights or subscription rights. Shares
may be voted in person or by proxy at shareholder meetings.

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


|X| Meetings of Shareholders.  As a Massachusetts  business trust, the Fund
is not required to hold, and does not plan to hold,  regular annual  meetings of
shareholders,  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 Fund, to remove a Trustee
or to take other action described in the Fund's 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
Fund's shareholder list available to the applicants or mail their communication
to all other shareholders at the applicants' expense. The shareholders making
the request must have been shareholders for at least six months and must hold
shares of the Fund valued at $25,000 or more or constituting at least 1% of the
Fund's outstanding shares. The Trustees may also take other action as permitted
by the Investment Company Act.

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

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

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


     The Board of Trustees has an Audit Committee,  a Regulatory & Oversight
Committee  and a Governance  Committee.  Each  committee is comprised  solely of
Trustees who are not "interested  persons" under the Investment Company Act (the
"Independent Trustees").  The members of the Audit Committee are David K. Downes
(Chairman),  Mary F. Miller, Joel W. Motley, Russell S. Reynolds, Jr., Joseph M.
Wikler and Peter I. Wold. The Audit  Committee held 2 meetings during the Fund's
fiscal year ended May 31, 2007.  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),  David K. Downes,  Matthew P. Fink,  Phillip A.  Griffiths,  Joel W.
Motley and Joseph M. Wikler.  The Regulatory  &  Oversight  Committee held 2
meetings during the Fund's fiscal year ended May 31, 2007. 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), Matthew P. Fink, Robert G. Galli, Mary F. Miller, Russell S.
Reynolds, Jr. and Peter I. Wold. The Governance Committee held 3 meetings during
the Fund's fiscal year ended May 31, 2007. 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, provides the Board with recommendations for voting
portfolio securities held by the Fund, and monitors the Fund's proxy voting,
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 Oppenheimer Absolute Return 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.

         Trustees and Officers of the Fund. 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 Absolute Return Fund                             Oppenheimer Money Market Fund, Inc.
Oppenheimer AMT-Free Municipals                              Oppenheimer Multi-State Municipal Trust
Oppenheimer AMT-Free New York Municipals                     Oppenheimer Portfolio Series
Oppenheimer Balanced Fund                                    Oppenheimer Real Estate Fund
Oppenheimer Baring China Fund                                Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Baring Japan Fund                                Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Baring SMA International Fund                    Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer California Municipal Fund                        Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Capital Appreciation Fund                        Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Developing Markets Fund                          Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Discovery Fund                                   Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Dividend Growth Fund                             Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Emerging Growth Fund                             Oppenheimer Select Value Fund
Oppenheimer Emerging Technologies Fund                       Oppenheimer Series Fund, Inc.
Oppenheimer Enterprise Fund                                  Oppenheimer SMA Core Bond Fund
Oppenheimer Global Fund                                      Oppenheimer SMA International Bond Fund
Oppenheimer Global Opportunities Fund                        Oppenheimer Transition 2010 Fund
Oppenheimer Gold & Special Minerals Fund                     Oppenheimer Transition 2015 Fund
Oppenheimer Growth Fund                                      Oppenheimer Transition 2020 Fund
Oppenheimer International Diversified Fund                   Oppenheimer Transition 2030 Fund
Oppenheimer International Growth Fund                        OFI Tremont Core Strategies Hedge Fund
Oppenheimer International Small Company Fund                 OFI Tremont Market Neutral Hedge Fund
Oppenheimer International Value Fund                         Oppenheimer Tremont Market Neutral Fund LLC
Oppenheimer Institutional Money Market Fund, Inc.            Oppenheimer Tremont Opportunity Fund LLC
Oppenheimer Limited Term California Municipal Fund           Oppenheimer U.S. Government Trust


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


         Present or former officers, directors, trustees and employees (and
their immediate family members) of the Fund, the Manager and its affiliates, and
retirement plans established by them for their employees are permitted to
purchase Class A shares of the Fund 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. Wong, Gillespie, Murphy, Petersen, Szilagyi, Vandehey, Wixted
and Zack and Mss. Bloomberg and Ives, who are officers of the Fund, hold the
same offices with one or more of the other Board I Funds. As of September 4,
2007 the Trustees and officers of the Fund, as a group, owned of record or
beneficially less than 1% of any class of shares of the Fund. The foregoing
statement does not reflect ownership of shares held of record by an employee
benefit plan for employees of the Manager, other than the shares beneficially
owned under that plan by the officers of the Fund listed above. 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 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       Principal Occupation(s) During the Past 5 Years; Other           Dollar Range of     Aggregate Dollar
                                                                                                   Shares
                                                                                                Beneficially      Range Of Shares
with the Fund, Length of     Trusteeships/Directorships Held; Number of Portfolios in the         Owned in       Beneficially Owned
Service, Age                 Fund Complex Currently Overseen                                      the Fund      in Supervised Funds
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
---------------------------- ---------------------------------------------------------------- ---------------------------------------
                                                                                                     As of December 31, 2006
---------------------------- ---------------------------------------------------------------- ---------------------------------------
---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Brian F. Wruble,             General Partner of Odyssey Partners, L.P. (hedge fund) (since    None              Over $100,000

Chairman of the Board of September 1995); Director of Special Value
Opportunities Fund, Trustees since 2007, LLC (registered investment company)
(since September 2004); Trustee since 2006, Member of Zurich Financial
Investment Advisory Board Age: 64 (insurance) (since October 2004); Board of
Governing Trustees
                             of The Jackson Laboratory (non-profit) (since
                             August 1991); Chair, The Jackson Laboratory Board
                             of Trustees (since August 2007); 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
                             (investment research, non-profit) (2000-2002);
                             Governor, Jerome Levy Economics Institute of Bard
                             College (economics research) (August 1990-September
                             2001); Director of Ray & Berendtson, Inc.
                             (executive search firm) (May 2000-April 2002).
                             Oversees 66 portfolios in the OppenheimerFunds
                             complex.

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

David K. Downes,             President, Chief Executive Officer and Board Member of CRAFund         None           Over $100,000
Trustee since 2007           Advisors, Inc. (investment management company) (since January
Age: 67                      2004); President of The Community Reinvestment Act Qualified
                             Investment Fund (investment management company)
                             (since January 2004); Independent Chairman of the
                             Board of Trustees of Quaker Investment Trust
                             (registered investment company) (since January
                             2004); Director of Internet Capital Group
                             (information technology company) (since October
                             2003); Chief Operating Officer and Chief Financial
                             Officer of Lincoln National Investment Companies,
                             Inc. (subsidiary of Lincoln National Corporation, a
                             publicly traded company) and Delaware Investments
                             U.S., Inc. (investment management subsidiary of
                             Lincoln National Corporation) (1993-2003);
                             President, Chief Executive Officer and Trustee of
                             Delaware Investment Family of Funds (1993-2003);
                             President and Board Member of Lincoln National
                             Convertible Securities Funds, Inc. and the Lincoln
                             National Income Funds, TDC (1993-2003); Chairman
                             and Chief Executive Officer of Retirement Financial
                             Services, Inc. (registered transfer agent and
                             investment adviser and subsidiary of Delaware
                             Investments U.S., Inc.) (1993-2003); President and
                             Chief Executive Officer of Delaware Service
                             Company, Inc. (1995-2003); Chief Administrative
                             Officer, Chief Financial Officer, Vice Chairman and
                             Director of Equitable Capital Management
                             Corporation (investment subsidiary of Equitable
                             Life Assurance Society) (1985-1992); Corporate
                             Controller of Merrill Lynch & Company (financial
                             services holding company) (1977-1985); held the
                             following positions at the Colonial Penn Group,
                             Inc. (insurance company): Corporate Budget Director
                             (1974-1977), Assistant Treasurer (1972-1974) and
                             Director of Corporate Taxes (1969-1972); held the
                             following positions at Price Waterhouse & Company
                             (financial services firm): Tax Manager (1967-1969),
                             Tax Senior (1965-1967) and Staff Accountant
                             (1963-1965); United States Marine Corps
                             (1957-1959). Oversees 66 portfolios in the
                             OppenheimerFunds complex.

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

Matthew P. Fink,             Trustee of the Committee for Economic Development (policy        None              Over $100,000
Trustee since 2006           research foundation) (since 2005); Director of ICI Education
Age: 66                      Foundation (education foundation) (October 1991-August 2006);
                             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 56
                             portfolios in the OppenheimerFunds complex.

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

Robert G. Galli,             A director or trustee of other Oppenheimer funds. Oversees 66    None              Over $100,000
Trustee since 2006           portfolios in the OppenheimerFunds complex.
Age: 74

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

Phillip A. Griffiths,        Distinguished Presidential Fellow for International Affairs      None              None
Trustee since 2006           (since 2002) and Member (since 1979) of the National Academy
Age: 68                      of Sciences; 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 56 portfolios in the
                             OppenheimerFunds complex.

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

Mary F. Miller,              Trustee of the American Symphony Orchestra (not-for-profit)      None              Over $100,000
Trustee since 2006           (since October 1998); and Senior Vice President and General
Age: 64                      Auditor of American Express Company (financial services
                             company) (July 1998-February 2003). Oversees 56
                             portfolios in the OppenheimerFunds complex.

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

Joel W. Motley,              Managing Director of Public Capital Advisors, LLC (privately     None              Over $100,000
Trustee since 2006           held financial adviser) (since January 2006).  Director of
Age: 55                      Columbia Equity Financial Corp. (privately-held financial
                             adviser) (since 2002); Managing Director of Carmona
                             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, Member of the Investment
                             Committee of the Episcopal Church of America,
                             Member of the Investment Committee and Board of
                             Human Rights Watch and Member of the Investment
                             Committee of Historic Hudson Valley. Oversees 56
                             portfolios in the OppenheimerFunds complex.

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

Russell S. Reynolds, Jr.,    Chairman of RSR Partners (formerly "The Directorship Search      None              Over $100,000
Trustee since 2006           Group, Inc.") (corporate governance consulting and executive
Age: 75                      recruiting) (since 1993); Life Trustee of International House
                             (non-profit educational organization); Former
                             Trustee of The Historical Society of the Town of
                             Greenwich; Former Director of Greenwich Hospital
                             Association. Oversees 56 portfolios in the
                             OppenheimerFunds complex.

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

Joseph M. Wikler,            Director of the following  medical device  companies:  Medintec  None              Over $100,000
Trustee since 2006           (since  1992)  and  Cathco  (since  1996);  Director  of  Lakes
Age: 66                      Environmental     Association     (environmental     protection
                             organization) (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);
                             Director of C-TASC (a privately held bio-statics
                             company) (since May 2007). Oversees 56 portfolios
                             in the OppenheimerFunds complex.

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

Peter I. Wold,               President   of  Wold  Oil   Properties,   Inc.   (oil  and  gas  None              Over $100,000
Trustee since 2006           exploration  and  production   company)   (since  1994);   Vice
Age: 59                      President  of American  Talc  Company,  Inc.  (talc  mining and
                             milling) (since 1999); Managing Member of
                             Hole-in-the-Wall Ranch (cattle ranching) (since
                             1979); Vice President, Secretary and Treasurer of
                             Wold Trona Company, Inc. (soda ash processing and
                             production) (1996 - 2006); 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 56 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 for an indefinite term, or until his
resignation, retirement, death or removal and as an officer for an indefinite
term, or until his resignation, retirement, death or removal.

------------------------------------------------------------------------------------------------------------------------------------
                                                  Interested Trustee and Officer
------------------------------------------------------------------------------------------------------------------------------------
--------------------------- ----------------------------------------------------------------- ---------------- ---------------------
Name, Position(s) Held      Principal Occupation(s) During the Past 5 Years; Other             Dollar Range      Aggregate Dollar
                                                                                                 of Shares
                                                                                               Beneficially      Range Of Shares
with Fund, Length of        Trusteeships/Directorships Held; Number of Portfolios in the         Owned in       Beneficially Owned
Service, Age                Fund Complex Currently Overseen                                      the Fund      in Supervised Funds
--------------------------- ----------------------------------------------------------------- ---------------- ---------------------
--------------------------- ----------------------------------------------------------------- --------------------------------------
                                                                                                     As of December 31, 2006
--------------------------- ----------------------------------------------------------------- --------------------------------------
--------------------------- ----------------------------------------------------------------- ----------------- --------------------

John V. Murphy,             Chairman, Chief Executive Officer and Director of the Manager     None              Over $100,000
Trustee 2006 and            since June 2001; President of the Manager(September 2000-March
President and Principal     2007); President and a director or trustee of other Oppenheimer
Executive Officer since     funds; President and Director of Oppenheimer Acquisition Corp.
2006                        ("OAC") (the Manager's parent holding company) and of
Age: 58                     Oppenheimer Partnership Holdings, Inc. (holding company
                            subsidiary of the Manager) (since July 2001);
                            Director of OppenheimerFunds Distributor, Inc.
                            (subsidiary of the Manager) (November 2001 - December 2006);
                            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). Oversees 103 portfolios in the
                            OppenheimerFunds complex.

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


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


-----------------------------------------------------------------------------------------------------------------------------
                                                 Other Officers of the Fund
-----------------------------------------------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------
Name, Position(s) Held with Fund,   Principal Occupation(s) During Past 5 Years
Length of Service, Age
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------

Caleb Wong, Vice President of the Manager since June 1999; worked in
fixed-income and asset Vice President and Portfolio allocation portfolio
management, quantitative research and risk management for the Manager since 2006
Manager (since July 1996); an officer of 1 portfolio in the OppenheimerFunds
complex. Age: 42 Formerly Assistant Vice President of the Manager (January
1997-June 1999); before joining the Manager in July 1996 Mr. Wong was enrolled in the Ph.D. program for
Economics at the University of Chicago.

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

Mark S. Vandehey,                   Senior Vice President and Chief Compliance Officer of the Manager (since March 2004);
Vice President and Chief            Chief Compliance Officer of the Manager, OppenheimerFunds Distributor, Inc., Centennial
Compliance Officer since 2006       Asset Management and Shareholder Services, Inc. (Since March 2004); Vice President of
Age: 56                             OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and
                                    Shareholder Services, Inc. (since June 1983). Former Vice President and Director of
                                    Internal Audit of the Manager (1997-February 2004). An officer of 103 portfolios in the
                                    OppenheimerFunds complex.

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

Brian W. Wixted,                    Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the
Treasurer and Principal Financial   following: HarbourView Asset Management Corporation, Shareholder Financial Services,
& Accounting Officer since 2006     Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, and
Age: 47                             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 103
                                    portfolios in the OppenheimerFunds complex.

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

Brian Petersen,                     Vice President of the Manager (since February 2007); Assistant Vice President of the
Assistant Treasurer since 2006      Manager (August 2002-February 2007); Manager/Financial Product Accounting of the
Age: 36                             Manager (November 1998-July 2002). An officer of 103 portfolios in the OppenheimerFunds
                                complex.
----------------------------------- -----------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------

Brian C. Szilagyi,                  Assistant Vice President of the Manager (since July 2004); Director of Financial
Assistant Treasurer since 2006      Reporting and Compliance of First Data Corporation (April 2003-July 2004); Manager of
Age: 37                             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 103
                                    portfolios in the OppenheimerFunds complex.

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

Robert G. Zack,                     Executive Vice President (since January 2004) and General Counsel (since March 2002) of
Secretary since 2006                the Manager; General Counsel and Director of the Distributor (since December 2001);
Age: 59                             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 103 portfolios in the OppenheimerFunds complex.

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

Kathleen T. Ives,                   Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since
Assistant Secretary since 2006      October 2003) of the Manager; Vice President (since 1999) and Assistant Secretary
Age: 41                             (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 103 portfolios in the
                                    OppenheimerFunds complex.

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

Lisa I. Bloomberg,                  Vice President and Associate Counsel of the Manager (since May 2004); First Vice
Assistant Secretary since 2006      President (April 2001-April 2004), Associate General Counsel (December 2000-April
Age: 39                             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 103 portfolios in the OppenheimerFunds complex.

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

Phillip S. Gillespie,               Senior Vice President and Deputy General Counsel of the Manager (since September 2004);
Assistant Secretary since 2006      First Vice President (2001-September 2004); Director (2000-September 2004) and Vice
Age: 43                             President (1998-2000) of Merrill Lynch Investment Management: An officer of 103
                                portfolios in the OppenheimerFunds complex.
----------------------------------- -----------------------------------------------------------------------------------------


           Remuneration of the Officers and Trustees. The officers and the
   interested Trustee of the Fund, who are affiliated with the Manager, receive
   no salary or fee from the Fund. The Independent Trustees' compensation from
   the Fund, shown below, is for serving as a Trustee and member of a committee
   (if applicable), with respect to the Fund's fiscal year ended May 31, 2007.
   The total compensation from the Fund and fund complex represents
   compensation, including accrued retirement benefits, for serving as a Trustee
   and member of a committee (if applicable) of the Boards of the Fund and other
   funds in the OppenheimerFunds complex during the calendar year ended December
   31, 2006.


--------------------------------- -------------------- --------------------- ---------------------- --------------------------
Name and Other Fund Position(s)        Aggregate                               Estimated Annual      Total Compensation From
                                                       Retirement Benefits
                                   Compensation From    Accrued as Part of       Benefits Upon

(as applicable)                       the Fund(1)       Fund Expenses(23)        Retirement(2)      the Fund and Fund Complex

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

                                       Fiscal year ended May 31, 2007                                Year ended December 31,

                                                                                                              2006
--------------------------------- ------------------------------------------ ---------------------- --------------------------
--------------------------------- -------------------- --------------------- ---------------------- --------------------------

Brian F. Wruble(3)                      $10(4)                  $0              $81,942(5) (19)           $241,260 (6)

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

Clayton K. Yeutter(7)                     $0                    $0                $117,498(8)               $173,700


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

David K. Downes(20)
Audit Committee Chairman and
Regulatory & Oversight
Committee Member                          $0                    $0                $45,913(21)            $146,668(2(2))

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

Matthew P. Fink                           $8                    $0                $56,034(9)                $113,472
Governance Committee Member and
Regulatory & Oversight
Committee Member

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

Robert G. Galli                           $10                   $0             $574,819(9) (10)           $264,812 (11)
Regulatory & Oversight
Committee Chairman & Governance
Committee Member

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

Phillip A. Griffiths                   $10 (12)                 $0               $327,278(19)               $150,760
Governance Committee Chairman
and Regulatory & Oversight
Committee Member

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

Mary F. Miller
Audit Committee Member and
Governance Committee Member             $8 (13)                 $0                $66,814(19)               $106,792

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

Joel W. Motley                          $8 (14)                 $0                $97,539(19)               $150,760
Audit Committee Member and
Regulatory & Oversight
Committee Member

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

Kenneth A. Randall(15)                    $8                    $0                $67,138(16)               $134,080

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

Russell S. Reynolds, Jr.                  $8                    $0                $59,739(16)               $110,120
Audit Committee Member and
Governance Committee Member

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

Joseph M. Wikler
Audit Committee Member and
Regulatory & Oversight
Committee Member                        $8 (17)                 $0               $159,825(19)                $99,080

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

Peter I. Wold
Audit Committee Member and              $8 (18)                 $0               $108,941(19)                $99,080
Governance Committee Member

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


1.   "Aggregate Compensation From the Fund" includes fees and deferred
     compensation, if any.
2.   "Estimated Annual Benefits Upon Retirement' is based on a straight life
     payment election with the assumption that Trustee will retire at the age of
     75 and is eligible (after 7 years of service) to receive retirement plan
     benefits with respect to certain Board I Funds. Although the Trustees of the
     Fund and other Board I Funds are no longer accruing benefits, plan
     participants will receive previously accrued benefits as described below
     under "Retirement Plan for Trustees." Plan participants have each elected a
     distribution method with respect to their benefits under the Plan.

