Registration No. 33-3076
                                                 File No. 811-4576

                                  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. 31                                     [X]

                                                                and/or

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

Amendment No. 33                                                    [X]

-------------------------------------------------------------------------------
               BOND FUND SERIES - OPPENHEIMER CONVERTIBLE SECURITIES FUND
-------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in Charter)

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

-------------------------------------------------------------------------------
                               800-552-1149
-------------------------------------------------------------------------------
              (Registrant's Telephone Number, including Area Code)

-------------------------------------------------------------------------------
                            Robert G. Zack, Esq.
-------------------------------------------------------------------------------
                          OppenheimerFunds, Inc.
                    Two World Financial Center, 225 Liberty Street
                         New York, New York 10281-1008

                      (Name and Address of Agent for Service)

        With a copy to: Ronald M. Feiman, Esq., Mayer, Brown, Rowe & Maw
                 1675 Broadway, New York, New York 10019

It is proposed that this filing will become effective (check appropriate box):

[   ]    Immediately upon filing pursuant to paragraph (b)
[X]      On April 30, 2007 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.


Oppenheimer
Convertible Securities Fund




Prospectus dated April 30, 2007


     Oppenheimer  Convertible Securities Fund is a mutual fund that seeks a high
level of total return as its objective,  through a combination of current income
and  capital   appreciation.   It  invests  primarily  in  securities  that  are
convertible into common stock.

     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.






                          [logo] OppenheimerFunds(R) The Right Way to Invest

Contents

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

          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


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

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

           Special Investor Services
           AccountLink
           PhoneLink
           OppenheimerFunds Internet Website
           Retirement Plans

           How to Sell Shares
           By Wire
           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 seeks a high level of
total return on its assets  through a combination  of current income and capital
appreciation.

     WHAT DOES THE FUND MAINLY INVEST IN? As a matter of non-fundamental  policy
that shall not be changed  without 60 days advance notice to  shareholders,  the
Fund  invests,  under normal market  conditions,  at least 80% of its net assets
(plus  borrowings for  investment  purposes) in  convertible  securities.  Those
convertible  securities  include  domestic  and (to a  limited  extent)  foreign
corporate bonds, notes,  warrants and preferred stocks that can be exchanged for
(converted  into) common stock of the issuer.  The Fund can invest without limit
in lower-grade,  high-yield convertible debt securities,  sometimes called "junk
bonds,"  and many of the  convertible  bonds the Fund buys are below  investment
grade.

     The  Fund  has no  limitations  on the  range  of  maturities  of the  debt
securities  in which it can invest  and  therefore  may hold bonds with  short-,
medium-  or  long-term  maturities.  In  addition,  the Fund  does not limit its
investments to securities of issuers in a particular market capitalization range
and can hold securities of small-cap, medium-cap and large-cap issuers.

     While  the  Fund  can  also   invest  up  to  20%  of  its  net  assets  in
non-convertible  debt securities and common stocks, not more than 15% of its net
assets  can be  invested  in  common  stocks  that do not pay  dividends.  These
investments are more fully explained in "About the Fund's Investments," below.

     HOW DOES THE PORTFOLIO  MANAGER  DECIDE WHAT  SECURITIES TO BUY OR SELL? In
selecting  securities  for  the  Fund,  the  Fund's  portfolio  manager  uses  a
disciplined,   value-oriented   investment   approach  based  on  a  fundamental
"bottom-up"  analysis of the financial  condition of individual  issuers  rather
than overall  market or industry  conditions or trends.  The  portfolio  manager
currently  focuses on the factors below (which may vary in particular  cases and
may change over time):

     o The portfolio  manager  analyzes the balance sheet strength of individual
issuers, including current and historic financial condition, trading activity in
their  securities,  present  and  anticipated  cash flows,  estimated  values in
relation to historic  cost,  the issuer's  managerial  expertise,  debt maturity
schedules,  current  and  future  borrowing  requirements  and any change in its
condition that might affect its ability to meet future obligations.

     o The portfolio manager searches for convertible debt securities that might
offer  participation in equity-like  returns without excessive price volatility.
The underlying stock prices of these securities are, in the portfolio  manager's
opinion,  likely to outperform  the equity  market  because of the potential for
future superior earnings growth.

     o To avoid the volatility of owning stocks directly,  the portfolio manager
generally sells stocks after they are obtained by converting securities the Fund
held. o While the Fund is not required to sell securities to maintain 80% of its
net assets in convertible  securities,  if its  investments  in  non-convertible
securities,  cash and  common  stock  exceed  20% of net assets it will make new
investments only in convertible securities until the 80% standard is met.

     WHO IS THE FUND DESIGNED FOR? The Fund is designed  primarily for investors
seeking  high total  return over the long term from a fund that invests for both
current  income  and  capital  appreciation  in  convertible  securities.  Those
investors  should be willing to assume the credit risks of a fund that typically
invests a significant  amount of its assets in lower-grade bonds and the changes
in share prices that can occur when interest rates change.  The Fund is intended
as a  long-term  investment,  not a  short-term  trading  vehicle,  and  may  be
appropriate as part of an investor's  retirement  plan portfolio.  However,  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  are
subject to changes in their  value from a number of  factors,  described  below.
There is also the risk that poor  security  selection  by the Fund's  investment
manager,  OppenheimerFunds,  Inc.  (the  "Manager"),  will  cause  the  Fund  to
underperform other funds having a similar objective.

     CREDIT  RISK.  Debt  securities  are  subject to credit  risk.  Credit risk
relates  to the  ability  of the  issuer  of a  security  to make  interest  and
principal  payments on the  security as they become due. If the issuer  fails to
pay  interest,  the Fund's  income might be reduced,  and if the issuer fails to
repay  principal,  the value of that  security and of the Fund's shares might be
reduced.  Debt  securities  and preferred  stocks issued by domestic and foreign
corporations are subject to risks of default.  A downgrade in an issuer's credit
rating or other adverse news about an issuer can reduce the market value of that
issuer's securities.

     Special  Risks of  Lower-Grade  Securities.  Because  the  Fund can  invest
without limit in securities  rated below  investment  grade to seek high income,
the  Fund's  credit  risks  are  greater  than  those  of  funds  that  buy only
investment-grade  bonds.  Lower-grade  debt securities may be subject to greater
market  fluctuations  and  greater  risks of loss of income and  principal  than
investment-grade  debt  securities.  Securities  that are (or that have  fallen)
below  investment  grade are exposed to a greater risk that the issuers of those
securities  might  not  meet  their  debt  obligations.  The  market  for  these
securities  may be less liquid,  making it  difficult  for the Fund to sell them
quickly at an acceptable  price.  These risks can reduce the Fund's share prices
and the income it earns.

     Special  Risks  of  Small-  and  Mid-Cap  Issuers.  While  the Fund can buy
convertible   securities   of  companies  of  small,   medium  or  large  market
capitalizations,  to the extent  the Fund  invests  in  small-capitalization  or
medium-capitalization companies, they may offer greater potential for high total
return than securities of larger issuers. However, small-cap and mid-cap issuers
may have less of a trading  market  for their  securities  and may be subject to
greater  risks of default  than  securities  of larger  issuers.  These  factors
increase the potential for losses to the Fund.

     INTEREST RATE RISKS.  The values of debt  securities  are subject to change
when prevailing  interest rates change. When prevailing interest rates fall, the
values  of  already-issued  debt  securities  generally  rise.  When  prevailing
interest  rates rise, the values of  already-issued  debt  securities  generally
fall,  and they may sell at a discount from their face amount.  The magnitude of
these  fluctuations  will often be greater  for debt  securities  having  longer
maturities than for 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  investments in new securities at lower yields will reduce the
Fund's income.

     STOCK MARKET RISKS.  Because most of the Fund's investments are convertible
into  common  stock,  the  prices  of  the  Fund's  investments  in  convertible
securities are sensitive to events that affect the values of the issuer's common
stock.  Those can include broad stock market events as well as events  affecting
the particular issuer,  such as poor earnings reports,  loss of major customers,
major  litigation,  or regulatory  changes affecting the issuer or its industry.
The income offered by fixed-income securities can help reduce the effect of that
volatility  on the Fund's  total  return to some  degree,  but the prices of the
Fund's convertible securities will be affected by those events.

     THERE ARE SPECIAL RISKS IN USING DERIVATIVE  INVESTMENTS.  The Fund can use
derivatives to seek increased  income or to try to hedge  investment  risks.  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,  structured  notes,  and  equity-linked  debt securities are
examples of derivatives the Fund can 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,  might not perform the
way the Manager expected it to perform. If that happens, the Fund's share prices
could fall or the Fund could get less income than expected.  The Fund has limits
on the amount of particular types of derivatives it can hold and is not required
to use them to seek its objective.  Using derivatives can cause the Fund to lose
money on its investments and/or increase the volatility of its share prices.

     HOW RISKY IS THE FUND OVERALL?  The risks described above collectively form
the  overall  risk  profile  of the Fund and can  affect the value of the Fund's
investments,   its  investment  performance,  and  the  prices  of  its  shares.
Particular  investments and investment  strategies also have risks.  These risks
mean that you can lose money by  investing  in the Fund.  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.

     The values of debt securities,  particularly lower-grade securities, can be
affected by a number of factors,  such as interest rate changes and other market
factors, and the prices of the Fund's shares can go up and down. The income from
the Fund's  investments may help cushion the Fund's total return from changes in
prices,  but debt  securities  are subject to credit  risks that can also affect
their   values  and  income   and  the  share   prices  of  the  Fund.   In  the
OppenheimerFunds  spectrum,  the Fund  generally  has more risks than bond funds
that focus primarily on U. S. government  securities and investment-grade  bonds
but may be less volatile than funds that focus solely on investments in stocks.

     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


     The bar chart and table below show one measure of the risks of investing in
the Fund, by showing changes in the Fund's  performance (for its Class M shares)
from year to year for the last 10 calendar  years and by showing how the average
annual total returns of the Fund's shares, both before and after taxes,  compare
to those of  broad-based  market  indices.  The after-tax  returns for the other
classes of shares will vary.

     The after-tax  returns are shown for Class M shares only and are calculated
using the historical  highest  individual  federal  marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or local
taxes.  In  certain  cases,  the  figure  representing  "Return  After  Taxes on
Distributions  and Sale of Fund  Shares"  may be higher  than the  other  return
figures for the same period.  A higher  after-tax  return results when a capital
loss occurs upon  redemption and  translates  into an assumed tax deduction that
benefits the shareholder.  The after-tax returns are calculated based on certain
assumptions  mandated by regulation and your actual after-tax returns may differ
from those shown,  depending on your  individual  tax  situation.  The after-tax
returns set forth below are not relevant to investors who hold their Fund shares
through   tax-deferred   arrangements  such  as  401(k)  plans  or  IRAs  or  to
institutional   investors  not  subject  to  tax.  The  Fund's  past  investment
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future.


     Annual Total Returns  (Class M) (as of December 31 each year) [See appendix
to prospectus for data in bar chart showing the annual total return]

     Sales charges and taxes are not included in the  calculations  of return in
this bar chart, and if those charges and taxes were included, the returns may be
less than those shown.


     For the period from 1/1/06 through  12/31/06,  the cumulative return before
taxes for Class M shares was 10.68%.


     During  the  period  shown  in the  bar  chart,  the  highest  return  (not
annualized)  before  taxes for a calendar  quarter was 16.47%  (4Qtr99)  and the
lowest return (not  annualized)  before taxes for a calendar quarter was -10.70%
(3Qtr98).

------------------------------------------------------ ---------------------- ---------------------- ----------------------
                                                                                     5 Years               10 Years

Average Annual Total Returns                                                   (or life of class,     (or life of class,
for the periods ended December 31, 2006                       1 Year                if less)               if less)

------------------------------------------------------ ---------------------- ---------------------- ----------------------
------------------------------------------------------ ---------------------- ---------------------- ----------------------
Class M Shares (inception 6/3/86)

  Return Before Taxes                                          7.08%                  5.92%                  6.21%
  Return After Taxes on Distributions                          6.01%                  4.35%                  3.90%
  Return After Taxes on Distributions and Sale of
         Fund Shares                                           4.72%                  4.11%                  3.95%

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

Lehman Bros. Aggregate Bond Index                              4.33%                  5.06%                6.24%(1)
(reflects no deduction for fees, expenses or taxes)                                                        5.33%(2)

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

Standard & Poor's 500 Index                                   15.78%                  6.18%                8.42%(1)
(reflects no deduction for fees, expenses or taxes)                                                        4.10%(2)

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

Merrill Lynch All Convertibles Index                          12.83%                  7.74%                8.54%(1)
(reflects no deduction for fees, expenses or taxes)                                                        6.09%(2)

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

Class A Shares (inception 5/1/95)                              4.27%                  5.54%                  6.28%

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

Class B Shares (inception 5/1/95)                              4.75%                  5.63%                  6.42%

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

Class C Shares (inception 3/11/96)                             8.78%                  5.98%                  6.10%

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

Class N Shares (inception 3/1/01)                              9.19%                  6.37%                  4.88%

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

1.     From 12/31/96.
2      From 2/28/01.


     Class M shares  were first  publicly  offered  6/3/86 as Class A shares and
were  re-designated  as Class M shares on  3/11/96.  The Fund's  Class Y shares,
which had been offered since  5/1/95,  were  re-designated  as Class A shares on
3/11/96.


     The Fund's average annual total returns include  applicable  sales charges:
for Class A, the current maximum initial sales charge of 5.75%; for Class M, the
current  maximum  initial  sales  charge of 3.25%;  for Class B, the  contingent
deferred sales charge of 5% (1-year) and 2% (5-year);  and for Class C and Class
N, the 1.00%  contingent  deferred sales charge for the 1-year  period.  Because
Class B shares  convert  to Class A shares 72  months  after  purchase,  Class B
"life-of-class"  performance  does not include  any  contingent  deferred  sales
charge and uses Class A performance for the period after conversion. The returns
measure the performance of a hypothetical  account and assume that all dividends
and capital gains  distributions  have been reinvested in additional shares. The
performance of the Fund's shares is compared to Lehman  Brothers  Aggregate Bond
Index, an unmanaged index of U.S.  corporate and government  bonds,  the S&P
500 Index,  an  unmanaged  index of common  stocks,  and the  Merrill  Lynch All
Convertibles  Index,  an unmanaged  index of U.S.  convertible  securities.  The
indices  performance  includes  reinvestment  of  income  but does  not  reflect
transaction costs, fees, expenses or taxes. Prior to 12/31/06, the Fund compared
its performance to the Goldman Sachs Convertible Bond 100 Index,  instead of the
Merrill Lynch All Convertibles  Index.  The Fund's  performance can no longer be
compared to the Goldman Sachs Convertible Bond 100 Index because it is no longer
published. The Fund's investments vary from those in the indices.


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  therefore pay those expenses  indirectly.  Shareholders  pay other
transaction  expenses  directly,  such as sales  charges.  The numbers below are
based on the Fund's expenses during its fiscal year ended December 31, 2006.


------------------------------------------------------------------------------------------------------------------------
Shareholder Fees (charges paid directly from your investment):
------------------------------------------------------------------------------------------------------------------------
--------------------------------------- --------------- ---------------- --------------- --------------- ---------------
                                        Class A Shares  Class B Shares   Class C Shares  Class M Shares  Class N Shares
--------------------------------------- --------------- ---------------- --------------- --------------- ---------------
--------------------------------------- --------------- ---------------- --------------- --------------- ---------------
Maximum Sales Charge (Load) on              5.75%            None             None           3.25%            None
purchases (as % of offering price)
--------------------------------------- --------------- ---------------- --------------- --------------- ---------------
--------------------------------------- --------------- ---------------- --------------- --------------- ---------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original         None(1)           5%(2)           1%(3)            None           1%(4)
offering price or redemption proceeds)
--------------------------------------- --------------- ---------------- --------------- --------------- ---------------


------------------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
------------------------------------------------------------------------------------------------------------------------
--------------------------------------- --------------- ---------------- --------------- ---------------- --------------
                                        Class A Shares  Class B Shares   Class C Shares  Class M Shares      Class N
                                                                                                             Shares
--------------------------------------- --------------- ---------------- --------------- ---------------- --------------
--------------------------------------- --------------- ---------------- --------------- ---------------- --------------

Management Fees                             0.50%            0.50%           0.50%            0.50%           0.50%

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

Distribution and/or Service (12b-1)         0.23%            1.00%           1.00%            0.24%           0.50%
Fees

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

Other Expenses                              0.22%            0.25%           0.24%            0.17%           0.23%

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

Total Annual Operating Expenses             0.95%            1.75%           1.74%            0.91%           1.23%

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

     Expenses may vary in future years. "Other Expenses" includes transfer agent
fees,  custodial fees, and accounting and legal expenses that the Fund pays. The
"Other  Expenses"  in the table are based on, among other  things,  the fees the
Fund would have paid if the  transfer  agent had not waived a portion of its fee
under a  voluntary  undertaking  to the  Fund to  limit  these  fees to 0.35% of
average daily net assets per fiscal year for all classes.  That  undertaking may
be amended or withdrawn at any time. The Fund also receives certain credits from
the Fund's  custodian  that,  during  the fiscal  year,  reduced  its  custodial
expenses for all share  classes.  "Other  Expenses" and "Total Annual  Operating
Expenses" for the other classes of shares were the same as shown in the table.

     While the Class M plan permits an annual  asset-based  sales charge payment
of 0.50% per year, the Board has set that payment at zero effective February 11,
2004.


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

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

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

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

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


---------------------------------- --------------------- -------------------- ------------------- -------------------
     If shares are redeemed:              1 Year               3 Years             5 Years             10 Years
---------------------------------- --------------------- -------------------- ------------------- -------------------
---------------------------------- --------------------- -------------------- ------------------- -------------------

Class A Shares                               $667                 $862               $1073               $1679

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

Class B Shares                               $679                 $856               $1157               $1669(1)

---------------------------------- --------------------- -------------------- ------------------- -------------------
---------------------------------- --------------------- -------------------- ------------------- -------------------
Class C Shares                               $278                 $553                $952               $2069
---------------------------------- --------------------- -------------------- ------------------- -------------------
---------------------------------- --------------------- -------------------- ------------------- -------------------
Class M Shares                               $415                 $607                $815               $1413
---------------------------------- --------------------- -------------------- ------------------- -------------------
---------------------------------- --------------------- -------------------- ------------------- -------------------

Class N Shares                               $226                 $393                $680               $1498

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

---------------------------------- --------------------- -------------------- ------------------- -------------------
   If shares are not redeemed:            1 Year               3 Years             5 Years             10 Years
---------------------------------- --------------------- -------------------- ------------------- -------------------
---------------------------------- --------------------- -------------------- ------------------- -------------------

Class A Shares                              $667                 $862               $1073               $1679

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

Class B Shares                             $179                 $556                $957        $1669    (1)

---------------------------------- --------------------- -------------------- ------------------- -------------------
---------------------------------- --------------------- -------------------- ------------------- -------------------
Class C Shares                             $178                 $553                $952               $2069
---------------------------------- --------------------- -------------------- ------------------- -------------------
---------------------------------- --------------------- -------------------- ------------------- -------------------
Class M Shares                             $415                 $607                $815               $1413
---------------------------------- --------------------- -------------------- ------------------- -------------------
---------------------------------- --------------------- -------------------- ------------------- -------------------

Class N Shares                             $126                 $393                $680               $1498


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

     1.  Class B  expenses  for years 7 through 10 are based on Class A expenses
since  Class B shares  automatically  convert to Class A shares 72 months  after
purchase.

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  Manager's  evaluation  of  economic  and  market  trends.  The  Fund's
portfolio  might not always  include all of the different  types of  investments
described in this prospectus.  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,  and in some cases by using hedging  techniques.  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  concentrate  25% or more of its
investments in any one industry.

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

     Convertible  Securities.  Convertible  debt  securities  pay  interest  and
convertible  preferred  stocks pay dividends until they mature or are converted,
exchanged  or  redeemed.  Because  of the  conversion  feature,  the  price of a
convertible  security will  normally  vary in some  proportion to changes in the
price of the underlying common stock. In general, convertible securities:

     o have higher  yields than common  stocks but lower yields than  comparable
non-convertible securities,

     o may be subject to less  fluctuation  in value than the  underlying  stock
because of their income, and

     o provide  potential  for capital  appreciation  if the market price of the
underlying  common  stock  increases  (and in those  cases may be  thought of as
"equity substitutes").

     The Fund does not invest  only in  securities  of  issuers in a  particular
market  capitalization  range,  and at times  the  Manager  might  increase  the
relative emphasis of securities of issuers in a particular  capitalization range
if the Manager believes they offer greater opportunities for total return.

     Securities of smaller,  newer  companies  may offer  greater  potential for
higher  returns,  but they are also  subject  to greater  risks of default  than
larger, more established issuers. They may have unseasoned management,  they may
lack established  markets for their products or services and may be dependent on
only a few customers or suppliers for a greater amount of their business.  Also,
they may not have the  financial  strength  to  sustain  them  through  business
downturns or adverse  market  conditions.  These  securities  may have less of a
trading market than securities of larger issuers, and it might be harder for the
Fund to dispose of its  holdings  at an  acceptable  price when it wants to sell
them.  As a result,  to the  extent  the Fund  invests  in  securities  of these
issuers,  they have  greater  risks.  The Fund might not  achieve  its  expected
returns  from these  securities  and its share price may  fluctuate  more to the
extent that it holds these investments.


     In selecting securities for the Fund's portfolio and evaluating their yield
potential and credit risk, the Manager does not rely solely on ratings by rating
organizations but evaluates business and economic factors affecting an issuer as
well. The debt  securities  the Fund buys may be rated by  nationally-recognized
rating  organizations  such as Moody's Investors  Service,  Inc.  ("Moody's") or
Standard & Poor's Rating Service ("Standard &  Poor's"),  or they may be
unrated securities assigned an equivalent rating by the Manager.  Credit ratings
evaluate the  expectation of scheduled  payments of interest and principal,  not
market risks. Rating agencies might not always change their credit ratings of an
issuer in a timely  manner to reflect the events  that could  affect an issuer's
ability to make timely payments on its obligations.


     The Fund can invest in debt securities  that are investment  grade or below
investment grade in credit quality and at times will invest substantial  amounts
of its assets in securities below investment grade to seek higher income as part
of its goal.  "Investment-grade"  rated securities are those in the four highest
rating categories of national ratings organizations.  The ratings definitions of
the principal ratings  organizations are included in Appendix A to the Statement
of Additional Information.

     Convertible Preferred Stock. Unlike common stock, preferred stock typically
has a stated dividend rate.  When  prevailing  interest rates rise, the value of
preferred stock having a fixed dividend rate tends to fall. The right to payment
of dividends on preferred  stock  generally is  subordinate to the rights of the
company's debt  securities.  Preferred stock  dividends may be cumulative  (they
remain a liability of the company until paid) or non-cumulative.

     Some convertible  preferred stock with a mandatory conversion feature has a
set call price to buy the  underlying  common stock.  If the  underlying  common
stock price is less than the call price, the holder will pay more for the common
stock than its market  price.  The issuer might also be able to redeem the stock
prior to the mandatory  conversion  date, which could diminish the potential for
capital appreciation on the investment.

     "Mandatory-Conversion" Securities. These securities may combine features of
both  equity and debt  securities.  Normally  they have a  mandatory  conversion
feature and an adjustable  conversion  ratio.  One type of mandatory  conversion
security is the  convertible  preferred stock  discussed  above.  Another is the
"equity-linked"  debt  security,  having a  principal  amount at  maturity  that
depends on the performance of a specified equity security,  such as the issuer's
common  stock.  Their  values can also be affected by interest  rate changes and
credit risks of the issuer.  They may be  structured  in a way that limits their
potential for capital  appreciation  and the entire value of the security may be
at risk of loss depending on the performance of the underlying equity security.


     Lower-Grade  Securities.   Lower-grade  convertible  securities  may  offer
greater   opportunities  for  higher  returns  than   higher-grade   securities.
Lower-grade  securities  are those  rated  below  "Baa" by Moody's or lower than
"BBB" by Standard & Poor's or similar ratings by other nationally-recognized
rating organizations.  The Fund does not invest in securities rated below "C" or
which are in  default.  While  securities  rated  "Baa" by  Moody's  or "BBB" by
Standard  &  Poor's  are  considered  "investment  grade,"  they  have  some
speculative characteristics.


     o  Special  Risks  of  Lower-Grade   Securities.   While   investment-grade
securities are subject to risks of  non-payment  of interest and  principal,  in
general,  higher-yielding  lower-grade  bonds,  whether  rated or unrated,  have
greater  risks  than  investment-grade  securities  as stated in "Main  Risks of
Investing  in the Fund."  There may be less of a market  for them and  therefore
they may be harder to sell at an  acceptable  price.  These  risks mean that the
Fund might not achieve the expected income from lower-grade securities, and that
the Fund's net asset  value per share  could be affected by declines in value of
these securities.

     The Fund  also  invests  in  investment-grade  debt  securities.  It is not
required to dispose of debt  securities  whose  ratings fall after the Fund buys
them.  However,  the portfolio  manager will monitor  those  holdings of issuers
whose credit quality falls to determine whether the Fund should sell them.


     Zero-Coupon  Securities.  Some of the debt  securities the Fund can buy are
zero-coupon  bonds that pay no interest and are often issued at a discount  from
their face value.  Zero-coupon securities are subject to greater fluctuations in
price from interest rate changes than interest-bearing  securities of similar or
same maturities.  The Fund may have to pay out the imputed income on zero-coupon
securities without receiving the actual cash currently.


     Derivative  Investments.  In addition to using hedging  instruments such as
options, the Fund can use other derivative investments, such as structured notes
and   "mandatory-conversion"    securities,   including   "equity-linked"   debt
securities,  because they offer the potential for increased income and principal
value.

     Markets  underlying  securities  and indices  may move in a  direction  not
anticipated  by the Manager.  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. Certain derivative investments held by the Fund may be illiquid.

     o "Structured" Notes.  Structured notes are  specially-designed  derivative
debt investments. Payments of principal or interest on those notes are linked to
the value of an index (such as a currency or  securities  index),  an individual
stock,  or a commodity.  The terms of the instrument may be  "structured" by the
purchaser (the Fund) and the borrower issuing the note.

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


     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 objective is not a
fundamental  policy but will not be changed by the Board without  advance notice
to  shareholders.  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 objective,  the Fund can also use
the investment  techniques and strategies  described  below.  The Fund might not
always use all of them. These techniques have risks,  although some are designed
to help reduce overall investment or market risks.

     Foreign  Securities.  The Fund can  invest  up to 15% of its net  assets in
foreign  securities.  The Fund can buy securities of companies in both developed
markets  and  emerging  markets.  The Fund's  foreign  debt  investments  can be
denominated in U.S. dollars or in foreign currencies.  The Fund will buy foreign
currency only in connection with the purchase and sale of foreign securities and
not for speculation.

     o Risks of  Foreign  Investing.  While  foreign  securities  offer  special
investment  opportunities,  there are also  special  risks  that can  reduce the
Fund's  share  prices and  returns.  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.  Currency rate changes can also
affect the distributions the Fund makes from the income it receives from foreign
securities as foreign  currency values change against the U.S.  dollar.  Foreign
investing can result in higher  transaction  and  operating  costs for the Fund.
Foreign   issuers  are  not  subject  to  the  same  accounting  and  disclosure
requirements that U.S. companies are subject to.

     The value of  foreign  investments  may be  affected  by  exchange  control
regulations,  expropriation or  nationalization  of a company's assets,  foreign
taxes, delays in settlement of transactions, changes in governmental economic or
monetary policy in the U.S. or abroad, or other political and economic factors.

     Additionally,  if a 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.

     Common  Stocks and Other Equity  Securities.  The Fund can invest in common
stocks  and  other  equity  securities,  including  warrants  and  rights,  when
consistent with the Fund's objectives.

     Stocks fluctuate in price and their  short-term  volatility at times may be
great.  Because the Fund may invest in stocks and  securities  convertible  into
stocks,  the value of the Fund's  portfolio  may be  affected  by changes in the
stock  markets.  Stock  market  risk may  therefore  affect the Fund's per share
prices,  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.  Because  the Fund can buy  both  U.S.  and  foreign  stocks  it could be
affected by changes in domestic and foreign  stock  markets.  Other  factors can
affect a particular  stock's price, such as poor earnings reports by the issuer,
loss of major  customers,  major  litigation  against the issuer,  or changes in
government regulations affecting the issuer or its industry.

     Additionally, stocks of issuers in a particular industry may be affected by
changes in economic conditions that affect that industry more than others, or by
changes in government regulations,  availability of basic resources or supplies,
or other events affecting that industry.  To the extent that the Fund emphasizes
investments in a particular industry, its share values may fluctuate in response
to events affecting that industry. Other factors can affect a particular stock's
price,  such as poor  earnings by the  issuer,  loss of major  customers,  major
litigation  against the issuer, or changes in government  regulations  affecting
the issuer or its industry.

     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 will
not invest more than 10% of its net assets in illiquid or restricted securities.
The Board can increase that limit to 15%. Certain restricted securities that are
eligible for resale to qualified institutional  purchasers 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.

