485-b Filing

485BPOS 1 n1apspsaiptc.htm N1A, PSP, SAI, PTC 485-b Filing

Registration No. 33-15489
File No. 811-5225

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. ____ [ ]

Post-Effective Amendment No. 51 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ ]

Amendment No. 53 [X]

OPPENHEIMER QUEST FOR VALUE FUNDS
---------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

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

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

Robert G. Zack, Esq.

OppenheimerFunds, Inc.

498 Seventh Avenue, New York, New York 10018

---------------------------------------------------------------------------------
(Name and Address of Agent for Service)

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

[ ]Immediately upon filing pursuant to paragraph (b) [X] On December 23,
2002 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
Quest Opportunity
Value Fund

Prospectus dated December 23, 2002

[OppenheimerFunds logo]

CONTENTS

ABOUT THE FUND

The Fund's Investment Objective and Strategies

Main Risks of Investing in the Fund

The Fund's Past Performance

Fees and Expenses of the Fund

About the Fund's Investments

How the Fund is Managed

ABOUT YOUR ACCOUNT

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

Special Investor Services
AccountLink
PhoneLink

OppenheimerFunds Internet Website
Retirement Plans

How to Sell Shares

By 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 Strategies

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks growth of capital.

WHAT DOES THE FUND MAINLY INVEST IN? The Fund can invest in a variety of equity
and debt securities. The Fund normally invests mainly in common stocks of U.S.
issuers that the portfolio manager believes are undervalued in the marketplace.
The Fund can invest in common stocks and other equity securities, including debt
securities convertible into common stock, without limit. Under normal market
conditions, the Fund invests at least 50% of its total assets in common stock
and debt securities convertible into common stock. The Fund's investments are
more fully explained in "About the Fund's Investments," below.

HOW DOES THE PORTFOLIO MANAGER DECIDE WHAT SECURITIES TO BUY OR SELL? In
selecting securities for the Fund, the Fund's portfolio manager, who is employed
by the Sub-Advisor, OpCap Advisors, uses a "value" approach to investing. The
portfolio manager searches for securities of companies believed to be
undervalued in the marketplace, in relation to factors such as a company's
assets, earnings, growth potential and cash flows. This process and the
inter-relationship of the factors used may change over time and its
implementation may vary in particular cases. Currently, the selection process
includes the following techniques:
o A "bottom up" analytical approach using fundamental research to focus on
particular issuers before considering industry trends, evaluating each
issuer's characteristics, financial results and management.
o A search for securities of companies believed to be undervalued in the
marketplace and having a high return on capital, strong management
committed to shareholder value, and positive cash flows.
o Ongoing monitoring of issuers for fundamental changes in the company that
might alter the portfolio manager's initial expectations about the
security and might result in the sale of the security.

The portfolio manager allocates the Fund's investments among equity and
debt securities after assessing the relative values of these different types of
investments under prevailing market conditions. The portfolio might hold stocks,
bonds and money market instruments in different proportions at different times.
While stocks and other equity securities are normally emphasized to seek growth,
the portfolio manager might buy bonds and other fixed-income securities, instead
of stocks, when he thinks that:
o common stocks in general appear to be overvalued,
o debt securities offer meaningful capital growth opportunities relative to common
stocks, or
o it is desirable to maintain liquidity pending investment in equity
securities to seek capital growth opportunities.

WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors seeking capital
appreciation over the long term. Those investors should be willing to assume the
risks of short-term share price fluctuations that are typical for a fund
focusing on stock investments. Since the Fund does not seek current income as
part of its objective, and its income level from investments will likely be
small, it is not designed for investors needing current income. Because of its
focus on long-term growth, the Fund may be appropriate for a portion of a
retirement plan investment. The Fund is not a complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in stocks and
bonds are subject to changes in their value from a number of factors, as
described below. There is also the risk that poor security selection by the
Sub-Advisor will cause the Fund to underperform other funds having a similar
objective. As an example, the portfolio manager's "value" approach to investing
could result in fewer Fund investments in stocks that become highly valued by
the marketplace during times of rapid market advances. This could cause the Fund
to underperform other funds that seek capital appreciation but that employ a
growth or non-value approach to investing.

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

Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer. The Fund
invests mainly in securities of companies with medium-size capitalizations and
larger. It can also buy securities of small capitalization companies, which may
have more volatile stock prices than large companies.

Industry Focus. At times the Fund may increase the relative emphasis of its
investments in a particular industry. Stocks of issuers in a particular
industry may be affected by changes in economic conditions, or by changes
in government regulations, availability of basic resources or supplies, or
other events that affect that industry more than others. To the extent
that the Fund increases the emphasis of its investments in a particular
industry, its share values may fluctuate in response to events affecting
that industry.

INTEREST RATE RISK. The values of debt securities are subject to change when
prevailing interest rates change. When interest rates fall, the value of
already-issued debt securities generally rise. When interest rates rise, the
values of already-issued debt securities generally fall. The magnitude of these
fluctuations will often be greater for longer-term debt securities than
shorter-term debt securities. The Fund's share prices can go up or down when
interest rates change because of the effect of the changes on the value of the
Fund's investments in debt securities.

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

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form the
risk profile of the Fund, and can affect the value of the Fund's investments,
its investment performance and its price per share. Particular investments and
investment strategies also have risks. These risks mean that you can lose money
by investing in the Fund. When you redeem your shares, they may be worth more or
less than what you paid for them. There is no assurance that the Fund will
achieve its investment objective. In the short term, the stock markets can be
volatile, and the price of the Fund's shares can go up and down substantially.
The Fund's income-oriented investments may help cushion the Fund's total return
from changes in stock prices, but fixed-income securities have their own risks
and normally are not the primary emphasis of the Fund. In the OppenheimerFunds
spectrum, the Fund is more conservative than aggressive growth stock funds, but
has greater risk than investment-grade bond funds.

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

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the
Fund, by showing the Fund's performance (for its Class A 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 a
broad-based market index.

The after-tax returns are shown for Class A 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. The after-tax returns for the other classes of shares will vary. 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 A) (as of 12/31 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 1/1/02 through 9/30/02, the cumulative
return (not annualized) before taxes for Class A shares was -20.12%.
During the period shown in the bar chart, the highest return (not annualized)
before taxes for a calendar quarter was 14.45% (2ndQtr'95) and the lowest return
(not annualized) before taxes for a calendar quarter was -12.98% (3rdQtr'98).

-------------------------------------------------------------------------------------
Average Annual Total Returns 5 Years 10 Years
for the periods ended (or life of (or life of
December 31, 2001 1 Year class, if less) class, if less)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class A Shares (inception
1/3/89) -10.06% 6.89% 12.54%
Return Before Taxes -10.48% 5.17% 11.13%
Return After Taxes on
Distributions -6.12% 5.29% 10.31%
Return After Taxes on
Distributions and Sale of
Fund Shares
-------------------------------------------------------------------------------------
S&P 500 Index (reflects no
deduction for fees, expenses -11.88% 10.70% 12.93%1
or taxes)
-------------------------------------------------------------------------------------
Class B Shares (inception -9.89% 7.26% 12.26%
9/1/93)
-------------------------------------------------------------------------------------
Class C Shares (inception -6.12% 7.58% 12.06%
9/1/93)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class N Shares (inception N/A2 N/A N/A
3/1/01)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class Y Shares (inception -4.26% 8.62% 8.96%
12/16/96)
-------------------------------------------------------------------------------------
1 From 12/31/91.
2 Because this is a new class of shares, return data for the period specified is
not available.

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 B, the
contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class
C, the 1% contingent deferred sales charge for the 1-year period. There is no
sales charge for Class Y. 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 Class A shares is
compared to the S&P 500 Index, an unmanaged index of equity securities. The
index performance includes reinvestment of income but does not reflect
transaction costs. The Fund's investments vary from those in the index.

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 October 31, 2002.

--------------------------------------------------------------------------------------
Shareholder Fees (charges paid directly from your investment):
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Maximum Sales Charge 5.75% None None None None
(Load) on purchases (as
% of offering price)
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Maximum Deferred Sales None1 5%2 1%3 1%4 None
Charge (Load) (as % of
the lower of the
original offering price
or redemption proceeds)
--------------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more ($500,000 for certain retirement plan accounts) of Class A
shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of a retirement plan's first
purchase of Class N shares.

-------------------------------------------------------------------------------
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Management Fees 0.88% 0.88% 0.88% 0.88% 0.88%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees 0.35% 1.00% 1.00% 0.50% None
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other Expenses 0.29% 0.29% 0.28% 0.38% 0.46%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total Annual 1.52% 2.17% 2.16% 1.76% 1.34%
Operating Expenses
-------------------------------------------------------------------------------

Effective March 1, 2002, the management fee rate was reduced as described below
in "How the Fund is Managed - The Manager - The Manager's Fees." Effective
January 1, 2002 the asset-based sales charge rate for Class A shares was
voluntarily reduced to 0.10% (as to Class A shares purchased on and after
September 1, 1993) and 0.15% (as to Class A shares purchased prior to September
1, 1993), in each case on average annual net assets representing Class A shares
of the Fund. The rate in effect during 2001 as to Class A shares purchased on or
after September 1, 1993 was 0.15%. Effective January 1, 2003, the Board has
voluntarily reduced the Class A asset-based sales charge to zero resulting in a
12b-1 fee of 0.25%. The Board of Trustees can set the rate of the asset-based
sales charge on Class A shares up to 0.25% of average annual net assets.

Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, and accounting and legal expenses that the Fund pays. The
Transfer Agent has voluntarily undertaken to the Fund to limit the transfer
agent fees to 0.25% of average daily net assets per fiscal year for Class Y
shares and 0.35% of average daily net assets per fiscal year for all other
classes. That undertaking for Class Y shares was effective January 1, 2001
through October 31, 2002 and all undertakings may be amended or withdrawn at any
time. After the waiver, the actual "Other Expenses" and "Total Annual Operating
Expenses" as percentages of average daily net assets were 0.35% and 1.23%,
respectively, for Class Y shares. For the Fund's fiscal year ended October 31,
2002, the transfer agent fees exceeded the expense limitation described above
for the other classes of shares by less than 0.01% for each of those classes.

Effective November 1, 2002, the limit on transfer agent fees for Class Y shares
increased to 0.35% of average daily net assets per fiscal year. Had that limit
been in effect during the Fund's prior fiscal year, the Class Y "Other Expenses"
and "Total Annual Operating Expenses" as percentages of average daily net assets
would have been 0.45% and 1.33%, respectively.

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 as in the table above. 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 $721 $1,028 $1,356 $2,283
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class B Shares $720 $979 $1,364 $2,1881
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class C Shares $319 $676 $1,159 $2,493
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class N Shares $279 $554 $954 $2,073
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class Y Shares $136 $425 $734 $1,613
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
If shares are not 1 Year 3 Years 5 Years 10 Years
redeemed:
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class A Shares $721 $1,028 $1,356 $2,283
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class B Shares $220 $679 $1,164 $2,1881
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class C Shares $219 $676 $1,159 $2,493
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class N Shares $179 $554 $954 $2,073
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class Y Shares $136 $425 $734 $1,613
---------------------------------------------------------------------------------
In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges. 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. The allocation of the Fund's portfolio
among the different types of investments will vary over time based upon the
evaluation of economic and market trends. The Fund's portfolio might not always
include all of the different types of investments described below. The Statement
of Additional Information contains more detailed information about the Fund's
investment policies and risks.

The Manager has engaged the Sub-Advisor, OpCap Advisors, to select
securities for the Fund's portfolio. The Sub-Advisor tries to reduce risks by
carefully researching securities before they are purchased and to reduce the
Fund's exposure to market risks by diversifying its investments, that is, by not
holding a substantial amount of stock of any one company and by not investing
too great a percentage of the Fund's assets in any one issuer. Also, the Fund
does not concentrate 25% or more of its assets in investments in any one
industry.

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

Stock Investments. The Fund invests mainly in a diversified portfolio of common
stocks and other equity securities of domestic issuers of medium or large
size, to seek capital growth. Equity securities include common stocks,
preferred stocks, warrants and debt securities convertible into common
stock. The Fund can invest in securities issued by domestic or foreign
companies of any size. Although convertible securities are debt
securities, in some cases convertible securities can be considered "equity
equivalents" because of the conversion feature. Their rating must meet the
Fund's credit criteria for debt securities, described below, but has less
impact on the investment decision than in the case of other debt
securities.

At times, the Fund may increase its relative emphasis on the securities of
issuers in a particular industry or group of industries, or of a
particular capitalization or a range of capitalizations, depending on the
Sub-Advisor's judgment about market and economic conditions.

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

The corporate debt securities the Fund buys must be "investment grade."
That means that they must either be rated at least "Baa" by Moody's
Investors Service or "BBB" by Standard & Poor's Rating Service or have
comparable ratings by other nationally-recognized rating organizations. If
they are unrated corporate debt securities, the Sub-Advisor must judge
that they are comparable to rated investment-grade securities.

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

Some securities issued or guaranteed by agencies or instrumentalities of
the U.S. Government have different levels of credit support from the U.S.
Government. Some are supported by the full faith and credit of the U.S.
Government, such as Government National Mortgage Association pass-through
mortgage certificates (called "Ginnie Maes"). Some are supported by the
right of the issuer to borrow from the U.S. Treasury under certain
circumstances, such as Federal National Mortgage Association bonds
("Fannie Maes"). Others are supported only by the credit of the entity
that issued them, such as Federal Home Loan Mortgage Corporation
obligations ("Freddie Macs"). These have relatively little credit risk.

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

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

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

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

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

Foreign Investing. While the Fund has no limits on the amounts it can invest in
foreign securities, it normally does not expect to invest a substantial
portion of its assets in foreign securities. The Fund can buy foreign
securities that are listed on a domestic or foreign stock exchange, traded
in domestic or foreign over-the-counter markets, or represented by
American Depository Receipts. While the Fund can invest in emerging
markets, which have greater risks than developed markets, the Fund
currently does not intend to purchase securities issued by governments or
companies in emerging markets. The Fund will hold foreign currency only in
connection with buying and selling foreign securities.

o Risks of Foreign Investing. While foreign securities offer special
investment opportunities, there are also special risks. The change in
value of a foreign currency against the U.S. dollar will result in a
change in the U.S. dollar value of securities denominated in that foreign
currency. Foreign issuers are not subject to the same accounting and
disclosure requirements 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.

"When-Issued" and "Delayed-Delivery" Transactions. The Fund can purchase
securities on a "when-issued" basis and can purchase or sell securities on
a "delayed delivery" basis. There is a risk that the value of the security
might decline prior to the settlement date. The Fund will not commit more
than 15% of its net assets under these transactions. Between the purchase
and settlement, no payment is made for the security, and no interest
accrues to the buyer from the investment. There is a risk of loss to the
Fund if the value of the when-issued security declines prior to the
settlement date.

Investing in Small, Unseasoned Companies. The Fund can invest up to 5% of its
total assets in securities of small, unseasoned companies. These are
companies that have been in continuous operation for less than three
years, counting the operations of any predecessors. These securities may
have limited liquidity, which means that the Fund could have difficulty
selling them at an acceptable price when it wants to. Their prices may be
very volatile, especially in the short term.

Illiquid and Restricted Securities. Investments may be illiquid because they do
not have an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted security has
a contractual restriction on its resale or cannot be sold publicly until
it is registered under the Securities Act of 1933. The Fund cannot invest
more than 15% of its net assets in illiquid or restricted securities.
Certain restricted securities that are eligible for resale to qualified
institutional purchasers may not be subject to that limit. The Manager and
Sub-Advisor monitor holdings of illiquid securities on an ongoing basis to
determine whether to sell any holdings to maintain adequate liquidity.
Portfolio Turnover. A change in the securities held by the Fund is known as
"portfolio turnover." The Fund does not expect to engage frequently in
short-term trading to try to achieve its objective. Portfolio turnover
affects brokerage costs the Fund pays. If the Fund realizes capital gains
when it sells its portfolio investments, it must generally pay those gains
out to shareholders, increasing their taxable distributions. The Financial
Highlights table at the end of this Prospectus shows the Fund's portfolio
turnover rates during prior fiscal years.

Temporary Defensive and Interim Investments. In times of unstable or adverse
market or economic conditions, the Fund can invest up to 100% of its
assets in temporary defensive investments. Generally they would be
short-term U.S. Government securities and the types of money market
instruments described above. The Fund can also hold these types of
securities pending the investment of proceeds from the sale of Fund shares
or portfolio securities or to meet anticipated redemptions of Fund shares.
To the extent the Fund invests defensively in these securities, it might
not achieve its investment objective of capital growth.

How the Fund Is Managed

THE MANAGER. The Manager supervises the Fund's investment program and handles
its day-to-day business. The Manager carries out its duties, subject to the
policies established by the Board of Trustees, under an investment advisory
agreement that states the Manager's responsibilities. The agreement sets the
fees paid by the Fund to the Manager and describes the expenses that the Fund
pays to conduct its business. The Manager became the Fund's investment advisor
on November 22, 1995.

The Manager has been an investment advisor since January 1960. The Manager
and its subsidiaries and controlled affiliates managed more than $120 billion in
assets as of September 30, 2002, including other Oppenheimer funds with more
than 7 million shareholder accounts. The Manager is located at 498 Seventh
Avenue, New York, New York 10018.

The Manager's Fees. Under the investment advisory agreement, effective March
1, 2002, the Fund pays the Manager an advisory fee at an annual rate that
declines as the Fund's assets grow: 1.00% of the first $400 million of
average annual net assets of the Fund, 0.90% of the next $400 million,
0.85% of the next $2.2 billion, 0.75% of the next $1 billion and 0.65% of
average annual net assets in excess of $4 billion. Prior to March 1, 2002,
the annual advisory fee rate was: 1.00% of the first $400 million of
average annual net assets of the Fund, 0.90% of the next $400 million,
0.85% of the next $3.2 billion, 0.80% of the next $4 billion and 0.75% of
average annual net assets in excess of $8 billion. The Fund's management
fee for its last fiscal year ended October 31, 2002 was 0.88% of average
annual net assets for each class of shares.

The Sub-Advisor. On November 22, 1995, the Manager retained the Sub-Advisor to
provide day-to-day portfolio management for the Fund. Prior to that date
and from the inception of the Fund, the Sub-Advisor had been the Fund's
investment advisor. The Sub-Advisor has operated as an investment advisor
to investment companies and other investors since its organization in
1980. As of September 30, 2002, the Sub-Advisor or its parent, Oppenheimer
Capital, advised accounts having assets in excess of $26 billion. The
Sub-Advisor is located at 1345 Avenue of the Americas, 49th Floor, New
York, New York 10105-4800.

The Manager, not the Fund, pays the Sub-Advisor an annual fee under the
Sub-Advisory Agreement between the Manager and the Sub-Advisor. The fee is
calculated as a percentage of the fee the Fund pays the Manager. The rate
is 40% of the advisory fee collected by the Manager based on the net
assets of the Fund as of November 22, 1995, and 30% of the fee collected
by the Manager on assets in excess of that amount. The Sub-Advisor is
wholly-owned by Oppenheimer Capital LLC, which in turn is wholly-owned by
Allianz Dresdner Asset Management of America L.P. The general partner of
Allianz Dresdner Asset Management of America L.P. is Allianz-PacLife
Partners LLP. Allianz AG has majority ownership of, and controls, Allianz
Dresdner Asset Management of America, L.P. and its subsidiaries, including
Oppenheimer Capital and the Sub-Advisor.

Portfolio Manager. The portfolio manager of the Fund is Richard J. Glasebrook
II, who is employed by the Sub-Advisor. He is the person primarily
responsible for the day-to-day management of the Fund's portfolio. He is a
Managing Director of Oppenheimer Capital, the immediate parent company of
the Sub-Advisor, and has been the Fund's portfolio manager since April
1991.

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.

BuyingShares Through Your Dealer. You can buy shares through any dealer, broker
or financial institution that has a sales agreement with the Distributor.
Your dealer will place your order with the Distributor on your behalf.
BuyingShares Through the Distributor. Complete an OppenheimerFunds New Account
Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If
you don't list a dealer on the application, the Distributor will act as
your agent in buying the shares. However, we recommend that you discuss
your investment with a financial advisor before you make a purchase to be
sure that the Fund is appropriate for you.
o Paying by Federal Funds Wire. Shares purchased through the Distributor may
be paid for by Federal Funds wire. The minimum investment is $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
pay for shares by electronic funds transfers from your bank account.
Shares are purchased for your account by a transfer of money from your
bank account through the Automated Clearing House (ACH) system. You can
provide those instructions 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 each month 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 subsequent investments (after making the initial investment
of $500) for as little as $50. For any type of account established under
one of these plans prior to November 1, 2002, the minimum additional
investment will remain $25.
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.

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

The net asset value per share is determined by dividing the value of the
Fund's net assets attributable to a class by the number of shares of that
class that are outstanding. To determine net asset value, the Fund's Board
of Trustees has established procedures to value the Fund's securities, in
general, based on market value. The Board has adopted special procedures
for valuing illiquid and restricted securities and obligations for which
market values cannot be readily obtained. 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.

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

The Offering Price. To receive the offering price for a particular day, in
most cases the Distributor or its designated agent must receive your order
by the time The New York Stock Exchange closes that day. If your order is
received on a day when the Exchange is closed or after it has closed, the
order will receive the next offering price that is determined after your
order is received.
BuyingThrough a Dealer. If you buy shares through a dealer, your dealer must
receive the order by the close of The New York Stock Exchange and transmit
it to the Distributor so that it is received before the Distributor's
close of business on a regular business day (normally 5:00 P.M.) to
receive that day's offering price, unless your dealer has made alternative
arrangements with the Distributor. Otherwise, the order will receive the
next offering price that is determined.

--------------------------------------------------------------------------------------------
WHAT CLASSES OF SHARES 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 N Shares. If you buy Class N shares (available only through certain
retirement plans), you pay no sales charge at the time of purchase, but
you will pay an annual asset-based sales charge. If you sell your shares
within 18 months of the retirement plan's first purchase of Class N
shares, you may pay a contingent deferred sales charge of 1.0%, as
described in "How Can You Buy Class N Shares?" below.
Class Y Shares. Class Y shares are offered only to certain institutional
investors that have special agreements with the Distributor.

WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is best
suited to your needs depends on a number of factors that you should discuss with
your financial advisor. Some factors to consider are how much you plan to invest
and how long you plan to hold your investment. 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
advisor before making that choice.

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

o Investing for the Shorter Term. While 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
probably consider purchasing Class A or Class C shares rather than Class B
shares. That is because of the effect of the Class B contingent deferred
sales charge if you redeem within six years, as well as the effect of the
Class B asset-based sales charge on the investment return for that class
in the short-term. Class C shares might be the appropriate choice
(especially for investments of less than $100,000), because there is no
initial sales charge on Class C shares, and the contingent deferred sales
charge does not apply to amounts you sell after holding them one year.

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

And for non-retirement plan investors who invest $1 million or more, in
most cases Class A shares will be the most advantageous choice, no matter
how long you intend to hold your shares. For that reason, the Distributor
normally will not accept purchase orders of $500,000 or more of Class B
shares or $1 million or more of Class C shares from a single investor.

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

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

Additionally, the dividends payable to Class B, Class C and Class N
shareholders will be reduced by the additional expenses borne by those
classes that are not borne by Class A or Class Y shares, such as the Class
B, Class C and Class N asset-based sales charge described below and in the
Statement of Additional Information. Share certificates are only available
for Class A shares. If you are considering using your shares as collateral
for a loan, that may be a factor to consider.

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

SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix 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.

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
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 5.50% 5.82% 4.75%
less than $50,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$50,000 or more but 4.75% 4.99% 4.00%
less than $100,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$100,000 or more but 3.75% 3.90% 3.00%
less than $250,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$250,000 or more but 2.50% 2.56% 2.00%
less than $500,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$500,000 or more but 2.00% 2.04% 1.60%
less than $1 million
------------------------------------------------------------------------------

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

Class A Contingent Deferred Sales Charge. There is no initial sales charge on
purchases of Class A shares of any one or more of the Oppenheimer funds
aggregating $1 million or more, or for certain purchases by particular
types of retirement plans that were permitted to purchase such shares
prior to March 1, 2001 ("grandfathered retirement accounts"). Retirement
plans are not permitted to make initial purchases of Class A shares
subject to a contingent deferred sales charge. The Distributor pays
dealers of record concessions in an amount equal to 1.0% of purchases of
$1 million or more other than by grandfathered retirement accounts. For
grandfathered retirement accounts, the concession is 0.75% of the first
$2.5 million of purchases plus 0.25% of purchases in excess of $2.5
million. In either case, the concession will not be paid on purchases of
shares by exchange or that were previously subject to a front-end sales
charge and dealer concession.

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

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

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

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

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

-------------------------------------------------------------------------------
Years Since Beginning of Month in Contingent Deferred Sales Charge on
Which Purchase Order was Accepted Redemptions in That Year
(As % of Amount Subject to Charge)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
0 - 1 5.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1 - 2 4.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2 - 3 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3 - 4 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4 - 5 2.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5 - 6 1.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
More than 6 None
-------------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the contingent deferred
sales charge, all purchases are considered to have been made on the first
regular business day of the month in which the purchase was made.

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

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

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

Who Can Buy Class Y Shares? Class Y shares are sold at net asset value per share
without a sales charge directly to institutional investors that have special
agreements with the Distributor for this purpose. They may include insurance
companies, registered investment companies and employee benefit plans.
Individual investors cannot buy Class Y shares directly.

An institutional investor that buys Class Y shares for its customers'
accounts may impose charges on those 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
at their Colorado office) and the special account features available to
investors buying those other classes of shares do not apply to Class Y shares.
Instructions for buying, selling, exchanging or transferring Class Y shares must
be submitted by the institutional investor, not by its customers for whose
benefit the shares are held.

DISTRIBUTION AND SERVICE (12b-1) PLANS.

Distribution and Service Plan for Class A Shares. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan the Fund
will pay through December 31, 2002 an asset-based sales charge to the
Distributor at an annual rate of 0.10% of average annual net assets of
Class A shares of the Fund purchased on or after September 1, 1993 (0.15%
as to Class A shares purchased prior to September 1, 1993) (the Board of
Trustees can set this rate up to 0.25%). Effective January 1, 2003, the
Board has voluntarily reduced the asset-based sales charge on all Class A
shares to zero. The Fund also pays a service fee to the Distributor of
0.25% of the average annual net assets of Class A shares. The Distributor
currently uses all of the service fee and, until December 2002, the
asset-based sales charge, to pay dealers, brokers, banks and other
financial institutions quarterly for providing personal service and
maintenance of accounts of their customers that hold Class A shares. With
respect to Class A shares subject to a Class A contingent deferred sales
charge purchased by grandfathered retirement accounts, the Distributor
pays the 0.25% service fee to dealers in advance for the first year after
the shares are sold by the dealer. During the first year after the shares
are sold, the Distributor retains the service fee. After the shares have
been held for a year, the Distributor pays the service fee to dealers on a
quarterly basis.

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

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

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

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

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

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

Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account with
an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
o transmit funds electronically to purchase shares 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 of bank account information must be made by signature-guaranteed
instructions to the Transfer Agent signed by all shareholders who own the
account.

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

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

RETIREMENT PLANS. You may buy shares of the Fund 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 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.

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

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

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

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption price
calculated on a particular regular business day, your call must be received by
the Transfer Agent by the close of The New York Stock Exchange that day, which
is normally 4:00 P.M., but may be earlier on some days. You may not redeem
shares held in an OppenheimerFunds retirement plan account 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 for that service. If your shares are held in the
name of your dealer, you must redeem them through your dealer.

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

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

Shares of the Fund may be exchanged for shares of certain Oppenheimer funds at
net asset value per share at the time of exchange, without sales charge. Shares
of the Fund can be purchased by exchange of shares of other Oppenheimer funds on
the same basis. To exchange shares, you must meet several conditions:
o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of both funds must offer the exchange privilege. o You
must hold the shares you buy when you establish your account for at least
seven
days before you can exchange them. After the account is open seven days,
you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose shares
you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of the Fund may be exchanged only for shares
of the same
class in the other Oppenheimer funds. For example, you can exchange Class A
shares of this Fund only for Class A shares of another fund. In some cases,
sales charges may be imposed on exchange transactions. For tax purposes,
exchanges of shares involve a sale of the shares of the fund you own and a
purchase of the shares of the other fund, which may result in a capital gain or
loss. Please refer to "How to Exchange Shares" in the Statement of Additional
Information for more details.

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

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

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

ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of: o Shares are redeemed from one fund and purchased from the
other fund in the exchange
transaction on the same regular business day on which the Transfer Agent
receives an exchange request that conforms to the policies described
above. It must be received by the close of The New York Stock Exchange
that day, which is normally 4:00 P.M. but may be earlier on some days.
o The interests of the Fund's long-term shareholders and its ability to manage its
investments may be adversely affected when its shares are repeatedly bought and sold
in response to short-term market fluctuations--also known as "market timing." When
large dollar amounts are involved, the Fund may have difficulty implementing
long-term investment strategies, because it cannot predict how much cash it will have
to invest. Market timing also may force the Fund to sell portfolio securities at
disadvantageous times to raise the cash needed to buy a market timer's Fund shares.
These factors may hurt the Fund's performance and its shareholders. When the Manager
believes frequent trading would have a disruptive effect on the Fund's ability to
manage its investments, the Manager and the Fund may reject purchase orders and
exchanges into the Fund by any person, group or account that the Manager believes to
be a market timer.
o The Fund may amend, suspend or terminate the exchange privilege at any
time. The Fund will provide you notice whenever it is required to do so by
applicable law, but it may impose changes at any time for emergency
purposes.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will
be exchanged.

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information. A
$12 annual fee is assessed on any account valued at less than $500. The fee is
automatically deducted from accounts annually on or about the second to
last business day of September. See the Statement of Additional
Information, or visit the OppenheimerFunds website, to learn how you can
avoid this fee and for circumstances when this fee will not be assessed.
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 Securities and Exchange Commission,
payment may be delayed or suspended. For accounts registered in the name
of a broker-dealer, payment will normally be forwarded within three
business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
described under "How to Sell Shares" for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much as
10 days from the date the shares were purchased. That delay may be avoided
if you purchase shares by Federal Funds wire or certified check, or
arrange with your bank to provide telephone or written assurance to the
Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the account
value has fallen below $500 for reasons other than the fact that the
market value of shares has dropped. In some cases, involuntary redemptions
may be made to repay the Distributor for losses from the cancellation of
share purchase orders.

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

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

Dividends, Capital Gains and Taxes

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

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

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

Avoid "Buying a Dividend." If you buy shares on or just before the ex-dividend
date, or just before the Fund declares a capital gains distribution, you
will pay the full price for the shares and then receive a portion of the
price back as a taxable dividend or capital gain.
Remember, There May be Taxes on Transactions. Because the Fund's share 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 advisor
about the effect of an investment in the Fund on your particular tax situation.

Financial Highlights

The Financial Highlights Table is presented to help you understand the Fund's
financial performance for the past 5 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). The
information for fiscal years 2002, 2001 and 2000 has been audited by KPMG LLP,
the Fund's independent auditors, whose report, along with the Fund's financial
statements, is included in the Statement of Additional Information, which is
available on request. Another accounting firm audited the information for the
fiscal years prior to 2000.

FINANCIAL HIGHLIGHTS

Class A Year Ended October 31 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $ 31.30 $ 36.04 $ 39.96 $ 36.44 $ 35.62
------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .24 .33 .59 .22 .31
Net realized and unrealized gain (loss) (4.74) (1.19) .34 5.46 1.72
------------------------------------------------------------------
Total from investment operations (4.50) (.86) .93 5.68 2.03
------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.39) (.58) (.20) (.31) (.18)
Distributions from net realized gain -- (3.30) (4.65) (1.85) (1.03)
------------------------------------------------------------------
Total dividends and/or
distributions to shareholders (.39) (3.88) (4.85) (2.16) (1.21)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $26.41 $31.30 $36.04 $39.96 $36.44
==================================================================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 (14.60)% (2.79)% 2.82% 16.31% 5.83%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,181,014 $1,285,953 $1,325,552 $1,820,497 $2,026,959
------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,300,422 $1,348,895 $1,486,116 $1,894,250 $2,070,927
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.82% 1.01% 1.42% 0.50% 0.85%
Expenses 1.52% 1.51% 1.53% 1.57% 1.54% 3
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 73% 42% 63% 47% 45%

1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.

19 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class B Year Ended October 31 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $ 30.56 $ 35.25 $ 39.19 $ 35.79 $ 35.05
------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 .15 .32 (.02) .13
Net realized and unrealized gain (loss) (4.63) (1.20) .39 5.41 1.68
----------------------------------------------------------------
Total from investment operations (4.60) (1.05) .71 5.39 1.81
------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.17) (.34) -- (.14) (.04)
Distributions from net realized gain -- (3.30) (4.65) (1.85) (1.03)
----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.17) (3.64) (4.65) (1.99) (1.07)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $25.79 $30.56 $35.25 $39.19 $35.79
================================================================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 (15.16)% (3.40)% 2.23% 15.72% 5.29%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $693,380 $1,157,671 $1,393,095 $1,969,529 $1,996,142
------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $981,593 $1,326,222 $1,585,561 $1,986,358 $1,976,134
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss) 0.17% 0.42% 0.82% (0.03)% 0.35%
Expenses 2.17% 2.11% 2.13% 2.10% 2.04% 3
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 73% 42% 63% 47% 45%

See accompanying Notes to Financial Statements.

20 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

Class C Year Ended October 31 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $ 30.55 $ 35.24 $ 39.17 $ 35.75 $ 35.01
------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .05 .14 .35 (.01) .13
Net realized and unrealized gain (loss) (4.65) (1.18) .37 5.40 1.68
----------------------------------------------------------------
Total from investment operations (4.60) (1.04) .72 5.39 1.81
------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.18) (.35) -- (.12) (.04)
Distributions from net realized gain -- (3.30) (4.65) (1.85) (1.03)
----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.18) (3.65) (4.65) (1.97) (1.07)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $25.77 $30.55 $35.24 $39.17 $35.75
================================================================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 (15.16)% (3.37)% 2.26% 15.74% 5.29%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $203,490 $257,556 $287,103 $428,182 $475,510
------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $245,055 $280,327 $336,213 $448,383 $487,222
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss) 0.18% 0.41% 0.86% (0.02)% 0.35%
Expenses 2.16% 2.11% 2.08% 2.08% 2.04% 3
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 73% 42% 63% 47% 45%

See accompanying Notes to Financial Statements.

21 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class N Year Ended October 31 2002 2001 1
---------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $ 31.26 $ 33.48
---------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .49 .03
Net realized and unrealized loss (5.02) (2.25)
-----------------------
Total from investment operations (4.53) (2.22)
---------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.52) --
Distributions from net realized gain -- --
-----------------------
Total dividends and/or distributions
to shareholders (.52) --
---------------------------------------------------------------------------------------------
Net asset value, end of period $26.21 $31.26
=======================

---------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 (14.78)% (6.63)%

---------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $14,843 $2,292
---------------------------------------------------------------------------------------------
Average net assets (in thousands) $10,295 $ 646
---------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.55% 0.47%
Expenses 1.76% 1.63%
---------------------------------------------------------------------------------------------
Portfolio turnover rate 73% 42%

1. For the period from March 1, 2001 (inception of offering) to October 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

Class Y Year Ended October 31 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $ 31.40 $ 36.21 $ 40.17 $ 36.64 $ 35.77
------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .56 .45 .71 .35 .48
Net realized and unrealized gain (loss) (4.99) (1.21) .39 5.48 1.74
----------------------------------------------------------------
Total from investment operations (4.43) (.76) 1.10 5.83 2.22
------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.44) (.75) (.41) (.45) (.32)
Distributions from net realized gain -- (3.30) (4.65) (1.85) (1.03)
----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.44) (4.05) (5.06) (2.30) (1.35)
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $26.53 $31.40 $36.21 $40.17 $36.64
================================================================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 (14.34)% (2.48)% 3.30% 16.74% 6.38%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $24,458 $46,942 $39,945 $54,692 $22,843
------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $28,726 $45,797 $43,926 $41,178 $20,347
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 1.17% 1.32% 1.87% 0.98% 1.39%
Expenses 1.34% 1.17% 1.07% 1.14% 1.00% 3
Expenses, net of reduction to custodian
expenses and/or voluntary waiver
of transfer agent fees 1.23% 1.17% 1.07% 1.14% 1.00%
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 73% 42% 63% 47% 45%

INFORMATION AND SERVICES

For More Information on Oppenheimer Quest Opportunity Value 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 send us a request by e-mail or read or
down-load documents on the OppenheimerFunds
website: WWW.OPPENHEIMERFUNDS.COM
------------------------------------------------------------------------------

Information about the Fund including the Statement of Additional Information can
be reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1.202.942.8090. Reports and other information about the Fund
are available on the EDGAR database on the SEC's Internet website at
WWW.SEC.GOV. Copies may be obtained after payment of a duplicating fee by
electronic request at the SEC's e-mail address: publicinfo@sec.gov or by writing
to the SEC's Public Reference Section, Washington, D.C. 20549-0102. No one has
been authorized to provide any information about the Fund or to make any
representations about the Fund other than what is contained in this Prospectus.
This Prospectus is not an offer to sell shares of the Fund, nor a solicitation
of an offer to buy shares of the Fund, to any person in any state or other
jurisdiction where it is unlawful to make such an offer.

The Fund's shares are distributed by: [logo] OppenheimerFunds Distributor,
Inc.
The Fund's SEC File No. 811-5225
PR0236.001.1202
Printed on recycled paper

Appendix to Prospectus of

Oppenheimer Quest Opportunity Value Fund

Graphic Material included in the Prospectus of Oppenheimer Quest
Opportunity Value Fund (the "Fund") under the heading: "Annual Total Returns
(Class A) (as of 12/31 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 A shares of the Fund
for the past ten calendar years, without deducting sales charges. Set forth
below are the relevant data points that will appear on the bar chart.

Calendar
Year Annual Total
Ended Return
----- ------
12/31/92 17.95%
12/31/93 8.20%
12/31/94 4.92%
12/31/95 41.98%
12/31/96 22.82%
12/31/97 20.14%
12/31/98 7.66%
12/31/99 9.27%
12/31/00 9.75%
12/31/01 -4.57%

------------------------------------------------------------------------------
Oppenheimer Quest Opportunity Value Fund
------------------------------------------------------------------------------

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

Statement of Additional Information dated December 23, 2002

This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Fund and supplements
information in the Prospectus dated December 23, 2002. 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 web site at
www.oppenheimerfunds.com.

Contents
Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks..
The Fund's Investment Policies.....................................
Other Investment Techniques and Strategies.........................
Investment Restrictions............................................
How the Fund is Managed ...............................................
Organization and History...........................................
Trustees and Officers of the Fund..................................
The Manager........................................................
Brokerage Policies of the Fund.........................................
Distribution and Service Plans.........................................
Performance of the Fund................................................

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

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

Appendix A: Ratings Definitions.....................................A-1
Appendix B: Corporate Industry Classifications......................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, the principal investment policies and the main
risks of the Fund are described in the Prospectus. This Statement of Additional
Information contains supplemental information about those policies and risks and
the types of securities that the Fund's investment Manager, OppenheimerFunds,
Inc., can select for the Fund. Additional information is also provided about the
strategies that the Fund may use to try to achieve its objective.

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

In selecting securities for the Fund's portfolio, the Sub-Advisor
evaluates the merits of particular securities primarily through the exercise of
its own investment analysis. In the case of corporate issuers, that process may
include, among other things, evaluation of the issuer's historical operations,
prospects for the industry of which the issuer is part, the issuer's financial
condition, its pending product developments and business (and those of
competitors), the effect of general market and economic conditions on the
issuer's business, and legislative proposals that might affect the issuer. In
the case of foreign securities, the Sub-Advisor may also consider the conditions
of a particular country's economy in relation to the U.S. economy or other
foreign economies, general political conditions in a country or region, the
effect of taxes, the efficiencies and costs of particular markets and other
factors when evaluating the securities of issuers in a particular country.

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

|_| Value Investing. In selecting equity investments for the Fund's
portfolio, the portfolio manager currently uses a value investing style. In
using a value approach, the portfolio manager seeks stock and other equity
securities that appear to be temporarily undervalued, by various measures, such
as price/earnings ratios. This approach is subject to change and may not
necessarily be used in all cases. Value investing seeks stocks having prices
that are low in relation to their real worth or future prospects, in the hope
that the Fund will realize appreciation in the value of its holdings when other
investors realize the intrinsic value of the stock.

Using value investing requires research as to the issuer's underlying
financial condition and prospects. While there are a variety of measures that
can be used to identify these securities, the portfolio manager looks primarily
at the issuer's price/earnings ratio, which is the stock's price divided by its
earnings per share. A stock having a price/earnings ratio lower than its
historical range, or the market as a whole or that of similar companies may
offer attractive investment opportunities.

|_| Preferred Stocks. 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.

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

|_| Rights and Warrants. The Fund can invest up to 5% of its total
assets in warrants but no more than 2% of its total assets may be invested in
warrants that are not listed on The New York Stock Exchange or The American
Stock Exchange. Those percentage limitations are fundamental policies. Warrants
basically are options to purchase equity securities at specific prices valid for
a specific period of time. Their prices do not necessarily move parallel to the
prices of the underlying securities. Rights are similar to warrants, but
normally have a short duration and are distributed directly by the issuer to its
shareholders. Rights and warrants have no voting rights, receive no dividends
and have no rights with respect to the assets of the issuer.

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

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

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

|X| Investments in Debt Securities. The Fund can invest in a variety of
domestic and foreign debt securities, including mortgage-backed securities,
investment-grade corporate debt securities and U.S. Government securities. It
might do so to seek its objective if and at times when the portfolio manager
believes that debt securities are preferable to equity investments. The Fund can
invest in those debt securities and other high-quality short-term debt
securities including money market instruments for liquidity or defensive
purposes. Because the Fund currently emphasizes investments in equity
securities, such as stocks, it is not anticipated that under normal market
conditions more than 50% of the Fund's assets will be invested in debt
securities. Foreign debt securities are subject to the risks of foreign
investing described below. In general, domestic and foreign debt securities are
also subject to two additional types of risks: credit risk and interest rate
risk.

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

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

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

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

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

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

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

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

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

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

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

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

|X| U.S. Government Securities. These are securities issued or guaranteed
by the U.S. Treasury or other U.S. Government agencies or federally-chartered
entities referred to as "instrumentalities." The obligations of U.S. Government
agencies or instrumentalities in which the Fund can invest may or may not be
guaranteed or supported by the "full faith and credit" of the United States.
"Full faith and credit" means generally that the taxing power of the U.S.
Government is pledged to the payment of interest and repayment of principal on a
security. If a security is not backed by the full faith and credit of the United
States, the owner of the security must look principally to the agency issuing
the obligation for repayment. The owner might not be able to assert a claim
against the United States if the issuing agency or instrumentality does not meet
its commitment. The Fund will invest in securities of U.S. Government agencies
and instrumentalities only if the Sub-Advisor is satisfied that the credit risk
with respect to the agency or instrumentality is minimal.

|_| U.S. Treasury Obligations. These include Treasury bills (which have
maturities of one year or less when issued), Treasury notes (which have
maturities of from one to ten years when issued), and Treasury bonds (which have
maturities of more than ten years when issued). Treasury securities are backed
by the full faith and credit of the United States as to timely payments of
interest and repayments of principal. They also can include U. S. Treasury
securities that have been "stripped" by a Federal Reserve Bank, zero-coupon U.S.
Treasury securities described below, and Treasury Inflation-Protection
Securities ("TIPS").

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

|_| Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. These include direct obligations and mortgage-related
securities that have different levels of credit support from the government.
Some are supported by the full faith and credit of the U.S. Government, such as
Government National Mortgage Association pass-through mortgage certificates
(called "Ginnie Maes"). Some are supported by the right of the issuer to borrow
from the U.S. Treasury under certain circumstances, such as Federal National
Mortgage Association bonds ("Fannie Maes"). Others are supported only by the
credit of the entity that issued them, such as Federal Home Loan Mortgage
Corporation obligations ("Freddie Macs").

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

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

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

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

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

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

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

|_| Federal Home Loan Mortgage Corporation Certificates. FHLMC, a
corporate instrumentality of the United States, issues FHLMC Certificates
representing interests in mortgage loans. FHLMC guarantees to each registered
holder of a FHLMC Certificate timely payment of the amounts representing a
holder's proportionate share in:
(i) interest payments less servicing and guarantee fees, (ii) principal
prepayments and
(iii) the ultimate collection of amounts representing the holder's
proportionate interest in principal payments on the mortgage loans in
the pool represented by the FHLMC Certificate, in each case whether
or not such amounts are actually received.