3.   Mr. Wruble became Chairman of the Board I Funds on January 1, 2007.

4.   Includes $10 deferred by Mr. Wruble under the "Compensation Deferral Plan"
     described below
5.   Includes $45,544 estimated benefits to be paid to  Mr. Wruble for serving
     as a director or trustee of 10 other Oppenheimer funds that are not
     Board I Funds.

6.   Includes $135,500 paid to Mr. Wruble for serving as a director or trustee
     of 10 other Oppenheimer funds (at December 31, 2006) that are not Board I
     Funds.
7.   Mr. Yeutter retired as Chairman of the Board of Trustees of the Board I
     Funds effective December 31, 2006.

8.   Mr. Yeutter elected to receive a single life annuity based on his benefits
     as of December 31, 2006
9.   Elected to receive a lump-sum payout in lieu of Retirement Plan benefits as
     of December 31, 2006.
10.  Includes $49,811 estimated benefits to be paid to Mr. Galli for serving as
     a director or trustee of 10

     other Oppenheimer funds that are not Board I Funds.
11.  Includes $135,500 paid to Mr. Galli for serving as a director or trustee of
     10 other Oppenheimer funds (at December 31, 2006) that are not Board I
     Funds.

12.  Includes $10 deferred by Mr. Griffiths under the "Compensation Deferral
     Plan" described below.
13.  Includes $4 deferred by Ms. Miller under the "Compensation Deferral Plan"
     described below
14.  Includes $1 deferred by Mr. Motley under the "Compensation Deferral Plan"
     described below. Mr. Randall retired from the Board I Funds effective
     June 30, 2007.
16.  Mr. Randall and Mr. Reynolds have elected to receive Joint Survival Annuity
     benefits payments based on the value of their Retirement Plan benefits as
     of December 31, 2006.
17.  Includes $4 deferred by Mr. Wikler under the "Compensation Deferral Plan"
     described below.
18.  Includes $8 deferred by Mr. Wold under the "Compensation Deferral Plan"
     described below
19.  Received a lump-sum roll-over to the Compensation Deferral Plan in lieu of
     Retirement Plan benefits as of December 31, 2006.
20.  Mr. Downes was appointed as Trustee to the Board I funds on August 1, 2007
21.  Estimated benefits to be paid to Mr. Downes for serving as a director or
     trustee of 10 other Oppenheimer Funds that are not Board I Funds.
22.  Compensation paid to Mr. Downes for serving as a director or trustee of 10
     other Oppenheimer Funds that are not Board I Funds.
23.  Since the Fund commenced operations on March 5, 2007, no retirement
     benefits were accrued as expenses due to the Board I Retirement Benefit
     Freeze, as of December 31, 2006.

         |X| Retirement Plan for Trustees. The Board I Funds adopted a
retirement plan that provides for payments to retired Independent Trustees.
Payments are up to 80% of the average compensation paid during a Trustee's five
years of service in which the highest compensation was received. A Trustee must
serve as director or trustee for any of the Board I Funds for at least seven
years to be eligible for retirement plan benefits and must serve for at least 15
years to be eligible for the maximum benefit. The Board has frozen the
retirement plan with respect to new accruals as of December 31, 2006 (the
"Freeze Date"). Each Trustee continuing to serve on the Board of any of the
Board I Funds after the Freeze Date (each such Trustee a "Continuing Board
Member") may elect to have his accrued benefit as of that date (i.e., an amount
equivalent to the actuarial present value of his benefit under the retirement
plan as of the Freeze Date) (i) paid at once or over time, (ii) rolled into the
Compensation Deferral Plan described below, or (iii) in the case of Continuing
Board Members having at least 7 years of service as of the Freeze Date paid in
the form of an annual benefit or joint and survivor annual benefit. The Board
determined to freeze the retirement plan after considering a recent trend among
corporate boards of directors to forego retirement plan payments in favor of
current compensation.

         |X| Compensation Deferral Plan. The Board of Trustees has adopted a
Compensation Deferral 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 certain Board I Funds. Under the plan, the compensation deferred by
a Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The
amount paid to the Trustee under the plan will be determined based upon the
amount of compensation deferred and the performance of the selected funds.


         Deferral of the Trustees' fees under the plan will not materially
affect a Fund's assets, liabilities or net income per share. The plan will not
obligate a fund to retain the services of any Trustee or to pay any particular
level of compensation to any Trustee. Pursuant to an Order issued by the SEC, a
fund may invest in the funds selected by the Trustee under the plan without
shareholder approval for the limited purpose of determining the value of the
Trustee's deferred compensation account.


Major Shareholders. As of August 31, 2007, the only persons or entities who
owned of record or were known by the Fund to own  beneficially 5% or more of any
class of the Fund's outstanding shares were:

OppenheimerFunds, Inc., Bldg 2, 6803 South Tuscan Way, Centennial, CO
80112-3924, which owned 670,000.000 Class A shares (100% of the Class A shares
then outstanding).


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


         The Code of Ethics is an exhibit to the Fund's registration statement
filed with the 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 1.202.551.8090. The Code of
Ethics can also be viewed as part of the Fund's registration statement on the
SEC's EDGAR database at the SEC's Internet website at www.sec.gov. Copies may be
obtained, after paying a duplicating fee, by electronic request at the following
E-mail address: publicinfo@sec.gov., or by writing to the SEC's Public Reference
Section, Washington, D.C. 20549-0102.


|X| Portfolio Proxy Voting. The Fund has adopted Portfolio Proxy Voting Policies
and Procedures, which include Proxy Voting Guidelines, under which the Fund
votes proxies relating to securities ("portfolio proxies") held by the Fund. The
Fund's primary consideration in voting portfolio proxies is the financial
interests of the Fund and its shareholders. The Fund has retained an
unaffiliated third-party as its agent to vote portfolio proxies in accordance
with the Fund's Proxy Voting Guidelines and to maintain records of such
portfolio proxy voting. The Portfolio Proxy Voting Policies and Procedures
include provisions to address conflicts of interest that may arise between the
Fund and the Manager or the Manager's affiliates or business relationships. Such
a conflict of interest may arise, for example, where the Manager or an affiliate
of the Manager manages or administers the assets of a pension plan or other
investment account of the portfolio company soliciting the proxy or seeks to
serve in that capacity. The Manager and its affiliates generally seek to avoid
such conflicts by maintaining separate investment decision making processes to
prevent the sharing of business objectives with respect to proposed or actual
actions regarding portfolio proxy voting decisions. Additionally, the Manager
employs the following two procedures: (1) if the proposal that gives rise to the
conflict is specifically addressed in the Proxy Voting Guidelines, the Manager
will vote the portfolio proxy in accordance with the Proxy Voting Guidelines,
provided that they do not provide discretion to the Manager on how to vote on
the matter; and (2) if such proposal is not specifically addressed in the Proxy
Voting Guidelines or the Proxy Voting Guidelines provide discretion to the
Manager on how to vote, the Manager will vote in accordance with the third-party
proxy voting agent's general recommended guidelines on the proposal provided
that the Manager has reasonably determined that there is no conflict of interest
on the part of the proxy voting agent. If neither of the previous two procedures
provides an appropriate voting recommendation, the Manager may retain an
independent fiduciary to advise the Manager on how to vote the proposal or may
abstain from voting. The Proxy Voting Guidelines' provisions with respect to
certain routine and non-routine proxy proposals are summarized below: o The Fund
generally votes with the recommendation of the issuer's management on routine
matters, including ratification of the independent registered public
accounting firm, unless circumstances indicate otherwise.
o             The Fund evaluates nominees for director nominated by management
              on a case-by-case basis, examining the following factors, among
              others: Composition of the board and key board committees,
              attendance at board meetings, corporate governance provisions and
              takeover activity, long-term company performance and the nominee's
              investment in the company.
o             In general, the Fund opposes anti-takeover proposals and supports
              the elimination, or the ability of shareholders to vote on the
              preservation or elimination, of anti-takeover proposals, absent
              unusual circumstances.
o             The Fund supports shareholder proposals to reduce a super-majority
              vote requirement, and opposes management proposals to add a
              super-majority vote requirement.
o The Fund opposes proposals to classify the board of directors. o The Fund
supports proposals to eliminate cumulative voting. o The Fund opposes re-pricing
of stock options without shareholder approval.
o             The Fund generally considers executive compensation questions such
              as stock option plans and bonus plans to be ordinary business
              activity. The Fund analyzes stock option plans, paying particular
              attention to their dilutive effect. While the Fund generally
              supports management proposals, the Fund opposes plans it considers
              to be excessive.

         The Fund is required to file Form N-PX, with its complete proxy voting
record for the 12 months ended June 30th, no later than August 31st of each
year. The Fund's Form N-PX filing is available (i) without charge, upon request,
by calling the Fund 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 Fund under an investment advisory agreement
between the Manager and the Fund. The Manager selects securities for the Fund's
portfolio and handles its day-to-day business. The portfolio manager of the Fund
is employed by the Manager and is the person who is principally responsible for
the day-to-day management of the Fund's portfolio. Other members of the
Manager's Equity and Fixed Income Portfolio Departments provide the portfolio
manager with counsel and support in managing the Fund's portfolio.


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


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


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

      Fiscal Year ended May 31:                            Management Fees Paid to OppenheimerFunds, Inc.

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

                 2007                                                          $48,300

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


         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 adviser 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
adviser or general distributor. If the Manager shall no longer act as investment
adviser to the Fund, the Manager may withdraw the right of the Fund to use the
name "Oppenheimer" as part of its name.

Portfolio Manager.  The Fund's portfolio is managed by Caleb Wong (referred
to as the "Portfolio Manager").  He is the person responsible for the day-to-day
management of the Fund's investments.


Other  Accounts  Managed.  In addition to  managing  the Fund's  investment
portfolio,  Mr. Wong also manages another investment  portfolio on behalf of the
Manager or its affiliates.  The following table provides  information  regarding
the other  portfolio  managed by the  Portfolio  Manager as of May 31, 2007.  No
portfolio or account has an advisory fee based on performance:


                                           Registered Investment    Other Pooled Investment
                                                 Companies                  Vehicles            Other Accounts**
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------


     Accounts Managed                                10                      1                   None


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


     Total Assets Managed*                        $22,620.3                  $59                  $0


     ---------------------------------------------------------------------------------------------------------------
      *   In millions.
      **  Does not include personal accounts of portfolio managers and their
          families, which are subject to the Code of Ethics.

As indicated above, the Portfolio Manager also manages other funds. Potentially,
at times, those responsibilities could conflict with the interests of the Fund.
That may occur whether the investment objectives and strategies of the other
fund are the same as, or different from, the Fund's investment objectives and
strategies. For example the Portfolio Manager may need to allocate investment
opportunities between the 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 the 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 Fund, the Manager could have an incentive to favor
the other fund. However, the Manager's compliance procedures and Code of Ethics
recognize the Manager's fiduciary obligation to treat all of its clients,
including the Fund, fairly and equitably, and are designed to preclude the
Portfolio Manager 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 various times, the Fund's Portfolio Manager may manage
other funds or accounts with investment objectives and strategies similar to
those of the Fund, or he may manage funds or accounts with different investment
objectives and strategies.

Compensation of the Portfolio Manager. The Fund's Portfolio Manager is
employed and compensated by the Manager, not the Fund. 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 or 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 shareholders. 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 SAI, the
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.

         To help the Manager attract and retain talent, 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 Lipper benchmark used with respect to the Fund is
the Global Flexible Portfolio Fund. Other factors considered include management
quality (such as style consistency, risk management, sector coverage, team
leadership and coaching) and organizational development. The Portfolio Manager`s
compensation is not based on the total value of the Fund's portfolio assets,
although the Fund's investment performance may increase those assets. The
compensation structure is also intended to be internally equitable and serve to
reduce potential conflicts of interest between the Fund and other funds managed
by the Portfolio Manager. The compensation structure of the other funds
currently managed by the Portfolio Manager is the same as the compensation
structure of the Fund, described above.


Ownership of Fund Shares. As of May 31, 2007, the Portfolio Manager did not
beneficially own any shares of the Fund.


Brokerage Policies of the Fund


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


         Under the investment advisory agreement, in choosing brokers to execute
portfolio transactions for the Fund, the Manager may select brokers (other than
affiliates) that provide both brokerage and research services to the Fund. 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
the Fund subject to the provisions of the 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.


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


         Other accounts advised by the Manager have investment policies similar
to those of the Fund. Those other accounts may purchase or sell the same
securities as the Fund at the same time as the Fund, which could affect the
supply and price of the securities. If two or more 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 procedures (and
the Fund's Board of Trustees has approved those procedures) that permit the Fund
to direct portfolio securities transactions to brokers or dealers that also
promote or sell shares of the Fund, subject to the "best execution"
considerations discussed above. Those procedures are designed to prevent: (1)
the Manager's personnel who effect the Fund's portfolio transactions from taking
into account a broker's or dealer's promotion or sales of the Fund shares when
allocating the Fund's portfolio transactions, and (2) the Fund, the Manager and
the Distributor from entering into agreements or understandings under which the
Manager directs or is expected to direct the Fund's 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 Fund's shares or the shares
of any of the other Oppenheimer funds.

         The investment advisory agreement permits the Manager to allocate
brokerage for research or brokerage services. The research or brokerage services
provided by a particular broker may be useful both to the 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.

         "Research" services are restricted to "advice," "analyses," and
"reports" that reflect the expression of reasoning or knowledge. "Brokerage
services" are those products and services that relate to the execution of the
trade from the point at which the Manager communicates with the broker-dealer
for the purpose of transmitting an order for execution, through the point at
which funds or securities are delivered or credited to the advised accounts. If
a research or brokerage service also assists the Manager in a
non-research/brokerage capacity (such as marketing, 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
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 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 the Fund's portfolio or are being considered for purchase. The Manager
provides information to the Board about the commissions paid to brokers
furnishing such services, together with the Manager's representation that the
amount of such commissions was reasonably related to the value or benefit of
such services.


         During the fiscal year ended May 31, 2007, the fund did not execute any
transactions through or pay any commissions to firms that provide research
services.


Service Plan

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


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


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

Fiscal Year         Aggregate Front-End      Class A Front-End
                                               Sales Charges
Ended May 31:         Sales Charges on          Retained by
                       Class A Shares          Distributor(1)

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

      2007                  None                    None

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

1. Includes amounts retained by a broker-dealer that is an affiliate or a parent
of the Distributor.


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

Fiscal Year         Concessions on Class
Ended May 31:       A Shares Advanced by
                       Distributor(1)

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

      2007                  None

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

1.   The Distributor advances concession payments to financial intermediaries
     for certain sales of Class A shares from its own resources at the time of
     sale.


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

Fiscal Year         Class A Contingent
                       Deferred Sales
Ended May 31:       Charges Retained by
                        Distributor

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

      2007                  None

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

Service Plan. The Fund has adopted a Service Plan for Class A shares under Rule
12b-1 of the Investment Company Act. Under the plan the Fund pays the
Distributor for all or a portion of its costs incurred in connection with the
distribution and/or servicing of the shares. The plan has been approved by a
vote of the Board of Trustees, including a majority of the Independent
Trustees(1), cast in person at a meeting called for the purpose of voting on
that plan.

         Under the Plan, 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 Fund, to compensate
brokers, dealers, financial institutions and other intermediaries for providing
distribution assistance and/or administrative services or that otherwise promote
sales of the Fund's shares. These payments, some of which may be referred to as
"revenue sharing," may relate to the Fund's 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 Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of
voting on continuing the plan. A plan may be terminated at any time by the vote
of a majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding shares
of that class.

         The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount of
payments to be made under a plan must be approved by shareholders of the class
affected by the amendment.

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

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

         Under the plan, 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 Fund to pay brokers, dealers and
other financial institutions (referred to as "recipients") for personal services
and account maintenance services they provide for their customers who hold Class
A shares. The services include, among others, answering customer inquiries about
the Fund, assisting in establishing and maintaining accounts in the Fund, making
the Fund's investment plans available and providing other services at the
request of the Fund or the Distributor. The Class A service plan permits
reimbursements to the Distributor at a rate of up to 0.25% of average annual net
assets of Class A shares. The Distributor makes payments to recipients
periodically at an annual rate not to exceed 0.25% of the average annual Class A
share net assets held in the accounts of the recipients or their customers.

         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 shares purchased prior to March 1,
2007 with respect to certain group retirement plans that were established prior
to March 1, 2001 ("grandfathered retirement plans"). Prior to March 1, 2007, the
Distributor paid the 0.25% service fee for grandfathered retirement plans in
advance for the first year and retained the first year's service fee paid by the
Fund with respect to those shares. After the shares were held for a year, the
Distributor paid the ongoing service fees to recipients on a periodic basis.
Such shares are subject to a contingent deferred sales charge if they are
redeemed within 18 months. If Class A shares purchased in a grandfathered
retirement plan prior to March 1, 2007 are redeemed within 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
those fees. For Class A shares purchased in grandfathered retirement plans on or
after March 1, 2007, the Distributor does not make any payment in advance and
does not retain the service fee for the first year. Such shares are not subject
to the contingent deferred sales charge.


         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.

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 SAI. 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 SAI. 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                   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 Class A shares,
                    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 FINRA.
                    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 SAI. 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, 2006, 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:

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

  1st Global Capital Co.                                  Advantage Capital Corporation / FSC

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

   Aegon                                                  Aetna Life Ins & Annuity Co.

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

   AG Edwards                                             AIG Financial Advisors

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

   AIG Life                                               Allianz Life Insurance Company

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

   Allstate Life                                          American Enterprise Life Insurance

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

   American General Annuity                               American Portfolios

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

   Ameriprise                                             Ameritas

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

   Annuity Investors Life                                 Associated Securities

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

   AXA Advisors                                           AXA Equitable Life Insurance

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

   Banc One Securities Corporation                        BNY Investment Center

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

   Cadaret Grant & Co, Inc.                               Chase Investment Services

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

   Citicorp Investment Services, Inc.                     Citigroup Global Markets Inc (SSB)

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

   CitiStreet                                             Citizen's Bank of Rhode Island

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

   Columbus Life                                          Commonwealth Financial Network

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

   CUNA Brokerage Services, Inc.                          CUSO Financial Services, L.P.

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

   Edward D Jones & Co.                                   Federal Kemper

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

   Financial Network (ING)                                GE Financial Assurance

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

   GE Life & Annuity                                      Genworth Financial

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

   GlenBrook Life and Annuity Co.                         Great West Life

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

   Hartford Life Insurance Co.                            HD Vest Investment Services

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

   Hewitt Associates                                      IFMG Securities, Inc.

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

   ING Financial Advisers                                 ING Financial Partners

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

   Jefferson Pilot Securities Co.                         Kemper Investors Life Insurance Co.

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

   Legend Equities Co.                                    Legg Mason Wood Walker

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

   Lincoln Benefit National Life                          Lincoln Financial

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

   Lincoln Investment Planning, Inc.                      Linsco Private Ledger Financial

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

   Mass Mutual                                            McDonald Investments, Inc.