     Hedging. The Fund can buy and sell put and call options. These are referred
to as "hedging instruments." The Fund is not required to use hedging instruments
to seek its objective. The Fund does not use hedging instruments for speculative
purposes and has limits on its use of them.

     The Fund could write  covered call options on stocks,  purchase put options
on stocks and enter into closing  transactions  on these options for a number of
purposes.  It might do so to try to manage its exposure to the possibility  that
the  prices  of its  portfolio  securities  may fall or to try to  increase  its
income.

     Options  trading  involves  the  payment of  premiums  and has  special tax
effects  on the  Fund.  There  are  also  special  risks in  particular  hedging
strategies.  For example,  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 and will not be able to realize  any profit if the
investment has increased in value above the call price.

     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 options  positions  were not
correlated  with its other  investments  or if it could not close out a position
because of an illiquid market.


     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 of 1940, as amended,  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  Fund  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.

     Portfolio  Turnover.  The Fund's  investment  process may cause the Fund to
engage  in  active  and  frequent  trading.  Therefore,  the Fund may  engage in
short-term  trading while trying to achieve its objective.  Increased  portfolio
turnover  creates higher  brokerage and transaction  costs for the Fund (and may
reduce  performance).  Additionally,  securities  trading  can cause the Fund to
realize   capital  gains  that  are   distributed  to  shareholders  as  taxable
distributions.  The  Financial  Highlights  table at the end of this  prospectus
shows the Fund's portfolio turnover rate for each of the past five fiscal years.


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


     The Manager has been an investment  adviser since 1960. The Manager and its
subsidiaries and controlled  affiliates managed more than $245 billion in assets
as of March 31, 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.

     Advisory Fees. Under the investment advisory  agreement,  the Fund pays the
Manager an advisory fee at an annual rate that declines on additional  assets as
the Fund grows:  0.625% of the first $50 million of average annual net assets of
the Fund,  0.50% of the next $250  million,  and  0.4375% of average  annual net
assets over $300 million. The Fund's advisory fee for its last fiscal year ended
December  31,  2006 was 0.50% of  average  annual  net  assets for each class of
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 year ended December 31, 2006.


     Portfolio Manager.  The Fund's portfolio is managed by Edward Everett.  Mr.
Everett is the Fund's sole portfolio  manager and has been the person  primarily
responsible for the day-to-day management of the Fund's portfolio since 2000 and
was an investment analyst with  responsibilities  for the Fund's portfolio since
1993. Mr. Everett has been a Vice President of the Manager and of the Fund since
January 2000 and is an officer 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


     You  can  buy  shares  several  ways,  as  described   below.   The  Fund's
Distributor, OppenheimerFunds Distributor, Inc., may appoint servicing agents to
accept  purchase  (and  redemption)   orders.  The  Distributor,   in  its  sole
discretion, may reject any purchase order for the Fund's shares.

     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. If you do
not list a dealer on the  application,  Class A shares  are your  only  purchase
option.  The  Distributor  will act as your  agent  in  buying  Class A  shares.
However,  we recommend that you discuss your investment with a financial adviser
before  you make a  purchase  to be sure that the Fund is  appropriate  for you.
Class B,  Class  C,  Class M or Class N  shares  may not be  purchased  by a new
investor directly from the Distributor without the investor  designating another
registered   broker-dealer.   If  a  current  investor  no  longer  has  another
broker-dealer  of record  for an  existing  Class B, Class C, Class M or Class N
account,  the Distributor is  automatically  designated as the  broker-dealer of
record, but solely for the purpose of acting as the investor's agent to purchase
the shares.

     o Paying by Federal Funds Wire.  Shares  purchased  through the Distributor
may be paid for by Federal  Funds  wire.  The minimum  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 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?  The Fund offers investors five
different  classes  of  shares.   The  different  classes  of  shares  represent
investments in the same portfolio of securities,  but the classes are subject to
different  expenses and will likely have  different  share prices.  When you buy
shares,  be sure to specify  the class of shares.  If you do not choose a class,
your investment will be made in Class A shares.



     Class A Shares. If you buy Class A shares,  you pay an initial sales charge
(on  investments  up to $1 million  for regular  accounts or lesser  amounts for
certain  retirement  plans). The amount of that sales charge will vary depending
on the amount you invest.  The sales charge rates are listed in "How Can You Buy
Class A Shares?" below.



     Class B Shares.  If you buy Class B shares,  you pay no sales charge at the
time of purchase,  but you will pay an annual  asset-based  sales charge. If you
sell  your  shares  within 6 years of  buying  them,  you  will  normally  pay a
contingent  deferred sales charge.  That contingent deferred sales charge varies
depending  on how long you own your  shares,  as  described  in "How Can You Buy
Class B Shares?" below.




     Class C Shares.  If you buy Class C shares,  you pay no sales charge at the
time of purchase,  but you will pay an annual  asset-based  sales charge. If you
sell your  shares  within 12 months of  buying  them,  you will  normally  pay a
contingent deferred sales charge of 1.0%, as described in "How Can You Buy Class
C Shares?" below.



     Class M Shares. If you buy Class M shares, you pay an initial sales charge.
The amount of that sales  charge  depends  on the amount you  invest.  The sales
charge  rates  are  listed  in  "How  Can  You  Buy  Class  M  Shares?"   below.



     Class N Shares.  If you buy Class N shares  (available only through certain
retirement plans), you pay no sales charge at the time of purchase, but you will
pay an annual asset-based sales charge. If you sell your shares within 18 months
of the  retirement  plan's  first  purchase  of  Class N  shares,  you may pay a
contingent deferred sales charge of 1.0%, as described in "How Can You Buy Class
N Shares?" below.




     WHICH CLASS OF SHARES  SHOULD YOU CHOOSE?  Once you decide that the Fund is
an  appropriate  investment for you, the decision as to which class of shares is
best suited to your needs depends on a number of factors that you should discuss
with your financial  adviser.  Some factors to consider are how much you plan to
invest  and how  long  you  plan to hold  your  investment.  If your  goals  and
objectives  change over time and you plan to  purchase  additional  shares,  you
should  re-evaluate those factors to see if you should consider another class of
shares.  The  Fund's  operating  costs  that  apply to a class of shares and the
effect of the different types of sales charges on your investment will vary your
investment results over time.

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


     How Long Do You  Expect to Hold Your  Investment?  While  future  financial
needs cannot be predicted  with  certainty,  knowing how long you expect to hold
your investment  will assist you in selecting the  appropriate  class of shares.
Because of the effect of class-based  expenses,  your choice will also depend on
how much you plan to invest.  For example,  the reduced sales charges  available
for larger  purchases  of Class A or Class M shares may,  over time,  offset the
effect of paying an initial  sales  charge on your  investment,  compared to the
effect over time of higher class-based expenses on shares of Class B, Class C or
Class N. For retirement  plans that qualify to purchase Class N shares,  Class N
shares will generally be more advantageous than Class B and Class C shares.

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

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

     If you invest $1 million or more,  in most cases Class A shares will be the
most advantageous choice, no matter how long you intend to hold your shares. For
that reason,  the  Distributor  normally will not accept purchase orders of more
than  $100,000  of Class B shares  or $1  million  or more of Class C or Class M
shares  from a  single  investor.  Dealers  or  other  financial  intermediaries
purchasing  shares for their  customers in omnibus  accounts are responsible for
compliance with those limits.

     o Investing for the Longer Term.  If you are  investing  less than $100,000
for the  longer-term,  for  example  for  retirement,  and do not expect to need
access to your money for seven years or more, Class B shares may be appropriate.

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

     Additionally,  the  dividends  payable  to  Class  B,  Class C and  Class N
shareholders  will be reduced by the additional  expenses borne by those classes
that are not  borne by Class A or Class M shares,  such as the Class B,  Class C
and Class N  asset-based  sales charge  described  below and in the Statement of
Additional Information.


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


     HOW CAN YOU BUY CLASS A SHARES?  Class A shares are sold at their  offering
price, which is normally net asset value plus an initial sales charge.  However,
in some cases,  described  below,  purchases are not subject to an initial sales
charge,  and the  offering  price will be the net asset  value.  In other cases,
reduced sales charges may be available,  as described  below or in the Statement
of Additional  Information.  Out of the amount you invest, 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 C to the Statement
of Additional Information details the conditions for the waiver of sales charges
that apply in certain  cases,  and the special  sales charge rates that apply to
purchases of shares of the 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,  Class B,  Class C or
Class M shares of the Fund or other  Oppenheimer  funds that you or your  spouse
currently own, or are currently  purchasing,  to the value of your Class A share
purchase.  Your  Class A shares  of  Oppenheimer  Money  Market  Fund,  Inc.  or
Oppenheimer  Cash Reserves on which you have not paid a sales charge will not be
counted for this purpose.  In totaling your holdings,  you may count shares held
in your  individual  accounts  (including  IRAs and  403(b)  plans),  your joint
accounts  with your  spouse,  or accounts you or your spouse hold as trustees or
custodians on behalf of your children who are minors.  A fiduciary can count all
shares  purchased  for a trust,  estate  or  other  fiduciary  account  that has
multiple accounts (including  employee benefit plans for the same employer).  If
you are buying shares directly from the 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,
Class B, Class C or Class M shares of the Fund or other Oppenheimer funds over a
13-month period.  The total amount of your intended  purchases of Class A, Class
B, Class C and Class M 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 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 may be  exchanged  for shares of
certain  other  Oppenheimer  funds at net  asset  value per share at the time of
exchange,  without  sales  charge,  and shares of the Fund can be  purchased  by
exchange of shares of certain other Oppenheimer funds on the same basis.  Please
refer to "How to Exchange  Shares" in this  prospectus  and in the  Statement of
Additional Information for more details, including a discussion of circumstances
in which sales charges may apply on exchanges.

     o  Reinvestment  Privilege.  Within six months of a  redemption  of certain
Class A, Class B or Class M 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 and Class M shares that were subject to an initial sales
charge or Class A or Class B shares that were subject to a  contingent  deferred
sales charge when  redeemed.  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 C to the  Statement of Additional  Information.  The
Fund's   Statement  of  Additional   Information   may  be  ordered  by  calling
1.800.225.5677  or may be accessed  through  the  OppenheimerFunds  website,  at
www.oppenheimerfunds.com  (under the heading "I Want To,"  follow the  hyperlink
"Access  Fund  Documents"  and click on the icon in the column "SAI" next to the
Fund's  name).   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.

     o 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 or 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%.


     HOW CAN YOU BUY CLASS B SHARES?  Class B shares are sold at net asset value
per share  without  an  initial  sales  charge.  However,  if Class B shares are
redeemed  within six from the beginning of the calendar month of their purchase,
a  contingent  deferred  sales  charge  will be  deducted  from  the  redemption
proceeds. The Class B contingent deferred sales charge is paid to compensate the
Distributor for its expenses of providing  distribution-related  services to the
Fund in connection with the sale of Class B shares.

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

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

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

     Automatic  Conversion  of  Class B  Shares.  Class B  shares  automatically
convert to Class A shares 72 months after you  purchase  them.  This  conversion
feature  relieves  Class B  shareholders  of the  asset-based  sales charge that
applies  to Class B shares  under the Class B  Distribution  and  Service  Plan,
described  below. The conversion is based on the relative net asset value of the
two  classes,  and no sales load or other  charge is  imposed.  When any Class B
shares that you hold  convert,  any other  Class B shares that were  acquired by
reinvesting  dividends  and  distributions  on the  converted  shares  will also
convert to Class A shares. For further information on the conversion feature and
its tax  implications,  see "Class B Conversion"  in the Statement of Additional
Information.


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

     HOW CAN YOU BUY CLASS M SHARES?  Class M shares are sold at their  offering
price,  which is  normally  net asset  value  plus an initial  sales  charge.(1)
Reduced sales charges and waivers  applicable to Class M shares may be available
as described under "Special Sales Charge Arrangements and Waivers" above. 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 you 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  Distributor  does not accept  purchases of Class M
shares in amounts of $1 million or more.  The  current  sales  charge  rates and
concession paid to dealers are as follows:

------------------------------- ---------------------------- ---------------------------- ----------------------------
Amount of Purchase              Front-End Sales Charge As    Front-End Sales Charge As
                                a Percentage of              a Percentage of Net Amount   Concession As Percentage
                                Offering Price               Invested                     of Offering Price
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Less than $250,000              3.25%                        3.36%                        3.00%
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
$250,000 or more but less       2.25%                        2.30%                        2.00%
than $500,000
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
$500,000 or more but less       1.25%                        1.27%                        1.00%
than $1 million
------------------------------- ---------------------------- ---------------------------- ----------------------------

     Due to rounding,  the actual sales charge for a particular  transaction may
be higher or lower than the rates listed above.

     (1) Accounts  holding Class M shares  established  prior to March 11, 1996,
can purchase  additional  Class M shares  without sales charge,  at the offering
price equal to the net asset value per share.

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


     Class N shares are sold at net asset value without an initial sales charge.
A contingent  deferred  sales charge of 1.0% will be imposed upon the redemption
of Class N shares, if:


     o The  group  retirement  plan  is  terminated  or  Class N  shares  of all
Oppenheimer funds are terminated as an investment option of the plan and Class N
shares are redeemed  within 18 months after the plan's first purchase of Class N
shares of any Oppenheimer fund, or

     o With respect to an IRA or 403(b) plan, Class N shares are redeemed within
18 months of the  plan's  first  purchase  of Class N shares of any  Oppenheimer
fund.

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


DISTRIBUTION AND SERVICE (12b-1) PLANS.


     Service  Plan for Class A Shares.  The Fund has adopted a Service  Plan for
Class A shares 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.

     Prior to March 1, 2007, the  Distributor  paid the first year's service fee
in  advance  for  shares  purchased  in  grandfathered  retirement  plans and it
retained the service fee from the Fund with  respect to those shares  during the
first year after their  purchase.  After the shares were held by a grandfathered
retirement plan for a year, the Distributor  paid the ongoing service fee to the
dealer of record on a periodic  basis.  For shares  purchased  in  grandfathered
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.

     Distribution  and  Service  Plans for Class B, Class C, Class M and Class N
Shares.  The Fund has adopted  Distribution and Service Plans for Class B, Class
C, Class M and Class N shares to pay the  Distributor for its services and costs
in  distributing  Class B,  Class C,  Class M and Class N shares  and  servicing
accounts.  Under the plans, the Fund pays the Distributor an annual  asset-based
sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares.
While the Class M plan permits an annual  asset-based  sales  charge  payment of
0.50%,  the Fund's  Board of  Trustees  has set that  payment at zero  effective
February 11, 2004. The Distributor also receives a service fee of 0.25% per year
under the Class B, Class C, Class M and Class N plans.

     The asset-based  sales charge and service fees increase Class B and Class C
expenses  by 1.0% and  increase  Class N expenses by 0.50% of the net assets per
year of the  respective  class.  The service fee  increases  Class M expenses by
0.25% of net  assets  per year.  Because  these  fees are paid out of the Fund's
assets on an on-going basis, over time these fees will increase the cost of your
investment and may cost you more than other types of sales charges.


     The Distributor  uses the service fees to compensate  dealers for providing
personal  services for  accounts  that hold Class B, Class C, Class M or Class N
shares.  The  Distributor  normally  pays the 0.25%  service  fees to dealers in
advance  for the first year after the shares are sold by the  dealer.  After the
shares  have been held for a year,  the  Distributor  pays the  service  fees to
dealers periodically.

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

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

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


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

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

     OTHER  PAYMENTS TO  FINANCIAL  INTERMEDIARIES  AND SERVICE  PROVIDERS.  The
Manager and the Distributor,  in their discretion, also may pay dealers or other
financial   intermediaries   and  service  providers  for  distribution   and/or
shareholder servicing  activities.  These payments are made out of the Manager's
and/or the Distributor's own resources,  including from the profits derived from
the advisory fees the Manager receives from the 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 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.  Exchanging Shares.  With
the  OppenheimerFunds  Exchange  Privilege,  described  below,  you can exchange
shares automatically by phone from your Fund account to another OppenheimerFunds
account you have already established by calling the special PhoneLink number.

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

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


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

     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.,  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, Class B,  Class C or Class N  contingent  deferred
sales charge and redeem any of those shares during the applicable holding period
for the class of shares,  the contingent  deferred sales charge will be deducted
from the redemption proceeds (unless you are eligible for a waiver of that sales
charge  based  on the  categories  listed  in  Appendix  C to the  Statement  of
Additional  Information  and you advise  the  Transfer  Agent 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 C to
the Statement of Additional Information.

     To  determine  whether a  contingent  deferred  sales  charge  applies to a
redemption, the Fund redeems shares in the following order:

     1.  shares acquired by reinvestment of dividends and capital gains
         distributions,
     2.  shares held for the holding period that applies to the class, and
     3.  shares held the longest during the holding period.

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

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.
Additionally, you can exchange Class M shares of this Fund for Class A shares of
another fund. You cannot exchange shares of other  Oppenheimer funds for Class M
shares  of this Fund  (except  for  shares of money  market  funds  acquired  by
exchange from Class M shares of this  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.

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


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


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

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

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

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


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


ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?


     Risks from Excessive Purchase, Redemption and Short-Term Exchange Activity.
The OppenheimerFunds  exchange privilege affords investors the ability to switch
their  investments  among  Oppenheimer  funds if their  investment needs change.
However, there are limits on that privilege. Frequent purchases, redemptions and
exchanges of Fund shares may interfere with the Manager's  ability to manage 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 Dividend Reinvestments/B Share Conversions.  Reinvestment of dividends or
distributions  from  one  fund  to  purchase  shares  of  another  fund  and the
conversion  of  Class B  shares  into  Class A  shares  will  not be  considered
exchanges for purposes of imposing the 30-day limit.


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


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


Shareholder Account Rules and Policies


     More  information  about the 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
price,  which is the net asset value per share,  will  normally  differ for each
class of shares.  The  redemption  value of your shares may be more or less than
their original cost.

     Payment for redeemed shares  ordinarily is made in cash. It is forwarded by
check,  or  through  AccountLink  or by Federal  Funds  wire (as  elected by the
shareholder)  within seven days after the  Transfer  Agent  receives  redemption
instructions in proper form. However, under unusual circumstances  determined by
the SEC,  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 $200 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.

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


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

Dividends, Capital Gains and Taxes

     DIVIDENDS.  The Fund intends to declare dividends separately for each class
of shares from net investment  income on each regular business day and pay those
dividends   quarterly.   Daily  dividends  will  not  be  declared  or  paid  on
newly-purchased  shares until  Federal  Funds are available to the Fund from the
purchase payment for the shares. Dividends and other distributions paid on Class
A and Class M shares will  generally be higher than dividends for Class B, Class
C or Class N shares,  which normally have higher expenses than Class A and Class
M shares.  The Fund cannot  guarantee  that it will pay any  dividends  or other
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.


     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.  It
qualified  during its last fiscal  year.  The Fund,  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.

     Avoid "Buying a Distribution." If you buy shares on 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 capital gain.

     Remember,  There May be Taxes on  Transactions.  Because  the Fund's  share
prices fluctuate,  you may have a capital gain or loss when you sell or exchange
your shares. A capital gain or loss is the difference between the price you paid
for the shares and the price you received  when you sold them.  Any capital gain
is subject to capital gains tax.

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


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


Financial Highlights


     The  Financial  Highlights  Table is presented to help you  understand  the
Fund's financial performance for the past five fiscal years. 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     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003          2002
------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.22        $   13.63       $   13.27       $   11.29     $   12.76
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .35 1            .35 1           .43 1           .56           .57
Net realized and unrealized gain (loss)                  1.04             (.16)            .58            1.98         (1.41)
                                                    --------------------------------------------------------------------------
Total from investment operations                         1.39              .19            1.01            2.54          (.84)
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.45)            (.60)           (.65)           (.56)         (.63)
------------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                      $   14.16        $   13.22       $   13.63       $   13.27     $   11.29
                                                    ==========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                      10.63%            1.50%           7.74%          22.95%        (6.59)%
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $ 240,088        $ 251,033       $ 319,478       $ 310,641     $ 202,968
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $ 239,978        $ 277,049       $ 321,729       $ 252,347     $ 190,677
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    2.57%            2.66%           3.24%           4.48%         4.77%
Total expenses                                           0.95% 4          0.97%           0.94%           0.94%         0.99%
Expenses after payments and waivers
and reduction to custodian expenses                      0.95%            0.96%           0.94%           0.94%         0.99%
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%           52%


1. Per share amounts calculated based on the average shares outstanding during the period.

2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and
distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated
on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not
annualized for periods 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.

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

4. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       0.95%








CLASS B     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003             2002
----------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.24        $   13.65       $   13.29       $   11.30        $   12.79
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .24 1            .24 1           .33 1           .43              .43
Net realized and unrealized gain (loss)                  1.04             (.15)            .58            2.02            (1.38)
                                                    ------------------------------------------------------------------------------
Total from investment operations                         1.28              .09             .91            2.45             (.95)
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.34)            (.50)           (.55)           (.46)            (.54)
----------------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                      $   14.18        $   13.24       $   13.65       $   13.29        $   11.30
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       9.75%            0.68%           6.92%          22.07%           (7.44)%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $  40,597        $  58,483       $  84,816       $ 133,058        $ 154,350
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $  47,985        $  68,098       $ 102,670       $ 139,757        $ 213,259
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    1.74%            1.84%           2.47%           3.79%            3.95%
Total expenses                                           1.75% 4,5        1.79% 6         1.75% 6         1.74% 6,7        1.77% 6
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%              52%


1. Per share amounts calculated based on the average shares outstanding during the period.

2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business
day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods
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.

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

4. Voluntary waiver of affiliated funds management fees less than 0.01%.

5. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       1.75%

6. Reduction to custodian expenses less than 0.01%.

7. Voluntary waiver of transfer agent fees less than 0.01%.






FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------



CLASS C     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003             2002
----------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.21        $   13.62       $   13.27       $   11.28        $   12.76
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .24 1            .25 1           .33 1           .46              .46
Net realized and unrealized gain (loss)                  1.04             (.16)            .57            1.99            (1.40)
                                                    ------------------------------------------------------------------------------
Total from investment operations                         1.28              .09             .90            2.45             (.94)
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.34)            (.50)           (.55)           (.46)            (.54)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $   14.15        $   13.21       $   13.62       $   13.27        $   11.28
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       9.78%            0.72%           6.89%          22.14%           (7.39)%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $  55,737        $  62,231       $  80,995       $  82,149        $  61,031
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $  57,353        $  69,275       $  82,470       $  69,787        $  66,391
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    1.77%            1.89%           2.48%           3.73%            3.97%
Total expenses                                           1.74% 4,5        1.74% 6         1.70% 6         1.70% 6,7        1.76% 6
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%              52%


1. Per share amounts calculated based on the average shares outstanding during the period.

2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and
distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods 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.

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

4. Voluntary waiver of affiliated funds management fees less than 0.01%.

5. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       1.74%

6. Reduction to custodian expenses less than 0.01%.

7. Voluntary waiver of transfer agent fees less than 0.01%.








CLASS M     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003             2002
----------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.21        $   13.62       $   13.27       $   11.28        $   12.76
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .36 1            .36 1           .43 1           .50              .49
Net realized and unrealized gain (loss)                  1.03             (.16)            .57            2.00            (1.40)
                                                    ------------------------------------------------------------------------------
Total from investment operations                         1.39              .20            1.00            2.50             (.91)
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.45)            (.61)           (.65)           (.51)            (.57)
----------------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                      $   14.15        $   13.21       $   13.62       $   13.27        $   11.28
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                      10.68%            1.55%           7.69%          22.59%           (7.16)%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $  70,996        $  79,023       $ 100,877       $ 114,600        $ 108,426
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $  73,597        $  86,969       $ 106,194       $ 110,337        $ 122,897
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    2.60%            2.72%           3.24%           4.16%            4.24%
Total expenses                                           0.91% 4,5        0.91% 6         0.95% 6,7       1.32% 6,7        1.51% 6
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%              52%


1. Per share amounts calculated based on the average shares outstanding during the period.

2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business
day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods
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.

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

4. Voluntary waiver of affiliated funds management fees less than 0.01%.

5. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       0.91%

6. Reduction to custodian expenses less than 0.01%.

7. Voluntary waiver of transfer agent fees less than 0.01%.






FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------



CLASS N     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003          2002
------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.22        $   13.63       $   13.27       $   11.29     $   12.76
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .31 1            .28 1           .37 1           .49           .55
Net realized and unrealized gain (loss)                  1.02             (.15)            .58            2.00         (1.43)
                                                    --------------------------------------------------------------------------
Total from investment operations                         1.33              .13             .95            2.49          (.88)
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.39)            (.54)           (.59)           (.51)         (.59)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $   14.16        $   13.22       $   13.63       $   13.27     $   11.29
                                                    ==========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                      10.19%            1.04%           7.31%          22.45%        (6.92)%
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $  16,869        $   2,485       $   2,131       $   1,458     $     388
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   5,669        $   2,378       $   1,781       $     743     $     205
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    2.26%            2.17%           2.79%           3.87%         4.38%
Total expenses                                           1.23% 4          1.45%           1.37%           1.37%         1.43%
Expenses after payments and waivers
and reduction to custodian expenses                      1.23%            1.43%           1.37%           1.35%         1.38%
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%           52%


1. Per share amounts calculated based on the average shares outstanding during the period.

2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business
day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods 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.

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

4. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       1.23%




INFORMATION AND SERVICES

     For  More  Information  on  Oppenheimer  Convertible  Securities  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


On the Internet:              You can request these documents by e-mail or
                              through the OppenheimerFunds website. You may
                              also read or download certain documents on the
                              OppenheimerFunds website at:
                              www.oppenheimerfunds.com



     Information   about  the  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:
The Fund's SEC File No.: 811-4576   [logo] OppenheimerFunds Distributor, Inc.

PR0345.001.0407
Printed on recycled paper




                                             Appendix to Prospectus of
                                      Oppenheimer Convertible Securities Fund


     Graphic  material  included in the  prospectus of  Oppenheimer  Convertible
Securities Fund (the "Fund") under the heading:  "Annual Total Returns (Class M)
(as of December 31 each year)":

     A bar chart will be included in the  prospectus  of the Fund  depicting the
annual total returns of a hypothetical  investment in Class M shares of the Fund
for each of the ten most recent calendar years,  without deducting sales charges
or taxes.  Set forth below are the relevant  data points that will appear in the
bar chart:

Year Ended:                     Annual Total Return
12/31/97                                    18.19%
12/31/98                                     3.58%
12/31/99                                    22.74%
12/31/00                                    -5.30%
12/31/01                                    -3.72%
12/31/02                                    -7.16%
12/31/03                                    22.59%
12/31/04                                     7.69%
12/31/05                                     1.55%
12/31/06                                   10.68%








Oppenheimer Convertible Securities Fund

6803 South Tucson Way, Centennial, CO 80112
1.800.225.5677


Statement of Additional Information dated April 30, 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  April 30,  2007.  It should  be read  together  with the
prospectus,  which may be  obtained  by writing to the  Fund's  Transfer  Agent,
OppenheimerFunds  Services,  at P.O.  Box  5270,  Denver,  Colorado  80217 or by
calling the Transfer Agent at the toll-free number shown above or by downloading
it from the OppenheimerFunds Internet website at www.oppenheimerfunds.com.


Contents                                                                 Page

About the Fund
Additional Information About the Fund's Investment Policies and Risks.....2
       The Fund's Investment Policies.....................................2
       Other Investment Techniques and Strategies.........................6
       Other Investment Restrictions......................................14
       Disclosure of Portfolio Holdings...................................17
 How the Fund is Managed..................................................21
       Organization and History...........................................21
       Board of Trustees and Audit Committees.............................22
       Trustees and Officers of the Fund..................................23
       The Manager .......................................................34
Brokerage Policies of the Fund............................................38
Distribution and Service Plans............................................40
Payments to Fund Intermediaries...........................................45
Performance of the Fund...................................................49

About Your Account
How to Buy Shares.........................................................55
How to Sell Shares........................................................66
How to Exchange Shares....................................................71
Dividends, Capital Gains and Taxes........................................75
Additional Information About the Fund.....................................79

Financial Information About the Fund
Independent Registered Public Accounting Firm's Report....................81
Financial Statements .....................................................82

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



ABOUT THE FUND

Additional Information About the Fund's Investment Policies and Risks


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


     The Fund's Investment Policies.  The allocation 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 all of the
investment  techniques and strategies  described below in seeking its objective.
It may use some of the special  investment  techniques  and  strategies  at some
times or not at all.

     |X| Convertible Securities.  Convertible securities are securities that may
be exchanged for or converted into the underlying  common stock of the issuer at
the  option  of the  holder  during a  specified  period  of  time.  Convertible
securities may take the form of convertible  preferred stock,  convertible bonds
or notes, or other fixed-income  securities with stock purchase  warrants.  They
may have a combination of the features of several of these securities.