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

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

|X| Money Market Instruments. The following is a brief description of the
types of money market securities the Fund can invest in. Those money market
securities are high-quality, short-term debt instruments that are issued by the
U.S. Government, corporations, banks or other entities. They may have fixed,
variable or floating interest rates.

|_| U.S. Government Securities. These include obligations issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities.
|_| Bank Obligations. The Fund can buy time deposits, certificates of
deposit and bankers' acceptances. Time deposits, other than overnight deposits,
may be subject to withdrawal penalties, and if so, they are deemed to be
"illiquid" investments.

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

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

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

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

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

The Fund has no limitations on the type of issuer from whom these notes
will be purchased. However, in connection with such purchases and on an ongoing
basis, the Sub-Advisor will consider the earning power, cash flow and other
liquidity ratios of the issuer, and its ability to pay principal and interest on
demand, including a situation in which all holders of such notes made demand
simultaneously. Investments in master demand notes are subject to the limitation
on investments by the Fund in illiquid securities, described in the Prospectus.
The Fund does not intend that its investments in variable amount master demand
notes will exceed 5% of its total assets.

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

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

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

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

|_| Foreign Debt Obligations. The debt obligations of foreign
governments and their agencies and instrumentalities may or may not be supported
by the full faith and credit of the foreign government. The Fund can buy
securities issued by certain "supra-national" entities, which include entities
designated or supported by governments to promote economic reconstruction or
development, international banking organizations and related government
agencies. Examples are the International Bank for Reconstruction and Development
(commonly called the "World Bank"), the Asian Development bank and the
Inter-American Development Bank.

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

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

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

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

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

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

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

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 Investment Company Act of 1940 (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.

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

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

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

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

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

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

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

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

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

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

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

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

The Fund may also acquire restricted securities through private
placements. Those securities have contractual restrictions on their public
resale. Those restrictions might limit the Fund's ability to dispose of the
securities and might lower the amount the Fund could realize upon the sale.
The Fund has limitations that apply to purchases of restricted securities,
as stated in the Prospectus. Those percentage restrictions do not limit
purchases of restricted securities that are eligible for sale to qualified
institutional purchasers under Rule 144A of the Securities Act of 1933, if those
securities have been determined to be liquid by the Manager and the Sub-Advisor
under Board-approved guidelines. Those guidelines take into account the trading
activity for such securities and the availability of reliable pricing
information, among other factors. If there is a lack of trading interest in a
particular Rule 144A security, the Fund's holdings of that security may be
considered to be illiquid.

|X| Loans of Portfolio Securities. The Fund can lend its portfolio
securities to certain types of eligible borrowers approved by the Board of
Trustees. It may do so to try to provide income or to raise cash or income for
liquidity purposes. These loans are limited to not more than 10% of the value of
the Fund's total assets. There are some risks in connection with securities
lending. The Fund might experience a delay in receiving additional collateral to
secure a loan, or a delay in recovery of the loaned securities. The Fund
presently does not intend to engage in loans of securities.

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 must
both 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| Interfund Borrowing and Lending Arrangements. Consistent with its
fundamental policies and pursuant to an exemptive order issued by the Securities
and Exchange Commission ("SEC"), the Fund may engage in borrowing and lending
activities with other funds in the OppenheimerFunds complex. Borrowing money
from affiliated funds may afford the Fund the flexibility to use the most
cost-effective alternative to satisfy its borrowing requirements. Lending money
to an affiliated fund may allow the Fund to obtain a higher rate of return than
it could from interest rates on alternative short-term investments.
Implementation of interfund lending will be accomplished consistent with
applicable regulatory requirements, including the provisions of the SEC order.

o Interfund Borrowing. The Fund will not borrow from affiliated funds unless the
terms of the borrowing arrangement are at least as favorable as the terms the
Fund could otherwise negotiate with a third party. To assure that the Fund will
not be disadvantaged by borrowing from an affiliated fund, certain safeguards
may be implemented. Examples of these safeguards include the following:
o the Fund will not borrow money from affiliated funds unless the
interest rate is more favorable than available bank loan rates;
o the Fund's borrowing from affiliated funds must be consistent
with its investment objective and investment policies;
o the loan rates will be the average of the overnight repurchase
agreement rate available through the OppenheimerFunds joint
repurchase agreement account and a pre-established formula based
on quotations from independent banks to approximate the lowest
interest rate at which bank loans would be available to the Fund;
o if the Fund has outstanding borrowings from all sources greater
than 10% of its total assets, then the Fund must secure each
additional outstanding interfund loan by segregating liquid
assets of the Fund as collateral;
o the Fund cannot borrow from an affiliated fund in excess of 125%
of its total redemptions for the preceding seven days;
o each interfund loan may be repaid on any day by the Fund; and
o the Trustees will be provided with a report of all interfund loans and
the Trustees will monitor all such borrowings to ensure that the
Fund's participation is appropriate.

There is a risk that a borrowing fund could have a loan called on one
day's notice. In that circumstance, the Fund might have to borrow from a bank at
a higher interest cost if money to lend were not available from another
Oppenheimer fund.

o Interfund Lending. To assure that the Fund will not be disadvantaged by making
loans to affiliated funds, certain safeguards will be implemented. Examples of
these safeguards include the following:

o the Fund will not lend money to affiliated funds unless the interest
rate on such loan is determined to be reasonable under the
circumstances;
o the Fund may not make interfund loans in excess of 15% of its net
assets;
o an interfund loan to any one affiliated fund shall not exceed 5% of the
Fund's net assets;
o an interfund loan may not be outstanding for more than seven days; o each
interfund loan may be called on one business day's notice; and o the Manager
will provide the Trustees reports on all interfund loans
demonstrating that the Fund's participation is appropriate and
that the loan is consistent with its investment objectives and
policies.

When the Fund lends assets to another affiliated fund, the Fund is subject
to the credit that the borrowing fund fails to repay the loan.

Investment Restrictions

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

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

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

|_| The Fund cannot buy securities issued or guaranteed by any one issuer
if more than 5% of its total assets would be invested in securities of that
issuer. This limitation applies to 75% of the Fund's total assets.

|_| The Fund cannot purchase more than 10% of any class of security of any
issuer. All outstanding debt securities and all preferred stock of an issuer is
considered as one class. This restriction does not apply to securities issued by
the U.S. Government or any of its agencies or instrumentalities.

|_| The Fund cannot concentrate its investments. That means it cannot
invest 25% or more of its total assets in any industry. However, there is no
limitation on investments in U.S. Government securities. Moreover, if deemed
appropriate for seeking its investment objective, the Fund may invest less than
25% of its total assets (valued at the time of investment) in any one industry
classification used by the Fund for investment purposes. Under this restriction,
a foreign government is considered an "industry."

|_| The Fund cannot borrow money in excess of one third of the value of
its total assets. The Fund can borrow only from banks and only as a temporary
measure for extraordinary or emergency purposes. The Fund will make no
additional investments while borrowings exceed 5% of the Fund's total assets.
The Fund can borrow only if it maintains a 300% ratio of assets to borrowings at
all times in the manner set forth in the Investment Company Act of 1940.

|_| The Fund cannot make loans to any person or individual. However,
portfolio securities may be loaned by the Fund within the limits set forth in
the Prospectus and Statement of Additional Information.

|_| The Fund cannot invest in real estate or real estate limited
partnerships (direct participation programs). However, the Fund can purchase
securities of issuers that engage in real estate operations and securities that
are secured by real estate or interests in real estate.

|_| The Fund cannot invest for the purpose of exercising control or
management of another company.

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

|_| The Fund cannot invest in or hold securities of any issuer if officers
and Trustees of the Fund or officers and directors of its Manager or Sub-Advisor
individually beneficially own more than 1/2 of 1% of the securities of that
issuer and together own more than 5% of the securities of that issuer.

|_| The Fund cannot invest in physical commodities or physical commodity
contracts. However, the Fund may buy and sell hedging instruments to the extent
specified in its Prospectus and Statement of Additional Information from time to
time. The Fund can also buy and sell options, futures, and securities or other
instruments backed by physical commodities or whose investment return is linked
to changes in the price of physical commodities.

|_| The Fund cannot purchase warrants that would cause more than 5% of the
Fund's total assets to be invested in warrants, or more than 2% of its total
assets to be invested in warrants that are not listed on The New York Stock
Exchange or The American Stock Exchange.

|_| The Fund cannot pledge its assets, or assign or otherwise encumber its
assets in an amount in excess of 10% of the value of its net assets. It can
pledge, assign or encumber its assets only to secure borrowings that comply with
the limits set forth in the Fund's Prospectus and Statement of Additional
Information.

|_| The Fund cannot issue senior securities (as defined in the Investment
Company Act of 1940). However, the Fund can enter into repurchase agreements,
borrow money in accordance with the restrictions set forth in its other
fundamental policies and lend its portfolio securities.

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

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

|_| The Fund cannot make short sales or purchase securities on margin.
However, the Fund can make short-term borrowings when necessary for the
clearance of purchases of portfolio securities. Collateral arrangements in
connection with futures and options transactions are not deemed to be margin
transactions under this restriction.

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

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

How the Fund is Managed

Organization and History. The Fund is an open-end, diversified management
investment company. The Fund is one of three series of Oppenheimer Quest For
Value Funds (the "Trust"), an open-end management investment company organized
as a Massachusetts business trust in April 1987.

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

The Fund currently has five classes of shares: Class A, Class B, Class C,
Class N and Class Y. All classes invest in the same investment portfolio. Only
retirement plans may purchase Class N shares. Only certain institutional
investors may elect to purchase Class Y shares. Each class of shares:
o has its own dividends and distributions,
o pays certain expenses which may be different for the different classes,
o may have a different net asset value,
o may have separate voting rights on matters in which interests of one
class are different from interests of another class, and o votes as a
class on matters that affect that class alone.

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

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

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

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

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

Board of Trustees and Oversight Committees. The Fund is governed by a Board of
Trustees, which is responsible for protecting the interests of shareholders
under Massachusetts law. The Trustees meet periodically throughout the year to
oversee the Fund's activities, review its performance, and review the actions of
the Manager. Although the Fund will not normally hold annual meetings of its
shareholders, it may hold shareholder meetings from time to time on important
matters, and shareholders have the right to call a meeting to remove a Trustee
or to take other action described in the Fund's Declaration of Trust.

The Board of Trustees has an Audit Committee which is comprised solely of
Independent Trustees. The Audit Committee provides the Board with
recommendations regarding the selection of the Fund's independent auditor. The
Audit Committee also reviews the scope and results of audits and the audit fees
charged, reviews reports from the Fund's independent auditors concerning the
Fund's internal accounting procedures and controls, and reviews reports of the
Manager's internal auditor. The members of the Audit Committee are Paul Clinton
(Chairman), Thomas Courtney, Robert Galli, Lacy Herrmann and Brian Wruble. The
Audit Committee met 4 times during the Fund's fiscal year ended October 31,
2002.

Trustees and Officers of the Fund. Each of the Trustees is an "Independent
Trustee," as defined in the Investment Company Act. The Fund's Trustees and
officers and their positions held with the Fund and length of service in such
position(s) and their principal occupations and business affiliations during the
past five years are listed in the chart below. The information for the Trustees
also includes the dollar range of shares of the Fund as well as the aggregate
dollar range of shares beneficially owned in any of the Oppenheimer funds
overseen by the Trustees. All of the Trustees are also trustees or directors of
the following Oppenheimer funds (referred to as "Board III Funds"):

Rochester Portfolio Series, a series Bond Fund Series, a series fund
fund having one series: Limited-Term New having one series: Oppenheimer
York Municipal Fund Convertible Securities Fund
Rochester Fund Municipals Oppenheimer MidCap Fund

In addition to being a trustee or director of the Board I Funds, Mr. Galli
is also a director or trustee of 31 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 charges on Class A shares is waived for
that group because of the economies of sales efforts realized by the
Distributor.

Messrs. Murphy, Masterson, Molleur, Vottiero, Wixted and Zack, and Mses.
Bechtolt, Feld and Ives who are officers of the Fund, respectively hold the same
offices of one or more of the other Board III Funds as with the Fund. As of
November 27, 2002, the Trustees and officers of the Fund, as a group, owned of
record or beneficially less than 1% of each class of shares of the Fund. The
foregoing statement does not reflect ownership of shares of the Fund held of
record by an employee benefit plan for employees of the Manager, other than the
shares beneficially owned under the plan by the officers of the Fund listed
above. In addition, each Independent Trustee, and his or her family members, do
not own securities of either the Manager, Distributor or Sub-Advisor of the
Board III Funds or any person directly or indirectly controlling, controlled by
or under common control with the Manager, Distributor or Sub-Advisor.

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

-------------------------------------------------------------------------------------
Independent Trustees
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Principal Occupation(s) During Past 5 Dollar Aggregate
Dollar
Range Of
Shares
Beneficially
Owned in
Years; Range of Any of the
Position(s) Held Other Trusteeships/Directorships Held by Shares Oppenheimer
with Fund, Trustee; BeneficiallFunds
Length of Service, Number of Portfolios in Fund Complex Owned in Overseen
Age Currently Overseen by Trustee the Fund by Trustee
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
As of December 31,
2001
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Thomas W. Principal of Courtney Associates, Inc. $0 $10,001-$50,000
Courtney, (venture capital firm); former General
Chairman of the Partner of Trivest Venture Fund (private
Board of Trustees, venture capital fund); former President
Trustee since 1996 of Investment Counseling Federated
Age: 69 Investors, Inc.; Trustee of Cash Assets
Trust, a money market fund; Director of OCC Cash Reserves,
Inc. and Trustee of OCC Accumulation Trust, both of which are
open-end investment companies; Trustee of four funds for
Pacific Capital and Tax Free Trust of Arizona. Oversees 10
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Paul Y. Clinton, Principal of Clinton Management $10,001-$50Over
Trustee, since Associates, a financial and venture $100,000
1996 Age: 70. capital consulting firm; Trustee of
Capital Cash Management Trust, a money-market fund and
Narragansett Tax-Free Fund, a tax-exempt bond fund; Director
of OCC Cash Reserves, Inc. and Trustee of OCC Accumulation
Trust, both of which are open-end investment companies.
Formerly: Director, External Affairs, Kravco Corporation, a
national real estate owner and property management
corporation; President of Essex Management Corporation, a
management consulting company; a general partner of Capital
Growth Fund, a venture capital partnership; a general partner
of Essex Limited Partnership, an investment partnership;
President of Geneve Corp., a venture capital fund; Chairman
of Woodland Capital Corp., a small business investment
company; and Vice President of W.R. Grace & Co. Oversees 10
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Galli, A trustee or director of other $0 Over
Trustee since 1996 Oppenheimer funds. Formerly Vice Chairman $100,000
Age: 69 (October 1995-December 1997) of the
Manager. Oversees 41 portfolios in the OppenheimerFunds
complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Lacy B. Herrmann, Chairman and Chief Executive Officer of $0 $10,001-$50,000
Trustee since 1996 Aquila Management Corporation, the
Age: 73 sponsoring organization and manager,
administrator and/or sub-Adviser to the following open-end
investment companies, and Chairman of the Board of Trustees
and President of each: Churchill Cash Reserves Trust,
Aquila-Cascadia Equity Fund, Pacific Capital Cash Assets
Trust, Pacific Capital U.S. Treasuries Cash Assets Trust,
Pacific Capital Tax-Free Cash Assets Trust, Prime Cash Fund,
Narragansett Insured Tax-Free Income Fund, Tax-Free Fund For
Utah, Churchill Tax-Free Fund of Kentucky, Tax-Free Fund of
Colorado, Tax-Free Trust of Oregon, Tax-Free Trust of
Arizona, Hawaiian Tax-Free Trust, and Aquila Rocky Mountain
Equity Fund; Vice President, Director, Secretary, and
formerly Treasurer of Aquila Distributors, Inc., distributor
of the above funds; President and Chairman of the Board of
Trustees of Capital Cash Management Trust ("CCMT"), and an
Officer and Trustee/Director of its predecessors; President
and Director of STCM Management Company, Inc., sponsor and
adviser to CCMT; Chairman, President and a Director of InCap
Management Corporation, formerly sub-adviser and
administrator of Prime Cash Fund and Short Term Asset
Reserves; Director of OCC Cash Reserves, Inc., and Trustee of
OCC Accumulation Trust, both of which are open-end investment
companies; Trustee Emeritus of Brown University. Oversees 10
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian Wruble, Special Limited Partner (since January $1-$10,000 $50,001-$100,000
Trustee since 2001 1999) of Odyssey Investment Partners, LLC
Age: 59 (private equity investment); General
Partner (since September 1996) of Odyssey Partners, L.P.
(hedge fund in distribution since 1/1/97); Board of Governing
Trustees (since August 1990) of The Jackson Laboratory
(non-profit); Trustee (since May 1992) of Institute for
Advanced Study (educational institute); Trustee (since May
2000) of Research Foundation of AIMR (investment research,
non-profit); formerly Governor, Jerome Levy Economics
Institute of Bard College (economics research) (August
1990-September 2001); Director of Ray & Berendtson, Inc.
(executive search firm) (May 2000-April 2002). Oversees 10
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------

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

-------------------------------------------------------------------------------------
Officers of the Fund
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Principal Occupation(s) During Past 5 Years
Position(s) Held with
Fund,
Length of Service,
Age
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
John V. Murphy, Chairman, Chief Executive Officer and director (since June
President since 2001 2001) and President (since September 2000) of the Manager;
Age: 53 President and a director or trustee of other Oppenheimer
funds; President and a director (since July 2001) of
Oppenheimer Acquisition Corp. (the Manager's parent
holding company) and of Oppenheimer Partnership
Holdings, Inc. (a holding company subsidiary of the
Manager); a director (since November 2001) of
OppenheimerFunds Distributor, Inc. (a subsidiary of the
Manager); Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial
Services, Inc. (transfer agent subsidiaries of the
Manager); President and a director (since July 2001) of
OppenheimerFunds Legacy Program (a charitable trust
program established by the Manager); a director of the
investment advisory subsidiaries of the Manager: OFI
Institutional Asset Management, Inc. and Centennial
Asset Management Corporation (since November 2001),
HarbourView Asset Management Corporation and OFI Private
Investments, Inc. (since July 2001); President (since
November 1, 2001) and a director (since July 2001) of
Oppenheimer Real Asset Management, Inc.; a director
(since November 2001) of Trinity Investment Management
Corp. and Tremont Advisers, Inc. (Investment advisory
affiliates of the Manager); Executive Vice President
(since February 1997) of Massachusetts Mutual Life
Insurance Company (the Manager's parent company); a
director (since June 1995) of DLB Acquisition
Corporation (a holding company that owns the shares of
David L. Babson & Company, Inc.); formerly, Chief
Operating Officer (September 2000-June 2001) of the
Manager; President and trustee (November 1999-November
2001) of MML Series Investment Fund and MassMutual
Institutional Funds (open-end investment companies); a
director (September 1999-August 2000) of C.M. Life
Insurance Company; President, Chief Executive Officer
and director (September 1999-August 2000) of MML Bay
State Life Insurance Company; a director (June 1989-June
1998) of Emerald Isle Bancorp and Hibernia Savings Bank
(a wholly-owned subsidiary of Emerald Isle Bancorp).
Oversees 69 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of
Treasurer, Principal the Manager; Treasurer (since March 1999) of HarbourView
Financial and Asset Management Corporation, Shareholder Services, Inc.,
Accounting Officer Oppenheimer Real Asset Management Corporation, Shareholder
since 1999 Financial Services, Inc., Oppenheimer Partnership Holdings,
Age: 43 Inc., OFI Private Investments, Inc. (since March 2000),
OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since May 2000) and OFI
Institutional Asset Management, Inc. (since November
2000) (offshore fund management subsidiaries of the
Manager); Treasurer and Chief Financial Officer (since
May 2000) of Oppenheimer Trust Company (a trust company
subsidiary of the Manager); Assistant Treasurer (since
March 1999) of Oppenheimer Acquisition Corp. and
OppenheimerFunds Legacy Program (since April 2000);
formerly Principal and Chief Operating Officer (March
1995-March 1999), Bankers Trust Company-Mutual Fund
Services Division. An officer of 85 portfolios in the
OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Philip Vottiero, Vice President/Fund Accounting of the Manager (since March
Assistant Treasurer 2002; formerly Vice President/Corporate Accounting of the
since 2002 Manager (July 1999-March 2002) prior to which he was Chief
Age: 39 Financial Officer at Sovlink Corporation (April 1996-June
1999). An officer of 85 portfolios in the
OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Connie Bechtolt, Assistant Vice President of the Manager (since September
Assistant Treasurer 1998); formerly Manager/Fund Accounting (September
since 2002 1994-September 1998) of the Manager. An officer of 85
Age: 39 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Zack, Senior Vice President (since May 1985) and General Counsel
Secretary since 2001 (since February 2002) of the Manager; General Counsel and a
Age: 54 director (since November 2001) of OppenheimerFunds
Distributor, Inc.; Senior Vice President and General
Counsel (since November 2001) of HarbourView Asset
Management Corporation; Vice President and a director
(since November 2000) of Oppenheimer Partnership Holdings,
Inc.; Senior Vice President, General Counsel and a director
(since November 2001) of Shareholder Services, Inc.,
Shareholder Financial Services, Inc., OFI Private
Investments, Inc., Oppenheimer Trust Company and OFI
Institutional Asset Management, Inc.; General Counsel
(since November 2001) of Centennial Asset Management
Corporation; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Assistant
Secretary and a director (since November 2001) of
OppenheimerFunds International Ltd.; Vice President (since
November 2001) of OppenheimerFunds Legacy Program;
Secretary (since November 2001) of Oppenheimer Acquisition
Corp.; formerly Acting General Counsel (November
2001-February 2002) and Associate General Counsel (May
1981-October 2001) of the Manager; Assistant Secretary of
Shareholder Services, Inc. (May 1985-November 2001),
Shareholder Financial Services, Inc. (November
1989-November 2001); OppenheimerFunds International Ltd.
and Oppenheimer Millennium Funds plc (October 1997-November
2001). An officer of 85 portfolios in the OppenheimerFunds
complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Philip T. Masterson, Vice President and Assistant Counsel of the Manager (since
Assistant Secretary July 1998); formerly, an associate with Davis, Graham, &
since 2002 Stubbs LLP (January 1997-June 1998). An officer of 85 Age: 38
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Denis R. Molleur, Vice President and Senior Counsel of the Manager (since
Assistant Secretary July 1999); formerly a Vice President and Associate Counsel
since 2001 of the Manager (September 1995-July 1999). An officer of 82
Age: 45 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Katherine P. Feld, Vice President and Senior Counsel (since July 1999) of the
Assistant Secretary Manager; Vice President (since June 1990) of
since 2001 OppenheimerFunds Distributor, Inc.; Director, Vice
Age: 44 President and Assistant Secretary (since June 1999) of
Centennial Asset Management Corporation; Vice President
(since 1997) of Oppenheimer Real Asset Management, Inc.;
formerly Vice President and Associate Counsel of the
Manager (June 1990-July 1999). An officer of 85
portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Kathleen T. Ives, Vice President and Assistant Counsel (since June 1998) of
Assistant Secretary the Manager; Vice President (since 1999) of
since 2001 OppenheimerFunds Distributor, Inc.; Vice President and
Age: 37 Assistant Secretary (since 1999) of Shareholder Services,
Inc.; Assistant Secretary (since December 2001) of
OppenheimerFunds Legacy Program and Shareholder Financial
Services, Inc.; formerly Assistant Vice President and
Assistant Counsel of the Manager (August 1997-June 1998);
Assistant Counsel of the Manager (August 1994-August 1997).
An officer of 85 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------

|X| Remuneration of Trustees. The officers of the Fund who are affiliated
with the Manager receive no salary or fee from the Fund. The Trustees of the
Fund received the compensation shown below from the Fund with respect to the
Fund's fiscal year ended October 31, 2002. The compensation from all of the
Board III Funds (including the Fund) represents compensation received as a
director, trustee or member of a committee of the boards of those funds during
the calendar year December 31, 2001.

-------------------------------------------------------------------------------------
Trustee Name and Aggregate Retirement Estimated Total
Compensation
Annual From All
Retirement Oppenheimer
Benefits Paid Funds For Which
Benefits at Retirement Individual
Other Fund Accrued as from all Board Serves As
Position(s) Compensation Part of Fund III Funds Trustee/Director
(as applicable) From Fund1 Expenses (10 Funds) 2 (10 Funds)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Paul Y. Clinton $13,785 $10,274 $63,738 $157,3263
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Thomas W. Courtney $13,785 $13,508 $63,738 $157,3263
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Galli $13,785 $19,448 $55,678 2 $202,8864
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Lacy B. Herrmann $13,785 $3,870 $63,702 $157,3263
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian Wruble5 $8,409 $3,241 $7,606 $59,250
-------------------------------------------------------------------------------------
1. Aggregate compensation includes fees, deferred compensation, if any, and
retirement plan benefits accrued for a Trustee. 2. Estimated annual retirement
benefits paid at retirement is based on a straight life payment plan election.
The amount for Mr. Galli includes $30,689 for serving as a trustee or director
of 33 Oppenheimer funds that are not Board III Funds.
3. Total Compensation for the 2001 calendar year includes $60,200 compensation
paid by two funds (OCC Cash Reserve and OCC Accumulation Trust) for which the
Sub-Advisor acts as the investment advisor. 4. Includes $105,760 for Mr. Galli
for serving as trustee or director of 33 Oppenheimer funds that are not Board
III Funds.
5. Elected to the board on April 1, 2001.

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

|X| Major Shareholders. As of November 27, 2002, the only persons 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:

Merrill Lynch Pierce Fenner & Smith for the sole benefit of its customers,
Attn: Fund Admin. #97HX7, 4800 Deer Lake Drive, E, Fl 3, Jacksonville, FL
32246-6484, which owned 576,788.366 Class C shares (representing 7.34% of the
Class C shares then outstanding);

Smith Barney House Acct. #00109801250, Attn: Cindy Tempesta, 333 West 34th
Street, 7th Fl., New York, NY 10001-2483, which owned 604,527.156 Class C shares
(representing 7.69% of the Class C shares then outstanding);

RPSS TR Peco Foods Inc. 401(k) Plan, Attn: M. Foucher & S. Hudson, P.O.
Box 1760, Tuscaloosa, AL 35403-1760, which owned 51,400.696 Class N shares
(representing 8.96% of the Class N shares then outstanding);

Brian Anderson TR US Personel Inc. 401(k) Plan, 2300 Valley View Lane, Suite
300, Irving, TX 75062-1726, which owned 57,526.488 Class N shares (representing
10.03% of the Class N shares then outstanding);

Brian Anderson TR US Personel Inc. 401(k) Plan Previous HRC Plan Deposits,
2300 Valley View Lane, Suite 300, Irving, TX 75062-1726, which owned 31,662.990
Class N shares (representing 5.52% of the Class N shares then outstanding);

IBT & Co. CUST OppenheimerFunds Cap Accum Plan, Attn: MML037, 200 Clarendon
Street, FL 16, Boston, MA 02116-5021, which owned 107,684.982 Class Y shares
(representing 11.56% of the Class Y shares then outstanding);

Mass Mutual Life Insurance Co. Separate Investment Acct, Attn: N225, 1295
State Street, Springfield, MA 01111-0001, which owned 787,451.132 Class Y shares
(representing 84.59% of the Class Y shares then outstanding);

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

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

The Code of Ethics is an exhibit to the Fund's registration statement
filed with the Securities and Exchange Commission and can be reviewed and copied
at the SEC's Public Reference Room in Washington, D.C. You can obtain
information about the hours of operation of the Public Reference Room by calling
the SEC at 1.202.942.8090. The Code of Ethics can also be viewed as part of the
Fund's registration statement on the SEC's EDGAR database at the SEC's Internet
website at HTTP://WWW.SEC.GOV. Copies may be obtained, after paying a
duplication fee, by electronic request at the following E-mail address:
PUBLICINFO@SEC.GOV., or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.

|X| The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Fund under an investment advisory
agreement between the Manager and Fund's parent Trust. The Manager handles the
Fund's day-to-day business, and the agreement permits the Manager to enter into
Sub-Advisory agreements with other registered investment advisers to obtain
specialized services for the Fund, as long as the Fund is not obligated to pay
any additional fees for those services. The Manager has retained the Sub-Advisor
pursuant to a separate Sub-Advisory Agreement, described below, under which the
Sub-Advisor buys and sells portfolio securities for the Fund. The portfolio
manager of the Fund is employed by the Sub-Advisor and is the person who is
principally responsible for the day-to-day management of the Fund's portfolio,
as described below.

The investment advisory agreement between the Fund and the Manager
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. Expenses for the Trust's three series are allocated to the
series in proportion to their net assets, unless allocations of expenses can be
made directly to a series. The advisory agreement lists examples of expenses
paid by the Fund. The major categories relate to calculation of the Fund's net
asset values per share, interest, taxes, brokerage commissions, fees to certain
Trustees, legal and audit expenses, custodian and transfer agent expenses, share
issuance costs, certain printing and registration costs and non-recurring
expenses, including litigation costs. The management fees paid by the Fund to
the Manager are calculated at the rates described in the Prospectus, which are
applied to the assets of the Fund as a whole. The fees are allocated to each
class of shares based upon the relative proportion of the Fund's net assets
represented by that class.

----------------------------------------------------------------------
Fiscal Year ended 10/31: Management Fees Paid to
OppenheimerFunds, Inc. 1
----------------------------------------------------------------------
----------------------------------------------------------------------
2000 $30,169,099
----------------------------------------------------------------------
----------------------------------------------------------------------
2001 $26,309,036
----------------------------------------------------------------------
----------------------------------------------------------------------
2002 $22,626,612
----------------------------------------------------------------------
1.The Manager, not the Fund, pays the Sub-Advisor an annual sub-advisory fee.
For fiscal 2002, this sub-advisory fee was $6,711,712.

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 resulting from a good faith
error or omission on its part with respect to any of its duties under the
agreement.

The agreement permits the Manager to act as investment adviser for any
other person, firm or corporation and to use the names "Oppenheimer" and "Quest
for Value" 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 names "Oppenheimer" or "Quest for Value" as part of its name.

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

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

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

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

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

After careful deliberation the Board of Trustees concluded that it was in
the best interests of shareholders to continue the investment advisory agreement
for another year. In arriving at a decision, the Board did not single out any
one factor or group of factors as being more important than other factors, but
considered all factors together. The Board judged the terms and conditions of
the investment advisory agreement, including the investment advisory fee, in
light of all of the surrounding circumstances.

The Sub-Advisor. The Sub-Advisor is a wholly-owned subsidiary of Oppenheimer
Capital, a registered investment adviser. From the Fund's inception on April 30,
1980, until November 22, 1995, the Sub-Advisor (which was then named Quest for
Value Advisors) or the Sub-Advisor's parent served as the Fund's investment
advisor. The Sub-Advisor acts as investment adviser to other investment
companies and for individual investors.

The Sub-Advisor is a Delaware limited liability company which is
wholly-owned by Oppenheimer Capital LLC a wholly-owned subsidiary of Allianz
Dresdner Asset Management U.S. Equities LLC, which is wholly-owned by Allianz
Dresdner Asset Management of America L.P. (formerly PIMCO Advisors L.P.).
Allianz Dresdner Asset Management of America L.P. ("ADAM") is a Delaware limited
partnership whose sole general partner is Allianz-PacLife Partners LLC. Allianz
PacLife Partners LLC is a Delaware limited liability company with two members,
Allianz Dresdner Asset Management of America LLC, a Delaware limited liability
company, and Pacific Asset Management LLC, a Delaware limited liability company.
Allianz Dresdner Asset Management of America LLC is a wholly-owned subsidiary of
Allianz of America, Inc., which is wholly-owned subsidiary of Pacific Life
Insurance Company which is a wholly-owned subsidiary of Pacific Mutual Holding
Company. Allianz A.G. indirectly holds a controlling interest in ADAM. Allianz
AG is a European-based, multinational insurance and financial services holding
company. Pacific Life Insurance Company owns an indirect minority equity
interest in ADAM and is a California-based insurance company.

Allianz Dresdner Asset Management of America L.P. is a direct or indirect
parent company of the following SEC-registered investment advisors, all of which
are affiliated: Cadence Capital Management; NFJ Investment Group; Pacific
Investment Management Company LLC; the Sub-Advisor, Oppenheimer Capital LLC,
PIMCO Allianz Advisors LLC and PIMCO Funds Advisors LLC.

|X| The Sub-Advisory Agreement. Under the Sub-Advisory Agreement between
the Manager and the Sub-Advisor, the Sub-Advisor shall regularly provide
investment advice with respect to the Fund and invest and reinvest cash,
securities and the property comprising the assets of the Fund. Under the
Sub-Advisory Agreement, the Sub-Advisor agrees not to change the portfolio
manager of the Fund without the written approval of the Manager. The Sub-Advisor
also agrees to provide assistance in the distribution and marketing of the Fund.

Under the Sub-Advisory Agreement, the Manager pays the Sub-Advisor an
annual fee in monthly installments, based on the average daily net assets of the
Fund. The fee paid to the Sub-Advisor under the Sub-Advisory agreement is paid
by the Manager, not by the Fund. The fee is equal to 40% of the investment
advisory fee collected by the Manager from the Fund based on the total net
assets of the Fund as of November 22, 1995 (the "Base Amount") plus 30% of the
investment advisory fee collected by the Manager based on the total net assets
of the Fund that exceed the Base Amount.

The Sub-Advisory Agreement states that in the absence of willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations, the Sub-Advisor shall not be liable to the Manager for any act or
omission in the course of or connected with rendering services under the
Sub-Advisory Agreement or for any losses that may be sustained in the purchase,
holding or sale of any security.

Brokerage Policies of the Fund

Brokerage Provisions of the Investment Advisory Agreement and the Sub-Advisory
Agreement. One of the duties of the Sub-Advisor under the Sub-Advisory Agreement
is to arrange the portfolio transactions for the Fund. The Fund's investment
advisory agreement with the Manager and the Sub-Advisory Agreement contain
provisions relating to the employment of broker-dealers to effect the Fund's
portfolio transactions. The Manager and the Sub-Advisor are authorized to employ
broker-dealers, including "affiliated" brokers, as that term is defined in the
Investment Company Act. They may employ broker-dealers that the Manager thinks,
in its best judgment based on all relevant factors, will implement the policy of
the Fund to obtain, at reasonable expense, the "best execution" of the Fund's
portfolio transactions. "Best execution" means prompt and reliable execution at
the most favorable price obtainable.

The Manager and the Sub-Advisor need not seek competitive commission
bidding. However, they are 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.

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

The Sub-Advisory Agreement permits the Sub-Advisor to enter into
"soft-dollar" arrangements through the agency of third parties to obtain
services for the Fund. Pursuant to these arrangements, the Sub-Advisor will
undertake to place brokerage business with broker-dealers who pay third parties
that provide services. Any such "soft-dollar" arrangements will be made in
accordance with policies adopted by the Board of the Trust and in compliance
with applicable law.

Brokerage Practices. Brokerage for the Fund is allocated subject to the
provisions of the investment advisory agreement and the Sub-Advisory agreement
and the procedures and rules described above. Generally, the Sub-Advisor's
portfolio traders allocate brokerage based upon recommendations from the Fund's
portfolio manager. In certain instances, portfolio managers may directly place
trades and allocate brokerage. In either case, the Sub-Advisor's executive
officers supervise the allocation of brokerage.

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

The Sub-Advisor serves as investment manager to a number of clients,
including other investment companies, and may in the future act as investment
manager or advisor to others. It is the practice of the Sub-Advisor to allocate
purchase or sale transactions among the Fund and other clients whose assets it
manages in a manner it deems equitable. In making those allocations, the
Sub-Advisor considers several main factors, including the respective investment
objectives, the relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment, the size of investment
commitments generally held and the opinions of the persons responsible for
managing the portfolios of the Fund and each other client's accounts.

When orders to purchase or sell the same security on identical terms are
placed by more than one of the funds and/or other advisory accounts managed by
the Sub-Advisor or its affiliates, the transactions are generally executed as
received, although a fund or advisory account that does not direct trades to a
specific broker (these are called "free trades") usually will have its order
executed first. Orders placed by accounts that direct trades to a specific
broker will generally be executed after the free trades. All orders placed on
behalf of the Fund are considered free trades. However, having an order placed
first in the market does not necessarily guarantee the most favorable price.
Purchases are combined where possible for the purpose of negotiating brokerage
commissions. In some cases that practice might have a detrimental effect on the
price or volume of the security in a particular transaction for the Fund.

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

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

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

The research services provided by brokers broadens the scope and
supplements the research activities of the Sub-Advisor. That research provides
additional views and comparisons for consideration, and helps the Sub-Advisor 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 Sub-Advisor
provides information to the Manager and the Board about the concessions paid to
brokers furnishing such services, together with the Sub-Advisor's representation
that the amount of such concessions was reasonably related to the value or
benefit of such services.

-------------------------------------------------------------------------
Fiscal Year Ended: Total Brokerage Commissions Paid by
the Fund1
-------------------------------------------------------------------------
-------------------------------------------------------------------------

-------------------------------------------------------------------------
-------------------------------------------------------------------------
10/31/00 $4,555,503
-------------------------------------------------------------------------
-------------------------------------------------------------------------
10/31/01 $2,530,906
-------------------------------------------------------------------------
-------------------------------------------------------------------------
10/31/02 $3,238,5102
-------------------------------------------------------------------------
1. Amounts do not include spreads or commissions on principal transactions on a
net trade basis.
2. In the fiscal year ended 10/31/02, the amount of transactions directed to
brokers for research services was $22,012,871 and the amount of the
commissions paid to broker-dealers for those services was $67,640.

Distribution and Service Plans

The Distributor. Under its General Distributor's Agreement with the Trust, the
Distributor acts as the Fund's principal underwriter in the continuous public
offering of shares 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 then those furnished to existing
shareholders. The Distributor is not obligated to sell a specific number of
shares. Expenses normally attributable to sales are borne by the Distributor.

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

-----------------------------------
Aggregate Class A
Fiscal Front-End Front-End
Year Sales Sales
Ended Charges on Charges
10/31: Class A Retained
Shares by
Distributor1
-----------------------------------
-----------------------------------
2000 $2,360,212 $598,916
-----------------------------------
-----------------------------------
2001 $2,118,916 $525,862
-----------------------------------
-----------------------------------
2002 $2,242,946 $604,564
-----------------------------------
1. Includes amounts retained by a broker-dealer that is an affiliate or a parent
of the Distributor.
------------------------------------------------------------------
Fiscal Concessions on Concessions Concessions Concessions
Year Class A Shares on Class B on Class C on Class N
Ended Advanced by Shares Shares Shares
10/31: Distributor1 Advanced by Advanced by Advanced by
Distributor1 Distributor1 Distributor1
------------------------------------------------------------------
------------------------------------------------------------------
2000 $796,337 $2,961,258 $266,906 N/A
------------------------------------------------------------------
------------------------------------------------------------------
2001 $580,857 $2,741,448 $245,023 $21,769
------------------------------------------------------------------
------------------------------------------------------------------
2002 $521,551 $2,313,084 $320,261 $136,828
------------------------------------------------------------------
1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its
own resources at the time of sale.

-------------------------------------------------------------------------------------
Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Fiscal Deferred Sales Deferred Sales Deferred Sales Deferred Sales
Year Ended Charges Retained Charges Retained Charges Retained Charges Retained
10/31 by Distributor by Distributor by Distributor by Distributor
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
2002 $18,383 $1,972,164 $26,211 $12,689
-------------------------------------------------------------------------------------

Distribution and Service Plans. The Fund has adopted Distribution and Service
Plans for Class A, Class B, Class C and Class N shares under Rule 12b-1 of the
Investment Company Act. Under those plans the Fund compensates the Distributor
for all or a portion of its costs incurred in connection with the distribution
and/or servicing of the shares of the particular class.
Under the plans, the Manager and the Distributor may make payments to
affiliates and in their sole discretion, from time to time, may use their own
resources (at no direct cost to the Fund) to make payments to brokers, dealers
or other financial institutions for distribution and administrative services
they perform. The Manager may use its profits from the advisory fee it receives
from the Fund. In their sole discretion, the Distributor and the Manager may
increase or decrease the amount of payments they make from their own resources
to plan recipients.

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

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

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

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

|X| Service Plans. Under the service plans, the Distributor currently uses
the fees it receives from the Fund to pay brokers, dealers and other financial
institutions (they are referred to as "recipients") for personal services and
account maintenance services they provide for their customers who hold shares of
a particular Class, A, B, C or N. 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 service plans
permit compensation to the Distributor at a rate of up to 0.25% of average
annual net assets of the applicable class. The Board has set the rate at that
level. While the plans permit the Board to authorize payments to the Distributor
to reimburse itself for services under the plan, the Board has not yet done so,
except in the case of the special arrangement described below. The Distributor
makes payments to plan recipients quarterly at an annual rate not to exceed
0.25% of the average annual net assets consisting of shares of the applicable
class held in the accounts of the recipients or their customers.

|X| Service and Distribution Plan Fees. Under each plan, service fees and
distribution fees are computed on the average of the net asset value of shares
in the respective class, determined as of the close of each regular business day
during the period. The plans compensate the Distributor at a flat rate for its
services and costs in distributing shares and servicing accounts, whether the
Distributor's expenses are more or less than the amounts paid by the Fund under
the plans during the period for which the fee is paid. The types of services
that recipients provide are similar to the services provided under the service
plan described above. During the first year after the Class A shares are sold to
grandfathered retirement plans, the Distributor retains the service fee to
reimburse itself for the costs of distributing the shares.

The plans permit the Distributor to retain both the asset-based sales
charges and the service fees or to pay recipients the service fee on a quarterly
basis, without payment in advance. However, the Distributor currently intends to
pay the service fee to recipients in advance for the first year after the shares
are purchased. After the first year shares are outstanding, the Distributor
makes service fee payments quarterly on those shares. The advance payment is
based on the net asset value of shares sold. Shares purchased by exchange do not
qualify for the advance service fee payment. If 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.

Under the Class A plan, the Distributor pays the asset-based sales charge
to brokers, dealers and financial institutions. 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 it receives on Class C
shares as an ongoing commission to the recipient on Class C shares outstanding
for a year or more. If a dealer has a special agreement with the Distributor,
the Distributor will pay the Class B, Class C and/or Class N service fee and the
asset-based sales charge to the dealer quarterly in lieu of paying the sales
commissions and service fee in advance at the time of purchase.
The asset-based sales charges on Class B, Class C and Class N shares allow
investors to buy shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell those shares. The Fund pays the
asset-based sales charges to the Distributor for its services rendered in
distributing Class A, Class B, Class C and Class N shares. The payments are made
to the Distributor in recognition that the Distributor: o pays sales commissions
to authorized brokers and dealers at the time of
sale and pays service fees as described above,
o may finance payment of sales commissions and/or the advance of the
service fee payment to recipients under the plans, or may provide such
financing from its own resources or from the resources of an affiliate,
o employs personnel to support distribution of shares, and
o bears the costs of sales literature, advertising and prospectuses
(other than those furnished to current shareholders) and state "blue
sky" registration fees and certain other distribution expenses.
o may not be able to adequately compensate dealers that sell Class B,
Class C and Class N shares without receiving payment under the plans
and therefore may not be able to offer such Classes for sale absent the
plans,
o receives payments under the plans consistent with the service fees and
asset-based sales charges paid by other non-proprietary funds that
change 12b-1 fees,
o may use the payment 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 lesser cost,
the same quality distribution sales efforts and services, or to obtain
such services from brokers and dealers, if the plan payments were to be
discontinued.

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

-------------------------------------------------------------------------------
Distribution Fees Paid to the Distributor in the Fiscal Year Ended 10/31/02
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class: Total Amount Retained Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Payments Expenses Under of Net Assets
Under Plan1 by Distributor Plan of Class
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class A Plan $4,601,675 $96,903 N/A N/A
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class B Plan $9,828,641 $7,533,544 $4,754,526 0.69%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class C Plan $2,452,030 $294,145 $5,795,007 2.85%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class N Plan $51,303 $48,539 $276,277 1.86%
-------------------------------------------------------------------------------
1. Includes amount paid to an affiliate of the Distributor's parent company:
$195,861 (Class A), $82,889 (Class B) and $36,178 (Class C), $29 (Class N).

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

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.CALL.OPP
or by visiting the OppenheimerFunds Internet website at
http://www.oppenheimerfunds.com.