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

   Merrill Lynch                                          Minnesota Life

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

   Mony Life                                              Morgan Stanley Dean Witter

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

   Multifinancial (ING)                                   Mutual Service Co.

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

   National Planning Co.                                  Nationwide

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

   NFP                                                    Park Avenue Securities LLC

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

   PFS Investments, Inc.                                  Phoenix Life Insurance Co.

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

   Plan Member Securities                                 Prime Capital Services, Inc.

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

   Primevest Financial Services, Inc.                     Protective Life Insurance Co.

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

   Provident Mutual Life & Annuity                        Prudential

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

   Raymond James & Associates, Inc.                       RBC Daine Rauscher

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

   Royal Alliance                                         Securities America, Inc.

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

   Security Benefit                                       Security First-Metlife

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

   Signator Investments                                   Sun Life Insurance Co.

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

   Sun Trust Securities, Inc.                             Thrivent Financial

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

   Travelers Life & Annuity Co.                           UBS Financial Services, Inc.

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

   Union Central                                          United Planners

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

   Wachovia                                               Walnut Street Securities (Met Life)

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

   Waterstone Financial Group                             Wells Fargo

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

                                                           A G Edwards

         For the year ended December 31, 2006, 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:


1st Global Capital Co.

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

ACS HR Solutions                                           ADP

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

  AETNA Life Ins & Annuity Co.                           Alliance Benefit Group

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

  American Enterprise Investments                        American Express Retirement Service

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

  American Funds (Fascorp)                               American United Life Insurance Co.

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

  Ameriprise                                             Ameritrade, Inc.

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

  AMG Administrative Management Group                    AST (American Stock & Transfer)

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

  AXA Advisors                                           Baden Retirement

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

  BCG - New                                              BCG (Programs for Benefit Plans)

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

  Bear Stearns Securities Co.                            Benefit Administration, Inc.(WA)

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

  Benefit Administration, Inc.(WIS)                      Benefit Plans Administration

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

  Benetech, Inc.                                         Bisys

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

  Boston Financial Data Services                         Ceridian

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

  Charles Schwab & Co, Inc.                              Citigroup Global Markets Inc (SSB)

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

  CitiStreet                                             City National Investments

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

  Clark Consulting                                       CPI

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

  DA Davidson & Co.                                      Daily Access. Com, Inc.

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

  Davenport & Co, LLC                                    David Lerner Associates

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

  Digital Retirement Solutions                           DR, Inc.

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

  Dyatech                                                E*Trade Clearing LLC

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

  Edgewood                                               Edward D Jones & Co.

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

  Equitable Life / AXA                                   ERISA Administrative Svcs, Inc

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

  ExpertPlan.com                                         FAS Co. (FASCore/RK Pro)

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

  FBD Consulting                                         Ferris Baker Watts, Inc.

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

  Fidelity                                               First Clearing LLC

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

  First Southwest Co.                                    First Trust - Datalynx

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

  First Trust Corp                                       Franklin Templeton

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

  Geller Group                                           Great West Life

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

  H&R Block Financial Advisors, Inc.                     Hartford Life Insurance Co.

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

  HD Vest Investment Services                            Hewitt Associates

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

  HSBC Brokerage USA, Inc.                               ICMA - RC Services

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

  Independent Plan Coordinators                          Ingham Group

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

  Interactive Retirement Systems                         Invesmart

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

  Janney Montgomery Scott, Inc.                          JJB Hillard W L Lyons, Inc.

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

  John Hancock                                           JP Morgan

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

  July Business Services                                 Kaufman & Goble

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

  Legend Equities Co.                                    Legg Mason Wood Walker

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

  Lehman Brothers, Inc.                                  Liberty-Columbia 529 Program

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

  Lincoln Investment Planning, Inc.                      Lincoln National Life Insurance Co.

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

  Linsco Private Ledger Financial                        MassMutual

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

  Matrix Settlement & Clearance Services                 McDonald Investments, Inc.

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

  Mercer HR Services                                     Merrill Lynch

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

  Mesirow Financial, Inc.                                MetLife

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

  MFS Investment Management                              Mid Atlantic Capital Co.

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

  Milliman USA                                           Morgan Keegan & Co, Inc.

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

  Morgan Stanley Dean Witter                             Nathan & Lewis Securities, Inc.

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

  National City Bank                                     National Deferred Comp

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

  National Financial                                     National Investor Services Co.

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

  Nationwide                                             Newport Retirement Services

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

  Northwest Plan Services                                NY Life Benefits

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

  Oppenheimer & Co, Inc.                                 Peoples Securities, Inc.

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

  Pershing                                               PFPC

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

  Piper Jaffray & Co.                                    Plan Administrators

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

  Plan Member Securities                                 Primevest Financial Services, Inc.

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

  Principal Life Insurance                               Prudential

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

  PSMI Group                                             Quads Trust Company

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

  Raymond James & Associates, Inc.                       Reliastar

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

  Robert W Baird & Co.                                   RSM McGladrey

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

  Scott & Stringfellow, Inc.                             Scottrade, Inc.
  Southwest Securities, Inc.                             Standard Insurance Co
  Stanley, Hunt, Dupree & Rhine                          Stanton Group, Inc.
  Sterne Agee & Leach, Inc.                              Stifel Nicolaus & Co, Inc.
  Sun Trust Securities, Inc.                             Symetra
  T Rowe Price                                           The 401k Company
  The Princeton Retirement Group Inc.                    The Retirement Plan Company, LLC
  TruSource                                              TruSource Union Bank of CA
  UBS Financial Services, Inc.                           Unified Fund Services (UFS)
  US Clearing Co.                                        USAA Investment Management Co.
  USI Consulting Group                                   Valic
  Vanguard Group                                         Wachovia
  Web401K.com                                            Wedbush Morgan Securities
  Wells Fargo                                            Wilmington Trust



Performance of the Fund

Explanation of Performance Terminology. The Fund uses a variety of terms to
illustrate its investment performance. Those terms include "cumulative total
return," "average annual total return," "average annual total return at net
asset value" and "total return at net asset value." An explanation of how total
returns are calculated is set forth below. The charts below show the Fund's
performance as of the Fund's most recent fiscal year end. You can obtain current
performance information by calling the Fund's Transfer Agent at 1.800.225.5677
or by visiting the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.

         The Fund's illustrations of its 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 it is to be calculated. In general, any advertisement
by the Fund of its performance data must include the average annual total
returns for the advertised class of shares of the Fund.

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

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

         In calculating total returns for Class A shares, the current maximum
sales charge of 5.75% (as a percentage of the offering price) is deducted from
the initial investment ("P" in the formula below) (unless the return is shown
without sales charge, as described below).


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


ERV l/n    - 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 Fund during the specified
period. It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVD" in the formula) of
that investment, after taking into account the effect of taxes on Fund
distributions, but not on the redemption of Fund shares, according to the
following formula:

ATVD l/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 Fund during
the specified period and the effect of capital gains taxes or capital loss tax
benefits (each calculated using the highest federal individual capital gains tax
rate in effect on the redemption date) resulting from the redemption of the
shares at the end of the period. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n" in the formula) to achieve an ending value
("ATVDR" in the formula) of that investment, after taking into account the
effect of taxes on Fund distributions and on the redemption of Fund shares,
according to the following formula:

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

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 Fund may also quote a
cumulative or an average annual total return "at net asset value" (without
deducting sales charges) for Class A 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 the shares (without considering front-end or
contingent deferred sales charges) and takes into consideration the reinvestment
of dividends and capital gains distributions.

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

                            The Fund's Total Returns for the Period Ended May 31, 2007

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

Class of           Cumulative Total Returns                         Average Annual Total Returns
                (10 Years or life-of-class, if
Shares                       less)

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

                                                              1-Year                           5-Years
                                                                                      (or life of class if less)

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

                 After Sales     Without Sales     After Sales     Without Sales     After Sales     Without Sales
                    Charge          Charge           Charge           Charge           Charge           Charge

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

Class A*            -4.27%           1.57%            0.00%            0.00%             N/A              N/A

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

* Inception of Class A:    03/05/07


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

                Total Returns for Class A Shares (After Sales Charge)
                      For the Fiscal Period Ended May 31, 2007

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

                                                 1-Year               5-Years

                     (or life of class (or life of class if
                                 if less) less)

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

After Taxes on Distributions                     -4.27%                 N/A

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

After Taxes on Distributions and                 -2.78%                 N/A
Redemption of Fund Shares

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

               * Inception of Class A:      03/05/07


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

         |X| Lipper Rankings. From time to time the Fund may publish the ranking
of the performance of its 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 Fund, 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 funds 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 Fund may publish the star
rating of the  performance  of its shares by  Morningstar,  Inc., an independent
mutual  fund  monitoring  service.  Morningstar  rates  mutual  funds  in  their
specialized market sector. The Fund is rated among large value funds.

         Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. For each fund with at least a three-year history,
Morningstar calculates a Morningstar Rating(TM) based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in a fund's monthly
performance (including the effects of sales charges, loads, and redemption
fees), placing more emphasis on downward variations and rewarding consistent
performance. The top 10% of funds in each category receive 5 stars, the next
22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2
stars, and the bottom 10% receive 1 star. 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 Fund may include in its advertisements and
sales literature performance information about the Fund cited in newspapers and
other periodicals such as The New York Times, The Wall Street Journal, Barron's,
or similar publications. That information may include performance quotations
from other sources, including Lipper and Morningstar. The performance of the
Fund's shares may be compared in publications to the performance of various
market indices or other investments, and averages, performance rankings or other
benchmarks prepared by recognized mutual fund statistical services.

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

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

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

ABOUT YOUR ACCOUNT

How to Buy Shares

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


When you purchase shares of the Fund, your ownership interest in the shares of
the Fund will be recorded as a book entry on the records of the Fund. The Fund
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. Shares will
be purchased on the regular business day the Distributor is instructed to
initiate the Automated Clearing House ("ACH") transfer to buy the shares.
Dividends will begin to accrue on shares purchased with the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for the purchase
through the ACH system before the close of the New York Stock Exchange (the
"NYSE"). The NYSE 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
NYSE, the shares will be purchased and dividends will begin to accrue on the
next regular business day. The proceeds of ACH transfers are normally received
by the Fund three days after the transfers are initiated. If the proceeds of the
ACH transfer are not received on a timely basis, the Distributor reserves the
right to cancel the purchase order. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays in ACH
transmissions.

Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge
rate may be obtained for Class A shares under Right of Accumulation and Letters
of Intent because of the economies of sales efforts and reduction in expenses
realized by the Distributor, dealers and brokers making such sales. No sales
charge is imposed in certain other circumstances described in Appendix B to this
SAI 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 MidCap Fund
Oppenheimer AMT-Free New York Municipals                      Oppenheimer New Jersey Municipal Fund
Oppenheimer Balanced Fund                                     Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Baring China Fund                                 Oppenheimer Portfolio Series:
Oppenheimer Baring Japan Fund                                     Active Allocation Fund
Oppenheimer Baring SMA International Fund                         Equity Investor Fund
Oppenheimer Core Bond Fund                                        Conservative Investor Fund
Oppenheimer California Municipal Fund                             Moderate Investor Fund
Oppenheimer Capital Appreciation Fund                         Oppenheimer Principal Protected Main Street Fund
Oppenheimer Capital Income Fund                               Oppenheimer Principal Protected Main Street Fund II
Oppenheimer Champion Income Fund                              Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Commodity Strategy Total Return Fund              Oppenheimer Quest Balanced Fund
Oppenheimer Convertible Securities Fund                       Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Developing Markets Fund                           Oppenheimer Quest Opportunity Value Fund
Oppenheimer Discovery Fund                                    Oppenheimer Real Estate Fund
Oppenheimer Dividend Growth Fund                              Oppenheimer Rising Dividends Fund, Inc.
Oppenheimer Emerging Growth Fund                              Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Emerging Technologies Fund                        Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Enterprise Fund                                   Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Equity Fund, Inc.                                 Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Equity Income Fund, Inc.                          Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Global Fund                                       Oppenheimer Rochester National Municipals
Oppenheimer Global Opportunities Fund                         Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Growth Fund                                       Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer International Bond Fund                           Oppenheimer Select Value Fund
Oppenheimer International Diversified Fund                    Oppenheimer Senior Floating Rate Fund
Oppenheimer International Growth Fund                         Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer International Small Company Fund                  Oppenheimer SMA Core Bond Fund
Oppenheimer International Value Fund                          Oppenheimer SMA International Bond Fund
Oppenheimer Limited Term California Municipal Fund            Oppenheimer Strategic Income Fund
Oppenheimer Limited-Term Government Fund                      Oppenheimer U.S. Government Trust
Oppenheimer Limited Term Municipal Fund                       Oppenheimer Value Fund
Oppenheimer Main Street Fund                                  Limited-Term New York Municipal Fund
Oppenheimer Main Street Opportunity Fund                      Rochester Fund Municipals
Oppenheimer Main Street Small Cap Fund

LifeCycle Funds
   Oppenheimer Transition 2010 Fund
   Oppenheimer Transition 2015 Fund
   Oppenheimer Transition 2020 Fund
   Oppenheimer Transition 2030 Fund

And the following money market funds:
Oppenheimer Cash Reserves                                     Centennial Government Trust
Oppenheimer Institutional Money Market Fund                   Centennial Money Market Trust
Oppenheimer Money Market Fund, Inc.                           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 SAI, 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 shares of the Fund or Class A, Class B or Class C of 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. Purchases made up to 90 days
before the date that you submit a Letter will be included in that determination.
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 shares of the fund
and Class A, Class B and Class C shares of other Oppenheimer funds during a
13-month period (the "Letter period"). 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 paying a front-end or contingent deferred 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 SAI
and the application used for a Letter. If those terms are amended, as they may
be from time to time by the Fund, the investor agrees to be bound by the amended
terms and that those amendments will apply automatically to existing Letters.

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

         2. If the total minimum investment specified under the Letter is
completed within the 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 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 explained in the Prospectus, you must initially
establish your account with $500. Subsequently, you can establish an Asset
Builder Plan to automatically purchase additional shares directly from a bank
account for as little as $50. For those accounts established prior to November
1, 2002 and which have previously established Asset Builder Plans, additional
purchases will remain at $25. Shares purchased by Asset Builder Plan payments
from bank accounts are subject to the redemption restrictions for recent
purchases described in the Prospectus. Asset Builder Plans are available only if
your bank is an ACH member. Asset Builder Plans may not be used to buy shares
for OppenheimerFunds employer-sponsored qualified retirement accounts.

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


         Before you establish Asset Builder payments, you should obtain a
prospectus of the selected fund(s) from your financial advisor (or the
Distributor) and request an application from the Distributor. Complete the
application and return it. You may change the amount of your Asset Builder
payment or you can terminate these automatic investments at any time by writing
to the Transfer Agent. The Transfer Agent requires a reasonable period
(approximately 10 days) after receipt of your instructions to implement them.
The Fund reserves the right to amend, suspend or discontinue offering Asset
Builder plans at any time without prior notice.

         Retirement Plans. Certain types of retirement plans are entitled to
purchase shares of the Fund without sales charges or at reduced sales charge
rates, as described in Appendix B to this SAI. Certain special sales charge
arrangements described in that Appendix apply to retirement plans whose records
are maintained on a daily valuation basis by Merrill Lynch Pierce Fenner &
Smith, Inc. ("Merrill Lynch") or an independent record keeper that has a
contract or special arrangement with Merrill Lynch. If, on the date the plan
sponsor signed the Merrill Lynch record keeping service agreement, the plan had
less than $1 million in assets invested in applicable investments (other than
assets invested in money market funds), then 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 had $1
million or more in assets but less than $5 million in assets invested in
applicable investments (other than assets invested in money market funds), then
the retirement plan may purchase only Class N shares of the Oppenheimer funds.
If, on the date the plan sponsor signed the Merrill Lynch record keeping service
agreement, the plan had $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
accounts in a retirement plan. While such compensation may act to reduce the
record keeping fees charged by the retirement plan's record keeper, that
compensation arrangement may be terminated at any time, potentially affecting
the record keeping fees charged by the retirement plan's record keeper.


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


         Class A Shares Subject to a Contingent Deferred Sales Charge. Under a
special arrangement with the Distributor, 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 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, 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 Class A share purchases by a retirement plan that are made
with the redemption proceeds of Class N shares of an Oppenheimer fund held by
the plan for more than 18 months.


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


         For calculating the net asset value, dividends and distributions, the
Fund's 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 cost distribution and service plan (12b-1) fees,
transfer and shareholder servicing agent fees and expenses, and shareholder
meeting expenses.


Fund Account Fees. As stated in the Prospectus, a $12 annual "Minimum Balance
Fee" is assessed on each Fund account with a share balance valued under $500.
The Minimum Balance Fee is automatically deducted from each such Fund account in
September.


         Listed below are certain cases in which the Fund has elected, in its
discretion, not to assess the Fund Account Fees. These exceptions are subject to
change:
o                 A fund account whose shares were acquired after September 30th
                  of the prior year;
o                 Accounts of shareholders who elect to access their account
                  documents electronically via eDoc Direct;
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, Record(k)eeper 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.

o                 Accounts held in the Portfolio Builder Program which is
                  offered through certain broker/dealers to qualifying
                  shareholders.


         To access account documents electronically via eDocs Direct, please
visit the Service Center on our website at www.oppenheimerfunds.com and click
the hyperlink "Sign Up for Electronic Document Delivery" under the heading "I
Want To," or call 1.888.470.0862 for instructions.

         The 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
the shares of the Fund are 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
the Fund's net assets by the number of shares of the Fund that are outstanding.
The NYSE normally closes at 4:00 p.m., Eastern time, but may close earlier on
some other days (for example, in case of weather emergencies or on days falling
before a U.S. holiday). All references to time in this SAI mean "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 Fund's net asset
values will not be calculated on those days, the Fund's net asset values per
share may be significantly affected on such days when shareholders may not
purchase or redeem shares. Additionally, trading on many foreign stock exchanges
and 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
Fund's calculation of its net asset values that day unless the Manager
determines that the event is likely to effect a material change in the value of
the security. The Manager, or an internal valuation committee established by the
Manager, as applicable, may establish a valuation, under procedures established
by the Board and subject to the approval, ratification and confirmation by the
Board at its next ensuing meeting.


         |X| Securities Valuation. The Fund's Board of Trustees has established
procedures for the valuation of the Fund's securities. In general those
procedures are as follows: o Equity securities traded on a U.S. securities
exchange 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, 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 the Fund's Board of Trustees or obtained
by the Manager from two active market makers in the security on the basis of
reasonable inquiry.
o The following securities are valued at the mean between the "bid" and "asked"
prices determined by a pricing service approved by the Fund's Board of Trustees
or obtained by the Manager from two active market makers in the security on the
basis of reasonable inquiry:
(1)      debt instruments that have a maturity of more than 397 days when issued,
(2)      debt instruments that had a maturity of 397 days or less when issued
         and have a remaining maturity of more than 60 days, and
(3)      non-money market debt instruments that had a maturity of 397 days or
         less when issued and which have a remaining maturity of 60 days or less.
o The following securities are valued at cost, adjusted for amortization of
premiums and accretion of discounts: (1) money market debt securities held by a
non-money market fund that had a maturity of less than 397 days when issued that
have a remaining maturity of 60 days or less, and
(2) debt instruments held by a money market fund that have a remaining maturity
of 397 days or less. o Securities (including restricted securities) not having
readily-available market quotations are valued at fair value determined under
the Board's procedures. If the Manager is unable to locate two market makers
willing to give quotes, a security may be priced at the mean between the "bid"
and "asked" prices provided by a single active market maker (which in certain
cases may be the "bid" price if no "asked" price is available).