     Because of the  conversion  feature,  the price of a  convertible  security
normally  will vary in  proportion  to  changes  in the price of the  underlying
common  stock.  Convertible  securities  in  general  are  subject to less price
volatility  than the common  stocks into which they are  convertible  because of
their  comparatively  higher yields, and because of their senior position in the
issuers   capital   structure,   relative  to  common  stocks.   The  investment
characteristics of each convertible  security vary, and that variety enables the
Fund to use  convertible  securities in different  ways to pursue its investment
objective of high total return. For example, the Fund can invest in:

     o convertible  securities  that provide a relatively  high level of income,
with less appreciation potential,

     o  convertible  securities  that have  high  appreciation  potential  and a
relatively low level of income, and

     o convertible  securities that provide some  combination of both income and
appreciation potential.

     Convertible  bonds  and  convertible   preferred  stocks  are  fixed-income
securities that retain the investment characteristics of fixed-income securities
until they have been  converted.  The holder is  entitled  to receive  the fixed
income of a bond or the  dividend  preference  of a  preferred  stock  until the
holder elects to exercise the conversion privilege.  Convertible  securities are
senior  securities  and therefore have a claim against the assets of the issuing
corporation  that is  superior to the claims of holders of the  issuer's  common
stock upon liquidation of the corporation.  Convertible securities, however, are
generally  subordinated  to  similar  non-convertible  securities  of  the  same
company.  The interest income and dividends from convertible bonds and preferred
stocks provide income potential and yields that are generally higher than common
stocks, but which are generally lower than non-convertible securities of similar
credit quality.

     As with all fixed-income securities,  convertible securities are subject to
changes  in value  from  changes  in the  level of  prevailing  interest  rates.
However, the conversion feature of convertible securities,  giving the owner the
right to exchange  them for the issuer's  common  stock,  in general  causes the
market  value of  convertible  securities  to  increase  when  the  value of the
underlying common stock increases, and to fall when the stock price falls. Since
securities prices fluctuate,  however, there can be no assurance that the market
value of convertible securities will increase.  Convertible securities generally
do not have the same potential for capital appreciation as the underlying stock.
When the  value of the  underlying  common  stock is  falling,  the value of the
convertible  security  may not  experience  the same  decline as the  underlying
common  stock.  It tends to decline to a level (often called  investment  value)
approximating the  yield-to-maturity  basis of  non-convertible  debt of similar
credit quality.

     Many convertible securities sell at a premium over their conversion values.
Conversion  value is the number of shares of common  stock to be  received  upon
conversion  multiplied  by the current  market price of the stock.  That premium
represents  the  price  investors  are  willing  to pay  for  the  privilege  of
purchasing a fixed-income security having capital appreciation potential because
of the  conversion  privilege.  If the Fund  buys a  convertible  security  at a
premium,  there  can be no  assurance  that the  underlying  common  stock  will
appreciate  enough  for the  Fund to  recover  the  premium  on the  convertible
security.

     While some  convertible  securities  are a form of debt  security,  in many
cases their  conversion  feature  (allowing  conversion into equity  securities)
causes them to be regarded by the  Manager  more as "equity  equivalents."  As a
result,  the 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.

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

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

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

     While preferred stock is an equity  security,  some  convertible  preferred
stock has  characteristics  of both a debt  security  and a call  option.  These
securities can be considered  derivative securities because of their call option
component,  described  below.  Typically  these stocks are convertible to common
stock after a three-year  period (although they are callable by the issuer prior
to  conversion).  They pay a cumulative,  fixed  dividend that is senior to, and
expected to be in excess of, the dividends  paid on the common stock of the same
issuer.

     Convertible  preferred  stock is  subject  to the same  market  risk as the
common  stock of the issuer.  However  that risk may be  mitigated by the higher
dividend paid on the preferred stock.  This  convertible  preferred stock offers
limited opportunity for appreciation,  however,  because of the call feature. If
the market  value of the issuer's  common  stock  increases to the call price or
above the call  price of the  preferred  stock,  the  issuer  can (and  would be
expected to) call the preferred  stock for  redemption  at the call price.  This
convertible  preferred  stock is also subject to credit risk of the issuer as to
its ability to pay the dividend. Generally,  convertible preferred stock is less
volatile  than the related  common  stock of the issuer,  in part because of the
fixed dividend.

     o Mandatory-Conversion  Securities. The Fund can also invest in convertible
securities  referred to as  "mandatory-conversion  securities." These securities
may combine  several of the features of debt  securities and equity  securities,
including  both  preferred  stock and  common  stock.  Unlike  more  traditional
convertible securities, however, many of these securities, which consist of debt
securities  or  preferred  stock,  have a  mandatory  conversion  feature and an
adjustable  conversion  ratio. At its mandatory  conversion date, the securities
convert  automatically  into equity securities of the same or a different issuer
based on the  conversion  ratio.  As a result,  many of these  securities  offer
unlimited potential for capital  appreciation and, in some instances are subject
to complete loss of invested capital. Moreover, mandatory-convertible securities
have  increased the  sensitivity  of this market to the volatility of the equity
markets.


     o Equity-Linked Debt Securities. The Fund can purchase mandatory conversion
debt securities  whose principal amount at maturity depends upon the performance
of a specified equity security. These "equity-linked debt securities" are a form
of  derivative  security and differ from  ordinary  debt  securities in that the
principal  amount  received at maturity is not fixed.  Instead,  their principal
value is based on the price of the linked  equity  security at the time the debt
security matures. These debt securities usually mature in one to four years, and
during the years to maturity pay interest at a fixed rate.


     Although these debt  securities  are typically  adjusted for events such as
stock  splits,  stock  dividends and certain other events that affect the market
value of the linked equity  security,  the debt  securities  are not adjusted if
additional  equity  securities  are issued for cash. An  additional  issuance of
equity  securities  of the  type to which  the debt  security  is  linked  could
adversely affect the price of the debt security. In general, however, these debt
securities  are less  volatile  than the  equity  securities  to which  they are
linked.


     o  Synthetic  Convertible  Securities.  The  Fund  can  purchase  a form of
derivative  security,  usually issued by an investment  bank,  that has a coupon
like a bond but can convert into stock on certain conditions. The maturity value
of these "synthetic convertible securities" is not fixed; it is instead based on
the price of a linked  equity  security,  basket of equity  securities or equity
index.  Synthetic  Convertible  Securities are generally not listed or traded on
any exchange.


     |X| Interest Rate Risk.  Interest rate risk refers to the  fluctuations  in
value of fixed-income 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.

     While the changes in value of the Fund's  portfolio  securities  after they
are  purchased  will be reflected  in the net asset value of the Fund's  shares,
those  changes  normally  do not  affect  the  interest  income  paid  by  those
securities (unless the security's  interest is paid at a variable rate pegged to
particular  interest rate changes).  However,  those price  fluctuations will be
reflected in the  valuations  of the  securities,  and  therefore the Fund's net
asset values will be affected by those fluctuations.

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

     The Fund's debt  investments can include  high-yield,  non-investment-grade
bonds (commonly referred to as "junk bonds").  Investment-grade  bonds are bonds
rated at least "Baa" by Moody's Investors  Service,  Inc.  ("Moody's),  at least
"BBB" by Standard &  Poor's Rating Services  ("S&P") or Fitch,  Inc., or
that  have   comparable   ratings   by  another   nationally-recognized   rating
organization.

     In making  investments  in debt  securities,  the  Manager may rely to some
extent on the ratings of ratings organizations or it may use its own research to
evaluate a security's creditworthiness. If securities the Fund buys are unrated,
they are assigned a rating by the Manager of comparable  quality to bonds having
similar  yield and risk  characteristics  within a rating  category  of a rating
organization.

     The Fund does not have investment policies  establishing  specific maturity
ranges for the Fund's  investments,  and they may be within any  maturity  range
(short,  medium or long)  depending on the  Manager's  evaluation  of investment
opportunities available within the debt securities markets. Generally,  however,
it is expected that the Fund's  average  portfolio  maturity will be of a longer
average  maturity.  The Fund may shift its  investment  focus to  securities  of
longer maturity as interest rates decline and to securities of shorter  maturity
as interest rates rise.

     o Special  Risks of  Lower-Grade  Securities.  The Fund can invest  without
limit in  lower-grade  debt  securities,  and the Fund will normally  invest its
assets  primarily  in  these  securities  to  seek  its  objective.  Lower-grade
securities  tend to offer higher yields than  investment-grade  securities,  but
also are subject to greater risks of default by the issuer in its obligations to
pay interest and/or repay principal on the maturity of the security.

     "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,  Inc., or similar ratings by other rating  organizations.
If they are  unrated,  and are  determined  by the  Manager to be of  comparable
quality to debt securities  rated below  investment  grade,  they are considered
part of the Fund's portfolio of lower-grade securities. The Fund will not invest
in securities  rated below "C" or which are in default at the time the Fund buys
them.


     Some of the special  credit risks of  lower-grade  securities 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 these risks than  non-convertible  high-yield  bonds,
since stock may be more liquid and less affected by some of these risk factors.

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

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

     |X| Portfolio  Turnover.  "Portfolio  turnover" describes the rate at which
the Fund trades its portfolio securities during its fiscal year. For example, if
a fund sold all of its securities  during the year, its portfolio  turnover rate
would have been 100%.  The Fund's  portfolio  turnover rate will  fluctuate from
year to year, and the Fund does not expect to have a portfolio  turnover rate in
excess of 150% annually.

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

     |X| Foreign Securities.  The Fund can invest up to 15% of its net assets in
foreign securities.  These primarily will be fixed-income debt securities issued
or guaranteed by foreign companies. "Foreign securities" include equity and debt
securities  of companies  organized  under the laws of countries  other than the
United  States.  They may be traded on foreign  securities  exchanges  or in the
foreign over-the-counter markets.

     The  percentage  of the Fund's  assets  that will be  allocated  to foreign
securities  will vary over time depending on a number of factors.  Those factors
may  include  the  Manager's  analysis  of  relative  yields of foreign and U.S.
securities,  the  economies of foreign  countries,  the condition of a country's
financial markets, the interest rate climate of particular foreign countries and
the  relationship  of  particular  foreign  currencies to the U.S.  dollar.  The
Manager analyzes fundamental economic criteria (for example,  relative inflation
levels and  trends,  growth rate  forecasts,  balance of  payments  status,  and
economic policies) as well as technical and political data.

     Securities of foreign issuers that are  represented by American  Depository
Receipts or that are listed on a U.S.  securities exchange or traded in the U.S.
over-the-counter markets are not considered "foreign securities" for the purpose
of the Fund's  investment  allocations,  because they are not 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 such  foreign  currency  against  the U.S.  dollar will
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  high  income
potential,  or in foreign  countries with economic  policies or business  cycles
different from those of the U.S., or to reduce  fluctuations  in portfolio value
by taking advantage of foreign  securities  markets that do not move in a manner
parallel to U.S. markets. The Fund will hold foreign currency only in connection
with the purchase or sale of foreign securities.

     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, securities exchanges and
brokers than in the U.S.;  o greater  difficulties  in  commencing  lawsuits;

     o higher brokerage  commission rates than in the U.S.;

     o increased risks of delays in settlement of portfolio transactions or loss
of certificates for portfolio  securities;

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

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

     |X| 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 IRCss.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."

     o Special Risks of Emerging Markets. Emerging and developing markets abroad
may also offer special  opportunities  for investing but have greater risks than
more developed foreign markets, such as those in Europe, Canada,  Australia, New
Zealand and Japan. There may be even less liquidity in their securities markets,
and  settlements  of  purchases  and  sales  of  securities  may be  subject  to
additional  delays.  They are  subject to greater  risks of  limitations  on the
repatriation of income and profits because of currency  restrictions  imposed by
local  governments.  Those  countries may also be subject to the risk of greater
political and economic  instability,  which can greatly affect the volatility of
prices of securities in those countries. The Manager will consider these factors
when  evaluating  securities  in these  markets,  because the selection of those
securities must be consistent with the Fund's investment objective.

     |X| Warrants.  A warrant basically is an option to purchase common stock at
a specific price valid for a specific period of time.  Usually the price is at a
premium above the market value of the  applicable  common stock at its issuance.
Warrants may have a life ranging from less than a year to twenty years or may be
perpetual.  However,  many warrants have  expiration  dates after which they are
worthless  unless the  warrants are  exercised  or sold before they  expire.  In
addition,  if the market  price of the common stock does not exceed the exercise
price of the warrant  during the life of the  warrant,  the warrant  will expire
worthless.  Warrants have no voting rights,  pay no dividends and have no rights
with respect to the assets of the corporation  issuing them. The market price of
a warrant may  increase or decrease  more than the market  price of the optioned
common stock.

     The Fund has an  operational  policy  under  which the Fund will not invest
more than 5% of the value of its net assets in warrants, and not more than 2% of
the Fund's net assets may be invested in warrants that are not listed on the New
York or  American  Stock  Exchanges.  Warrants  acquired by the Fund in units or
attached  to  securities  are deemed to be  without  value for  purposes  of the
limitation imposed by the operational policy.

     |X|  Repurchase  Agreements.  The Fund can  acquire  securities  subject to
repurchase  agreements.  It might do so for temporary  defensive purposes or 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.

     In a  repurchase  transaction,  the Fund  acquires  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  a primary  dealer in  government  securities,  which meet the credit
requirements set by the Fund's Manager from time to time.

     The majority of these  transactions run from day to day.  Delivery pursuant
to  resale  typically  will  occur  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.

     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
collateral's   value  must  equal  or  exceed  the  repurchase  price  to  fully
collateralize the repayment obligation.  Additionally,  the Manager will monitor
the vendor's  creditworthiness  to confirm that the vendor is financially  sound
and will continuously  monitor the collateral's  value.  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.

     Pursuant  to an  Exemptive  Order  issued by the  Securities  and  Exchange
Commission (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.

     |X| Illiquid and Restricted  Securities.  Under policies established by the
Fund's Board of Trustees,  the Manager  determines  the liquidity of some of the
Fund's  securities.  The Manager  monitors  holdings of illiquid and  restricted
securities  on an ongoing  basis to  determine  whether to sell any  holdings to
maintain adequate liquidity.

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

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


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


     |X| Borrowing and  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.  To raise cash for  liquidity or income
purposes,  the Fund can lend its portfolio  securities  to brokers,  dealers and
other types of financial  institutions approved by the Fund's Board of Trustees.
These  loans are  limited  to not more than 10% of the value of the  Fund's  net
assets under guidelines established by the Board of Trustees. The Fund currently
does not intend to lend its securities.

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

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


     |X| Derivatives. The Fund can invest in a variety of derivative investments
to seek income or for hedging purposes. Some derivative investments the Fund can
use are the hedging  instruments  described below in this SAI. The Fund can also
purchase  synthetic  convertible  securities,  a  form  of  derivative  security
described above in this SAI.

     Among the other  derivative  investments  the Fund can  invest in are "debt
exchangeable for common stock" of an issuer or  "equity-linked  debt securities"
of an issuer described in "Convertible Preferred Stock," above. At maturity, the
debt security is exchanged for common stock of the issuer or it is payable in an
amount based on the price of the issuer's  common stock at the time of maturity.
Both  alternatives  present a risk that the amount  payable at maturity  will be
less than the  principal  amount of the debt  because the price of the  issuer's
common stock might not be as high as the Manager expected.


     |X|  Hedging.  The Fund can use  hedging  to  attempt  to  protect  against
declines  in the  market  value of its  portfolio,  to permit the Fund to retain
unrealized gains in the value of portfolio securities that have appreciated,  or
to facilitate  selling  securities  for  investment  reasons.  To do so the Fund
could: o buy puts on securities, or o write covered calls on securities. Covered
calls can also be written on debt  securities  to attempt to increase the Fund's
income.

     The Fund is not  obligated  to use hedging  instruments,  even though it is
permitted  to use them in the  Manager's  discretion,  as described  below.  The
particular  options the Fund can use are  described  below.  The Fund may employ
other hedging  instruments  and  strategies in the future,  if those  investment
methods are  consistent  with the Fund's  investment  objective and  fundamental
policies,  are permissible under applicable  regulations  governing the Fund and
are approved by the Fund's Board of Trustees.

     The Fund can buy and sell only certain kinds of put options (puts) and call
options (calls). The Fund limits its options trading activity to writing covered
calls on stocks (including the stock underlying a convertible  security the Fund
owns), purchasing put options on stocks, and entering into closing transactions.
These strategies are described below.

     o Writing  Covered  Call  Options.  The Fund can write (that is, sell) call
options  on  stocks.  The  Fund's  call  writing  is  subject  to  a  number  of
restrictions:  (1) Calls the Fund sells must be listed on a national  securities
exchange.  (2)  Each  call  the  Fund  writes  must  be  "covered"  while  it is
outstanding.  That  means  the  Fund  must own the  stock on which  the call was
written or must own a security convertible into the stock on which the option is
written.  (3) As a fundamental  policy,  the Fund cannot write a call that would
cause the value of its securities  underlying  call options (valued at the lower
of the option price or market value) to exceed 25% of its net assets.

     When the Fund writes a call on a security,  it receives  cash (a  premium).
The  Fund  agrees  to  sell  the  underlying  investment  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 retained 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.

     The  Fund's  custodian  bank,  or a  securities  depository  acting for the
custodian  bank,  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 calls or upon the Fund's
entering into a closing purchase transaction.

     The  Fund  may buy  calls  only to  close  out a call  it has  written,  as
discussed above. Calls the Fund buys must be listed on a securities exchange. 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 was
more or less  than the  price of the call the Fund  purchased  to close  out the
transaction.  A profit  may also be  realized  if the call  lapses  unexercised,
because the Fund retains the underlying investment and the premium received. 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.

     o Purchasing  Puts. The Fund may buy only those puts that relate to stocks,
including stocks  underlying the convertible  securities that the Fund owns. The
Fund may not sell puts other than puts it has previously purchased, to close out
a position.

     When the Fund  purchases  a put,  it pays a premium.  The Fund then has the
right to sell the underlying  investment to a seller of a  corresponding  put on
the same investment  during the put period at a fixed exercise  price.  Buying a
put on a stock enables the Fund to protect  itself during the put period against
a decline in the value of the underlying investment below the exercise price. 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 lose its premium
payment and the right to sell the underlying investment. A put may be sold prior
to expiration (whether or not at a profit).

     o Risks of Hedging with Options.  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 returns.

     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 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. Such commissions  might 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.  There is no assurance that a
liquid secondary market will exist for a particular option.


     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 advisor (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  advisor as the Fund (or an advisor  that is an affiliate of the Fund's
advisor). The exchanges also impose position limits on futures transactions.  An
exchange  may order the  liquidation  of  positions  found to be in violation of
those limits and may impose certain other sanctions.

     Based on interpretations  of staff members of the SEC regarding  applicable
provisions of the Investment  Company Act, when the Fund purchases a future,  it
must  segregate  liquid  assets in an amount equal to the purchase  price of the
future, less the margin deposit applicable to it.

     |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.  The Fund can  also  purchase  these
securities  for liquidity  purposes to meet cash needs due to the  redemption of
Fund shares, or to hold while waiting to reinvest cash received from the sale of
other portfolio securities. The Fund can buy:

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

     o  commercial  paper  (rated  in  the  top  two  rating   categories  of  a
nationally-recognized  rating organization)  short-term,  unsecured,  promissory
notes of domestic or foreign companies,

     o debt obligations of corporate  issuers,  rated investment grade (rated at
least Baa by Moody's or at least BBB by S&P, or a  comparable  rating by another
rating  organization)  or unrated  securities  judged by the  Manager to be of a
quality comparable to rated securities in those categories,

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

     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. 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.

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, such 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 not a fundamental  policy, but will not
be changed without  approval by the Fund's Board of Trustees and prior notice to
shareholders.  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  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 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 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 cannot issue senior  securities,  except to the extent permitted
under the  Investment  Company Act, the rules or  regulations  thereunder or any
exemption  therefrom,  as such statute,  rules or regulations  may be amended or
interpreted from time to time.

     o 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.

     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. While these investment policies do not require shareholder
approval to be changed, as a matter of operating policy, the Fund has agreed not
to  change  these  policies  without  prior  notice to its  shareholders.  These
operating policies provide that the Fund may not do any of the following:

     o The Fund may not  invest in any  issuer  for the  purpose  of  exercising
control or  management  of that issuer,  unless  approved by the Fund's Board of
Trustees.

     o The Fund may not invest any part of its total assets in interests in oil,
gas, or other  mineral  exploration  or  development  programs,  although it may
invest in securities of companies which invest in or sponsor such programs.  The
Fund may not invest in oil, gas or other mineral leases.

     o The Fund may not  invest  more than 5% of the value of its net  assets in
warrants, valued at the lower of cost or market value. The Fund can buy warrants
that are not  listed  on The New  York  Stock  Exchange  or The  American  Stock
Exchange, but they count toward the 5% limit on warrants described above and may
not exceed 2% of the value of the Fund's net  assets.  Warrants  acquired by the
Fund in units or attached to securities are not covered by this restriction.

     o 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.

     o The Fund may not acquire securities of any other investment  company,  if
as a result of that acquisition,  the Fund would own in the aggregate:  (1) more
than 3% of the voting stock of that investment  company;  (2) securities of that
investment company having an aggregate value in excess of 5% of the value of the
total assets of the Fund; or (3)  securities of that  investment  company and of
any other  investment  companies (but  excluding  treasury stock of those funds)
having an  aggregate  value in  excess  of 10% of the total  assets of the Fund.
However,  none of these limitations applies to a security received as a dividend
or as a result of an offer of exchange, a merger or plan of reorganization.



     Unless the prospectus or 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).  In
that case 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.


     In carrying out its policy with respect to  concentration  of  investments,
the Fund applies that policy to prohibit the Fund from making an  investment  in
the  securities  of any one issuer or group of issuers in the same  industry  if
that investment  would cause 25% or more of the value of the Fund's total assets
to be invested in that industry.  In applying its policy not to concentrate  its
investments,  the Fund has adopted  the  industry  classifications  set forth in
Appendix B to this SAI. This is not a fundamental policy.

     In carrying out its policy  prohibiting the issuance of senior  securities,
the Fund interprets that policy not to prohibit  certain  investment  activities
for which assets of the Fund are  designated  as segregated to cover the related
obligations.  Examples of those activities  include borrowing money,  repurchase
agreements, and contracts to buy or sell derivatives.

     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  and annual  reports to  shareholders,  and in 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, 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 during the previous calendar
quarter and shall make  recommendations  to the Board as to any amendments  that
the CCO  believes are  necessary  and  desirable  to carry out or improve  these
policies and procedures.


     The Manager and/or the 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, a series of Bond Fund Series (referred
to as the "Trust"),  is an open-end,  diversified  management investment company
with an unlimited number of authorized shares of beneficial  interest.  The Fund
was  organized  as a  Massachusetts  business  trust  in  1986.  The  Trust  was
originally  named  Rochester  Convertible  Fund and was renamed  Rochester  Fund
Series,  which was its name until it was renamed  Bond Fund Series in 1997.  The
Fund is currently the only series of the Trust and is a diversified fund. It was
called The Bond Fund for Growth until 1997. In 1997 it was re-named  Oppenheimer
Bond Fund for Growth.  The Fund's name was  changed to  Oppenheimer  Convertible
Securities Fund in 1998.

     |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 five classes of shares:  Class A, Class B, Class C,
Class M and Class N. All classes invest in the same investment  portfolio.  Only
retirement plans may purchase Class N shares. Each class of shares:


     o has its own dividends and distributions,

     o pays certain expenses which may be different for the different classes,

     o will generally have a different net asset value,

     o will generally have separate  voting rights on matters in which interests
of one class are different from interests of another class, and

     o votes as a class on matters that affect that class alone.

     Shares are freely  transferable,  and each share of each class has one vote
at  shareholder  meetings,  with  fractional  shares voting  proportionally,  on
matters  submitted to 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 Audit  Committee.  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  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),  John Cannon, Thomas W. Courtney,  Robert G. Galli, Lacy B. Herrmann
and Brian Wruble.  The Audit  Committee held 6 meetings during the Fund's fiscal
year ended  December  31, 2006.  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  registered  public  accounting  firm 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;
(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 Audit Committee's  functions  include selecting and nominating,  to the
full Board,  nominees for election as Trustees,  and  selecting  and  nominating
Independent  Trustees  for  election.  The Audit  Committee  may,  but need not,
consider  the advice and  recommendation  of the Manager and its  affiliates  in
selecting  nominees.  The full  Board  elects  new  Trustees  except  for  those
instances when a shareholder vote is required.

     To date,  the  Audit  Committee  has  been  able to  identify  from its own
resources an ample number of qualified candidates. Nonetheless, shareholders may
submit names of  individuals,  accompanied  by complete  and properly  supported
resumes, for the Audit Committee's  consideration by mailing such information to
the Audit  Committee.  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,  NY  10281-1008,  to the attention of the Board of Trustees of
Oppenheimer  Convertible  Securities  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  ("MassMutual") (the parent company of the Manager) would
be deemed an "interested  person" under the Investment Company Act. In addition,
certain other relationships with MassMutual or its subsidiaries, with registered
broker-dealers,  or with the Funds'  outside legal counsel may cause a person to
be deemed an "interested person."


     Although   candidates   are  expected  to  provide  a  mix  of  attributes,
experience,   perspective  and  skills  necessary  to  effectively  advance  the
interests of  shareholders,  the Audit  Committee has not  established  specific
qualifications  that must be met by a trustee  nominee.  In  evaluating  trustee
nominees,  the Audit 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  Audit  Committee  also  considers   whether  the
individual's background,  skills, and experience will complement the background,
skills,  and experience of other  nominees.  The Audit Committee may, upon Board
approval,  retain  an  executive  search  firm or use  the  services  of  legal,
financial,   or  other  external  counsel  to  assist  in  screening   potential
candidates.


     There  are no  differences  in the  manner  in which  the  Audit  Committee
evaluates nominees for trustees based on whether the nominee is recommended by a
shareholder.

     Trustees  and  Officers  of the Fund.  Except for Mr.  Murphy,  each of the
Trustees is an  "Independent  Trustee" under the Investment  Company Act. All of
the  Trustees,  except for Mr.  Cannon are also  directors  or  trustees  of the
following Oppenheimer funds (referred to as "Board III Funds"):

              Bond Fund Series
              Oppenheimer MidCap Fund
              Oppenheimer Quest Capital Value Fund, Inc.
              Oppenheimer Quest For Value Funds
              Oppenheimer Quest International Value Fund, Inc.
              Oppenheimer Quest Value Fund, Inc.
              Rochester Fund Municipals
              Rochester Portfolio Series

     Mr. Cannon is a Trustee of Bond Fund Series,  Rochester Fund Municipals and
Rochester  Portfolio  Series. In addition to being a Board member of each of the
Board III Funds,  Messrs.  Galli and Wruble are also directors or trustees of 38
other portfolios in the OppenheimerFunds 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. Everett, 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 III Funds. As of March 30, 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 III 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 Range
with the Fund, Length of     Trusteeships/Directorships Held; Number of Portfolios      Shares Beneficially   of Shares Beneficially
Service, Age                 in the Fund Complex Currently Overseen                      Owned in the Fund   Owned in Supervised Funds
---------------------------- --------------------------------------------------------- --------------------- ------------------------
---------------------------- --------------------------------------------------------- ----------------------------------------------

                                                                                                  As of December 31, 2006

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

Thomas W. Courtney,          Principal of Courtney Associates, Inc. (venture capital   $10,001-$50,000       $50,001-$100,000
Chairman of the Board of     firm) (since 1982); General Partner of Trivest Venture
Trustees since 2001,         Fund (private venture capital fund); President of
Trustee since 1995           Investment Counseling Federated Investors, Inc.
Age: 73                      (1973-1982); Trustee of the following open-end
                             investment companies: Cash Assets Trust (1984), Premier
                             VIT (formerly PIMCO Advisors VIT), Tax Free Trust of
                             Arizona (since 1984) and four funds for the Hawaiian
                             Tax Free Trust. Oversees 11 portfolios in the
                             OppenheimerFunds complex.

---------------------------- --------------------------------------------------------- --------------------- ------------------------
---------------------------- --------------------------------------------------------- --------------------- ------------------------
John Cannon,                 Director of Neuberger Berman Income Managers Trust,       $10,001-$50,000       $10,001-$50,000
Trustee, since 1992          Neuberger & Berman Income Funds and Neuberger Berman

Age: 77                      Trust, (open-end investment companies) (1995-present);
                             Director of Neuberger Berman Equity Funds (open-end
                             investment company) (since November 2000); Trustee,
                             Neuberger Berman Mutual Funds (open-end investment
                             company) (since October 1994); Mr. Cannon held the
                             following positions at CDC Investment Advisors
                             (registered investment adviser): Chairman and Treasurer
                             (December 1993-February 1996), Independent Consultant
                             and Chief Investment Officer (1996-June 2000) and
                             Consultant and Director (December 1993-February 1999).
                             Oversees 3 portfolios in the OppenheimerFunds complex.