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

Use of standardized performance calculations enables an investor to
compare the Fund's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using the
Fund's performance information as a basis for comparison with other investments:

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

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

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

In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment ("P") (unless the return is shown without sales charge, as
described below). For Class B shares, payment of the applicable contingent
deferred sales charge is applied, depending on the period for which the return
is shown: 5.0% in the first year, 4.0% in the second year, 3.0% in the third and
fourth years, 2.0% in the fifth year, 1.0% in the sixth year and none
thereafter. For Class C shares, the 1% contingent deferred sales charge is
deducted for returns for the 1-year period. For Class N shares, the 1%
contingent deferred sales charge is deducted for returns for the one-year
period. Class N total returns may also be calculated for the periods prior to
3/1/01 (the inception date for Class N shares), based on the Fund's Class A
returns, adjusted to reflect the higher Class N 12b-1 fees. There is no sales
charge on Class Y shares.

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

|_| Average Annual Total Return (After Taxes on Distributions). The "average
annual total return (after taxes on distributions)" of Class A shares is an
average annual compounded rate of return for each year in a specified number of
years, adjusted to show the effect of federal taxes (calculated using the
highest individual marginal federal income tax rates in effect on any
reinvestment date) on any distributions made by the Fund during the specified
period. It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVD" in the formula) of
that investment, after taking into account the effect of taxes on Fund
distributions, but not on the redemption of Fund shares, according to the
following formula:

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

|_| Average Annual Total Return (After Taxes on Distributions and Redemptions).
The "average annual total return (after taxes on distributions and redemptions)"
of Class A shares is an average annual compounded rate of return for each year
in a specified number of years, adjusted to show the effect of federal taxes
(calculated using the highest individual marginal federal income tax rates in
effect on any reinvestment date) on any distributions made by the Fund during
the specified period and the effect of capital gains taxes or capital loss tax
benefits (each calculated using the highest federal individual capital gains tax
rate in effect on the redemption date) resulting from the redemption of the
shares at the end of the period. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n" in the formula) to achieve an ending value
("ATVDR" in the formula) of that investment, after taking into account the
effect of taxes on fund distributions and on the redemption of Fund shares,
according to the following formula:

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

--------------------------------------------------------------------------
Average Annual Total Returns for Class A Shares (After Sales Charge)
For the Periods Ended 10/31/02
--------------------------------------------------------------------------
--------------------------------------------------------------------------
1-Year 5-Year 10-Year
(or life of
class)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
After Taxes on Distributions -19.89% -1.80% 7.86%1
--------------------------------------------------------------------------
--------------------------------------------------------------------------
After Taxes on -11.83% -0.28% 7.48%1
Distributions and
Redemption of Fund Shares
--------------------------------------------------------------------------
1. Inception date of Class A: 1/3/89

|_| 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:

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

---------------------------------------------------------------------------------
The Fund's Total Returns for the Periods Ended 10/31/02
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cumulative Total Average Annual Total Returns
Class of Returns (10
Shares years or Life of
Class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
5-Year 10-Year
1-Year (or (or
life-of-class) life-of-class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
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 A1 141.62% 156.37% -19.51% -14.60% -0.20% 0.99% 9.22% 9.87%
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class B2 117.23% 117.23% -19.38% -15.16% 0.12% 0.41% 8.83% 8.83%
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class C3 112.96% 112.96% -16.00% -15.16% 0.43% 0.43% 8.60% 8.60%
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class N4 -20.43% -20.43% -15.62% -14.78% -12.81% -12.81% N/A N/A
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class Y5 28.07% 28.07% -14.34% -14.34% 1.39% 1.39% 4.30% 4.30%
---------------------------------------------------------------------------------
1. Inception of Class A: 1/3/89 2. Inception of Class B: 9/1/93 3. Inception of
Class C: 9/1/93 4. Inception of Class N: 3/01/01 5. Inception of Class Y:
12/16/96

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

|X| Lipper Rankings. From time to time the Fund may publish the ranking of
the performance of its classes of shares by Lipper, Inc. 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 based on stated fund classifications.
Lipper currently ranks the Fund's performance against all other flexible
portfolio funds. 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.

|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., an
independent mutual fund monitoring service. Morningstar rates mutual funds in
their specialized market sector. The Fund is rated among Large Value funds.

Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. For each fund with at least a three-year history,
Morningstar calculates a Morningstar Rating(TM) based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in a fund's monthly
performance (including the effects of sales charges, loads, and redemption
fees), placing more emphasis on downward variations and rewarding consistent
performance. The top 10% of funds in each category receive 5 stars, the next
22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2
stars, and the bottom 10% receive 1 star. (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.

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 Exchange normally closes at 4:00 P.M., but may close earlier on certain
days. If Federal Funds are received on a business day after the close of the
Exchange, the shares will be purchased and dividends will begin to accrue on the
next regular business day. The proceeds of ACH transfers are normally received
by the Fund three days after the transfers are initiated. If the proceeds of the
ACH transfer are not received on a timely basis, the Distributor reserves the
right to cancel the purchase order. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays in ACH
transmissions.

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

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

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

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

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

Centennial America Fund, L. P. Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust Centennial Tax Exempt Trust
Centennial Government Trust Oppenheimer Cash Reserves
Centennial Money Market Trust Oppenheimer Money Market Fund, Inc.
1 - "OSM" stands for Oppenheimer Select Managers

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

Letters of Intent. Under a Letter of Intent, if you purchase Class A shares or
Class A and Class B shares of the Fund and other Oppenheimer funds during a
13-month period, you can reduce the sales charge rate that applies to your
purchases of Class A shares. The total amount of your intended purchases of both
Class A and Class B shares will determine the reduced sales charge rate for the
Class A shares purchased during that period. You can include purchases made up
to 90 days before the date of the Letter. Letters of Intent do not consider
Class C or Class N shares you purchase or may have purchased.

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

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

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

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

The Transfer Agent will not hold shares in escrow for purchases of shares
of the Fund and other Oppenheimer funds by OppenheimerFunds prototype 401(k)
plans under a Letter of Intent. If the intended purchase amount under a Letter
of Intent entered into by an OppenheimerFunds prototype 401(k) plan is not
purchased by the plan by the end of the Letter of Intent period, there will be
no adjustment of 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 of Intent period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter in placing any purchase
orders for the investor during the Letter of Intent period. All of such
purchases must be made through the Distributor.

|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 of Intent period, the escrowed shares will be
promptly released to the investor.

3. If, at the end of the 13-month Letter of Intent period the total
purchases pursuant to the Letter are less than the intended purchase amount
specified in the Letter, the investor must remit to the Distributor an amount
equal to the difference between the dollar amount of sales charges actually paid
and the amount of sales charges which would have been paid if the total amount
purchased had been made at a single time. That sales charge adjustment will
apply to any shares redeemed prior to the completion of the Letter. If the
difference in sales charges is not paid within twenty days after a request from
the Distributor or the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed shares necessary to
realize such difference in sales charges. Full and fractional shares remaining
after such redemption will be released from escrow. If a request is received to
redeem escrowed shares prior to the payment of such additional sales charge, the
sales charge will be withheld from the redemption proceeds.

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

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

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

Asset Builder Plans. 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. Asset
Builder Plans also enable shareholders of Oppenheimer Cash Reserves to use their
fund account to make monthly automatic purchases of shares of up to four other
Oppenheimer funds.

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

Before you establish Asset Builder payments, you should obtain a
prospectus of the selected fund(s) from your financial advisor (or the
Distributor) and request an application from the Distributor. Complete the
application and return it. You may change the amount of your Asset Builder
payment or you can terminate these automatic investments at any time by writing
to the Transfer Agent. The Transfer Agent requires a reasonable period
(approximately 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 charge or at reduced sales charge rates, as
described in Appendix C to this Statement of Additional Information. Certain
special sales charge arrangements described in that Appendix apply to retirement
plans whose records are maintained on a daily valuation basis by Merrill Lynch
Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an independent record keeper
that has a contract or special arrangement with Merrill Lynch. If on the date
the plan sponsor signed the Merrill Lynch record keeping service agreement the
plan has less than $3 million in assets (other than assets invested in money
market funds) invested in applicable investments, then the retirement plan may
purchase only Class B shares of the Oppenheimer funds. Any retirement plans in
that category that currently invest in Class B shares of the Fund will have
their Class B shares converted to Class A shares of the Fund when the plan's
applicable investments reach $5 million. OppenheimerFunds has entered into
arrangements with certain record keepers whereby the Transfer Agent compensates
the record keeper for its record keeping and account servicing functions that it
performs on behalf of the participant level accounts of a retirement plan. While
such compensation may act to reduce the record keeping fees charged by the
retirement plan's record keeper, that compensation arrangement may be terminated
at any time, potentially affecting the record keeping fees charged by the
retirement plan's record keeper.

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

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

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

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

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

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

|X| Availability of Class N Shares. In addition to the description of the
types of retirement plans which may purchase Class N shares contained in the
prospectus, Class N shares also are offered to the following: o to all rollover
IRAs (including SEP IRAs and SIMPLE IRAs), o to all rollover contributions made
to Individual 401(k) plans,
Profit-Sharing Plans and Money Purchase Pension Plans, o to all
direct rollovers from OppenheimerFunds-sponsored Pinnacle and
Ascender retirement plans,
o to all trustee-to-trustee IRA transfers,
o to all 90-24 type 403(b) transfers,
o to Group Retirement Plans (as defined in Appendix C to this
Statement of Additional Information) which have entered into a
special agreement with the Distributor for that purpose,
o to Retirement Plans qualified under Sections 401(a) or 401(k) of the
Internal Revenue Code, the recordkeeper or the plan sponsor for
which has entered into a special agreement with the Distributor,
o to Retirement Plans of a plan sponsor where the aggregate assets of
all such plans invested in the Oppenheimer funds is $500,000 or
more,
o to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
purchase with the redemption proceeds of Class A shares of one or
more Oppenheimer funds.
o to certain customers of broker-dealers and financial advisors that
are identified in a special agreement between the broker-dealer or
financial advisor and the Distributor for that purpose.

The sales concession and the advance of the service fee, as described in
the Prospectus, will not be paid to dealers of record on sales of Class N shares
on:
o purchases of Class N shares in amounts of $500,000 or more by a
retirement plan that pays for the purchase with the redemption
proceeds of Class A shares of one or more Oppenheimer funds (other
than rollovers from an OppenheimerFunds-sponsored Pinnacle or
Ascender 401(k) plan to any IRA invested in the Oppenheimer funds),
o purchases of Class N shares in amounts of $500,000 or more by a
retirement plan that pays for the purchase with the redemption
proceeds of Class C shares of one or more Oppenheimer funds held by
the plan for more than one year (other than rollovers from an
OppenheimerFunds-sponsored Pinnacle or Ascender 401(k) plan to any
IRA invested in the Oppenheimer funds), and
o on purchases of Class N shares by an OppenheimerFunds-sponsored
Pinnacle or Ascender 401(k) plan made with the redemption proceeds
of Class A shares of one or more Oppenheimer funds.

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

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

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

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

Account Fees. As stated in the Prospectus, a $12 annual fee is assessed on
any account valued at less than $500. This fee will not be assessed on the
following accounts:
o Accounts that have balances below $500 due to the automatic conversion of
shares from Class B to Class A shares;
o Accounts with an active Asset Builder Plan, payroll deduction plan or a
military allotment plan;
o OppenheimerFunds-sponsored group retirement accounts that are making
continuing purchases;
o Certain accounts held by broker-dealers through the National Securities
Clearing Corporation; and
o Accounts that fall below the $500 threshold due solely to market
fluctuations within the 12-month period preceding the date the fee is
deducted.

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

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

Dealers other than Exchange members may conduct trading in certain
securities on days on which the Exchange is closed (including weekends and
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 European and Asian stock
exchanges and over-the-counter markets normally is completed before the close of
The Exchange.

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

|X| Securities Valuation. The Fund's Board of Trustees has established
procedures for the valuation of the Fund's securities. In general those
procedures are as follows:
o Equity securities traded on a U.S. securities exchange or on Nasdaq(R)
are valued as follows:
(1) if last sale information is regularly reported, they are valued at the
last reported sale price on the principal exchange on which
they are traded or on Nasdaq, as applicable, on that day, or
(2) if last sale information is not available on a valuation date,
they are valued at the last reported sale price preceding the
valuation date if it is within the spread of the closing "bid"
and "asked" prices on the valuation date or, if not, at the
closing "bid" price on the valuation date.
o Equity securities traded on a foreign securities exchange generally are valued
in one of the following ways: (1) at the last sale price available to the
pricing service approved by the
Board of Trustees, or
(2) at the last sale price obtained by the Manager from the report of
the principal exchange on which the security is traded at its
last trading session on or immediately before the valuation date,
or
(3) at the mean between the "bid" and "asked" prices obtained from
the principal exchange on which the security is traded or, on the
basis of reasonable inquiry, from two market makers in the
security.
o Long-term debt securities having a remaining maturity in excess of 60 days are
valued based on the mean between the "bid" and "asked" prices determined by a
portfolio pricing service approved by 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 London foreign exchange market on a particular
business day that are provided to the Manager by a bank, dealer or pricing
service that the Manager has determined to be reliable are used to value foreign
currency, including forward contracts, and to convert to U.S. dollars securities
that are denominated in foreign currency.

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

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

How to Sell Shares

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

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

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

The reinvestment may be made without sales charge only in Class A shares
of the Fund 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,
Class N or Class Y shares. The Fund may amend, suspend or cease offering this
reinvestment privilege at any time as to shares redeemed after the date of such
amendment, suspension or cessation.

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

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

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

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

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

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

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

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

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

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

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

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 Statement of
Additional Information).

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

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

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

The Transfer Agent will administer the investor's Automatic Withdrawal
Plan as agent for the shareholder(s) (the "Planholder") who executed the Plan
authorization and application submitted to the Transfer Agent. Neither the Fund
nor the Transfer Agent shall incur any liability to the Planholder for any
action taken or not taken by the Transfer Agent in good faith to administer the
Plan. Share certificates will not be issued for shares of the Fund purchased for
and held under the Plan, but the Transfer Agent will credit all such shares to
the account of the Planholder on the records of the Fund. Any share certificates
held by a Planholder may be surrendered unendorsed to the Transfer Agent with
the Plan application so that the shares represented by the certificate may be
held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done at
net asset value without a sales charge. Dividends on shares held in the account
may be paid in cash or reinvested.

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

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

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

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

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

How to Exchange Shares

As stated in the Prospectus, shares of a particular class of Oppenheimer funds
having more than one class of shares may be exchanged only for shares of the
same class of other Oppenheimer funds. Shares of Oppenheimer funds that have a
single class without a class designation are deemed "Class A" shares for this
purpose. You can obtain a current list showing which funds offer which classes
of shares by calling the Distributor.

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

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

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

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

o Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
shares of any other fund.
o Class B, Class C and Class N shares of Oppenheimer Cash Reserves are
generally available only by exchange from the same class of shares of
other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k)
plans.
o Class M shares of Oppenheimer Convertible Securities Fund may be exchanged
only for Class A shares of other Oppenheimer funds. They may not be
acquired by exchange of shares of any class of any other Oppenheimer funds
except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash
Reserves acquired by exchange of Class M shares.
o Class X shares of Limited Term New York Municipal Fund may be exchanged
only for Class B shares of other Oppenheimer funds and no exchanges may be
made to Class X shares.
o Shares of Oppenheimer Capital Preservation Fund may not be exchanged for
shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves
or Oppenheimer Limited-Term Government Fund. Only participants in certain
retirement plans may purchase shares of Oppenheimer Capital Preservation
Fund, and only those participants may exchange shares of other Oppenheimer
funds for shares of Oppenheimer Capital Preservation Fund.
o Class A shares of Oppenheimer Senior Floating Rate Fund are not available
by exchange of shares of Oppenheimer Money Market Fund or Class A shares
of Oppenheimer Cash Reserves.
o Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund and
Oppenheimer Select Managers QM Active Balanced Fund are only available to
retirement plans and are available only by exchange from the same class of
shares of other Oppenheimer funds held by retirement plans.
o Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any money market fund offered by the Distributor. Shares of
any money market fund purchased without a sales charge may be exchanged
for shares of Oppenheimer funds offered with a sales charge upon payment
of the sales charge. They may also be used to purchase shares of
Oppenheimer funds subject to an early withdrawal charge or contingent
deferred sales charge.
o Shares of Oppenheimer Money Market Fund, Inc. purchased with the
redemption proceeds of shares of other mutual funds (other than funds
managed by the Manager or its subsidiaries) redeemed within the 30 days
prior to that purchase may subsequently be exchanged for shares of
other Oppenheimer funds without being subject to an initial sales
charge or contingent deferred sales charge. To qualify for that
privilege, the investor or the investor's dealer must notify the
Distributor of eligibility for this privilege at the time the shares of
Oppenheimer Money Market Fund, Inc. are purchased. If requested, they
must supply proof of entitlement to this privilege.
o Shares of the Fund acquired by reinvestment of dividends or distributions
from any of the other Oppenheimer funds or from any unit investment trust
for which reinvestment arrangements have been made with the Distributor
may be exchanged at net asset value for shares of any of the Oppenheimer
funds.

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

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

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

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

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

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

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

o With respect to Class C shares, the Class C contingent deferred sales charge
is imposed on Class C shares acquired by exchange if they are redeemed within 12
months of the initial purchase of the exchanged Class C shares.

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

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

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

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

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

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

When you exchange some or all of your shares from one fund to another, any
special account feature such as an Asset Builder Plan or Automatic Withdrawal
Plan, will be switched to the new fund account unless you tell the Transfer
Agent not to do so. However, special redemption and exchange features such as
Automatic Exchange Plans and Automatic Withdrawal Plans cannot be switched to an
account in Oppenheimer Senior Floating Rate Fund.

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

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

Dividends, Capital Gains and Taxes

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

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

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

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

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

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

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

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

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

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.

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

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

The Fund will be required in certain cases to withhold 30% (29% for
payments after December 31, 2003) of ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any
shareholder (1) who has failed to provide a correct taxpayer identification
number or to properly certify that number when required, (2) who is subject to
backup withholding for failure to report the receipt of interest or dividend
income properly, or (3) who has failed to certify to the Fund that the
shareholder is not subject to backup withholding or is an "exempt recipient"
(such as a corporation). All income and any tax withheld by the Fund is remitted
by the Fund to the U.S. Treasury and is identified in reports mailed to
shareholders in January of each year.

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

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

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

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

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

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

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

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

Additional Information About the Fund

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

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

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

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

INDEPENDENT AUDITORS' REPORT

--------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Quest Opportunity Value Fund:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Quest Opportunity Value Fund, including the statement of
investments, as of October 31, 2002, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of
the two years in the period then ended, and the financial highlights for each
of the three years in the 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. The financial highlights for each of
the two years in the period ended October 31, 1999, were audited by other
auditors whose report dated November 19, 1999, expressed an unqualified opinion
on this information.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of October 31, 2002, 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 Quest Opportunity Value Fund as of October 31, 2002, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the three years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.

KPMG LLP

Denver, Colorado
November 21, 2002

STATEMENT OF INVESTMENTS October 31, 2002

Market Value
Shares See Note 1
--------------------------------------------------------------------------------
Common Stocks--68.0%

Consumer Discretionary--8.2%
--------------------------------------------------------------------------------
Hotels, Restaurants & Leisure--3.2%
McDonald's Corp. 3,750,000 $ 67,912,500
--------------------------------------------------------------------------------
Media--4.1%
Clear Channel
Communications,
Inc. 1 500,000 18,525,000
--------------------------------------------------------------------------------
General Motors
Corp., Cl. H 1 6,836,600 67,340,510
-----------------
85,865,510
--------------------------------------------------------------------------------
Multiline Retail--0.9%
Dollar General Corp. 1,400,000 19,544,000
--------------------------------------------------------------------------------
Consumer Staples--1.4%
--------------------------------------------------------------------------------
Food & Drug Retailing--1.4%
CVS Corp. 1,067,900 29,612,867
--------------------------------------------------------------------------------
Energy--7.4%
--------------------------------------------------------------------------------
Oil & Gas--7.4%
Anadarko
Petroleum Corp. 500,000 22,270,000
--------------------------------------------------------------------------------
ChevronTexaco Corp. 921,074 62,292,235
--------------------------------------------------------------------------------
ConocoPhillips 1,500,000 72,750,000
-----------------
157,312,235

--------------------------------------------------------------------------------
Financials--32.8%
--------------------------------------------------------------------------------
Banks--11.7%
M&T Bank Corp. 1,096,500 89,825,280
--------------------------------------------------------------------------------
PNC Financial
Services Group 63,900 2,598,174
--------------------------------------------------------------------------------
Wells Fargo Co. 3,100,000 156,457,000
-----------------
248,880,454

--------------------------------------------------------------------------------
Diversified Financials--17.5%
Citigroup, Inc. 2,186,333 80,785,004
--------------------------------------------------------------------------------
Fannie Mae 600,000 40,116,000
--------------------------------------------------------------------------------
Freddie Mac 3,300,000 203,214,000
-------------------------------------------------------------------------------
Household
International, Inc. 1,950,000 46,332,000
-----------------
370,447,004

Market Value
Shares See Note 1
--------------------------------------------------------------------------------
Insurance--3.6%
--------------------------------------------------------------------------------
John Hancock
Financial Services, Inc. 580,000 $ 16,994,000
--------------------------------------------------------------------------------
Travelers Property
Casualty Corp., Cl. A 1 2,232,088 29,798,375
--------------------------------------------------------------------------------
UnumProvident
Corp. 1,400,000 28,728,000
-----------------
75,520,375

--------------------------------------------------------------------------------
Health Care--2.9%
--------------------------------------------------------------------------------
Biotechnology--1.1%
Wyeth 700,000 23,450,000
--------------------------------------------------------------------------------
Pharmaceuticals--1.8%
Bristol-Myers
Squibb Co. 750,000 18,457,500
--------------------------------------------------------------------------------
Pharmacia Corp. 441,700 18,993,100
-----------------
37,450,600

--------------------------------------------------------------------------------
Industrials--4.7%
--------------------------------------------------------------------------------
Aerospace & Defense--2.7%
Boeing Co. 1,955,000 58,161,250
--------------------------------------------------------------------------------
Machinery--2.0%
ITT Industries, Inc. 637,000 41,392,260
--------------------------------------------------------------------------------
Information Technology--0.9%
--------------------------------------------------------------------------------
Computers & Peripherals--0.3%
EMC Corp. 1 1,382,500 7,064,575
--------------------------------------------------------------------------------
Semiconductor Equipment & Products--0.1%
Agere Systems,
Inc., Cl. A 1 1,455,900 1,266,633
--------------------------------------------------------------------------------
Software--0.5%
Microsoft Corp. 1 200,000 10,694,000
--------------------------------------------------------------------------------
Materials--5.7%
--------------------------------------------------------------------------------
Metals & Mining--5.7%
Alcan, Inc. 3,400,000 95,710,000
--------------------------------------------------------------------------------
Alcoa, Inc. 1,143,700 25,230,022
-----------------
120,940,022

13 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

STATEMENT OF INVESTMENTS Continued

Market Value
Shares See Note 1
--------------------------------------------------------------------------------
Telecommunication Services--0.9%
--------------------------------------------------------------------------------
Diversified Telecommunication Services--0.7%
Sprint Corp.
(Fon Group) 1,200,000 $ 14,904,000
--------------------------------------------------------------------------------
Wireless Telecommunication Services--0.2%
AT&T Corp. 1 500,000 2,875,000
--------------------------------------------------------------------------------
Utilities--3.1%
--------------------------------------------------------------------------------
Electric Utilities--2.1%
Exelon Corp. 900,000 45,360,000
--------------------------------------------------------------------------------
Gas Utilities--1.0%
NiSource, Inc. 1,250,000 20,650,000
-----------------
Total Common Stocks
(Cost $1,360,033,282) 1,439,303,285

Principal
Amount
--------------------------------------------------------------------------------
U.S. Government Obligations--21.5% U.S. Treasury Bonds,
5.375%, 2/15/31 $ 25,000,000 26,395,525
--------------------------------------------------------------------------------
U.S. Treasury Nts.,
5.75%, 11/15/05 388,000,000 429,179,604
-----------------
Total U.S. Government Obligations
(Cost $453,196,476) 455,575,129

Principal Market Value
Amount See Note 1
--------------------------------------------------------------------------------
Short-Term Notes--9.0%
American Express
Credit Corp.:
2%, 11/7/02 $ 45,000,000 $ 44,986,950
2%, 11/12/02 25,000,000 24,986,708
--------------------------------------------------------------------------------
Federal Home
Loan Bank,
1.63%, 11/4/02 90,000,000 89,987,775
--------------------------------------------------------------------------------
General Electric
Capital Corp.,
1.75%, 11/1/02 20,000,000 20,000,000
--------------------------------------------------------------------------------
Student Loan
Marketing
Assn., 1.72%, 11/1/02 11,606,000 11,606,000
-----------------
Total Short-Term Notes
(Cost $191,567,433) 191,567,433

--------------------------------------------------------------------------------
Total Investments, at Value
(Cost $2,004,797,191) 98.5% 2,086,445,847
--------------------------------------------------------------------------------
Other Assets Net of
Liabilities 1.5 30,738,576
-----------------------------------
Net Assets 100.0% $2,117,184,423
===================================

Footnotes to Statement of Investments
1. Non-income producing security.

See accompanying Notes to Financial Statements.

14 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES October 31, 2002

--------------------------------------------------------------------------------
Assets

Investments, at value (cost $2,004,797,191)--
see accompanying statement $2,086,445,847
--------------------------------------------------------------------------------
Cash 890,257
--------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 22,054,696
Interest and dividends 12,805,382
Shares of beneficial interest sold 2,371,244
Other 94,133
----------------
Total assets 2,124,661,559

--------------------------------------------------------------------------------
Liabilities

Payables and other liabilities:
Shares of beneficial interest redeemed 3,195,941
Investments purchased 2,442,192
Transfer and shareholder servicing agent fees 503,212
Distribution and service plan fees 446,298
Shareholder reports 407,100
Trustees' compensation 344,758
Other 137,635
----------------
Total liabilities 7,477,136

--------------------------------------------------------------------------------
Net Assets $2,117,184,423
================

--------------------------------------------------------------------------------
Composition of Net Assets

Par value of shares of beneficial interest $ 809,806
--------------------------------------------------------------------------------
Additional paid-in capital 2,218,868,261
--------------------------------------------------------------------------------
Undistributed net investment income 10,122,924
--------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (194,265,224)
--------------------------------------------------------------------------------
Net unrealized appreciation on investments 81,648,656
----------------
Net Assets $2,117,184,423
================

15 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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
$1,181,014,168 and 44,715,132 shares of
beneficial interest outstanding) $26.41
Maximum offering price per share (net
asset value plus sales charge
of 5.75% of offering price) $28.02
--------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $693,379,838
and 26,882,045 shares of beneficial interest outstanding) $25.79
--------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $203,489,658
and 7,895,268 shares of beneficial interest outstanding) $25.77
--------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $14,843,003
and 566,242 shares of beneficial interest outstanding) $26.21
--------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $24,457,756 and 921,872 shares
of beneficial interest outstanding) $26.53

See accompanying Notes to Financial Statements.

16 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

STATEMENT OF OPERATIONS For the Year Ended October 31, 2002

--------------------------------------------------------------------------------
Investment Income

Interest $ 31,073,722
--------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $237,150) 28,976,810
---------------
Total investment income 60,050,532

--------------------------------------------------------------------------------
Expenses

Management fees 22,626,612
--------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 4,601,675
Class B 9,828,641
Class C 2,452,030
Class N 51,303
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 3,206,222
Class B 2,470,004
Class C 585,046
Class N 34,800
Class Y 120,140
--------------------------------------------------------------------------------
Shareholder reports 688,820
--------------------------------------------------------------------------------
Trustees' compensation 113,890
--------------------------------------------------------------------------------
Custodian fees and expenses 51,486
--------------------------------------------------------------------------------
Other 118,713
---------------
Total expenses 46,949,382
Less reduction to custodian expenses (1,184)
Less voluntary waiver of transfer and
shareholder servicing agent fees--
Classes A, B, C and N (17,401)
Less voluntary waiver of transfer and
shareholder servicing agent fees-- Class Y (32,533)
---------------
Net expenses 46,898,264

--------------------------------------------------------------------------------
Net Investment Income 13,152,268

--------------------------------------------------------------------------------
Realized and Unrealized Loss

Net realized loss on investments (167,047,784)
--------------------------------------------------------------------------------
Net change in unrealized depreciation on investments (240,811,400)
---------------
Net realized and unrealized loss (407,859,184)

--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations $(394,706,916)
===============

See accompanying Notes to Financial Statements.

17 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

STATEMENTS OF CHANGES IN NET ASSETS

Year Ended October 31, 2002 2001
------------------------------------------------------------------------------------------

Operations

Net investment income $ 13,152,268 $ 20,933,212
------------------------------------------------------------------------------------------
Net realized loss (167,047,784) (5,569,382)
------------------------------------------------------------------------------------------
Net change in unrealized depreciation (240,811,400) (100,105,976)
-------------------------------------
Net decrease in net assets resulting from operations (394,706,916) (84,742,146)

------------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders

Dividends from net investment income:
Class A (15,901,977) (20,887,533)
Class B (6,149,541) (13,318,325)
Class C (1,540,507) (2,835,364)
Class N (56,109) --
Class Y (378,333) (834,807)
------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (119,859,705)
Class B -- (128,333,379)
Class C -- (26,426,237)
Class N -- --
Class Y -- (3,674,627)

------------------------------------------------------------------------------------------
Beneficial Interest Transactions

Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class A 117,293,913 140,063,389
Class B (314,532,059) (58,607,213)
Class C (13,709,069) 8,428,712
Class N 14,922,973 2,416,386
Class Y (18,471,746) 13,330,360

------------------------------------------------------------------------------------------
Net Assets

Total decrease (633,229,371) (295,280,489)
------------------------------------------------------------------------------------------
Beginning of period 2,750,413,794 3,045,694,283
-------------------------------------
End of period [including undistributed net
investment income of $10,122,924 and $20,997,123,
respectively] $2,117,184,423 $2,750,413,794
=====================================

See accompanying Notes to Financial Statements.

18 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

FINANCIAL HIGHLIGHTS

Class A Year Ended October 31 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 (14.60)% (2.79)% 2.82% 16.31% 5.83%

See accompanying Notes to Financial Statements.

19 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class B Year Ended October 31 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 (15.16)% (3.40)% 2.23% 15.72% 5.29%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

See accompanying Notes to Financial Statements.

20 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

Class C Year Ended October 31 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 (15.16)% (3.37)% 2.26% 15.74% 5.29%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

See accompanying Notes to Financial Statements.

21 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class N Year Ended October 31 2002 2001 1
---------------------------------------------------------------------------------------------

Per Share Operating Data

---------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 (14.78)% (6.63)%

---------------------------------------------------------------------------------------------
Ratios/Supplemental Data

See accompanying Notes to Financial Statements.

OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

Class Y Year Ended October 31 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1 (14.34)% (2.48)% 3.30% 16.74% 6.38%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

See accompanying Notes to Financial Statements.

23 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Quest Opportunity Value Fund (the Fund), a series of Oppenheimer
Quest For Value Funds, is an open-end management investment company registered
under the Investment Company Act of 1940, as amended. The Fund's investment
objective is to seek growth of capital. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Manager has entered into a
sub-advisory agreement with OpCap Advisors.

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

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

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

--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.

24 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

During the fiscal year ended October 31, 2002, the Fund did not utilize any
capital loss carryforward.

As of October 31, 2002, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:

Expiring
----------------------
2009 $ 11,666,725
2010 170,810,990
------------
Total $182,477,715
============

-------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted a nonfunded 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
October 31, 2002, the Fund's projected benefit obligations were increased by
$50,341 and payments of $8,954 were made to retired trustees, resulting in an
accumulated liability of $340,779 as of October 31, 2002.

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

--------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.

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

25 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

--------------------------------------------------------------------------------
1. Significant Accounting Policies Continued

The tax character of distributions paid during the year ended October 31, 2002
and year ended October 31, 2001 was as follows:

Year Ended Year Ended
October 31, 2002 October 31, 2001
----------------------------------------------------------
Distributions paid from:
Ordinary income $24,026,467 $ 49,233,700
Long-term capital gain -- 266,936,277
Return of capital -- --
-----------------------------
Total $24,026,467 $316,169,977
=============================

As of October 31, 2002, the components of distributable earnings on a tax basis
were as follows:

Undistributed net investment income $ 10,122,924
Accumulated net realized loss (194,265,224)
Net unrealized appreciation 81,648,656
-------------
Total $(102,493,644)
=============

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

--------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.

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

26 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

--------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:

Year Ended October 31, 2002 Year Ended October 31, 2001 1
Shares Amount Shares Amount
-----------------------------------------------------------------------------------------------------

Class A
Sold 14,738,098 $ 441,197,976 9,112,778 $ 306,084,416
Dividends and/or
distributions reinvested 463,238 14,754,127 4,060,629 132,011,185
Redeemed (11,574,654) (338,658,190) (8,859,978) (298,032,212)
--------------------------------------------------------------------------
Net increase 3,626,682 $ 117,293,913 4,313,429 $ 140,063,389
==========================================================================

-----------------------------------------------------------------------------------------------------
Class B
Sold 2,934,475 $ 87,327,724 3,130,052 $ 102,546,742
Dividends and/or
distributions reinvested 178,950 5,599,347 4,061,616 129,646,793
Redeemed (14,116,397) (407,459,130) (8,832,524) (290,800,748)
--------------------------------------------------------------------------
Net decrease (11,002,972) $(314,532,059) (1,640,856) $ (58,607,213)
==========================================================================

-----------------------------------------------------------------------------------------------------
Class C
Sold 1,336,866 $ 39,503,632 1,015,523 $ 33,157,102
Dividends and/or
distributions reinvested 43,323 1,354,281 805,511 25,703,865
Redeemed (1,916,590) (54,566,982) (1,535,333) (50,432,255)
--------------------------------------------------------------------------
Net increase (decrease) (536,401) $ (13,709,069) 285,701 $ 8,428,712
==========================================================================

-----------------------------------------------------------------------------------------------------
Class N
Sold 587,227 $ 17,677,458 75,082 $ 2,472,335
Dividends and/or
distributions reinvested 1,771 56,093 -- --
Redeemed (96,091) (2,810,578) (1,747) (55,949)
--------------------------------------------------------------------------
Net increase 492,907 $ 14,922,973 73,335 $ 2,416,386
==========================================================================

-----------------------------------------------------------------------------------------------------
Class Y
Sold 415,522 $ 12,503,449 663,752 $ 22,478,978
Dividends and/or
distributions reinvested 11,852 378,332 138,666 4,509,433
Redeemed (1,000,613) (31,353,527) (410,435) (13,658,051)
--------------------------------------------------------------------------
Net increase (decrease) (573,239) $ (18,471,746) 391,983 $ 13,330,360
==========================================================================

1. For the year ended October 31, 2001, for Class A, B, C and Y shares and for
the period from March 1, 2001 (inception of offering) to October 31, 2001, for
Class N shares.

27 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

--------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended October 31, 2002, were
$1,602,432,969 and $1,665,999,581, respectively.

As of October 31, 2002, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $2,016,584,696 was composed of:

Gross unrealized appreciation $ 280,635,203
Gross unrealized depreciation (210,774,052)
-------------
Net unrealized appreciation $ 69,861,151
=============

The difference between book-basis and tax-basis unrealized appreciation and
depreciation, if applicable, is attributable primarily to the tax deferral of
losses on wash sales, or return of capital dividends, and the realization for
tax purposes of unrealized gain (loss) on certain futures contracts,
investments in passive foreign investment companies, and forward foreign
currency exchange contracts.

--------------------------------------------------------------------------------
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. Effective March 1, 2002 the
agreement provides for an annual fee of 1.00% of the first $400 million of
average annual net assets of the Fund, 0.90% of the next $400 million, 0.85% of
the next $2.2 billion, 0.75% of the next $1 billion and 0.65% of average annual
net assets in excess of $4 billion. Prior to March 1, 2002, the annual advisory
fee rate was: 1.00% of the first $400 million of average annual net assets of
the Fund, 0.90% of the next $400 million, 0.85% of the next $3.2 billion, 0.80%
of the next $4 billion and 0.75% of average annual net assets in excess of $8
billion.

--------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager retains OpCap Advisors (the Sub-Advisor) to
provide the day-to-day portfolio management of the Fund. For the year ended
October 31, 2002, the Manager paid $7,581,970 to the Sub-Advisor for its
services to the Fund.

Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.

OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.25% of average net assets of Class Y shares and
for all other classes, up to an annual rate of 0.35% of average net assets of
each class. Beginning November 1,

28 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

2002, transfer agent fees for Class Y shares are limited to 0.35% of the
Fund's average daily net assets. This undertaking may be amended or withdrawn
at any time.

--------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.

Aggregate Class A Concessions Concessions Concessions Concessions
Front-End Front-End on Class A on Class B on Class C on Class N
Sales Charges Sales Charges Shares Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
--------------------------------------------------------------------------------------------------------------------------

October 31, 2002 $2,242,946 $604,564 $521,551 $2,313,084 $320,261 $136,828

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

Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Deferred Deferred Deferred Deferred
Sales Charges Sales Charges Sales Charges Sales Charges
Retained by Retained by Retained by Retained by
Year Ended Distributor Distributor Distributor Distributor
--------------------------------------------------------------------------------------------------------------------------

October 31, 2002 $18,383 $1,972,164 $26,211 $12,689

--------------------------------------------------------------------------------
Class A Distribution and Service Plan Fees. The Fund has adopted a Distribution
and Service Plan for Class A shares. Under the plan the Fund currently pays an
asset-based sales charge to the Distributor at an annual rate equal to 0.15% of
average annual net assets representing Class A shares purchased before
September 1, 1993 and 0.10% of average annual net assets representing Class A
shares purchased on or after that date. The Fund also pays a service fee to the
Distributor of 0.25% of the average annual net assets of Class A shares. For
the year ended October 31, 2002, payments under the Class A plan totaled
$4,601,675, all of which were paid by the Distributor to recipients, and
included $195,861 paid to an affiliate of the Manager.

--------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The
Fund has adopted Distribution and Service Plans for Class B, Class C and Class
N shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per
year under each plan.

29 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

--------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
Distribution fees paid to the Distributor for the year ended October 31, 2002,
were as follows:

Distributor's
Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
----------------------------------------------------------------------------------------------------------

Class B Plan $9,828,641 $7,533,544 $4,754,526 0.69%
Class C Plan 2,452,030 294,145 5,795,007 2.85
Class N Plan 51,303 48,539 276,277 1.86

--------------------------------------------------------------------------------
5. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes, provided
asset coverage for borrowings exceeds 300%. The Fund has entered into an
agreement which enables it to participate with other Oppenheimer funds in an
unsecured line of credit with a bank, which permits borrowings up to $400
million, collectively. Interest is charged to each fund, based on its
borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Borrowings
are payable within 30 days after such loan is executed. The Fund also pays a
commitment fee equal to its pro rata share of the average unutilized amount of
the credit facility at a rate of 0.08% per annum.

The Fund had no borrowings outstanding during the year ended or at October
31, 2002.

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

Long-Term (Taxable) Bond Ratings

Aaa: Bonds 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 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 risks appear somewhat larger than those of Aaa securities.

A: Bonds 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 sometime in the future.

Baa: Bonds 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 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 not well safeguarded during both good and bad
times over the future. Uncertainty of position characterizes bonds in this
class.
B: Bonds rated B generally lack characteristics of 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 rated Caa are of poor standing and may be in default or there may
be present elements of danger with respect to principal or interest.

Ca: Bonds rated Ca represent obligations which are speculative in a high
degree and are often in default or have other marked shortcomings.

C: Bonds 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 category; the modifier "2" indicates a
mid-range ranking and the modifier "3" indicates a ranking in the lower end of
the category.

Short-Term Ratings - Taxable Debt

These ratings apply to the ability of issuers to repay punctually senior debt
obligations having an original maturity not exceeding one year:

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, while sound, may be 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 Rating Services
------------------------------------------------------------------------------

Long-Term Credit Ratings

AAA: Bonds 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: Bonds 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: Bonds rated "A" are somewhat more susceptible to 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: Bonds 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.

Bonds 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: Bonds rated BB are less vulnerable to nonpayment than other speculative
issues. However, these face major 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: A bond rated B is more vulnerable to nonpayment than an obligation rated BB,
but the obligor currently has the capacity to meet its financial commitment on
the obligation.

CCC: A bond rated CCC 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. 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 is currently highly vulnerable to nonpayment.

C: The C rating may used where a bankruptcy petition has been filed or similar
action has been taken, but payments on this obligation are being continued.

D: Bonds rated D are in default. Payments on the obligation are not being made
on the date due.

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. The
"r" symbol is attached to the ratings of instruments with significant noncredit
risks.

Short-Term Issue Credit Ratings

A-1: Rated in the highest category. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category, a plus (+) sign
designation indicates the issuer's capacity to meet its financial obligation is
very strong.

A-2: Obligation 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: 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: 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: 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: In payment default. Payments on the obligation have not been made on the due
date. The rating may also be used if a bankruptcy petition has been filed or
similar actions jeopardize payments on the obligation.

Fitch, Inc.
------------------------------------------------------------------------------

International Long-Term Credit 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 rates 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

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.

B-1

Appendix B

Industry Classifications

Aerospace & Defense Household Durables
Air Freight & Couriers Household Products
Airlines Industrial Conglomerates
Auto Components Insurance
Automobiles Internet & Catalog Retail
Banks Internet Software & Services
Beverages Information Technology Consulting &
Services
Biotechnology Leisure Equipment & Products Building Products Machinery Chemicals
Marine Commercial Services & Supplies Media Communications Equipment Metals &
Mining Computers & Peripherals Multiline Retail Construction & Engineering
Multi-Utilities Construction Materials Office Electronics Containers & Packaging
Oil & Gas Distributors Paper & Forest Products Diversified Financials Personal
Products Diversified Telecommunication Pharmaceuticals Services Electric
Utilities Real Estate Electrical Equipment Road & Rail Electronic Equipment &
Instruments Semiconductor Equipment & Products Energy Equipment & Services
Software Food & Drug Retailing Specialty Retail Food Products Textiles & Apparel
Gas Utilities Tobacco Health Care Equipment & Supplies Trading Companies &
Distributors Health Care Providers & Services Transportation Infrastructure
Hotels Restaurants & Leisure Water Utilities
Wireless Telecommunication Services

C-12

C-1
Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases, the initial sales charge that applies to purchases of Class A
shares1 of the Oppenheimer funds or the contingent deferred sales charge that
may apply to Class A, Class B or Class C shares may be waived.2 That is because
of the economies of sales efforts realized by OppenheimerFunds Distributor,
Inc., (referred to in this document as the "Distributor"), or by dealers or
other financial institutions that offer those shares to certain classes of
investors.

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

For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds, the
term "Retirement Plan" refers to the following types of plans:
1) plans qualified under Sections 401(a) or 401(k) of the Internal
Revenue Code,
2) non-qualified deferred compensation plans, 3) employee benefit
plans3
4) Group Retirement Plans4 5) 403(b)(7) custodial plan accounts
6) Individual Retirement Accounts ("IRAs"), including traditional IRAs,
Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

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

Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
I. Applicability of Class A Contingent Deferred Sales Charges in Certain
Cases
------------------------------------------------------------------------------

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

There is no initial sales charge on purchases of Class A shares of any of
the Oppenheimer funds in the cases listed below. However, these purchases may be
subject to the Class A contingent deferred sales charge if redeemed within 18
months (24 months in the case of Oppenheimer Rochester National Municipals and
Rochester Fund Municipals) of the beginning of the calendar month of their
purchase, as described in the Prospectus (unless a waiver described elsewhere in
this Appendix applies to the redemption). Additionally, on shares purchased
under these waivers that are subject to the Class A contingent deferred sales
charge, the Distributor will pay the applicable concession described in the
Prospectus under "Class A Contingent Deferred Sales Charge."5 This waiver
provision applies to: |_| Purchases of Class A shares aggregating $1 million or
more. |_| Purchases of Class A shares by a Retirement Plan that was permitted to
purchase such shares at net asset value but subject to a contingent
deferred sales charge prior to March 1, 2001. That included plans
(other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares
costing $500,000 or more, 2) had at the time of purchase 100 or more
eligible employees or total plan assets of $500,000 or more, or 3)
certified to the Distributor that it projects to have annual plan
purchases of $200,000 or more.
|_| Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
purchases are made:
1) through a broker, dealer, bank or registered investment adviser
that has made special arrangements with the Distributor for those
purchases, or
2) by a direct rollover of a distribution from a qualified Retirement
Plan if the administrator of that Plan has made special arrangements
with the Distributor for those purchases.
|_| Purchases of Class A shares by Retirement Plans that have any of the
following record-keeping arrangements: 1) The record keeping is
performed by Merrill Lynch Pierce Fenner &
Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
Retirement Plan. On the date the plan sponsor signs the
record-keeping service agreement with Merrill Lynch, the Plan must
have $3 million or more of its assets invested in (a) mutual funds,
other than those advised or managed by Merrill Lynch Investment
Management, L.P. ("MLIM"), that are made available under a Service
Agreement between Merrill Lynch and the mutual fund's principal
underwriter or distributor, and (b) funds advised or managed by MLIM
(the funds described in (a) and (b) are referred to as "Applicable
Investments").
2) The record keeping for the Retirement Plan is performed on a daily
valuation basis by a record keeper whose services are provided under
a contract or arrangement between the Retirement Plan and Merrill
Lynch. On the date the plan sponsor signs the record keeping service
agreement with Merrill Lynch, the Plan must have $3 million or more
of its assets (excluding assets invested in money market funds)
invested in Applicable Investments.
3) The record keeping for a Retirement Plan is handled under a service
agreement with Merrill Lynch and on the date the plan sponsor signs
that agreement, the Plan has 500 or more eligible employees (as
determined by the Merrill Lynch plan conversion manager).