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

         The closing prices in the 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, 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 on the valuation date. If not, the value shall be the closing bid price
on the principal exchange on the valuation date. If the put, call or future is
not traded on an exchange, it shall be valued by the mean between "bid" and
"asked" prices obtained by the Manager from two active market makers. In certain
cases that may be at the "bid" price if no "asked" price is available.

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


How to Sell Shares

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

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

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

         The reinvestment may be made without sales charge only in Class A
shares of the Fund or any of the other Oppenheimer funds into which shares of
the Fund are exchangeable as described in "How to Exchange Shares" below.
Reinvestment will be at the net asset value next computed after the Transfer
Agent receives the reinvestment order. The shareholder must ask the Transfer
Agent for that privilege at the time of reinvestment. The Fund may amend,
suspend or cease offering this reinvestment privilege at any time as to shares
redeemed after the date of such amendment, suspension or cessation.

         Any capital gain that was realized when the shares were redeemed is
taxable, and reinvestment will not alter any capital gains tax payable on that
gain. If there has been a capital loss on the redemption, some or all of the
loss may not be tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption proceeds of
Fund shares on which a sales charge was paid are reinvested in shares of the
Fund or another of the Oppenheimer funds within 90 days of payment of the sales
charge, the shareholder's basis in the shares of the Fund that were redeemed may
not include the amount of the sales charge paid. That would reduce the loss or
increase the gain recognized from the redemption. However, in that case the
sales charge would be added to the basis of the shares acquired by the
reinvestment of the redemption proceeds.

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

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

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

Transfers of Shares. A transfer of shares to a different registration is not an
event that triggers the payment of sales charges. Therefore, shares are not
subject to the payment of a contingent deferred sales charge 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.

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 SAI. The request must:
(1) state the reason for the distribution;
(2) state the owner's awareness of tax penalties if the distribution is
premature; and
(3) conform to the requirements of the plan and the Fund's other redemption
requirements.

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

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

Special Arrangements for Repurchase of Shares from Dealers and Brokers. The
Distributor is the Fund's agent to repurchase its shares from authorized dealers
or brokers on behalf of their customers. Shareholders should contact their
broker or dealer to arrange this type of redemption. The repurchase price per
share will be the net asset value next computed after the Distributor receives
an order placed by the dealer or broker. However, if the Distributor receives a
repurchase order from a dealer or broker after the close of the NYSE 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 NYSE closes. Normally, the NYSE closes at 4:00 p.m., but may do so earlier
on some days.

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

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

         The Fund cannot guarantee receipt of a payment on the date requested.
The Fund reserves the right to amend, suspend or discontinue offering these
plans at any time without prior notice. Because of the sales charge assessed on
Class A share purchases, shareholders should not make regular additional Class A
share purchases while participating in an Automatic Withdrawal Plan.

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

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

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

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

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

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

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

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


How to Exchange Shares

As stated in the Prospectus, shares of a particular class of Oppenheimer funds
having more than one class of shares may be exchanged only for shares of the
same class of other Oppenheimer funds. Shares of Oppenheimer funds that have a
single class without a class designation are deemed "Class A" shares for this
purpose. You can obtain a current list showing which funds offer which classes
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 Pennsylvania Municipal Fund
     Oppenheimer AMT-Free Municipals                             Oppenheimer Principal Protected Main Street Fund
     Oppenheimer AMT-Free New York Municipals                    Oppenheimer Principal Protected Main Street Fund II
     Oppenheimer Balanced Fund                                   Oppenheimer Principal Protected Main Street Fund III
     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 Equity Income Fund, Inc.                         Oppenheimer Rochester Minnesota Municipal Fund
     Oppenheimer Gold & Special Minerals Fund                     Oppenheimer Rochester National Municipals
     Oppenheimer Institutional Money Market Fund                  Oppenheimer Rochester North Carolina Municipal Fund
     Oppenheimer Limited Term California Municipal Fund           Oppenheimer Rochester Ohio Municipal Fund
     Oppenheimer Limited Term Municipal Fund                      Oppenheimer Rochester Virginia Municipal Fund
     Oppenheimer New Jersey Municipal Fund


o        Oppenheimer Money Market Fund, Inc. only offers Class A and Class Y shares.
o        Oppenheimer Institutional Money Market Fund only offers Class E, Class L, and Class P 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 certain money market funds offered by the Distributor.
         Shares of any money market fund purchased without a sales charge may be
         exchanged for shares of Oppenheimer funds offered with a sales charge
         upon payment of the sales charge.
o        Shares of the Fund acquired by reinvestment of dividends or
         distributions from any of the other Oppenheimer funds or from any unit
         investment trust for which reinvestment arrangements have been made
         with the Distributor may be exchanged at net asset value for shares of
         the same class of any of the other Oppenheimer funds into which you may
         exchange shares.
o        Shares of Oppenheimer Principal Protected Main Street Fund may be
         exchanged at net asset value for shares of the same class of any of the
         other Oppenheimer funds into which you may exchange shares. 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 the same class of any of the
         other Oppenheimer funds into which you may exchange shares. 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 the same class of any of the
         other Oppenheimer funds into which you may exchange shares. 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 (12/16/2011).
o        Class A, Class B, Class C and Class N shares of Oppenheimer Developing
         Markets Fund may be acquired by exchange only with a minimum initial
         investment of $50,000. An existing shareholder of that fund may make
         additional exchanges into that fund with as little as $50.
o        Shares of Oppenheimer International Small Company Fund may be acquired
         only by existing shareholders of that fund. Existing shareholders may
         make exchanges into the fund with as little as $50.
o        In most cases, shares of Oppenheimer Small- & Mid-Cap Value Fund may be
         acquired only by shareholders who currently own shares of that Fund.

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

         |X| How Exchanges Affect Contingent Deferred Sales Charges. No
contingent deferred sales charge is imposed on exchanges of shares of any class
purchased subject to a contingent deferred sales charge, with the following
exceptions:

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

o When Class A shares of Oppenheimer Rochester National Municipals and Rochester
Fund Municipals acquired by exchange of Class A shares of any Oppenheimer fund
purchased subject to a Class A contingent deferred sales charge are redeemed
within 24 months of the beginning of the calendar month of the initial purchase
of the exchanged Class A shares, the Class A contingent deferred sales charge is
imposed on the redeemed shares.

o If any Class A shares of another Oppenheimer fund that are exchanged for Class
A shares of Oppenheimer Senior Floating Rate Fund are subject to the Class A
contingent deferred sales charge of the other Oppenheimer fund at the time of
exchange, the holding period for that Class A contingent deferred sales charge
will carry over to the Class A shares of Oppenheimer Senior Floating Rate Fund
acquired in the exchange. The Class A shares of Oppenheimer Senior Floating Rate
Fund acquired in that exchange will be subject to the Class A Early Withdrawal
Charge of Oppenheimer Senior Floating Rate Fund if they are repurchased before
the expiration of the holding period.

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

o 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 California
Municipal Fund, Oppenheimer Limited-Term Government Fund, Oppenheimer Limited
Term Municipal Fund, Limited Term New York Municipal Fund 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 Fund, 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 fund or
with respect to an individual retirement plan or 403(b) plan, Class N shares are
redeemed within 18 months of the plan's first purchase of Class N shares of any
Oppenheimer fund.

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

         Shareholders owning shares of more than one class must specify which
class of shares they wish to exchange.

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

         Processing Exchange Requests. Shares to be exchanged are redeemed on
the regular business day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date"). Normally, shares of the fund to be acquired
are purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The Fund
reserves the right, in its discretion, to refuse any exchange request that may
disadvantage it. For example, if the receipt of multiple exchange requests might
require the disposition of portfolio securities at a time or at a price that
might be disadvantageous to the Fund, the Fund may refuse the request.

         When you exchange some or all of your shares from one fund to another,
any special account features that are available in the new fund (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.

         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
SAI, or would include shares covered by a share certificate that is not tendered
with the request. In those cases, only the shares available for exchange without
restriction will be exchanged.

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


Dividends, Capital Gains and Taxes


Dividends and Distributions. The Fund has no fixed dividend rate and there can
be no assurance as to the payment of any dividends or the realization of any
capital gains. The dividends and distributions paid by the class of shares will
vary from time to time depending on market conditions, the composition of the
Fund's portfolio, and expenses borne by the Fund or borne separately by the
class. Dividends are calculated in the same manner, at the same time, and on the
same day for the class of shares.


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

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

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

         Qualification as a Regulated Investment Company. The Fund has elected
to be taxed as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a regulated investment company, the Fund is
not subject to federal income tax on the portion of its net investment income
(that is, taxable interest, dividends, and other taxable ordinary income, net of
expenses) and capital gain net income (that is, the excess of net long-term
capital gains over net short-term capital losses) that it distributes to
shareholders. That qualification enables the Fund to "pass through" its income
and realized capital gains to shareholders without having to pay tax on them.
This avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive from the
Fund (unless their Fund shares are held in a retirement account or the
shareholder is otherwise exempt from tax).

         The Internal Revenue Code contains a number of complex tests relating
to qualification that the Fund might not meet in a particular year. If it did
not qualify as a regulated investment company, the Fund would be treated for tax
purposes as an ordinary corporation and would receive no tax deduction for
payments made to shareholders.

         To qualify as a regulated investment company, the Fund must distribute
at least 90% of its investment company taxable income (in brief, net investment
income and the excess of net short-term capital gain over net long-term capital
loss) for the taxable year. The Fund must also satisfy certain other
requirements of the Internal Revenue Code, some of which are described below.
Distributions by the Fund made during the taxable year or, under specified
circumstances, within 12 months after the close of the taxable year, will be
considered distributions of income and gains for the taxable year and will
therefore count toward satisfaction of the above-mentioned requirement.

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

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

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

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

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

         The Fund may either retain or distribute to shareholders its net
capital gain for each taxable year. The Fund currently intends to distribute any
such amounts. If net long term capital gains are distributed and designated as a
capital gain distribution, it will be taxable to shareholders as a long-term
capital gain and will be properly identified in reports sent to shareholders in
January of each year. Such treatment will apply no matter how long the
shareholder has held his or her shares or whether that gain was recognized by
the Fund before the shareholder acquired his or her shares.

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

         Investment income that may be received by the Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
entitle the Fund to a reduced rate of, or exemption from, taxes on such income.
The Fund may be subject to U.S. Federal income tax, and an interest charge, on
certain distributions or gains from the sale of shares of a foreign company
considered to be a PFIC, even if those amounts are paid out as dividends to
shareholders. To avoid imposition of the interest charge, the Fund may elect to
"mark to market" all PFIC shares that it holds at the end of each taxable year.
In that case, any increase or decrease in the value of those shares would be
recognized as ordinary income or as ordinary loss (but only to the extent of
previously recognized "mark-to-market" gains).

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

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

         The Fund will be required in certain cases to withhold 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 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.

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

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

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

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

         If the ordinary income dividends from the Fund are effectively
connected with the conduct of a U.S. trade or business, then the foreign person
may claim an exemption from the U.S. tax described above provided the Fund
obtains a properly completed and signed Certificate of Foreign Status. If the
foreign person fails to provide a certification of his/her foreign status, the
Fund will be required to withhold U.S. tax at a rate of 28% on ordinary income
dividends, capital gains distributions and the proceeds of the redemption of
shares, paid to any foreign person. Any tax withheld 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.


         The tax consequences to foreign persons entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisors or the U.S.
Internal Revenue Service with respect to the particular tax consequences to them
of an investment in the Fund, including the applicability of the U.S.
withholding taxes described above.


Additional Information About the Fund

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

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

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


Independent Registered Public Accounting Firm. KPMG LLP serves as the
independent registered public accounting firm for the Fund. KPMG LLP audits the
Fund's financial statements and performs other related audit services. KPMG LLP
also acts as the independent registered public accounting firm for the Manager
and certain other funds advised by the Manager and its affiliates. Audit and
non-audit services provided by KPMG LLP to the Fund must be pre-approved by the
Audit Committee.





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER ABSOLUTE RETURN FUND:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Absolute Return Fund, including the statement of investments, as of
May 31, 2007, and the related statement of operations, the statement of changes
in net assets and the financial highlights for the period March 5, 2007
(commencement of operations) to May 31, 2007. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.

      We conducted our audit in accordance with 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 and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of May 31, 2007, by correspondence with the
custodian and brokers or by other appropriate auditing procedures where replies
from brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Absolute Return Fund as of May 31, 2007, the results of its
operations, the changes in its net assets and the financial highlights for the
period March 5, 2007 (commencement of operations) to May 31, 2007, in conformity
with U.S. generally accepted accounting principles.


/s/ KPMG LLP
KPMG LLP

Denver, Colorado
July 16, 2007


                      35 | OPPENHEIMER ABSOLUTE RETURN FUND




STATEMENT OF INVESTMENTS  May 31, 2007
--------------------------------------------------------------------------------

                                                                          VALUE
                                                            SHARES   SEE NOTE 1
--------------------------------------------------------------------------------
COMMON STOCKS--54.6%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--5.0%
--------------------------------------------------------------------------------
AUTO COMPONENTS--0.4%
Cie Generale des Etablissements Michelin, B Shares             612   $   80,174
--------------------------------------------------------------------------------
AUTOMOBILES--0.7%
Volkswagen AG                                                  510       77,160
--------------------------------------------------------------------------------
Volkswagen AG, Preference                                      762       74,509
                                                                     -----------
                                                                        151,669

--------------------------------------------------------------------------------
DISTRIBUTORS--0.4%
Pacific Brands Ltd.                                         28,500       81,654
--------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--0.8%
Compass Group plc                                           10,700       79,876
--------------------------------------------------------------------------------
Punch Taverns plc                                            3,000       79,838
                                                                     -----------
                                                                        159,714

--------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.4%
Haseko Corp. 1                                              23,500       73,355
--------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.4%
Mattel, Inc.                                                 2,683       75,151
--------------------------------------------------------------------------------
MEDIA--0.7%
PagesJaunes Groupe SA                                        3,331       71,264
--------------------------------------------------------------------------------
Vivendi SA                                                   1,877       81,779
                                                                     -----------
                                                                        153,043

--------------------------------------------------------------------------------
MULTILINE RETAIL--0.8%
Big Lots, Inc. 1                                             2,406       75,789
--------------------------------------------------------------------------------
Mitsukoshi Ltd.                                             16,000       80,348
                                                                     -----------
                                                                        156,137

--------------------------------------------------------------------------------
SPECIALTY RETAIL--0.4%
RadioShack Corp.                                             2,640       90,130
--------------------------------------------------------------------------------
CONSUMER STAPLES--1.6%
--------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.2%
Aeon Co. Ltd.                                                4,700       88,206
--------------------------------------------------------------------------------
J Sainsbury plc                                              6,800       75,134
--------------------------------------------------------------------------------
SUPERVALU, Inc.                                              1,670       79,559
                                                                     -----------
                                                                        242,899

--------------------------------------------------------------------------------
TOBACCO--0.4%
Altria Group, Inc.                                           1,120       79,632


                      12 | OPPENHEIMER ABSOLUTE RETURN FUND



                                                                          VALUE
                                                            SHARES   SEE NOTE 1
--------------------------------------------------------------------------------
ENERGY--4.0%
--------------------------------------------------------------------------------
OIL & GAS--4.0%
Anadarko Petroleum Corp.                                     1,698   $   84,306
--------------------------------------------------------------------------------
Chesapeake Energy Corp.                                      2,179       75,960
--------------------------------------------------------------------------------
Chevron Corp.                                                  983       80,105
--------------------------------------------------------------------------------
ConocoPhillips                                               1,114       86,257
--------------------------------------------------------------------------------
Hess Corp.                                                   1,356       80,302
--------------------------------------------------------------------------------
Marathon Oil Corp.                                             756       93,600
--------------------------------------------------------------------------------
Occidental Petroleum Corp.                                   1,510       83,005
--------------------------------------------------------------------------------
Sunoco, Inc.                                                 1,001       79,790
--------------------------------------------------------------------------------
Valero Energy Corp.                                          1,062       79,246
--------------------------------------------------------------------------------
XTO Energy, Inc.                                             1,390       80,634
                                                                     -----------
                                                                        823,205

--------------------------------------------------------------------------------
FINANCIALS--22.3%
--------------------------------------------------------------------------------
CAPITAL MARKETS--2.0%
CI Financial Income Fund                                     3,000       82,713
--------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The)                                352       81,249
--------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.                                      850       78,821
--------------------------------------------------------------------------------
Morgan Stanley                                                 922       78,407
--------------------------------------------------------------------------------
SBI Holdings, Inc.                                             243       77,972
                                                                     -----------
                                                                        399,162

--------------------------------------------------------------------------------
COMMERCIAL BANKS--3.5%
Bank of Montreal                                             1,200       79,835
--------------------------------------------------------------------------------
BNP Paribas SA                                                 670       81,299
--------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce                             900       86,390
--------------------------------------------------------------------------------
Credit Agricole SA                                           1,840       75,958
--------------------------------------------------------------------------------
National City Corp.                                          2,162       74,784
--------------------------------------------------------------------------------
PNC Financial Services Group, Inc.                           1,044       77,047
--------------------------------------------------------------------------------
Resona Holdings, Inc.                                           34       85,043
--------------------------------------------------------------------------------
Royal Bank of Canada                                         1,500       81,731
--------------------------------------------------------------------------------
Societe Generale, Cl. A                                        370       72,084
                                                                     -----------
                                                                        714,171

--------------------------------------------------------------------------------
CONSUMER FINANCE--0.8%
Brightside Group plc 1                                      75,190       78,909
--------------------------------------------------------------------------------
Takefuji Corp.                                               2,270       83,749
                                                                     -----------
                                                                        162,658


                      13 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

                                                                          VALUE
                                                            SHARES   SEE NOTE 1
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--8.0%
Consumer Discretionary Select Sector SPDR Fund               5,110   $  204,911
--------------------------------------------------------------------------------
Financial Select Sector SPDR Fund                            5,424      205,570
--------------------------------------------------------------------------------
iShares MSCI Australia Index Fund                            7,451      207,883
--------------------------------------------------------------------------------
iShares MSCI Belgium Index Fund                              7,260      203,643
--------------------------------------------------------------------------------
iShares MSCI Italy Index Fund                                5,602      200,552
--------------------------------------------------------------------------------
iShares MSCI Netherlands Index Fund                          6,610      202,332
--------------------------------------------------------------------------------
iShares MSCI Sweden Index Fund                               5,450      199,525
--------------------------------------------------------------------------------
Utilities Select Sector SPDR Fund                            4,786      200,246
                                                                     -----------
                                                                      1,624,662