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

David K. Downes,             President, Chief Executive Officer and Board Member of    $10,001-$50,000       Over $100,000
Trustee since 2005           CRAFund Advisors, Inc. (investment management company)
 Age: 67                     (since January 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) (1995-2003); President, Chief Executive
                             Officer and Trustee of Delaware Investment Family of
                             Funds (1995-2003); President and Board Member of
                             Lincoln National Convertible Securities Funds, Inc. and
                             the Lincoln National Income Funds, TDC (1995-2003);
                             Chairman and Chief Executive Officer of Retirement
                             Financial Services, Inc. (registered transfer agent and
                             investment adviser and subsidiary of Delaware
                             Investments U.S., Inc.) (1995-2003); 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 10 portfolios in the
                             OppenheimerFunds complex.

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

Robert G. Galli,             A director or trustee of other Oppenheimer funds.         Over $100,000         Over $100,000
Trustee since 1998           Oversees 59 portfolios in the OppenheimerFunds complex.*
Age: 73


---------------------------- --------------------------------------------------------- --------------------- ------------------------
---------------------------- --------------------------------------------------------- --------------------- ------------------------
Lacy B. Herrmann,            Founder and Chairman Emeritus of Aquila Group of Funds    None                  $10,001-$50,000
Trustee since 1995           (open-end investment company) (since December 2004);

Age: 77                      Chairman of Aquila Management Corporation and Aquila
                             Investment Management LLC (since August 1984); Chief
                             Executive Officer and President of Aquila Management
                             Corporation (August 1984-December 1994); Vice
                             President, Director and Secretary of Aquila
                             Distributors, Inc. (distributor of Aquila Management
                             Corporation); Treasurer of Aquila Distributors, Inc.;
                             President and Chairman of the Board of Trustees of
                             Capital Cash Management Trust ("CCMT"); President and
                             Director of STCM Management Company, Inc. (sponsor and
                             adviser to CCMT); Chairman, President and Director of
                             InCap Management Corporation; Sub-Advisor and
                             Administrator of Prime Cash Fund & Short Term Asset
                             Reserves; Director of OCC Cash Reserves, Inc. (open-end
                             investment company) (June 2003-December 2004); Trustee
                             of Premier VIT (formerly PIMCO Advisors VIT)
                             (investment company) (since 1994); Trustee of OCC
                             Accumulation Trust (open-end investment company) (until
                             December 2004); Trustee Emeritus of Brown University
                             (since June 1983). Oversees 11 portfolios in the
                             OppenheimerFunds complex.

---------------------------- --------------------------------------------------------- --------------------- ------------------------
---------------------------- --------------------------------------------------------- --------------------- ------------------------
Brian F. Wruble,             General Partner of Odyssey Partners, L.P. (hedge fund)    $1-$10,000            Over $100,000
Trustee since 2001           (since September 1995); Director of Special Value

 Age: 64                     Opportunities Fund, LLC (registered investment company)
                             (since September 2004); Member, Zurich Financial
                             Investment Advisory Board (insurance) (affiliate of the
                             Manager's parent company) (since October 2004); Board
                             of Governing Trustees of The Jackson Laboratory
                             (non-profit) (since August 1990); Trustee of the
                             Institute for Advanced Study (non-profit educational
                             institute) (since May 1992); Special Limited Partner of
                             Odyssey Investment Partners, LLC (private equity
                             investment) (January 1999-September 2004); Trustee of
                             Research Foundation of AIMR (2000-2002) (investment
                             research, non-profit); Governor, Jerome Levy Economics
                             Institute of Bard College (August 1990-September 2001)
                             (economics research); Director of Ray & Berendtson,
                             Inc. (May 2000-April 2002) (executive search firm);
                             President and Chief Executive Officer of the Delaware
                             Group of Mutual Funds (1992-1995); Chairman, President
                             and Chief Executive Officer of Equitable Capital
                             Management Corporation (1985-1992); Executive Vice
                             President and Chief Investment Officer at The Equitable
                             Life Assurance Society of the U.S. (1979-1992); Vice
                             President and Co-manager at Smith Barney, Harris Upham
                             and Company (1970-1979); Engineer, Sperry Gyroscope
                             Company (1966-1970); former governor of the Association
                             for Investment Management and Research; former chairman
                             of the Institute of Chartered Financial Analysts;
                             Chartered Financial Analyst. Oversees 59 portfolios in
                             the OppenheimerFunds complex.*

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

     * In  addition to serving as a director or trustee of each of the Board III
Funds, Messrs. Galli and Wruble also serve on the Boards of 51 other Oppenheimer
funds that are not Board III Funds.

     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 since 2005 and      (since June 2001); President of the Manager (September
President and Principal     2000-March 2007); President and director or trustee of other
Executive Officer since     Oppenheimer funds; President and Director of Oppenheimer
2001                        Acquisition Corp. ("OAC") (the Manager's parent holding
Age: 57                     company) and of Oppenheimer Partnership Holdings, Inc. (holding
                            company subsidiary of the Manager) (since July 2001); Director
                            of OppenheimerFunds Distributor, Inc. (subsidiary of the
                            Manager) (since November 2001); Chairman and Director of
                            Shareholder Services, Inc. and of Shareholder Financial
                            Services, Inc. (transfer agent subsidiaries of the Manager)
                            (since July 2001); President and Director of OppenheimerFunds
                            Legacy Program (charitable trust program established by the
                            Manager) (since July 2001); Director of the following
                            investment advisory subsidiaries of the Manager: OFI
                            Institutional Asset Management, Inc., Centennial Asset
                            Management Corporation, Trinity Investment Management
                            Corporation and Tremont Capital Management, Inc. (since
                            November 2001), HarbourView Asset Management Corporation and
                            OFI Private Investments, Inc. (since July 2001); President
                            (since November 1, 2001) and Director (since July 2001) of
                            Oppenheimer Real Asset Management, Inc.; Executive Vice
                            President of Massachusetts Mutual Life Insurance Company (OAC's
                            parent company) (since February 1997); Director of DLB
                            Acquisition Corporation (holding company parent of Babson
                            Capital Management LLC) (since June 1995); Member of the
                            Investment Company Institute's Board of Governors (since
                            October 3, 2003); Chief Operating Officer of the Manager
                            (September 2000-June 2001); President and Trustee of MML Series
                            Investment Fund and MassMutual Select Funds (open-end
                            investment companies) (November 1999-November 2001); Director
                            of C.M. Life Insurance Company (September 1999-August 2000);
                            President, Chief Executive Officer and Director of MML Bay
                            State Life Insurance Company (September 1999-August 2000);
                            Director of Emerald Isle Bancorp and Hibernia Savings Bank
                            (wholly-owned subsidiary of Emerald Isle Bancorp) (June
                            1989-June 1998). Oversees 99 portfolios in the OppenheimerFunds
                            complex.

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

     The  addresses  of the  officers  in the chart  below are as  follows:  for
Messrs.  Everett,  Gillespie  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
----------------------------------- -----------------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------------
Edward Everett,                     Vice President of the Manager since January 2000; Assistant Vice President of the Manager and
Vice President since 2000 and       of the Fund (January 1996-January 2000). An officer of 1 portfolio in the OppenheimerFunds
Portfolio Manager since 1997        complex.

Age: 40

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

Mark S. Vandehey,                   Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice
Vice President and Chief            President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and
Compliance Officer since 2004       Shareholder Services, Inc. (since June 1983). Former Vice President and Director of Internal
Age: 56                             Audit of the Manager (1997-February 2004). An officer of 98 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, Inc.,
& Accounting Officer since 1999     Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer
Age: 47                             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 98 portfolios in
                                    the OppenheimerFunds complex.

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

Brian Petersen,                     Vice President of the Manager (since February 2007); Assistant Vice President of the Manager
Assistant Treasurer since 2004      (August 2002-February 2007); Manager/Financial Product Accounting of the Manager (November
Age: 36                             1998-July 2002). An officer of 98 portfolios in the OppenheimerFunds complex.


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

Brian C. Szilagyi,                  Assistant Vice President of the Manager (since July 2004); Director of Financial Reporting
Assistant Treasurer since 2005      and Compliance of First Data Corporation (April 2003-July 2004); Manager of Compliance of
Age: 37                             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 98 portfolios in the
                                    OppenheimerFunds complex.

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

Robert G. Zack,                     Executive Vice President (since January 2004) and General Counsel (since March 2002) of the
Secretary since 2001                Manager; General Counsel and Director of the Distributor (since December 2001); General
Age: 58                             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 98 portfolios in the OppenheimerFunds complex.

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

Kathleen T. Ives,                   Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since October
Assistant Secretary since 2001      2003) of the Manager; Vice President (since 1999) and Assistant Secretary (since October
Age: 41                             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 98 portfolios in the OppenheimerFunds complex.

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

Lisa I. Bloomberg,                  Vice President and Associate Counsel of the Manager (since May 2004); First Vice President
Assistant Secretary since 2004      (April 2001-April 2004), Associate General Counsel (December 2000-April 2004), Corporate Vice
Age: 39                             President (May 1999-April 2001) and Assistant General Counsel (May 1999-December 2000) of UBS
                                    Financial Services Inc. (formerly, PaineWebber Incorporated). An officer of 98 portfolios in
                                    the OppenheimerFunds complex.

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

Phillip S. Gillespie,               Senior Vice President and Deputy General Counsel of the Manager (since September 2004); Mr.
Assistant Secretary since 2004      Gillespie held the following positions at Merrill Lynch Investment Management: First Vice
Age: 43                             President (2001-September 2004); Director (2000-September 2004) and Vice President
                                    (1998-2000). An officer of 98 portfolios in the OppenheimerFunds complex.

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


         |X|  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 December 31, 2006. 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. The amounts shown for Mr. Cannon relate solely to Bond Fund Series, Rochester Fund
Municipals and Rochester Portfolio Series as Mr. Cannon serves as Trustee of those Board III Funds only.





----------------------------------- --------------------- ------------------- ----------------------- --------------------------
                                         Aggregate            Retirement                               Total Compensation From
Trustee Name and Other Fund                                Benefits Accrued      Estimated Annual
Position(s)                          Compensation From     as Part of Fund        Benefits Upon           the Fund and Fund
(as applicable)                         the Fund(1)            Expenses           Retirement(2)              Complex (3)
----------------------------------- --------------------- ------------------- ----------------------- --------------------------
----------------------------------- ----------------------------------------- ----------------------- --------------------------

                                      Fiscal year ended December 31, 2006                              Year ended December 31,
                                                                                                                2006

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

Thomas W. Courtney                         $2,895                N/A                 $100,284                $196,500(4)

Chairman of the Board and Audit
Committee Member
----------------------------------- --------------------- ------------------- ----------------------- --------------------------
----------------------------------- --------------------- ------------------- ----------------------- --------------------------

John Cannon(13)                            $2,380                N/A                 $32,705                 $61,036(14)

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

Paul Y. Clinton(5)                          $696                 N/A                 $85,662                 $44,438(6)

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

David K. Downes((7))                       $2,570                N/A                  $4,391                  $146,668

Audit Committee Chairman
----------------------------------- --------------------- ------------------- ----------------------- --------------------------
----------------------------------- --------------------- ------------------- ----------------------- --------------------------

Robert G. Galli                            $2,387                N/A               $107,096(8)               $264,812(9)

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

Lacy B. Herrmann                           $2,451                N/A                 $88,150                $167,000(10)

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

----------------------------------         $2,451                N/A               $49,899(11)              $241,260(12)

Brian F. Wruble
----------------------------------
----------------------------------
Audit Committee Member
----------------------------------- --------------------- ------------------- ----------------------- --------------------------

1.    "Aggregate Compensation From the Fund" includes fees and deferred compensation, if any, for a Trustee.

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

     2. "Estimated  Annual Benefits Upon Retirement" is based on a straight life
payment plan election with the assumption  that a Trustee will retire at the age
of 75 and is  eligible  (after 7 years of service)  to receive  retirement  plan
benefits  as  described  below  under  "Retirement  Plan for  Trustees."  Actual
benefits upon  retirement may vary based on retirement age, years of service and
benefit payment elections of the Trustee.

     3.  "Total  Compensation  From the Fund and Fund  Complex"  includes  fees,
deferred  compensation  (if any) and accrued  retirement  benefits (if any). For
purposes of this section  only,  in accordance  with the  instructions  for Form
N-1A, "Fund Complex" includes the Oppenheimer funds and one open-end  investment
company,  PIMCO  Advisors VIT ("PIMCO")  (formerly OCC  Accumulation  Trust) for
which the Fund's former Sub-Adviser acts as the investment adviser.  The Manager
does not consider  PIMCO to be part of the  OppenheimerFunds  "Fund  Complex" as
that term may be otherwise interpreted.

     4. Includes  $35,500 in compensation  from Premier VIT, with respect to Mr.
Courtney's service as a trustee of that fund.

     5. Mr. Clinton retired from the Board III funds effective March 31, 2006.

     6. Includes  $10,313 in compensation  from Premier VIT, with respect to Mr.
Clinton's service as a trustee of that fund.

     7. Mr.  Downes was  appointed as Trustee of the Board III Funds on December
16, 2005.

     8. Includes $57,285 estimated  benefits to be paid to Mr. Galli for serving
as a director or trustee of 49 other  Oppenheimer  funds (at  December 31, 2006)
that are not Board III Funds.

     9.  Includes  $129,312  for  serving as a  director  or trustee of 49 other
Oppenheimer funds (at December 31, 2006) that are not Board III Funds.

     10. Includes $31,500 in compensation  from Premier VIT, with respect to Mr.
Herrmann's service as a trustee of that fund.

     11. Includes $4,355 estimated benefits to be paid to Mr. Wruble for serving
as a director or trustee of 49 other  Oppenheimer  funds (at  December 31, 2006)
that are not Board III Funds.

     12.  Includes  $105,760  for  serving as a director  or trustee of 49 other
Oppenheimer funds (at December 31, 2006) that are not Board III Funds.

     13. Mr. Cannon is only a Board Member of certain Board III Funds.

     14. Total  Compensation  and Estimated Annual  Retirement  Benefits for Mr.
Cannon are for  serving as a trustee of the Fund and two other funds in the Fund
Complex.


     |X| Retirement  Plan for Trustees.  The Fund has 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 III 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 amount of  retirement  benefits  a Trustee  will
receive depends on the amount of the Trustee's  compensation,  including  future
compensation and the length of his or her service on the Board.


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


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


     |X| Major Shareholders.  As of March 30, 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:


     MLPF&S   for  the  sole   benefit   of  its   customers,   Attn:   Fund
Administration,  4800 Deal Lake Dr. E. Fl. 3, Jacksonville,  FL 32246-6484 which
owned   1,485,595.536  Class  A  shares  (8.68%  of  the  Class  A  shares  then
outstanding).

     MLPF&S   for  the  sole   benefit   of  its   customers,   Attn:   Fund
Administration,  4800 Deal Lake Dr. E. Fl. 3, Jacksonville,  FL 32246-6484 which
owned   497,957.911   Class  B  shares  (19.07%  of  the  Class  B  shares  then
outstanding).

     MLPF&S   for  the  sole   benefit   of  its   customers,   Attn:   Fund
Administration,  4800 Deal Lake Dr. E. Fl. 3, Jacksonville,  FL 32246-6484 which
owned   633,176.530   Class  C  shares  (16.35%  of  the  Class  C  shares  then
outstanding).

     Citigroup Global Markets Inc., Attn: Cindy Tempesta, 7th Fl., 333 West 34th
Street, New York, NY 10001-2483 which owned 201,945.835 Class C shares (5.21% of
the Class C shares then outstanding).

     Citigroup Global Markets Inc., Attn: Cindy Tempesta, 7th Fl., 333 West 34th
Street,  New York, NY 10001-2483 which owned  610,888.105 Class M shares (15.10%
of the Class M shares then outstanding).

     MLPF&S   for  the  sole   benefit   of  its   customers,   Attn:   Fund
Administration,  4800 Deal Lake Dr. E. Fl. 3, Jacksonville,  FL 32246-6484 which
owned   721,771.134   Class  M  shares  (12.78%  of  the  Class  M  shares  then
outstanding).

     MLPF&S   for  the  sole   benefit   of  its   customers,   Attn:   Fund
Administration,  4800 Deal Lake Dr. E. Fl. 3, Jacksonville,  FL 32246-6484 which
owned 21,757.473 Class N shares (9.29% of the Class N shares then outstanding).

     Reliance  Trust Co. Tr,  William J. Kamm &  Sons Inc.  401K,  P.O.  Box
48529,  Atlanta,  GA 30362-1529  which owned 13,127.225 Class N shares (5.61% of
the Class N 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  1.202.942.8090.  The Code of
Ethics can also be viewed as part of the Fund's  registration  statement  on the
SEC's EDGAR database at the SEC's Internet website at www.sec.gov. Copies may be
obtained, after paying a duplicating fee, by electronic request at the following
E-mail address: publicinfo@sec.gov., or by writing to the SEC's Public Reference
Section, Washington, D.C. 20549-0102.


     |X| 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.


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


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


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




  Fiscal Year ended 12/31:      Management Fees Paid to OppenheimerFunds, Inc.



   2004                                            $2,940,552


   2005                                            $2,455,646



   2006                                            $2,107,898




     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 Edward  Everett
(referred to as the "Portfolio  Manager").  He is the person responsible for the
day-to-day management of the Fund's investments.

     This does not include  personal  accounts of  portfolio  managers and their
families, which are subject to the Code of Ethics.


     At the current time, the Fund's Portfolio Manager does not manage any other
fund or account.  However,  he may be responsible  for the management of another
fund or account in the future.  Potentially, at times, any such responsibilities
could conflict with the interests of the 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.

     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 December 31, 2006, 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
Convertible  Securities Fund Index.  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 future fund
and accounts possibly managed by the Portfolio Manager.

     Ownership of Fund Shares.  As of December 31, 2006,  the Portfolio  Manager
beneficially owned $100,001 - $500,000 of 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 services. The research 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.

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

     Although  the Manager  currently  does not do so, the Board of Trustees 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 years ended  December 31, 2004,  2005 and 2006,  the Fund
paid the total brokerage  commissions  indicated in the chart below.  During the
fiscal year ended  December 31, 2006,  the Fund paid $104,628 in  commissions to
firms that provide  brokerage and research  services to the Fund with respect to
$7,708,743,462 of aggregate portfolio  transactions.  All such transactions were
on a "best  execution"  basis,  as described  above.  The  provision of research
services was not necessarily a factor in the placement of all such transactions.



                Fiscal Year Ended 12/31             Total Brokerage
                                                  Commissions Paid by
                                                       the Fund*

                   2004                                 $126,688

                   2005                                 $ 199,107



                   2006                                 $ 117,678



     * Amounts do not include  spreads or commissions on principal  transactions
on a net trade basis.


Distribution and Service Plans

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

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

--------------- ----------------------- ----------------------- ----------------------- -----------------------
 Fiscal Year     Aggregate Front-End      Class A Front-End      Aggregate Front-End      Class M Front-End
                                            Sales Charges                                   Sales Charges
 Ended 12/31:      Sales Charges on          Retained by           Sales Charges on          Retained by
                    Class A Shares          Distributor(1)          Class M Shares          Distributor(1)
--------------- ----------------------- ----------------------- ----------------------- -----------------------
--------------- ----------------------- ----------------------- ----------------------- -----------------------

     2004              $449,078                $131,622                $33,315                  $6,967

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

     2005              $185,987                $114,807                $33,315                  $3,336

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

     2006              $155,833                $44,839                 $33,315                   $78

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

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

           --------------- ------------------ ------------------ ------------------- ------------------ -------------------
            Fiscal Year     Concessions on     Concessions on      Concessions on     Concessions on      Concessions on
            Ended 12/31:    Class A Shares     Class B Shares      Class C Shares     Class M Shares      Class N Shares
                              Advanced by        Advanced by        Advanced by         Advanced by        Advanced by
                            Distributor(1)     Distributor(1)1     Distributor(1)     Distributor(1)      Distributor(1)
           --------------- ------------------ ------------------ ------------------- ------------------ -------------------
           --------------- ------------------ ------------------ ------------------- ------------------ -------------------
                2004            $18,158           $343,428            $105,744              $0                $7,926
           --------------- ------------------ ------------------ ------------------- ------------------ -------------------
           --------------- ------------------ ------------------ ------------------- ------------------ -------------------
                2005            $16,402           $122,503            $34,510               $0                $4,328
           --------------- ------------------ ------------------ ------------------- ------------------ -------------------
           --------------- ------------------ ------------------ ------------------- ------------------ -------------------

                2006            $7,926             $66,897            $23,937               $0                $2,064

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

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

           --------------- ------------------ ------------------- ------------------ ------------------- ------------------
            Fiscal Year         Class A            Class B             Class C            Class M             Class N
                              Contingent          Contingent         Contingent          Contingent         Contingent
                            Deferred Sales      Deferred Sales     Deferred Sales      Deferred Sales     Deferred Sales
            Ended 12/31:   Charges Retained    Charges Retained   Charges Retained    Charges Retained   Charges Retained
                            by Distributor      by Distributor     by Distributor      by Distributor     by Distributor
           --------------- ------------------ ------------------- ------------------ ------------------- ------------------
           --------------- ------------------ ------------------- ------------------ ------------------- ------------------
                2004            $2,108             $242,429            $14,123               $0               $2,508
           --------------- ------------------ ------------------- ------------------ ------------------- ------------------
           --------------- ------------------ ------------------- ------------------ ------------------- ------------------
                2005             $966              $195,627            $15,359               $0               $2,726
           --------------- ------------------ ------------------- ------------------ ------------------- ------------------
           --------------- ------------------ ------------------- ------------------ ------------------- ------------------

                2006            $2,889             $138,403            $2,021                $0                $309

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


     Distribution  and Service  Plans.  The Fund has adopted a Service  Plan for
Class A shares and  Distribution and Service Plans for Class B, Class C, Class M
and Class N shares under Rule 12b-1 of the  Investment  Company Act. Under those
plans the Fund pays the  Distributor  for all or a portion of its costs incurred
in  connection  with the  distribution  and/or  servicing  of the  shares of the
particular  class.  Each  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 Plans,  the  Manager  and the  Distributor  may make  payments to
affiliates.  In their  sole  discretion,  they may also  from  time to time make
substantial  payments  from their own  resources,  which include the profits the
Manager  derives from the advisory fees it receives from the 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.  Because  Class B shares of the Fund  automatically
convert into Class A shares 72 months after  purchase,  the Fund must obtain the
approval  of both  Class A and  Class B  shareholders  for a  proposed  material
amendment to the Class A plan that would materially  increase payments under the
plan.  That approval  must be by a majority of the shares of each class,  voting
separately by class.

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

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

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


     |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.

     |X| 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.

     For the fiscal year ended December 31, 2006 payments under the Class A plan
totaled  $563,788,  of which  $967 was  retained  by the  Distributor  under the
arrangement described above,  regarding  grandfathered  retirement accounts, and
included $32,581 paid to an affiliate of the Distributor's  parent company.  Any
unreimbursed  expenses the Distributor  incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years. The Distributor may not
use  payments  received  under  the  Class  A plan  to pay  any of its  interest
expenses, carrying charges, or other financial costs, or allocation of overhead.


     |X| Class B, Class C, Class M and Class N  Distribution  and  Service  Plan
Fees. Under each plan, distribution and service fees are computed on the average
of the net asset value of shares in the respective  class,  determined as of the
close of each regular business day during the period. Each plan provides for the
Distributor  to  be  compensated  at a  flat  rate,  whether  the  Distributor's
distribution  expenses  are more or less than the amounts paid by the Fund under
the plan  during the period for which the fee is paid.  The Class M plan  allows
the  Distributor  to be  reimbursed  for its services and costs in  distributing
Class M shares and servicing accounts. However, effective February 11, 2004, the
Board has set the 0.50% annual  asset based sales  charge at zero.  The types of
services that recipients  provide are similar to the services provided under the
Class A service plan, described above.


     Each plan  permits the  Distributor  to retain both the  asset-based  sales
charges and the service fees or to pay  recipients the service fee on a periodic
basis, without payment in advance. However, the Distributor currently intends to
pay the service fee to  recipients  in advance for the first year after Class B,
Class C, Class M and Class N shares are purchased. After the first year Class B,
Class C, Class M or Class N shares are  outstanding,  after their purchase,  the
Distributor makes service fee payments periodically on those shares. The advance
payment is based on the net asset  value of shares  sold.  Shares  purchased  by
exchange do not qualify for the advance  service fee payment.  If Class B, Class
C, Class M or Class N shares  are  redeemed  during  the first year after  their
purchase, the recipient of the service fees on those shares will be obligated to
repay the  Distributor a pro rata portion of the advance  payment of the service
fee made on those shares. Class B, Class C, Class M or Class N shares may not be
purchased by a new investor  directly from the Distributor  without the investor
designating  another registered  broker-dealer.  If a current investor no longer
has another  broker-dealer of record for an existing account, the Distributor is
automatically  designated  as the  broker-dealer  of record,  but solely for the
purpose of acting as the  investor's  agent to  purchase  the  shares.  In those
cases,  the Distributor  retains the  asset-based  sales charge paid on Class B,
Class C, Class M and Class N shares,  but does not retain any service fees as to
the assets represented by that account.


     The asset-based  sales charge and service fees increase Class B and Class C
expenses by 1.00%, the asset-based  sales charge and service fees increase Class
N expenses by 0.50%,  and the service fees increase Class M expenses by 0.25% of
the net assets per year of the respective classes.

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

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

     o pays sales  concessions to authorized  brokers and dealers at the time of
sale and pays service fees as described above,

     o may  finance  payment  of sales  concessions  and/or  the  advance of the
service fee payment to recipients under the plans, or may provide such financing
from its own resources or from the resources of an affiliate,

     o employs personnel to support distribution of Class B, Class C and Class N
shares,

     o bears the costs of sales literature,  advertising and prospectuses (other
than those furnished to current  shareholders) and state "blue sky" registration
fees and certain other distribution expenses,

     o may not be able to adequately compensate dealers that sell Class B, Class
C and Class N shares without receiving payment under the plans and therefore may
not be able to offer such Classes for sale absent the plans,

     o receives  payments under the plans  consistent  with the service fees and
asset-based sales charges paid by other  non-proprietary funds that charge 12b-1
fees,

     o may use the  payments  under  the plan to  include  the  Fund in  various
third-party distribution programs that may increase sales of Fund shares,

     o may experience increased difficulty selling the Fund's shares if payments
under the plan are  discontinued  because most competitor  funds have plans that
pay dealers for rendering distribution services as much or more than the amounts
currently being paid by the Fund, and

     o may not be able to continue  providing,  at the same or at a lesser cost,
the same quality  distribution  sales  efforts and  services,  or to obtain such
services from brokers and dealers, if the plan payments were to be discontinued.

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

---------------------------------------------------------------------------------------------------------------------
               Distribution and Service Fees Paid to the Distributor for the Fiscal Year Ended 12/31
---------------------------------------------------------------------------------------------------------------------
-------------------- ----------------------- ------------------------ ----------------------- -----------------------
      Class:          Total Payments Under     Amount Retained by         Distributor's           Distributor's
                                                                            Aggregate         Unreimbursed Expenses
                                                                      Unreimbursed Expenses   as % of Net Assets of
                              Plan                 Distributor              Under Plan                Class
-------------------- ----------------------- ------------------------ ----------------------- -----------------------
-------------------- ----------------------- ------------------------ ----------------------- -----------------------

Class B Plan              $479,898(1)               $363,067                $2,207,450                5.44%

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

Class C Plan              $573,326(2)                $36,566                $2,567,276                4.61%

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

Class M Plan              $174,110(3)                $1,655                     $0                      0%

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

Class N Plan               $28,132(4)                $4,334                  $157,611                 0.93%

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

1.  Includes $4,737 paid to an affiliate of the Distributor's parent company.
2.  Includes $13,476 paid to an affiliate of the Distributor's parent company.
3.  Includes $4,892 paid to an affiliate of the Distributor's parent company.
4.  Includes $832 paid to an affiliate of the Distributor's parent company.


     All payments under the plans are subject to the limitations  imposed by the
Conduct Rules of the NASD on payments of  asset-based  sales charges and service
fees.

Payments to Fund Intermediaries

     Financial  intermediaries  may receive  various  forms of  compensation  or
reimbursement  from the Fund in the form of 12b-1 plan  payments as described in
the preceding section of this 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  depending  on the share  class  that the  investor  selects,  contingent
deferred sales charges or initial  front-end sales charges,  all or a portion of
which  front-end  sales  charges are  payable by the  Distributor  to  financial
intermediaries (see "About Your Account" in the prospectus);

     o ongoing  asset-based  payments  attributable to the share class selected,
including  fees  payable  under the Fund's  distribution  and/or  service  plans
adopted under Rule 12b-1 under the  Investment  Company Act, which are paid from
the Fund's assets and allocated to the class of shares to which the plan relates
(see "About the Fund -- Distribution and Service Plans" above);

     o  shareholder   servicing  payments  for  providing  omnibus   accounting,
recordkeeping,  networking,  sub-transfer  agency  or  other  administrative  or
shareholder  services,  including  retirement  plan and 529 plan  administrative
services fees,  which are paid from the assets of a Fund as reimbursement to the
Manager or Distributor for expenses they incur on behalf of the Fund.

     o Payments  made by the  Manager  or  Distributor  out of their  respective
resources  and assets,  which may  include  profits  the  Manager  derives  from
investment  advisory  fees  paid by the  Fund.  These  payments  are made at the
discretion of the Manager and/or the Distributor. These payments, often referred
to as "revenue sharing" payments, may be in addition to the payments by the Fund
listed above.

     o These types of payments may reflect  compensation for marketing  support,
support provided in offering the Fund or other Oppenheimer funds through certain
trading platforms and programs,  transaction processing or other services; o The
Manager and Distributor  each may also pay other  compensation to the extent the
payment is not prohibited by law or by any  self-regulatory  agency, such as the
NASD.  Payments are made based on the guidelines  established by the Manager and
Distributor, subject to applicable law.