II. Waivers of Class A Sales Charges of Oppenheimer Funds
------------------------------------------------------------------------------
A. Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers.

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

B. Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions.

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

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

The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
|_| To make Automatic Withdrawal Plan payments that are limited annually to
no more than 12% of the account value adjusted annually.
|_| Involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (please refer to "Shareholder Account
Rules and Policies," in the applicable fund Prospectus).
|_| For distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes: 1)
Following the death or disability (as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was
established.
2) To return excess contributions.
3) To return contributions made due to a mistake of fact. 4) Hardship
withdrawals, as defined in the plan.6 5) Under a Qualified Domestic
Relations Order, as defined in the
Internal Revenue Code, or, in the case of an IRA, a divorce or
separation agreement described in Section 71(b) of the Internal
Revenue Code.
6) To meet the minimum distribution requirements of the Internal
Revenue Code.
7) To make "substantially equal periodic payments" as described in
Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries. 9) Separation from
service.7
10)Participant-directed redemptions to purchase shares of a mutual
fund (other than a fund managed by the Manager or a subsidiary of
the Manager) if the plan has made special arrangements with the
Distributor.
11)Plan termination or "in-service distributions," if the redemption
proceeds are rolled over directly to an OppenheimerFunds-sponsored
IRA.
|_| For distributions from 401(k) plans sponsored by broker-dealers that
have entered into a special agreement with the Distributor allowing
this waiver.
|_| For distributions from retirement plans that have $10 million or more
in plan assets and that have entered into a special agreement with the
Distributor.
|_| For distributions from retirement plans which are part of a retirement
plan product or platform offered by certain banks, broker-dealers,
financial advisors, insurance companies or record keepers which have
entered into a special agreement with the Distributor.
III. Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer
Funds
--------------------------------------------------------------------------------

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

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases: |_| Shares redeemed
involuntarily, as described in "Shareholder Account
Rules and Policies," in the applicable Prospectus.
|_| Redemptions from accounts other than Retirement Plans following the
death or disability of the last surviving shareholder. The death or
disability must have occurred after the account was established, and
for disability you must provide evidence of a determination of
disability by the Social Security Administration.
|_| The contingent deferred sales charges are generally not waived
following the death or disability of a grantor or trustee for a
trust account. The contingent deferred sales charges will only be
waived in the limited case of the death of the trustee of a grantor
trust or revocable living trust for which the trustee is also the
sole beneficiary. The death or disability must have occurred after
the account was established, and for disability you must provide
evidence of a determination of disability by the Social Security
Administration.
|_| Distributions from accounts for which the broker-dealer of record has
entered into a special agreement with the Distributor allowing this
waiver.
|_| Redemptions of Class B shares held by Retirement Plans whose records
are maintained on a daily valuation basis by Merrill Lynch or an
independent record keeper under a contract with Merrill Lynch.
|_| Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
accounts of clients of financial institutions that have entered into a
special arrangement with the Distributor for this purpose.
|_| Redemptions requested in writing by a Retirement Plan sponsor of Class
C shares of an Oppenheimer fund in amounts of $500,000 or more and made
more than 12 months after the Retirement Plan's first purchase of Class
C shares, if the redemption proceeds are invested in Class N shares of
one or more Oppenheimer funds.
|_| Distributions8 from Retirement Plans or other employee benefit plans
for any of the following purposes: 1) Following the death or disability
(as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was
established in an Oppenheimer fund.
2) To return excess contributions made to a participant's account. 3)
To return contributions made due to a mistake of fact. 4) To make
hardship withdrawals, as defined in the plan.9 5) To make distributions
required under a Qualified Domestic
Relations Order or, in the case of an IRA, a divorce or separation
agreement described in Section 71(b) of the Internal Revenue Code.
6) To meet the minimum distribution requirements of the Internal
Revenue Code.
7) To make "substantially equal periodic payments" as described in
Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries.10 9) On account of the
participant's separation from service.11 10) Participant-directed
redemptions to purchase shares of a
mutual fund (other than a fund managed by the Manager or a
subsidiary of the Manager) offered as an investment option in a
Retirement Plan if the plan has made special arrangements with the
Distributor.
11)Distributions made on account of a plan termination or "in-service"
distributions, if the redemption proceeds are rolled over directly
to an OppenheimerFunds-sponsored IRA.
12)For distributions from a participant's account under an Automatic
Withdrawal Plan after the participant reaches age 59 1/2, as long as
the aggregate value of the distributions does not exceed 10% of the
account's value, adjusted annually.
13)Redemptions of Class B shares under an Automatic Withdrawal Plan
for an account other than a Retirement Plan, if the aggregate value
of the redeemed shares does not exceed 10% of the account's value,
adjusted annually.
14)For distributions from 401(k) plans sponsored by broker-dealers
that have entered into a special arrangement with the Distributor
allowing this waiver.
|_| Redemptions of Class B shares or Class C shares under an Automatic
Withdrawal Plan from an account other than a Retirement Plan if the
aggregate value of the redeemed shares does not exceed 10% of the
account's value annually.

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

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

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

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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

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

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

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

|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A shares
purchased by the following investors are not subject to any Class A initial or
contingent deferred sales charges:
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.

|X| Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions.
The Class A contingent deferred sales charge will not apply to redemptions of
Class A shares purchased by the following investors who were shareholders of any
Former Quest for Value Fund:

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

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

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

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

A shareholder's account will be credited with the amount of any contingent
deferred sales charge paid on the redemption of any Class A, Class B or Class C
shares of the Oppenheimer fund described in this section if the proceeds are
invested in the same Class of shares in that fund or another Oppenheimer fund
within 90 days after redemption.
V. Special Sales Charge Arrangements for Shareholders of Certain
Oppenheimer Funds Who Were Shareholders of Connecticut Mutual
Investment Accounts, Inc.
---------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

Oppenheimer Quest Opportunity Value Fund

Internet Website:
WWW.OPPENHEIMERFUNDS.COM

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

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

Sub-Advisor
OpCap Advisors
1345 Avenue of the Americas, 49th Floor
New York, New York 10105-4800

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 Auditors
KPMG LLP
707 Seventeenth Street
Denver, Colorado 80202

Legal Counsel
Mayer, Brown, Rowe & Maw
1675 Broadway
New York, New York 10019
1234
PX236.1202

--------
1 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund. 2 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred sales
charges mean the Fund's Early Withdrawal Charges and references to "redemptions"
mean "repurchases" of shares.
3 An "employee benefit plan" means any plan or arrangement, whether or not it is
"qualified" under the Internal Revenue Code, under which Class N shares of an
Oppenheimer fund or funds are purchased by a fiduciary or other administrator
for the account of participants who are employees of a single employer or of
affiliated employers. These may include, for example, medical savings accounts,
payroll deduction plans or similar plans. The fund accounts must be registered
in the name of the fiduciary or administrator purchasing the shares for the
benefit of participants in the plan. 4 The term "Group Retirement Plan" means
any qualified or non-qualified retirement plan for employees of a corporation or
sole proprietorship, members and employees of a partnership or association or
other organized group of persons (the members of which may include other
groups), if the group has made special arrangements with the Distributor and all
members of the group participating in (or who are eligible to participate in)
the plan purchase shares of an Oppenheimer fund or funds through a single
investment dealer, broker or other financial institution designated by the
group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b)
plans other than plans for public school employees. The term "Group Retirement
Plan" also includes qualified retirement plans and non-qualified deferred
compensation plans and IRAs that purchase shares of an Oppenheimer fund or funds
through a single investment dealer, broker or other financial institution that
has made special arrangements with the Distributor. 5 However, that concession
will not be paid on purchases of shares in amounts of $1 million or more
(including any right of accumulation) by a Retirement Plan that pays for the
purchase with the redemption proceeds of Class C shares of one or more
Oppenheimer funds held by the Plan for more than one year.
6 This provision does not apply to IRAs.
7 This provision does not apply to 403(b)(7) custodial plans if the participant
is less than age 55, nor to IRAs. 8 The distribution must be requested prior to
Plan termination or the elimination of the Oppenheimer funds as an investment
option under the Plan. 9 This provision does not apply to IRAs.

10 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan. 11 This
provision does not apply to 403(b)(7) custodial plans if the participant is less
than age 55, nor to IRAs.

Oppenheimer
Small Cap Value Fund

Prospectus dated December 23, 2002

Oppenheimer Small Cap Value Fund is a
mutual fund that seeks capital
appreciation as its goal. It
emphasizes investments in common
stocks and other equity securities of
"small-cap" companies.
This Prospectus contains
important information about the Fund's
objective, and 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.

[OppenheimerFunds logo]

CONTENTS

ABOUT THE FUND
------------------------------------------------------------------------------

The Fund's Investment Objective and Strategies

Main Risks of Investing in the Fund

The Fund's Past Performance

Fees and Expenses of the Fund

About the Fund's Investments

How the Fund is Managed

ABOUT YOUR ACCOUNT

How to Buy Shares
Class A Shares
Class B Shares
Class C 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 Strategies

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

WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests mainly in common stocks of
U.S. issuers that have market capitalizations under $2.5 billion. These are
described as "small-cap" companies. Under normal market conditions it will
invest at least 80% of its net assets (plus the amount of any borrowings for
investment purposes) in equity securities of "small-cap" domestic and foreign
issuers. The Fund emphasizes equity securities of companies that the portfolio
managers believe are undervalued in the marketplace. These investments are more
fully explained in "About the Fund's Investments" below.

HOW DO THE PORTFOLIO MANAGERS DECIDE WHAT SECURITIES TO BUY OR SELL? In
selecting securities for purchase or sale by the Fund, the portfolio managers
use a "value" approach to investing. The portfolio managers search for
securities of companies believed to be undervalued in the marketplace, in
relation to factors such as a company's book value, sales, earnings, growth
potential and cash flows. The portfolio managers select securities one at a
time. This is called a "bottom up" approach, and the portfolio managers use
fundamental company analysis to focus on particular companies before considering
industry trends. The portfolio managers consider the following factors in
assessing a company's prospects:
o Favorable supply/demand conditions for key products
o Development of new products or businesses
o Quality of management
o Competitive position in the marketplace
o Allocation of capital

WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors seeking capital
appreciation in their investment over the long term. Those investors should be
willing to assume the greater risk of short-term share price fluctuations that
are typical for funds emphasizing small-cap stock investments. Since the Fund
does not seek current income and its income from investments will likely be
small, it is not designed for investors needing investment income or
preservation of capital. Because of its focus on long-term growth, the Fund may
be appropriate for a portion of a retirement plan investment. The Fund is not a
complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in
stocks 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., will cause the Fund to underperform
other funds having a similar objective. As an example, the portfolio managers'
"value" approach to investing could result in fewer Fund investments in stocks
that become highly valued by the marketplace during times of rapid market
advances. This could cause the Fund to underperform other funds that seek
capital appreciation but that employ a growth or non-value approach to
investing.

RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term
volatility at times may be great. Because the Fund invests primarily in equity
securities of small-cap companies, the value of the Fund's portfolio will be
affected by changes in the stock markets and the special economic and other
factors that might primarily affect the prices of small-cap stocks in the
markets in which it invests. Market risk will affect the Fund's net asset values
per share, which will fluctuate as the values of the Fund's portfolio securities
change. A variety of factors can affect the price of a particular stock and the
prices of individual stocks do not all move in the same direction uniformly or
at the same time. Different stock markets may behave differently from each
other. Because the Fund can buy both foreign stocks and stocks of U.S. issuers,
it will be affected by changes in domestic and foreign stock markets.

Special Risks of Small-Cap Stocks. The Fund emphasizes its investments in
securities of companies having a market capitalization under $2.5 billion.
While these companies might be established businesses, generally they tend
to be newer companies. Small-cap companies may have limited product lines
or markets for their products, limited access to financial resources and
less depth in management skill than larger, more established companies.
Additionally, smaller capitalization companies may be more reliant on the
efforts of particular members of their management team, and management
changes may pose a risk to the success of the business.

Small-cap stocks may be less liquid than those of larger issuers. That
means the Fund could have greater difficulty selling a security of a
small-cap issuer at an acceptable price, especially in periods of market
volatility. That factor increases the potential for losses to the Fund.
Also, it may take a substantial period of time before the Fund realizes a
gain on an investment in a small-cap company, if it realizes any gain at
all.

Industry Focus. At times, the Fund may increase the relative emphasis of its
investments in a particular industry. Stocks of issuers in a particular
industry may be affected by changes in economic conditions, government
regulations, availability of basic resources or supplies, or other events
that affect that industry more than others. To the extent that the Fund is
emphasizing investments in a particular industry, its share values may
fluctuate in response to events affecting that industry.

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 its price per share. Particular
investment 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 Fund's investments in
small-cap stocks can be volatile, especially in the short term. The price of the
Fund's shares can go up and down substantially. The Fund generally does not use
income-oriented investments to help cushion the Fund's total return from changes
in stock prices, except for defensive or liquidity purposes. In the
OppenheimerFunds spectrum, the Fund is likely to experience greater price
fluctuations than funds that emphasize large-cap stocks or investment-grade
bonds. It is designed for investors willing to assume greater risks in the hope
of achieving long-term capital appreciation.
------------------------------------------------------------------------------
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 A 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 a broad-based market index.

The after-tax returns are shown for Class A 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. The after-tax returns for the other classes of shares will vary. 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 A) (as of 12/31 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 1/1/02 through 9/30/02, the cumulative return (not
annualized) before taxes for Class A shares was -13.47%. During the period shown
in the bar chart, the highest return (not annualized) before taxes for a
calendar quarter was 17.22% (2ndQtr'99) and the lowest return (not annualized)
before taxes for a calendar quarter was -17.88% (3rdQtr'98).

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

Average Annual Total Returns 5 Years 10 Years
for the periods ended Decembe (or life
2001 1 Year of class,
r 31, if less)

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

Class A Shares (inception 1/3/89)
Return Before Taxes 5.75% 6.30% 10.01%
Return After Taxes on Distributions 5.68% 5.19% 8.15%
Return After Taxes on
Distributions and Sale of Fund 3.57% 4.68% 7.50%
Shares

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

------------------------------------------------------
Russell 2000 Index (reflects no 2.49% 7.52% 11.51%1
deduction for fees, expenses or
taxes)

--------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class B Shares (inception 6.53% 6.69% 8.45%
9/1/93)
-------------------------------------------------------------------------------------
Class C Shares (inception 10.55% 7.01% 8.28%
9/1/93)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Class N Shares (inception 3/1/01) N/A2 N/A N/A

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

1 From 12/31/91.
2 Because this is a new class of shares, return data for the period specified is
not available.

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 B, the
contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class
C, the 1% 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 Class A shares is compared to the Russell 2000 Index,
an unmanaged index of equity securities. The index performance includes
reinvestment of income but does not reflect transaction costs. The Fund's
investments vary from those in the index.

Fees and Expenses of the Fund

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

Shareholder Fees (charges paid directly from your investment):

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

Maximum Sales Charge 5.75% None None None
(Load) on purchases (as
% of offering price)

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

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

------------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more ($500,000 for certain retirement plan accounts) of Class A
shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.

3. Applies to shares redeemed within 12 months of purchase. 4. Applies to shares
redeemed within 18 months of a retirement plan's
first purchase of Class N shares.

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

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

Management Fees 0.88% 0.88% 0.88% 0.88%

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

Distribution and/or
Service (12b-1) Fees 0.36% 1.00% 1.00% 0.50%

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

Other Expenses 0.44% 0.46% 0.45% 0.44%

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

Total Annual 1.68% 2.34% 2.33% 1.82%
Operating Expenses

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

Effective March 1, 2002, the management fee rate was reduced as described below
in "How the Fund is Managed - The Manager - Advisory Fees." If the prior
management fee rate schedule had been in effect during the entire fiscal year,
Management Fees would have been 1.00% of average annual net assets for each
class. Accordingly, the "Management Fees" and "Total Annual Operating Expenses"
set forth above have been restated to reflect the reduced fees. Effective
January 1, 2002 the asset-based sales charge rate for Class A shares was
voluntarily reduced to 0.10% (as to Class A shares purchased on and after
September 1, 1993 and 0.15% (as to Class A shares purchased prior to September
1, 1993) in each case on average annual net assets representing Class A shares
of the Fund. The rate in effect during 2001, as to Class A shares purchased
after September 1, 1993 was 0.15%. Effective January 1, 2003, the Board has
voluntarily reduced the Class A asset-based sales charge to zero resulting in a
12b-1 fee of 0.25%. The Board of Trustees can set the rate of the asset-based
sales charge up to 0.25% of average annual net assets.

Expenses may vary in future years. "Other Expenses" include 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. After the waiver, the actual "Other Expenses" and "Total
Annual Operating Expenses" as percentages of average daily net assets were 0.42%
and 1.66%, respectively, for Class A shares, 0.44% and 2.32%, respectively, for
Class B shares, 0.43% and 2.31%, respectively, for Class C shares and 0.42% and
1.80%, respectively, for Class N shares.

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 $736 $1,074 $1,435 $2,448

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

Class B Shares $737 $1,030 $1,450 $2,3611

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

Class C Shares $336 $727 $1,245 $2,666

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

Class N Shares $285 $573 $985 $2,137

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

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

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

Class A Shares $736 $1,074 $1,435 $2,448

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

Class B Shares $237 $730 $1,250 $2,3611

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

Class C Shares $236 $727 $1,245 $2,666

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

Class N Shares $185 $573 $985 $2,137

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

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

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. The allocation of the Fund's portfolio
among different investments will vary over time based upon the evaluation of
economic and market trends by the Manager. 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 by reducing the Fund's exposure to market risks by
diversifying its investments. That means the Fund does not hold a substantial
percentage of the stock of any one company and does not invest too great a
percentage of its assets in any one issuer. Also, the Fund does not concentrate
25% or more of its investments in any one industry.

SMALL-CAP STOCK INVESTMENTS. The Fund emphasizes investments in equity
securities, primarily common stocks. The portfolio managers look for stocks of
small-cap companies that they believe have been undervalued by the market. These
companies may have a low ratio of their stock price to earnings, for example.
The portfolio managers also look at the issuers' cash flows and earnings, to
measure potential for capital growth. After looking at the individual issuers in
the small-cap universe that meet these criteria, the portfolio managers may also
look at broader industry and economic trends that could affect the growth
potential of particular small-cap stocks. Current examples of sectors offering
value investing opportunities among small-cap issuers include technology,
capital goods and cyclical sectors. However, these opportunities and industries
may change over time.

Cyclical Opportunities. The Fund may seek to take advantage of changes in the
business cycle by investing in companies that are sensitive to those
changes if the Manager believes they are undervalued and have growth
potential. For example, when the economy is expanding, companies in the
consumer durables and technology sectors may benefit and present long-term
growth opportunities. Other cyclical industries include insurance and
forest products, for example. The Fund focuses on seeking growth over the
long term, but may seek to take tactical advantage of short-term market
movements or events affecting particular issuers or industries.

Industry Focus. At times, the Fund may increase the relative emphasis of its
investments in a particular industry or group of industries. 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. To the extent that the Fund has a greater emphasis on
investments in a particular industry or group of industries, its share
values may fluctuate in response to events affecting those industries. To
some extent that risk may be limited by the Fund's policy of not
concentrating its assets in investments in any one industry.

Other Equity Securities. While the Fund emphasizes investments in common stocks,
it can also buy preferred stocks and securities convertible into common
stock. Although they are debt securities, the Manager considers some
convertible securities to be "equity equivalents" because of the
conversion feature, and their credit rating has less impact on the
investment decision than in the case of other debt securities.
Nevertheless, convertible securities are subject to both "credit risk"
(the risk that the issuer will not pay interest or repay principal in a
timely manner) and "interest rate risk" (the risk that the prices of the
securities will fluctuate inversely to changes in prevailing interest
rates). To the extent that the Fund buys convertible securities (or other
debt securities) it will focus primarily on investment-grade securities,
which pose less credit risk than lower-grade debt securities.

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 are those that cannot be changed without the
approval of a majority of the Fund's outstanding voting shares. The Fund's
investment objective is a fundamental policy. Other investment restrictions that
are fundamental policies are listed in the Statement of Additional Information.
An investment policy is not fundamental unless this Prospectus or the Statement
of Additional Information says that it is.

OTHER INVESTMENT STRATEGIES. To seek its objective, the Fund can also use the
investment techniques and strategies described below. The Manager might not
always use all of them. These techniques have certain risks, although some are
designed to help reduce investment or market risks.

Foreign Investing. The Fund can buy foreign securities that are listed on a
domestic or foreign stock exchange, traded in domestic or foreign
over-the-counter markets, or represented by American Depository Receipts.
The Fund can invest in emerging markets, which have greater risks than
developed markets, making these investments more volatile than other
foreign investments. The Fund will hold foreign currency only in
connection with buying and selling foreign securities.

Risks of Foreign Investing. While the Fund has no limits on the percentage
of its assets it can invest in foreign securities, normally it does not
expect to invest substantial amounts of its assets in foreign securities
and generally limits investments in emerging markets to not more than 5%
of its total assets. While foreign securities may offer special investment
opportunities, there are also special risks.

The change in value of a foreign currency against the U.S. dollar will
result in a change in the U.S. dollar value of securities denominated in
that foreign currency. Foreign issuers are not subject to the same
accounting and disclosure requirements 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. These risks could cause the prices of
foreign stocks to fall and could therefore depress the Fund's share
prices.

Debt Securities. The Fund can also invest in debt securities, such as U.S.
Government securities and corporate bonds and debentures. The Fund
typically does not hold significant amounts of debt securities to seek its
goal of capital appreciation. The Fund might buy short-term debt
securities for liquidity purposes pending the purchase of new investments
or to have cash to pay for redemptions of Fund shares. The Fund can invest
up to 5% of its total assets in "lower-grade" debt securities. These debt
securities (commonly known as "junk bonds") are rated below investment
grade. That means that they are rated lower than "Baa" by Moody's
Investors Service or "BBB" by Standard & Poor's Rating Service or have
comparable ratings by other nationally-recognized rating organizations or
are unrated securities assigned an equivalent rating by the Manager.

o U.S. Government Securities. The Fund's investments in U.S. Government
securities can include U.S. Treasury securities and securities issued
or guaranteed by agencies or instrumentalities of the U.S. Government.
U.S. Treasury securities are backed by the full faith and credit of the
U.S. Government and are subject to little credit risk. Securities of
U.S. Government agencies and instrumentalities are not all backed by
the full faith and credit of the U.S. Government but generally offer
little credit risk.

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

Risks in Using Hedging Instruments. The Fund can use certain hedging instruments
such as options, futures and forward contracts to try to hedge investment
risks. The Fund does not currently use hedging extensively and is not
required to do so to seek its objective.

There are special risks in certain hedging strategies. The underlying
security or investment on which the hedging instrument is based, and the
hedging instrument itself, may not perform the way the Manager expected it
to perform. If that happens, the Fund's hedge could be unsuccessful and
the Fund's share price could decline. The Fund has limits on the amount of
particular types of hedging instruments it can hold. However, hedging can
cause the Fund to lose money on its investments and/or increase the
volatility of its share prices.

Investing in Small, Unseasoned Companies. The Fund can invest up to 5% of its
total assets in securities of small, unseasoned companies. These are
companies that have been in continuous operation for less than three
years, counting the operations of any predecessors. These securities may
have limited liquidity, so that the Fund could have difficulty selling
them at an acceptable price when it wants to. The values of these
securities may be very volatile, especially in the short term.

Portfolio Turnover. A change in the securities held by the Fund is known as
"portfolio turnover." The Fund may engage in short-term trading to try to
achieve its objective. Portfolio turnover increases brokerage costs the
Fund pays. If the Fund realizes capital gains when it sells its portfolio
investments, it must generally pay those gains out to shareholders,
increasing their taxable distributions. The Financial Highlights table at
the end of this prospectus shows the Fund's portfolio turnover rates
during prior fiscal years.

Temporary Defensive Investments. In times of adverse or unstable market,
economic or political conditions, the Fund can invest up to 100% of its
assets in temporary defensive investments that are inconsistent with the
Fund's principal investment strategy. Generally they would be U.S.
Government securities and the types of money market instruments described
above. To the extent the Fund invests defensively in these securities, it
might not achieve its investment objective of capital appreciation.

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 Board of Trustees, under an investment advisory agreement
that states the Manager's responsibilities. The agreement sets the fees paid by
the Fund to the Manager and describes the expenses that the Fund pays to conduct
its business. The Manager became the Fund's investment adviser on November 22,
1995.

The Manager has been an investment adviser since January 1960. The Manager
and its subsidiaries and controlled affiliates managed more than $120 billion of
assets as of September 30, 2002, including other Oppenheimer funds with more
than 7 million shareholder accounts. The Manager is located at 498 Seventh
Avenue, New York, New York 10018.

Portfolio Managers. The Fund's portfolio managers are Christopher Leavy and
John Damian. They are the persons primarily responsible for the
day-to-day management of the Fund's portfolio. Mr. Leavy is a Senior
Vice President of the Manager and an officer and portfolio manager of
other Oppenheimer funds. Mr. Damian is a Vice President of the
Manager. Mr. Leavy became the Fund's co-portfolio manager on March 1,
2001 and Mr. Damian became the Fund's co-portfolio manager on October
10, 2002.

Prior to joining the Manager in September 2000, Mr. Leavy was a portfolio
manager of Morgan Stanley Dean Witter Investment (from 1997 to September
2000) and a portfolio manager and equity analyst of Crestar Asset
Management (from 1995 to 1997). Before joining the Manager in September
2001, Mr. Damian was an equity analyst at Citigroup Asset Management (from
1999 to September 2001) and an equity ananlyst at Pzena Investment
Management (from 1997 to 1999).

Advisory Fees. Under the investment advisory agreement, effective March 1, 2002,
the Fund pays the Manager an advisory fee at an annual rate that declines
on additional assets as the Fund grows: 0.85% of the first $400 million of
average annual net assets of the Fund, 0.75% of the next $400 million and
0.60% of average annual net assets in excess of $800 million. Prior to
March 1, 2002, the annual advisory fee rate was: 1.00% of the first $400
million of average annual net assets of the Fund, 0.90% of the next $400
million, and 0.85% of average annual net assets in excess of $800 million.
The Fund's management fee for its last fiscal year ended October 31, 2002
was 0.88% of average annual net assets for each class of 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.

BuyingShares Through the Distributor. Complete an OppenheimerFunds New Account
Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If
you don't list a dealer on the application, the Distributor will act as
your agent in buying the shares. However, we recommend that you discuss
your investment with a financial advisor before you make a purchase to be
sure that the Fund is appropriate for you.
o Paying by Federal Funds Wire. Shares purchased through the Distributor may
be paid for by Federal Funds wire. The minimum investment is $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 pay for shares by electronic funds transfers from your bank
account. Shares are purchased for your account by a transfer of money
from your bank account through the Automated Clearing House (ACH)
system. You can provide those instructions 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 each month 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:
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.
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 subsequent investments (after making the initial investment of
$500) for as little as $50. For any type of account established under one
of these plans prior to November 1, 2002, the minimum additional
investment will remain $25.

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.

BuyingThrough a Dealer. If you buy shares through a dealer, your dealer must
receive the order by the close of The New York Stock Exchange and transmit
it to the Distributor so that it is received before the Distributor's
close of business on a regular business day (normally 5:00 P.M.) to
receive that day's offering price, unless your dealer has made alternative
arrangements with the Distributor. Otherwise, the order will receive the
next offering price that is determined.

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

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

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

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

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

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

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

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

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

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

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

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
probably consider purchasing Class A or Class C shares rather than Class B
shares. That is because of the effect of the Class B contingent deferred
sales charge if you redeem within six years, as well as the effect of the
Class B asset-based sales charge on the investment return for that class
in the short term. Class C shares might be the appropriate choice
(especially for investments of less than $100,000), because there is no
initial sales charge on Class C shares, and the contingent deferred sales
charge does not apply to amounts you sell after holding them one year.

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.

Additionally, the dividends payable to Class B, Class C and Class N
shareholders will be reduced by the additional expenses borne by those
classes that are not borne by Class A shares, such as the Class B, Class C
and Class N asset-based sales charge described below and in the Statement
of Additional Information. Share certificates are only available for Class
A shares. If you are considering using your shares as collateral for a
loan, that may be a factor to consider.

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

Amount of Purchase Front-End Front-End Sales Concession As
Sales Charge As a Percentage of
Charge As a Percentage of Offering Price
Percentage of Net
Offering Price Amount Invested

---------------------------------------------------------------------------------
------------------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$25,000 or more but 5.50% 5.82% 4.75%
less than $50,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$50,000 or more but 4.75% 4.99% 4.00%
less than $100,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$100,000 or more but 3.75% 3.90% 3.00%
less than $250,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$250,000 or more but 2.50% 2.56% 2.00%
less than $500,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
$500,000 or more but 2.00% 2.04% 1.60%
less than $1 million
------------------------------------------------------------------------------

o the aggregate net asset value of the redeemed shares at the time of
redemption (excluding shares purchased by reinvestment of dividends or
capital gain distributions) or
o the original net asset value of the redeemed shares.

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

Contingent Deferred Sales Charge on
Years Since Beginning of Month in Which Redemptions in That Year
Purchase Order was Accepted (As % of Amount Subject to Charge)

---------------------------------------------------------------------------------
-------------------------------------------------------------------------------
0 - 1 5.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1 - 2 4.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2 - 3 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3 - 4 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4 - 5 2.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5 - 6 1.0%
-------------------------------------------------------------------------------
---------------------------------------------------------------------------------

More than 6 None

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

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.

DISTRIBUTION AND SERVICE (12b-1) PLANS.

Distribution and Service Plan for Class A Shares. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan the Fund
will pay through December 31, 2002 an asset-based sales charge to the
Distributor at an annual rate of 0.10% of average annual net assets of
Class A shares of the Fund purchased on or after September 1, 1993 (0.15%
as to Class A shares purchased prior to September 1, 1993) (the Board of
Trustees can set this rate up to 0.25%). Effective January 1, 2003 the
Board has voluntarily reduced the asset-based sales charge, on all Class A
shares to zero. The Fund also pays a service fee to the Distributor of
0.25% of the average annual net assets of Class A shares. The Distributor
currently uses all of the service fee and, until December 31, 2002, the
asset-based sales charge, to pay dealers, brokers, banks and other
financial institutions quarterly for providing personal service and
maintenance of accounts of their customers that hold Class A shares. With
respect to Class A shares subject to a Class A contingent deferred sales
charge purchased by grandfathered retirement accounts, the Distributor
pays the 0.25% service fee to dealers in advance for the first year after
the shares are sold by the dealer. During the first year after the shares
are sold, the Distributor retains the service fee. After the shares have
been held for a year, the Distributor pays the service fee to dealers on a
quarterly basis.

Special Investor Services

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.

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.

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.

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

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.

registered, and

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

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

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.

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.

How to Exchange Shares

o Shares of the fund selected for exchange must be available for sale in
your state of residence.
o The prospectuses of both funds must offer the exchange privilege. o You
must hold the shares you buy when you establish your account for at
least seven days before you can exchange them. After the account is open
seven days, you can exchange shares every regular business day.
o You must meet the minimum purchase requirements for the fund whose shares
you purchase by exchange.
o Before exchanging into a fund, you must obtain and read its prospectus.
Shares of a particular class of the Fund may be exchanged only for

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

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

o The interests of the Fund's long-term shareholders and its ability to
manage its investments may be adversely affected when its shares are
repeatedly bought and sold in response to short-term market
fluctuations--also known as "market timing." When large dollar amounts
are involved, the Fund may have difficulty implementing long-term
investment strategies, because it cannot predict how much cash it will
have to invest. Market timing also may force the Fund to sell portfolio
securities at disadvantageous times to raise the cash needed to buy a
market timer's Fund shares. These factors may hurt the Fund's
performance and its shareholders. When the Manager believes frequent
trading would have a disruptive effect on the Fund's ability to manage
its investments, the Manager and the Fund may reject purchase orders
and exchanges into the Fund by any person, group or account that the
Manager believes to be a market timer.
o The Fund may amend, suspend or terminate the exchange privilege at any
time. The Fund will provide you notice whenever it is required to do so by
applicable law, but it may impose changes at any time for emergency
purposes.
o If the Transfer Agent cannot exchange all the shares you request because
of a restriction cited above, only the shares eligible for exchange will
be exchanged.

Shareholder Account Rules and Policies

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 Securities and Exchange Commission,
payment may be delayed or suspended. For accounts registered in the name
of a broker-dealer, payment will normally be forwarded within three
business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
described under "How to Sell Shares" for recently purchased shares, but
only until the purchase payment has cleared. That delay may be as much as
10 days from the date the shares were purchased. That delay may be avoided
if you purchase shares by Federal Funds wire or certified check, or
arrange with your bank to provide telephone or written assurance to the
Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the account
value has fallen below $500 for reasons other than the fact that the
market value of shares has dropped. In some cases, involuntary redemptions
may be made to repay the Distributor for losses from the cancellation of
share purchase orders.
Sharesmay be "redeemed in kind" under unusual circumstances (such as a lack of
liquidity in the Fund's portfolio to meet redemptions). This means that
the redemption proceeds will be paid with liquid securities from the
Fund's portfolio.

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.

Dividends, Capital Gains and Taxes

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

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.

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.

Financial Highlights

FINANCIAL HIGHLIGHTS

Class A Year Ended October 31, 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period $19.53 $21.26 $16.82 $17.29 $22.26
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.19) (.23) (.16) (.10) (.09)
Net realized and unrealized gain (loss) (.09) (.47) 4.60 .18 (3.02)
--------------------------------------------------------------------------
Total from investment operations (.28) (.70) 4.44 .08 (3.11)
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.07) (1.03) -- 1 (.54) (1.86)
Distributions in excess of net realized gain -- -- -- (.01) --
--------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.07) (1.03) -- (.55) (1.86)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $19.18 $19.53 $21.26 $16.82 $17.29
==========================================================================

------------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 (1.45)% (3.02)% 26.40% 0.38% (15.05)%

------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $222,029 $172,395 $157,759 $151,059 $183,567
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $231,657 $163,007 $147,952 $170,205 $201,952
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.69)% (1.06)% (0.95)% (0.60)% (0.42)%
Expenses 1.68% 1.86% 1.90% 1.96% 1.80% 4
Expenses, net of reduction to custodian
expenses and/or voluntary waiver
of transfer agent fees 1.66% 1.86% 1.90% 1.96% 1.80%
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 151% 162% 166% 87% 65%

1. Less than $0.005 per share
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 of less than one
full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.

19 | OPPENHEIMER SMALL CAP VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class B Year Ended October 31, 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.65 $ 20.47 $ 16.28 $ 16.84 $ 21.83
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.18) (.23) (.33) (.22) (.12)
Net realized and unrealized gain (loss) (.20) (.56) 4.52 .21 (3.01)
---------------------------------------------------------------------------
Total from investment operations (.38) (.79) 4.19 (.01) (3.13)
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.07) (1.03) -- 1 (.54) (1.86)
Distributions in excess of net realized gain -- -- -- (.01) --
---------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.07) (1.03) -- (.55) (1.86)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.20 $18.65 $20.47 $16.28 $16.84
==========================================================================

------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $129,885 $95,418 $83,859 $82,949 $98,041
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $134,304 $88,235 $79,526 $94,863 $97,818
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.34)% (1.65)% (1.48)% (1.10)% (0.92)%
Expenses 2.34% 2.45% 2.44% 2.45% 2.31% 4
Expenses, net of reduction to custodian
expenses and/or voluntary waiver
of transfer agent fees 2.32% 2.45% 2.44% 2.45% 2.31%
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 151% 162% 166% 87% 65%

1. Less than $0.005 per share.
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 of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.

20 | OPPENHEIMER SMALL CAP VALUE FUND

Class C Year Ended October 31, 2002 2001 2000 1999 1998

Per Share Operating Data
Net asset value, beginning of period $ 18.62 $ 20.44 $ 16.25 $ 16.81 $ 21.79
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.10) (.19) (.33) (.25) (.13)
Net realized and unrealized gain (loss) (.28) (.60) 4.52 .24 (2.99)
------------------------------------------------------------------------
Total from investment operations (.38) (.79) 4.19 (.01) (3.12)
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.07) (1.03) -- 1 (.54) (1.86)
Distributions in excess of net realized gain -- -- -- (.01) --
------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.07) (1.03) -- (.55) (1.86)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.17 $18.62 $20.44 $16.25 $16.81
========================================================================

----------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 (2.06)% (3.61)% 25.79% (0.16)% (15.45)%

----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $46,360 $26,604 $22,173 $20,959 $26,707
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $45,455 $24,134 $20,521 $24,964 $28,647
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.33)% (1.64)% (1.49)% (1.10)% (0.92)%
Expenses 2.33% 2.45% 2.44% 2.45% 2.31% 4
Expenses, net of reduction to custodian
expenses and/or voluntary waiver
of transfer agent fees 2.31% 2.45% 2.44% 2.45% 2.31%
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 151% 162% 166% 87% 65%

1. Less than $0.005 per share.
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 of less than one
full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.

21 | OPPENHEIMER SMALL CAP VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class N Year Ended October 31, 2002 2001 1
------------------------------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period $ 19.51 $ 19.58
------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.27) (.04)
Net realized and unrealized loss (.04) (.03)
----------------------------
Total from investment operations (.31) (.07)
------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.07) --
Distributions in excess of net realized gain -- --
----------------------------
Total dividends and/or distributions
to shareholders (.07) --
------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $19.13 $19.51
============================

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 (1.61)% (0.36)%

------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $4,558 $409
------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,882 $106
------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.78)% (1.14)%
Expenses 1.82% 2.01%
Expenses, net of reduction to custodian expenses
and/or voluntary waiver of transfer agent fees 1.80% 2.01%
------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 151% 162%

1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

INFORMATION AND SERVICES

For More Information on Oppenheimer Small Cap Value Fund The following
additional information about the Fund is available without charge upon request:

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

----------------------------- Call OppenheimerFunds Services toll-free:
By Telephone: 1.800.CALL.OPP (225.5677)

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

By Mail: Write to:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270

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

----------------------------- You can send us a request by e-mail or read or
On the Internet: down-load documents on the OppenheimerFunds
website: WWW.OPPENHEIMERFUNDS.COM
------------------------

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

The Fund's shares are distributed by: [logo]
OppenheimerFunds Distributor, Inc.

The Fund's SEC File No. 811-5225

PR0251.001.1202
Printed on recycled paper

Appendix to Prospectus of

Oppenheimer Small Cap Value Fund

Graphic Material included in the Prospectus of Oppenheimer Quest Small Cap
Fund (the "Fund") under the heading: "Annual Total Returns (Class A) (as of
12/31 each year)":

Calendar
Year Annual Total
Ended Return
----- ------
12/31/92 20.96%
12/31/93 18.21%
12/31/94 -0.29%
12/31/95 12.42%
12/31/96 19.30%
12/31/97 24.32%
12/31/98 -10.08%
12/31/99 -1.40%
12/31/00 16.44%
12/31/01 12.20%

------------------------------------------------------------------------------
Oppenheimer Small Cap Value Fund
------------------------------------------------------------------------------

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

Statement of Additional Information dated December 23, 2002

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

Appendix A: Description of Debt Security Ratings....................A-1
Appendix B: Corporate Industry Classifications......................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 Fund's Investment Policies. The composition of the Fund's portfolio and the
techniques and strategies that the Manager may use in selecting portfolio
securities will vary over time. The Fund is not required to use all of the
investment techniques and strategies described below at all times in seeking its
goal. It may use some of the special investment techniques and strategies at
some times or not at all.

In selecting securities for the Fund's portfolio, the Manager evaluates
the merits of particular securities primarily through the exercise of its own
investment analysis. In the case of corporate issuers, that process may include,
among other things, evaluation of the issuer's historical operations, prospects
for the industry of which the issuer is part, the issuer's financial condition,
its pending product developments and business (and those of competitors), the
effect of general market and economic conditions on the issuer's business, and
legislative proposals that might affect the issuer. In the case of foreign
securities, the Manager may also consider the conditions of a particular
country's economy in relation to the U.S. economy or other foreign economies,
general political conditions on a country or region, the effect of taxes, the
efficiencies and costs of particular markets and other factors when evaluating
the securities of issuers in a particular country.

Investments in Equity Securities. The Fund emphasizes investments in equity
securities of small-cap companies. Equity securities include common stocks,
preferred stocks, rights and warrants, and securities convertible into common
stock. The Fund's investments primarily include stocks of companies having a
market capitalization under $2.5 billion, but the Fund can purchase securities
of issuers having a larger market capitalization.

Current income is not a criterion used to select equity securities, as the
Fund does not seek income as part of its goal. However, certain debt securities
can be selected for the Fund's portfolio for liquidity needs or for defensive
purposes (including debt securities that the Manager believes might offer some
opportunities for capital appreciation when stocks are disfavored).

Securities of newer small-cap companies might offer greater opportunities
for capital appreciation than securities of large, more established companies.
However, these securities also involve greater risks than securities of larger
companies. Securities of small-capitalization issuers may be subject to greater
price volatility in general than securities of large-cap and mid-cap companies.
Therefore, to the degree that the Fund has investments in smaller capitalization
companies at times of market volatility, the Fund's share price may fluctuate
more than that of funds focusing on larger-capitalization issuers.

|X| Value Investing. In using a value approach, the portfolio managers
seek stock and other equity securities that appear to be temporarily
undervalued, by various measures, such as price/earnings ratios. This approach
is subject to change and might not necessarily be used in all cases. Value
investing seeks stocks having prices that are low in relation to their real
worth or future prospects, in the hope that the Fund will realize appreciation
in the value of its holdings when other investors realize the intrinsic value of
the stock.

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

? Price/Earnings ratio, which is the stock's price divided by its earnings
per share. A stock having a price/earnings ratio lower than its historical
range, or the market as a whole or that of similar companies may offer
attractive investment opportunities.
? Price/book value ratio, which is the stock price divided by the book
value of the company per share, which measures the company's stock price in
relation to its asset value.
? Dividend Yield is measured by dividing the annual dividend by the stock
price per share. ? Valuation of Assets, which compares the stock price to
the value of the company's underlying assets, including their projected
value in the marketplace and liquidation value.

|X| Preferred Stocks. Preferred stock, unlike common stock, has a stated
dividend rate payable from the corporation's earnings. Preferred stock dividends
may be cumulative or non-cumulative. "Cumulative" dividend provisions require
all or a portion of prior unpaid dividends to be paid before dividends can be
paid on the issuer's common stock.

|X| Rights and Warrants. The Fund can invest up to 5% of its total assets
in warrants and rights. Warrants basically are options to purchase equity
securities at specific prices valid for a specific period of time. Their prices
do not necessarily move parallel to the prices of the underlying securities.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and warrants have
no voting rights, receive no dividends and have no rights with respect to the
assets of the issuer.

|X| Convertible Securities. Convertible securities are debt securities
that are convertible into an issuer's common stock. Convertible securities rank
senior to common stock in a corporation's capital structure and therefore are
subject to less risk of loss than common stock in case of the issuer's
bankruptcy or liquidation.
The value of a convertible security is a function of its "investment
value" and its "conversion value." If the investment value exceeds the
conversion value, the security will behave more like a debt security, and the
security's price will likely increase when interest rates fall and decrease when
interest rates rise. If the conversion value exceeds the investment value, the
security will behave more like an equity security: it will likely sell at a
premium over its conversion value, and its price will tend to fluctuate directly
with the price of the underlying security.