--------------------------------------------------------------------------------
INSURANCE--4.8%
ACE Ltd.                                                     1,276       78,563
--------------------------------------------------------------------------------
Allstate Corp.                                               1,231       75,707
--------------------------------------------------------------------------------
Chubb Corp.                                                  1,420       77,915
--------------------------------------------------------------------------------
Cincinnati Financial Corp.                                   1,695       76,987
--------------------------------------------------------------------------------
Fairfax Financial Holdings Ltd.                                300       60,597
--------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The)                  751       77,481
--------------------------------------------------------------------------------
Loews Corp.                                                  1,625       82,924
--------------------------------------------------------------------------------
MBIA, Inc.                                                   1,110       73,871
--------------------------------------------------------------------------------
Muenchener Rueckversicherungs-Gesellschaft AG                  434       81,405
--------------------------------------------------------------------------------
Royal & Sun Alliance Insurance Group plc                    23,342       73,166
--------------------------------------------------------------------------------
Safeco Corp.                                                 1,205       75,614
--------------------------------------------------------------------------------
Travelers Cos., Inc. (The)                                   1,414       76,596
--------------------------------------------------------------------------------
XL Capital Ltd., Cl. A                                         979       79,847
                                                                     -----------
                                                                        990,673

--------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--3.2%
Boston Properties, Inc.                                        660       76,349
--------------------------------------------------------------------------------
CFS Retail Property Trust                                   41,600       83,271
--------------------------------------------------------------------------------
Commonwealth Property Office Fund                           65,200       90,479
--------------------------------------------------------------------------------
DB RREEF Trust                                              53,000       86,456
--------------------------------------------------------------------------------
Gecina SA 1                                                    410       74,300
--------------------------------------------------------------------------------
ING Industrial Fund                                         38,700       77,870
--------------------------------------------------------------------------------
Macquarie Office Trust                                      59,000       82,821
--------------------------------------------------------------------------------
Multiplex Group                                             20,000       81,480
                                                                     -----------
                                                                        653,026


                      14 | OPPENHEIMER ABSOLUTE RETURN FUND



                                                                        VALUE
                                                      SHARES       SEE NOTE 1
------------------------------------------------------------------------------
HEALTH CARE--1.5%
--------------------------------------------------------------------------------
BIOTECHNOLOGY--0.4%
MedImmune, Inc. 1                                      1,360   $         78,717
--------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.3%
SSL International plc                                  8,930             74,841
--------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.4%
CIGNA Corp.                                              500             83,815
--------------------------------------------------------------------------------
PHARMACEUTICALS--0.4%
Biovail Corp.                                          3,200             77,786
--------------------------------------------------------------------------------
INDUSTRIALS--4.8%
--------------------------------------------------------------------------------
AIRLINES--0.7%
British Airways plc 1                                  7,670             71,638
--------------------------------------------------------------------------------
Deutsche Lufthansa AG                                  2,577             74,204
                                                               -----------------
                                                                        145,842

--------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.1%
Aggreko plc                                            6,908             77,666
--------------------------------------------------------------------------------
Michael Page International plc                         6,750             76,252
--------------------------------------------------------------------------------
Serco Group plc                                        7,830             73,762
                                                               -----------------
                                                                        227,680

--------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.8%
Leighton Holdings Ltd.                                 2,647             98,029
--------------------------------------------------------------------------------
Okumura Corp.                                         14,000             69,866
                                                               -----------------
                                                                        167,895

--------------------------------------------------------------------------------
MACHINERY--1.6%
Charter plc 1                                          3,730             76,561
--------------------------------------------------------------------------------
Cummins, Inc.                                            850             80,096
--------------------------------------------------------------------------------
Paccar, Inc.                                             893             77,896
--------------------------------------------------------------------------------
Terex Corp. 1                                            965             81,803
                                                               -----------------
                                                                        316,356

--------------------------------------------------------------------------------
ROAD & RAIL--0.2%
Stagecoach Group plc                                  13,390             48,984
--------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.4%
Societe des Autoroutes Paris-Rhin-Rhone                  781             79,719
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--1.5%
--------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.4%
Mitsumi Electric Co. Ltd.                              2,300             73,285


                      15 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

                                                                          VALUE
                                                      SHARES         SEE NOTE 1
--------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4%
Hitachi Ltd.                                          10,000   $         73,749
--------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.4%
Sumco Corp.                                            1,800             87,211
--------------------------------------------------------------------------------
SOFTWARE--0.3%
Nintendo Co. Ltd.                                        200             69,926
--------------------------------------------------------------------------------
MATERIALS--7.7%
--------------------------------------------------------------------------------
CHEMICALS--1.6%
BASF AG                                                  649             80,296
--------------------------------------------------------------------------------
Dainippon Ink & Chemicals, Inc.                       21,000             77,276
--------------------------------------------------------------------------------
Hercules, Inc. 1                                       4,080             76,826
--------------------------------------------------------------------------------
Methanex Corp.                                         3,200             83,470
                                                               -----------------
                                                                        317,868

--------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.8%
Sumitomo Osaka Cement Co. Ltd.                        27,000             79,425
--------------------------------------------------------------------------------
Vulcan Materials Co.                                     662             79,235
                                                               -----------------
                                                                        158,660

--------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.4%
Temple-Inland, Inc.                                    1,283             80,829
--------------------------------------------------------------------------------
METALS & MINING--4.9%
Algoma Steel, Inc. 1                                   1,600             83,770
--------------------------------------------------------------------------------
Allegheny Technologies, Inc.                             704             81,375
--------------------------------------------------------------------------------
BlueScope Steel Ltd.                                   7,800             71,499
--------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B            1,124             88,459
--------------------------------------------------------------------------------
Nucor Corp.                                            1,196             80,778
--------------------------------------------------------------------------------
Salzgitter AG                                            470             89,676
--------------------------------------------------------------------------------
Sumitomo Metal Mining Co.                              4,000             91,208
--------------------------------------------------------------------------------
Teck Cominco Ltd., Cl. B                               2,000             84,518
--------------------------------------------------------------------------------
ThyssenKrupp AG                                        1,434             83,355
--------------------------------------------------------------------------------
United States Steel Corp.                                742             83,965
--------------------------------------------------------------------------------
Xstrata plc                                            1,479             85,489
--------------------------------------------------------------------------------
Zinifex Ltd.                                           5,700             83,070
                                                               -----------------
                                                                      1,007,162


                      16 | OPPENHEIMER ABSOLUTE RETURN FUND



                                                                          VALUE
                                                      SHARES         SEE NOTE 1
--------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.6%
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.6%
BCE, Inc.                                              2,300   $         84,874
--------------------------------------------------------------------------------
Cable & Wireless plc                                  20,990             82,173
--------------------------------------------------------------------------------
Deutsche Telekom AG                                    4,219             78,227
--------------------------------------------------------------------------------
France Telecom SA 1                                    2,641             81,129
                                                               -----------------
                                                                        326,403

--------------------------------------------------------------------------------
UTILITIES--4.6%
--------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.9%
Duke Energy Corp.                                      3,721             72,708
--------------------------------------------------------------------------------
Entergy Corp.                                            664             74,966
--------------------------------------------------------------------------------
FPL Group, Inc.                                        1,197             76,524
--------------------------------------------------------------------------------
PPL Corp.                                              1,730             79,511
--------------------------------------------------------------------------------
Tokyo Electric Power Corp.                             2,300             76,793
                                                               -----------------
                                                                        380,502

--------------------------------------------------------------------------------
ENERGY TRADERS--0.8%
Constellation Energy Group, Inc.                         837             76,811
--------------------------------------------------------------------------------
International Power plc                                8,855             79,830
                                                               -----------------
                                                                        156,641

--------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--1.9%
CenterPoint Energy, Inc.                               3,999             75,701
--------------------------------------------------------------------------------
Public Service Enterprise Group, Inc.                    880             78,267
--------------------------------------------------------------------------------
RWE AG                                                   729             82,200
--------------------------------------------------------------------------------
RWE AG, Preference, Non-Vtg.                             788             83,784
--------------------------------------------------------------------------------
Suez SA                                                1,350             77,655
                                                               -----------------
                                                                        397,607
                                                               -----------------
Total Common Stocks (Cost $10,389,906)                               11,142,593


                      17 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

                                                   PRINCIPAL              VALUE
                                                      AMOUNT         SEE NOTE 1
--------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--6.3%
--------------------------------------------------------------------------------
U.S. Treasury Bonds, 4.75%, 2/15/37 2          $     980,000   $        940,418
--------------------------------------------------------------------------------
U.S. Treasury Nts., 4.625%, 2/15/17                  365,000            357,273
                                                               -----------------
Total U.S. Government Obligations
(Cost $1,364,206)                                                     1,297,691

--------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--5.2%
--------------------------------------------------------------------------------
Germany (Federal Republic of) Bonds,
Series 06, 3.75%, 1/4/17 [EUR]                       370,000            473,608
--------------------------------------------------------------------------------
Japan (Government of) Bonds, 10 yr.,
Series 285, 1.70%, 3/20/17 [JPY]                  44,100,000            361,153
--------------------------------------------------------------------------------
United Kingdom Treasury Bonds, 4%, 9/7/16 [GBP]      130,000            234,264
                                                               -----------------
Total Foreign Government Obligations
(Cost $1,096,667)                                                     1,069,025

--------------------------------------------------------------------------------
STRUCTURED NOTES--9.9%
--------------------------------------------------------------------------------
Cascadia Ltd. Catastrophe Linked
Nts., 8.465%, 6/13/08 3,4                            250,000            249,765
--------------------------------------------------------------------------------
Champlain Ltd. Catastrophe Linked Nts.,
Series A, 18.10%, 1/7/09 3,4                         250,000            250,725
--------------------------------------------------------------------------------
Eurus Ltd. Catastrophe Linked Nts.,
11.605%, 4/8/09 4,5                                  250,000            252,875
--------------------------------------------------------------------------------
Successor Euro Wind Ltd. Catastrophe Linked
Nts., Series A-I, 22.846%, 6/6/08 4,5                250,000            255,975
--------------------------------------------------------------------------------
Successor Japan Quake Ltd. Catastrophe Linked
Nts., Series A-I, 9.596%, 6/6/08 3,4                 250,000            253,088
--------------------------------------------------------------------------------
Swiss Re Capital Markets Corp./Akibare Ltd.
Catastrophe Linked Nts.,
Cl. A, 8.31%, 5/22/12 3,4                            250,000            250,025
--------------------------------------------------------------------------------
Swiss Re Capital Markets Corp./Redwood Capital
VII I Catastrophe Linked Nts.,
10.60%, 1/9/08 3,4                                   250,000            250,755
--------------------------------------------------------------------------------
VASCO Re 2006 Ltd. Catastrophe Linked
Nts., 13.848%, 6/5/09 3,4                            250,000            252,600
                                                               -----------------
Total Structured Notes (Cost $2,020,221)                              2,015,808

--------------------------------------------------------------------------------
SHORT-TERM NOTES--22.8%
--------------------------------------------------------------------------------
U.S. Treasury Bills, 4.96%, 6/7/07 6
(Cost $4,656,148)                                  4,660,000          4,656,148

                                                      SHARES
--------------------------------------------------------------------------------

INVESTMENTS IN AFFILIATED COMPANIES--0.7%
--------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund,
Cl. E, 5.29% 7,8
(Cost $136,660)                                      136,660            136,660

--------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $19,663,808)          99.5%        20,317,925
--------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES                          0.5             94,122
                                               ---------------------------------


NET ASSETS                                             100.0%  $     20,412,047
                                               =================================



                      18 | OPPENHEIMER ABSOLUTE RETURN FUND



FOOTNOTES TO STATEMENT OF INVESTMENTS

Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:

EUR   Euro
GBP   British Pound Sterling
JPY   Japanese Yen

1. Non-income producing security.

2. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $455,810. See Note 6 of accompanying Notes.

3. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $1,506,958 or 7.38% of the Fund's net
assets as of May 31, 2007.

4. Represents the current interest rate for a variable or increasing rate
security.

5. Illiquid security. The aggregate value of illiquid securities as of May 31,
2007 was $508,850, which represents 2.49% of the Fund's net assets. See Note 8
of accompanying Notes.

6. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of accompanying Notes.

7. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended May 31, 2007 by virtue of the Fund, owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:



                                                             SHARES
                                                    SINCE INCEPTION        GROSS        GROSS         SHARES
                                                      MARCH 5, 2007    ADDITIONS   REDUCTIONS   MAY 31, 2007
------------------------------------------------------------------------------------------------------------

Oppenheimer Institutional Money Market Fund, Cl. E               --   29,857,552   29,720,892        136,660




                                                                                        VALUE       DIVIDEND
                                                                                   SEE NOTE 1         INCOME
------------------------------------------------------------------------------------------------------------

Oppenheimer Institutional Money Market Fund, Cl. E                                 $  136,660      $   9,263


8. Rate shown is the 7-day yield as of May 31, 2007.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      19 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF ASSETS AND LIABILITIES  May 31, 2007
--------------------------------------------------------------------------------


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

ASSETS
-----------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $19,527,148)                                                         $   20,181,265
Affiliated companies (cost $136,660)                                                                     136,660
                                                                                                  ---------------
                                                                                                      20,317,925
-----------------------------------------------------------------------------------------------------------------
Cash                                                                                                      91,787
-----------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts                                                     25,404
-----------------------------------------------------------------------------------------------------------------
Swaps, at value                                                                                            4,273
-----------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends                                                                                   102,430
Futures margins                                                                                           14,576
Closed foreign currency contracts                                                                          4,177
Other                                                                                                      1,208
                                                                                                  ---------------
Total assets                                                                                          20,561,780

-----------------------------------------------------------------------------------------------------------------
LIABILITIES
-----------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts                                                      4,039
-----------------------------------------------------------------------------------------------------------------
Swaps, at value                                                                                          114,978
-----------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Legal, auditing and other professional fees                                                               21,150
Custodian fees                                                                                               750
Trustees' compensation                                                                                       744
Registration and filing fees                                                                                 617
Other                                                                                                      7,455
                                                                                                  ---------------
Total liabilities                                                                                        149,733

-----------------------------------------------------------------------------------------------------------------
NET ASSETS                                                                                        $   20,412,047
                                                                                                  ===============

-----------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
-----------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest                                                        $          670
-----------------------------------------------------------------------------------------------------------------
Additional paid-in capital                                                                            20,072,303
-----------------------------------------------------------------------------------------------------------------
Accumulated net investment loss                                                                          (37,768)
-----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions                            89,185
-----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies                                                                        287,657
                                                                                                  ---------------
NET ASSETS                                                                                        $   20,412,047
                                                                                                  ===============

-----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
-----------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $20,412,047 and
670,000 shares of beneficial interest outstanding)                                                $        30.47
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)   $        32.33


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      20 | OPPENHEIMER ABSOLUTE RETURN FUND



STATEMENT OF OPERATIONS  For the Period Ended May 31, 2007 1
--------------------------------------------------------------------------------


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

INVESTMENT INCOME
-----------------------------------------------------------------------------------------------------------------
Interest                                                                                          $      109,616
-----------------------------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $6,204)                                       89,336
Affiliated companies                                                                                       9,263
                                                                                                  ---------------
Total investment income                                                                                  208,215

-----------------------------------------------------------------------------------------------------------------
EXPENSES
-----------------------------------------------------------------------------------------------------------------
Management fees                                                                                           48,300
-----------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees                                                               27,000
-----------------------------------------------------------------------------------------------------------------
Trustees' compensation                                                                                       744
-----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses                                                                                  105
-----------------------------------------------------------------------------------------------------------------
Other                                                                                                      3,035
                                                                                                  ---------------
Total expenses                                                                                            79,184
Less reduction to custodian expenses                                                                          (7)
Less waivers and reimbursements of expenses                                                                 (201)
                                                                                                  ---------------
Net expenses                                                                                              78,976

-----------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                                                                    129,239

-----------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
-----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments                                                                                              481,757
Closing and expiration of futures contracts                                                              (84,595)
Foreign currency transactions                                                                            125,857
Swap contracts                                                                                          (627,868)
                                                                                                  ---------------
Net realized loss                                                                                       (104,849)
-----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments                                                                                              641,058
Translation of assets and liabilities denominated in foreign currencies                                   27,535
Futures contracts                                                                                       (270,231)
Swap contracts                                                                                          (110,705)
                                                                                                  ---------------
Net change in unrealized appreciation                                                                    287,657

-----------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                              $      312,047
                                                                                                  ===============


1. For the period from March 5, 2007 (commencement of operations) to May 31,
2007.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      21 | OPPENHEIMER ABSOLUTE RETURN FUND



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



PERIOD ENDED MAY 31,                                                                                               2007 1
-------------------------------------------------------------------------------------------------------------------------

OPERATIONS
-------------------------------------------------------------------------------------------------------------------------
Net investment income                                                                                    $      129,239
-------------------------------------------------------------------------------------------------------------------------
Net realized loss                                                                                              (104,849)
-------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation                                                                           287,657
                                                                                                         ----------------
Net increase in net assets resulting from operations                                                            312,047

-------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
-------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions                                   20,000,000

-------------------------------------------------------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------------------------------------------------------
Total increase                                                                                               20,312,047
-------------------------------------------------------------------------------------------------------------------------
Beginning of period                                                                                             100,000 2
                                                                                                         ----------------
End of period (including accumulated net investment loss of $37,768 for the period ended May 31, 2007)   $   20,412,047
                                                                                                         ================


1. For the period from March 5, 2007 (commencement of operations) to May 31,
2007.

2. Reflects the value of the manager's initial seed money on August 21, 2006.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      22 | OPPENHEIMER ABSOLUTE RETURN FUND



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



                                                                                                         CLASS A
PERIOD ENDED MAY 31,                                                                                        2007 1
-----------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
-----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                                                                $      30.00
-----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2                                                                                      .20
Net realized and unrealized gain                                                                             .27
                                                                                                    -------------------
Total from investment operations                                                                             .47
-----------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                                                                      $      30.47
                                                                                                    ===================

-----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                                                                          1.57%
-----------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                                                            $     20,412
-----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                                                                   $     20,264
-----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                                                                       2.65%
Total expenses                                                                                              1.62% 5,6,7
-----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                                                                       75%


1. For the period from March 5, 2007 (commencement of operations) to May 31,
2007.

2. Per share amounts calculated based on the average shares outstanding during
the period.

3. Assumes an initial investment on the business day before the first day of the
fiscal period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods of less than one full year. Returns do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.

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

5. Total expenses including indirect expenses from affiliated fund were as
follows:

      Period Ended May 31, 2007          1.62%

6. Reduction to custodian expenses less than 0.005%.

7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      23 | OPPENHEIMER ABSOLUTE RETURN FUND



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

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES

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

      The Fund currently offers Class A shares only. Class A shares are sold at
their offering price, which is normally net asset value plus a front-end sales
charge. As of May 31, 2007, 100% of the Fund's total shares outstanding were
owned by the Manager and its affiliates.

      The following is a summary of significant accounting policies consistently
followed by the Fund.

--------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ(R) are valued based on the
closing price provided by NASDAQ prior to the time when the Fund's assets are
valued. In the absence of a sale, the security is valued at the last sale price
on the prior trading day, if it is within the spread of the closing "bid" and
"asked" prices, and if not, at the closing bid price. Securities traded on
foreign exchanges are valued based on the last sale price on the principal
exchange on which the security is traded, as identified by the portfolio pricing
service, prior to the time when the Fund's assets are valued. In the absence of
a sale, the security is valued at the official closing price on the principal
exchange. Corporate, government and municipal debt instruments having a
remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices. Futures
contracts traded on a commodities or futures exchange will be valued at the
final settlement price or official closing price on the principal exchange as
reported by such principal exchange at its trading session ending at, or most
recently prior to, the time when the Fund's assets are valued. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially affected by
what the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued. Fair value is determined in good faith using consistently applied
procedures under the supervision of the Board of Trustees. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. Short-term "money market type" debt securities
with remaining maturities of sixty days or less are valued at amortized cost
(which approximates market value).