     These  payments may provide an incentive  to  financial  intermediaries  to
actively  market or promote the sale of shares of the Fund or other  Oppenheimer
funds, or to support the marketing or promotional  efforts of the Distributor in
offering shares of the Fund or other Oppenheimer funds. In addition,  some types
of payments may provide a financial  intermediary with an incentive to recommend
the Fund or a particular share class. Financial  intermediaries may earn profits
on these  payments,  since the  amount of the  payment  may  exceed  the cost of
providing  the service.  Certain of these  payments  are subject to  limitations
under applicable law. Financial intermediaries may categorize and disclose these
arrangements to their clients and to members of the public in a manner different
from the disclosures in the Fund's  prospectus and this 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

     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.                                 A G Edwards
  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 Yields  and 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,  its yields 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 Yields and total returns for any given past period  represent  historical
performance information and are not, and should not be considered,  a prediction
of future yields or returns.

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

     |X| Yields.  The Fund uses a variety of different  yields to illustrate its
current returns. Each class of shares calculates its yield separately because of
the different expenses that affect each class.

     o Standardized Yield. The "standardized  yield" (sometimes referred to just
as "yield") is shown for a class of shares for a stated 30-day period. It is not
based on actual  distributions  paid by the Fund to  shareholders  in the 30-day
period,  but is a hypothetical  yield based upon the net investment  income from
the Fund's portfolio  investments for that period.  It may therefore differ from
the "dividend yield" for the same class of shares, described below.

     Standardized  yield is calculated using the following  formula set forth in
rules  adopted by the SEC,  designed  to assure  uniformity  in the way that all
funds calculate their yields:

    Standardized Yield         = 2[(   a - b   +1)(6)     -1 ]
                                      --------
                                        cd

     The symbols above represent the following factors:

     a = dividends and interest earned during the 30-day period.

     b = expenses accrued for the period (net of any expense assumptions).

     c = the average daily number of shares of that class outstanding during the
30-day period that were entitled to receive dividends.

     d = the maximum  offering  price per share of that class on the last day of
the period, adjusted for undistributed net investment income.

     The standardized  yield for a particular  30-day period may differ from the
yield for other periods. The SEC formula assumes that the standardized yield for
a 30-day  period  occurs  at a  constant  rate  for a  six-month  period  and is
annualized at the end of the six-month period. Additionally,  because each class
of shares is subject to different  expenses,  it is likely that the standardized
yields of the Fund's classes of shares will differ for any 30-day period.

     o Dividend Yield.  The Fund may quote a "dividend  yield" for each class of
its shares.  Dividend  yield is based on the dividends paid on a class of shares
during the actual dividend period. To calculate dividend yield, the dividends of
a class  declared  during a stated  period  are added  together,  and the sum is
multiplied by 12 (to  annualize  the yield) and divided by the maximum  offering
price on the last day of the dividend period. The formula is shown below:

    Dividend Yield = dividends paid x 12/maximum offering price (payment date)

     The  maximum  offering  price for Class A and Class M shares  includes  the
current  maximum initial sales charge.  The maximum  offering price for Class B,
Class C and Class N shares is the net asset value per share, without considering
the  effect  of  contingent  deferred  sales  charges.  The  Class A and Class M
dividend  yield may also be quoted without  deducting the maximum  initial sales
charge.





The Fund's Yields for the 30-Day Periods Ended 12/31/06

Class of Shares             Standardized Yield                         Dividend Yield
----------------- --------------------------------------- -----------------------------------------
----------------- ------------------- ------------------- --------------------- -------------------
                       Without              After               Without               After
                        Sales               Sales                Sales                Sales
                        Charge              Charge               Charge               Charge
----------------- ------------------- ------------------- --------------------- -------------------
----------------- ------------------- ------------------- --------------------- -------------------

Class A                 2.21%               2.08%                5.16%                4.86%

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

Class B                 1.45%               1.45%                4.39%                 N/A

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

Class C                 1.47%               1.47%                4.40%                 N/A

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

Class M                 2.23%               2.16%                5.19%                5.02%

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

Class N                 2.08%               2.08%                4.97%                 N/A

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


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


     In calculating total returns for Class A shares,  the current maximum sales
charge of 5.75%,  and for Class M, the current  maximum  initial sales charge of
3.25% (as a  percentage  of the  offering  price) is  deducted  from the initial
investment  ("P" in the formula below) (unless the return is shown without sales
charge,  as  described  below).  For Class B shares,  payment of the  applicable
contingent  deferred sales charge is applied,  depending on the period for which
the return is shown:  5.0% in the first year,  4.0% in the second year,  3.0% in
the third and fourth years,  2.0% in the fifth year,  1.0% in the sixth year and
none thereafter.  For Class C shares, the 1.0% contingent  deferred sales charge
is deducted for returns for the one-year  period.  For Class N shares,  the 1.0%
contingent  deferred  sales  charge is deducted for returns for the one-year and
life-of-class periods, as applicable.


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

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 o 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,  Class B, Class C, Class M or
Class N shares.  Each is based on the difference in net asset value per share at
the  beginning and the end of the period for a  hypothetical  investment in that
class of shares  (without  considering  front-end or contingent  deferred  sales
charges) and takes into  consideration the reinvestment of dividends and capital
gains distributions.


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

The Fund's Total Returns for the Periods Ended 12/31/06

----------------------------------------------------------------------------------------------------------------------
-------------- ------------------------- -----------------------------------------------------------------------------
Class      of      Cumulative Total      Average Annual Total Returns
                 Returns (10 years or
Shares              life-of-class)
-------------- ------------------------- -----------------------------------------------------------------------------
-------------- ------------------------- ------------------------- ------------------------- -------------------------
                                                  1-Year                   5-Years                   10-Years
                                                                                               (or life of class if
                                                                                                      less)
-------------- ------------------------- ------------------------- ------------------------- -------------------------
-------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
                  After       Without       After       Without       After       Without       After       Without
                  Sales        Sales        Sales        Sales        Sales        Sales        Sales        Sales
                 Charge       Charge       Charge       Charge       Charge       Charge       Charge       Charge
-------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------

Class A(1)          83.84%       95.06%        4.27%       10.63%        5.54%        6.80%        6.28%        6.91%

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

Class B(2)          86.24%       86.24%        4.75%        9.75%        5.63%        5.95%        6.42%        6.42%

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

Class C(3)          80.73%       80.73%        8.78%        9.78%        5.98%        5.98%        6.10%        6.10%

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

Class M(4)          82.61%       88.75%        7.08%       10.68%        6.37%        6.62%        6.21%        6.56%

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

Class N(5)          32.05%       32.05%        9.19%       10.19%        5.92%        6.37%        4.88%        4.88%

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

1.       Inception of Class A:      05/01/95
2.       Inception of Class B:      05/01/95
3.       Inception of Class C:      03/11/96
4.       Inception of Class M:      06/03/86
5.       Inception of Class N:      03/01/01


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

      Average Annual Total Returns for Class M(1) Shares (After Sales Charge)
                        For the Periods Ended 12/31/06

----------------------------------------------------------------------------------------------------------------
------------------------------------------ --------------------- ------------------------ ----------------------
                                                  1-Year
                                                                         5-Years                10-Years
------------------------------------------ --------------------- ------------------------ ----------------------
------------------------------------------ --------------------- ------------------------ ----------------------

After Taxes on Distributions                      6.01%                   4.35%                   3.90%

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

After Taxes on Distributions and                  4.72%                   4.11%                   3.95%

Redemption of Fund Shares
------------------------------------------ --------------------- ------------------------ ----------------------

     1.  Inception of Class M: 06/03/86


     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 classes of shares by Lipper, Inc. ("Lipper"). Lipper is a
widely-recognized  independent mutual fund monitoring  service.  Lipper monitors
the performance of regulated investment companies, including the 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  classes  of  shares  by  Morningstar,  Inc.
("Morningstar"),  an independent  mutual fund  monitoring  service.  Morningstar
rates mutual funds in their specialized  market sector.  The Fund is rated among
convertibles.


     Morningstar proprietary star ratings reflect historical risk-adjusted total
investment return. For each fund with at least a three-year history, Morningstar
calculates a Morningstar  Rating(TM)based on a Morningstar  Risk-Adjusted Return
measure that accounts for variation in a fund's monthly  performance  (including
the effects of sales charges, loads, and redemption fees), placing more emphasis
on downward  variations  and rewarding  consistent  performance.  The top 10% of
funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next
35% receive 3 stars,  the next 22.5% receive 2 stars, and the bottom 10% receive
1 star. (Each share class is counted as a fraction of one fund within this scale
and rated  separately,  which may cause slight  variations  in the  distribution
percentages.)  The  Overall  Morningstar  Rating  for a fund is  derived  from a
weighted average of the performance figures associated with its three-, five-and
ten-year (if applicable) Morningstar Rating metrics.

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

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

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

     From  time to time the Fund may  include  in its  advertisements  and sales
literature the total return  performance of a  hypothetical  investment  account
that  includes  shares of the Fund and other  Oppenheimer  funds.  The  combined
account may be part of an illustration of an asset  allocation  model or similar
presentation.  The account  performance may combine total return  performance of
the Fund and the total return performance of other Oppenheimer funds included in
the account.  Additionally,  from time to time,  the Fund's  advertisements  and
sales  literature  may  include,  for  illustrative  or  comparative   purposes,
statistical  data or other  information  about  general or  specific  market and
economic conditions. That may include, for example,

     o information  about the  performance of certain  securities or commodities
markets or segments of those markets,

     o  information  about  the  performance  of  the  economies  of  particular
countries or regions,

     o the earnings of companies included in segments of particular  industries,
sectors, securities markets, countries or regions,

     o the  availability  of  different  types of  securities  or  offerings  of
securities,

     o information  relating to the gross national or gross domestic  product of
the United States or other countries or regions,

     o  comparisons   of  various  market  sectors  or  indices  to  demonstrate
performance, risk, or other characteristics of the Fund.





ABOUT YOUR ACCOUNT


                                                      How to Buy Shares

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

     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.  Accounts
established  prior  to  November  1,  2002  will  remain  at $25 for  additional
purchases.  Shares will be purchased on the regular business day the Distributor
is instructed to initiate the Automated  Clearing House ("ACH")  transfer to buy
the shares. Dividends will begin to accrue on shares purchased with the proceeds
of ACH  transfers on the business day the 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 C
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 Core Bond Fund                                        Equity Investor Fund
Oppenheimer California Municipal Fund                             Conservative Investor Fund
Oppenheimer Capital Appreciation Fund                             Moderate Investor Fund
Oppenheimer Capital Income Fund                               Oppenheimer Principal Protected Main Street Fund
Oppenheimer Champion Income Fund                              Oppenheimer Principal Protected Main Street Fund II
Oppenheimer Commodity Strategy Total Return Fund              Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Convertible Securities Fund                       Oppenheimer Quest Balanced Fund
Oppenheimer Developing Markets Fund                           Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Discovery Fund                                    Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Dividend Growth Fund                              Oppenheimer Quest Opportunity Value Fund
Oppenheimer Emerging Growth Fund                              Oppenheimer Quest Value Fund, Inc.
Oppenheimer Emerging Technologies Fund                        Oppenheimer Real Estate Fund
Oppenheimer Enterprise Fund                                   Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Equity Fund, Inc.                                 Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Global Fund                                       Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Global Opportunities Fund                         Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Growth Fund                                       Oppenheimer Rochester National Municipals
Oppenheimer International Bond Fund                           Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer International Diversified Fund                    Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer International Growth Fund                         Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer International Small Company Fund                  Oppenheimer Select Value Fund
Oppenheimer International Value Fund                          Oppenheimer Senior Floating Rate Fund
Oppenheimer Limited Term California Municipal Fund            Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Limited-Term Government Fund                      Oppenheimer Strategic Income Fund
Oppenheimer Limited Term Municipal Fund                       Oppenheimer U.S. Government Trust
Oppenheimer Main Street Fund                                  Oppenheimer Value Fund
Oppenheimer Main Street Opportunity Fund                      Limited-Term New York Municipal Fund
Oppenheimer Main Street Small Cap Fund                        Rochester Fund Municipals

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,  Class B,  Class C or  Class M  shares  of the Fund or other
Oppenheimer  funds during a 13-month period.  The total amount of your purchases
of Class A, Class B, Class C and Class M 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 of Intent  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, Class B, Class C and
Class M shares of the Fund and 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 C 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.

     Classes of Shares.  Each class of shares of the Fund represents an interest
in the same  portfolio  of  investments  of the Fund.  However,  each  class has
different  shareholder  privileges and features.  The net income attributable to
Class B, Class C, Class M or Class N shares and the  dividends  payable on Class
B, Class C, Class M or Class N shares  will be reduced by  incremental  expenses
borne solely by that class. Those expenses include the asset-based sales charges
to which Class B, Class C and Class N shares are  subject.  Although the Class M
Plan permits the Fund to pay the  Distributor a 0.50%  asset-based  sales charge
annually, the Board has set that payment at zero.

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

     The Distributor  will not accept a purchase order of more than $100,000 for
Class B shares or a purchase  order of $1 million or more to purchase Class C or
Class M shares on behalf of a single  investor  (not  including  dealer  "street
name" or omnibus accounts).

     Class B, Class C, Class M or Class N shares may not be  purchased  by a new
investor directly from the Distributor without the investor  designating another
registered broker-dealer.


     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| Class B Conversion. Under current interpretations of applicable federal
income tax law by the Internal Revenue Service, the conversion of Class B shares
to Class A shares 72 months after purchase is not treated as a taxable event for
the shareholder.  If those laws or the IRS  interpretation  of those laws should
change,  the automatic  conversion  feature may be suspended.  In that event, no
further conversions of Class B shares would occur while that suspension remained
in effect. Although Class B shares could then be exchanged for Class A shares on
the basis of relative net asset value of the two classes, without the imposition
of a sales charge or fee, such exchange could constitute a taxable event for the
shareholder,  and absent  such  exchange,  Class B shares  might  continue to be
subject to the asset-based sales charge for longer than six years.

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

     o to all rollover IRAs (including SEP IRAs and SIMPLE IRAs),

     o  to  all  rollover   contributions   made  to  Individual  401(k)  plans,
Profit-Sharing Plans and Money Purchase Pension Plans,

     o to all direct  rollovers  from  OppenheimerFunds-sponsored  Pinnacle  and
Ascender retirement plans,

     o to all trustee-to-trustee IRA transfers,

     o to all 90-24 type 403(b) transfers,

     o to Group  Retirement  Plans (as  defined in Appendix C to this SAI) which
have entered into a special agreement with the Distributor for that purpose,

     o to Retirement  Plans  qualified  under  Sections  401(a) or 401(k) of the
Internal  Revenue  Code,  the  recordkeeper  or the plan  sponsor  for which has
entered into a special agreement with the Distributor,

     o to Retirement  Plans of a plan sponsor where the aggregate  assets of all
such plans invested in the Oppenheimer funds is $500,000 or more,

     o to Retirement  Plans with at least 100 eligible  employees or $500,000 or
more in plan assets,

     o to  OppenheimerFunds-sponsored  Ascender  401(k)  plans  that pay for the
purchase  with  the  redemption  proceeds  of  Class  A  shares  of one or  more
Oppenheimer funds, and

     o to certain  customers of broker-dealers  and financial  advisors that are
identified in a special agreement between the broker-dealer or financial advisor
and the Distributor for that purpose.


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

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

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

     o on purchases of Class N shares by an OppenheimerFunds-sponsored  Pinnacle
or Ascender  401(k) plan made with the redemption  proceeds of Class A shares of
one or more Oppenheimer funds.


     No  sales  concessions  will be paid to the  broker-dealer  of  record,  as
described  in the  prospectus,  on sales of  Class N shares  purchased  with the
redemption  proceeds of shares of another  mutual fund offered as an  investment
option in a  retirement  plan in which  Oppenheimer  funds are also  offered  as
investment  options under a special  arrangement  with the  Distributor,  if the
purchase  occurs more than 30 days after the  Oppenheimer  funds are added as an
investment option under that plan.


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


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


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


     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 A fund  account  that  has a  balance  below  $500  due to the  automatic
conversion of shares from Class B to Class A shares.  However,  once all Class B
sh ares held in the account have been converted to Class A shares the new account
balance may become subject to the Minimum Balance Fee;

     o Accounts of  shareholders  who elect to access  their  account  documents
electronically via eDoc Direct;

      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.


     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 each class of 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  attributable  to a class by the
number of shares of that class that are outstanding. The NYSE normally closes at
4:00 p.m.,  Eastern time, but may close earlier on some 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 or Class M shares purchased subject to an initial sales charge or
Class A shares on which a contingent deferred

     sales charge was paid, or o Class B shares that were subject to the Class B
contingent deferred sales charge when redeemed.


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


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


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


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

     Involuntary  Redemptions.  The Fund's  Board of  Trustees  has the right to
cause the  involuntary  redemption  of the  shares  held in any  account  if the
aggregate net asset value of those shares is less than $200or such lesser amount
as the Board may fix.  The Board will not cause the  involuntary  redemption  of
shares in an account if the  aggregate net asset value of such shares has fallen
below the stated minimum solely as a result of market fluctuations. If the Board
exercises  this  right,  it may also fix the  requirements  for any notice to be
given to the  shareholders  in question  (not less than 30 days).  The Board may
alternatively  set  requirements for the shareholder to increase the investment,
or set other terms and conditions so that the shares would not be  involuntarily
redeemed.

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


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

     Distributions  From  Retirement  Plans.  Requests  for  distributions  from
OppenheimerFunds-sponsored  IRAs,  SEP-IRAs,  SIMPLE IRAs,  403(b)(7)  custodial
plans,  401(k) plans or pension or  profit-sharing  plans should be addressed to
"Trustee,  OppenheimerFunds  Retirement  Plans," c/o the  Transfer  Agent at its
address listed in "How To Sell Shares" in the prospectus or on the back cover of
this 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 and Exchange  Plans.  Investors  owning shares of the
Fund valued at $5,000 or more can authorize the Transfer  Agent to redeem shares
(having  a  value  of at  least  $50)  automatically  on a  monthly,  quarterly,
semi-annual or annual basis under an Automatic  Withdrawal Plan.  Shares will be
redeemed three business days prior to the date requested by the  shareholder for
receipt of the payment.  Automatic  withdrawals of up to $1,500 per month may be
requested  by  telephone  if  payments  are to be made by check  payable  to all
shareholders of record.  Payments must also be sent to the address of record for
the account and the address must not have been changed within the prior 30 days.
Required minimum distributions from OppenheimerFunds-sponsored  retirement plans
may not be arranged on this basis.

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

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

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


     |X| Automatic Exchange Plans. Shareholders can authorize the Transfer Agent
to  automatically  exchange  a  pre-determined  amount of shares of the Fund for
shares (of the same class) of other  Oppenheimer  funds that offer the  exchange
privilege  on a  monthly,  quarterly,  semi-annual  or  annual  basis  under  an
Automatic  Exchange Plan. The minimum amount that may be exchanged to each other
fund  account is $50.  Instructions  should be provided on the  OppenheimerFunds
application  or  signature-guaranteed  instructions.  Exchanges made under these
plans are subject to the  restrictions  that apply to  exchanges as set forth in
"How to Exchange Shares" in the prospectus and below in this SAI.


     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 Principal Protected Main Street Fund
     Oppenheimer AMT-Free Municipals                             Oppenheimer Principal Protected Main Street Fund II
     Oppenheimer AMT-Free New York Municipals                    Oppenheimer Principal Protected Main Street Fund III
     Oppenheimer Balanced Fund                                   Oppenheimer Quest Capital Value Fund, Inc.
     Oppenheimer California Municipal Fund                       Oppenheimer Quest International Value Fund, Inc.
     Oppenheimer Capital Income Fund                              Oppenheimer Rochester Arizona Municipal Fund
     Oppenheimer Cash Reserves                                    Oppenheimer Rochester Maryland Municipal Fund
     Oppenheimer Convertible Securities Fund                      Oppenheimer Rochester Massachusetts Municipal Fund
     Oppenheimer Dividend Growth Fund                             Oppenheimer Rochester Michigan Municipal Fund
     Oppenheimer Gold & Special Minerals Fund                     Oppenheimer Rochester Minnesota Municipal Fund
     Oppenheimer Institutional Money Market Fund                  Oppenheimer Rochester National Municipals
     Oppenheimer Limited Term California Municipal Fund           Oppenheimer Rochester North Carolina Municipal Fund
     Oppenheimer Limited Term Municipal Fund                      Oppenheimer Rochester Ohio Municipal Fund
     Oppenheimer New Jersey Municipal Fund                        Oppenheimer Rochester Virginia Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund

     o  Oppenheimer  Money  Market  Fund,  Inc.  only offers Class A and Class Y
shares.

     o Oppenheimer Institutional Money Market Fund only offers Class E and Class
L 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 each of  Oppenheimer
Developing Markets Fund and Oppenheimer  International Small Company Fund may be
acquired by  exchange  only with a minimum  initial  investment  of $50,000.  An
existing  shareholder of each fund may make additional  exchanges into that fund
with as little as $50.


     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 a class of shares will
vary from time to time depending on market  conditions,  the  composition of the
Fund's portfolio, and expenses borne by the Fund or borne separately by a class.
Dividends are  calculated in the same manner,  at the same time, and on the same
day for each class of shares. However, dividends on Class B, Class C and Class N
shares are  expected to be lower than  dividends  on Class A and Class M shares.
That is because of the effect of the asset-based  sales charge on Class B, Class
C and  Class  N  shares.  Those  dividends  will  also  differ  in  amount  as a
consequence of any  difference in the net asset values of the different  classes
 of shares.

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


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

     The tax  discussion in the  prospectus  and this 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.

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

Additional Information About the Fund

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

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

     The  Custodian.  Citibank,  N.A.  is the  custodian  of the Fund's  assets.
Effective May 11, 2007,  Brown  Brothers  Harriman  & Co. will be the Fund's
custodian. 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
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER BOND FUND SERIES:

      We have audited the accompanying statement of assets and liabilities of
Oppenheimer Convertible Securities Fund, (a portfolio of the Bond Fund Series),
including the statement of investments, as of December 31, 2006, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
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 audits.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements 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 December 31, 2006, 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
audits provide 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 Convertible Securities Fund as of December 31, 2006, the results of
its operations for the year then ended, the changes in its net assets for each
of the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with U.S.
generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP

Denver, Colorado
February 8, 2007



STATEMENT OF INVESTMENTS  December 31, 2006
--------------------------------------------------------------------------------



                                                                          PRINCIPAL           VALUE
                                                                             AMOUNT      SEE NOTE 1
----------------------------------------------------------------------------------------------------

CONVERTIBLE CORPORATE BONDS AND NOTES--57.4%
----------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.1%
----------------------------------------------------------------------------------------------------
AUTOMOBILES--0.4%
Ford Motor Co., 4.25% Cv. Sr. Unsec. Nts., 12/15/36 1                  $  1,700,000   $   1,818,150
----------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--3.5%
Carnival Corp., 2% Cv. Sr. Unsec. Unsub. Debs., 4/15/21                   5,000,000       6,425,000
----------------------------------------------------------------------------------------------------
Hilton Hotels Corp., 3.375% Cv. Sr. Unsec. Unsub. Nts., 4/15/23           2,500,000       3,956,250
----------------------------------------------------------------------------------------------------
Scientific Games Corp., 0.75% Cv. Sr. Sub. Nts., 12/1/24                  4,000,000       4,595,000
                                                                                      --------------
                                                                                         14,976,250

----------------------------------------------------------------------------------------------------
MEDIA--5.0%
Lamar Advertising Co., 2.875% Cv. Sr. Nts., 12/31/10                      4,000,000       5,445,000
----------------------------------------------------------------------------------------------------
Liberty Media Corp., 0.75% Cv. Sr. Unsec. Unsub. Debs., 3/30/23           5,000,000       6,362,500
----------------------------------------------------------------------------------------------------
Walt Disney Co. (The), 2.125% Cv. Sr. Unsec. Nts., 4/15/23                5,000,000       6,100,000
----------------------------------------------------------------------------------------------------
XM Satellite Radio Holdings, Inc., 1.75% Cv. Sr. Nts., 12/1/09 1          4,000,000       3,415,000
                                                                                      --------------
                                                                                         21,322,500

----------------------------------------------------------------------------------------------------
SPECIALTY RETAIL--1.2%
Lowe's Cos., Inc., 0% Cv. Sr. Nts., 10/19/21 2                            4,500,000       4,893,750
----------------------------------------------------------------------------------------------------
ENERGY--4.9%
----------------------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--4.2%
Cameron International Corp., 2.50% Cv. Sr. Unsec. Nts., 6/15/26 1         5,000,000       5,393,750
----------------------------------------------------------------------------------------------------
Halliburton Co., 3.125% Cv. Sr. Nts., 7/15/23 1                           3,000,000       5,088,750
----------------------------------------------------------------------------------------------------
Schlumberger Ltd., 2.125% Cv. Sr. Unsec. Nts., 6/1/23                     4,500,000       7,408,125
                                                                                      --------------
                                                                                         17,890,625

----------------------------------------------------------------------------------------------------
OIL & GAS--0.7%
Peabody Energy Corp., 4.75% Cv. Jr. Unsec. Sub. Debs., 12/15/66           3,000,000       2,876,250
----------------------------------------------------------------------------------------------------
FINANCIALS--3.7%
----------------------------------------------------------------------------------------------------
CAPITAL MARKETS--2.0%
Merrill Lynch & Co., Inc., 0% Cv. Sr. Unsec. Unsub. Nts., 3/13/32 2       6,500,000       8,656,050
----------------------------------------------------------------------------------------------------
REAL ESTATE--0.7%
Host Marriott LP, 3.25% Cv. Sr. Debs., 4/15/24 1                          2,000,000       2,975,000
----------------------------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--1.0%
Forest City Enterprises, Inc., 3.625% Cv. Nts., 10/15/11 3                4,000,000       4,253,800
----------------------------------------------------------------------------------------------------
HEALTH CARE--16.5%
----------------------------------------------------------------------------------------------------
BIOTECHNOLOGY--5.0%
Amgen, Inc., 0.375% Cv. Sr. Nts., 2/1/13 1                                7,500,000       7,406,250
----------------------------------------------------------------------------------------------------
Amylin Pharmaceuticals, Inc., 2.50% Cv. Sr. Unsec. Nts., 4/15/11 1        2,000,000       2,522,500
----------------------------------------------------------------------------------------------------
Genzyme Corp., 1.25% Cv. Sr. Nts., 12/1/23 1                              4,000,000       4,180,000
----------------------------------------------------------------------------------------------------
Gilead Sciences, Inc., 0.50% Cv. Sr. Nts., 5/1/11 1                       3,000,000       3,078,750
----------------------------------------------------------------------------------------------------
Invitrogen Corp., 1.50% Cv. Sr. Unsec. Nts., 2/15/24                      2,000,000       1,717,500






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



                                                                          PRINCIPAL          VALUE
                                                                             AMOUNT     SEE NOTE 1
---------------------------------------------------------------------------------------------------

BIOTECHNOLOGY Continued
PDL BioPharma, Inc., 2% Cv. Sr. Unsec. Nts., 2/15/12                   $  2,000,000   $  2,115,000
                                                                                      -------------
                                                                                        21,020,000

---------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--4.1%
Cytyc Corp.:
2.25% Cv. Sr. Nts., 3/15/24 1                                             2,000,000      2,160,000
2.25% Cv. Sr. Nts., 3/15/24                                               2,000,000      2,160,000
---------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc.,3.25% Cv.Sr.Sub.Nts.,3/1/24         6,000,000      7,792,500
---------------------------------------------------------------------------------------------------
Medtronic, Inc., 1.50% Cv. Sr. Unsec. Nts., 4/15/11                       5,000,000      5,325,000
                                                                                      -------------
                                                                                        17,437,500

---------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.8%
Omnicare, Inc., 3.25% Cv. Sr. Unsec. Debs., 12/15/35                      4,000,000      3,490,000
---------------------------------------------------------------------------------------------------
PHARMACEUTICALS--6.6%
Advanced Medical Optics, Inc., 2.50% Cv. Sr. Sub. Nts., 7/15/24           3,000,000      2,917,500
---------------------------------------------------------------------------------------------------
Allergan, Inc., 1.50% Cv. Nts., 4/1/26 1                                  5,000,000      5,475,000
---------------------------------------------------------------------------------------------------
Medicis Pharmaceutical Corp., 1.50% Cv. Sr. Unsec. Sub. Nts., 6/4/33      4,000,000      4,230,000
---------------------------------------------------------------------------------------------------
Sepracor, Inc., 0% Cv. Sr. Sub. Nts., 10/15/24 2                          3,000,000      3,243,750
---------------------------------------------------------------------------------------------------
Teva Pharmaceutical Finance II LLC, 0.50% Cv. Sr. Debs.,
Series A,2/1/24 (cv.into ADRs of Teva Pharmaceutical Industries Ltd.)     6,500,000      6,621,875
---------------------------------------------------------------------------------------------------
Wyeth, 5.109% Cv. Sr. Unsec. Nts., 1/15/24 4                              5,000,000      5,453,000
                                                                                      -------------
                                                                                        27,941,125