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

|X| Investments In Debt Securities. While the Fund does not invest for the
purpose of seeking current income, at times the portfolio managers may select
certain debt securities (besides convertible debt securities described above)
for investment by the Fund for liquidity or defensive purposes. For example,
when the stock market is volatile, or when the portfolio managers believe that
growth opportunities in stocks are not attractive, debt securities might offer
defensive opportunities and also some opportunities for capital appreciation.
These investments could include corporate bonds and notes of foreign or U.S.
companies, as well as U.S. and foreign government securities. It is not expected
that this will be a significant portfolio strategy of the Fund under normal
market conditions.

|X| Credit Risk. Debt securities are subject to credit risk. Credit risk
relates to the ability of the issuer of a debt security to make interest or
principal payments on the security as they become due. If the issuer fails to
pay interest, the Fund's income may be reduced and if the issuer fails to repay
principal, the value of that bond and of the Fund's shares may be reduced. The
Manager may rely to some extent on credit ratings by nationally recognized
rating agencies in evaluating the credit risk of securities selected for the
Fund's portfolio. It may also use its own research and analysis. Many factors
affect an issuer's ability to make timely payments, and the credit risks of a
particular security may change over time. The Fund can invest up to 5% of its
total assets in higher-yielding lower-grade debt securities (that is, securities
below investment grade).

|X| Special Risks of Lower-Grade Securities. The Fund can invest up to 5%
of its total assets in lower-grade securities. Lower-grade securities (commonly
known as "junk bonds") are rated less than "BBB" by Standard & Poor's Rating
Services or less than "Baa" by Moody's Investors Service, Inc., or have a
comparable rating from another rating organization. If unrated, a security is
considered to be below investment grade if the Manager deems it to be of
comparable quality to securities rated less than investment grade. The Fund does
not intend to invest in securities that are in default.

High yield, lower-grade securities, whether rated or unrated, often have
speculative characteristics and special risks that make them riskier investments
than investment grade securities. They may be subject to greater market
fluctuations and risk of loss of income and principal than lower yielding,
investment-grade securities. There may be less of a market for them and
therefore they may be harder to sell at an acceptable price. There is a
relatively greater possibility that the issuer's earnings may be insufficient to
make the payments of interest due on the bonds. The issuer's low
creditworthiness may increase the potential for its insolvency.

These risks mean that the Fund may not achieve the expected income from
lower-grade securities, and that the Fund's net asset value per share may be
affected by declines in value of these securities. However, the Fund's
limitations on investments in these types of securities may reduce some of the
risk, as will the Fund's policy of diversifying its investments.

|X| Interest Rate Risk. In addition to credit risks, debt securities are
subject to changes in value when prevailing interest rates change. When interest
rates fall, the values of outstanding debt securities generally rise, and the
bonds may sell for more than their face amount. When interest rates rise, the
values of outstanding debt securities generally decline, and the bonds may sell
at a discount from their face amount. The magnitude of these price changes is
generally greater for bonds with longer maturities. Therefore, when the average
maturity of the Fund's debt securities is longer, its share price may fluctuate
more when interest rates change.

|X| U.S. Government Securities. These are securities issued or guaranteed
by the U.S. Treasury or other U.S. government agencies or federally-chartered
corporate entities referred to as "instrumentalities." The obligations of U.S.
government agencies or instrumentalities in which the Fund may invest may or may
not be guaranteed or supported by the "full faith and credit" of the United
States. "Full faith and credit" means generally that the taxing power of the
U.S. government is pledged to the payment of interest and repayment of principal
on a security. If a security is not backed by the full faith and credit of the
United States, the owner of the security must look principally to the agency
issuing the obligation for repayment. The owner might not be able to assert a
claim against the United States if the issuing agency or instrumentality does
not meet its commitment. The Fund will invest in securities of U.S. government
agencies and instrumentalities only if the Manager is satisfied that the credit
risk with respect to such instrumentality is minimal. While U.S. government
securities have little credit risk, prior to their maturity they are subject to
price fluctuations from changes in interest rates.

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

|X| U.S. Government Securities. These include obligations issued or
guaranteed by the U.S. government or any of its agencies or instrumentalities.

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

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

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

The Fund has no limitations on the type of issuer from whom these notes
will be purchased. However, in connection with such purchases and on an ongoing
basis, the Manager will consider the earning power, cash flow and other
liquidity ratios of the issuer, and its ability to pay principal and interest on
demand, including a situation in which all holders of such notes made demand
simultaneously. Investments in master demand notes are subject to the limitation
on investments by the Fund in illiquid securities, described in the Prospectus.
The Fund does not intend that its investments in variable amount master demand
notes will exceed 5% of its total assets.

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

|X| Foreign Debt Obligations. The debt obligations of foreign governments
and their agencies and instrumentalities may or may not be supported by the full
faith and credit of the foreign government. The Fund can buy securities issued
by certain "supra-national" entities, which include entities designated or
supported by governments to promote economic reconstruction or development,
international banking organizations and related government agencies. Examples
are the International Bank for Reconstruction and Development (commonly called
the "World Bank"), the Asian Development bank and the Inter-American Development
Bank.

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

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

|X| Special Risks of Emerging Markets. Emerging and developing markets
abroad may also offer special opportunities for growth investing but have
greater risks than more developed foreign markets, such as those in Europe,
Canada, Australia, New Zealand and Japan. There may be even less liquidity in
their securities markets, and settlements of purchases and sales of securities
may be subject to additional delays. They are subject to greater risks of
limitations on the repatriation of income and profits because of currency
restrictions imposed by local governments. Those countries may also be subject
to the risk of greater political and economic instability, which can greatly
affect the volatility of prices of securities in those countries. The Manager
will consider these factors when evaluating securities in these markets. The
Fund currently limits these investments to not more than 5% of its total assets.

|X| Portfolio Turnover. "Portfolio turnover" describes the rate at which
the Fund traded its portfolio securities during its last fiscal year. For
example, if a fund sold all of its securities during the year, its portfolio
turnover rate would have been 100% annually. The Fund's portfolio turnover rate
will fluctuate from year to year. Although the Fund does not generally expect to
have a portfolio turnover rate of 100% or more, during its past fiscal year its
portfolio turnover rate exceeded 160%. 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| Investing in Small, Unseasoned Companies. The Fund can invest in
securities of small, unseasoned companies. These are companies that have been in
operation for less than three years, including the operations of any
predecessors. Securities of these companies may be subject to volatility in
their prices. They may have a limited trading market, which may adversely affect
the Fund's ability to dispose of them and can reduce the price the Fund might be
able to obtain for them. Other investors that own a security issued by a small,
unseasoned issuer for which there is limited liquidity might trade the security
when the Fund is attempting to dispose of its holdings of that security. In that
case the Fund might receive a lower price for its holdings than might otherwise
be obtained.

|X| Investing in Other Investment Companies. The Fund can invest up to 10%
of its total assets in shares of other investment companies. It can invest up to
5% of its total assets in any one investment company (but cannot own more than
3% of the outstanding voting stock of that company). These limits do not apply
to shares acquired in a merger, consolidation, reorganization or acquisition of
another investment company. Because the Fund would be subject to its ratable
share of the other investment company's expenses, the Fund will not make these
investments unless the Manager believes that the potential investment benefits
justify the added costs and expenses.

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 of 1940 (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.

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

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

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

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

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

|X| Loans of Portfolio Securities. The Fund can lend its portfolio
securities to certain types of eligible borrowers approved by the Board of
Trustees. It might do so to try to provide income or to raise cash or income for
liquidity purposes. These loans are limited to not more than 10% of the value of
the Fund's total assets. There are some risks in connection with securities
lending. The Fund might experience a delay in receiving additional collateral to
secure a loan, or a delay in recovery of the loaned securities. The Fund
presently does not intend to engage in loans of securities.

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 must
both 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
finders, 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| Borrowing. As a fundamental policy, the Fund cannot borrow money
except as a temporary measure for extraordinary or emergency purposes. Loans may
not exceed 33 1/3% of the value of the Fund's total assets. Additionally, as
part of that fundamental policy, the Fund will not purchase securities at times
when loans exceed 5% of its total assets.

The Fund may borrow only from banks. Under current regulatory
requirements, borrowings can be made only to the extent that the value of the
Fund's assets, less its liabilities other than borrowings, is equal to at least
300% of all borrowings (including the proposed borrowing). If the value of the
Fund's assets fails to meet this 300% asset coverage requirement, the Fund will
reduce its bank debt within three days to meet the requirement. To do so, the
Fund might have to sell a portion of its investments at a disadvantageous time.

The Fund will pay interest on these loans, and that interest expense will
raise the overall expenses of the Fund and reduce its returns. If it does
borrow, its expenses will be greater than comparable funds that do not borrow.
Additionally, the Fund's net asset value per share might fluctuate more than
that of funds that do not borrow.

o Interfund Lending. To assure that the Fund will not be disadvantaged by making
loans to affiliated funds, certain safeguards will be implemented. Examples of
these safeguards include the following:

When the Fund lends assets to another affiliated fund, the Fund is subject
to the credit that the borrowing fund fails to repay the loan.

|X| Hedging. Although the Fund can use hedging instruments, it is not
obligated to use them in seeking its objective. It does not currently
contemplate using them to any significant degree. To attempt to protect against
declines in the market value of the Fund's portfolio, to permit the Fund to
retain unrealized gains in the value of portfolio securities that have
appreciated, or to facilitate selling securities for investment reasons, the
Fund could:
|_| sell futures contracts, |_| buy puts on futures or on securities, or |_|
write covered calls on securities or futures.

The Fund can use hedging to establish a position in the securities market
as a temporary substitute for purchasing particular securities. In that case the
Fund would normally seek to purchase the securities and then terminate that
hedging position. The Fund might also use this type of hedge to attempt to
protect against the possibility that its portfolio securities would not be fully
included in a rise in value of the market. To do so, the Fund could:
|_| buy futures, or
|_| buy calls on futures or on securities.

The Fund's strategy of hedging with futures and options on futures will be
incidental to the Fund's activities in the underlying cash market. The
particular hedging instruments the Fund can use are described below. The Fund
may employ new hedging instruments and strategies when they are developed, if
those investment methods are consistent with the Fund's investment objective and
are permissible under applicable regulations governing the Fund.

|X| Futures. The Fund can buy and sell futures contracts that relate to
broadly-based stock indices (these are referred to as "stock index futures"),
foreign currencies (these are referred to as "forward contracts"), and financial
futures.

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

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

The Trustees have adopted a non-fundamental policy that the Fund may write
covered call options or write covered put options with respect to not more than
25% of the value of its net assets. Similarly, the Fund may purchase call or put
options only if, after purchase, the value of all call and put options held by
the Fund will not exceed 50% of the fund's total assets.

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

|X| Put and Call Options. The Fund can buy and sell certain kinds of put
options ("puts") and call options ("calls"). The Fund can buy and sell
exchange-traded and over-the-counter put and call options, including options on
broadly-based indices, securities, and stock index futures. The Trustees have
adopted a non-fundamental policy that the Fund may write covered call options or
write covered put options with respect to not more than 25% of the value of its
net assets. Similarly, the Fund may purchase call or put options only if, after
the purchase, the value of all call and put options held by the Fund will not
exceed 50% of the Fund's total assets.

|X| Writing Covered Call Options. The Fund can write (that is, sell)
covered calls. If the Fund sells a call option, it must be covered. For options
on securities, that means the Fund must own the security subject to the call
while the call is outstanding. For stock index options, that means the call must
be covered by segregating liquid assets to enable the Fund to satisfy its
obligations if the call is exercised.

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

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

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

Settlement of puts and calls on broadly-based stock indices is in cash.
Gain or loss on options on stock indices depends on changes in the index in
question (and thus on price movements in the stock market generally).

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

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

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

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

|X| Writing Put Options. The Fund can sell put options on broadly-based
stock indices or stock index futures. A put option on securities gives the
purchaser the right to sell, and the writer the obligation to buy, the
underlying investment at the exercise price during the option period. If the
Fund writes a put, the put must be covered by liquid assets identified on the
Fund's books in an amount at least equal to the exercise price of the underlying
securities. The Fund therefore foregoes the opportunity of investing the
segregated assets or writing calls against those assets.

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

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

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

When the Fund buys a put, it pays a premium. It has the right during the
put period to require a seller of a corresponding put, upon the Fund's exercise
of its put, to buy the underlying security (in the case of puts on securities or
futures) or in the case of puts on stock indices, to deliver cash to the Fund to
settle the put if the closing level of the stock index upon which the put is
based is less than the exercise price of the put. That cash payment is
determined by the multiplier, in the same manner as described above as to calls.

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

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

When the Fund purchases a put on a stock index, the put protects the Fund
to the extent that the index moves in a similar pattern to the securities the
Fund holds. The Fund can resell the put. The resale price of the put will vary
inversely with the price of the underlying investment. If the market price of
the underlying investment is above the exercise price, and as a result the put
is not exercised, the put will become worthless on the expiration date. In the
event of a decline in price of the underlying investment, the Fund could
exercise or sell the put at a profit to attempt to offset some or all of its
loss on its portfolio securities.

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

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

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

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

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

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

If a covered call written by the Fund is exercised on an investment that
has increased in value, the Fund will be required to sell the investment at the
call price. It will not be able to realize any profit if the investment has
increased in value above the call price.
An option position may be closed out only on a market that provides
secondary trading for options of the same series, and there is no assurance that
a liquid secondary market will exist for any particular option. The Fund might
experience losses if it could not close out a position because of an illiquid
market for the future or option.

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

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

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

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

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

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

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

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

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

The Fund will cover its short positions in these cases by identifying to
its custodian bank assets having a value equal to the aggregate amount of the
Fund's commitment under forward contracts. The Fund will not enter into forward
contracts or maintain a net exposure to such contracts if the consummation of
the contracts would obligate the Fund to deliver an amount of foreign currency
in excess of the value of the Fund's portfolio securities or other assets
denominated in that currency or another currency that is the subject of the
hedge. However, to avoid excess transactions and transaction costs, the Fund may
maintain a net exposure to forward contracts in excess of the value of the
Fund's portfolio securities or other assets denominated in foreign currencies if
the excess amount is "covered" by liquid securities denominated in any currency.
The cover must be at least equal at all times to the amount of that excess.

As one alternative, the Fund may purchase a call option permitting the
Fund to purchase the amount of foreign currency being hedged by a forward sale
contract at a price no higher than the forward contract price. As another
alternative, the Fund may purchase a put option permitting the Fund to sell the
amount of foreign currency subject to a forward purchase contract at a price as
high or higher than the forward contact price.

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

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

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

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

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

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

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

Under the Investment Company Act, when the Fund purchases a future, it
must maintain cash or readily marketable short-term debt instruments in an
amount equal to the market value of the securities underlying the future, less
the margin deposit applicable to it. The account must be a segregated account or
accounts held by the Fund's custodian bank.

|X| Tax Aspects of Certain Hedging Instruments. Certain foreign currency
exchange contracts in which the Fund may invest are treated as "Section 1256
contracts" under the Internal Revenue Code. In general, gains or losses relating
to Section 1256 contracts are characterized as 60% long-term and 40% short-term
capital gains or losses under the Code. However, foreign currency gains or
losses arising from Section 1256 contracts that are forward contracts generally
are treated as ordinary income or loss. In addition, Section 1256 contracts held
by the Fund at the end of each taxable year are "marked-to-market," and
unrealized gains or losses are treated as though they were realized. These
contracts also may be marked-to-market for purposes of determining the excise
tax applicable to investment company distributions and for other purposes under
rules prescribed pursuant to the Internal Revenue Code. An election can be made
by the Fund to exempt those transactions from this marked-to-market treatment.
Certain forward contracts the Fund enters into may result in "straddles"
for federal income tax purposes. The straddle rules may affect the character and
timing of gains (or losses) recognized by the Fund on straddle positions.
Generally, a loss sustained on the disposition of a position making up a
straddle is allowed only to the extent that the loss exceeds any unrecognized
gain in the offsetting positions making up the straddle. Disallowed loss is
generally allowed at the point where there is no unrecognized gain in the
offsetting positions making up the straddle, or the offsetting position is
disposed of Under the Internal Revenue Code, the following gains or losses are
treated as ordinary income or loss:

(1) gains or losses attributable to fluctuations in exchange rates that
occur between the time the Fund accrues interest or other receivables or accrues
expenses or other liabilities denominated in a foreign currency and the time the
Fund actually collects such receivables or pays such liabilities, and

(2) gains or losses attributable to fluctuations in the value of a foreign
currency between the date of acquisition of a debt security denominated in a
foreign currency or foreign currency forward contracts and the date of
disposition.

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

Investment Restrictions

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

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

? The Fund cannot invest more than 5% of the value of its total assets in
the securities of any one issuer. This limitation applies to 75% of the Fund's
total assets.

? The Fund cannot purchase more than 10% of any class of security of any
issuer. All outstanding debt securities and all preferred stock of an issuer are
considered as one class. This restriction does not apply to securities issued by
the U.S. government or any of its agencies or instrumentalities.

? The Fund cannot concentrate its investments. That means it cannot invest
25% or more of its total assets in any industry. If deemed appropriate for
attaining its investment objective, the Fund may invest less than but up to 25%
of its total assets in any one industry classification used by the Fund for
investment purposes. For this purpose, a foreign government is considered an
industry.

? The Fund cannot borrow money in excess of 33 1/3% of the value of the
Fund's total assets. The Fund may borrow only from banks and only as a temporary
measure for extraordinary or emergency purposes. The Fund will make no
additional investments while borrowings exceed 5% of the Fund's total assets.
The Fund can borrow only if it maintains a 300% ratio of assets to borrowings at
all times in the manner set forth in the Investment Company Act of 1940.

? The Fund cannot invest in physical commodities or physical commodity
contracts. However, the Fund may buy and sell hedging instruments to the extent
specified in its Prospectus or Statement of Additional Information from time to
time. The Fund can also buy and sell options, futures, securities or other
instruments backed by, or the investment return from which is linked to, changes
in the price of physical commodities.

? The Fund cannot invest in real estate or real estate limited
partnerships (direct participation programs). However, the Fund may purchase
securities of issuers that engage in real estate operations and securities which
are secured by real estate or interests in real estate.

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

? The Fund cannot invest in securities of any issuer if, to the knowledge
of the Trust, officers, directors or trustees of the Trust, or the Manager who
owns more than 1/2 of 1% of the outstanding securities of such issuer together
own more than 5% of the outstanding securities of such issuer.

? The Fund cannot pledge its assets or assign or otherwise encumber its
assets in excess of 10% of its net assets. It can pledge, assign or encumber its
assets only to secure borrowings effected within the limitations set forth in
the Prospectus.

? The Fund cannot invest for the purpose of exercising control or
management of another company.

? The Fund cannot issue senior securities (as defined in the Investment
Company Act of 1940). However, the Fund can enter into any repurchase agreement,
borrow money in accordance with restrictions described above and lend its
portfolio securities.

? The Fund cannot make loans to any person or individual. However, the
Fund may loan portfolio securities within the limitations set forth in the
Prospectus.

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

? The Fund cannot make short sales or purchase securities on margin.
However, the Fund can make short-term borrowings when necessary for the
clearance of purchases of portfolio securities. Collateral arrangements in
connection with futures and options are not deemed to be margin transactions
under this restriction.

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

How the Fund is Managed

Organization and History. The Fund is an open-end, diversified management
investment company. The Fund is one of three series of Oppenheimer Quest For
Value Funds, an open-end management investment company organized as a
Massachusetts business trust in April 1987 (and which is referred to as the
"Trust").

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

The Fund currently has four classes of shares: Class A, Class B, Class C
and Class N. All classes invest in the same investment portfolio. Only
retirement plans may purchase Class N shares. Each class of shares: o has its
own dividends and distributions, o pays certain expenses which may be different
for the different classes, o may have a different net asset value, o may have
separate voting rights on matters in which interests of one
class are different from interests of another class, and o votes as a
class on matters that affect that class alone.

Oppenheimer Quest For Value Funds, a series fund having the following three
series:
Oppenheimer Small Cap Value Fund, Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Balanced Value Oppenheimer Quest Capital Value Fund, Inc.
Fund and
Oppenheimer Quest Opportunity Value
Fund Oppenheimer Quest Value Fund, Inc.
Rochester Portfolio Series, a series Bond Fund Series, a series fund
fund having one series: Limited-Term New having one series: Oppenheimer
York Municipal Fund Convertible Securities Fund
Rochester Fund Municipals Oppenheimer MidCap Fund

Messrs. Damian, Leavy, Murphy, Masterson, Molleur, Vottiero, Wixted and
Zack, and Mses. Bechtolt, Feld and Ives who are officers of the Fund,
respectively hold the same offices of one or more of the other Board III Funds
as with the Fund. As of November 27, 2002, the Trustees and officers of the
Fund, as a group, owned of record or beneficially less than 1% of each class of
shares of the Fund. The foregoing statement does not reflect ownership of shares
of the Fund held of record by an employee benefit plan for employees of the
Manager, other than the shares beneficially owned under the plan by the officers
of the Fund listed above. In addition, each Independent Trustee, and his or her
family members, do not own securities of either the Manager or Distributor of
the Board III Funds or any person directly or indirectly controlling, controlled
by or under common control with the Manager or Distributor.

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

Independent
Trustees

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

Name, Principal Occupation(s) During Past Dollar Aggregate
Position(s) Held Dollar Range
with Fund, Of Shares
Length of 5 of Beneficially
Service, O Owned in Any
Age H Years; Range ciallyof the
Nther Trusteeships/Directorships Sharesin Oppenheimer
Celd by Trustee; Benefind Funds
umber of Portfolios in Fund Complex Owned Overseen by
urrently Overseen by Trustee the Fu Trustee

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

As of December 31,
2001

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

Thomas W. Principal of Courtney Associates, Inc. $0 $10,001-$50,000
Courtney, (venture capital firm); former General
Chairman of the Partner of Trivest Venture Fund (private
Board of Trustees, venture capital fund); former President
Trustee since 1996 of Investment Counseling Federated
Age: 69 Investors, Inc.; Trustee of Cash Assets
Trust, a money market fund; Director of OCC Cash Reserves,
Inc. and Trustee of OCC Accumulation Trust, both of which are
open-end investment companies; Trustee of four funds for
Pacific Capital and Tax Free Trust of Arizona. Oversees 10
portfolios in the OppenheimerFunds complex.

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

Paul Y. Clinton, Principal of Clinton Management $10,001 - Over $100,000
Trustee, since Associates, a financial and venture
1996 Age: 71. capital consulting firm; Trustee of
Capital Cash Management Trust, a
money-market fund and Narragansett
Tax-Free Fund, a tax-exempt bond
fund; Director of OCC Cash Reserves,
Inc. and Trustee of OCC Accumulation
Trust, both of which are open-end
investment companies. Formerly:
Director, External Affairs, Kravco
Corporation, a national real estate
owner and property management
corporation; President of Essex
Management Corporation, a management $50,000
consulting company; a general
partner of Capital Growth Fund, a
venture capital partnership; a
general partner of Essex Limited
Partnership, an investment
partnership; President of Geneve
Corp., a venture capital fund;
Chairman of Woodland Capital Corp.,
a small business investment company;
and Vice President of W.R. Grace &
Co. Oversees 10 portfolios in the
OppenheimerFunds complex.

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

Robert G. Galli, A trustee or director of other Over Over $100,000
Trustee since Oppenheimer funds. Formerly Vice
1996 Chairman (October 1995-December
Age: 69 1997) of the Manager. Oversees 41 $100,000
portfolios in the OppenheimerFunds
complex.

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

Lacy B. Herrmann, Chairman and Chief Executive Officer $0 $10,001-$50,000
Trustee since of Aquila Management Corporation,
1996 the sponsoring organization and
Age: 73 manager, administrator and/or
sub-Adviser to the following
open-end investment companies, and
Chairman of the Board of Trustees
and President of each: Churchill
Cash Reserves Trust, Aquila-Cascadia
Equity Fund, Pacific Capital Cash
Assets Trust, Pacific Capital U.S.
Treasuries Cash Assets Trust,
Pacific Capital Tax-Free Cash Assets
Trust, Prime Cash Fund, Narragansett
Insured Tax-Free Income Fund,
Tax-Free Fund For Utah, Churchill
Tax-Free Fund of Kentucky, Tax-Free
Fund of Colorado, Tax-Free Trust of
Oregon, Tax-Free Trust of Arizona,
Hawaiian Tax-Free Trust, and Aquila
Rocky Mountain Equity Fund; Vice
President, Director, Secretary, and
formerly Treasurer of Aquila
Distributors, Inc., distributor of
the above funds; President and
Chairman of the Board of Trustees of
Capital Cash Management Trust
("CCMT"), and an Officer and
Trustee/Director of its
predecessors; President and Director
of STCM Management Company, Inc.,
sponsor and adviser to CCMT;
Chairman, President and a Director
of InCap Management Corporation,
formerly sub-adviser and
administrator of Prime Cash Fund and
Short Term Asset Reserves; Director
of OCC Cash Reserves, Inc., and
Trustee of OCC Accumulation Trust,
both of which are open-end
investment companies; Trustee
Emeritus of Brown University.
Oversees 10 portfolios in the OppenheimerFunds complex.

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

Brian Wruble, Special Limited Partner (since $10,001 - $50,001-$100,000
Trustee since January 1999) of Odyssey Investment
2001 Partners, LLC (private equity
Age: 59 investment); General Partner (since
September 1996) of Odyssey Partners,
L.P. (hedge fund in distribution
since 1/1/97); Board of Governing
Trustees (since August 1990) of The
Jackson Laboratory (non-profit);
Trustee (since May 1992) of
Institute for Advanced Study
(educational institute); Trustee
(since May 2000) of Research $50,000
Foundation of AIMR (investment
research, non-profit); formerly
Governor, Jerome Levy Economics
Institute of Bard College (economics
research) (August 1990-September
2001); Director of Ray & Berendtson,
Inc. (executive search firm) (May
2000-April 2002). Oversees 10
portfolios in the OppenheimerFunds
complex.

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

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

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

Officers of the Fund

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

Name, Principal Occupation(s) During Past 5 Years
Position(s) Held with Fu
Length of Service,
Age nd,

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

John Damian, Vice President Vice President (since September 2001) of the
and Portfolio Manager since Manager; an officer of 1 portfolio in the
October 2001 OppenheimerFunds complex; formerly Senior
Age: 34 Analyst/Director for Citigroup Asset Management
(November 1999 - September 2001); Senior
Research Analyst for Pzena Investment Management
(October 1997 - November 1999); Associate in
theFinancial Services Group of Booz Allen &
Hamilton, Inc. (July 1995 - October 1997).

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

Christopher Leavy, Vice Senior Vice President (since September 2000) of
President and Portfolio the Manager; an officer of 5 portfolios in the
Manager since March 2001 OppenheimerFunds complex; prior to joining the
Age: 31 Manager in September 2000, he was a portfolio
manager of Morgan Stanley Dean Witter Investment
Management (from 1997) prior to which he was a
portfolio manager and equity analyst of Crestar
Asset Management (from 1995).

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

John V. Murphy, Chairman, Chief Executive Officer and director
President since 2001 (since June 2001) and President (since
Age: 53 September 2000) of the Manager; President and a
director or trustee of other Oppenheimer funds;
President and a director (since July 2001) of
Oppenheimer Acquisition Corp. (the Manager's
parent holding company) and of Oppenheimer
Partnership Holdings, Inc. (a holding company
subsidiary of the Manager); a director (since
November 2001) of OppenheimerFunds Distributor,
Inc. (a subsidiary of the Manager); Chairman and
a director (since July 2001) of Shareholder
Services, Inc. and of Shareholder Financial
Services, Inc. (transfer agent subsidiaries of
the Manager); President and a director (since
July 2001) of OppenheimerFunds Legacy Program (a
charitable trust program established by the
Manager); a director of the investment advisory
subsidiaries of the Manager: OFI Institutional
Asset Management, Inc. and Centennial Asset
Management Corporation (since November 2001),
HarbourView Asset Management Corporation and OFI
Private Investments, Inc. (since July 2001);
President (since November 1, 2001) and a
director (since July 2001) of Oppenheimer Real
Asset Management, Inc.; a director (since
November 2001) of Trinity Investment Management
Corp. and Tremont Advisers, Inc. (Investment
advisory affiliates of the Manager); Executive
Vice President (since February 1997) of
Massachusetts Mutual Life Insurance Company (the
Manager's parent company); a director (since
June 1995) of DLB Acquisition Corporation (a
holding company that owns the shares of David L.
Babson & Company, Inc.); formerly, Chief
Operating Officer (September 2000-June 2001) of
the Manager; President and trustee (November
1999-November 2001) of MML Series Investment
Fund and MassMutual Institutional Funds
(open-end investment companies); a director
(September 1999-August 2000) of C.M. Life
Insurance Company; President, Chief Executive
Officer and director (September 1999-August
2000) of MML Bay State Life Insurance Company; a
director (June 1989-June 1998) of Emerald Isle
Bancorp and Hibernia Savings Bank (a
wholly-owned subsidiary of Emerald Isle
Bancorp). Oversees 69 portfolios in the
OppenheimerFunds complex.

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

Brian W. Wixted, Senior Vice President and Treasurer (since
Treasurer, Principal Financial March 1999) of the Manager; Treasurer (since
and Accounting Officer since March 1999) of HarbourView Asset Management
1999 Corporation, Shareholder Services, Inc.,
Age: 43 Oppenheimer Real Asset Management Corporation,
Shareholder Financial Services, Inc.,
Oppenheimer Partnership Holdings, Inc., OFI
Private Investments, Inc. (since March 2000),
OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since May
2000) and OFI Institutional Asset Management,
Inc. (since November 2000) (offshore fund
management subsidiaries of the Manager);
Treasurer and Chief Financial Officer (since
May 2000) of Oppenheimer Trust Company (a trust
company subsidiary of the Manager); Assistant
Treasurer (since March 1999) of Oppenheimer
Acquisition Corp. and OppenheimerFunds Legacy
Program (since April 2000); formerly Principal
and Chief Operating Officer (March 1995-March
1999), Bankers Trust Company-Mutual Fund
Services Division. An officer of 85 portfolios
in the OppenheimerFunds complex.

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

Philip Vottiero, Vice President/Fund Accounting of the Manager
Assistant Treasurer since 2002 (since March 2002; formerly Vice
Age: 39 President/Corporate Accounting of the Manager
(July 1999-March 2002) prior to which he was
Chief Financial Officer at Sovlink Corporation
(April 1996-June 1999). An officer of 85
portfolios in the OppenheimerFunds complex.

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

Connie Bechtolt, Assistant Vice President of the Manager (since
Assistant Treasurer since 2002 September 1998); formerly Manager/Fund
Age: 39 Accounting (September 1994-September 1998) of
the Manager. An officer of 85 portfolios in the
OppenheimerFunds complex.

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

Robert G. Zack, Senior Vice President (since May 1985) and
Secretary since 2001 General Counsel (since February 2002) of the
Age: 54 Manager; General Counsel and a director (since
November 2001) of OppenheimerFunds Distributor,
Inc.; Senior Vice President and General Counsel
(since November 2001) of HarbourView Asset
Management Corporation; Vice President and a
director (since November 2000) of Oppenheimer
Partnership Holdings, Inc.; Senior Vice
President, General Counsel and a director
(since November 2001) of Shareholder Services,
Inc., Shareholder Financial Services, Inc., OFI
Private Investments, Inc., Oppenheimer Trust
Company and OFI Institutional Asset Management,
Inc.; General Counsel (since November 2001) of
Centennial Asset Management Corporation; a
director (since November 2001) of Oppenheimer
Real Asset Management, Inc.; Assistant
Secretary and a director (since November 2001)
of OppenheimerFunds International Ltd.; Vice
President (since November 2001) of
OppenheimerFunds Legacy Program; Secretary
(since November 2001) of Oppenheimer
Acquisition Corp.; formerly Acting General
Counsel (November 2001-February 2002) and
Associate General Counsel (May 1981-October
2001) of the Manager; Assistant Secretary of
Shareholder Services, Inc. (May 1985-November
2001), Shareholder Financial Services, Inc.
(November 1989-November 2001); OppenheimerFunds
International Ltd. and Oppenheimer Millennium
Funds plc (October 1997-November 2001). An
officer of 85 portfolios in the
OppenheimerFunds complex.

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

Philip T. Masterson, Vice President and Assistant Counsel of the
Assistant Secretary since 2002 Manager (since July 1998); formerly, an
Age: 38 associate with Davis, Graham, & Stubbs LLP
(January 1997-June 1998). An officer of 85
portfolios in the OppenheimerFunds complex.

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

Denis R. Molleur, Vice President and Senior Counsel of the
Assistant Secretary since 2001 Manager (since July 1999); formerly a Vice
Age: 45 President and Associate Counsel of the Manager
(September 1995-July 1999). An officer of 82
portfolios in the OppenheimerFunds complex.

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

Katherine P. Feld, Vice President and Senior Counsel (since July
Assistant Secretary since 2001 1999) of the Manager; Vice President (since
Age: 44 June 1990) of OppenheimerFunds Distributor,
Inc.; Director, Vice President and Assistant
Secretary (since June 1999) of Centennial Asset
Management Corporation; Vice President (since
1997) of Oppenheimer Real Asset Management,
Inc.; formerly Vice President and Associate
Counsel of the Manager (June 1990-July 1999).
An officer of 85 portfolios in the
OppenheimerFunds complex.

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

Kathleen T. Ives, Vice President and Assistant Counsel (since
Assistant Secretary since 2001 June 1998) of the Manager; Vice President
Age: 37 (since 1999) of OppenheimerFunds Distributor,
Inc.; Vice President and Assistant Secretary
(since 1999) of Shareholder Services, Inc.;
Assistant Secretary (since December 2001) of
OppenheimerFunds Legacy Program and Shareholder
Financial Services, Inc.; formerly Assistant
Vice President and Assistant Counsel of the
Manager (August 1997-June 1998); Assistant
Counsel of the Manager (August 1994-August
1997). An officer of 85 portfolios in the
OppenheimerFunds complex.

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

Trustee Name and Aggregate Retirement Total Compensation
Other Fund Co ued Estimated Annual From All
Position(s) F nd Retirement Oppenheimer Funds For Which
(as applicable) Benefits Paid at Individual Serves As Trustee/Director
Benefits Accr Retirement from (10 Funds)
mpensation as Part of Fu all Board III Funds
rom Fund1 Expenses (10 Funds) 2

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

Paul Y. Clinton $3,759 $1,187 $63,738 $157,3263

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

Thomas W. Courtney $3,759 $1,560 $63,738 $157,3263

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

Robert G. Galli $3,759 $2,247 $55,6782 $202,8864

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

Lacy B. Herrmann $3,759 $447 $63,702 $157,3263

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

Brian Wruble5 $2,292 $374 $7,606 $59,250

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

1. Aggregate compensation includes fees, deferred compensation, if any, and
retirement plan benefits accrued for a Trustee. Estimated annual retirement
benefits paid at retirement is based on a straight life payment plan election.
The amount for Mr. Galli includes $30,689 for serving as a trustee or director
of 33 Oppenheimer funds that are not Board III Funds.
1. Total Compensation for the 2001 calendar year includes $60,200 compensation
paid by two funds (OCC Cash Reserve and OCC Accumulation Trust) for which the
Sub-Advisor acts as the investment advisor. 4. Includes $105,760 for Mr. Galli
for serving as trustee or director of 33 Oppenheimer funds that are not Board
III Funds.
5. Elected to the board on April 1, 2001.

|X| Major Shareholders. As of November 27, 2002, the only persons 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:

Charles Schwab & Co. Inc. Special Custody Acct for the Exclusive
Benefit of Customers, Attn: Mutual Funds, 101 Montgomery Street, San
Francisco, CA 94104-4122, which owned 694,118.756 Class A shares
(representing 5.97% of the Class A shares then outstanding);

Geohr J. Auerbach & D Markowitz TR FBO Erkshire Radiological Assoc., 20
Dunham Mall, Suite 301, Pittsfield, MA 01201-6208, which owned 34,313.357 Class
N shares (representing 14.36% of the Class N shares then outstanding);

Chris Prater TR I.P.H.F.H.A. Inc. 401(k) PSP, 7829 E Rockhill Street,
Wichita, KS 67206-3920, which owned 14,997.206 Class N shares (representing
6.28% 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.

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

The Code of Ethics is an exhibit to the Fund's registration statement
filed with the Securities and Exchange Commission and can be reviewed and copied
at the SEC's Public Reference Room in Washington, D.C. You can obtain
information about the hours of operation of the Public Reference Room by calling
the SEC at 1.202.942.8090. The Code of Ethics can also be viewed as part of the
Fund's registration statement on the SEC's EDGAR database at the SEC's Internet
website at HTTP://WWW.SEC.GOV. Copies may be obtained, after paying a
duplicating fee, by electronic request at the following E-mail address:
PUBLICINFO@SEC.GOV., or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.

|X| The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Fund under an investment advisory
agreement between the Manager and the Fund's parent Trust. The Manager selects
securities for the Fund's portfolio and handles the Fund's day-to-day business.
The portfolio managers of the Fund are employed by the Manager and are the
persons who are principally responsible for the day to day management of the
Fund's portfolio. From November 22, 1995 to April 28, 2000, pursuant to the
terms of a Sub-Advisory Agreement with the Manager, OpCap Advisors acted as the
Manager to the Fund and in such capacity selected securities for the Fund's
portfolio.

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

Management Fees Paid to
Fiscal Year ended 10/31: OppenheimerFunds, Inc.
----------------------------------------------------------------------
----------------------------------------------------------------------
2000 $2,480,877
----------------------------------------------------------------------
----------------------------------------------------------------------
2001 $2,752,474
----------------------------------------------------------------------
----------------------------------------------------------------------

2002 $3,656,726

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

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

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

relationship with the Fund. These included services provided by the
Distributor and the Transfer Agent, and brokerage and soft dollar
arrangements permissible under Section 28(e) of the Securities Exchange
Act.

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

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

Brokerage Practices Followed by the Manager. Brokerage for the Fund is allocated
subject to the provisions of the investment advisory agreement and the
procedures and rules described above. Generally, the Manager's portfolio traders
allocate brokerage based upon recommendations from the Fund's portfolio manager.
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 concessions and therefore would not have the benefit of negotiated
concessions available in U.S. markets. Brokerage concessions are paid primarily
for transactions in listed securities or for certain fixed-income agency
transactions in the secondary market. Otherwise brokerage concessions are paid
only if it appears likely that a better price or execution can be obtained by
doing so.

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

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

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

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

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

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

Fiscal Year Ended: Total Brokerage Commissions Paid by the
Fund1
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
10/31/00 $1,046,059
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

10/31/01 $1,038,440

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

10/31/02 $2,850,1382

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

2. In the fiscal year ended 10/31/02, the amount of transactions directed to
brokers for research services was $37,574,379 and the amount of the
commissions paid to broker-dealers for those services was $85,877.

Distribution and Service Plans

The Distributor. Under its General Distributor's Agreement with the Trust, the
Distributor acts as the Fund's principal underwriter in the continuous public
offering of shares 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. Expenses normally attributable to sales are borne by the Distributor.

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

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

Aggregate Class A
Fiscal Front-End Front-End
Year Sales Sales
Ended Charges on Charges
10/31: Class A Retained
Shares By
Distributor1

------------------------------------------------------
------------------------------------------------------
2000 $349,046 $93,524
------------------------------------------------------
------------------------------------------------------
2001 $559,325 $154,880
------------------------------------------------------
------------------------------------------------------

2002 $1,277,747 $364,089

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

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

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

Fiscal Year Concessions on Concessions Concessions Concessions
Ended 10/31: Class A Shares on Class B on Class C on Class N
Advanced by Shares Shares Shares
Distributor1 Advanced by Advanced by Advanced by
Distributor1 Distributor1 Distributor1
---------------------------------------------------------------------
---------------------------------------------------------------------
2000 $67,555 $438,019 $48,485 N/A
---------------------------------------------------------------------
---------------------------------------------------------------------
2001 $79,900 $725,731 $73,490 $3,543
---------------------------------------------------------------------
---------------------------------------------------------------------

2002 $136,926 $1,601,790 $237,568 $43,172

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

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

Class A Class B Class C Class N
Fiscal Year Contingent Contingent Contingent Contingent
Ended 10/31 Deferred Sales Deferred Sales Deferred Sales Deferred Sales
Charges Retained Charges Retained Charges Retained Charges Retained
by Distributor by Distributor by Distributor by Distributor
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

2002 $12,049 $369,914 $19,284 $4,079

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

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

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. The reports
on the Class B plan and Class C plan shall also include the Distributor's
distribution costs for that quarter and such costs for previous fiscal periods
that have been carried forward. Those reports are subject to the review and
approval of the Independent Trustees.

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

The asset-based sales charges on Class B, Class C and Class N shares allow
investors to buy shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell those shares. The Fund pays the
asset-based sales charges to the Distributor for its services rendered in
distributing Class A, Class B, Class C and Class N shares. The payments are made
to the Distributor in recognition that the Distributor: o pays sales commissions
to authorized brokers and dealers at the time of
sale and pays service fees as described above,
o may finance payment of sales commissions and/or the advance of the service
fee payment to recipients under the plans, or may provide such financing from
its own resources or from the resources of an affiliate,
o employs personnel to support distribution of shares, and
o bears the costs of sales literature, advertising and prospectuses
(other than those furnished to current shareholders) and state "blue sky"
registration fees and certain other distribution expenses.
o may not be able to adequately compensate dealers that sell Class B, Class C
and Class N shares without receiving payment under the plans and therefore
may not be able to offer such Classes for sale absent the plans,
o receives payments under the plans consistent with the service fees and
asset-based sales charges paid by other non-proprietary funds that change
12b-1 fees,
o may use the payment 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 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.

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

Distribution Fees Paid to the Distributor in the Fiscal Year Ended 10/31/02

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

Distributor's
Aggregate Distributor's
Unreimbursed Unreimbursed
Total Amount Retained Expenses Under Expenses as % of
Class: Payments by Distributor Plan Net Assets of
Under Plan1 Class

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

Class A Plan $829,827 $12,696 N/A N/A

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

Class B Plan $1,342,095 $1,082,932 $2,798,044 2.15%

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

Class C Plan $454,008 $157,970 $788,312 1.70%

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

Class N Plan $14,351 $13,320 $82,489 1.81%

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

1. Includes amounts paid to an affiliate of the Distributor's parent company:
$31,812 (Class A), $11,229 (Class B) and $5,093 (Class C), $2 (Class N).

Performance of the Fund

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

Use of standardized performance calculations enable an investor to compare
the Fund's performance to the performance of other funds for the same periods.
However, a number of factors should be considered before using the Fund's
performance information as a basis for comparison with other investments:

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

|_| 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:

------------------------------------------------------------------------------
[OBJECT OMITTED]
------------------------------------------------------------------------------

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

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

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

Average Annual Total Returns for Class A Shares (After Sales Charge)
For the Periods Ended 10/31/02

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

1-Year 5-Year 10-Year
(or life of
class)

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

After Taxes on Distributions -7.18% -1.62% 6.08%1

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

After Taxes on -4.26% -0.84% 5.74%1
Distributions and
Redemption of Fund Shares

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

1. Inception date of Class A: 1/3/89

|_| 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:

------------------------------------------------------------------------------
[OBJECT OMITTED]
------------------------------------------------------------------------------
|_| Total Returns at Net Asset Value. From time to time the Fund may
also quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for Class A, Class B, Class C or Class N
shares. Each is based on the difference in net asset value per share at the
beginning and the end of the period for a hypothetical investment in that class
of shares (without considering front-end or contingent deferred sales charges)
and takes into consideration the reinvestment of dividends and capital gains
distributions.

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

The Fund's Total Returns for the Periods Ended 10/31/02

----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Cumulative Total Average Annual Total Returns
Returns (10 years
Class of or Life of Class)
Shares
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
5-Year 10-Year
1-Year (or (or
life-of-class) life-of-class)
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
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 A1 114.01% 127.07% -7.12% -1.45% -0.59% 0.60% 7.91% 8.55%

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

Class B2 73.88% 73.88% -6.94% -2.06% -0.30% 0.04% 6.22% 6.22%

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

Class C3 70.78% 70.78% -3.04% -2.06% 0.05% 0.05% 6.01% 6.01%

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

Class N4 -1.96% -1.96% -2.59% -1.61% -1.18% -1.18% N/A N/A

----------------------------------------------------------------------------------
1. Inception of Class A: 1/3/89 2. Inception of Class B: 9/1/93 3. Inception of
Class C: 9/1/93 4. Inception of Class N: 3/01/01

|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 based on stated fund classifications.
Lipper currently ranks the Fund's performance against all other small-cap value
funds. 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.