                      24 | OPPENHEIMER ABSOLUTE RETURN FUND



--------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying Statement of Operations. The Fund records a realized gain or loss
when a structured note is sold or matures.

--------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the New
York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each
day the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.

      Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.

      The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.

--------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.


                      25 | OPPENHEIMER ABSOLUTE RETURN FUND



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

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

INVESTMENTS WITH OFF BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.

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

The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.

                                                             NET UNREALIZED
                                                               APPRECIATION
                                                           BASED ON COST OF
                                                             SECURITIES AND
     UNDISTRIBUTED    UNDISTRIBUTED        ACCUMULATED    OTHER INVESTMENTS
     NET INVESTMENT       LONG-TERM               LOSS   FOR FEDERAL INCOME
     INCOME                    GAIN   CARRYFORWARD 1,2         TAX PURPOSES
     ----------------------------------------------------------------------
     $--                        $--           $252,460             $592,221

1. As of May 31, 2007, the Fund had $252,460 of post-October losses available to
offset future realized capital gains, if any. Such losses, if unutilized, will
expire in 2016.

2. During the fiscal year ended May 31, 2007, the Fund did not utilize any
capital loss carryforward.

Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for May 31, 2007. Net assets of the
Fund were unaffected by the reclassifications.

                                   REDUCTION TO      REDUCTION TO
                                    ACCUMULATED   ACCUMULATED NET
               REDUCTION TO      NET INVESTMENT     REALIZED LOSS
               PAID-IN CAPITAL           INCOME    ON INVESTMENTS
               --------------------------------------------------
               $27,027                 $167,007          $194,034

No distributions were paid during the period ended May 31, 2007.


                      26 | OPPENHEIMER ABSOLUTE RETURN FUND



The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of May 31, 2007 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.

          Federal tax cost of securities                  $ 19,680,590
          Federal tax cost of other investments             (8,759,033)
                                                          ------------
          Total federal tax cost                          $ 10,921,557
                                                          ============

          Gross unrealized appreciation                   $    967,347
          Gross unrealized depreciation                       (375,126)
                                                          ------------
          Net unrealized appreciation                     $    592,221
                                                          ============

--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral plan for independent trustees that enables trustees to elect to defer
receipt of all or a portion of the annual compensation they are entitled to
receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or in other Oppenheimer funds
selected by the Trustee. The Fund purchases shares of the funds selected for
deferral by the Trustee in amounts equal to his or her deemed investment,
resulting in a Fund asset equal to the deferred compensation liability. Such
assets are included as a component of "Other" within the asset section of the
Statement of Assets and Liabilities. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the compensation deferral plan.

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.

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

--------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed


                      27 | OPPENHEIMER ABSOLUTE RETURN FUND



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

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

trades in portfolio securities and from cash outflows resulting from
unanticipated shareholder redemption activity. The Fund pays interest to its
custodian on such cash overdrafts, to the extent they are not offset by positive
cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate
plus 0.50%. The "Reduction to custodian expenses" line item, if applicable,
represents earnings on cash balances maintained by the Fund during the period.
Such interest expense and other custodian fees may be paid with these earnings.

--------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.

--------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.

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

--------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST

The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:

                                                   PERIOD ENDED MAY 31, 2007 1,2
                                                           SHARES         AMOUNT
--------------------------------------------------------------------------------
CLASS A
Sold                                                      666,667   $ 20,000,000
Redeemed                                                       --             --
                                                        ------------------------
Net increase                                              666,667   $ 20,000,000
                                                        ========================

1. For the period from March 5, 2007 (commencement of operations) to May 31,
2007.

2. The Fund sold 3,333 Class A shares at a value of $100,000 to the Manager upon
seeding of the Fund on August 21, 2006.


                      28 | OPPENHEIMER ABSOLUTE RETURN FUND



--------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES

The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the period ended May
31, 2007, were as follows:

                                                       PURCHASES          SALES
--------------------------------------------------------------------------------
Investment securities                              $  20,678,908    $  9,779,904
U.S. government and government agency obligations      2,525,714       1,132,952

--------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES

MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.00% of the average daily net assets.

--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee.

--------------------------------------------------------------------------------
OFFERING AND ORGANIZATIONAL COSTS. The Manager paid all offering and
organizational costs associated with the registration and seeding of the Fund.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1)FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Class A shares of the Fund.

--------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
periodically at an annual rate of up to 0.25% of the average annual net assets
of Class A shares of the Fund. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent periods.

--------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees to 0.35% of average annual net
assets of the Fund. This undertaking may be amended or withdrawn at any time.

      The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the period ended May 31, 2007, the Manager waived $201 for IMMF
management fees.

--------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS

A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.


                      29 | OPPENHEIMER ABSOLUTE RETURN FUND



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

--------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued

      The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.

      The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.

As of May 31, 2007, the Fund had outstanding foreign currency contracts as
follows:



                                                   CONTRACT          VALUATION
                                    EXPIRATION       AMOUNT              AS OF      UNREALIZED     UNREALIZED
                                         DATES       (000S)       MAY 31, 2007    APPRECIATION   DEPRECIATION
-------------------------------------------------------------------------------------------------------------

CONTRACTS TO PURCHASE
Brazilian Real (BRR)                    7/3/07          950BRR    $    492,497   $       8,494   $         --
Hungarian Forint (HUF)                 6/29/07       85,000HUF         456,058              --            489
Indian Rupee (INR)                     6/29/07       200,000INR        491,965              --          1,375
New Turkish Lira (TRY)                 6/25/07          660TRY         496,389           2,839             --
South African Rand (ZAR)               6/29/07        3,400ZAR         475,935              --             15
                                                                                 ----------------------------
                                                                                        11,333          1,879
                                                                                 ----------------------------
CONTRACTS TO SELL
British Pound Sterling (GBP)           6/27/07          280GBP         554,315           1,686             --
Chinese Renminbi (Yuan)(CNY)           6/29/07        3,600CNY         472,188             129             --
Czech Koruna (CZK)                     6/29/07        9,500CZK         453,117              --            844
Euro (EUR)                              6/6/07          430EUR         578,716           4,123             --
Japanese Yen (JPY)              6/7/07-8/31/07      106,000JPY         876,245           8,133            130
Singapore Dollar (SGD)                  7/5/07          700SGD         458,962              --            397
Swiss Franc (CHF)                      6/29/07          560CHF         458,354              --            789
                                                                                 ----------------------------
                                                                                        14,071          2,160
                                                                                 ----------------------------
Total unrealized appreciation and depreciation                                   $      25,404   $      4,039
                                                                                 ============================


--------------------------------------------------------------------------------
6. FUTURES CONTRACTS

A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures) or debt securities (interest rate futures) in order to gain
exposure to or protection from changes in market value of stocks and bonds or
interest rates. The Fund may also buy or write put or call options on these
futures contracts.


                      30 | OPPENHEIMER ABSOLUTE RETURN FUND



      The Fund generally sells futures contracts as a hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures contracts to gain exposure to market changes as it may
be more efficient or cost effective than actually buying securities.

      Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or has expired.

      Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable and/or payable for the
daily mark to market for variation margin. Realized gains and losses are
reported in the Statement of Operations at the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.

      Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.

As of May 31, 2007, the Fund had outstanding futures contracts as follows:



                                                                              UNREALIZED
                               EXPIRATION   NUMBER OF   VALUATION AS OF     APPRECIATION
CONTRACT DESCRIPTION                DATES   CONTRACTS      MAY 31, 2007   (DEPRECIATION)
-----------------------------------------------------------------------------------------

CONTRACTS TO PURCHASE
CAC40 10 Euro                     6/15/07           2        $  163,888       $    3,292
Dax Index                         6/15/07           1           265,410           32,813
FTSE 100 Index                    6/15/07           3           392,598            7,808
Nikkei 225 Index                   6/7/07           2           293,509            5,445
Standard & Poor's 500 E-Mini      6/15/07          19         1,456,255           64,752
                                                                              -----------
                                                                                 114,110
                                                                              -----------
CONTRACTS TO SELL
Euro-Bundesobligation, 10 yr.      6/7/07           6           904,614           22,057
Standard & Poor's 500 E-Mini      6/15/07          71         5,441,795         (404,987)
U.S. Treasury Nts., 10 yr.        9/19/07           7           744,625                1
U.S. Treasury Nts., 30 yr.        9/19/07          25         2,728,125           (1,412)
                                                                              -----------
                                                                                (384,341)
                                                                              -----------
                                                                              $ (270,231)
                                                                              ===========



                      31 | OPPENHEIMER ABSOLUTE RETURN FUND



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

--------------------------------------------------------------------------------
7. TOTAL RETURN SWAP CONTRACTS

A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Total return swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Fund at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).

As of May 31, 2007, the Fund had entered into the following total return swap
agreements:



SWAP               NOTIONAL                  PAID BY                  RECEIVED BY   TERMINATION
COUNTERPARTY         AMOUNT                 THE FUND                     THE FUND         DATES      VALUE
-----------------------------------------------------------------------------------------------------------

Goldman Sachs
International:
                                                              One-Month BBA LIBOR
                                                        USD minus 15 basis points
                              If positive, the Total         and if negative, the
                                Return of the CAC 40    absolute value of the CAC
                 $  674,869      Market Index (FRF).       40 Market Index (FRF).       4/14/08   $ (4,780)
                                                              One-Month BBA LIBOR
                                                        USD minus 14 basis points
                              If positive, the Total         and if negative, the
                                       Return of DAX    absolute value of the DAX
                    659,332            Market Index.                Market Index.       4/14/08    (31,571)
                                                              One-Month BBA LIBOR
                                                        USD minus 25 basis points
                              If positive, the Total         and if negative, the
                                  Return of the FTSE   absolute value of the FTSE
                  1,065,649        100 Market Index.            100 Market Index.       4/14/08     (8,010)
                                                              One-Month BBA LIBOR
                                                        USD minus 15 basis points
                              If positive, the Total         and if negative, the
                                Return of the Nikkei        absolute value of the
                  1,168,500               225 Index.            Nikkei 225 Index.       4/10/08      4,273



                      32 | OPPENHEIMER ABSOLUTE RETURN FUND





SWAP                        NOTIONAL                   PAID BY                     RECEIVED BY   TERMINATION
COUNTERPARTY                  AMOUNT                  THE FUND                        THE FUND         DATES         VALUE
---------------------------------------------------------------------------------------------------------------------------

Goldman Sachs
International: Continued
                                                                           One-Month BBA LIBOR
                                                                     USD minus 60 basis points
                                        If positive, the Total            and if negative, the
                                             Return of the S&P       absolute value of the S&P
                           $ 771,448            ASX 200 Index.                  ASX 200 Index.        6/9/08   $    (7,031)

                                                                           One-Month BBA LIBOR
                                        If positive, the Total       USD minus 50 basis points
                                             Return of the S&P   and if negative, the absolute
                                              Canada (60 Index         value of the S&P Canada
                             774,540            Market) Index.        (60 Index Market) Index.        6/5/08       (58,457)
---------------------------------------------------------------------------------------------------------------------------

                                                                           One-Month BBA LIBOR
                                                                     USD minus 45 basis points
                                        If positive, the Total            and if negative, the
Morgan Stanley &                            Return of the MSCI      absolute value of the MSCI
Co. International Ltd.     1,001,126               EAFE Index.                     EAFE Index.       3/10/08        (5,129)
                                                                                                               ------------
                                                                                                               $  (110,705)
                                                                                                               ============


Index abbreviations are as follows:

BBA LIBOR               British Bankers' Association London-Interbank Offered
                        Rate.

CAC 40 Market Index     French Options Market. The index contains 40 stocks
                        selected amoung the top 100 market capitalization and
                        the most active stocks listed on Euronext Paris and is
                        the underlying asset for options and futures contracts.

DAX Market Index        Frankfurt Stock Exchange comprised of the 30 largest
                        and most liquid issues traded on the exchange.

FTSE 100 Market Index   United Kingdom 100 most highly capitalized blue chip
                        companies.

MSCI EAFE Index         Morgan Stanley Capital International Europe, Australia
                        and Far East. A stock market index of foreign stocks
                        from the perspective of a North American investor.

Nikkei 225 Index        225 top-rated Japanese companies listed on the Tokyo
                        Stock Exchange.

S&P ASX 200 Index       S&P Australian Securities Exchange. The investable
                        benchmark for the Australian equity market. The S&P/ASX
                        200 is comprised of the S&P/ASX 100 plus an additional
                        100 stocks.

--------------------------------------------------------------------------------
8. ILLIQUID SECURITIES

As of May 31, 2007, investments in securities included issues that are illiquid.
A security may be considered illiquid if it lacks a readily available market or
if its valuation has not changed for a certain period of time. The Fund will not
invest more than 15% of its net assets (determined at the time of purchase and
reviewed periodically) in illiquid securities. Securities that are illiquid are
marked with the applicable footnote on the Statement of Investments.


                      33 | OPPENHEIMER ABSOLUTE RETURN FUND



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

--------------------------------------------------------------------------------
9. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
May 31, 2007, the Manager has evaluated the implications of FIN 48 and does not
currently anticipate a material impact to the Fund's financial statements. The
Manager will continue to monitor the Fund's tax positions prospectively for
potential future impacts.

      In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. As of May 31, 2007, the Manager does not believe the
adoption of SFAS No. 157 will materially impact the financial statement amounts;
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.


                      34 | OPPENHEIMER ABSOLUTE RETURN FUND





                                               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

          OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases, the initial sales charge that applies to purchases of Class A
shares(1) of the Oppenheimer funds or the contingent deferred sales charge that
may apply to Class A, Class B or Class C shares may be waived.(2) That is
because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors. Not all waivers apply to all funds.

For 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 created or qualified under Sections 401(a) or 401(k) of the Internal
Revenue Code,
2)  non-qualified deferred compensation plans,
3)  employee benefit plans(3)
4)  Group Retirement Plans(4)
5)  403(b)(7) custodial plan accounts
6)  Individual Retirement Accounts ("IRAs"), including traditional IRAs,
Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

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

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

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

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

         There is no initial sales charge on purchases of Class A shares of any
of the Oppenheimer funds in the cases listed below. However, these purchases may
be subject to the Class A contingent deferred sales charge if redeemed within 18
months (24 months in the case of Oppenheimer Rochester National Municipals and
Rochester Fund Municipals) of the beginning of the calendar month of their
purchase, as described in the Prospectus (unless a waiver described elsewhere in
this Appendix applies to the redemption). Additionally, on shares purchased
under these waivers that are subject to the Class A contingent deferred sales
charge, the Distributor will pay the applicable concession described in the
Prospectus under "Class A Contingent Deferred Sales Charge."(5) This waiver
provision applies to:
|_|           Purchases of Class A shares aggregating $1 million or more.
|_|           Purchases of Class A shares, prior to March 1, 2007, by a
              Retirement Plan that was permitted to purchase such shares at net
              asset value but subject to a contingent deferred sales charge
              prior to March 1, 2001. That included plans (other than IRA or
              403(b)(7) Custodial Plans) that: 1) bought shares costing $500,000
              or more, 2) had at the time of purchase 100 or more eligible
              employees or total plan assets of $500,000 or more, or 3)
              certified to the Distributor that it projects to have annual plan
              purchases of $200,000 or more.
|_|           Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
              purchases are made:
1)  through a broker, dealer, bank or registered investment adviser that has
made special arrangements with the Distributor for those purchases, or
2) by a direct rollover of a distribution from a qualified Retirement Plan if the
administrator of that Plan has made special arrangements with the Distributor
for those purchases.
|_|           Purchases of Class A shares by Retirement Plans that have any of
              the following record-keeping arrangements:
1)  The record keeping is performed by Merrill Lynch Pierce Fenner & 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").
|X|               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 $5 million or more of its
                  assets (excluding assets invested in money market funds)
                  invested in Applicable Investments.
|X|               3) The record keeping for a Retirement Plan is handled under a
                  service agreement with Merrill Lynch and on the date the plan
                  sponsor signs that agreement, the Plan has 500 or more
                  eligible employees (as determined by the Merrill Lynch plan
                  conversion manager).

II.      Waivers of Class A Sales Charges of Oppenheimer Funds
-------------------------------------------------------------------------------------------------------------------

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

Class A shares purchased by the following investors are not subject to any Class
A sales charges (and no concessions are paid by the Distributor on such
purchases):
|_|           The Manager or its affiliates.
|_|           Present or former officers, directors, trustees and employees (and
              their "immediate families") of the Fund, the Manager and its
              affiliates, and retirement plans established by them for their
              employees. The term "immediate family" refers to one's spouse,
              children, grandchildren, grandparents, parents, parents-in-law,
              brothers and sisters, sons- and daughters-in-law, a sibling's
              spouse, a spouse's siblings, aunts, uncles, nieces and nephews;
              relatives by virtue of a remarriage (step-children, step-parents,
              etc.) are included.
|_|           Registered management investment companies, or separate accounts
              of insurance companies having an agreement with the Manager or the
              Distributor for that purpose.
|_|           Dealers or brokers that have a sales agreement with the
              Distributor, if they purchase shares for their own accounts or for
              retirement plans for their employees.
|_|           Employees and registered representatives (and their spouses) of
              dealers or brokers described above or financial institutions that
              have entered into sales arrangements with such dealers or brokers
              (and which are identified as such to the Distributor) or with the
              Distributor. The purchaser must certify to the Distributor at the
              time of purchase that the purchase is for the purchaser's own
              account (or for the benefit of such employee's spouse or minor
              children).
|_|           Dealers, brokers, banks or registered investment advisors that
              have entered into an agreement with the Distributor providing
              specifically for the use of shares of the Fund in particular
              investment products made available to their clients. Those clients
              may be charged a transaction fee by their dealer, broker, bank or
              advisor for the purchase or sale of Fund shares.
|_|           Investment advisors and financial planners who have entered into
              an agreement for this purpose with the Distributor and who charge
              an advisory, consulting or other fee for their services and buy
              shares for their own accounts or the accounts of their clients.
|_|           "Rabbi trusts" that buy shares for their own accounts, if the
              purchases are made through a broker or agent or other financial
              intermediary that has made special arrangements with the
              Distributor for those purchases.
|_|           Clients of investment advisors or financial planners (that have
              entered into an agreement for this purpose with the Distributor)
              who buy shares for their own accounts may also purchase shares
              without sales charge but only if their accounts are linked to a
              master account of their investment adviser or financial planner on
              the books and records of the broker, agent or financial
              intermediary with which the Distributor has made such special
              arrangements . Each of these investors may be charged a fee by the
              broker, agent or financial intermediary for purchasing shares.
|_|           Directors, trustees, officers or full-time employees of OpCap
              Advisors or its affiliates, their relatives or any trust, pension,
              profit sharing or other benefit plan which beneficially owns
              shares for those persons.
|_|           Accounts for which Oppenheimer Capital (or its successor) is the
              investment adviser (the Distributor must be advised of this
              arrangement) and persons who are directors or trustees of the
              company or trust which is the beneficial owner of such accounts.
|_| A unit investment trust that has entered into an appropriate agreement with
the Distributor.
|_| Dealers, brokers, banks, or registered investment advisers
that have entered into an agreement with the
              Distributor to sell shares to defined contribution employee
              retirement plans for which the dealer, broker or investment
              adviser provides administration services.
|_|           Retirement Plans and deferred compensation plans and trusts used
              to fund those plans (including, for example, plans qualified or
              created under sections 401(a), 401(k), 403(b) or 457 of the
              Internal Revenue Code), in each case if those purchases are made
              through a broker, agent or other financial intermediary that has
              made special arrangements with the Distributor for those
              purchases.
|_|           A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
              Advisors) whose Class B or Class C shares of a Former Quest for
              Value Fund were exchanged for Class A shares of that Fund due to
              the termination of the Class B and Class C TRAC-2000 program on
              November 24, 1995.
|_|           A qualified Retirement Plan that had agreed with the former Quest
              for Value Advisors to purchase shares of any of the Former Quest
              for Value Funds at net asset value, with such shares to be held
              through DCXchange, a sub-transfer agency mutual fund
              clearinghouse, if that arrangement was consummated and share
              purchases commenced by December 31, 1996.
|_|           Effective March 1, 2007, 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.
|_|           Effective October 1, 2005, taxable accounts established with the
              proceeds of Required Minimum Distributions from Retirement Plans.