---------------------------------------------------------------------------------------------------
INDUSTRIALS--6.3%
---------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--2.8%
Alliant Techsystems, Inc., 2.75% Cv. Sr. Sub. Nts., 9/15/11 1             6,500,000      6,678,750
---------------------------------------------------------------------------------------------------
Lockheed Martin Corp., 5.124% Cv. Sr. Nts., 8/15/33 4                     4,000,000      5,328,040
                                                                                      -------------
                                                                                        12,006,790

---------------------------------------------------------------------------------------------------
AIRLINES--1.4%
AirTran Holdings, Inc., 7% Cv. Sr. Nts., 7/1/23                           2,500,000      3,334,375
---------------------------------------------------------------------------------------------------
UAL Corp., 5% Cv. Bonds, 2/1/21                                           2,000,000      2,323,080
                                                                                      -------------
                                                                                         5,657,455

---------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.1%
FTI Consulting, Inc., 3.75% Cv. Sr. Unsec. Sub. Nts., 7/15/12             4,000,000      4,620,000
---------------------------------------------------------------------------------------------------
MACHINERY--1.0%
Danaher Corp., 2.518% Cv. Sr.Unsec.Unsub.Liquid Yield Option Nts.,
1/22/21 2                                                                 3,000,000      3,202,500
---------------------------------------------------------------------------------------------------
SystemOne Technologies, Inc.:
2.888% Cv. Sub. Nts., 12/31/06 3,5                                        3,931,593        629,055
8.25% Cv. Sub. Nts., 12/31/06 3,5                                         3,212,132        513,941
                                                                                      -------------
                                                                                         4,345,496








                                                                       PRINCIPAL             VALUE
                                                                          AMOUNT        SEE NOTE 1
---------------------------------------------------------------------------------------------------

INFORMATION TECHNOLOGY--10.1%
---------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.2%
Comverse Technology, Inc., 0% Cv. Sr. Unsec. Zero Yield Puttable
Securities, 5/15/23 2                                                  $  4,000,000   $  5,050,000
---------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.5%
EMC Corp., 1.75% Cv. Sr. Nts., 12/1/11 3                                  6,000,000      6,241,200
---------------------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.4%
Yahoo!, Inc., 0% Cv. Sr. Unsec. Nts., 4/1/08 2                            1,500,000      1,950,000
---------------------------------------------------------------------------------------------------
IT CONSULTING & SERVICES--1.6%
DST Systems, Inc., 3.625% Cv. Sr. Unsec. Debs., Series B, 8/15/23         5,000,000      6,712,500
---------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--2.5%
Agere Systems, Inc.,6.50% Cv.Unsec.Unsub.Nts., 12/15/09 (cv. into
Agere Systems, Inc., Cl. A common stock)                                  5,000,000      5,112,500
---------------------------------------------------------------------------------------------------
Intel Corp.:
2.95% Cv. Unsec. Sub. Debs., 12/15/35 1                                   4,000,000      3,640,000
2.95% Cv. Unsec. Sub. Debs., 12/15/35                                     2,000,000      1,820,000
                                                                                      -------------
                                                                                        10,572,500

---------------------------------------------------------------------------------------------------
SOFTWARE--2.9%
Amdocs Ltd., 0.50% Cv. Nts., 3/15/24                                      5,000,000      5,331,250
---------------------------------------------------------------------------------------------------
Red Hat, Inc., 0.50% Cv. Sr. Unsec. Sub. Debs., 1/15/24                   3,000,000      3,221,250
---------------------------------------------------------------------------------------------------
Symantec Corp., 0.75% Cv. Sr. Nts., 6/15/11 1                             3,000,000      3,630,000
                                                                                      -------------
                                                                                        12,182,500

---------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.1%
---------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.6%
Level 3 Communications, Inc., 2.875% Cv. Sub. Nts., 7/15/10               2,500,000      2,634,375
---------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--2.5%
American Tower Corp., 3% Cv. Sr. Nts., 8/15/12                            1,000,000      1,906,250
---------------------------------------------------------------------------------------------------
NII Holdings, Inc., 2.75% Cv. Nts., 8/15/25 1                             6,000,000      8,707,500
                                                                                      -------------
                                                                                        10,613,750

---------------------------------------------------------------------------------------------------
UTILITIES--2.7%
---------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--2.7%
CenterPoint Energy,Inc., 3.75% Cv. Sr. Unsec.Nts., Series B, 5/15/23      4,000,000      5,830,000
---------------------------------------------------------------------------------------------------
CMS Energy Corp., 2.875% Cv. Sr. Nts., 12/1/24                            4,500,000      5,760,000
                                                                                      -------------
                                                                                        11,590,000
                                                                                      -------------
Total Convertible Corporate Bonds and Notes (Cost $229,046,704)                        243,727,566






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



                                                                                             VALUE
                                                                             SHARES     SEE NOTE 1
---------------------------------------------------------------------------------------------------

PREFERRED STOCKS--28.4%
---------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--2.7%
---------------------------------------------------------------------------------------------------
AUTOMOBILES--2.7%
Ford Motor Co. Capital Trust II, 6.50% Cum. Cv., Non-Vtg.                   155,000   $  5,301,000
---------------------------------------------------------------------------------------------------
General Motors Corp.:
4.50% Cv. Sr. Debs., Series A                                               150,000      3,792,000
5.25% Cv. Sr. Unsec. Debs., Series B                                        100,000      2,119,000
                                                                                      -------------
                                                                                        11,212,000

---------------------------------------------------------------------------------------------------
ENERGY--3.0%
---------------------------------------------------------------------------------------------------
OIL & GAS--3.0%
Chesapeake Energy Corp., 4.50% Cum. Cv., Non-Vtg.                            65,000      6,246,500
---------------------------------------------------------------------------------------------------
El Paso Corp., 4.99% Cv.                                                      5,000      6,637,500
                                                                                      -------------
                                                                                        12,884,000

---------------------------------------------------------------------------------------------------
FINANCIALS--12.0%
---------------------------------------------------------------------------------------------------
CAPITAL MARKETS--4.2%
Affiliated Managers Group, Inc.:
5.10% Cv. 1                                                                 120,000      6,315,000
5.10% Cv.                                                                    20,000      1,052,500
---------------------------------------------------------------------------------------------------
E*TRADE Financial Corp., 6.125% Cum. Cv., Non-Vtg.                          135,000      3,948,750
---------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 6.25% Cv. Premium Income Equity
Linked Nts. (linked to General Mills, Inc. common stock)                    240,000      6,604,800
                                                                                      -------------
                                                                                        17,921,050

---------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--2.3%
Marshall & Ilsley Corp., 6.50% Cv.                                          200,000      5,454,000
---------------------------------------------------------------------------------------------------
Washington Mutual Capital Trust 2001, 5.375% Cum. Cv. Units
(each unit consists of one preferred stock and one warrant to
purchase shares of Washington Mutual, Inc.), Non-Vtg. 6                      75,000      4,284,000
                                                                                      -------------
                                                                                         9,738,000

---------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.3%
Citigroup Funding, Inc., 5.02% Cv., Series GNW                              175,000      5,656,000
---------------------------------------------------------------------------------------------------
INSURANCE--2.6%
MetLife, Inc., 6.375% Cv. Equity Units, Series B (each equity unit consists
of a fractional interest in trust preferred securities as well as a stock
purchase contract to purchase MetLife, Inc., Series A and Series B) 6       200,000      6,116,000
---------------------------------------------------------------------------------------------------
Platinum Underwriters Holdings Ltd., 6% Cv., Series A, Non-Vtg.             160,000      4,900,000
                                                                                      -------------
                                                                                        11,016,000

---------------------------------------------------------------------------------------------------
REAL ESTATE--1.6%
Simon Property Group, Inc., 6% Cv., Non-Vtg.                                 80,000      6,512,000








                                                                                             VALUE
                                                                             SHARES     SEE NOTE 1
---------------------------------------------------------------------------------------------------

HEALTH CARE--1.3%
---------------------------------------------------------------------------------------------------
PHARMACEUTICALS--1.3%
Schering-Plough Corp., 6% Cv.                                               100,000   $  5,689,000
---------------------------------------------------------------------------------------------------
INDUSTRIALS--1.3%
---------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.3%
Northrop Grumman Corp., 7% Cum. Cv., Series B                                40,000      5,320,000
---------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--1.2%
---------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.2%
Lucent Technologies Capital Trust I, 7.75% Cum. Cv., Non-Vtg.                 5,000      5,166,250
---------------------------------------------------------------------------------------------------
MATERIALS--2.2%
---------------------------------------------------------------------------------------------------
CHEMICALS--1.1%
Celanese Corp., 4.25% Cum. Cv.                                              130,000      4,680,000
---------------------------------------------------------------------------------------------------
METALS & MINING--1.1%
Freeport-McMoRan Copper & Gold, Inc., 5.50% Cv.                               3,500      4,573,188
---------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.8%
---------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.8%
Crown Castle International Corp., 6.25% Cv.                                  64,000      3,512,000
---------------------------------------------------------------------------------------------------
UTILITIES--3.9%
---------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--3.9%
AES Trust VII, 6% Cv., Non-Vtg.                                              75,000      3,731,250
---------------------------------------------------------------------------------------------------
Entergy Corp., 7.625% Cv.                                                   100,000      5,948,000
---------------------------------------------------------------------------------------------------
NRG Energy, Inc., 5.75% Cv.                                                  25,000      6,746,875
                                                                                      -------------
                                                                                        16,426,125
                                                                                      -------------
Total Preferred Stocks (Cost $110,676,252)                                             120,305,613

---------------------------------------------------------------------------------------------------
COMMON STOCKS--8.0%
---------------------------------------------------------------------------------------------------
Alltel Corp.                                                                 50,000      3,024,000
---------------------------------------------------------------------------------------------------
Altria Group, Inc.                                                           65,000      5,578,300
---------------------------------------------------------------------------------------------------
Bank of America Corp.                                                        60,000      3,203,400
---------------------------------------------------------------------------------------------------
Hess Corp.                                                                   49,830      2,470,073
---------------------------------------------------------------------------------------------------
Johnson & Johnson                                                            80,000      5,281,600
---------------------------------------------------------------------------------------------------
Legg Mason, Inc.                                                             25,000      2,376,250
---------------------------------------------------------------------------------------------------
Microchip Technology, Inc.                                                   90,000      2,943,000
---------------------------------------------------------------------------------------------------
Monsanto Co.                                                                100,000      5,253,000
---------------------------------------------------------------------------------------------------
SystemOne Technologies, Inc. 3,7                                            197,142          1,380
---------------------------------------------------------------------------------------------------
Tyco International Ltd.                                                     130,644      3,971,578
                                                                                      -------------
Total Common Stocks (Cost $28,136,735)                                                  34,102,581






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



----------------------------------------------------------------------------------------------
                                                                   PRINCIPAL            VALUE
                                                                      AMOUNT       SEE NOTE 1
----------------------------------------------------------------------------------------------

STRUCTURED NOTES--1.3%
----------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., Cv. Linked Nts., 6%, 12/5/07
(linked to Corning, Inc.) 3,7 (Cost $5,999,776)                  $   285,705   $    5,526,963

                                                                      SHARES
----------------------------------------------------------------------------------------------
MONEY MARKET FUND--4.3%
----------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E, 5.25% 8,9
(Cost $18,266,066)                                                18,266,066       18,266,066

----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $392,125,533)                         99.4%     421,928,789
----------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES                                          0.6        2,358,080
                                                                 -----------------------------

NET ASSETS                                                             100.0%  $  424,286,869
                                                                 =============================


FOOTNOTES TO STATEMENT OF INVESTMENTS

1. 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 $72,484,400 or 17.08% of the Fund's net
assets as of December 31, 2006.

2. Zero coupon bond reflects effective yield on the date of purchase.

3. Illiquid security. The aggregate value of illiquid securities as of December
31, 2006 was $17,166,339, which represents 4.05% of the Fund's net assets. See
Note 6 of accompanying Notes.

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

5. Issue is in default. See Note 1 of accompanying Notes.

6. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units, which
represent debt securities, principal amount disclosed represents total
underlying principal.

7. Non-income producing security.

8. Rate shown is the 7-day yield as of December 31, 2006.

9. Represents ownership of an affiliated fund, at or during the period ended
December 31, 2006. Transactions during the period in which the issuer was an
affiliate are as follows:



                                         SHARES                                      SHARES
                                   DECEMBER 31,         GROSS          GROSS   DECEMBER 31,
                                           2005     ADDITIONS     REDUCTIONS           2006
-------------------------------------------------------------------------------------------

Oppenheimer Institutional
Money Market Fund, Cl. E, 5.25%*             --    78,400,578     60,134,512     18,266,066




                                                                       VALUE       DIVIDEND
                                                                  SEE NOTE 1         INCOME
-------------------------------------------------------------------------------------------

Oppenheimer Institutional
Money Market Fund, Cl. E, 5.25%*                                $ 18,266,066   $    255,288


* The money market fund and the Fund are affiliated by having the same
investment advisor.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.





STATEMENT OF ASSETS AND LIABILITIES  December 31, 2006
--------------------------------------------------------------------------------


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

ASSETS
-----------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $373,859,467)                          $  403,662,723
Affiliated companies (cost $18,266,066)                                 18,266,066
                                                                    ---------------
                                                                       421,928,789
-----------------------------------------------------------------------------------
Cash                                                                       626,977
-----------------------------------------------------------------------------------
Receivables and other assets:
Investments sold                                                         2,519,423
Interest and dividends                                                   1,837,007
Shares of beneficial interest sold                                         528,690
Other                                                                       30,177
                                                                    ---------------
Total assets                                                           427,471,063

-----------------------------------------------------------------------------------
LIABILITIES
-----------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                    2,118,000
Shares of beneficial interest redeemed                                     614,925
Distribution and service plan fees                                         254,548
Trustees' compensation                                                      65,375
Transfer and shareholder servicing agent fees                               55,579
Shareholder communications                                                  49,342
Other                                                                       26,425
                                                                    ---------------
Total liabilities                                                        3,184,194

-----------------------------------------------------------------------------------
NET ASSETS                                                          $  424,286,869
                                                                    ===============

-----------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
-----------------------------------------------------------------------------------
Paid-in capital                                                     $  478,543,642
-----------------------------------------------------------------------------------
Accumulated net investment loss                                         (2,420,816)
-----------------------------------------------------------------------------------
Accumulated net realized loss on investments                           (81,639,213)
-----------------------------------------------------------------------------------
Net unrealized appreciation on investments                              29,803,256
                                                                    ---------------
NET ASSETS                                                          $  424,286,869
                                                                    ===============






STATEMENT OF ASSETS AND LIABILITIES  Continued
--------------------------------------------------------------------------------


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

NET ASSET VALUE PER SHARE
-----------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $240,088,014 and
16,958,853 shares of beneficial interest outstanding)                                             $  14.16
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)   $  15.02
-----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $40,596,924 and 2,863,217 shares of
beneficial interest outstanding)                                                                  $  14.18
-----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $55,737,300 and 3,939,081 shares of
beneficial interest outstanding)                                                                  $  14.15
-----------------------------------------------------------------------------------------------------------
Class M Shares:
Net asset value and redemption price per share (based on net assets of $70,996,026 and
5,018,133 shares of beneficial interest outstanding)                                              $  14.15
Maximum offering price per share (net asset value plus sales charge of 3.25% of offering price)   $  14.63
-----------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $16,868,605 and 1,191,048 shares of
beneficial interest outstanding)                                                                  $  14.16


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.





STATEMENT OF OPERATIONS  For the Year Ended December 31, 2006
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
INVESTMENT INCOME
--------------------------------------------------------------------------------
Dividends:
Unaffiliated companies                                           $    7,341,838
Affiliated companies                                                    255,288
--------------------------------------------------------------------------------
Interest                                                              7,313,060
--------------------------------------------------------------------------------
Other income                                                              5,245
                                                                 ---------------
Total investment income                                              14,915,431

--------------------------------------------------------------------------------
EXPENSES
--------------------------------------------------------------------------------
Management fees                                                       2,107,898
--------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                                 563,788
Class B                                                                 479,898
Class C                                                                 573,326
Class M                                                                 174,110
Class N                                                                  28,132
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                                 353,712
Class B                                                                  86,608
Class C                                                                  97,628
Class M                                                                  82,842
Class N                                                                   9,058
--------------------------------------------------------------------------------
Shareholder communications:
Class A                                                                  46,862
Class B                                                                  12,259
Class C                                                                  12,656
Class M                                                                  10,170
Class N                                                                   1,192
--------------------------------------------------------------------------------
Accounting service fees                                                 130,398
--------------------------------------------------------------------------------
Custodian fees and expenses                                               3,692
--------------------------------------------------------------------------------
Administration service fees                                               1,500
--------------------------------------------------------------------------------
Other                                                                    82,959
                                                                 ---------------
Total expenses                                                        4,858,688
Less waivers and reimbursements of expenses                              (4,889)
                                                                 ---------------
Net expenses                                                          4,853,799

--------------------------------------------------------------------------------
NET INVESTMENT INCOME                                                10,061,632





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


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

REALIZED AND UNREALIZED GAIN
--------------------------------------------------------------------------------
Net realized gain on:
Investments                                                      $   28,507,724
Closing and expiration of option contracts written                      627,461
                                                                 ---------------
Net realized gain                                                    29,135,185
--------------------------------------------------------------------------------
Net change in unrealized appreciation on investments                  3,105,320

--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS             $   42,302,137
                                                                 ===============


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.





STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------



YEAR ENDED DECEMBER 31,                                                    2006             2005
-------------------------------------------------------------------------------------------------

OPERATIONS
-------------------------------------------------------------------------------------------------
Net investment income                                            $   10,061,632   $   12,354,631
-------------------------------------------------------------------------------------------------
Net realized gain                                                    29,135,185       12,688,258
-------------------------------------------------------------------------------------------------
Net change in unrealized appreciation                                 3,105,320      (23,076,957)
                                                                 --------------------------------
Net increase in net assets resulting from operations                 42,302,137        1,965,932

-------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
-------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A                                                              (7,800,060)     (12,158,423)
Class B                                                              (1,112,118)      (2,373,869)
Class C                                                              (1,396,887)      (2,499,131)
Class M                                                              (2,400,470)      (3,875,859)
Class N                                                                (244,472)         (98,537)
                                                                 --------------------------------
                                                                    (12,954,007)     (21,005,819)

-------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
-------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A                                                             (27,464,457)     (58,200,165)
Class B                                                             (21,179,903)     (23,575,464)
Class C                                                             (10,458,453)     (16,051,502)
Class M                                                             (13,103,309)     (18,593,755)
Class N                                                              13,889,747          419,514
                                                                 --------------------------------
                                                                    (58,316,375)    (116,001,372)

-------------------------------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------------------------------
Total decrease                                                      (28,968,245)    (135,041,259)
-------------------------------------------------------------------------------------------------
Beginning of period                                                 453,255,114      588,296,373
                                                                 --------------------------------
End of period (including accumulated net investment loss of
$2,420,816 and $4,601,685, respectively)                         $  424,286,869   $  453,255,114
                                                                 ================================


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.





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



CLASS A     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003          2002
------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.22        $   13.63       $   13.27       $   11.29     $   12.76
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .35 1            .35 1           .43 1           .56           .57
Net realized and unrealized gain (loss)                  1.04             (.16)            .58            1.98         (1.41)
                                                    --------------------------------------------------------------------------
Total from investment operations                         1.39              .19            1.01            2.54          (.84)
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.45)            (.60)           (.65)           (.56)         (.63)
------------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                      $   14.16        $   13.22       $   13.63       $   13.27     $   11.29
                                                    ==========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                      10.63%            1.50%           7.74%          22.95%        (6.59)%
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $ 240,088        $ 251,033       $ 319,478       $ 310,641     $ 202,968
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $ 239,978        $ 277,049       $ 321,729       $ 252,347     $ 190,677
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    2.57%            2.66%           3.24%           4.48%         4.77%
Total expenses                                           0.95% 4          0.97%           0.94%           0.94%         0.99%
Expenses after payments and waivers
and reduction to custodian expenses                      0.95%            0.96%           0.94%           0.94%         0.99%
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%           52%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods 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.

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

4. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       0.95%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.







CLASS B     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003             2002
----------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.24        $   13.65       $   13.29       $   11.30        $   12.79
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .24 1            .24 1           .33 1           .43              .43
Net realized and unrealized gain (loss)                  1.04             (.15)            .58            2.02            (1.38)
                                                    ------------------------------------------------------------------------------
Total from investment operations                         1.28              .09             .91            2.45             (.95)
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.34)            (.50)           (.55)           (.46)            (.54)
----------------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                      $   14.18        $   13.24       $   13.65       $   13.29        $   11.30
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       9.75%            0.68%           6.92%          22.07%           (7.44)%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $  40,597        $  58,483       $  84,816       $ 133,058        $ 154,350
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $  47,985        $  68,098       $ 102,670       $ 139,757        $ 213,259
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    1.74%            1.84%           2.47%           3.79%            3.95%
Total expenses                                           1.75% 4,5        1.79% 6         1.75% 6         1.74% 6,7        1.77% 6
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%              52%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods 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.

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

4. Voluntary waiver of affiliated funds management fees less than 0.01%.

5. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       1.75%

6. Reduction to custodian expenses less than 0.01%.

7. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.





FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------



CLASS C     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003             2002
----------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.21        $   13.62       $   13.27       $   11.28        $   12.76
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .24 1            .25 1           .33 1           .46              .46
Net realized and unrealized gain (loss)                  1.04             (.16)            .57            1.99            (1.40)
                                                    ------------------------------------------------------------------------------
Total from investment operations                         1.28              .09             .90            2.45             (.94)
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.34)            (.50)           (.55)           (.46)            (.54)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $   14.15        $   13.21       $   13.62       $   13.27        $   11.28
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       9.78%            0.72%           6.89%          22.14%           (7.39)%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $  55,737        $  62,231       $  80,995       $  82,149        $  61,031
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $  57,353        $  69,275       $  82,470       $  69,787        $  66,391
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    1.77%            1.89%           2.48%           3.73%            3.97%
Total expenses                                           1.74% 4,5        1.74% 6         1.70% 6         1.70% 6,7        1.76% 6
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%              52%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods 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.

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

4. Voluntary waiver of affiliated funds management fees less than 0.01%.

5. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       1.74%

6. Reduction to custodian expenses less than 0.01%.

7. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.







CLASS M     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003             2002
----------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.21        $   13.62       $   13.27       $   11.28        $   12.76
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .36 1            .36 1           .43 1           .50              .49
Net realized and unrealized gain (loss)                  1.03             (.16)            .57            2.00            (1.40)
                                                    ------------------------------------------------------------------------------
Total from investment operations                         1.39              .20            1.00            2.50             (.91)
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.45)            (.61)           (.65)           (.51)            (.57)
----------------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                      $   14.15        $   13.21       $   13.62       $   13.27        $   11.28
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                      10.68%            1.55%           7.69%          22.59%           (7.16)%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $  70,996        $  79,023       $ 100,877       $ 114,600        $ 108,426
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $  73,597        $  86,969       $ 106,194       $ 110,337        $ 122,897
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    2.60%            2.72%           3.24%           4.16%            4.24%
Total expenses                                           0.91% 4,5        0.91% 6         0.95% 6,7       1.32% 6,7        1.51% 6
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%              52%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods 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.

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

4. Voluntary waiver of affiliated funds management fees less than 0.01%.

5. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       0.91%

6. Reduction to custodian expenses less than 0.01%.

7. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.





FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------



CLASS N     YEAR ENDED DECEMBER 31,                      2006             2005            2004            2003          2002
------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $   13.22        $   13.63       $   13.27       $   11.29     $   12.76
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .31 1            .28 1           .37 1           .49           .55
Net realized and unrealized gain (loss)                  1.02             (.15)            .58            2.00         (1.43)
                                                    --------------------------------------------------------------------------
Total from investment operations                         1.33              .13             .95            2.49          (.88)
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.39)            (.54)           (.59)           (.51)         (.59)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $   14.16        $   13.22       $   13.63       $   13.27     $   11.29
                                                    ==========================================================================

------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                      10.19%            1.04%           7.31%          22.45%        (6.92)%
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $  16,869        $   2,485       $   2,131       $   1,458     $     388
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   5,669        $   2,378       $   1,781       $     743     $     205
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    2.26%            2.17%           2.79%           3.87%         4.38%
Total expenses                                           1.23% 4          1.45%           1.37%           1.37%         1.43%
Expenses after payments and waivers
and reduction to custodian expenses                      1.23%            1.43%           1.37%           1.35%         1.38%
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    54%              50%             54%             61%           52%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods 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.

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

4. Expenses including indirect expenses from affiliated fund were as follows:

      Year Ended December 31, 2006       1.23%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.





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

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES

Oppenheimer Convertible Securities Fund (the Fund), a portfolio of the Bond Fund
Series, 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 a high level of total return on its assets through a combination of current
income and capital appreciation. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager).

      The Fund offers Class A, Class B, Class C, Class M and Class N shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class M shares are sold with a reduced front-end
sales charge. Class N shares are sold only through retirement plans. Retirement
plans that offer Class N shares may impose charges on those accounts. All
classes of shares have identical rights and voting privileges with respect to
the Fund in general and exclusive voting rights on matters that affect that
class alone. Earnings, net assets and net asset value per share may differ due
to each class having its own expenses, such as transfer and shareholder
servicing agent fees and shareholder communications, directly attributable to
that class. Class A, B, C, M and N have separate distribution and/or service
plans. Class B shares will automatically convert to Class A shares six years
after the date of purchase.

      The following is a summary of significant accounting policies consistently
followed by the Fund.

--------------------------------------------------------------------------------
SECURITIES VALUATION. 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





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

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

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).

--------------------------------------------------------------------------------
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.

--------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, market fluctuations and loss of
income and principal, and may be more sensitive to economic conditions than
lower-yielding, higher-rated fixed-income securities. The Fund may acquire
securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. As of December 31, 2006, securities with an
aggregate market value of $1,142,996, representing 0.27% of the Fund's net
assets, were in default.

--------------------------------------------------------------------------------
AFFILIATED FUNDS. The Fund is permitted to invest daily available cash balances
in affiliated money market funds. Each day, the Fund invests 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.

--------------------------------------------------------------------------------
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.





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

--------------------------------------------------------------------------------
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 1,2,3         TAX PURPOSES
   --------------------------------------------------------------------------
   $  973,299               $  --          $  80,698,872        $  25,801,736

1. As of December 31, 2006, the Fund had $80,698,872 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of December 31, 2006,
details of the capital loss carryforward were as follows:

                            EXPIRING
                            ------------------------
                            2010       $  80,698,872
                                       =============

2. During the fiscal year ended December 31, 2006, the Fund utilized $21,096,894
of capital loss carryforward to offset capital gains realized in that fiscal
year.

3. During the fiscal year ended December 31, 2005, the Fund utilized $7,504,322
of capital loss carryforward to offset capital gains realized in that fiscal
year.

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 December 31, 2006. Net assets of
the Fund were unaffected by the reclassifications.





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

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

                               REDUCTION TO                  INCREASE TO
        REDUCTION              ACCUMULATED               ACCUMULATED NET
        TO PAID-IN             NET INVESTMENT              REALIZED LOSS
        CAPITAL                LOSS                       ON INVESTMENTS
        ----------------------------------------------------------------
        $  285,664             $  5,073,244                 $  4,787,580

The tax character of distributions paid during the years ended December 31, 2006
and December 31, 2005 was as follows:

                                          YEAR ENDED          YEAR ENDED
                                   DECEMBER 31, 2006   DECEMBER 31, 2005
        ----------------------------------------------------------------
        Distributions paid from:
        Ordinary income                $  12,954,007       $  21,005,819

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 December 31, 2006 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   $  396,127,053
                                         ==============

        Gross unrealized appreciation    $   39,475,377
        Gross unrealized depreciation       (13,673,641)
                                         --------------
        Net unrealized appreciation      $   25,801,736
                                         ==============

--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended December
31, 2006, the Fund's projected benefit obligations were decreased by $29,737 and
payments of $3,660 were made to retired trustees, resulting in an accumulated
liability of $56,548 as of December 31, 2006.

      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 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 distributions, if any, are declared
and paid quarterly. 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 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.