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

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.

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

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

Oppenheimer Quest Capital Value Fund,
Oppenheimer Champion Income Fund Inc.

Oppenheimer Quest Global Value Fund,
Oppenheimer Convertible Securities Fund Inc.
Oppenheimer Developing Markets Fund Oppenheimer Quest Opportunity Value Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Discovery Fund Oppenheimer Real Asset Fund
Oppenheimer Rochester National
Oppenheimer Emerging Growth Fund Municipals
Oppenheimer Emerging Technologies Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Enterprise Fund Oppenheimer Small Cap Value Fund
Oppenheimer Europe Fund Oppenheimer Strategic Income Fund
Oppenheimer Global Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Growth & Income Fund Oppenheimer Trinity Core Fund

Oppenheimer Trinity Large Cap Growth
Oppenheimer Gold & Special Minerals Fund Fund

Oppenheimer Growth Fund Oppenheimer Trinity Value Fund Oppenheimer High Yield
Fund Oppenheimer U.S. Government Trust Oppenheimer International Bond Fund
Oppenheimer Value Fund Oppenheimer International Growth Fund Limited-Term New
York Municipal Fund Oppenheimer International Small Company Fund Rochester Fund
Municipals Oppenheimer Limited-Term Government Fund OSM1- Gartmore Millennium
Growth Fund II Oppenheimer Limited Term Municipal Fund OSM1 - Jennison Growth
Fund Oppenheimer Main Street Growth & Income OSM1 - Mercury Advisors S&P 500
Index Fund Fund

OSM1 - Mercury Advisors Focus Growth
Oppenheimer Main Street Opportunity Fund Fund

Oppenheimer Main Street Small Cap Fund OSM1 - QM Active Balanced Fund
Oppenheimer MidCap Fund OSM1 - Salomon Brothers All Cap Fund Oppenheimer
Multiple Strategies Fund And the following money market funds:

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

2. If the total minimum investment specified under the Letter is completed
within the 13-month Letter of Intent period, the escrowed shares will be
promptly released to the investor.

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.

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

|X| Availability of Class N Shares. In addition to the description of the
types of retirement plans which may purchase Class N shares contained in the
prospectus, Class N shares also are offered to the following:
o to all rollover IRAs (including
SEP IRAs and SIMPLE IRAs),
o to all rollover contributions made
to Individual 401(k) plans,
Profit-Sharing Plans and Money
Purchase Pension Plans,
o to all direct rollovers from
OppenheimerFunds-sponsored Pinnacle
and Ascender retirement plans,
o to all trustee-to-trustee IRA
transfers,
o to all 90-24 type 403(b) transfers,
o to Group Retirement Plans (as defined in Appendix C to this Statement of
Additional Information) which have entered into a special agreement with the
Distributor for that purpose,
o to Retirement Plans qualified under Sections 401(a) or 401(k) of the Internal
Revenue Code, the recordkeeper or the plan sponsor for which has entered into
a special agreement with the Distributor,
o to Retirement Plans of a plan sponsor where the aggregate assets of all such
plans invested in the Oppenheimer funds is $500,000 or more,
o to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the purchase
with the redemption proceeds of Class A shares of one or more Oppenheimer
funds.

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.

Account Fees. As stated in the
Prospectus, a $12 annual fee is assessed
on any account valued at less than $500.
This fee will not be assessed on the
following accounts:
o Accounts that have balances below $500 due to the automatic conversion of
shares from Class B to Class A shares;
o Accounts with an active Asset
Builder Plan, payroll deduction
plan or a military allotment plan;
o OppenheimerFunds-sponsored group
retirement accounts that are
making continuing purchases;
o Certain accounts held by
broker-dealers through the
National Securities Clearing
Corporation; and
o Accounts that fall below the $500 threshold due solely to market
fluctuations within the 12-month period preceding the date the fee is
deducted.

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

How to Sell Shares

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

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

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

(1) state the reason for the distribution;

state the owner's awareness of tax
penalties if the distribution
is premature; and
conform to the requirements of the
plan and the Fund's other
redemption requirements.

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.

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

o Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
shares of any other fund.

o Class B, Class C and Class N shares of Oppenheimer Cash Reserves are
generally available only by exchange from the same class of shares of
other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k)
plans.
o Class M shares of Oppenheimer Convertible Securities Fund may be exchanged
only for Class A shares of other Oppenheimer funds. They may not be
acquired by exchange of shares of any class of any other Oppenheimer funds
except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash
Reserves acquired by exchange of Class M shares.

o Class X shares of Limited Term New York Municipal Fund may be exchanged
only for Class B shares of other Oppenheimer funds and no exchanges may be
made to Class X shares.

o Shares of Oppenheimer Capital Preservation Fund may not be exchanged for
shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves
or Oppenheimer Limited-Term Government Fund. Only participants in certain
retirement plans may purchase shares of Oppenheimer Capital Preservation
Fund, and only those participants may exchange shares of other Oppenheimer
funds for shares of Oppenheimer Capital Preservation Fund.
o Class A shares of Oppenheimer Senior Floating Rate Fund are not available
by exchange of shares of Oppenheimer Money Market Fund or Class A shares
of Oppenheimer Cash Reserves.
Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund and
Oppenheimer Select Managers QM Active Balanced Fund are only available to
retirement plans and are available only by exchange from the same class of
shares of other Oppenheimer funds held by retirement plans.
o Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any money market fund offered by the Distributor. Shares of
any money market fund purchased without a sales charge may be exchanged
for shares of Oppenheimer funds offered with a sales charge upon payment
of the sales charge. They may also be used to purchase shares of
Oppenheimer funds subject to an early withdrawal charge or contingent
deferred sales charge.
o Shares of Oppenheimer Money Market Fund, Inc. purchased with the
redemption proceeds of shares of other mutual funds (other than funds
managed by the Manager or its subsidiaries) redeemed within the 30 days
prior to that purchase may subsequently be exchanged for shares of other
Oppenheimer funds without being subject to an initial sales charge or
contingent deferred sales charge. To qualify for that privilege, the
investor or the investor's dealer must notify the Distributor of
eligibility for this privilege at the time the shares of Oppenheimer Money
Market Fund, Inc. are purchased. If requested, they must supply proof of
entitlement to this privilege.
o Shares of the Fund acquired by reinvestment of dividends or distributions
from any of the other Oppenheimer funds or from any unit investment trust
for which reinvestment arrangements have been made with the Distributor
may be exchanged at net asset value for shares of any of the Oppenheimer
funds.

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

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.

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

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

When you exchange some or all of your shares from one fund to another,
any special account feature such as an Asset Builder Plan or Automatic
Withdrawal Plan, will be switched to the new fund account unless you tell the
Transfer Agent not to do so. However, special redemption and exchange features
such as Automatic Exchange Plans and Automatic Withdrawal Plans cannot be
switched to an account in Oppenheimer Senior Floating Rate Fund.

Dividends, Capital Gains and Taxes

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).

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.

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.

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

Additional Information About the Fund

INDEPENDENT AUDITORS' REPORT

--------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Small Cap Value Fund:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Small Cap Value Fund, including the statement of investments, as of
October 31, 2002, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the three years in
the 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. The financial highlights for each of the two years in the period ended
October 31, 1999, were audited by other auditors whose report dated November 19,
1999, expressed an unqualified opinion on this information.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2002, 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 Small Cap Value Fund as of October 31, 2002, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the three years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.

KPMG LLP

Denver, Colorado
November 21, 2002

STATEMENT OF INVESTMENTS October 31, 2002

Market Value
Shares See Note 1
--------------------------------------------------------------------------------
Common Stocks--94.3%

Consumer Discretionary--16.8%
--------------------------------------------------------------------------------
Auto Components--0.6%
American Axle &
Manufacturing
Holdings, Inc. 1 110,000 $ 2,607,000
--------------------------------------------------------------------------------
Hotels, Restaurants & Leisure--2.5%
Rare Hospitality
International, Inc. 1 205,000 5,469,400
--------------------------------------------------------------------------------
Ruby Tuesday, Inc. 255,000 4,449,750
-----------
9,919,150

--------------------------------------------------------------------------------
Household Durables--2.5%
Libbey, Inc. 165,000 4,654,650
--------------------------------------------------------------------------------
Yankee Candle,
Inc. (The) 1 315,000 5,402,250
-----------
10,056,900

--------------------------------------------------------------------------------
Leisure Equipment & Products--1.1%
Hasbro, Inc. 440,000 4,496,800
--------------------------------------------------------------------------------
Media--2.1%
Journal Register Co. 1 250,000 4,617,500
--------------------------------------------------------------------------------
Readers Digest Assn.,
Inc. (The), Cl. A,
Non-Vtg. 250,000 4,065,000
-----------
8,682,500

--------------------------------------------------------------------------------
Specialty Retail--4.5%
Foot Locker, Inc. 1 480,000 4,704,000
--------------------------------------------------------------------------------
Too, Inc. 1 205,000 5,186,500
--------------------------------------------------------------------------------
Tuesday Morning
Corp. 1 387,000 8,092,170
-----------
17,982,670

--------------------------------------------------------------------------------
Textiles & Apparel--3.5%
Quicksilver, Inc. 1 295,000 7,082,950
--------------------------------------------------------------------------------
Reebok
International Ltd. 1 250,000 7,062,500
-----------
14,145,450
--------------------------------------------------------------------------------
Consumer Staples--3.7%
--------------------------------------------------------------------------------
Food Products--2.3%
Bunge Ltd. 365,000 $ 9,263,700
--------------------------------------------------------------------------------
Tobacco--1.4%
Universal Corp. 160,000 5,635,200
--------------------------------------------------------------------------------
Energy--6.1%
--------------------------------------------------------------------------------
Energy Equipment & Services--3.3%
FMC Technologies, Inc. 1 230,000 4,255,000
--------------------------------------------------------------------------------
Maverick Tube Corp. 1 400,000 5,100,000
--------------------------------------------------------------------------------
Rowan Cos., Inc. 205,000 4,179,950
-----------
13,534,950

--------------------------------------------------------------------------------
Oil & Gas--2.8%
Equitable Resources, Inc. 193,000 6,870,800
--------------------------------------------------------------------------------
Premcor, Inc. 1 215,000 4,310,750
-----------
11,181,550

--------------------------------------------------------------------------------
Financials--24.8%
--------------------------------------------------------------------------------
Banks--8.6%
City National Corp. 85,000 3,846,250
--------------------------------------------------------------------------------
Community First
Bankshares, Inc. 131,000 3,590,710
--------------------------------------------------------------------------------
Cullen/Frost
Bankers, Inc. 185,000 6,406,550
--------------------------------------------------------------------------------
Independence
Community
Bank Corp. 230,000 5,904,100
--------------------------------------------------------------------------------
Indymac Mortgage
Holdings, Inc. 1 335,000 6,244,400
--------------------------------------------------------------------------------
United Bankshares, Inc. 120,000 3,626,400
--------------------------------------------------------------------------------
Webster Financial Corp. 150,000 4,861,500
-----------
34,479,910

--------------------------------------------------------------------------------
Diversified Financials--5.9%
Doral Financial Corp. 202,500 5,317,650
--------------------------------------------------------------------------------
iShares Russell 2000
Value Index Fund 170,000 18,540,200
-----------
23,857,850

12 | OPPENHEIMER SMALL CAP VALUE FUND

Market Value
Shares See Note 1
--------------------------------------------------------------------------------
Insurance--4.7%
IPC Holdings Ltd. 1 240,000 $ 7,480,800
--------------------------------------------------------------------------------
RenaissanceRe
Holdings Ltd. 117,000 4,797,000
--------------------------------------------------------------------------------
StanCorp Financial
Group, Inc. 121,500 6,561,000
-----------
18,838,800

--------------------------------------------------------------------------------
Real Estate--5.6%
Alexandria Real
Estate Equities, Inc. 100,000 4,200,000
--------------------------------------------------------------------------------
CarrAmerica
Realty Corp. 185,000 4,391,900
--------------------------------------------------------------------------------
IStar Financial, Inc. 256,000 7,270,400
--------------------------------------------------------------------------------
Ventas, Inc. 590,000 6,726,000
-----------
22,588,300

--------------------------------------------------------------------------------
Health Care--8.7%
--------------------------------------------------------------------------------
Health Care Providers & Services--7.1%
Coventry Health
Care, Inc. 1 170,000 5,688,200
--------------------------------------------------------------------------------
Manor Care, Inc. 1 335,000 6,622,950
--------------------------------------------------------------------------------
Omnicare, Inc. 280,000 6,084,400
--------------------------------------------------------------------------------
Universal Health
Services, Inc., Cl. B 1 105,000 5,090,400
--------------------------------------------------------------------------------
US Oncology, Inc. 1 645,000 5,166,450
-----------
28,652,400

--------------------------------------------------------------------------------
Pharmaceuticals--1.6%

Pharmaceutical
Resources, Inc. 1 75,000 1,767,750
--------------------------------------------------------------------------------
Taro Pharmaceutical
Industries Ltd. 1 135,000 4,691,250
-----------
6,459,000

--------------------------------------------------------------------------------
Industrials--14.8%
--------------------------------------------------------------------------------
Aerospace & Defense--3.7%
Alliant Techsystems, Inc. 1 75,000 4,511,250
--------------------------------------------------------------------------------
DRS Technologies, Inc. 1 60,000 1,988,400
--------------------------------------------------------------------------------
Moog, Inc., Cl. A 1 175,000 4,649,750
--------------------------------------------------------------------------------
Triumph Group, Inc. 1 159,200 3,919,504
-----------
15,068,904

Market Value
Shares See Note 1
--------------------------------------------------------------------------------
Building Products--1.5%
Apogee Enterprises, Inc. 500,000 $ 5,915,000
--------------------------------------------------------------------------------
Construction & Engineering--1.2%
EMCOR Group, Inc. 1 100,000 4,861,000
--------------------------------------------------------------------------------
Machinery--5.9%
AGCO Corp. 1 190,000 4,826,000
--------------------------------------------------------------------------------
Harsco Corp. 195,000 5,001,750
--------------------------------------------------------------------------------
Navistar
International Corp. 1 120,000 2,690,400
--------------------------------------------------------------------------------
Oshkosh Truck Corp. 115,000 6,549,250
--------------------------------------------------------------------------------
Pentair, Inc. 140,000 4,625,600
-----------
23,693,000

--------------------------------------------------------------------------------
Road & Rail--2.5%
CNF
Transportation, Inc. 150,000 4,828,500
--------------------------------------------------------------------------------
Landstar System, Inc. 1 110,000 5,361,400
-----------
10,189,900

--------------------------------------------------------------------------------
Information Technology--6.4%
--------------------------------------------------------------------------------
Communications Equipment--1.0%
3Com Corp. 1 1,000,000 4,219,000
--------------------------------------------------------------------------------
Computers & Peripherals--2.2%
Electronics for
Imaging, Inc. 1 350,000 6,377,000
--------------------------------------------------------------------------------
Pinnacle Systems, Inc. 1 200,000 2,378,000
-----------
8,755,000

--------------------------------------------------------------------------------
Electronic Equipment & Instruments--1.2%
Newport Corp. 1 140,000 1,534,540
--------------------------------------------------------------------------------
Planar Systems, Inc. 1 170,000 3,122,900
-----------
4,657,440
--------------------------------------------------------------------------------
Semiconductor Equipment & Products--1.2%
MKS Instruments, Inc. 1 110,000 1,444,300
--------------------------------------------------------------------------------
Ultratech Stepper, Inc. 1 395,000 3,476,000
-----------
4,920,300

--------------------------------------------------------------------------------
Software--0.8%
Activision, Inc. 1 150,000 3,075,000

13 | OPPENHEIMER SMALL CAP VALUE FUND

STATEMENT OF INVESTMENTS Continued

Market Value
Shares See Note 1
-------------------------------------------------------------------------------
Materials--11.1%
-------------------------------------------------------------------------------
Chemicals--5.2%
Ferro Corp. 178,700 $ 4,372,789
-------------------------------------------------------------------------------
FMC Corp. 1 206,000 6,301,540
-------------------------------------------------------------------------------
Georgia Gulf Corp. 235,000 5,111,250
-------------------------------------------------------------------------------
NOVA Chemicals Corp. 255,000 5,049,000
------------
20,834,579

-------------------------------------------------------------------------------
Construction Materials--1.2%
Lafarge North
America, Inc. 160,000 4,744,000
-------------------------------------------------------------------------------
Containers & Packaging--1.0%
Packaging Corp.
of America 1 228,000 3,962,640
-------------------------------------------------------------------------------
Metals & Mining--0.9%
Freeport-McMoRan
Copper & Gold,
Inc., Cl. B 1 300,000 3,660,000
-------------------------------------------------------------------------------
Paper & Forest Products--2.8%
Rayonier, Inc. 105,000 4,428,900
-------------------------------------------------------------------------------
Sappi Ltd.,
Sponsored ADR 573,300 7,028,658
-----------
11,457,558

-------------------------------------------------------------------------------
Utilities--1.9%
-------------------------------------------------------------------------------
Electric Utilities--1.9%
Opticnet, Inc. 1,2 9,350 --
-------------------------------------------------------------------------------
PNM Resources, Inc. 100,000 2,205,000
-------------------------------------------------------------------------------
Puget Energy, Inc. 250,000 5,322,500
------------
7,527,500
------------
Total Common Stocks
(Cost $380,631,227) 379,922,951

Principal Market Value
Amount See Note 1
-------------------------------------------------------------------------------
Joint Repurchase Agreements--7.2%
Undivided interest of 7.83% in joint repurchase
agreement (Market Value $371,794,000) with
Banc One Capital Markets, Inc., 1.85%, dated
10/31/02, to be repurchased at $29,095,495 on
11/1/02, collateralized by U.S. Treasury Nts.,
3.25%, 12/31/03, with a value of $136,423,268,
U.S. Treasury Bonds, 2.125%, 10/31/04, with a
value of $145,203,510 and U.S. Treasury Bills,
12/26/02, with a value of $97,874,253
(Cost $29,094,000) $ 29,094,000 $ 29,094,000
-------------------------------------------------------------------------------
Total Investments, at Value
(Cost $409,725,227) 101.5% 409,016,951
-------------------------------------------------------------------------------
Liabilities in Excess of
Other Assets (1.5) (6,184,880)
------------------------------
Net Assets 100.0% $ 402,832,071
==============================

Footnotes to Statement of Investments
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted-- See Note 6 of
Notes to Financial Statements.

See accompanying Notes to Financial Statements.

14 | OPPENHEIMER SMALL CAP VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES October 31, 2002
--------------------------------------------------------------------------------

Assets

Investments, at value
(cost $409,725,227)-- see accompanying statement $ 409,016,951
--------------------------------------------------------------------------------
Cash 68,997
--------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 2,624,012
Shares of beneficial interest sold 814,175
Interest and dividends 308,488
Other 87,685
---------------
Total assets 412,920,308

--------------------------------------------------------------------------------
Liabilities

Payables and other liabilities:
Investments purchased 8,759,902
Shares of beneficial
interest redeemed 968,902
Transfer and shareholder
servicing agent fees 150,095
Distribution and service plan fees 85,963
Shareholder reports 67,392
Trustees' compensation 30,593
Other 25,390
---------------
Total liabilities 10,088,237

--------------------------------------------------------------------------------
Net Assets $402,832,071
===============

--------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of
beneficial interest $ 215,055
--------------------------------------------------------------------------------
Additional paid-in capital 422,588,579
--------------------------------------------------------------------------------
Accumulated net investment loss (30,591)
--------------------------------------------------------------------------------
Accumulated net realized
loss on investments and
foreign currency transactions (19,232,696)
--------------------------------------------------------------------------------
Net unrealized depreciation
on investments and
translation of
assets and liabilities
denominated in foreign currencies (708,276)
---------------
Net Assets $402,832,071
===============

15 | OPPENHEIMER SMALL CAP VALUE FUND

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 $222,029,245 and 11,576,841 shares of beneficial
interest outstanding) $ 19.18
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $ 20.35
--------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $129,885,108 and 7,138,490 shares of beneficial
interest outstanding) $ 18.20
--------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $46,359,900 and 2,551,938 shares of beneficial
interest outstanding) $ 18.17
--------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $4,557,818 and 238,241 shares of beneficial interest
outstanding) $ 19.13

See accompanying Notes to Financial Statements.

16 | OPPENHEIMER SMALL CAP VALUE FUND

STATEMENT OF OPERATIONS For the Year Ended October 31, 2002

Investment Income
Dividends (net of foreign withholding taxes of $15,003) $ 3,483,453
--------------------------------------------------------------------------------
Interest 527,531
-------------
Total investment income 4,010,984

--------------------------------------------------------------------------------
Expenses

Management fees 3,656,726
--------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 829,827
Class B 1,342,095
Class C 454,008
Class N 14,351
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 858,936
Class B 517,943
Class C 172,890
Class N 10,764
--------------------------------------------------------------------------------
Shareholder reports 200,360
--------------------------------------------------------------------------------
Trustees' compensation 23,143
--------------------------------------------------------------------------------
Custodian fees and expenses 8,758
--------------------------------------------------------------------------------
Other 39,185
-------------
Total expenses 8,128,986
Less reduction to custodian expenses (2,526)
Less voluntary waiver of transfer and
shareholder servicing agent fees--Classes A, B, C and N (92,149)
-------------
Net expenses 8,034,311

--------------------------------------------------------------------------------
Net Investment Loss (4,023,327)

--------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investments (18,265,223)
Foreign currency transactions (432,845)
Net increase from payments
by affiliates 36,188
-------------
Net realized loss (18,661,880)
--------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (10,269,211)
Translation of assets and
liabilities denominated in
foreign currencies 417,776
-------------
Net change (9,851,435)
-------------
Net realized and unrealized loss (28,513,315)

--------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations $(32,536,642)
=============

See accompanying Notes to Financial Statements.

17 | OPPENHEIMER SMALL CAP VALUE FUND

Year Ended October 31, 2002 2001
--------------------------------------------------------------------------------
Operations

Net investment loss $ (4,023,327) $ (3,573,838)
--------------------------------------------------------------------------------
Net realized gain (loss) (18,661,880) 1,917,078
--------------------------------------------------------------------------------
Net change in unrealized depreciation (9,851,435) (8,983,493)
-------------------------------
Net decrease in net assets resulting
from operations (32,536,642) (10,640,253)

--------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders

Distributions from net realized gain:
Class A (680,554) (7,643,347)
Class B (388,655) (4,245,696)
Class C (109,996) (1,096,851)
Class N (3,973) --

--------------------------------------------------------------------------------
Beneficial Interest Transactions

Net increase in net assets resulting from beneficial interest transactions:
Class A 65,028,767 28,136,903
Class B 46,660,317 19,515,640
Class C 25,340,589 6,597,307
Class N 4,695,770 410,857

--------------------------------------------------------------------------------
Net Assets
Total increase 108,005,623 31,034,560
--------------------------------------------------------------------------------
Beginning of period 294,826,448 263,791,888
-------------------------------
End of period [including
accumulated net investment
losses of $30,591 and $25,521, respectively] $ 402,832,071 $ 294,826,448
===============================

See accompanying Notes to Financial Statements.

18 | OPPENHEIMER SMALL CAP VALUE FUND

FINANCIAL HIGHLIGHTS

Class A Year Ended October 31, 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------------------

See accompanying Notes to Financial Statements.

19 | OPPENHEIMER SMALL CAP VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class B Year Ended October 31, 2002 2001 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

See accompanying Notes to Financial Statements.

20 | OPPENHEIMER SMALL CAP VALUE FUND

Class C Year Ended October 31, 2002 2001 2000 1999 1998

----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

1. Less than $0.005 per share.
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 of less than one
full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.

21 | OPPENHEIMER SMALL CAP VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class N Year Ended October 31, 2002 2001 1
------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 (1.61)% (0.36)%

1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

22 | OPPENHEIMER SMALL CAP VALUE FUND

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. Significant Accounting Policies Oppenheimer Small Cap Value Fund (the Fund),
a series of Oppenheimer Quest For Value Funds, is an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek capital appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C 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 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. Earnings, net assets and net
asset value per share may differ by minor amounts due to each class having its
own expenses directly attributable to that class. Classes A, B, C 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. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the prevailing exchange rates on the valuation
date. Amounts related to the purchase and sale of foreign securities and
investment income are translated at the prevailing exchange rates on the
respective dates of such transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.

23 | OPPENHEIMER SMALL CAP VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

--------------------------------------------------------------------------------
1. Significant Accounting Policies Continued

Joint Repurchase Agreements. The Fund, along with other affiliated funds of the
Manager, may transfer uninvested cash balances into one or more joint repurchase
agreement accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement 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 of the
collateral may be subject to legal proceedings.
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by capital loss carryforwards, if any, to shareholders.
Therefore, no federal income or excise tax provision is required.
During the fiscal year ended October 31, 2002, the Fund did not utilize any
capital loss carryforward.

As of October 31, 2002, the Fund had available for federal income tax purposes
an unused capital loss carryforward as follows:

Expiring
--------------------------
2010 $18,203,203
--------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted a nonfunded 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 October
31, 2002, the Fund's projected benefit obligations were increased by $5,815 and
payments of $745 were made to retired trustees, resulting in an accumulated
liability of $30,593 as of October 31, 2002.

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

24 | OPPENHEIMER SMALL CAP VALUE FUND

Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
--------------------------------------------------------------------------------
Classification of Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for 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.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended October 31, 2002, amounts have been reclassified to reflect a
decrease in paid-in capital of $4,041,933, a decrease in accumulated net
investment loss of $4,018,257, and a decrease in accumulated net realized loss
on investments of $23,676. Net assets of the Fund were unaffected by the
reclassifications.
The tax character of distributions paid during the year ended October 31,
2002 and year ended October 31, 2001 was as follows:

Year Ended Year Ended
October 31, 2002 October 31, 2001
-------------------------------------------------------------------------
Distributions paid from:
Ordinary income $-- $ 7,672,571
Long-term capital gain 1,183,178 5,313,323
Return of capital -- --
-----------------------------------------
Total $1,183,178 $12,985,894
=========================================

As of October 31, 2002, the components of distributable earnings on a tax basis
were as follows:

Accumulated net investment loss $ (30,591)
Accumulated net realized loss (19,232,696)
Net unrealized depreciation (708,276)
------------
Total $(19,971,563)
=============
--------------------------------------------------------------------------------
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.

25 | OPPENHEIMER SMALL CAP VALUE FUND

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

1. Significant Accounting Policies Continued
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.

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

The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:

Year Ended October 31, 2002 Year Ended October 31, 2001 1
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------
Class A

Sold 7,897,143 $ 173,016,763 4,958,465 $ 99,631,224
Dividends and/or
distributions reinvested 31,174 657,161 396,702 7,346,840
Redeemed (5,179,234) (108,645,157) (3,947,339) (78,841,161)
-----------------------------------------------------------------
Net increase 2,749,083 $65,028,767 1,407,828 $28,136,903
=================================================================
------------------------------------------------------------------------------------------------
Class B
Sold 5,081,569 $ 107,197,590 2,108,217 $ 40,683,055
Dividends and/or
distributions reinvested 17,890 359,961 223,956 3,981,950
Redeemed (3,076,759) (60,897,234) (1,312,971) (25,149,365)
-----------------------------------------------------------------
Net increase 2,022,700 $ 46,660,317 1,019,202 $19,515,640
=================================================================
------------------------------------------------------------------------------------------------
Class C
Sold 2,319,208 $ 48,865,275 911,099 $ 17,673,282
Dividends and/or
distributions reinvested 5,008 100,623 56,599 1,004,647
Redeemed (1,201,029) (23,625,309) (623,819) (12,080,622)
-----------------------------------------------------------------
Net increase 1,123,187 $ 25,340,589 343,879 $ 6,597,307
=================================================================
------------------------------------------------------------------------------------------------
Class N
Sold 268,260 $ 5,721,300 21,089 $ 413,033
Dividends and/or
distributions reinvested 188 3,969 -- --
Redeemed (51,183) (1,029,499) (113) (2,176)
-----------------------------------------------------------------
Net increase 217,265 $ 4,695,770 20,976 $ 410,857
=================================================================

1. For the year ended October 31, 2001, for Class A, B and C shares and for the
period from March 1, 2001 (inception of offering ) to October 31, 2001, for
Class N shares.

26 | OPPENHEIMER SMALL CAP VALUE FUND

As of October 31, 2002, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $410,754,720 was composed of:

Gross unrealized appreciation $ 25,638,230
Gross unrealized depreciation (27,375,999)
------------
Net unrealized depreciation $(1,737,769)
============

The difference between book-basis and tax-basis unrealized appreciation and
depreciation, if applicable, is attributable primarily to the tax deferral of
losses on wash sales, or return of capital dividends, and the realization for
tax purposes of unrealized gain (loss) on certain futures contracts, investments
in passive foreign investment companies, and forward foreign currency exchange
contracts.

--------------------------------------------------------------------------------
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. Effective March 1, 2002, the
agreement provides for an annual fee of 0.85% of the first $400 million of
average annual net assets of the Fund, 0.75% of the next $400 million and 0.60%
of average annual net assets in excess of $800 million. Prior to March 1, 2002,
the annual advisory fee rate was: 1.00% of the first $400 million of average
annual net assets of the Fund, 0.90% of the next $400 million, and 0.85% of
average annual net assets in excess of $800 million.
For the year ended October 31, 2002, the Manager voluntarily reimbursed the
Fund in the amount of $36,188 for an error in one day's calculation of the
Fund's net asset value per share.

27 | OPPENHEIMER SMALL CAP VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

4. Fees and Other Transactions with Affiliates Continued The compensation paid
to (or retained by) the Distributor from the sale of shares or on the redemption
of shares is shown in the table below for the period indicated.

October 31, 2002 $1,277,747 $364,089 $136,926 $1,601,790 $237,568 $43,172

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

October 31, 2002 $12,049 $369,914 $19,284 $4,079

--------------------------------------------------------------------------------
Class A Distribution and Service Plan Fees. The Fund has adopted a Distribution
and Service Plan for Class A shares. Under the plan the Fund currently pays an
asset-based sales charge to the Distributor at an annual rate equal to 0.15% of
average annual net assets representing Class A shares purchased before September
1, 1993 and 0.10% of average annual net assets representing Class A shares
purchased on or after that date. The Fund also pays a service fee to the
Distributor of 0.25% of the average annual net assets of Class A shares. For the
year ended October 31, 2002, payments under the Class A plan totaled $829,827,
all of which were paid by the Distributor to recipients, and included $31,812
paid to an affiliate of the Manager.

--------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per year
under each plan.

Distribution fees paid to the Distributor for the year ended October 31, 2002,
were as follows:

Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
----------------------------------------------------------------------------------------

Class B Plan $1,342,095 $1,082,932 $2,798,044 2.15%
Class C Plan 454,008 157,970 788,312 1.70
Class N Plan 14,351 13,320 82,489 1.81

28 | OPPENHEIMER SMALL CAP VALUE FUND

--------------------------------------------------------------------------------
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and to seek to protect against adverse
exchange rate fluctuation. Risks to the Fund include the potential inability of
the counterparty to meet the terms of the contract.

The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.

The Fund may realize a gain or loss upon the closing or settlement of the
forward transaction. Such realized gains and losses are reported with all other
foreign currency gains and losses in the Statement of Operations.

--------------------------------------------------------------------------------
6. Illiquid or Restricted Securities
As of October 31, 2002, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may also be
considered illiquid if it lacks a readily available market or if its valuation
has not changed for a certain period of time. The Fund intends to invest no more
than 15% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of October 31, 2002 was zero.
Information concerning restricted securities is as follows:

Unrealized
Acquisition Valuation as of Appreciation
Security Date Cost October 31, 2002 (Depreciation)
-----------------------------------------------------------------------------------------

Stocks and/or Warrants
Opticnet, Inc. 10/26/00 $-- $-- $--

29 | OPPENHEIMER SMALL CAP VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

--------------------------------------------------------------------------------
7. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes, provided
asset coverage for borrowings exceeds 300%. The Fund has entered into an
agreement which enables it to participate with other Oppenheimer funds in an
unsecured line of credit with a bank, which permits borrowings up to $400
million, collectively. Interest is charged to each fund, based on its
borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Borrowings are
payable within 30 days after such loan is executed. The Fund also pays a
commitment fee equal to its pro rata share of the average unutilized amount of
the credit facility at a rate of 0.08% per annum.
The Fund had no borrowings outstanding during the year ended or at October
31, 2002.

Appendix A

RATINGS DEFINITIONS

Moody's Investors Service, Inc.

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

Long-Term (Taxable) Bond Ratings

B: Bonds rated B generally lack characteristics of 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 rated Caa are of poor standing and may be in default or there may
be present elements of danger with respect to principal or interest.

Ca: Bonds rated Ca represent obligations which are speculative in a high
degree and are often in default or have other marked shortcomings.

C: Bonds 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.

Short-Term Ratings - Taxable Debt

These ratings apply to the ability of issuers to repay punctually senior debt
obligations having an original maturity not exceeding one year:

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Rating Services

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

Long-Term Credit Ratings

AAA: Bonds 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: Bonds 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.

B: A bond rated B is more vulnerable to nonpayment than an obligation rated BB,
but the obligor currently has the capacity to meet its financial commitment on
the obligation.

C: The C rating may used where a bankruptcy petition has been filed or similar
action has been taken, but payments on this obligation are being continued.

D: Bonds rated D are in default. Payments on the obligation are not being made
on the date due.

Short-Term Issue Credit Ratings

C: 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.

Fitch, Inc.
------------------------------------------------------------------------------

International Long-Term Credit Ratings

Speculative Grade:

International Short-Term Credit Ratings

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

C-1B-1
Electrical Equipment
Electronic Equipment & Instruments Semiconductor Equipment & Products
Energy Equipment & Services Software
Food & Drug Retailing Specialty Retail
Food Products Textiles & Apparel
Gas Utilities Tobacco
Health Care Equipment & Supplies Trading Companies & Distributors
Health Care Providers & Services Transportation Infrastructure
Hotels Restaurants & Leisure Water Utilities
Wireless Telecommunication Services

C-12

C-1

Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers

1) plans qualified under Sections 401(a) or 401(k) of the Internal
Revenue Code,
2) non-qualified deferred compensation plans, 3) employee benefit
plans3
4) Group Retirement Plans4 5) 403(b)(7) custodial plan accounts
6) Individual Retirement Accounts ("IRAs"), including traditional IRAs,
Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

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

Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
------------------------------------------------------------------------------

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

that has made special arrangements with the Distributor for those
purchases, or

2) by a direct rollover of a distribution from a qualified Retirement
Plan if the administrator of that Plan has made special arrangements
with the Distributor for those purchases.
Purchases of Class A shares by Retirement Plans that have any of the
following record-keeping arrangements: 1) The record keeping is
performed by Merrill Lynch Pierce Fenner &

Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
Retirement Plan. On the date the plan sponsor signs the
record-keeping service agreement with Merrill Lynch, the Plan must
have $3 million or more of its assets invested in (a) mutual funds,
other than those advised or managed by Merrill Lynch Investment
Management, L.P. ("MLIM"), that are made available under a Service
Agreement between Merrill Lynch and the mutual fund's principal
underwriter or distributor, and (b) funds advised or managed by MLIM
(the funds described in (a) and (b) are referred to as "Applicable
Investments").

2) The record keeping for the Retirement Plan is performed on a daily
valuation basis by a record keeper whose services are provided under
a contract or arrangement between the Retirement Plan and Merrill
Lynch. On the date the plan sponsor signs the record keeping service
agreement with Merrill Lynch, the Plan must have $3 million or more
of its assets (excluding assets invested in money market funds)
invested in Applicable Investments.
3) The record keeping for a Retirement Plan is handled under a service
agreement with Merrill Lynch and on the date the plan sponsor signs
that agreement, the Plan has 500 or more eligible employees (as
determined by the Merrill Lynch plan conversion manager).
II.

Waivers of Class A Sales Charges of Oppenheimer Funds
------------------------------------------------------------------------------

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

Class A shares purchased by the following investors are not subject to any Class
A sales charges (and no concessions are paid by the Distributor on such
purchases):
|_| The Manager or its affiliates.

|_| Present or former officers, directors, trustees and employees (and
their "immediate families") of the Fund, the Manager and its
affiliates, and retirement plans established by them for their
employees. The term "immediate family" refers to one's spouse,
children, grandchildren, grandparents, parents, parents-in-law,
brothers and sisters, sons- and daughters-in-law, a sibling's
spouse, a spouse's siblings, aunts, uncles, nieces and nephews;
relatives by virtue of a remarriage (step-children, step-parents,
etc.) are included.

|_| Registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the
Distributor for that purpose.
|_| Dealers or brokers that have a sales agreement with the Distributor, if
they purchase shares for their own accounts or for retirement plans for
their employees.
|_| Employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have
entered into sales arrangements with such dealers or brokers (and
which are identified as such to the Distributor) or with the
Distributor. The purchaser must certify to the Distributor at the
time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor
children).
|_| Dealers, brokers, banks or registered investment advisors that have
entered into an agreement with the Distributor providing specifically
for the use of shares of the Fund in particular investment products
made available to their clients. Those clients may be charged a
transaction fee by their dealer, broker, bank or advisor for the
purchase or sale of Fund shares.
|_| Investment advisors and financial planners who have entered into an
agreement for this purpose with the Distributor and who charge an
advisory, consulting or other fee for their services and buy shares for
their own accounts or the accounts of their clients.
|_| "Rabbi trusts" that buy shares for their own accounts, if the purchases
are made through a broker or agent or other financial intermediary that
has made special arrangements with the Distributor for those purchases.
|_| Clients of investment advisors or financial planners (that have entered
into an agreement for this purpose with the Distributor) who buy
shares for their own accounts may also purchase shares without sales
charge but only if their accounts are linked to a master account of
their investment advisor or financial planner on the books and
records of the broker, agent or financial intermediary with which
the Distributor has made such special arrangements . Each of these
investors may be charged a fee by the broker, agent or financial
intermediary for purchasing shares.
|_| Directors, trustees, officers or full-time employees of OpCap Advisors
or its affiliates, their relatives or any trust, pension, profit
sharing or other benefit plan which beneficially owns shares for those
persons.
|_| Accounts for which Oppenheimer Capital (or its successor) is the
investment advisor (the Distributor must be advised of this
arrangement) and persons who are directors or trustees of the company
or trust which is the beneficial owner of such accounts.
|_| A unit investment trust that has entered into an appropriate agreement
with the Distributor.
|_| Dealers, brokers, banks, or registered investment advisers that have
entered into an agreement with the Distributor to sell shares to
defined contribution employee retirement plans for which the dealer,
broker or investment adviser provides administration services.

|-|

Retirement Plans and deferred compensation plans and trusts used to fund
those plans (including, for example, plans qualified or created under
sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code),
in each case if those purchases are made through a broker, agent or
other financial intermediary that has made special arrangements with
the Distributor for those purchases.
|_| A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
Advisors) whose Class B or Class C shares of a Former Quest for Value
Fund were exchanged for Class A shares of that Fund due to the
termination of the Class B and Class C TRAC-2000 program on November
24, 1995.
|_| A qualified Retirement Plan that had agreed with the former Quest for
Value Advisors to purchase shares of any of the Former Quest for Value
Funds at net asset value, with such shares to be held through
DCXchange, a sub-transfer agency mutual fund clearinghouse, if that
arrangement was consummated and share purchases commenced by December
31, 1996.

B. Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions.

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

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

|_| For distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes: 1)
Following the death or disability (as defined in the Internal
Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was
established.
2) To return excess contributions.
3) To return contributions made due to a mistake of fact. 4) Hardship
withdrawals, as defined in the plan.6 5) Under a Qualified Domestic
Relations Order, as defined in the

Internal Revenue Code, or, in the case of an IRA, a divorce or
separation agreement described in Section 71(b) of the Internal
Revenue Code.

6) To meet the minimum distribution requirements of the Internal
Revenue Code.
7) To make "substantially equal periodic payments" as described in
Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries. 9) Separation from
service.7
10)Participant-directed redemptions to purchase shares of a mutual
fund (other than a fund managed by the Manager or a subsidiary of
the Manager) if the plan has made special arrangements with the
Distributor.
11)Plan termination or "in-service distributions," if the redemption
proceeds are rolled over directly to an OppenheimerFunds-sponsored
IRA.

Fordistributions 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.

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

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

A. Waivers for Redemptions in Certain Cases.

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.
Thecontingent deferred sales charges are generally not waived following
the death or disability of a grantor or trustee for a trust account.
The contingent deferred sales charges will only be waived in the
limited case of the death of the trustee of a grantor trust or
revocable living trust for which the trustee is also the sole
beneficiary. The death or disability must have occurred after the
account was established, and for disability you must provide evidence
of a determination of disability by the Social Security Administration.

|_| Distributions from accounts for which the broker-dealer of record has
entered into a special agreement with the Distributor allowing this
waiver.
|_| Redemptions of Class B shares held by Retirement Plans whose records
are maintained on a daily valuation basis by Merrill Lynch or an
independent record keeper under a contract with Merrill Lynch.
|_| Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
accounts of clients of financial institutions that have entered into a
special arrangement with the Distributor for this purpose.

|_| Redemptions requested in writing by a Retirement Plan sponsor of Class
C shares of an Oppenheimer fund in amounts of $500,000 or more and made
more than 12 months after the Retirement Plan's first purchase of Class
C shares, if the redemption proceeds are invested in Class N shares of
one or more Oppenheimer funds.
|_| Distributions8 from Retirement Plans or other employee benefit plans
for any of the following purposes: 1) Following the death or disability
(as defined in the Internal

Revenue Code) of the participant or beneficiary. The death or
disability must occur after the participant's account was
established in an Oppenheimer fund.

2) To return excess contributions made to a participant's account. 3)
To return contributions made due to a mistake of fact. 4) To make
hardship withdrawals, as defined in the plan.9 5) To make distributions
required under a Qualified Domestic

Relations Order or, in the case of an IRA, a divorce or separation
agreement described in Section 71(b) of the Internal Revenue Code.

mutual fund (other than a fund managed by the Manager or a
subsidiary of the Manager) offered as an investment option in a
Retirement Plan if the plan has made special arrangements with the
Distributor.

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

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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

Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions. The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:

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

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

Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but
Prior to November 24, 1995. In the following cases, the contingent deferred
sales charge will be waived for redemptions of Class A, Class B or Class C
shares of an Oppenheimer fund. The shares must have been acquired by the merger
of a Former Quest for Value Fund into the fund or by exchange from an
Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995: 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

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.

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

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

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

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.

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

1) by the estate of a deceased shareholder;
2) upon the disability of a shareholder, as defined in Section 72(m)(7) of
the Internal Revenue Code;
3) for retirement distributions (or loans) to participants or beneficiaries
from retirement plans qualified under Sections 401(a) or 403(b)(7)of the
Code, or from IRAs, deferred compensation plans created under Section 457
of the Code, or other employee benefit plans;
4) as tax-free returns of excess contributions to such retirement or employee
benefit plans;
5) in whole or in part, in connection with shares sold to any state, county,
or city, or any instrumentality, department, authority, or agency thereof,
that is prohibited by applicable investment laws from paying a sales
charge or concession in connection with the purchase of shares of any
registered investment management company;
6) in connection with the redemption of shares of the Fund due to a
combination with another investment company by virtue of a merger,
acquisition or similar reorganization transaction;
7) in connection with the Fund's right to involuntarily redeem or liquidate
the Fund;
8) in connection with automatic redemptions of Class A shares and Class B
shares in certain retirement plan accounts pursuant to an Automatic
Withdrawal Plan but limited to no more than 12% of the original value
annually; or
9) as involuntary redemptions of shares by operation of law, or under
procedures set forth in the Fund's Articles of Incorporation, or as
adopted by the Board of Directors of the Fund.

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

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

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

- dealers, brokers, or registered investment advisors that had entered into
an agreement with the Distributor or the prior distributor of the Fund
specifically providing for the use of Class M shares of the Fund in
specific investment products made available to their clients, |_|
and dealers, brokers or registered investment advisors that had entered
into an agreement with the Distributor or prior distributor of the
Fund's shares to sell shares to defined contribution employee
retirement plans for which the dealer, broker, or investment advisor
provides administrative services.