B.   Waivers of the Class A Initial and Contingent Deferred Sales Charges in
     Certain Transactions.

1.   Class A shares issued or purchased in the following transactions are not
     subject to sales charges (and no concessions are paid by the Distributor on
     such purchases):
|_|           Shares issued in plans of reorganization, such as mergers, asset
              acquisitions and exchange offers, to which the Fund is a party.
|_|           Shares purchased by the reinvestment of dividends or other
              distributions reinvested from the Fund or other Oppenheimer funds
              or unit investment trusts for which reinvestment arrangements have
              been made with the Distributor.
|_|           Shares purchased by certain Retirement Plans that are part of a
              retirement plan or platform offered by banks, broker-dealers,
              financial advisors or insurance companies, or serviced by
              recordkeepers.
|_|           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.
|_|           Shares purchased in amounts of less than $5.

2.   Class A shares issued and purchased in the following transactions are not
     subject to sales charges (a dealer concession at the annual rate of 0.25%
     is paid by the Distributor on purchases made within the first 6 months of
     plan establishment):
|_| Retirement Plans that have $5 million or more in plan assets.
|_| Retirement Plans with a single plan sponsor that have $5 million or more in
    aggregate assets invested in Oppenheimer funds.

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

The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
|_| To make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the account
              value adjusted annually.
|_|           Involuntary redemptions of shares by operation of law or
              involuntary redemptions of small accounts (please refer to
              "Shareholder Account Rules and Policies," in the applicable fund
              Prospectus).
|_|           For distributions from Retirement Plans, deferred compensation
              plans or other employee benefit plans for any of the following
              purposes:
1) Following the death or disability (as defined in the
                  Internal Revenue Code) of the participant or beneficiary. The
                  death or disability must occur after the participant's account
                  was established.
2)       To return excess contributions.
3)       To return contributions made due to a mistake of fact.
4)       Hardship withdrawals, as defined in the plan.(6)
5) Under a Qualified Domestic Relations Order, as defined in
                  the Internal Revenue Code, or, in the case of an IRA, a
                  divorce or separation agreement described in Section 71(b) of
                  the Internal Revenue Code.
6)       To meet the minimum distribution requirements of the Internal Revenue Code.
7)       To make "substantially equal periodic payments" as described in Section
         72(t) of the Internal Revenue Code.
8)       For loans to participants or beneficiaries.
9)       Separation from service.(7)
10) Participant-directed redemptions to purchase shares of a
                  mutual fund (other than a fund managed by the Manager or a
                  subsidiary of the Manager) if the plan has made special
                  arrangements with the Distributor.
11)      Plan termination or "in-service distributions," if the redemption proceeds are rolled over
                  directly to an OppenheimerFunds-sponsored IRA.
|_|           For distributions from 401(k) plans sponsored by broker-dealers
              that have entered into a special agreement with the Distributor
              allowing this waiver.
|_|           For distributions from retirement plans that have $10 million or
              more in plan assets and that have entered into a special agreement
              with the Distributor.
|_|           For distributions from retirement plans which are part of a
              retirement plan product or platform offered by certain banks,
              broker-dealers, financial advisors, insurance companies or record
              keepers which have entered into a special agreement with the
              Distributor.
|_|           At the sole discretion of the Distributor, the contingent deferred
              sales charge may be waived for redemptions of shares requested by
              the shareholder of record within 60 days following the termination
              by the Distributor of the selling agreement between the
              Distributor and the shareholder of record's broker-dealer of
              record for the account.

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

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

|_|      A.   Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases: |_| Shares redeemed
involuntarily, as described in "Shareholder Account Rules and Policies," in the
              applicable Prospectus.
|_|           Redemptions from accounts other than Retirement Plans following
              the death or disability of the last surviving shareholder. The
              death or disability must have occurred after the account was
              established, and for disability you must provide evidence of a
              determination of disability by the Social Security Administration.
|_|           The contingent deferred sales charges are generally not waived
              following the death or disability of a grantor or trustee for a
              trust account. The contingent deferred sales charges will only be
              waived in the limited case of the death of the trustee of a
              grantor trust or revocable living trust for which the trustee is
              also the sole beneficiary. The death or disability must have
              occurred after the account was established, and for disability you
              must provide evidence of a determination of disability (as defined
              in the Internal Revenue Code).
|_|           Distributions from accounts for which the broker-dealer of record
              has entered into a special agreement with the Distributor allowing
              this waiver.
|_|           At the sole discretion of the Distributor, the contingent deferred
              sales charge may be waived for redemptions of shares requested by
              the shareholder of record within 60 days following the termination
              by the Distributor of the selling agreement between the
              Distributor and the shareholder of record's broker-dealer of
              record for the account.
|_|           Redemptions of Class B shares held by Retirement Plans whose
              records are maintained on a daily valuation basis by Merrill Lynch
              or an independent record keeper under a contract with Merrill
              Lynch.
|_|           Redemptions of Class C shares of Oppenheimer U.S. Government Trust
              from accounts of clients of financial institutions that have
              entered into a special arrangement with the Distributor for this
              purpose.
|_|           Redemptions 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.
|_| Distributions(8) from Retirement Plans or other employee benefit plans for
any of the following purposes:
1) Following the death or disability (as defined in the Internal Revenue Code) of the participant
   or beneficiary. The death or disability must occur after the participant's account was
   established in an Oppenheimer fund.
2)       To return excess contributions made to a participant's account.
3)       To return contributions made due to a mistake of fact.
4)       To make hardship withdrawals, as defined in the plan.(9)
5) To make distributions required under a Qualified Domestic
                  Relations Order or, in the case of an IRA, a divorce or
                  separation agreement described in Section 71(b) of the
                  Internal Revenue Code.
6)       To meet the minimum distribution requirements of the Internal Revenue Code.
7)       To make "substantially equal periodic payments" as described in Section 72(t) of the Internal
                  Revenue Code.
8)       For loans to participants or beneficiaries.(10)
9)       On account of the participant's separation from service.(11)
10) Participant-directed redemptions to purchase shares of a
                  mutual fund (other than a fund managed by the Manager or a
                  subsidiary of the Manager) offered as an investment option in
                  a Retirement Plan if the plan has made special arrangements
                  with the Distributor.
11) Distributions made on account of a plan termination or
                  "in-service" distributions, if the redemption proceeds are
                  rolled over directly to an OppenheimerFunds-sponsored IRA.
12) For distributions from a participant's account under an
                  Automatic Withdrawal Plan after the participant reaches age 59
                  1/2, as long as the aggregate value of the distributions does
                  not exceed 10% of the account's value, adjusted annually.
13) Redemptions of Class B shares under an Automatic
                  Withdrawal Plan for an account other than a Retirement Plan,
                  if the aggregate value of the redeemed shares does not exceed
                  10% of the account's value, adjusted annually.
14) For distributions from 401(k) plans sponsored by
                  broker-dealers that have entered into a special arrangement
                  with the Distributor allowing this waiver.
|_|           Redemptions of Class B shares or Class C shares under an Automatic
              Withdrawal Plan from an account other than a Retirement Plan if
              the aggregate value of the redeemed shares does not exceed 10% of
              the account's value annually.

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

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

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

The initial and contingent deferred sales charge rates and waivers for Class A,
Class B and Class C shares described in the Prospectus or Statement of
Additional Information of the Oppenheimer funds are modified as described below
for certain persons who were shareholders of the former Quest for Value Funds.
To be eligible, those persons must have been shareholders on November 24, 1995,
when OppenheimerFunds, Inc. became the investment adviser to those former Quest
for Value Funds. Those funds include:
     Oppenheimer Rising Dividends Fund, Inc.         Oppenheimer Small- & Mid- Cap Value Fund
     Oppenheimer Quest Balanced Fund                 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 Fund
     Quest for Value Investment Quality Income Fund           Quest for Value National Tax-Exempt Fund
     Quest for Value Global Income Fund                       Quest for Value California Tax-Exempt Fund

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

A.   Reductions or Waivers of Class A Sales Charges.

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

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

-------------------------------- ---------------------------- --------------------------------- ---------------------
Number of Eligible Employees     Initial Sales Charge as a    Initial Sales Charge as a % of    Concession as % of
or Members                       % of Offering Price          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 fund's Prospectus.

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

|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A shares
purchased by the following investors are not subject to any Class A initial or
contingent deferred sales charges: 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 Funds 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.
o
|X| Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions.
The Class A contingent deferred sales charge will not apply to redemptions of
Class A shares purchased by the following investors who were shareholders of any
Former Quest for Value Fund:

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

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

|X| Waivers for Redemptions of Shares Purchased Prior to March 6, 1995. In
the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an
Oppenheimer fund. The shares must have been acquired by the merger of a Former
Quest for Value Fund into the fund or by exchange from an Oppenheimer fund that
was a Former Quest for Value Fund or into which such fund merged. Those shares
must have been purchased prior to March 6, 1995 in connection with: 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.
o
|X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but
Prior to November 24, 1995. In the following cases, the contingent deferred
sales charge will be waived for redemptions of Class A, Class B or Class C
shares of an Oppenheimer fund. The shares must have been acquired by the merger
of a Former Quest for Value Fund into the fund or by exchange from an
Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995:
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 fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another
Oppenheimer fund within 90 days after redemption.

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

The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix) of
the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
     Oppenheimer U. S. Government Trust,
     Oppenheimer Core Bond Fund,
     Oppenheimer Value Fund and
are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:
     Connecticut Mutual Liquid Account                            Connecticut Mutual Total Return Account
     Connecticut Mutual Government Securities Account             CMIA LifeSpan Capital Appreciation Account
     Connecticut Mutual Income Account                            CMIA LifeSpan Balanced Account
     Connecticut Mutual Growth Account                            CMIA Diversified Income Account

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

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

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

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

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

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

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

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

In addition to the waivers set forth in the Prospectus and in this Appendix,
above, the contingent deferred sales charge will be waived for redemptions of
Class A and Class B shares of a Fund and exchanges of Class A or Class B shares
of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund
provided that the Class A or Class B shares of the Fund to be redeemed or
exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by
exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund.
Additionally, the shares of such Former Connecticut Mutual Fund must have been
purchased prior to March 18, 1996: |X| 1) by the estate of a deceased
shareholder; |X| 2) upon the disability of a shareholder, as defined in Section
72(m)(7) of the Internal Revenue
         Code;
|X|      3) for retirement distributions (or loans) to participants or
         beneficiaries from retirement plans qualified under Sections 401(a) or
         403(b)(7)of the Code, or from IRAs, deferred compensation plans created
         under Section 457 of the Code, or other employee benefit plans;
4) as tax-free returns of excess contributions to such retirement or employee
benefit plans; |X| 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;
|X|      6)       in connection with the redemption of shares of the Fund due to a combination with another
         investment company by virtue of a merger, acquisition or similar reorganization transaction;
|X|      7)       in connection with the Fund's right to involuntarily redeem or liquidate the Fund;
|X|      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
|X|      9) as involuntary redemptions of shares by operation of law, or under
         procedures set forth in the Fund's Articles of Incorporation, or as
         adopted by the Board of Directors of the Fund.

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

Shareholders of Oppenheimer 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 Funds, Inc. into those Oppenheimer
funds on October 18, 1991, and who held shares of Advance America Funds, Inc. on
March 30, 1990, may purchase Class A shares of those four Oppenheimer funds at a
maximum sales charge rate of 4.50%.

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

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





Oppenheimer Absolute Return Fund

Internet Website:
         www.oppenheimerfunds.com

Investment Adviser
         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
         JPMorgan Chase Bank
         4 Chase Metro Tech Center
         Brooklyn, New York 11245


Independent Registered Public Accounting Firm
         KPMG LLP
         707 Seventeenth Street
         Denver, Colorado 80202

Legal Counsel
         Mayer Brown LLP
         1675 Broadway
         New York, New York 10019




PX0853.001.0907



---------------------
(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 ABSOLUTE RETURN 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. 333-135492) on June 30, 2006, and
incorporated herein by reference.

(b) By-Laws dated June 5, 2006: Previously filed with Registrant's Initial
Registration Statement (Reg. No. 333-135492) on June 30, 2006, and incorporated
herein by reference.

(c) Not applicable.

(d) Investment Advisory Agreement dated June 15, 2006: Previously filed with
Registrant's Pre-Effective Amendment No. 1, 11/21/06, and incorporated herein by
reference.

(e) (i) General Distributor's Agreement dated June 15, 2006: Previously filed
with Registrant's Pre-Effective Amendment No. 1, 11/21/06, and incorporated
herein by reference.

(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 Compensation Deferral Plan for Disinterested
Trustees/Directors: Previously filed with Post-Effective Amendment No. 1 to the
Registration Statement of Oppenheimer Baring Japan Fund (Reg. No. 333-137581),
(9/27/07), 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: Previously filed with Registrant's
             Pre-Effective Amendment No. 2, 2/16/07, and incorporated herein by
             reference.

(j)          Independent Auditor's Consent: Filed herewith.

(k)          Not applicable.

(l)          Investment Letter from OppenheimerFunds, Inc. to Registrant:
             Previously filed with Registrant's Pre-Effective Amendment No. 2,
             2/16/07, and incorporated herein by reference.

(m)          Service Plan and Agreement for Class A shares dated June 15, 2006:
             Previously filed with Registrant's Pre-Effective Amendment No. 2,
             2/16/07, and incorporated herein by reference.

(n)          (i) 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.

             (ii) Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated
             through 8/29/07: Previously filed with the Initial Registration
             Statement of Oppenheimer Portfolio Series Fixed Income Investor
             Fund (Reg. No. 333-146105), (9/14/07), 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.