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

--------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST

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



                           YEAR ENDED DECEMBER 31, 2006    YEAR ENDED DECEMBER 31, 2005
                               SHARES            AMOUNT        SHARES            AMOUNT
----------------------------------------------------------------------------------------

CLASS A
Sold                        2,318,909     $  31,684,747     2,229,111    $   29,269,773
Dividends and/or
distributions reinvested      444,736         6,153,926       717,744         9,447,315
Redeemed                   (4,798,119)      (65,303,130)   (7,396,919)      (96,917,253)
                           -------------------------------------------------------------
Net decrease               (2,034,474)    $ (27,464,457)   (4,450,064)   $  (58,200,165)
                           =============================================================

----------------------------------------------------------------------------------------
CLASS B
Sold                          219,096     $   2,994,379       384,419    $    5,032,394
Dividends and/or
distributions reinvested       51,658           716,244       118,262         1,559,371
Redeemed                   (1,825,531)      (24,890,526)   (2,299,068)      (30,167,229)
                           -------------------------------------------------------------
Net decrease               (1,554,777)    $ (21,179,903)   (1,796,387)   $  (23,575,464)
                           =============================================================

----------------------------------------------------------------------------------------
CLASS C
Sold                          363,323     $   4,952,367       369,150    $    4,830,334
Dividends and/or
distributions reinvested       71,329           988,545       125,570         1,652,747
Redeemed                   (1,206,502)      (16,399,365)   (1,730,481)      (22,534,583)
                           -------------------------------------------------------------
Net decrease                 (771,850)    $ (10,458,453)   (1,235,761)   $  (16,051,502)
                           =============================================================

----------------------------------------------------------------------------------------
CLASS M
Sold                           46,520     $     635,319        58,022    $      752,410
Dividends and/or
distributions reinvested      121,268         1,676,096       206,256         2,712,110
Redeemed                   (1,132,431)      (15,414,724)   (1,688,476)      (22,058,275)
                           -------------------------------------------------------------
Net decrease                 (964,643)    $ (13,103,309)   (1,424,198)   $  (18,593,755)
                           =============================================================

----------------------------------------------------------------------------------------
CLASS N
Sold                        1,037,870     $  14,367,145        71,550    $      939,101
Dividends and/or
distributions reinvested       16,642           234,685         6,529            86,038
Redeemed                      (51,480)         (712,083)      (46,439)         (605,625)
                           -------------------------------------------------------------
Net increase                1,003,032     $  13,889,747        31,640    $      419,514
                           =============================================================






--------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES

The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and money market funds, for the year ended December
31, 2006, were as follows:

                                          PURCHASES            SALES
             -------------------------------------------------------
             Investment securities   $  205,513,183   $  257,240,392

--------------------------------------------------------------------------------
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 average net assets as shown in the following table:

             FEE SCHEDULE
             --------------------------------------------------------
             Up to $50 million                                0.6250%
             Next $250 million                                0.5000
             Over $300 million                                0.4375

--------------------------------------------------------------------------------
ACCOUNTING FEES. Accounting fees paid to the Manager were in accordance with the
accounting services agreement with the Fund which provides for an annual fee of
$12,000 for the first $30 million of average daily net assets and $9,000 for
each additional $30 million of average daily net assets. During the year ended
December 31, 2006, the Fund paid $130,398 to the Manager for accounting and
pricing services.

--------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.

--------------------------------------------------------------------------------
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. For the year ended December 31, 2006, the Fund paid
$642,643 to OFS for services to 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 Fund's classes of shares.

--------------------------------------------------------------------------------
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. The Distributor currently uses all of those fees
to pay dealers, brokers, banks and other financial institutions periodically for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
periods. Fees incurred by the Fund under the Plan are detailed in the Statement
of Operations.





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

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

DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C, CLASS M AND CLASS N SHARES.
The Fund has adopted Distribution and Service Plans for Class B, Class C, Class
M and Class N shares to compensate the Distributor for its services in
connection with the distribution of those shares and servicing accounts. Under
the plans, the Fund pays the Distributor an annual asset-based sales charge of
0.75% on Class B and Class C shares and 0.25% on Class N shares. While the Class
M plan permits an annual asset-based sales charge payment of 0.50%, the Board
has set that payment at zero effective February 11, 2004. The Distributor also
receives a service fee of 0.25% per year under each plan. If either the Class B,
Class C, Class M or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Trustees and its independent trustees must
determine whether the Distributor shall be entitled to payment from the Fund of
all or a portion of the service fee and/or asset-based sales charge in respect
to shares sold prior to the effective date of such termination. The Distributor
determines its uncompensated expenses under the plan at calendar quarter ends.
The Distributor's aggregate uncompensated expenses under the plan at December
31, 2006 for Class B, Class C and Class N shares were $2,207,450, $2,567,276 and
$157,611, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.

--------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the following table for the period
indicated.



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

December 31, 2006       $  44,839           $  78        $  2,889      $  138,403        $  2,021          $  309


--------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the year ended December 31, 2006,
OFS waived $15 for Class N shares. 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 year ended December 31, 2006, the Manager waived $4,874 for
IMMF management fees.





--------------------------------------------------------------------------------
5. OPTION ACTIVITY

The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.

      The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.

      Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.

      Securities designated to cover outstanding call or put options are noted
in the Statement of Investments where applicable. Contracts subject to call or
put, expiration date, exercise price, premium received and market value are
detailed in a note to the Statement of Investments. Options written are reported
as a liability in the Statement of Assets and Liabilities. Realized gains and
losses are reported in the Statement of Operations.

      The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.

Written option activity for the year ended December 31, 2006 was as follows:

                                                          CALL OPTIONS
                                              ------------------------
                                              NUMBER OF      AMOUNT OF
                                              CONTRACTS       PREMIUMS
----------------------------------------------------------------------
Options outstanding as of December 31, 2005          --   $         --
Options written                                   5,600      1,012,830
Options closed or expired                        (5,600)    (1,012,830)
                                              ------------------------
Options outstanding as of December 31, 2006          --   $         --
                                              ========================





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

--------------------------------------------------------------------------------
6. ILLIQUID SECURITIES

As of December 31, 2006, 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 10% 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.

--------------------------------------------------------------------------------
7. 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
December 31, 2006, 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 December 31, 2006, 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.

--------------------------------------------------------------------------------
8. LITIGATION

A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds including the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers
of the funds breached their fiduciary duties to fund shareholders under the
Investment Company Act of 1940 and at common law. The plaintiffs sought
unspecified damages, an accounting of all fees paid, and an award of attorneys'
fees and litigation expenses.

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

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





                                                              Appendix A

                                                          RATINGS DEFINITIONS

     Below   are   summaries   of   the   rating   definitions   used   by   the
nationally-recognized  rating agencies listed below. Those ratings represent the
opinion  of the agency as to the credit  quality of issues  that they rate.  The
summaries below are based upon publicly  available  information  provided by the
rating organizations.

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM RATINGS: BONDS AND PREFERRED STOCK ISSUER RATINGS

     Aaa:  Bonds and  preferred  stock  rated  "Aaa"  are  judged to be the best
quality.  They carry the smallest degree of investment risk.  Interest  payments
are protected by a large or by an  exceptionally  stable margin and principal is
secure.  While the various protective elements are likely to change, the changes
that can be  expected  are most  unlikely  to impair  the  fundamentally  strong
position of such issues.

     Aa: Bonds and  preferred  stock rated "Aa" are judged to be of high quality
by all  standards.  Together  with  the  "Aaa"  group,  they  comprise  what are
generally  known as high-grade  bonds.  They are rated lower than the best bonds
because  margins of protection  may not be as large as with "Aaa"  securities or
fluctuation of protective  elements may be of greater  amplitude or there may be
other elements present which make the long-term risk appear somewhat larger than
that of "Aaa" securities.

     A: Bonds and preferred  stock rated "A" possess many  favorable  investment
attributes and are to be considered as upper-medium grade  obligations.  Factors
giving  security to principal and interest are considered  adequate but elements
may be present which  suggest a  susceptibility  to impairment  some time in the
future.

     Baa:  Bonds and  preferred  stock rated "Baa" are  considered  medium-grade
obligations;  that is, they are neither  highly  protected  nor poorly  secured.
Interest  payments and principal  security  appear  adequate for the present but
certain  protective  elements  may  be  lacking  or  may  be  characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and have speculative characteristics as well.

     Ba:  Bonds and  preferred  stock rated "Ba" are judged to have  speculative
elements. Their future cannot be considered  well-assured.  Often the protection
of interest and  principal  payments  may be very  moderate and thereby not well
safeguarded  during  both good and bad times  over the  future.  Uncertainty  of
position characterizes bonds in this class.

     B: Bonds and preferred  stock rated "B" generally lack  characteristics  of
the desirable  investment.  Assurance of interest and  principal  payments or of
maintenance  of other terms of the contract  over any long period of time may be
small.

     Caa:  Bonds and  preferred  stock  rated "Caa" are of poor  standing.  Such
issues may be in default or there may be present elements of danger with respect
to principal or interest.  Ca: Bonds and  preferred  stock rated "Ca"  represent
obligations  which are  speculative  in a high degree.  Such issues are often in
default or have other marked shortcomings.

     C: Bonds and preferred  stock rated "C" are the lowest class of rated bonds
and can be regarded as having  extremely  poor  prospects of ever  attaining any
real investment standing.

     Moody's  applies  numerical  modifiers 1, 2, and 3 in each  generic  rating
classification  from "Aa" through  "Caa." The modifier  "1"  indicates  that the
obligation ranks in the higher end of its generic rating category;  the modifier
"2" indicates a mid-range  ranking;  and the modifier "3" indicates a ranking in
the lower end of that generic rating category. Advanced refunded issues that are
secured by certain assets are identified with a # symbol.

     PRIME RATING SYSTEM  (SHORT-TERM  RATINGS - TAXABLE DEBT) These ratings are
opinions of the ability of issuers to honor  senior  financial  obligations  and
contracts.  Such obligations  generally have an original  maturity not exceeding
one year, unless explicitly noted.

     Prime-1:  Issuer has a superior ability for repayment of senior  short-term
debt obligations.

     Prime-2:  Issuer has a strong  ability for  repayment of senior  short-term
debt obligations.  Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics,  while appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

     Prime-3:   Issuer  has  an  acceptable  ability  for  repayment  of  senior
short-term  obligations.  The  effect of  industry  characteristics  and  market
compositions may be more pronounced.  Variability in earnings and  profitability
may  result in  changes  in the level of debt  protection  measurements  and may
require  relatively high financial  leverage.  Adequate  alternate  liquidity is
maintained.

Not Prime: Issuer does not fall within any Prime rating category.

     Standard  &  Poor's  Ratings  Services  ("Standard  &  Poor's"),  a
division of The McGraw-Hill Companies, Inc.

LONG-TERM ISSUE CREDIT RATINGS

     Issue  credit  ratings  are  based in  varying  degrees,  on the  following
considerations:

     o Likelihood of payment-capacity and willingness of the obligor to meet its
financial  commitment  on an  obligation  in  accordance  with the  terms of the
obligation;

     o Nature of and provisions of the obligation; and

     o Protection  afforded by, and relative  position of, the obligation in the
event of  bankruptcy,  reorganization,  or other  arrangement  under the laws of
bankruptcy and other laws affecting creditors' rights.

     The issue  ratings  definitions  are expressed in terms of default risk. As
such, they pertain to senior  obligations of an entity.  Junior  obligations are
typically rated lower than senior obligations,  to reflect the lower priority in
bankruptcy, as noted above.

     AAA: An obligation rated "AAA" have the highest rating assigned by Standard
&  Poor's.  The obligor's  capacity to meet its financial  commitment on the
obligation is extremely strong.

     AA: An obligation rated "AA" differ from the highest rated obligations only
in small degree. The obligor's capacity to meet its financial  commitment on the
obligation is very strong.

     A: An  obligation  rated "A" are somewhat more  susceptible  to the adverse
effects of changes in circumstances and economic  conditions than obligations in
higher-rated  categories.  However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

     BBB: An obligation  rated "BBB"  exhibit  adequate  protection  parameters.
However,  adverse economic conditions or changing  circumstances are more likely
to lead to a weakened  capacity of the obligor to meet its financial  commitment
on the obligation.

     BB, B, CCC, CC, and C An obligation  rated `BB', `B', `CCC',  `CC', and `C'
are regarded as having significant speculative  characteristics.  `BB' indicates
the least degree of speculation and `C' the highest. While such obligations will
likely have some quality and protective characteristics, these may be outweighed
by large uncertainties or major exposures to adverse conditions.

     BB: An obligation  rated "BB" are less  vulnerable to nonpayment than other
speculative issues.  However,  they face major ongoing uncertainties or exposure
to adverse business,  financial,  or economic conditions which could lead to the
obligor's   inadequate  capacity  to  meet  its  financial   commitment  on  the
obligation.

     B:  An  obligation  rated  "B"  are  more  vulnerable  to  nonpayment  than
obligations  rated "BB", but the obligor  currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's  capacity or willingness to meet its
financial commitment on the obligation.

     CCC: An obligation rated "CCC" are currently vulnerable to nonpayment,  and
are dependent upon favorable  business,  financial,  and economic conditions for
the obligor to meet its financial commitment on the obligation.  In the event of
adverse business,  financial, or economic conditions,  the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

     C: Subordinated debt or preferred stock obligations rated "C" are currently
highly vulnerable to nonpayment. The "C" rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action taken, but payments
on this  obligation  are  being  continued.  A "C" also  will be  assigned  to a
preferred stock issue in arrears on dividends or sinking fund payments, but that
is currently paying.

     D: An obligation rated "D" are in payment default.  The "D" rating category
is used when payments on an obligation  are not made on the date due even if the
applicable grace period has not expired,  unless Standard &  Poor's believes
that such payments  will be made during such grace  period.  The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.

     The ratings  from "AA" to "CCC" may be  modified by the  addition of a plus
(+) or  minus  (-)  sign to show  relative  standing  within  the  major  rating
categories.

     c: The `c' subscript is used to provide additional information to investors
that the bank may terminate its  obligation  to purchase  tendered  bonds if the
long-term credit rating of the issuer is below an investment-grade  level and/or
the issuer's bonds are deemed taxable.

     p: The letter `p' indicates that the rating is  provisional.  A provisional
rating  assumes the  successful  completion of the project  financed by the debt
being rated and indicates that payment of debt service  requirements  is largely
or entirely  dependent upon the  successful,  timely  completion of the project.
This rating,  however,  while addressing credit quality subsequent to completion
of the  project,  makes no comment on the  likelihood  of or the risk of default
upon failure of such  completion.  The investor should exercise his own judgment
with respect to such likelihood and risk.

     Continuance of the ratings is contingent upon Standard & Poor's receipt
of an executed copy of the escrow agreement or closing documentation  confirming
investments and cash flows.

     r: The `r' highlights  derivative,  hybrid,  and certain other  obligations
that Standard  &  Poor's  believes may  experience  high  volatility or high
variability in expected returns as a result of noncredit risks. Examples of such
obligations  are  securities  with  principal  or  interest  return  indexed  to
equities,   commodities,   or  currencies;   certain  swaps  and  options;   and
interest-only  and  principal-only  mortgage  securities.  The absence of an `r'
symbol should not be taken as an indication  that an obligation  will exhibit no
volatility or variability in total return.

N.R. Not rated.

     Debt  obligations of issuers  outside the United States and its territories
are rated on the same basis as domestic  corporate  and  municipal  issues.  The
ratings measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.

Bond Investment Quality Standards

     Under present  commercial bank regulations issued by the Comptroller of the
Currency,  bonds rated in the top four  categories  (`AAA',  `AA',  `A',  `BBB',
commonly known as  investment-grade  ratings) generally are regarded as eligible
for  bank  investment.   Also,  the  laws  of  various  states  governing  legal
investments  impose certain rating or other standards for  obligations  eligible
for investment by savings  banks,  trust  companies,  insurance  companies,  and
fiduciaries in general

SHORT-TERM ISSUE CREDIT RATINGS

     Short-term ratings are generally  assigned to those obligations  considered
short-term  in the  relevant  market.  In the  U.S.,  for  example,  that  means
obligations  with an  original  maturity  of no  more  than  365  days-including
commercial paper.

     A-1: A short-term  obligation  rated "A-1" is rated in the highest category
by  Standard  &  Poor's.  The  obligor's  capacity  to  meet  its  financial
commitment  on  the  obligation  is  strong.   Within  this  category,   certain
obligations  are  designated  with a plus  sign  (+).  This  indicates  that the
obligor's  capacity to meet its  financial  commitment on these  obligations  is
extremely strong.

     A-2: A short-term  obligation  rated "A-2" is somewhat more  susceptible to
the adverse  effects of changes in  circumstances  and economic  conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial  commitment on the obligation is  satisfactory.  A-3: A short-term
obligation rated "A-3" exhibits adequate protection parameters. However, adverse
economic  conditions  or  changing  circumstances  are more  likely to lead to a
weakened  capacity  of the  obligor  to meet  its  financial  commitment  on the
obligation.

     B: A  short-term  obligation  rated "B" is regarded  as having  significant
speculative characteristics.  The obligor currently has the capacity to meet its
financial  commitment  on  the  obligation;  however,  it  faces  major  ongoing
uncertainties which could lead to the obligor's  inadequate capacity to meet its
financial commitment on the obligation.

     C: A short-term  obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions for
the obligor to meet its financial commitment on the obligation.

     D: A short-term  obligation rated "D" is in payment default. The "D" rating
category  is used when  payments on an  obligation  are not made on the date due
even if the  applicable  grace period has not  expired,  unless  Standard  &
Poor's  believes that such  payments will be made during such grace period.  The
"D" rating  also will be used upon the filing of a  bankruptcy  petition  or the
taking of a similar action if payments on an obligation are jeopardized.

     NOTES: A Standard &  Poor's note rating reflects the liquidity  factors
and market  access risks unique to notes.  Notes due in three years or less will
likely receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating.  The following  criteria will be used in making
that assessment:

     o Amortization  schedule-the  larger the final  maturity  relative to other
maturities, the more likely it will be treated as a note; and

     o Source of  payment-the  more dependent the issue is on the market for its
refinancing, the more likely

     it will be treated as a note.

     SP-1:  Strong capacity to pay principal and interest.  An issue with a very
strong capacity to pay debt service is given a (+) designation.

     SP-2:  Satisfactory  capacity  to pay  principal  and  interest,  with some
vulnerability  to adverse  financial  and economic  changes over the term of the
notes.

     SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.

     International  credit ratings assess the capacity to meet foreign  currency
or local  currency  commitments.  Both "foreign  currency" and "local  currency"
ratings are internationally  comparable  assessments.  The local currency rating
measures  the  probability  of payment  within the  relevant  sovereign  state's
currency and  jurisdiction  and therefore,  unlike the foreign  currency rating,
does not take account of the possibility of foreign exchange  controls  limiting
transfer into foreign currency.

INTERNATIONAL LONG-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency ratings.

Investment Grade:

     AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong capacity
for timely payment of financial commitments. This capacity is highly unlikely to
be adversely affected by foreseeable events. AA: Very High Credit Quality.  "AA"
ratings  denote a very low  expectation  of credit  risk.  They  indicate a very
strong  capacity for timely payment of financial  commitments.  This capacity is
not significantly vulnerable to foreseeable events.

     A: High Credit  Quality.  "A" ratings  denote a low  expectation  of credit
risk.  The capacity for timely  payment of financial  commitments  is considered
strong.  This  capacity  may,  nevertheless,  be more  vulnerable  to changes in
circumstances or in economic conditions than is the case for higher ratings.

     BBB: Good Credit Quality.  "BBB" ratings indicate that there is currently a
low  expectation  of credit risk.  The capacity for timely  payment of financial
commitments is considered adequate,  but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.  This is the lowest
investment-grade category.

Speculative Grade:

     BB:  Speculative.  "BB" ratings  indicate  that there is a  possibility  of
credit risk  developing,  particularly as the result of adverse  economic change
over time. However, business or financial alternatives may be available to allow
financial  commitments  to be met.  Securities  rated in this  category  are not
investment grade.


     B: Highly Speculative. "B" ratings indicate that significant credit risk is
present,  but a limited  margin of safety  remains.  Financial  commitments  are
currently being met. However,  capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

     CCC, CC C: High Default Risk.  Default is a real possibility.  Capacity for
meeting  financial  commitments  is solely  reliant  upon  sustained,  favorable
business or economic developments.  A "CC" rating indicates that default of some
kind appears probable. "C" ratings signal imminent default.

     DDD, DD, and D: Default.  The ratings of  obligations  in this category are
based  on  their  prospects  for  achieving   partial  or  full  recovery  in  a
reorganization or liquidation of the obligor. While expected recovery values are
highly  speculative  and cannot be estimated with any  precision,  the following
serve as general  guidelines.  "DDD"  obligations have the highest potential for
recovery,  around  90%-100% of outstanding  amounts and accrued  interest.  "DD"
indicates  potential  recoveries  in the range of  50%-90%,  and "D" the  lowest
recovery potential, i.e., below 50%.

     Entities  rated in this  category  have  defaulted  on some or all of their
obligations.  Entities  rated "DDD" have the highest  prospect for resumption of
performance  or  continued  operation  with or  without a formal  reorganization
process.  Entities  rated  "DD"  and  "D"  are  generally  undergoing  a  formal
reorganization or liquidation process;  those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.

     Plus (+) and minus (-) signs may be appended  to a rating  symbol to denote
relative status within the major rating categories. Plus and minus signs are not
added to the "AAA"  category or to  categories  below  "CCC," nor to  short-term
ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS

     The following  ratings scale applies to foreign currency and local currency
ratings.  A short-term rating has a time horizon of less than 12 months for most
obligations,  or up to three years for U.S. public finance securities,  and thus
places greater emphasis on the liquidity necessary to meet financial commitments
in a timely manner.

     F1:  Highest  credit  quality.  Strongest  capacity  for timely  payment of
financial commitments.  May have an added "+" to denote any exceptionally strong
credit feature.

     F2: Good credit  quality.  A  satisfactory  capacity for timely  payment of
financial  commitments,  but the margin of safety is not as great as in the case
of higher ratings.

     F3:  Fair  credit  quality.   Capacity  for  timely  payment  of  financial
commitments is adequate.  However,  near-term  adverse changes could result in a
reduction to non-investment grade.

     B:   Speculative.   Minimal   capacity  for  timely  payment  of  financial
commitments,  plus  vulnerability to near-term  adverse changes in financial and
economic conditions.

     C: High default risk.  Default is a real possibility.  Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

     D: Default. Denotes actual or imminent payment default.



                                                              Appendix B

                                            Industry Classifications

Aerospace & Defense                          Household Products
Air Freight & Couriers                       Industrial Conglomerates
Airlines                                         Insurance
Auto Components                                 Internet & Catalog Retail
Automobiles                                     Internet Software & Services
Beverages                                       IT Services
Biotechnology                                  Leisure Equipment & Products
Building Products                              Machinery
Chemicals                                     Marine
Consumer Finance                              Media
Commercial Banks                              Metals & Mining
Commercial Services & Supplies            Multiline Retail
Communications Equipment                      Multi-Utilities
Computers & Peripherals                   Office Electronics
Construction & Engineering                Oil & Gas
Construction Materials                        Paper & Forest Products
Containers & Packaging                    Personal Products
Distributors                                  Pharmaceuticals
Diversified Financial Services                Real Estate
Diversified Telecommunication Services        Road & Rail
Electric Utilities                            Semiconductors and Semiconductor
                                                   Equipment
Electrical Equipment                          Software
Electronic Equipment & Instruments        Specialty Retail
Energy Equipment & Services               Textiles, Apparel & Luxury Goods
Food & Staples Retailing                  Thrifts & Mortgage Finance
Food Products                                 Tobacco
Gas Utilities                                 Trading Companies & Distributors
Health Care Equipment & Supplies          Transportation Infrastructure
Health Care Providers & Services          Water Utilities
Hotels Restaurants & Leisure              Wireless Telecommunication Services
Household Durables





                                                     Appendix C

           OppenheimerFunds Special Sales Charge Arrangements and Waivers

     In certain  cases,  the initial  sales  charge that applies to purchases of
Class A shares(2) 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.(3)
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(4)

     4) Group Retirement Plans(5)

     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.

     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."(6)  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").

     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.

     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).

Waivers of Class A Sales Charges of Oppenheimer Funds


     |X| 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.

     |_|  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.

     |X| 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.

     |X| 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.(7)

     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.(8)

     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.

     o 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.

|X|      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(9)  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.(10)

     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.(11)

     9) On account of the participant's separation from service.(12)

     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.

     |X| 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.

     o 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 Quest Value 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.


|X|      A.   Reductions or Waivers of Class A Sales Charges.

     o 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.


     o 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  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.

|X|      B.   Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.

     o 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 o 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.

     o 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
|X|
|X|      A.   Prior Class A CDSC and Class A Sales Charge Waivers.

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

     Those shareholders who are eligible for the prior Class A CDSC are:

     1) persons  whose  purchases  of Class A shares of a Fund and other  Former
Connecticut  Mutual Funds were $500,000  prior to March 18, 1996, as a result of
direct  purchases  or  purchases  pursuant  to the Fund's  policies  on Combined
Purchases or Rights of Accumulation, who still hold those shares in that Fund or
other Former Connecticut Mutual Funds, and

     2) persons whose intended  purchases under a Statement of Intention entered
into prior to March 18, 1996, with the former general  distributor of the Former
Connecticut  Mutual Funds to purchase  shares  valued at $500,000 or more over a
13-month  period  entitled  those persons to purchase  shares at net asset value
without being subject to the Class A initial sales charge

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

     o 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.

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


     In  addition  to the  waivers  set  forth  in the  prospectus  and in  this
Appendix,  above,  the  contingent  deferred  sales  charge  will be waived  for
redemptions  of Class A and Class B shares of a Fund and exchanges of Class A or
Class B shares of a Fund into Class A or Class B shares of a Former  Connecticut
Mutual  Fund  provided  that the  Class A or  Class B  shares  of the Fund to be
redeemed or  exchanged  were (i)  acquired  prior to March 18, 1996 or (ii) were
acquired  by exchange  from an  Oppenheimer  fund that was a Former  Connecticut
Mutual Fund.  Additionally,  the shares of such Former  Connecticut  Mutual Fund
must have been purchased prior to March 18, 1996:

     1) by the estate of a deceased shareholder;

     2) upon the disability of a shareholder,  as defined in Section 72(m)(7) of
the Internal Revenue Code;

     3) for retirement distributions (or loans) to participants or beneficiaries
from  retirement  plans qualified under Sections 401(a) or 403(b)(7)of the Code,
or from IRAs, deferred compensation plans created under Section 457 of the Code,
or other employee benefit plans;

     4) as  tax-free  returns  of excess  contributions  to such  retirement  or
employee benefit plans;

     5) in  whole or in part,  in  connection  with  shares  sold to any  state,
county,  or city,  or any  instrumentality,  department,  authority,  or  agency
thereof,  that is prohibited by applicable  investment  laws from paying a sales
charge or concession in connection with the purchase of shares of any registered
investment management company;

     6) in  connection  with  the  redemption  of  shares  of the  Fund due to a
combination with another investment  company by virtue of a merger,  acquisition
or similar reorganization transaction;

     7) in connection with the Fund's right to involuntarily redeem or liquidate
the Fund;

     8) in connection  with automatic  redemptions of Class A shares and Class B
shares in certain  retirement plan accounts pursuant to an Automatic  Withdrawal
Plan but limited to no more than 12% of the original value annually; or

     9) as  involuntary  redemptions  of shares by  operation  of law,  or under
procedures set forth in the Fund's Articles of  Incorporation,  or as adopted by
the Board of Directors of the Fund.

     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%.  o 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.


     (1) In accordance  with Rule 12b-1 of the Investment  Company Act, the term
"Independent  Trustees" in this  Statement of Additional  Information  refers to
those Trustees who are not "interested  persons" of the Fund and who do not have
any direct or indirect  financial  interest in the operation of the distribution
plan or any agreement under the plan.

     (2) Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.

     (3)  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.

     (4) 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.

     (5) 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.

     (6)  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.

     (7) This provision does not apply to IRAs.

     (8) 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.

     (9) The  distribution  must be requested  prior to Plan  termination or the
elimination of the Oppenheimer funds as an investment option under the Plan.

     (10) This provision does not apply to IRAs.

     (11) This provision does not apply to loans from 403(b)(7)  custodial plans
and loans from the OppenheimerFunds-sponsored Single K retirement plan.

     (12) This  provision  does not apply to  403(b)(7)  custodial  plans if the
participant is less than age 55, nor to IRAs.



Oppenheimer Convertible Securities Fund

Internet Website
         www.oppenheimerfunds.com

Investment Advisor
         OppenheimerFunds, Inc.
         Two World Financial Center
         225 Liberty Street, 11th Floor
         New York, New York 10281-1008

Distributor
         OppenheimerFunds Distributor, Inc.
         Two World Financial Center
         225 Liberty Street, 11th Floor
         New York, New York 10281-1008

Transfer Agent
         OppenheimerFunds Services
         P.O. Box 5270
         Denver, Colorado 80217
         1.800.CALL OPP (225.5677)

Custodian Bank
         Citibank, N.A.
         111 Wall Street
         New York, New York 10005

Independent Registered Public Accounting Firm
         KPMG LLP
         707 Seventeenth Street
         Denver, Colorado 80202

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


1234


PX345.001.0407





                                                 BOND FUND SERIES
                                      OPPENHEIMER CONVERTIBLE SECURITIES FUND

                                                     FORM N1-A

                                                      PART C

                                                 OTHER INFORMATION

Item 23. - Exhibits

     (a) (i) Amended and Restated  Agreement and  Declaration  of Trust as filed
with the  Commonwealth  of  Massachusetts  on 2/8/95,  as  amended  on  11/7/95:
Previously filed with  Registrant's  Post-Effective  Amendment No. 15 (1/11/96),
and incorporated herein by reference.