Oppenheimer Small Cap Value Fund

Internet Website

WWW.OPPENHEIMERFUNDS.COM

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

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

Transfer Agent

OppenheimerFunds Services
P.O. Box 5270 Denver, Colorado 80217 1.800.CALL.OPP (225.5677)

Custodian Bank
Citibank, N.A.
111 Wall Street
New York, New York 10005

Independent Auditors
KPMG LLP

707 Seventeenth Street
Denver, Colorado 80202

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

1234

PX251.1202

Oppenheimer
Quest Balanced Value Fund

Prospectus dated December 23, 2002

Oppenheimer Quest Balanced Value Fund
is a mutual fund. The Fund's primary
objective is growth of capital, and
the Fund also seeks investment income.
The Fund invests primarily in equity
securities, but also buys debt
securities.
This Prospectus contains
important information about the Fund's
objective, and 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.

[OppenheimerFunds logo]

CONTENTS

ABOUT THE FUND
------------------------------------------------------------------------------

The Fund's Investment Objective and Strategies

Main Risks of Investing in the Fund

The Fund's Past Performance

Fees and Expenses of the Fund

About the Fund's Investments

How the Fund is Managed

ABOUT YOUR ACCOUNT
------------------------------------------------------------------------------

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

Special Investor Services
AccountLink
PhoneLink

OppenheimerFunds Internet Website
Retirement Plans

How to Sell Shares

By 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 Strategies

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks a combination of
growth of capital and investment income. The Fund's primary objective is
growth of capital.

WHAT DOES THE FUND MAINLY INVEST IN? To seek growth, the Fund normally invests
mainly in common stocks of U.S. issuers that the portfolio manager believes are
undervalued in the marketplace. The Fund also invests in other equity
securities, such as preferred stock and securities convertible into common
stock. The Fund also buys corporate and government bonds, notes and other debt
securities for investment income, which can include securities below investment
grade.

Under normal market conditions, the Fund invests:

o at least 25% of its total assets in equity securities, including common
stocks and preferred stocks, and expects to have between 50% to 70% of its
total assets invested in equities, and
o at least 25% of its total assets in fixed-income senior securities.

The Fund's investments in fixed-income securities include bonds,
debentures, notes, convertible securities and U.S. Government securities. 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, who is employed
by the Sub-Advisor, OpCap Advisors, uses a "value" approach to investing. The
portfolio manager searches primarily for securities of established companies
believed to be undervalued in the marketplace, in relation to factors such as a
company's assets, earnings, growth potential and cash flows. This process and
the inter-relationship of the factors used may change over time and its
implementation may vary in particular cases. Currently, the selection process
for equity securities includes the following techniques:
o A "bottom up" analytical approach using fundamental research to focus
on particular issuers before considering industry trends, by evaluating
each issuer's characteristics, financial results and management.
o A search for securities of established companies believed to be
undervalued and having a high return on capital, strong management
committed to shareholder value, and positive cash flows.
o Ongoing monitoring of issuers for fundamental changes in the company
that might alter the portfolio manager's initial expectations about the
security and might result in a decision to sell the security.

The portfolio manager allocates the Fund's investments among equity and
debt securities after assessing the relative values of these different types of
investments under prevailing market conditions. Within the parameters for stock
and bond investments described above, under normal market conditions the
portfolio might hold stocks, bonds and money market instruments in different
proportions at different times. The portfolio manager might increase the
relative emphasis of investments in bonds and other fixed-income securities,
instead of stocks, when he thinks that:

o common stocks in general appear to be overvalued,
o debt securities present capital growth and income opportunities
relative to common stocks because of declining interest rates
or improved issuer credit quality, or
o it is desirable to maintain liquidity pending investment in equity
securities to seek capital growth opportunities.

WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors seeking capital
appreciation over the long term with the opportunity for some income. Those
investors should be willing to assume the risk of short-term share price
fluctuations that are typical for a fund emphasizing equity investments. Since
the Fund's income level will fluctuate, it is not designed for investors needing
an assured level of current income. Because of its primary focus on long-term
growth, with income as a secondary goal, the Fund may be appropriate for
moderately aggressive investors and for a portion of a retirement plan
investment. The Fund is not a complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in stocks and
bonds are subject to changes in their value from a number of factors, described
below. There is also the risk that poor selection by the portfolio manager will
cause the Fund to underperform other funds having a similar objective. As an
example, the portfolio manager's "value" approach to investing could result in
fewer Fund investments in stocks that become highly valued by the marketplace
during times of rapid market advances. This could cause the Fund to underperform
other funds with similar investment objectives but that employ a growth or
non-value approach to investing.

RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term
volatility at times may be great. Because the Fund normally emphasizes
investments in common stocks and other equity securities, the value of the
Fund's portfolio will be affected by changes in the stock markets in which it
invests. Market risk will affect the Fund's net asset values per share, which
will fluctuate as the values of the Fund's portfolio securities change. A
variety of factors can affect the price of a particular stock and the prices of
individual stocks do not all move in the same direction uniformly or at the same
time. Different stock markets may behave differently from each other. 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. The Fund invests primarily in securities of companies with a
medium-size or larger capitalization. It also can invest in small capitalization
companies, which may have more volatile stock prices than large companies.

Industry Focus. At times the Fund may increase the relative emphasis of its
investments in a particular industry. Stocks of issuers in a particular industry
may be affected by changes in economic conditions, government regulations,
availability of basic resources or supplies, or other events that affect that
industry more than others. To the extent that the Fund is emphasizing
investments in a particular industry, its share values may fluctuate in response
to events affecting that industry.

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

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

Annual Total Returns (Class A) (as of 12/31 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 1/1/02 through 9/30/02, the cumulative return (not
annualized) before taxes for Class A shares was -27.77%. During the period shown
in the bar chart, the highest return (not annualized) before taxes for a
calendar quarter was 21.44% (4thQtr'98) and the lowest return (not annualized)
before taxes for a calendar quarter was -5.80% (3rdQtr'99).

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

Average Annual Total Returns 5 Years 10 Years
for the periods ended (or life of (or life of
December 31, 2001 class, if class, if
1 Year less) less)

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

Class A Shares (inception
11/1/91) -2.73% 14.42% 13.80%
Return Before Taxes -3.93% 11.35% 10.37%
Return After Taxes on
Distributions -1.26% 10.49% 9.77%
Return After Taxes on
Distributions and Sale of
Fund Shares

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

S&P 500 Index (reflects no
deduction for fees, expenses -11.88% 10.70% 12.93%1
or taxes)

--------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class B Shares (inception -2.37% 14.87% 15.10%
9/1/93)
-------------------------------------------------------------------------------------
Class C Shares (inception 1.60% 15.11% 14.85%
9/1/93)
-------------------------------------------------------------------------------------
------------------------------------------------------------------------------------

Class N Shares (inception N/A2 N/A N/A
3/1/01)

------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class Y Shares (inception 3.73% 7.61% N/A
5/1/00)
-------------------------------------------------------------------------------------

1 From 12/31/91.
2 Because this is a new class of shares, return data for the period specified is
not available.

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 B, the
contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class
C, the 1% contingent deferred sales charge for the 1-year period. There is no
sales charge for Class Y shares. 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 Class A shares is compared to the S&P 500 Index, an unmanaged index of
equity securities. The index performance includes reinvestment of income but
does not reflect transaction costs. The Fund's investments will vary from those
in the index.

Fees and Expenses of the Fund

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

Shareholder Fees (charges paid directly from your investment):

--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

Maximum Sales Charge 5.75% None None None None
(Load) on purchases (as
% of offering price)

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

Maximum Deferred Sales None1 5%2 1%3 1%4 None
Charge (Load) (as % of
the lower of the
original offering price
or redemption proceeds)

--------------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more ($500,000 for certain retirement plan accounts) of Class A
shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.

3. Applies to shares redeemed within 12 months of purchase. 4. Applies to shares
redeemed within 18 months of a retirement plan's
first purchase of Class N shares.

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

-------------------------------------------------------------------------------
Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Management Fees 0.85% 0.85% 0.85% 0.85% 0.85%

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

Distribution and/or
Service (12b-1) Fees 0.36% 1.00% 1.00% 0.50% N/A

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

Other Expenses 0.30% 0.30% 0.28% 0.32% 0.11%

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

Total Annual
Operating Expenses 1.51% 2.15% 2.13% 1.67% 0.96%

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

Effective March 1, 2002, the management fee rate was reduced as described below
in "How the Fund is Managed - The Manager -The Manager's Fee." If the prior
management fee rate schedule had been in effect during the entire fiscal year,
management fees would have been the same as shown above. Effective January 1,
2002 the asset-based sales charge rate for Class A shares was voluntarily
reduced to 0.10% of average annual net assets representing Class A shares of the
Fund resulting in a Class A 12b-1 fee of 0.35%. The rate in effect during 2001
for Class A shares was 0.15% of average annual net assets of the Class.
Effective January 1, 2003, the Board has voluntarily reduced the Class A
asset-based sales charge to zero resulting in a 12b-1 fee of 0.25%. The Board of
Trustees can set the rate of the asset-based sales charge on Class A shares up
to 0.15% of average annual net assets.

Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, and accounting and legal expenses that the Fund pays. The
Transfer Agent has voluntarily undertaken to the Fund to limit transfer agent
fees to 0.25% of average daily net assets per fiscal year for Class Y shares and
0.35% of average daily net assets per fiscal year for all other classes. That
undertaking for Class Y shares was effective January 1, 2001 through October 31,
2002 and all undertakings may be amended or withdrawn at any time. For the
Fund's fiscal year ended October 31, 2002, the transfer agent fees exceeded the
expense limitation described above by less than 0.01% for each class.

Effective November 1, 2002, the limit on transfer agent fees for Class Y shares
increased to 0.35% of average daily net assets per fiscal year. Had that limit
been in effect during the Fund's prior fiscal year, the transfer agent fees
would not have exceeded the expense limitation described above.

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

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

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

Class A Shares $ 720 $ 1,025 $ 1,351 $ 2,273

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

Class B Shares $ 718 $ 973 $ 1,354 $ 2,1721

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

Class C Shares $ 316 $ 667 $ 1,144 $ 2,462

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

Class N Shares $ 270 $ 526 $ 907 $ 1,976

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

Class Y Shares $ 98 $ 306 $ 531 $ 1,178

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

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

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

Class A Shares $ 720 $ 1,025 $ 1,351 $ 2,273

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

Class B Shares $ 218 $ 673 $ 1,154 $ 2,1721

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

Class C Shares $ 216 $ 667 $ 1,144 $ 2,462

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

Class N Shares $ 170 $ 526 $ 907 $ 1,976

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

Class Y Shares $ 98 $ 306 $ 531 $ 1,178

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

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. The allocation of the Fund's portfolio
among different types of investments will vary over time based upon the
evaluation of economic and market trends. The Fund's portfolio might not always
include all of the different types of investments described in this prospectus.
The Statement of Additional Information contains more detailed information about
the Fund's investment policies and risks.

The Fund's investment manager, OppenheimerFunds, Inc., has engaged the
Sub-Advisor, OpCap Advisors, to select securities for the Fund's portfolio. The
Sub-Advisor tries to reduce risks by carefully researching securities before
they are purchased and to reduce the Fund's exposure to market risks by
diversifying its investments. That means the Fund does not hold a substantial
percentage of the stock of any one company and does not invest too great a
percentage of the Fund's assets in any one issuer. Also, the Fund does not
concentrate 25% or more of its investments in any one industry.

Stock and Other Equity Investments. The Fund invests in equity securities for
growth opportunities as well as secondarily for income from dividends.
While the Fund does not limit its investments to issuers in a particular
capitalization range, the portfolio manager currently focuses on
securities of mid-size and larger established companies.

Although they are debt securities, the Sub-Advisor considers some
convertible securities to be "equity equivalents" because of the
conversion feature, and their credit rating must meet the Fund's credit
criteria for debt securities described below but has less impact on the
investment decision than in the case of other debt securities. Other
convertible securities may behave more like other debt securities.

Debt Securities. The Fund may invest in corporate bond obligations, as well as
government obligations and mortgage-related securities described below.
Debt securities are selected primarily for their income possibilities and
their relative emphasis in the portfolio may be greater when the stock
market is volatile. For example, when interest rates are falling, or when
the credit quality of a particular issuer is improving, the portfolio
manager might buy debt securities for their own appreciation
possibilities. The Fund has no limit on the range of maturities of the
debt securities it can buy.
The Fund can buy short-term debt securities for liquidity, for example,
pending the purchase of new investments or to have cash to pay for
redemptions of Fund shares. The Sub-Advisor does not rely solely on
ratings by rating organizations in selecting debt securities, but also
uses its own judgment to evaluate particular issues as well as business
and economic factors affecting an issuer. The debt securities the Fund
buys may be rated by nationally-recognized rating organizations or they
may be unrated securities assigned a rating by the Sub-Advisor.

The Fund's investments in debt securities, including convertible
securities, can be above or below investment grade in quality.
"Investment-grade" securities are those rated in the four highest rating
categories by Moody's Investors Service or other rating organizations, or,
if unrated, assigned a comparable rating by the Sub-Advisor. A list of the
ratings definitions of the principal ratings organizations is in Appendix
A to the Statement of Additional Information.

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

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

Some securities issued or guaranteed by agencies or instrumentalities of
the U.S. government have different levels of credit support from the U.S.
government. Some are supported by the full faith and credit of the U.S.
government, such as Government National Mortgage Association pass-through
mortgage certificates (called "Ginnie Maes"). Some are supported by the
right of the issuer to borrow from the U.S. Treasury under certain
circumstances, such as Federal National Mortgage Association bonds
("Fannie Maes"). Others are supported only by the credit of the entity
that issued them, such as Federal Home Loan Mortgage Corporation
obligations ("Freddie Macs"). These have relatively little credit risk.

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

Special Risks of Lower-Grade Securities. Because the Fund can invest as much as
25% of its total assets in securities below investment grade (commonly
known as "junk bonds") to seek higher 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 higher-grade debt
securities. Securities that are (or have fallen) below investment grade
entail a greater risk that the issuers of such securities may not meet
their debt obligations. However, by limiting its investments in
non-investment grade debt securities, the Fund may reduce the effect of
some of these risks on its share price and income. Currently, the
portfolio manager does not intend to buy these securities unless they
offer relatively attractive opportunities for both income and capital
appreciation.

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

Foreign Investing. The Fund can buy foreign securities that are listed on a
domestic or foreign stock exchange, traded in domestic or foreign
over-the-counter markets, or represented by American Depository Receipts.
The Fund may invest in developed markets as well as emerging markets,
which have greater risks than developed markets, although the Fund
currently does not intend to purchase securities issued by governments or
companies in emerging markets. The Fund will hold foreign currency only in
connection with buying and selling foreign securities.

While the Fund has no limits on the amounts it can invest in foreign
securities, it normally does not expect to invest substantial amounts of
its assets in foreign securities. Foreign securities may offer special
investment opportunities, but there are also special risks.

The change in value of a foreign currency against the U.S. dollar will
result in a change in the U.S. dollar value of securities denominated in
that foreign currency. Foreign issuers are not subject to the same
accounting and disclosure requirements 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. These risks could cause the prices of
foreign securities to fall and could therefore depress the Fund's share
prices.

"When-Issued" And "Delayed-Delivery" Transactions. The Fund can purchase
securities on a "when-issued" basis and may purchase or sell securities on
a "delayed-delivery" basis. There is a risk that the value of the security
might decline prior to the settlement date. The Fund will not commit more
than 15% of its net assets under these transactions. Between the purchase
and settlement no payment is made for the when-issued security and no
interest accrues to the buyer from the investment.

Portfolio Turnover. A change in the securities held by the Fund is known as
"portfolio turnover." The Fund can engage in active and frequent
short-term trading to try to achieve its objective. It may have a
portfolio turnover rate in excess of 100% annually. Portfolio turnover
increases brokerage costs the Fund pays. If the Fund realizes capital
gains when it sells its portfolio investments, it must generally pay those
gains out to shareholders, increasing their taxable distributions. The
Financial Highlights table at the end of this Prospectus shows the Fund's
portfolio turnover rates during prior fiscal years.

Temporary Defensive and Interim Investments. In times of adverse or unstable
market, economic or political conditions, the Fund can invest up to 100%
of its assets in temporary defensive investments. Generally they would be
short-term U.S. Government securities and the types of money market
instruments described above. The Fund can also hold these types of
securities pending the investment of proceeds from the sale of Fund shares
or portfolio securities or to meet anticipated redemptions of Fund shares.
To the extent the Fund invests defensively in these securities, it might
not achieve its primary investment objective of capital growth.

How the Fund Is Managed

THE MANAGER. The Manager supervises the Fund's investment program and handles
its day-to-day business. The Manager carries out its duties, subject to the
policies established by the Fund's Board of Trustees, under an Investment
Advisory Agreement that states the Manager's responsibilities. The agreement
sets the fees paid by the Fund to the Manager and describes the expenses that
the Fund pays to conduct its business. The Manager became the Fund's investment
advisor on November 22, 1995.

The Manager's Fees. Under the Investment Advisory Agreement, effective March
1, 2002, the Fund pays the Manager an advisory fee at an annual rate that
declines on additional assets as the Fund grows: 0.85% of the first $5
billion of average annual net assets of the Fund, 0.75% of the next $1
billion, 0.65% of the next $1 billion, and 0.60% of average annual net
assets in excess of $7 billion. Prior to March 1, 2002, the management fee
was 0.85% of average annual net assets. The Fund's management fee for its
last fiscal year ended October 31, 2002 was 0.85% of average annual net
assets for each class of shares.

The Sub-Advisor. On November 22, 1995, the Manager retained the Sub-Advisor to
provide day-to-day portfolio management for the Fund. Prior to that date
and from the inception of the Fund, the Sub-Advisor had been the Fund's
investment advisor. The Sub-Advisor has operated as an investment advisor
to investment companies and other investors since its organization in
1980, and as of September 30, 2002, the Sub-Advisor and its parent,
Oppenheimer Capital, advised accounts having assets in excess of $26
billion. The Sub-Advisor is located at 1345 Avenue of the Americas, 49th
Floor, New York, New York 10105-4800.

The Sub-Advisor is wholly-owned by Oppenheimer Capital, LLC, which is
wholly-owned by Allianz Dresdner Asset Management of America L.P. The
general partner of Allianz Dresdner Asset Management of America L.P. is
Allianz-PacLife LLP. Allianz AG has majority ownership of, and controls,
Allianz Dresdner Asset Management of America L.P. and its subsidiaries,
including Oppenheimer Capital and the Sub-Advisor.

Portfolio Manager. The portfolio manager of the Fund is Colin Glinsman, who is
Chief Executive Officer and Chief Investment Officer of the Sub-Advisor.
He is the person primarily responsible for the day-to-day management of
the Fund's portfolio. Mr. Glinsman is the Managing Director, Chief
Executive Officer and the Chief Investment Officer of Oppenheimer Capital,
the immediate parent company of the Sub-Advisor. He has been the Fund's
portfolio manager since December 1992.

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.

BuyingShares Through the Distributor. Complete an OppenheimerFunds New Account
Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If
you don't list a dealer on the application, the Distributor will act as
your agent in buying the shares. However, we recommend that you discuss
your investment with a financial advisor before you make a purchase to be
sure that the Fund is appropriate for you.
o Paying by Federal Funds Wire. Shares purchased through the Distributor
may be paid for by Federal Funds wire. The minimum investment is $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 pay for shares by electronic funds transfers from your bank
account. Shares are purchased for your account by a transfer of money
from your bank account through the Automated Clearing House (ACH)
system. You can provide those instructions 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.

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.
By using an Asset Builder o Plan or Automatic Exchange Plan (details are in
the Statement of Additional Information), or government allotment plan,
you can make subsequent investments (after making the initial investment
of $500) for as little as $50. For any type of account established under
one of these plans prior to November 1, 2002, the minimum additional
investment will remain $25.

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

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
probably consider purchasing Class A or Class C shares rather than Class B
shares. That is because of the effect of the Class B contingent deferred
sales charge if you redeem within six years, as well as the effect of the
Class B asset-based sales charge on the investment return for that class
in the short term. Class C shares might be the appropriate choice
(especially for investments of less than $100,000), because there is no
initial sales charge on Class C shares, and the contingent deferred sales
charge does not apply to amounts you sell after holding them one year.

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.

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

Amount of Purchase Front-End Sales Front-End Sales Concession As
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 5.50% 5.82% 4.75%
less than $50,000

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

$50,000 or more but 4.75% 4.99% 4.00%
less than $100,000

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

$100,000 or more 3.75% 3.90% 3.00%
but less than
$250,000

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

$250,000 or more 2.50% 2.56% 2.00%
but less than
$500,000

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

$500,000 or more but 2.00% 2.04% 1.60%
less than $1 million

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

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

Years Since Beginning of Month in Which Contingent Deferred Sales Charge on
Purchase Order was Accepted Redemptions in That Year
(As % of Amount Subject to Charge)

---------------------------------------------------------------------------------
-------------------------------------------------------------------------------
0 - 1 5.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1 - 2 4.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2 - 3 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3 - 4 3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4 - 5 2.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5 - 6 1.0%
-------------------------------------------------------------------------------
---------------------------------------------------------------------------------

More than 6 None

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.

An institutional investor that buys Class Y shares for its customers'
accounts may impose charges on those 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
at their Colorado office) and the special account features available to
investors buying those other classes of shares do not apply to Class Y shares.
Instructions for buying, selling, exchanging or transferring Class Y shares held
by institutional investors must be submitted by the institutional investor, not
by its customers for whose benefit the shares are held.

DISTRIBUTION AND SERVICE (12b-1) PLANS.

Distribution and Service Plan for Class A Shares. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan the Fund
will pay through December 31, 2002 an asset-based sales charge to the
Distributor at an annual rate of 0.10% of average annual net assets of
Class A shares of the Fund (the Board of Trustees can set this rate up to
0.15%). Effective January 1, 2003 the Board has voluntarily reduced the
asset-based sales charge in all Class A shares to zero. The Fund also pays
a service fee to the Distributor of 0.25% of the average annual net assets
of Class A shares. The Distributor currently uses all of the service fee
and, until December 31, 2002, the asset-based sales charge, to pay
dealers, brokers, banks and other financial institutions quarterly for
providing personal service and maintenance of accounts of their customers
that hold Class A shares. With respect to Class A shares subject to a
Class A contingent deferred sales charge purchased by grandfathered
retirement accounts, the Distributor pays the 0.25% service fee to dealers
in advance for the first year after the shares are sold by the dealer.
During the first year after the shares are sold, the Distributor retains
the service fee. After the shares have been held for a year, the
Distributor pays the service fee to dealers on a quarterly basis.

Special Investor Services

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.

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.

403(b)(7) Custodial Plans. These are tax-deferred plans for employees of
eligible tax-exempt organizations, such as schools, hospitals and
charitable organizations.

How to Sell Shares

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

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.

registered, and

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

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption price
calculated on a particular regular business day, your call must be received by
the Transfer Agent by the close of The New York Stock Exchange that day, which
is normally 4:00 P.M., but may be earlier on some days. You may not redeem
shares held in an OppenheimerFunds retirement plan account or under a share
certificate by telephone.
o 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.

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.

How to Exchange Shares

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

Telephone Exchange Requests. Telephone exchange requests may be made either by
calling a service representative or by using PhoneLink for automated
exchanges by calling 1.800.225.5677. Telephone exchanges may be made only
between accounts that are registered with the same name(s) and address.
Shares held under certificates may not be exchanged by telephone.

Shareholder Account Rules and Policies

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.

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.

"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.

Dividends, Capital Gains and Taxes

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

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.

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). The information for fiscal years 2002, 2001 and 2000 has been
audited by KPMG LLP, the Fund's independent auditors, whose report, along with
the Fund's financial statements, is included in the Statement of Additional
Information, which is available on request. Another accounting firm audited the
information for the fiscal years prior to 2000.

FINANCIAL HIGHLIGHTS

Class A Year Ended October 31 2002 2001 2000 1999 1998
================================================================================================

Per Share Operating Data
Net asset value, beginning of period $16.09 $16.66 $16.41 $15.50 $13.99
------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .17 .46 .36 .21 .26
Net realized and unrealized gain (loss) (3.53) (.20) .55 2.88 3.24
---------------------------------------------------
Total from investment operations (3.36) .26 .91 3.09 3.50
------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.27) (.53) (.28) (.26) (.20)
Distributions from net realized gain (.44) (.30) (.38) (1.92) (1.79)
---------------------------------------------------
Total dividends and/or distributions
to shareholders (.71) (.83) (.66) (2.18) (1.99)
------------------------------------------------------------------------------------------------
Net asset value, end of period $12.02 $16.09 $16.66 $16.41 $15.50
===================================================

================================================================================================
Total Return, at Net Asset Value 1 (21.88)% 1.64% 5.78% 21.48% 27.91%

================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,667,143 $1,763,404 $1,027,560 $899,084 $135,821
------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,960,568 $1,353,860 $1,020,483 $454,409 $103,244
------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 1.20% 2.61% 2.24% 1.81% 2.07%
Expenses 1.51% 1.47% 1.45% 1.51% 1.55% 3
------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 88% 105% 58% 165%

See accompanying Notes to Financial Statements.

21 | OPPENHEIMER QUEST BALANCED VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class B Year Ended October 31 2002 2001 2000 1999 1998
================================================================================================

Per Share Operating Data
Net asset value, beginning of period $16.00 $16.52 $16.28 $15.40 $13.92
------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 .35 .25 .14 .19
Net realized and unrealized gain (loss) (3.52) (.19) .55 2.84 3.20
---------------------------------------------------
Total from investment operations (3.45) .16 .80 2.98 3.39
------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.13) (.38) (.18) (.18) (.12)
Distributions from net realized gain (.44) (.30) (.38) (1.92) (1.79)
---------------------------------------------------
Total dividends and/or distributions
to shareholders (.57) (.68) (.56) (2.10) (1.91)
------------------------------------------------------------------------------------------------
Net asset value, end of period $11.98 $16.00 $16.52 $16.28 $15.40
===================================================

================================================================================================
Total Return, at Net Asset Value 1 (22.38)% 1.03% 5.10% 20.84% 27.08%

================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,759,167 $1,836,130 $925,476 $801,485 $60,807
------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,068,300 $1,307,367 $873,470 $355,797 $39,165
------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.56% 2.00% 1.64% 1.21% 1.53%
------------------------------------------------------------------------------------------------
Expenses 2.15% 2.07% 2.06% 2.10% 2.15% 3
------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 88% 105% 58% 165%

See accompanying Notes to Financial Statements.

22 | OPPENHEIMER QUEST BALANCED VALUE FUND

Class C Year Ended October 31 2002 2001 2000 1999 1998
================================================================================================

Per Share Operating Data
Net asset value, beginning of period $16.00 $16.51 $16.27 $15.40 $13.92
------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .07 .34 .25 .15 .18
Net realized and unrealized gain (loss) (3.52) (.18) .55 2.83 3.21
---------------------------------------------------
Total from investment operations (3.45) .16 .80 2.98 3.39
------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.14) (.37) (.18) (.19) (.12)
Distributions from net realized gain (.44) (.30) (.38) (1.92) (1.79)
---------------------------------------------------
Total dividends and/or distributions
to shareholders (.58) (.67) (.56) (2.11) (1.91)
------------------------------------------------------------------------------------------------
Net asset value, end of period $11.97 $16.00 $16.51 $16.27 $15.40
===================================================

================================================================================================
Total Return, at Net Asset Value 1 (22.40)% 1.05% 5.10% 20.80% 27.12%

================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $763,338 $751,229 $341,824 $313,506 $20,910
------------------------------------------------------------------------------------------------
Average net assets (in thousands) $903,426 $502,037 $336,336 $139,356 $11,598
------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.58% 2.00% 1.64% 1.21% 1.60%
Expenses 2.13% 2.07% 2.06% 2.10% 2.15% 3
------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 88% 105% 58% 165%

See accompanying Notes to Financial Statements.

23 | OPPENHEIMER QUEST BALANCED VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class N Year Ended October 31 2002 2001 1
=======================================================================================

Per Share Operating Data
Net asset value, beginning of period $ 16.05 $ 16.84
---------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 .22
Net realized and unrealized loss (3.56) (.83)
--------------------
Total from investment operations (3.36) (.61)
---------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.31) (.18)
Distributions from net realized gain (.44) --
--------------------
Total dividends and/or distributions
to shareholders (.75) (.18)
---------------------------------------------------------------------------------------
Net asset value, end of period $11.94 $16.05
====================

=======================================================================================
Total Return, at Net Asset Value 2 (21.99)% (3.71)%

=======================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $85,744 $19,649
---------------------------------------------------------------------------------------
Average net assets (in thousands) $70,477 $ 4,977
---------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.07% 2.75%
Expenses 1.67% 1.58%
---------------------------------------------------------------------------------------
Portfolio turnover rate 108% 88%

See accompanying Notes to Financial Statements.

24 | OPPENHEIMER QUEST BALANCED VALUE FUND

Class Y Year Ended October 31 2002 2001 2000 1
======================================================================================

Per Share Operating Data
Net asset value, beginning of period $ 16.05 $ 16.67 $ 15.65
--------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .25 .74 .15
Net realized and unrealized gain (loss) (3.52) (.40) .99
-----------------------------
Total from investment operations (3.27) .34 1.14
--------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.38) (.66) (.12)
Distributions from net realized gain (.44) (.30) --
-----------------------------
Total dividends and/or distributions
to shareholders (.82) (.96) (.12)
--------------------------------------------------------------------------------------
Net asset value, end of period $11.96 $16.05 $16.67
=============================

======================================================================================
Total Return, at Net Asset Value 2 (21.48)% 2.14% 7.32%

======================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $118,068 $134,654 $144
--------------------------------------------------------------------------------------
Average net assets (in thousands) $137,322 $ 77,394 $ 32
--------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.75% 2.97% 2.46%
Expenses 0.96% 1.00% 0.98%
--------------------------------------------------------------------------------------
Portfolio turnover rate 108% 88% 105%

1. For the period from May 1, 2000 (inception of offering) to October 31, 2000.
2. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

INFORMATION AND SERVICES

For More Information on Oppenheimer Quest Balanced Value Fund The following
additional information about the Fund is available without charge upon request:

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:

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

----------------------------- Call OppenheimerFunds Services toll-free:

By Telephone: -----------------------------------------------
1.800.CALL.OPP (225.5677)

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

----------------------------- Write to:

By Mail: -----------------------------------------------
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270

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

----------------------------- You can send us a request by e-mail or read or
down-load documents on the OppenheimerFunds
website: WWW.OPPENHEIMERFUNDS.COM
------------------------
On the Internet:

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

The Fund's shares are distributed by: [logo]
OppenheimerFunds Distributor, Inc.

The Fund's SEC File No. 811-5225

PR0257.001.1202
Printed on recycled paper

Appendix to Prospectus of
Oppenheimer Quest Balanced Value Fund

Graphic Material included in the Prospectus of Oppenheimer Quest
Balanced Value Fund: (the "Fund") "Annual Total Returns (Class A) (as of
12/31 each year)":

Calendar Annual
Year Total
Ended Returns
----- -------
12/31/92 8.53%
12/31/93 11.77%
12/31/94 1.13%
12/31/95 28.41%
12/31/96 17.95%
12/31/97 31.01%
12/31/98 28.18%
12/31/99 11.23%
12/31/00 7.94%
12/31/01 3.20 %

------------------------------------------------------------------------------
Oppenheimer Quest Balanced Value Fund
------------------------------------------------------------------------------

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

Statement of Additional Information dated December 23, 2002

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

ABOUT THE FUND
------------------------------------------------------------------------------

Additional Information About the Fund's Investment Policies and Risks

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

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

|_| Value Investing. In selecting equity investments for the Fund's
portfolio, the portfolio manager currently uses a value investing style. In
using a value approach, the portfolio manager seeks stock and other equity
securities that appear to be temporarily undervalued, by various measures, such
as price/earnings ratios. This approach is subject to change and might not
necessarily be used in all cases. Value investing seeks stocks having prices
that are low in relation to their real worth or future prospects, in the hope
that the Fund will realize appreciation in the value of its holdings when other
investors realize the intrinsic value of the stock.

|_| Rights and Warrants. The Fund can invest up to 5% of its total
assets in warrants and rights. Warrants basically are options to purchase equity
securities at specific prices valid for a specific period of time. Their prices
do not necessarily move parallel to the prices of the underlying securities.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and warrants have
no voting rights, receive no dividends and have no rights with respect to the
assets of the issuer.

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

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

|X| Investments in Debt Securities. The Fund invests in a variety of
domestic and foreign debt securities, including corporate bonds, debentures and
other debt securities, and foreign and U.S. government securities including
mortgage-related securities, to seek investment income as part of its investment
objectives. It might invest in them also to seek capital growth or for liquidity
or defensive purposes. Although the Fund will invest at least 25% of its total
assets in fixed-income senior securities, the Fund currently emphasizes
investments in equity securities. Foreign debt securities are subject to the
risks of foreign investing described below. In general, domestic and foreign
debt securities are also subject to credit risk and interest rate risk.

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

|_| Special Risks of Lower-Grade Securities. The Fund can invest up to
25% of its total assets in lower-grade debt securities. Because lowergrade
securities tend to offer higher yields than investment-grade securities, the
Fund may invest in lowergrade securities if the Sub-Advisor is trying to achieve
greater income. In some cases, the appreciation possibilities of lower-grade
securities may be a reason they are selected for the Fund's portfolio.
"Lower-grade" debt securities are those rated below "investment grade"
which means they have a rating lower than "Baa" by Moody's or lower than "BBB"
by Standard & Poor's or Duff & Phelps, or similar ratings by other rating
organizations. If they are unrated, and are determined by the Sub-Advisor to be
of comparable quality to debt securities rated below investment grade, they are
included in determining the maximum amount of the Fund's assets that can be
invested in lower-grade securities under the 25% limitation. The Fund can invest
in securities rated as low as "Caa" by Moody's or "CCC" by Standard and Poor's,
although currently it does not intend to invest in securities in those ratings
categories.

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

However, the Fund's limitations on these investments may reduce some of
the risks to the Fund, as will the Fund's policy of diversifying its
investments. Additionally, to the extent they can be converted into stock,
convertible securities may be less subject to some of these risks than
non-convertible high yield bonds, since stock may be more liquid and less
affected by some of these risk factors.

While securities rated "Baa" by Moody's or "BBB" by Standard & Poor's or
Duff & Phelps are investment grade and are not regarded as junk bonds, those
securities may be subject to special risks, and have some speculative
characteristics.

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

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

|X| U.S. Government Securities. These are securities issued or guaranteed
by the U.S. Treasury or other U.S. government agencies or federally-chartered
corporate entities referred to as "instrumentalities." The obligations of U.S.
Government agencies or instrumentalities in which the Fund may invest may or may
not be guaranteed or supported by the "full faith and credit" of the United
States. "Full faith and credit" means generally that the taxing power of the
U.S. government is pledged to the payment of interest and repayment of principal
on a security. If a security is not backed by the full faith and credit of the
United States, the owner of the security must look principally to the agency
issuing the obligation for repayment. The owner might be able to assert a claim
against the United States if the issuing agency or instrumentality does not meet
its commitment. The Fund will invest in securities of U.S. government agencies
and instrumentalities only if the Sub-Advisor is satisfied that the credit risk
with respect to such instrumentality is minimal.

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

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

|_| Zero-Coupon U.S. Government Securities. The Fund may buy
zero-coupon U.S. government securities. These will typically be U.S. Treasury
Notes and Bonds that have been stripped of their unmatured interest coupons, the
coupons themselves, or certificates representing interests in those stripped
debt obligations and coupons.

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

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

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

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

|_| U.S. Government Securities. These include obligations issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities.

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

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

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

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

|_| Foreign Debt Obligations. The debt obligations of foreign
governments and their agencies and instrumentalitites may or may not be
supported by the full faith and credit of the foreign government. The Fund may
buy securities issued by certain "supra-national" entities, which include
entities designated or supported by governments to promote economic
reconstruction or development, international banking organizations and related
government agencies. Examples are the International Bank for Reconstruction and
Development (commonly called the "World Bank"), the Asian Development bank and
the Inter-American Development Bank.

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

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

|X| 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 Investment Company Act of 1940 (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.

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

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

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 and the Sub-Advisor
under Board-approved guidelines. Those guidelines take into account the trading
activity for such securities and the availability of reliable pricing
information, among other factors. If there is a lack of trading interest in a
particular Rule 144A security, the Fund's holdings of that security may be
considered to be illiquid.

|X| Participation Interests. The Fund can invest in participation
interests, subject to the Fund's limitation on investments in illiquid
investments. A participation interest is an undivided interest in a loan made by
the issuing financial institution in the proportion that the buyers
participation interest bears to the total principal amount of the loan. No more
than 5% of the Fund's net assets can be invested in participation interests of
the same borrower. The issuing financial institution may have no obligation to
the Fund other than to pay the Fund the proportionate amount of the principal
and interest payments it receives.

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

|X| Loans of Portfolio Securities. The Fund can lend its portfolio
securities to certain types of eligible borrowers approved by the Board of
Trustees. It may do so to try to provide income or to raise cash for liquidity
purposes. 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. The Fund presently does not intend
to engage in loans of securities.

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 must
both 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, 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.

Interfund Borrowing and Lending Arrangements. Consistent with its fundamental
policies and pursuant to an exemptive order issued by the Securities and
Exchange Commission ("SEC"), the Fund may engage in borrowing and lending
activities with other funds in the OppenheimerFunds complex. Borrowing money
from affiliated funds may afford the Fund the flexibility to use the most
cost-effective alternative to satisfy its borrowing requirements. Lending money
to an affiliated fund may allow the Fund to obtain a higher rate of return than
it could from interest rates on alternative short-term investments.
Implementation of interfund lending will be accomplished consistent with
applicable regulatory requirements, including the provisions of the SEC order.

o Interfund Lending. To assure that the Fund will not be disadvantaged by making
loans to affiliated funds, certain safeguards will be implemented. Examples of
these safeguards include the following:

When the Fund lends assets to another affiliated fund, the Fund is subject
to the credit that the borrowing fund fails to repay the loan.

|X| Hedging. Although the Fund can use hedging instruments, it is not
obligated to use them in seeking its objectives. It does not currently
contemplate using them to any significant degree. To attempt to protect against
declines in the market value of the Fund's portfolio, to permit the Fund to
retain unrealized gains in the value of portfolio securities that have
appreciated, or to facilitate selling securities for investment reasons, the
Fund could:
|_| sell futures contracts,
|_| buy puts on such futures or on securities, or
|_| write covered calls on securities or futures. Covered calls could also
be used to increase the Fund's income, but the Sub-Advisor does not expect
to engage extensively in that practice.

The Fund's strategy of hedging with futures and options on futures will be
incidental to the Fund's activities in the underlying cash market. The
particular hedging instruments the Fund can use are described below. The Fund
may employ new hedging instruments and strategies when they are developed, if
those investment methods are consistent with the Fund's investment objectives
and are permissible under applicable regulations governing the Fund.

|_| Futures. The Fund can buy and sell futures contracts that relate
to (1) broadly-based stock indices (these are referred to as "stock index
futures"), (2) foreign currencies (these are referred to as "forward
contracts"), and (3) commodities (these are referred to as "commodity futures").

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

|_| Put and Call Options. The Fund can buy and sell certain kinds of
put options ("puts") and call options ("calls"). The Fund can buy and sell
exchange-traded and over-the-counter put and call options, including options on
broadly-based indices, securities, foreign currencies and stock index futures.

|_| Writing Covered Call Options. The Fund can write (that is, sell)
covered calls. If the Fund sells a call option, it must be covered. For options
on securities, that means the Fund must own the security subject to the call
while the call is outstanding. For stock index options, that means the call must
be covered by segregating liquid assets to enable the Fund to satisfy its
obligations if the call is exercised. The Trustees have adopted an operating
policy that the Fund may not write covered call options (or write put options)
with respect to more than 5% of the value of the Fund's total assets.

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

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

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

When the Fund writes an over-the-counter ("OTC") option, it will enter
into an arrangement with a primary U.S. Government securities dealer which will
establish a formula price at which the Fund will have the absolute right to
repurchase that OTC option. The formula price will generally be based on a
multiple of the premium received for the option, plus the amount by which the
option is exercisable below the market price of the underlying security (that
is, the option is "in the money"). When the Fund writes an OTC option, it will
treat as illiquid (for purposes of its restriction on holding illiquid
securities) the mark-to-market value of any OTC option it holds, unless the
option is subject to a buy-back agreement by the executing broker.
To terminate its obligation on a call it has written, the Fund may
purchase a corresponding call in a "closing purchase transaction." The Fund will
then realize a profit or loss, depending upon whether the net of the amount of
the option transaction costs and the premium received on the call the Fund wrote
is more or less than the price of the call the Fund purchases to close out the
transaction. The Fund may realize a profit if the call expires unexercised,
because the Fund will retain the premium it received when it wrote the call. Any
such profits are considered short-term capital gains for federal income tax
purposes, as are the premiums on lapsed calls. When distributed by the Fund they
are taxable as ordinary income. If the Fund cannot effect a closing purchase
transaction due to the lack of a market, it will have to hold the escrowed
assets in escrow until the call expires or is exercised.

|_| Writing Put Options. The Fund can sell put options on stock
indices, foreign currencies or stock index futures. A put option on securities
gives the purchaser the right to sell, and the writer the obligation to buy, the
underlying investment of the exercise price during the option period. If the
Fund writes a put, the put must be covered by liquid assets identified on the
Fund's books in an amount at least equal to the exercise price of the underlying
securities. The Fund therefore forgoes the opportunity of investing the
segregated assets or writing calls against those assets.

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

The Fund may decide to effect a closing purchase transaction to realize a
profit on an outstanding put option it has written or to prevent the underlying
security from being put. The Fund will realize a profit or loss from a closing
purchase transaction depending on whether the cost of the transaction is less or
more than the premium received from writing the put option. Any profits from
writing puts are considered short-term capital gains for federal tax purposes,
and when distributed by the Fund, are taxable as ordinary income.
|_| Purchasing Calls and Puts. The Fund can buy calls to protect
against the possibility that the Fund's portfolio will not participate in an
anticipated rise in the securities market. When the Fund buys a call (other than
in a closing purchase transaction), it pays a premium. Buying a call on a
security or future gives the Fund the right to buy the underlying investment
from a seller of a corresponding call on the same investment during the call
period at a fixed exercise price. The Fund benefits only if it sells the call at
a profit or if, during the call period, the market price of the underlying
investment is above the sum of the call price plus the transaction costs and the
premium paid for the call and the Fund exercises the call. If the Fund does not
exercise the call or sell it (whether or not at a profit), the call will become
worthless at its expiration date. In that case the Fund will have paid the
premium but lost the right to purchase the underlying investment.

In the case of a purchase of a call on a stock index, if the Fund
exercises the call during the call period, a seller of a corresponding call on
the same index will pay the Fund an amount of cash to settle the call if the
closing level of the stock index upon which the call is based is greater than
the exercise price of the call. That cash payment is equal to the difference
between the closing price of the call and the exercise price of the call times a
specified multiple (the "multiplier") which determines the total dollar value
for each point of difference.
When the Fund buys a put, it pays a premium. It has the right during the
put period to require a seller of a corresponding put, upon the Fund's exercise
of its put, to buy the underlying security (in the case of puts on securities or
futures) or in the case of puts on stock indices, to deliver cash to the Fund to
settle the put if the closing level of the stock index upon which the put is
based is less than the exercise price of the put. That cash payment is
determined by the multiplier, in the same manner as described above as to calls.

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

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

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

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

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

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

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

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

Transactions in options by the Fund are subject to limitations established
by the option exchanges. The exchanges limit the maximum number of options that
may be written or held by a single investor or group of investors acting in
concert. Those limits apply regardless of whether the options were written or
purchased on the same or different exchanges or are held in one or more accounts
or through one or more different exchanges or through one or more brokers. Thus,
the number of options that the Fund may write or hold may be affected by options
written or held by other entities, including other investment companies having
the same advisor as the Fund (or an advisor that is an affiliate of the Fund's
advisor or Sub-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.

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

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

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

Investment Restrictions

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

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

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

|_| The Fund cannot invest in physical commodities or physical
commodity contracts. However, the Fund may buy and sell hedging instruments to
the extent specified in its Prospectus and this Statement of Additional
Information from time to time. The Fund can also buy and sell options, futures,
securities or other instruments backed by, or the investment return from which
is linked to changes in the price of, physical commodities.

|_| The Fund cannot invest in real estate or real estate limited
partnerships (direct participation programs). However, the Fund may purchase
securities of issuers that engage in real estate operations and securities that
are secured by real estate or interests in real estate.