             (iii)Power of Attorney for David Downes dated August 8, 2007:
             Previously filed with the Pre-Effective Amendment No. 1 to the
             Registration Statement on Form N-14 of Oppenheimer Capital
             Appreciation Fund (Reg. No. 333-144564), 08/09/07, 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 Amended and
Restated 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, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Patrick Adams                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert Agan,                             Senior  Vice  President  of  Shareholder   Financial  Services,   Inc.  and
Senior Vice President                    Shareholders   Services,   Inc.;   Vice   President   of   OppenheimerFunds
                                         Distributor,  Inc., Centennial Asset Management Corporation and OFI Private
                                         Investments Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Carl Algermissen,                        None
Vice President & Associate Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael Amato,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Tracey Beck Apostolopoulos,              None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Janette Aprilante,                       Secretary   (since   December  2001)  of:   Centennial   Asset   Management
Vice President & Secretary               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).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dmitri Artemiev                          Formerly (until January 2007) Analyst/Developer at Fidelity Investments.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Hany S. Ayad,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
James F. Bailey,                         Senior Vice President of  Shareholder  Services,  Inc.  (since March 2006).
Senior Vice President                    Formerly Vice  President at T. Rowe Price Group  (September  2000 - January
                                     2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert Baker,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Michael Banta,                      None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Adam Bass,                               None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kevin Baum,                              None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jeff Baumgartner,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Marc Baylin,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Todd Becerra,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kathleen Beichert,                       Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gerald B. Bellamy,                       Assistant Vice President (Sales Manager of the  International  Division) of
Assistant Vice President                 OFI Institutional Asset Management, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Erik S. Berg,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert Bertucci,                         None
Assistant Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rajeev Bhaman,                           None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Craig Billings,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mark Binning,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert J. Bishop,                        Treasurer (since October 2003) of  OppenheimerFunds  Distributor,  Inc. and
Vice President                           Centennial Asset Management Corporation.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Beth Bleimehl,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa I. Bloomberg,                       None
Vice President & Associate Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Veronika Boesch,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Chad Boll,                               None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Antulio N. Bomfim,                       None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michelle Borre Massick,                  None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lori E. Bostrom,                         None
Vice President & Senior Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Bourgeois,                          Assistant Vice President of Shareholder Services, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David J. Bowers                          Formerly (until July 2007) Analyst at Evergreen Investments.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Boydell,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Garrett C. Broadrup,                     Formerly  an  Associate  at Davis Polk & Wardwell  (October  2002 - October
Assistant Vice President & Assistant     2006)
Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael Bromberg,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Holly Broussard,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kristine Bryan-Levin,                    None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Stephanie Bullington, Formerly Fund Accounting Manager at Madison Capital
Management Company Assistant Vice President (July 2005 - October 2005.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Paul Burke,                              None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mark Burns,                              None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
JoAnne Butler,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Geoffrey Caan,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dale William Campbell,                   Formerly (until January 2007) Manager at OppenheimerFunds, Inc.
Assistant 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
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
H.C. Digby Clements, None Vice President: Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Thomas Closs,                            Formerly  (until  January 2007)  Development  Manager at  OppenheimerFunds,
Assistant Vice President                 Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Peter V. Cocuzza,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gerald James Concepcion,                 None.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Susan Cornwell,                          Senior  Vice  President  of  Shareholder   Financial  Services,   Inc.  and
Senior Vice President                    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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Terry Crady,                             Formerly IT Development Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
George Curry,                            Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Julie C. Cusker,                         None
Assistant Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kevin Dachille,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Damian,                             None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert Dawson,                           None.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Delano,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kendra Delisa,                           Formerly (until January 2007) Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Richard Demarco,                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Craig P. Dinsell,                        None
Executive Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Randall C. Dishmon,                      None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rebecca K. Dolan,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Steven D. Dombrower,                     Senior Vice President of OFI Private  Investments  Inc.;  Vice President of
Vice President                           OppenheimerFunds Distributor, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Sara Donahue,                            Formerly (until November 2006) Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Alicia Dopico,                           Formerly (until August 2007) Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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 - December
2005). Vice President & Assistant Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Venkat Eleswarapu,                       Formerly  Associate  Professor  of Finance at Texas Tech  University  (July
Vice President                           2005 - December 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,                           Assistant  Secretary  (as of July  2004) of  HarbourView  Asset  Management
Assistant Vice President                 Corporation.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rachel Fanopoulos,                       Formerly Manager (until August 2007) of OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Matthew Farkas,                          Formerly Associate at Epstein Becker & Green, P.C.  (September 2000 - March
Assistant Vice President and Assistant   2006).
Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kristie Feinberg,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Emmanuel Ferreira,                       None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Ronald H. Fielding,                      Vice  President  of  OppenheimerFunds  Distributor,  Inc.;  Director of ICI
Senior Vice President;                   Mutual Insurance Company;  Governor of St. John's College;  Chairman of the
Chairman of the Rochester Division       Board of  Directors  of  International  Museum  of  Photography  at  George
                                         Eastman House.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Bradley G. Finkle,                       None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Steven Fling,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John E. Forrest,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David Foxhoven,                          Assistant Vice President of OppenheimerFunds Legacy Program.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Colleen M. Franca,                       None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Barbara Fraser,                          Formerly Attorney in Private Practice (April 2000 - November 2005).
Vice President & Associate Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Donald French,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dominic Freud,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Hazem Gamal,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Charles Gapay,                           Formerly (as of January 2007) Help Desk Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Seth Gelman,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Timothy Gerlach,                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Charles W. Gilbert,                      None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kurt Gibson,                             Formerly Manager at Barclays Capital (January 2002 - April 2006).
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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  Corporation  and of OFI
Vice President                           Institutional Asset Management, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Raquel Granahan,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert B. Grill,                         None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Carol Guttzeit,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Marilyn Hall,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kelly Haney,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Steve Hauenstein,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert W. Hawkins,                       None
Vice President & Assistant Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Thomas B. Hayes,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Heidi Heikenfeld,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Annika Helgerson,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Daniel Herrmann,                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dennis Hess,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Joseph Higgins,                          Vice President of OFI Institutional Asset Management, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dorothy F. Hirshman,                     None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Daniel Hoelscher,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Brian Hourihan,                          Assistant  Secretary of OFI  Institutional  Asset  Management,  Inc. (since
Vice President & Associate Counsel       April 2006).  Formerly Vice President and Senior  Counsel at  Massachusetts
                                         Financial Service Company (June 2004 - March 2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Edward Hrybenko,                         Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kevin Andrew Huddleston,                 None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Scott T. Huebl,                          Assistant Vice President of OppenheimerFunds Legacy Program.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Margaret Hui,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dana Hunter,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Huttlin,                            Senior Vice  President  (Director  of the  International  Division)  (since
Senior Vice President                    January 2004) of OFI Institutional Asset Management,  Inc.; Director (since
                                         June 2003) of OppenheimerFunds International Distributor Limited.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
James G. Hyland,                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kelly Bridget Ireland,                   None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kathleen T. Ives,                        Vice  President and Assistant  Secretary of  OppenheimerFunds  Distributor,
Vice President, Senior Counsel &         Inc. and  Shareholder  Services,  Inc.;  Assistant  Secretary of Centennial
Assistant Secretary                      Asset   Management   Corporation,   OppenheimerFunds   Legacy  Program  and
                                         Shareholder Financial Services, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
William Jaume,                           Senior Vice President of HarbourView  Asset Management  Corporation and OFI
Vice President                           Institutional Asset Management, Inc.; Director of OFI Trust Company.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Frank V. Jennings,                       None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Jennings,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jin Jo,                                  Formerly Audit Manager at Deloitte & Touche LLP (as of August 2007)
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Kadehjian,                          None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Charles Kandilis,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Amee Kantesaria,                         Formerly Counsel at Massachusetts Mutual Life Insurance Company
Assistant Vice President and             (May 2005-December 2006).
Assistant Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rezo Kanovich,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Thomas W. Keffer,                        None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael Keogh,                           Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Kiernan,                            Formerly  Vice  President and Senior  Compliance  Officer,  Guardian  Trust
Assistant Vice President & Marketing     Company,  FSB at The  Guardian  Life  Insurance  Company of America  (since
Compliance Manager                       February 1998 - November 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael Kim,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Audrey Kiszla,                           Formerly Vice President at First Horizon Merchant Services  (December 2005-
Vice President                           May 2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Klassen,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Richard Knott,                           None
Executive Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Daniel Kohn,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Martin S. Korn,                          None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Tatyana Kosheleva,                       Formerly (as of April 2007) Finance Manager at IBM Corp.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Brian Kramer,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
S. Arthur Krause, Formerly Product Manager of OppenheimerFunds, Inc. (as of
January 2007). Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gloria LaFond,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Lamentino,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Tracey Lange,                            Vice  President  of  OppenheimerFunds  Distributor,  Inc.  and OFI  Private
Vice President                           Investments Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jeffrey P. Lagarce,                      President of OFI Institutional Asset Management, Inc. as of January 2005.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Latino,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gayle Leavitt,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Christopher M. Leavy,                    None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Randy Legg,                              None
Vice President & Associate Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Laura Leitzinger,                        Senior  Vice  President  of  Shareholder  Services,  Inc.  and  Shareholder
Senior Vice President                    Financial Services, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Justin Leverenz,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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 Inc.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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 Distributor, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Justin Livengood,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Christina Loftus,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David P. Lolli,                          None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Daniel G. Loughran                       None
Senior Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Patricia Lovett,                         Vice  President of  Shareholder  Financial  Services,  Inc. and Senior Vice
Senior Vice President                    President of Shareholder Services, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Misha Lozovik,                           None.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dongyan Ma,                              None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Steve Macchia,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Daniel Martin,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jerry Mandzij,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Angelo G. Manioudakis,                   Senior Vice President of HarbourView  Asset  Management  Corporation and of
Senior Vice President                    OFI Institutional Asset Management, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Carolyn Maxson,                          None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
William T. Mazzafro,                     Formerly  self-employed as a securities consultant (January 2004 - December
Vice President                           2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Trudi McKenna,                           Formerly Leadership  Development Supervisor at JetBlue Airways (July 2003 -
Assistant Vice President                 October 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Neil McCarthy,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Elizabeth McCormack,                     Vice  President and Assistant  Secretary of  HarbourView  Asset  Management
Vice President                           Corporation.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Joseph McDonnell,                        Formerly Senior Vice President at Lehman Bros. (April 1995 - March 2006).
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Joseph McGovern,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Charles L. McKenzie,                     Chairman of the Board,  Director,  Chief Executive Officer and President of
Senior Vice President                    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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mary McNamee,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael Medev,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lucienne Mercogliano,                    None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jay Mewhirter,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Andrew J. Mika,                          None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jan Miller,                              None.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rejeev Mohammed,                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Nikolaos D. Monoyios,                    None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Sarah Morrison,                          Formerly (as of January 2007) Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jill Mulcahy,                            None
Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John V. Murphy,                          President  and  Management  Director  of  Oppenheimer   Acquisition  Corp.;
Chairman, Chief                          President  and  Director  of  Oppenheimer  Real  Asset  Management,   Inc.;
Executive Officer & Director             Chairman  and  Director  of  Shareholder  Services,  Inc.  and  Shareholder
                                         Financial Services, Inc.; Director of 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,                          None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Suzanne Murphy,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Thomas J. Murray,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kenneth Nadler,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Christine Nasta,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Paul Newman,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
William Norman,                          None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
James B. O'Connell,                      None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Matthew O'Donnell,                       None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Ogren,                              Formerly Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Tony Oh,                                 None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John J. Okray,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kristina Olson,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lerae A. Palumbo,                        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
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Marmeline Petion-Midy,                   None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David Pfeffer,                           Senior Vice President of HarbourView  Asset  Management  Corporation  since
Senior Vice President & Chief            February 2004.
Financial Officer
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
James F. Phillips,                       None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gary Pilc,                               None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Piper,                              Assistant Vice President of Shareholder Services, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jeaneen Pisarra,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Nicolas Pisciotti,                       None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Christine Polak,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Sergei Polevikov,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jeffrey Portnoy,                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David Preuss,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Ellen Puckett,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Paul Quarles,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael E. Quinn,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Julie S. Radtke,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Timothy Raeke,                           Formerly (as of July 2007) Vice President at MFS Investment Management.
Assistant 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  Corporation.  Formerly
Vice President                           Investment  Officer at Alaska  Permanent  Fund  Corporation  (April  2005 -
                                         February 2006)
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Claire Ring,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Grace Roberts,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David Robertson,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert Robis,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Antoinette Rodriguez,                    None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Stacey Roode,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jeffrey S. Rosen,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jessica Rosenfeld,                       None.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Stacy Roth,                              None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Richard Royce,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Adrienne Ruffle,                         None.
Vice President & 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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gary Salerno,                            Formerly  (as  of  May  2007)   Separate   Account   Business   Liaison  at
Assistant Vice President                 OppenheimerFunds, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Valerie Sanders,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kurt Savallo,                            Formerly Senior Business Analyst at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rudi W. Schadt,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mary Beth Schellhorn, Formerly Human Resources Generalist at Misys Banking
Systems (November Assistant Vice President 2000 - June 2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Ellen P. Schoenfeld,                     None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Patrick Schneider,                       Formerly Human Resources Manager at ADT Security Services  (December 2001 -
Assistant Vice President                 July 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 Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Asutosh Shah,                            Formerly Vice  President at Merrill  Lynch  Investment  Managers  (February
Vice President                           2002 - February 2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kamal Shah,                              None.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Nava Sharma,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Tammy Sheffer,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mary Dugan Sheridan,                     None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David C. Sitgreaves,                     None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael Skatrud,                         Formerly (as of March 2007) Corporate Bond Analyst at Putnam Investments.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Enrique H. Smith,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kevin 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 XAware,  Inc. (October 2002 -
Vice President                           August 2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Richard A. Stein,                        None
Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Arthur P. Steinmetz,                     Senior Vice President of HarbourView Asset Management Corporation.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jennifer Stevens,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Benjamin Stewart,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Peter Strzalkowski,                      Formerly (as of August  2007)  Founder/Managing  Partner at Vector  Capital
Vice President                           Management.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John P. Stoma,                           Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Thomas Swaney,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Brian C. Szilagyi,                       None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Martin Telles,                           Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Charles Toomey,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Vincent Toner,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Melinda Trujillo,                        Formerly Senior Manager at CoBank, ACB (January 2004 - April 2006).
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Leonid Tsvayg,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Keith Tucker,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Cameron Ullyatt,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Angela Uttaro,                           None
Assistant Vice President: Rochester
Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mark S. Vandehey,                        Vice   President   and  Chief   Compliance   Officer  of   OppenheimerFunds
Senior Vice President & Chief            Distributor,  Inc., Centennial Asset Management Corporation and Shareholder
Compliance Officer                       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,                              None
Vice President & Associate Counsel
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rene Vecka,                              None
Assistant Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Vincent Vermette,                        Assistant Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Elaine Villas-Obusan,                    None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jake Vogelaar,                           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 Management Corporation.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Christopher D. Weiler,                   None
Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Barry D. Weiss,                          Vice  President  of  HarbourView   Asset  Management   Corporation  and  of
Vice President                           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 Corporation.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Diederik Werdmolder,                     Director of OppenheimerFunds  International Ltd. and  OppenheimerFunds  plc
Senior Vice President                    and  OppenheimerFunds   International   Distributor  Limited;  Senior  Vice
                                         President  (Managing  Director  of  the  International   Division)  of  OFI
                                         Institutional Asset Management, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Catherine M. White,                      Assistant Vice President of OppenheimerFunds  Distributor,  Inc.; member of
Assistant Vice President                 the American Society of Pension Actuaries (ASPA) since 1995.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Troy Willis,                             None
Assistant Vice President,
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mitchell Williams,                       None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Julie Wimer,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Donna M. Winn,                           President,  Chief Executive  Officer & Director of OFI Private  Investments
Senior Vice President                    Inc.; Director & President of OppenheimerFunds  Legacy Program; Senior Vice
                                         President of OppenheimerFunds Distributor, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Philip Witkower,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Brian W. Wixted,                         Treasurer of HarbourView  Asset  Management  Corporation;  OppenheimerFunds
Senior Vice President & Treasurer        International Ltd.,  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  Management  Corporation and of
Senior Vice President                    Centennial  Asset  Management  Corporation;  serves  on  the  Board  of the
                                         Colorado Ballet.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Meredith Wolff,                          None.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Oliver Wolff,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kurt Wolfgruber,                         Director of Tremont Group  Holdings,  Inc.,  HarbourView  Asset  Management
President, Chief Investment Officer &    Corporation  and OFI  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,                            None.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lucy Zachman,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert G. Zack,                          General  Counsel  of  Centennial  Asset  Management  Corporation;   General
Executive Vice President &               Counsel and Director of  OppenheimerFunds  Distributor,  Inc.;  Senior Vice
General Counsel                          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.;  Executive Vice
                                         President,  General Counsel and Director of OFI Trust Company; Director and
                                         Assistant  Secretary  of  OppenheimerFunds   International   Limited;  Vice
                                         President,  Secretary and General Counsel of Oppenheimer Acquisition Corp.;
                                         Director  of  OppenheimerFunds   International  Distributor  Limited;  Vice
                                         President of OppenheimerFunds  Legacy Program;  Vice President and Director
                                         of Oppenheimer Partnership Holdings Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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, Jr.                      Formerly  Managing  Director  and Small Cap Growth  Team  Leader at Merrill
Vice President                           Lynch.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Arthur J. Zimmer,                        Senior Vice President of HarbourView Asset Management Corporation.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------

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 Absolute Return Fund
Oppenheimer AMT-Free Municipals
Oppenheimer AMT-Free New York Municipals
Oppenheimer Balanced Fund
Oppenheimer Baring China Fund
Oppenheimer Baring Japan Fund
Oppenheimer Baring SMA International Fund
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Commodity Strategy Total Return 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 Equity Income 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
     Equity 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 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 Real Estate Fund
Oppenheimer Rising Dividends Fund, Inc.
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 SMA Core Bond Fund
Oppenheimer SMA International Bond Fund
Oppenheimer Strategic Income Fund
Oppenheimer Transition 2010 Fund
Oppenheimer Transition 2015 Fund
Oppenheimer Transition 2020 Fund
Oppenheimer Transition 2030 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, 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.  Oppenheimer
Real Asset Management, Inc. and OFI 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 30 Herbert Street,
Dublin 2, Ireland.

The address of Trinity Investment Management Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.

The address of OppenheimerFunds International Distributor Limited is Suite 1601,
Central Tower, 28 Queen's Road 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 and Treasurer         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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kathleen Beichert(1)                             Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Rocco Benedetto(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Beringer                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Rick Bettridge                                   Vice President                       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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Bryan Bracchi                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michelle Brennan(2)                              Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Joshua Broad(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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Robert Caruso                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Donelle Chisolm(2)                               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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael Daley                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Cliff H. Dunteman                                Vice President                       None
N 53 W 27761 Bantry Road
Sussex, WI 53089-45533
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Beth Arthur Du Toit(1)                           Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William Friebel                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Alyson Frost                                     Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Robert Grill(2)                                  Senior Vice President
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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. Gunter                                  Vice President                       None
603 Withers Circle
Wilmington, DE 19810
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Garrett Harbron                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kevin J. Healy(2)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Wendy G. Hetson(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Jennifer Hoelscher(1)                            Assistant 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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Patrick Hyland(2)                                Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Keith Hylind(2)                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kathleen T. Ives(1)                              Vice President & Assistant           Assistant Secretary
                                                 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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Elyse Jurman                                     Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Matthew Kasa                                     Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Keffer(2)                                 Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Christina J. Keller(2)                           Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael Keogh(2)                                 Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Brian Kiley(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)                                 President and Director               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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Jesse Levitt(2)                                  Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Eric J. Liberman                                 Vice President                       None
27 Tappan Ave., Unit West
Sleepy Hollow, NY 10591
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Malissa Lischin(2)                               Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Christina Loftus(2)                              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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael McDonald                                 Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John C. McDonough                                Senior 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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William Meerman                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Daniel Melehan                                   Vice President                       None
906 Bridgeport Court
San Marcos, CA 92069
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Saul Mendoza                                     Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Matthew Mulcahy(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Donald Pawluk(2)                                 Vice President
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Brian C. Perkes                                  Vice President                       None
6 Lawton Ct.
Frisco, TX 75034
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Wayne Perry                                      Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Charles K. Pettit(2)                             Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Rachel Powers                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Nicole Pretzel                                   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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ramsey Rayan                                     Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William J. Raynor(5)                             Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Corry Read(2)                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ruxandra Risko(2)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
David R. Robertson(2)                            Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ian M. Roche                                     Vice President                       None
7070 Bramshill Circle
Bainbridge, OH 44023
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael Rock                                     Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kenneth A. Rosenson                              Vice President                       None
24753 Vantage Pt. Terrace
Malibu, CA 90265
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Sabow                                     Vice President                       None
6617 Southcrest Drive
Edina, MN 55435
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John Saunders                                    Vice President                       None
2251 Chantilly Ave.
Winter Park, FL 32789
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Schmitt                                   Vice President                       None
40 Rockcrest Rd
Manhasset, NY 11030
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William Schories                                 Vice President                       None
3 Hill Street
Hazlet, NJ 07730
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Jennifer Sexton(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Eric Sharp                                       Vice President                       None
862 McNeill Circle
Woodland, CA 95695
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Debbie A. Simon                                  Vice President                       None
55 E. Erie St., #4404
Chicago, IL 60611
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Bryant Smith                                     Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Mark S. Vandehey(1)                              Vice President and Chief             Vice President and Chief
                                                 Compliance Officer                   Compliance Officer
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Vincent Vermete(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Patrick Walsh                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kenneth Lediard Ward                             Vice President                       None
1400 Cottonwood Valley Circle N.
Irving, TX 75038
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Teresa Ward(1)                                   Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Janeanne Weickum                                 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 Winer(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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kurt Wolfgruber                                  Director                             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Meredith Wolff(2)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michelle Wood(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 & Director           Secretary
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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 the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Registration Statement 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 27th day of September, 2007.

                                            OPPENHEIMER ABSOLUTE RETURN FUND


                                            By:      /s/ John V. Murphy*
                                                     --------------------------------------------
                                                     John V. Murphy, President,
                                                     Principal Executive Officer and 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/ Brian F. Wruble*                        Chairman of the
-------------------------------
Brian F. Wruble                             Board of Trustees                           September 27, 2007


/s/ John V. Murphy*                         President, Principal
-------------------------------
John V. Murphy                              Executive Officer and Trustee               September 27, 2007


/s/ Brian W. Wixted*                        Treasurer, Principal                        September 27, 2007
-------------------------------
Brian W. Wixted                             Financial & Accounting Officer


/s/ David K. Downes*                        Trustee                                     September 27, 2007
-------------------------------
David K. Downes

/s/ Matthew P. Fink*                        Trustee                                     September 27, 2007
-------------------------------
Matthew P. Fink


/s/ Robert G. Galli*                        Trustee                                     September 27, 2007
-------------------------------
Robert G. Galli


/s/ Phillip A. Griffiths*                   Trustee                                     September 27, 2007
-------------------------------
Phillip A. Griffiths


/s/ Mary F. Miller*                         Trustee                                     September 27, 2007
-------------------------------
Mary F. Miller


/s/ Joel W. Motley*                         Trustee                                     September 27, 2007
-------------------------------
Joel W. Motley

/s/ Russell S. Reynolds, Jr.*               Trustee                                     September 27, 2007
-----------------------------
Russell S. Reynolds, Jr.


/s/ Joseph M. Wikler*                       Trustee                                     September 27, 2007
-------------------------------
Joseph M. Wikler


/s/ Peter I. Wold*                          Trustee                                     September 27, 2007
-------------------------------
Peter I. Wold


*By:     /s/ Mitchell J. Lindauer
         --------------------------------------
         Mitchell J. Lindauer, Attorney-in-Fact





                                         OPPENHEIMER ABSOLUTE RETURN FUND

                                          Post-Effective Amendment No. 1

                                       Registration Statement No. 333-135492


                                                   EXHIBIT INDEX


Exhibit No.              Description

23(j)                    Independent Auditor's Consent