     (ii)  Amendment to the Amended and Restated  Agreement and  Declaration  of
Trust dated 2/7/96:  Previously filed with Registrant's Post Effective Amendment
No. 16 (3/5/96), and incorporated herein by reference.

     (iii)  Amendment to the Amended and Restated  Agreement and  Declaration of
Trust dated 6/17/97: Previously filed with Registrant's Post Effective Amendment
No. 21 (4/19/00), and incorporated herein by reference.

     (iv)  Amendment to the Amended and Restated  Agreement and  Declaration  of
Trust dated 4/1/98:  Previously filed with Registrant's Post Effective Amendment
No. 18 (4/28/98), and incorporated herein by reference.

     (v)  Amendment to the Amended and Restated  Agreement  and  Declaration  of
Trust dated 6/10/98: Previously filed with Registrant's Post Effective Amendment
No. 23 (2/01/01), and incorporated herein by reference.

     (vi)  Amendment to the Amended and Restated  Agreement and  Declaration  of
Trust dated 1/12/06: Previously filed with Registrant's Post Effective Amendment
No. 30 (4/28/06) and incorporated herein by reference.

     (b)  (i)  By-Laws  dated  4/15/87:   Previously  filed  with   Registrant's
Post-Effective Amendment (5/1/87), and incorporated herein by reference.

     (ii)  Amendment  No. 1 to  By-Laws  dated  7/22/98:  Previously  filed with
Registrant's  Post-Effective  Amendment No. 19 (3/1/99), and incorporated herein
by reference.

     (c) (i)  Specimen  Class A Share  Certificate  of  Oppenheimer  Convertible
Securities   Fund,  a  portfolio  of  the  Registrant:   Previously  filed  with
Registrant's Post Effective Amendment No. 20 (4/28/99),  and incorporated herein
by reference.

     (ii)  Specimen  Class  B  Share  Certificate  of  Oppenheimer   Convertible
Securities   Fund,  a  portfolio  of  the  Registrant:   Previously  filed  with
Registrant's Post Effective Amendment No. 20 (4/28/99),  and incorporated herein
by reference.

     (iii)  Specimen  Class  C  Share  Certificate  of  Oppenheimer  Convertible
Securities   Fund,  a  portfolio  of  the  Registrant:   Previously  filed  with
Registrant's Post Effective Amendment No. 20 (4/28/99),  and incorporated herein
by reference.

     (iv)  Specimen  Class  N  Share  Certificate  of  Oppenheimer   Convertible
Securities   Fund,  a  portfolio  of  the  Registrant:   Previously  filed  with
Registrant's Post Effective  Amendment No. 23 (2/1/01),  and incorporated herein
by reference.

     (v)  Specimen  Class  M  Share   Certificate  of  Oppenheimer   Convertible
Securities   Fund,  a  portfolio  of  the  Registrant:   Previously  filed  with
Registrant's Post Effective Amendment No. 20 (4/28/99),  and incorporated herein
by reference.

     (d)  Amended and  Restated  Investment  Advisory  Agreement  dated  1/1/05:
Previously filed with Registrant's  Post-Effective  Amendment No. 28, (2/25/05),
and incorporated herein by reference.

     (e) (i) General Distributor's Agreement dated 1/4/96 with Oppenheimer Funds
Distributor,  Inc: Previously filed with Registrant's  Post-Effective  Amendment
No. 15, 1/11/96, and incorporated herein by reference.

     (ii)  Form of  Dealer  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.

     (iii)  Form of Broker  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.

     (iv)  Form of  Agency  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.

     (v)  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) Trust Company Agency 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.

     (f)  (i)   Form   of   Deferred   Compensation   Plan   for   Disinterested
Trustees/Directors: Previously filed with Post-Effective Amendment No. 40 to the
Registration  Statement  of  Oppenheimer  High Yield Fund  (Reg.  No.  2-62076),
10/27/98, and incorporated herein by reference.

     (ii) Amended and Restated  Retirement Plan for  Non-Interested  Trustees or
Directors  dated 12/12/00:  Previously  filed with  Registrant's  Post-Effective
Amendment No. 49 to the  Registration  Statement of Oppenheimer  Quest For Value
Funds (Reg. No. 33-15489), 2/09/01, and incorporated herein by reference.

     (g) (i) Global  Custodial  Services  Agreement  dated  7/15/03,  as amended
September 13, 2006, between Registrant and Citibank, N.A.: Previously filed with
the Post Effective Amendment No. 27 to the Registration Statement of Oppenheimer
California Municipal Fund (Reg. No. 33-23566),  9/26/06, and incorporated herein
by reference.

     (ii) Amended and Restated Foreign Custody Manager  Agreement dated 5/31/01,
as amended 7/15/03:  Previously filed with the Pre-Effective  Amendment No. 1 to
the  Registration  Statement of Oppenheimer  International  Large-Cap Core Trust
(Reg. No. 333-106014), 8/5/03, and incorporated herein by reference.

(h)      Not applicable.

     (i) (i) Opinion and Consent of Counsel dated 2/24/97: Previously filed with
Registrant's Rule 24f-2 Notice (2/27/97) and incorporated herein by reference.

(j)      Independent Registered Public Accounting Firm's Consent: Filed herewith.

(k)      Not applicable.

     (l) Form of  Investment  Letter from  OppenheimerFunds,  Inc. to Registrant
dated 3/11/96:  Previously filed with Registrant's  Post-Effective Amendment No.
16, (3/5/96), and incorporated herein by reference.

     (m) (i) Amended and Restated  Service Plan and Agreement for Class A shares
dated 10/6/05:  Previously filed with Registrant's Post Effective  Amendment No.
30 (4/28/06) and incorporated herein by reference.

     (ii) Amended and Restated  Distribution  and Service Plan and Agreement for
Class B shares dated 10/6/05:  Previously filed with Registrant's Post Effective
Amendment No. 30 (4/28/06) and incorporated herein by reference.

     (iii) Amended and Restated  Distribution and Service Plan and Agreement for
Class C shares dated 10/6/05:  Previously filed with Registrant's Post Effective
Amendment No. 30 (4/28/06) and incorporated herein by reference.

     (iv) Amended and Restated  Distribution  and Service Plan and Agreement for
Class N shares dated 10/6/05:  Previously filed with Registrant's Post Effective
Amendment No. 30 (4/28/06) and incorporated herein by reference.

     (v) Amended and Restated  Distribution  and Service Plan and  Agreement for
Class M shares dated 10/6/05:  Previously filed with Registrant's Post Effective
Amendment No. 30 (4/28/06) and incorporated herein by reference.

     (n) Oppenheimer  Funds Multiple Class Plan under Rule 18f-3 updated through
8/11/05:   Previously  filed  with   Post-Effective   Amendment  No.  5  to  the
Registration  Statement of Oppenheimer  Main Street  Opportunity  Fund (Reg. No.
333-40186), 9/27/05, and incorporated herein by reference.

     (o) (i)  Powers  of  Attorney  for  all  Trustees/Directors  and  Principal
Officers  dated  4/4/05:  Previously  filed  with  Registrant's   Post-Effective
Amendment No. 29, (4/29/05), and incorporated herein by reference.

     (ii) Power of Attorney for David K. Downes dated 1/17/06:  Previously filed
with  Post-Effective   Amendment  No.  54  to  the  Registration   Statement  of
Oppenheimer Quest Value Fund, Inc. (Reg. No. 2-65223), 2/27/06, and incorporated
herein by reference.

     (p)  Amended and  Restated  Code of Ethics of the  Oppenheimer  Funds dated
3/31/06 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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Erik Anderson,                           None
Assistant 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).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Hany S. Ayad,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert Baker,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
James F. Bailey,                         Senior Vice President of  Shareholder  Services,  Inc.  (since March 2006).
Senior Vice President                    Formerly  Vice  President at T. Row Price Group  (September  2000 - January
                                         2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael Baldwin,                         President  and  Director  of  Shareholder  Financial  Services,   Inc.  and
Executive Vice President                 Shareholder  Services,  Inc.  Formerly  Managing  Director at Deutsche Bank
                                         (March 2001 - March 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Michael Banta,                      None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Joanne Bardell,                          None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Adam Bass,                               None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kevin Baum,                              None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jeff Baumgartner,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Marc Baylin,                             Formerly Portfolio Manager at J.P. Morgan (June 2002-August 2005.)
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Todd Becerra,                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lalit K. Behal                           Assistant Secretary of HarbourView Asset Management Corporation.
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
Assistant 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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kristine Bryan-Levin,                    Formerly Senior Vice President at Brown Brothers Harriman  (November 2002 -
Vice President                           May 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Stephanie Bullington,                    Formerly Fund  Accounting  Manager at Madison  Capital  Management  Company
Assistant Vice President                 (July 2005 - October 2005 and Fund Accounting  Officer at Butterfield  Fund
                                         Services  (Bermuda)  Limited (a wholly owned  subsidiary  of the Bank of NT
                                         Butterfield & Sons) (September 2003 - June 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Paul Burke,                              None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mark Burns,                              None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert Corbett,                          None
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
George Curry,                            Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Julie C. Cusker,                         None
Assistant Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kevin Dachille,                          Formerly Fixed Income Director at National Railroad  Retirement  Investment
Vice President                           Trust (May 2003 - May 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Damian,                             None
Senior 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.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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) and  Assistant  Professor  of  Finance  at  Southern
                                         Methodist University (January 1999 - May 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Daniel R. Engstrom,                      None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
James Robert Erven                       None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
George R. Evans,                         None
Senior Vice President & Director of
International Equities
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Edward N. Everett,                       None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kathy Faber,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David Falicia,                           Assistant  Secretary  (as of July  2004) of  HarbourView  Asset  Management
Assistant Vice President                 Corporation.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dominic Freud,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dan Gagliardo,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Hazem Gamal,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Charles Gapay                            Formerly (until January 2007) Help Desk Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Seth Gelman,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Timothy Gerlach,                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Subrata Ghose,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Charles W. Gilbert,                      None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kurt Gibson,                             Formerly Manager at Barclays Capital (January 2002 - 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.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Leyla Greengard,                         None
Assistant 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,                       Formerly an  Associate  at Shearman  and  Sterling  LLP (July 2004 - August
Vice President & Assistant Counsel       2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Thomas B. Hayes,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jennifer Kane Heathwood,                 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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Kadehjian,                          Formerly  Vice  President,  Compensation  Manager  at The  Bank of New York
Assistant Vice President                 (November 1996-November 2004).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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); Director at Janus (January 1998 - August 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Klassen,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Martin S. Korn,                          None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Brian Kramer,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Paul Kunz,                               None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gloria LaFond,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Lamentino,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Tracey Lange,                            Vice  President  of  OppenheimerFunds  Distributor,  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                    Formerly  Executive Vice  President-Head  of Fidelity  Tax-Exempt  Services
                                         Business at Fidelity Investments (August 1996-January 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Latino,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gayle Leavitt,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Christopher M. Leavy,                    None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kevin Lee,                               Formerly Vice  President at Delaware  Investments  (October 2000 - February
Vice President                           2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David P. Lolli,                          None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Daniel G. Loughran                       None
Vice President:
Rochester Division
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Patricia Lovett,                         Vice  President of  Shareholder  Financial  Services,  Inc. and Senior Vice
Vice President                           President of Shareholder Services, Inc.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Misha Lozovik,                           None.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Dongyan Ma,                              None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Steve Macchia,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mark H. Madden,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jerry Mandzij,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Angelo G. Manioudakis                    Senior Vice President of HarbourView  Asset  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
Assistant Vice President                 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Trudi McKenna,                           Formerly Leadership  Development Supervisor at JetBlue Airways (July 2003 -
Assistant Vice President                 October 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jay Mewhirter,                           Formerly Director of Application  Development at AMVESCAP (September 1999 -
Vice President                           March 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Michael Medev,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lucienne Mercogliano,                    None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Andrew J. Mika,                          None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jan Miller,                              None.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Heather Minks                            None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rejeev Mohammed,                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Nikolaos D. Monoyios,                    None
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Sarah Morrison                           Formerly (until 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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Tony Oh,                                 Formerly  Director of SEC Reporting at Teletech Holdings (July 2004 - April
Assistant Vice President                 2005.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lisa Ogren,                              Formerly Manager at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John O'Hare,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John J. Okray,                           None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kristina Olson,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Lerae A. Palumbo,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Anthony Parish,                          None
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Sanjeev Phansalkar,                      Formerly  Consultant at The  Solomon-Page  Group  (October 2004 - September
Assistant Vice President                 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
James F. Phillips,                       None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Scott Phillips,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Gary Pilc,                               None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
John Piper,                              Assistant Vice President of Shareholder Services, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jeaneen Pisarra,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Nicolas Pisciotti,                       Formerly Assistant Vice President at ING (April 2002 - May 2005).
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David Poiesz,                            None
Senior Vice President, Head of Growth
Equity Investments
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Sergei Polevikov,                        None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Semyon Polyak,                           Formerly Vice  President and  Co-Portfolio  Manager at Pioneer  Investments
Vice President                           (June 1998 - August 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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);  Vice  President at Loomis Sayles & Co. (July 1997 - April
                                         2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Claire Ring,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Grace Roberts,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David Robertson,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Robert Robis,                            Formerly a  Proprietary  Trader at J.P.  Morgan  Chase & Co. (May  2004-May
Assistant Vice President                 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Antoinette Rodriguez,                    None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Stacey Roode,                            None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jeffrey S. Rosen,                        None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Stacy Roth,                              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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Valerie Sanders,                         None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kurt Savallo                             Formerly Senior Business Analyst at OppenheimerFunds, Inc.
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Rudi W. Schadt,                          None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Ellen P. Schoenfeld,                     None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Patrick Schneider                        Formerly Human Resources Manager at ADT Security Services  (December 2001 -
Assistant Vice President                 July 2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mary Beth Schellhorn,                    Formerly  Human  Resources  Generalist at Misys Banking  Systems  (November
Assistant Vice President                 2000 - June 2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Scott A. Schwegel,                       None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Allan P. Sedmak                          None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Jennifer L. Sexton,                      Senior Vice President of OFI Private Investments Inc.
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Asutosh Shah,                            Formerly Vice  President at Merrill  Lynch  Investment  Managers  (February
Vice President                           2002 - February 2006).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Kamal Shah,                              Formerly  Senior Vice President Chief  Technology  Officer at Tremont Group
Vice President                           Holdings, Inc. (March 1998 - July 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Nava Sharma,                             None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Tammy Sheffer,                           None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Mary Dugan Sheridan,                     None
Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Thomas Siomades,                         Formerly  Vice  President,  Portfolio  Management  at  Curian  Capital  LLC
Vice President                           (December 2002 - September 2005).
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
David C. Sitgreaves,                     None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Edward James Sivigny                     None
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
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Benjamin Stewart                         None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Matthew Tartaglia,                       None
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
Assistant 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
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Adam Weiner,                             None
Assistant Vice President
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
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.
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
William L. Wilby,                        None
Senior Vice President & Senior
Investment Officer, Director of
Equities
---------------------------------------- ----------------------------------------------------------------------------
---------------------------------------- ----------------------------------------------------------------------------
Troy Willis,                             None
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,                            Formerly Principal Consultant at XAware Inc (January 2004 - June 2005).
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 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 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 Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small- & Mid-Cap Value Fund
Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Estate Fund
Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Select Value Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (1 series):
Oppenheimer Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Transition 2010 Fund
Oppenheimer Transition 2015 Fund
Oppenheimer Transition 2020 Fund
Oppenheimer Transition 2030 Fund
Oppenheimer Strategic Income Fund
Oppenheimer Tremont Market Neutral Fund, LLC
Oppenheimer Tremont Opportunity Fund, LLC
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (11 series):
     Oppenheimer Balanced Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Core Bond Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer MidCap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Strategic Bond Fund/VA
     Oppenheimer Value Fund/VA
Panorama Series Fund, Inc. (4 series):
     Government Securities Portfolio
     Growth Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio
Rochester Fund Municipals

     The address of the Oppenheimer  funds listed above,  Shareholder  Financial
Services,   Inc.,  Shareholder  Services,   Inc.,   OppenheimerFunds   Services,
Centennial Asset Management Corporation,  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                       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)                               Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Beringer                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Rick Bettridge                                   Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Robert J. Bishop(1)                              Treasurer                            None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Tracey Blinzler(1)                               Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
David A. Borrelli                                Vice President                       None
105 Black Calla Ct.
San Ramon, CA 94583
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Jeffrey R. Botwinick                             Vice President                       None
4431 Twin Pines Drive
Manlius, NY 13104
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Sarah Bourgraf(1)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michelle Brennan(2)                              Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Fredrick Davis                                   Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John Davis(2)                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Stephen J. Demetrovits(2)                        Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Steven Dombrower                                 Vice President                       None
13 Greenbrush Court
Greenlawn, NY 11740
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
George P. Dougherty                              Vice President                       None
328 Regency Drive
North Wales, PA 19454
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ryan C. Drier                                    Vice President                       None
2240 Breton Road SE
Grand Rapids, MI 49525
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Cliff H. Dunteman                                Vice President                       None
N 53 W 27761 Bantry Road
Sussex, WI 53089-45533
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Hillary Eigen(2)                                 Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kent M. Elwell                                   Vice President                       None
35 Crown Terrace
Yardley, PA 19067
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Gregg A. Everett                                 Vice President                       None
4328 Auston Way
Palm Harbor, FL 34685-4017
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
George R. Fahey                                  Senior Vice President                None
9511 Silent Hills Lane
Lone Tree, CO 80124
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Eric C. Fallon                                   Vice President                       None
10 Worth Circle
Newton, MA 02458
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Deanna Farrugia(1)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
James Fereday                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Joseph Fernandez                                 Vice President                       None
1717 Richbourg Park Drive
Brentwood, TN 37027
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Mark J. Ferro                                    Senior Vice President                None
104 Beach 221st Street
Breezy Point, NY 11697
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ronald H. Fielding(3)                            Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Bradley Finkle(2)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Eric P. Fishel                                   Vice President                       None
725 Boston Post Rd., #12
Sudbury, MA 01776
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Patrick W. Flynn                                 Senior Vice President                None
14083 East Fair Avenue
Englewood, CO 80111
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John E. Forrest(2)                               Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John ("J") Fortuna(2)                            Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Jayme D. Fowler                                  Vice President                       None
3818 Cedar Springs Road, #101-349
Dallas, TX 75219
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Richard Fuermann                                 Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Lucio Giliberti                                  Vice President                       None
6 Cyndi Court
Flemington, NJ 08822
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael Gottesman                                Vice President                       None
255 Westchester Way
Birmingham, MI 48009
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Raquel Granahan(4)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ralph Grant                                      Senior Vice President                None
10 Boathouse Close
Mt. Pleasant, SC 29464
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kahle Greenfield(2)                              Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Eric Grossjung                                   Vice President                       None
4002 N. 194th Street
Elkhorn, NE 68022
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael D. Guman                                 Vice President                       None
3913 Pleasant Avenue
Allentown, PA 18103
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
James E. Gunther                                 Vice President                       None
603 Withers Circle
Wilmington, DE 19810
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kevin J. Healy(2)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Elyse R. Jurman Herman                           Vice President                       None
5486 NW 42 Avenue
Boca Raton, FL 33496
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Wendy G. Hetson(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William E. Hortz(2)                              Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Edward Hrybenko(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Amy Huber(1)                                     Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Brian F. Husch                                   Vice President                       None
37 Hollow Road
Stonybrook, NY 11790
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Patrick Hyland(2)                                Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Keith Hylind                                     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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Christina J. Keller(2)                           Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael Keogh(2)                                 Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Lisa Klassen(1)                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Richard Klein                                    Senior Vice President                None
4820 Fremont Avenue South
Minneapolis, MN 55419
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Richard Knott(1)                                 Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Brent A. Krantz                                  Senior Vice President                None
61500 Tam McArthur Loop
Bend, OR 97702
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Eric Kristenson(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
David T. Kuzia                                   Vice President                       None
10258 S. Dowling Way
Highlands Ranch, CO 80126
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Tracey Lange(2)                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Paul R. LeMire                                   Assistant Vice President             None
7 Cormorant Drive
Middletown, NJ 07748
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Eric J. Liberman                                 Vice President                       None
27 Tappan Ave., Unit West
Sleepy Hollow, NY 10591
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Malissa Lischin(2)                               Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Loncar                                    Vice President                       None
1401 North Taft Street, Apt. 726
Arlington, VA 22201
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Craig Lyman                                      Vice President                       None
7425 Eggshell Drive
N. Las Vegas, NV 89084
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Peter Maddox(2)                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael Malik                                    Vice President                       None
546 Idylberry Road
San Rafael, CA 94903
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Steven C. Manns                                  Vice President                       None
1627 N. Hermitage Avenue
Chicago, IL 60622
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Todd A. Marion                                   Vice President                       None
24 Midland Avenue
Cold Spring Harbor, NY 11724
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
LuAnn Mascia(2)                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Theresa-Marie Maynier                            Vice President                       None
2421 Charlotte Drive
Charlotte, NC 28203
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John C. McDonough                                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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Daniel Melehan                                   Vice President                       None
906 Bridgeport Court
San Marcos, CA 92069
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Mark Mezzanotte                                  Vice President                       None
16 Cullen Way
Exeter, NH 03833
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Matthew L. Michaelson                            Vice President                       None
1250 W. Grace, #3R
Chicago, IL 60613
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Noah Miller(1)                                   Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Clint Modler(1)                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Robert Moser                                     Vice President                       None
9650 East Aspen Hill Circle
Lone Tree, CO 80124
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
David W. Mountford                               Vice President                       None
7820 Banyan Terrace
Tamarac, FL 33321
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Gzim Muja                                        Vice President                       None
269 S. Beverly Dr. #807
Beverly Hills, CA 90212
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John V. Murphy(2)                                Director                             President & Trustee
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Wendy Jean Murray                                Vice President                       None
32 Carolin Road
Upper Montclair, NJ 07043
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John S. Napier                                   Vice President                       None
17 Hillcrest Ave.
Darien, CT 06820
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Christina Nasta(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kevin P. Neznek(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Bradford G. Norford                              Vice President                       None
5095 Lahinch Ct.
Westerville, OH 43082
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Alan Panzer                                      Vice President                       None
6755 Ridge Mill Lane
Atlanta, GA 30328
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael Park(2)                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Donald Pawluk(2)                                 Vice President
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Brian C. Perkes                                  Vice President                       None
6 Lawton Ct.
Frisco, TX 75034
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Charles K. Pettit(2)                             Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Elaine M. Puleo-Carter(2)                        Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Minnie Ra                                        Vice President                       None
100 Dolores Street, #203
Carmel, CA 93923
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Dusting Raring                                   Vice President                       None
27 Blakemore Drive
Ladera Ranch, CA 92797
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael A. Raso                                  Vice President                       None
3 Vine Place
Larchmont, NY 10538
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Richard E. Rath                                  Vice President                       None
46 Mt. Vernon Ave.
Alexandria, VA 22301
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William J. Raynor(5)                             Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ruxandra Risko(2)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
David R. Robertson(2)                            Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Nicole Robbins(2)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ian M. Roche                                     Vice President                       None
7070 Bramshill Circle
Bainbridge, OH 44023
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Kenneth A. Rosenson                              Vice President                       None
24753 Vantage Pt. Terrace
Malibu, CA 90265
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William R. Rylander                              Vice President                       None
85 Evergreen Road
Vernon, CT 06066
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Sabow                                     Vice President                       None
6617 Southcrest Drive
Edina, MN 55435
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John Saunders                                    Vice President                       None
2251 Chantilly Ave.
Winter Park, FL 32789
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Jill Schmitt(2)                                  Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Schmitt                                   Vice President                       None
40 Rockcrest Rd
Manhasset, NY 11030
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William Schories                                 Vice President                       None
3 Hill Street
Hazlet, NJ 07730
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Charles F. Scully                                Vice President                       None
125 Cypress View Way
Apex, NC 27502
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Jennifer Sexton(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Eric Sharp                                       Vice President                       None
862 McNeill Circle
Woodland, CA 95695
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Debbie A. Simon                                  Vice President                       None
55 E. Erie St., #4404
Chicago, IL 60611
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Christopher M. Spencer                           Vice President                       None
2353 W 118th Terrace
Leawood, KS 66211
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John A. Spensley                                 Vice President                       None
375 Mallard Court
Carmel, IN 46032
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Alfred St. John(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Bryan Stein                                      Vice President                       None
8 Longwood Rd.
Voorhees, NJ 08043
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
John Stoma(2)                                    Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Wayne Strauss(3)                                 Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Brian C. Summe                                   Vice President                       None
2479 Legends Way
Crestview Hills, KY 41017
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael Sussman(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
George T. Sweeney                                Senior Vice President                None
5 Smokehouse Lane
Hummelstown, PA 17036
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
William K. Tai                                   Vice President                       None
12701 Prairie Drive
Urbandale, IA 50323
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
James Taylor(2)                                  Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Martin Telles(2)                                 Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Paul Temple(2)                                   Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
David G. Thomas                                  Vice President                       None
16628 Elk Run Court
Leesburg, VA 20176
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Barrie L. Tiedemann                              Vice President                       None
1774 Sheridan Drive
Ann Arbor, MI 48104
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Mark S. Vandehey(1)                              Vice President and Chief             Vice President and Chief
                                                 Compliance Officer                   Compliance Officer
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Vincent Vermete(2)                               Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Cynthia Walloga(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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Michael J. Weigner                               Vice President                       None
4905 W. San Nicholas Street
Tampa, FL 33629
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Donn Weise                                       Vice President                       None
3249 Earlmar Drive
Los Angeles, CA 90064
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Chris G. Werner                                  Vice President                       None
98 Crown Point Place
Castle Rock, CO 80108
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Catherine White(2)                               Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Ryan Wilde(1)                                    Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Julie Wimer(2)                                   Assistant Vice President             None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Donna Winn(2)                                    Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Peter Winters                                    Vice President                       None
911 N. Organce Ave, Pat. 514
Orlando, FL 32801
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Patrick Wisneski(1)                              Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Philip Witkower(2)                               Senior Vice President                None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Meredith Wolff(2)                                Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
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
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Walter Zinych                                    Vice President                       None
630 North Franklin St., Apt. 718
Chicago, IL 60610
------------------------------------------------ ------------------------------------ ---------------------------------
------------------------------------------------ ------------------------------------ ---------------------------------
Steven Zito(1)                                   Vice President                       None
------------------------------------------------ ------------------------------------ ---------------------------------

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY
   10281-1008
(3)350 Linden Oaks, Rochester, NY 14623
(4)555 Theodore Fremd Avenue, Rye, NY 10580
(5)Independence Wharf, 470 Atlantic Avenue, 11th Floor, Boston, MA 02210

(c)      Not applicable.

Item 28. Location of Accounts and Records

     The  accounts,  books and other  documents  required  to be  maintained  by
Registrant  pursuant to Section 31(a) of the Investment  Company Act of 1940 and
rules promulgated thereunder are in the possession of OppenheimerFunds,  Inc. at
its offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.

Item 29. Management Services

Not applicable

Item 30. Undertakings

Not applicable.




                                                    SIGNATURES

     Pursuant  to the  requirements  of the  Securities  Act of 1933  and/or the
Investment  Company Act of 1940, the Registrant  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
April, 2007.

                                    Bond Fund Series,
                                    on behalf of its series,
                                    Oppenheimer Convertible Securities 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/ Thomas W. Courtney*          Chairman of the            April 27, 2007
Thomas W. Courtney               Board of Trustee


/s/ John V. Murphy*              President, Principal       April 27, 2007
John V. Murphy                   Executive Officer and
                                 Trustee


/s/ Brian W. Wixted*             Treasurer, Principal       April 27, 2007
Brian W. Wixted                  Financial & Accounting
                                 Officer


/s/ David K. Downes*             Trustee                    April 27, 2007
David K. Downes


/s/ John Cannon*                 Trustee                    April 27, 2007
John Cannon


/s/ Robert G. Galli*             Trustee                    April 27, 2007
Robert G. Galli


/s/ Lacy B. Herrmann*            Trustee                    April 27, 2007
Lacy B. Herrmann


/s/ Brian F. Wruble*             Trustee                    April 27, 2007
Brian F. Wruble


*By:     /s/ Mitchell J. Lindauer
         Mitchell J. Lindauer, Attorney-in-Fact




                                 BOND FUND SERIES
                          OPPENHEIMER CONVERTIBLE SECURITIES FUND

                               Registration No. 33-3076

                             Post-Effective Amendment No. 31


                                     EXHIBIT INDEX


Exhibit No.                Description

23(j)             Independent Registered Public Accounting Firm's Consent