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

|_| The Fund cannot invest in securities of any issuer if, to the
knowledge of the Trust, any officer or trustee of the Trust or any officer or
director of the Manager or Sub-Advisor owns more than 1/2 of 1% of the
outstanding securities of that issuer, and who together own more 5% of the
outstanding securities of that issuer;

|_| The Fund cannot pledge its assets or assign or otherwise
encumber its assets in amounts in excess of 10% of its net assets (taken at
market value at the time of pledging). The Fund can pledge, assign or encumber
its assets only to secure borrowings made within the limitations set forth in
the Prospectus or this Statement of Additional Information.

|_| The Fund cannot invest for the purpose of exercising control or
management of another company.

|_| The Fund cannot issue senior securities as defined in the
Investment Company Act of 1940. However, the Fund may enter into any repurchase
agreement; borrow money in accordance with restrictions described above, and
lend portfolio securities.

|_| The Fund cannot make loans to any person or individual. However,
portfolio securities may be loaned by the Fund within the limitations set forth
in the Prospectus or this Statement of Additional Information.

|_| The Fund cannot invest more than 5% of the value of its total
assets in the securities of any one issuer. This restriction applies to 75% of
its total assets.

|_| The Fund cannot purchase more than 10% of the voting securities
of any one issuer (other than the U.S. government or any of its agencies or
instrumentalities). This restriction applies to 75% of the Fund's total assets.

|_| The Fund cannot concentrate its investments in any particular
industry. However, if it is deemed appropriate to help the Fund attain its
investment objective, the Fund may invest up to but less than 25% of its total
assets (valued at the time of investment) in any one industry classification
used by the Fund for investment purposes. For this purpose, a foreign government
is considered to be an industry.

|_| The Fund cannot borrow money in excess of 33-1/3% of the value
of the Fund's total assets. The Fund may borrow only from banks and only as a
temporary measure for extraordinary or emergency purposes. The Fund will make no
additional investments while borrowings exceed 5% of the Fund's total assets.
With respect to this fundamental policy, the Fund can borrow only if it
maintains a 300% ratio of assets to borrowings at all times in the manner set
forth in the Investment Company Act.

|_| The Fund cannot make short sales or purchase securities on
margin. However, the Fund can mark short-term borrowings when necessary for the
clearance of purchases of portfolio securities. Collateral arrangements in
connection with futures and options transactions are not deemed to be margin
transactions under this restriction.

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

For purposes of the Fund's policy not to concentrate its assets as
described in the Prospectus, the Fund has adopted, as a matter of
non-fundamental policy, the corporate industry classifications set forth in
Appendix B to this Statement of Additional Information. The percentage
restrictions described above and in the Prospectus apply only at the time of
investment and require no action by the Fund as a result of subsequent changes
in relative values.

How the Fund is Managed

The Fund currently has five classes of shares: Class A, Class B, Class C,
Class N and Class Y. All classes invest in the same investment portfolio. Only
retirement plans may purchase Class N shares. Only certain institutional
investors may elect to purchase Class Y shares. Each class of shares: o has its
own dividends and distributions, o pays certain expenses which may be different
for the different classes, o may have a different net asset value, o may have
separate voting rights on matters in which interests of one

class are different from interests of another class, and o votes as a
class on matters that affect that class alone.

Oppenheimer Quest For Value Funds, a series fund having the following three
series:
Oppenheimer Small Cap Value Fund, Oppenheimer Quest Global Value Fund,
Inc.
Oppenheimer Quest Balanced Value Fund Oppenheimer Quest Capital Value
and Fund, Inc.
Oppenheimer Quest Opportunity Value Oppenheimer Quest Value Fund, Inc.
Fund
Rochester Portfolio Series, a series Bond Fund Series, a series fund
fund having one series: Limited-Term New having one series: Oppenheimer
York Municipal Fund Convertible Securities Fund
Rochester Fund Municipals Oppenheimer MidCap Fund

Messrs. Murphy, Masterson, Molleur, Vottiero, Wixted and Zack and Mses.
Bechtolt, Feld and Ives who are officers of the Fund, respectively hold the same
offices of one or more of the other Board III Funds as with the Fund. As of
November 27, 2002, the Trustees and officers of the Fund, as a group, owned of
record or beneficially less than 1% of each class of shares of the Fund. The
foregoing statement does not reflect ownership of shares of the Fund held of
record by an employee benefit plan for employees of the Manager, other than the
shares beneficially owned under the plan by the officers of the Fund listed
above. In addition, each Independent Trustee, and his or her family members, do
not own securities of either the Manager, Distributor or Sub-Advisor of the
Board III Funds or any person directly or indirectly controlling, controlled by
or under common control with the Manager, Distributor or Sub-Advisor.

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

Independent
Trustees

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

Name, Principal Occupation(s) During Past Dollar Aggregate
Position(s) Held Dollar Range
with Fund, Of Shares
Length of Service, of Beneficially
Age 5 Years; Range Owned in Any
Other Trusteeships/Directorships Sharesciallyof the
Held by Trustee; Benefiin Oppenheimer
Number of Portfolios in Fund Owned nd Funds
Complex Currently Overseen by the Fu Overseen by
Trustee Trustee

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

As of December 31,
2001

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

Paul Y. Clinton, Principal of Clinton Management $0 Over $100,000
Trustee, since Associates, a financial and venture
1996 Age: 71. capital consulting firm; Trustee of
Capital Cash Management Trust, a
money-market fund and Narragansett
Tax-Free Fund, a tax-exempt bond
fund; Director of OCC Cash
Reserves, Inc. and Trustee of OCC
Accumulation Trust, both of which
are open-end investment companies.
Formerly: Director, External
Affairs, Kravco Corporation, a
national real estate owner and
property management corporation;
President of Essex Management
Corporation, a management
consulting company; a general
partner of Capital Growth Fund, a
venture capital partnership; a
general partner of Essex Limited
Partnership, an investment
partnership; President of Geneve
Corp., a venture capital fund;
Chairman of Woodland Capital Corp.,
a small business investment
company; and Vice President of W.R.
Grace & Co. Oversees 10 portfolios
in the OppenheimerFunds complex.

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

Robert G. Galli, A trustee or director of other $0 Over $100,000
Trustee since 1996 Oppenheimer funds. Formerly Vice
Age: 69 Chairman (October 1995-December
1997) of the Manager. Oversees 41
portfolios in the OppenheimerFunds
complex.

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

Lacy B. Herrmann, Chairman and Chief Executive $0 $10,001-$50,000
Trustee since 1996 Officer of Aquila Management
Age: 73 Corporation, the sponsoring
organization and manager,
administrator and/or sub-Adviser to
the following open-end investment
companies, and Chairman of the
Board of Trustees and President of
each: Churchill Cash Reserves
Trust, Aquila-Cascadia Equity Fund,
Pacific Capital Cash Assets Trust,
Pacific Capital U.S. Treasuries
Cash Assets Trust, Pacific Capital
Tax-Free Cash Assets Trust, Prime
Cash Fund, Narragansett Insured
Tax-Free Income Fund, Tax-Free Fund
For Utah, Churchill Tax-Free Fund
of Kentucky, Tax-Free Fund of
Colorado, Tax-Free Trust of Oregon,
Tax-Free Trust of Arizona, Hawaiian
Tax-Free Trust, and Aquila Rocky
Mountain Equity Fund; Vice
President, Director, Secretary, and
formerly Treasurer of Aquila
Distributors, Inc., distributor of
the above funds; President and
Chairman of the Board of Trustees
of Capital Cash Management Trust
("CCMT"), and an Officer and
Trustee/Director of its
predecessors; President and
Director of STCM Management
Company, Inc., sponsor and adviser
to CCMT; Chairman, President and a
Director of InCap Management
Corporation, formerly sub-adviser
and administrator of Prime Cash
Fund and Short Term Asset Reserves;
Director of OCC Cash Reserves,
Inc., and Trustee of OCC
Accumulation Trust, both of which
are open-end investment companies;
Trustee Emeritus of Brown
University. Oversees 10 portfolios in the OppenheimerFunds
complex.

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

Brian Wruble, Special Limited Partner (since $1-$10,000 $50,001-$100,000
Trustee since 2001 January 1999) of Odyssey Investment
Age: 59 Partners, LLC (private equity
investment); General Partner (since
September 1996) of Odyssey
Partners, L.P. (hedge fund in
distribution since 1/1/97); Board
of Governing Trustees (since August
1990) of The Jackson Laboratory
(non-profit); Trustee (since May
1992) of Institute for Advanced
Study (educational institute);
Trustee (since May 2000) of
Research Foundation of AIMR
(investment research, non-profit);
formerly Governor, Jerome Levy
Economics Institute of Bard College
(economics research) (August
1990-September 2001); Director of
Ray & Berendtson, Inc. (executive
search firm) (May 2000-April 2002).
Oversees 10 portfolios in the OppenheimerFunds complex.

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

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

Officers of the Fund

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

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

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

John V. Murphy, Chairman, Chief Executive Officer and director (since June
President since 2001 2001) and President (since September 2000) of the Manager;
Age: 53 President and a director or trustee of other Oppenheimer
funds; President and a director (since July 2001) of
Oppenheimer Acquisition Corp. (the Manager's parent
holding company) and of Oppenheimer Partnership
Holdings, Inc. (a holding company subsidiary of the
Manager); a director (since November 2001) of
OppenheimerFunds Distributor, Inc. (a subsidiary of the
Manager); Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial
Services, Inc. (transfer agent subsidiaries of the
Manager); President and a director (since July 2001) of
OppenheimerFunds Legacy Program (a charitable trust
program established by the Manager); a director of the
investment advisory subsidiaries of the Manager: OFI
Institutional Asset Management, Inc. and Centennial
Asset Management Corporation (since November 2001),
HarbourView Asset Management Corporation and OFI Private
Investments, Inc. (since July 2001); President (since
November 1, 2001) and a director (since July 2001) of
Oppenheimer Real Asset Management, Inc.; a director
(since November 2001) of Trinity Investment Management
Corp. and Tremont Advisers, Inc. (Investment advisory
affiliates of the Manager); Executive Vice President
(since February 1997) of Massachusetts Mutual Life
Insurance Company (the Manager's parent company); a
director (since June 1995) of DLB Acquisition
Corporation (a holding company that owns the shares of
David L. Babson & Company, Inc.); formerly, Chief
Operating Officer (September 2000-June 2001) of the
Manager; President and trustee (November 1999-November
2001) of MML Series Investment Fund and MassMutual
Institutional Funds (open-end investment companies); a
director (September 1999-August 2000) of C.M. Life
Insurance Company; President, Chief Executive Officer
and director (September 1999-August 2000) of MML Bay
State Life Insurance Company; a director (June 1989-June
1998) of Emerald Isle Bancorp and Hibernia Savings Bank
(a wholly-owned subsidiary of Emerald Isle Bancorp).
Oversees 69 portfolios in the OppenheimerFunds complex.

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

Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of
Treasurer, Principal the Manager; Treasurer (since March 1999) of HarbourView
Financial and Asset Management Corporation, Shareholder Services, Inc.,
Accounting Officer Oppenheimer Real Asset Management Corporation, Shareholder
since 1999 Financial Services, Inc., Oppenheimer Partnership Holdings,
Age: 43 Inc., OFI Private Investments, Inc. (since March 2000),
OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since May 2000) and OFI
Institutional Asset Management, Inc. (since November
2000) (offshore fund management subsidiaries of the
Manager); Treasurer and Chief Financial Officer (since
May 2000) of Oppenheimer Trust Company (a trust company
subsidiary of the Manager); Assistant Treasurer (since
March 1999) of Oppenheimer Acquisition Corp. and
OppenheimerFunds Legacy Program (since April 2000);
formerly Principal and Chief Operating Officer (March
1995-March 1999), Bankers Trust Company-Mutual Fund
Services Division. An officer of 85 portfolios in the
OppenheimerFunds complex.

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

Philip Vottiero, Vice President/Fund Accounting of the Manager (since March
Assistant Treasurer 2002; formerly Vice President/Corporate Accounting of the
since 2002 Manager (July 1999-March 2002) prior to which he was Chief
Age: 39 Financial Officer at Sovlink Corporation (April 1996-June
1999). An officer of 85 portfolios in the
OppenheimerFunds complex.

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

Connie Bechtolt, Assistant Vice President of the Manager (since September
Assistant Treasurer 1998); formerly Manager/Fund Accounting (September
since 2002 1994-September 1998) of the Manager. An officer of 85
Age: 39 portfolios in the OppenheimerFunds complex.

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

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

Trustee Name and Aggregate Retirement Estimated Annual Total Compensation From All Oppenheimer Funds For Which Individual Serves As
Other Fund crued Retirement Benefits Trustee/Director
Position(s) Fund Paid at Retirement (10 Funds)
(as applicable) Benefits Acs from all Board III
Compensation as Part of Funds
From Fund1 Expense (10 Funds) 2

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

Paul Y. Clinton $24,014 $13,681 $63,738 $157,3263

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

Thomas W. Courtney $24,014 $17,987 $63,738 $157,3263

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

Robert G. Galli $24,014 $25,895 $55,6782 $202,8864

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

Lacy B. Herrmann $24,014 $5,153 $63,702 $157,3263

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

Brian Wruble5 $14,649 $4,315 $7,606 $59,250

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

Aggregate compensation includes fees, deferred compensation, if any, and
retirement plan benefits accrued for a Trustee. Estimated annual retirement
benefits paid at retirement is based on a straight life payment plan election.
The amount for Mr. Galli includes $30,689 for serving as a trustee or director
of 33 Oppenheimer funds that are not Board III Funds.
2. Total Compensation for the 2001 calendar year includes $60,200 compensation
paid by two funds (OCC Cash Reserve and OCC Accumulation Trust) for which the
Sub-Advisor acts as the investment advisor. 4. Includes $105,760 for Mr. Galli
for serving as trustee or director of 33 Oppenheimer funds that are not Board
III Funds.
5. Elected to the board on April 1, 2001.

|X| Major Shareholders. As of November 27, 2002, the only persons 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:

Charles Schwab & Co. Inc. Special Custody Acct for the Exclusive Benefit
of Customers, Attn: Mutual Funds, 101 Montgomery Street, San Francisco, CA
94104-4122, which owned 10,843,646.875 Class A shares (representing 7.83% of
the Class A shares then outstanding);

Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of its
Customers, Attn: Fund Admin. #971H3, 4800 Deer Lake Drive E Fl. 3,
Jacksonville, FL 32246-6484; which owned 13,719,428.806 Class A shares
(representing 9.91% of the Class A shares then outstanding);

Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of its
Customers, Attn: Fund Admin. #97CK8, 4800 Deer Lake Drive E Fl. 3,
Jacksonville, FL 32246-6484; which owned 20,682,744.772 Class B shares
(representing 14.15% of the Class B shares then outstanding);

Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of its
Customers, Attn: Fund Admin. #97HX9, 4800 Deer Lake Drive E Fl. 3,
Jacksonville, FL 32246-6484; which owned 12,134,215.252 Class C shares
(representing 19.29% of the Class C shares then outstanding);

Smith Barney House Acct 00109801250, Attn: Cindy Tempesta 7th Fl., 333
West 34th Street, New York, NY 10001-2483, which owned 4,726,069.328 Class C
shares (representing 7.51% of the Class C shares then outstanding);

Trustlynx & Co. #TRI, c/o Datalynx Recon, 717 17th Street, Suite 2600,
Denver, CO 80202-3326, which owned 500,532.757 Class N shares (representing
6.67% of the Class N shares then outstanding);

Vanguard Fiduciary Trust Co., Attn: Outside Funds, Oppenheimer Quest
Balanced Fund Y 249, VM 613, P.O. Box 2600, Valley Forge, PA 19482-2600,
which owned 4,692,509.868 Class Y shares (representing 47.40% of the Class Y
shares then outstanding);

Mass Mutual Life Insurance Co. Separate Investment Acct, Attn: N225, 1295
State Street, Springfield, MA 01111-0001, which owned 4,996,745.779 Class Y
shares (representing 50.47% of the Class Y shares then outstanding);

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

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's parent Trust. The Manager handles
the Fund's day-to-day business, and the agreement permits the Manager to enter
into sub-advisory agreements with other registered investment advisors to obtain
specialized services for the Fund, as long as the Fund is not obligated to pay
any additional fees for those services. The Manager has retained the Sub-Advisor
pursuant to a separate Sub-Advisory Agreement, described below, under which the
Sub-Advisor buys and sells portfolio securities for the Fund. The portfolio
manager of the Fund is employed by the Sub-Advisor and is the person who is
principally responsible for the day-to-day management of the Fund's portfolio,
as described below.

The investment advisory agreement between the Fund and the Manager 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.

----------------------------------------------------------------------
Management Fees Paid to
Fiscal Year ended 10/31: OppenheimerFunds, Inc. 1
----------------------------------------------------------------------
----------------------------------------------------------------------
2000 $18,958,482
----------------------------------------------------------------------
----------------------------------------------------------------------
2001 $27,514,492
----------------------------------------------------------------------
----------------------------------------------------------------------

2002 $43,436,918

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

1.The Manager, not the Fund, pays the Sub-Advisor an annual sub-advisory fee.
For fiscal 2002, this sub-advisory fee was $13,154,575.

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

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

Fund from its relationship with the Manager, and
o The direct and indirect benefits the Manager received from its
relationship with the Fund. These included services provided by the
Distributor and the Transfer Agent, and brokerage and soft dollar
arrangements permissible under Section 28(e) of the Securities Exchange Act.

After careful deliberation the Board of Trustees concluded that it was in
the best interests of the shareholders to continue the investment advisory
agreement for another year. In arriving at a decision, the Board did not single
out any one factor or group of factors as being more important than other
factors, but considered all factors together. The Board judged the terms and
conditions of the investment advisory agreement, including the investment
advisory fee, in light of all of the surrounding circumstances.

The Sub-Advisor. The Sub-Advisor is a wholly-owned subsidiary of Oppenheimer
Capital, a registered investment advisor. From the Fund's inception on November
1, 1991 until November 22, 1995, the Sub-Advisor (which was then named Quest for
Value Advisors) or the Sub-Advisor's parent served as the Fund's investment
advisor. The Sub-Advisor acts as investment advisor to other investment
companies and for individual investors.

The Sub-Advisor is a Delaware limited liability company which is wholly-owned by
Oppenheimer Capital LLC a wholly-owned subsidiary of Allianz Dresdner Asset
Management U.S. Equities LLC, which is wholly-owned by Allianz Dresdner Asset
Management of America L.P. (formerly PIMCO Advisors L.P.). Allianz Dresdner
Asset Management of America L.P. ("ADAM") is a Delaware limited partnership
whose sole general partner is Allianz-PacLife Partners LLC. Allianz PacLife
Partners LLC is a Delaware limited liability company with two members, Allianz
Dresdner Asset Management of America LLC, a Delaware limited liability company,
and Pacific Asset Management LLC, a Delaware limited liability company. Allianz
Dresdner Asset Management of America LLC is a wholly-owned subsidiary of Allianz
of America, Inc., which is wholly-owned subsidiary of Pacific Life Insurance
Company which is a wholly-owned subsidiary of Pacific Mutual Holding Company.
Allianz A.G. indirectly holds a controlling interest in ADAM. Allianz AG is a
European-based, multinational insurance and financial services holding company.
Pacific Life Insurance Company owns an indirect minority equity interest in ADAM
and is a California-based insurance company.

Allianz Dresdner Asset Management of America, L.P. is a direct or indirect
parent company of the following SEC-registered investment advisors, all of which
are affiliated: Cadence Capital Management; NFJ Investment Group; Pacific
Investment Management Company LLC; the Sub-Advisor, Oppenheimer Capital LLC,
PIMCO Allianz Advisors LLC and PIMCO Funds Advisors LLC.
|X| The Sub-Advisory Agreement. Under the Sub-Advisory Agreement between
the Manager and the Sub-Advisor, the Sub-Advisor shall regularly provide
investment advice with respect to the Fund and invest and reinvest cash,
securities and the property comprising the assets of the Fund. Under the
Sub-Advisory Agreement, the Sub-Advisor agrees not to change the portfolio
manager of the Fund without the written approval of the Manager. The Sub-Advisor
also agrees to provide assistance in the distribution and marketing of the Fund.

Brokerage Policies of the Fund

Brokerage Provisions of the Investment Advisory Agreement and the Sub-Advisory
Agreement. One of the duties of the Sub-Advisor under the Sub-Advisory Agreement
is to arrange the portfolio transactions for the Fund. The Fund's investment
advisory agreement with the Manager and the Sub-Advisory Agreement contain
provisions relating to the employment of broker-dealers to effect the Fund's
portfolio transactions. The Manager and the Sub-Advisor are authorized to employ
broker-dealers, including "affiliated" brokers, as that term is defined in the
Investment Company Act. They may employ broker-dealers that the Manager or the
Sub-Advisor 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.

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

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

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

The research services provided by brokers broadens the scope and supplements
the research activities of the Sub-Advisor. That research provides additional
views and comparisons for consideration, and helps the Sub-Advisor 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 Sub-Advisor provides
information to the Manager and the Board about the concessions paid to brokers
furnishing such services, together with the Sub-Advisor's representation that
the amount of such concessions was reasonably related to the value or benefit of
such services.

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

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
10/31/00 $4,379,578
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
10/31/01 $7,101,0272
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

10/31/02 $14,892,886

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

1. Amounts do not include spreads or commissions on principal transactions on a
net trade basis.
2. In the fiscal year ended 10/31/02, the amount of transactions directed to
brokers for research services was $52,318,460 and the amount of the
commissions paid to broker-dealers for those services was $192,500.

Distribution and Service Plans

-----------------------------------
Aggregate Class A
Fiscal Front-End Front-End
Year Sales Sales
Ended Charges on Charges
10/31: Class A Retained
Shares by
Distributor
-----------------------------------
-----------------------------------
2000 $6,392,362 $1,302,254
-----------------------------------
-----------------------------------
2001 $12,897,720 $3,056,554
-----------------------------------
-----------------------------------

2002 $14,121,824 $3,513,191

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

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

------------------------------------------------------------------
Fiscal Concessions on Concessions Concessions Concessions
Year Class A Shares on Class B on Class C on Class N
Ended Advanced by Shares Shares Shares
10/31: Distributor1 Advanced by Advanced by Advanced by
Distributor1 Distributor1 Distributor1
------------------------------------------------------------------
------------------------------------------------------------------
2000 $2,029,296 $11,994,681 $1,446,469 N/A
------------------------------------------------------------------
------------------------------------------------------------------
2001 $1,428,338 $34,087,489 $4,090,133 $171,698
------------------------------------------------------------------
------------------------------------------------------------------

2002 $1,237,651 $32,336,348 $4,801,712 $983,606

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

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

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

Class A Class B Class C Class N
Fiscal Contingent Contingent Contingent Contingent
Year Ended Deferred Sales Deferred Sales Deferred Sales Deferred Sales
10/31 Charges Retained Charges Retained Charges Charges Retained
by Distributor by Distributor Retained by by Distributor
Distributor
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

2002 $83,677 $7,504,572 $559,091 $236,911

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

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

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

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

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

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

|X| Service and Distribution Plan Fees. Under each plan, service fees and
distribution fees are computed on the average of the net asset value of shares
in the respective class, determined as of the close of each regular business day
during the period. The plans compensate the Distributor at a flat rate for its
services and costs in distributing shares and servicing accounts, whether the
Distributor's expenses are more or less than the amounts paid by the Fund under
the plans during the period for which the fee is paid. The types of services
that recipients provide are similar to the services provided under the Class A
service plan, described above. During the first year after the Class A shares
are sold to grandfathered retirement plans, the Distributor retains the service
fee to reimburse itself for the costs of distributing the shares.

The asset-based sales charges on Class B, Class C and Class N shares allow
investors to buy shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell those shares. The Fund pays the
asset-based sales charges to the Distributor for its services rendered in
distributing Class A, Class B, Class C and Class N shares. The payments are made
to the Distributor in recognition that the Distributor: o pays sales commissions
to authorized brokers and dealers at the time of
sale and pays service fees as described above,
o may finance payment of sales commissions and/or the advance of the
service fee payment to recipients under the plans, or may provide such
financing from its own resources or from the resources of an affiliate,
o employs personnel to support distribution of shares, and
o bears the costs of sales literature, advertising and prospectuses
(other than those furnished to current shareholders) and state "blue sky"
registration fees and certain other distribution expenses.
o may not be able to adequately compensate dealers that sell Class B, Class
C and Class N shares without receiving payment under the plans and
therefore may not be able to offer such Classes for sale absent the
plans,
o receives payments under the plans consistent with the service fees and
asset-based sales charges paid by other non-proprietary funds that change
12b-1 fees,
o may use the payment 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 lesser cost, the
same quality distribution sales efforts and services, or to obtain such
services from brokers and dealers, if the plan payments were to be
discontinued.

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

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

Distribution Fees Paid to the Distributor in the Fiscal Year Ended 10/31/02

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class: Total Amount Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Payments Retained by Expenses Under of Net Assets
Under Plan1 Distributor Plan of Class
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Class A Plan $6,990,513 $126,708 N/A N/A

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

Class B Plan $20,684,949 $17,808,806 $78,997,422 4.49%

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

Class C Plan $9,033,822 $4,875,857 $15,610,946 2.05%

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

Class N Plan $351,477 $337,566 $1,862,069 2.17%

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

1. Includes amounts paid to an affiliate of the Distributor's parent company:
$246,589 (Class A), $86,904 (Class B) $69,342 (Class C)and $186 (Class N).

Performance of the Fund

In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment ("P") (unless the return is shown without sales charge, as
described below). For Class B shares, payment of the applicable contingent
deferred sales charge is applied, depending on the period for which the return
is shown: 5.0% in the first year, 4.0% in the second year, 3.0% in the third and
fourth years, 2.0% in the fifth year, 1.0% in the sixth year and none
thereafter. For Class C shares, the 1% contingent deferred sales charge is
deducted for returns for the 1-year period. For Class N shares, the 1%
contingent deferred sales charge is deducted for returns for the one-year
period. Class N total returns may also be calculated for the periods prior to
3/1/01 (inception date for Class N shares), based on the Fund's Class A returns,
adjusted to reflect the higher Class N 12b-1 fees. Class Y shares do not have a
sales charge.

------------------------------------------------------------------------------
[OBJECT OMITTED]
------------------------------------------------------------------------------

|_| 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:

Average Annual Total Return (After Taxes on Distributions). The "average
annual total return (after taxes on distributions)" of Class A shares is an
average annual compounded rate of return for each year in a specified number of
years, adjusted to show the effect of federal taxes (calculated using the
highest individual marginal federal income tax rates in effect on any
reinvestment date) on any distributions made by the Fund during the specified
period. It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVD" in the formula) of
that investment, after taking into account the effect of taxes on Fund
distributions, but not on the redemption of Fund shares, according to the
following formula:

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

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

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

Average Annual Total Returns for Class A Shares1 (After Sales Charge)
For the Periods Ended 10/31/02

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

10-Year
1-Year 5-Year (or Life of
Class)

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

After Taxes on -27.33% 1.44% 6.76%1
Distributions

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

After Taxes on -15.50% 2.39% 6.76%1
Distributions and
Redemption of Fund Shares

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

1. Inception of Class A shares: 11/1/91.

|_| 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:

------------------------------------------------------------------------------
[OBJECT OMITTED]
------------------------------------------------------------------------------
|_| Total Returns at Net Asset Value. From time to time the Fund may
also quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for Class A, Class B, Class C or Class N
shares. Each is based on the difference in net asset value per share at the
beginning and the end of the period for a hypothetical investment in that class
of shares (without considering front-end or contingent deferred sales charges)
and takes into consideration the reinvestment of dividends and capital gains
distributions.

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

The Fund's Total Returns for the Periods Ended 10/31/02

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cumulative Total Average Annual Total Returns
Class of Returns (10
Shares years or Life of
Class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
5-Year 10-Year
1-Year (or (or
life-of-class) life-of-class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
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 A1 160.70% 176.60% -26.37% -21.88 % 4.23% 5.47% 10.06% 10.71%

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

Class B2 145.07% 145.07% -26.12% -22.38% 4.54% 4.82% 10.27% 10.27%

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

Class C3 139.27 % 139.27% -23.14% -22.40% 4.82% 4.82% 9.99% 9.99%

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

Class N4 -24.88% -24.88% -22.74% -21.99% -15.77 -15.77% N/A N/A

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

Class Y5 -13.93% -13.93% -21.48% -21.48% -5.82% -5.82% N/A N/A

---------------------------------------------------------------------------------
1. Inception of Class A: 11/1/91 2. Inception of Class B: 9/1/93 3. Inception of
Class C: 9/1/93 4. Inception of Class N: 3/1/01 5. Inception of Class Y: 5/1/00

|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 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 based on stated fund classifications.
Lipper currently ranks the Fund's performance against all other balanced funds.
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.

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.

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.

o Current purchases of Class A and Class B shares of the Fund and
other Oppenheimer funds to reduce the sales charge rate that applies
to current purchases of Class A shares, and

o Class A and Class B shares of Oppenheimer funds you previously
purchased subject to an initial or contingent deferred sales charge
to reduce the sales charge rate for current purchases of Class A
shares, provided that you still hold your investment in one of the
Oppenheimer funds.

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

Oppenheimer Quest Capital Value Fund,
Oppenheimer Champion Income Fund Inc.

Oppenheimer Quest Global Value Fund,
Oppenheimer Convertible Securities Fund Inc.
Oppenheimer Quest Opportunity Value
Oppenheimer Developing Markets Fund Fund
Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Discovery Fund Oppenheimer Real Asset Fund
Oppenheimer Rochester National
Oppenheimer Emerging Growth Fund Municipals
Oppenheimer Emerging Technologies Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Enterprise Fund Oppenheimer Small Cap Value Fund
Oppenheimer Europe Fund Oppenheimer Strategic Income Fund
Oppenheimer Global Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Growth & Income Fund Oppenheimer Trinity Core Fund

Oppenheimer Trinity Large Cap Growth
Oppenheimer Gold & Special Minerals Fund Fund

Oppenheimer Growth Fund Oppenheimer Trinity Value Fund
Oppenheimer High Yield Fund Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund Oppenheimer Value Fund
Oppenheimer International Growth Fund Limited-Term New York Municipal Fund
Oppenheimer International Small Company
Fund Rochester Fund Municipals
OSM1- Gartmore Millennium Growth Fund
Oppenheimer Limited-Term Government Fund II
Oppenheimer Limited Term Municipal Fund OSM1 - Jennison Growth Fund
Oppenheimer Main Street Growth & Income OSM1 - Mercury Advisors S&P 500 Index
Fund Fund

OSM1 - Mercury Advisors Focus Growth
Oppenheimer Main Street Opportunity Fund Fund

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

2. If the total minimum investment specified under the Letter is completed
within the 13-month Letter of Intent period, the escrowed shares will be
promptly released to the investor.

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

5. The shares eligible for purchase under the Letter (or the holding of which
may be counted toward completion of a Letter) include:

(a) Class A shares sold with a front-end sales charge or subject to a
Class A contingent deferred sales charge,

(b) Class B shares of other Oppenheimer funds acquired subject to a
contingent deferred sales charge, and
(c) Class A or Class B shares acquired
by exchange of either (1)
Class A shares of one of the
other Oppenheimer funds that
were acquired subject to a
Class A initial or
contingent deferred sales
charge or (2) Class B shares
of one of the other
Oppenheimer funds that were
acquired subject to a
contingent deferred sales
charge.

|X| Class A Shares Subject to a
Contingent Deferred Sales

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

|X| Availability of Class N Shares. In addition to the description of the
types of retirement plans which may purchase Class N shares contained in the
prospectus, Class N shares also are offered to the following:
o to all rollover IRAs (including
SEP IRAs and SIMPLE IRAs),
o to all rollover contributions made
to Individual 401(k) plans,
Profit-Sharing Plans and
Money Purchase Pension Plans,
o to all direct rollovers from
OppenheimerFunds-sponsored
Pinnacle and Ascender
retirement plans,
o to all trustee-to-trustee IRA
transfers,
o to all 90-24 type 403(b) transfers,
o to Group Retirement Plans (as defined in Appendix C to this
Statement of Additional Information) which have entered into a
special agreement with the Distributor for that purpose,
o to Retirement Plans qualified
under Sections 401(a) or
401(k) of the Internal
Revenue Code, the
recordkeeper or the plan
sponsor for which has
entered into a special
agreement with the
Distributor,
o to Retirement Plans of a plan sponsor where the aggregate assets of
all such plans invested in the Oppenheimer funds is $500,000 or
more,
o to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
purchase with the redemption proceeds of Class A shares of one or
more Oppenheimer funds.
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.

Account Fees. As stated in the
Prospectus, a $12 annual fee is assessed
on any account valued at less than $500.
This fee will not be assessed on the
following accounts:
o Accounts that have balances below $500 due to the automatic conversion of
shares from Class B to Class A shares;
o Accounts with an active Asset
Builder Plan, payroll deduction
plan or a military allotment plan;
o OppenheimerFunds-sponsored group
retirement accounts that are
making continuing purchases;
o Certain accounts held by
broker-dealers through the
National Securities Clearing
Corporation; and
o Accounts that fall below the $500 threshold due solely to market
fluctuations within the 12-month period preceding the date the fee is
deducted.

|X| Securities Valuation. The
Fund's Board of Trustees has established
procedures for the valuation of the
Fund's securities. In general those
procedures are as follows:
Equity securities traded on a
U.S. securities exchange or on Nasdaq(R)
are valued as follows:
(1) if last sale information is
regularly reported, they
are valued at the last
reported sale price on
the principal exchange on
which they are traded or
on Nasdaq, as applicable,
on that day, or

(2) if last sale information is not
available on a valuation
date, they are valued at
the last reported sale
price preceding the
valuation date if it is
within the spread of the
closing "bid" and "asked"
prices on the valuation
date or, if not, at the
closing "bid" price on
the valuation date.
Equity securities traded on a foreign securities exchange generally are
valued in one of the following ways: (1) at the last sale price available
to the pricing service
approved by the Board of
Trustees, or
(2) at the last sale price obtained by
the Manager from the report of the principal exchange on which
the security is traded at its last trading session on or
immediately before the valuation date, or
(3) at the mean between the "bid" and
"asked" prices obtained
from the principal
exchange on which the
security is traded or, on
the basis of reasonable
inquiry, from two market
makers in the security.

Long-term debt securities having a remaining maturity in excess of 60
days are valued based on the mean between the "bid" and "asked" prices
determined by a portfolio pricing service approved by the Fund's Board of
Trustees or obtained by the Manager from two active market makers in the
security on the basis of reasonable inquiry.
The following securities are valued at the mean between the "bid" and
"asked" prices determined by a pricing service approved by the Fund's Board of
Trustees or obtained by the Manager from two active market makers in the
security on the basis of reasonable inquiry: (1) debt instruments that have a

maturity of more than 397
days when issued,
(2) debt instruments that had a maturity of 397 days or less when
issued and have a remaining maturity of more than 60 days, and
(3) non-money market debt instruments that had a maturity of 397 days
or less when issued and which have a remaining maturity of 60
days or less.
The following securities are valued at cost, adjusted for amortization
of premiums and accretion of discounts:
(1) money market debt securities held
by a non-money market
fund that had a maturity
of less than 397 days
when issued that have a
remaining maturity of 60
days or less, and
(2) debt instruments held by a money market fund that have a
remaining maturity of 397 days or less.

Securities (including restricted securities) not having
readily-available market quotations are valued at fair value determined under
the Board's procedures. If the Manager is unable to locate two market makers
willing to give quotes, a security may be priced at the mean between the
"bid" and "asked" prices provided by a single active market maker (which in
certain cases may be the "bid" price if no "asked" price is available).

How to Sell Shares

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

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 or Class Y shares. The Fund may amend, suspend or cease offering
this reinvestment privilege at any time as to shares redeemed after the date of
such amendment, suspension or cessation.

(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.

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

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

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

o Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
shares of any other fund.

o Class X shares of Limited Term New York Municipal Fund may be exchanged
only for Class B shares of other Oppenheimer funds and no exchanges may be
made to Class X shares.

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 o 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.

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

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

When you exchange some or all of your shares from one fund to
another, any special account feature such as an Asset Builder Plan or Automatic
Withdrawal Plan, will be switched to the new fund account unless you tell the
Transfer Agent not to do so. However, special redemption and exchange features
such as Automatic Exchange Plans and Automatic Withdrawal Plans cannot be
switched to an account in Oppenheimer Senior Floating Rate Fund.

Dividends, Capital Gains and Taxes

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

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

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

Additional Information About the Fund

INDEPENDENT AUDITORS' REPORT

================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Quest Balanced Value Fund:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Quest Balanced Value Fund, including the statement of investments,
as of October 31, 2002, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the three years
in the 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. The financial highlights for each of the two years in the period
ended October 31, 1999, were audited by other auditors whose report dated
November 19, 1999, expressed an unqualified opinion on this information.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2002, 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 Quest Balanced Value Fund as of October 31, 2002, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the three years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.

KPMG LLP

Denver, Colorado
November 21, 2002

STATEMENT OF INVESTMENTS October 31, 2002

Market Value
Shares See Note 1
===================================================================================

Common Stocks--71.0%
-----------------------------------------------------------------------------------
Consumer Discretionary--11.7%
-----------------------------------------------------------------------------------
Hotels, Restaurants & Leisure--0.8%
McDonald's Corp. 2,000,000 $ 36,220,000
-----------------------------------------------------------------------------------
Media--7.3%
Clear Channel Communications, Inc. 1 2,000,000 74,100,000
-----------------------------------------------------------------------------------
EchoStar Communications Corp., Cl. A 1 3,000,000 61,170,000
-----------------------------------------------------------------------------------
General Motors Corp., Cl. H 1 19,000,000 187,150,000
--------------
322,420,000

-----------------------------------------------------------------------------------
Multiline Retail--3.6%
Dollar General Corp. 5,500,000 76,780,000
-----------------------------------------------------------------------------------
Sears Roebuck & Co. 3,000,000 78,780,000
--------------
155,560,000

-----------------------------------------------------------------------------------
Energy--4.8%
-----------------------------------------------------------------------------------
Energy Equipment & Services--1.6%
Transocean, Inc. 3,250,000 71,435,000
-----------------------------------------------------------------------------------
Oil & Gas--3.2%
Anadarko Petroleum Corp. 2,000,000 89,080,000
-----------------------------------------------------------------------------------
ConocoPhillips 1,000,000 48,500,000
--------------
137,580,000

-----------------------------------------------------------------------------------
Financials--24.2%
-----------------------------------------------------------------------------------
Banks--2.4%
FleetBoston Financial Corp. 4,500,000 105,255,000
-----------------------------------------------------------------------------------
Diversified Financials--19.5%
Capital One Financial Corp. 2,000,000 60,940,000
-----------------------------------------------------------------------------------
CIT Group, Inc. 1 4,000,000 71,240,000
-----------------------------------------------------------------------------------
Citigroup, Inc. 4,500,000 166,275,000
-----------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 1,000,000 50,310,000
-----------------------------------------------------------------------------------
Freddie Mac 4,000,000 246,320,000
-----------------------------------------------------------------------------------
Household International, Inc. 6,000,000 142,560,000
-----------------------------------------------------------------------------------
J.P. Morgan Chase & Co. 3,000,000 62,250,000
-----------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 1,500,000 56,925,000
--------------
856,820,000

-----------------------------------------------------------------------------------
Insurance--2.3%
John Hancock Financial Services, Inc. 3,500,000 102,550,000
-----------------------------------------------------------------------------------
Health Care--7.4%
-----------------------------------------------------------------------------------
Biotechnology--2.7%
Wyeth 3,500,000 117,250,000

13 | OPPENHEIMER QUEST BALANCED VALUE FUND

STATEMENT OF INVESTMENTS Continued

Market Value
Shares See Note 1
-----------------------------------------------------------------------------------

Health Care Providers & Services--1.0%
IMS Health, Inc. 3,000,000 $ 45,120,000
-----------------------------------------------------------------------------------
Pharmaceuticals--3.7%
Bristol-Myers Squibb Co. 4,443,500 109,354,535
-----------------------------------------------------------------------------------
Pfizer, Inc. 1,700,000 54,009,000
--------------
163,363,535

-----------------------------------------------------------------------------------
Industrials--1.7%
-----------------------------------------------------------------------------------
Industrial Conglomerates--1.7%
Tyco International Ltd. 5,000,000 72,300,000
-----------------------------------------------------------------------------------
Information Technology--13.5%
-----------------------------------------------------------------------------------
Communications Equipment--2.0%
Cisco Systems, Inc. 1 8,000,000 89,440,000
-----------------------------------------------------------------------------------
Computers & Peripherals--4.2%
EMC Corp. 1 36,000,000 183,960,000
-----------------------------------------------------------------------------------
Electronic Equipment & Instruments--2.5%
Flextronics International Ltd. 1 13,000,000 108,680,000
-----------------------------------------------------------------------------------
IT Consulting & Services--2.1%
Electronic Data Systems Corp. 6,000,000 90,360,000
-----------------------------------------------------------------------------------
Semiconductor Equipment & Products--2.7%
Applied Materials, Inc. 1 8,000,000 120,240,000
-----------------------------------------------------------------------------------
Materials--3.8%
-----------------------------------------------------------------------------------
Metals & Mining--3.8%
Alcan, Inc. 6,000,000 168,900,000
-----------------------------------------------------------------------------------
Utilities--3.9%
-----------------------------------------------------------------------------------
Electric Utilities--3.0%
Duke Energy Corp. 1,595,600 32,693,844
-----------------------------------------------------------------------------------
Exelon Corp. 2,000,000 100,800,000
--------------
133,493,844

-----------------------------------------------------------------------------------
Gas Utilities--0.9%
NiSource, Inc. 2,344,200 38,726,184
--------------
Total Common Stocks (Cost $3,614,443,680) 3,119,673,563

Principal
Amount
===================================================================================
U.S. Government Obligations--8.8% U.S. Treasury Inflationary Index Bonds:
3.375%, 1/15/12-4/15/32 2 $151,523,230 164,247,893
3.875%, 4/15/29 2 164,862,000 190,518,814
-----------------------------------------------------------------------------------
U.S. Treasury Inflationary Index Nts., 3.875%, 1/15/09 2 27,862,246 30,739,914
-------------
Total U.S. Government Obligations (Cost $340,035,779) 385,506,621

14 | OPPENHEIMER QUEST BALANCED VALUE FUND

Principal Market Value
Amount See Note 1
===================================================================================

Non-Convertible Corporate Bonds and Notes--18.0%
AES Corp. (The), 8.75% Sr. Unsec. Unsub. Nts., 6/15/08 $22,300,000 $ 9,700,500
-----------------------------------------------------------------------------------
AFLAC, Inc., 6.50% Sr. Unsec. Nts., 4/15/09 16,900,000 18,386,710
-----------------------------------------------------------------------------------
AOL Time Warner, Inc.:
7.625% Bonds, 4/15/31 61,612,000 56,010,730
7.70% Debs, 5/1/32 99,225,000 91,433,754
-----------------------------------------------------------------------------------
AT&T Corp.:
6.50% Sr. Nts., 11/15/06 15,000,000 15,015,735
7.30% Sr. Nts., 11/15/11 6 3,000,000 2,945,733
-----------------------------------------------------------------------------------
AT&T Wireless Services, Inc.:
7.35% Sr. Unsec. Nts., 3/1/06 15,000,000 13,586,565
8.75% Sr. Unsec. Nts., 3/1/31 5,000,000 4,010,630
-----------------------------------------------------------------------------------
Boeing Capital Corp., 6.50% Nts., 2/15/12 10,000,000 10,254,110
-----------------------------------------------------------------------------------
Capital One Bank, 6.50% Sr. Nts., 7/30/04 17,000,000 15,673,116
-----------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 15,000,000 15,359,160
-----------------------------------------------------------------------------------
Citigroup, Inc., 6% Nts., 2/21/12 15,000,000 16,098,015
-----------------------------------------------------------------------------------
Conseco Financing Trust II, 8.70% Unsec. Capital
Securities, 11/15/26 1,3,4 51,155,000 319,719
-----------------------------------------------------------------------------------
Conseco Financing Trust III, 8.796% Bonds, 4/1/27 1,3,4 41,990,000 262,437
-----------------------------------------------------------------------------------
Conseco, Inc., 6.80% Sr. Unsec. Nts., 6/15/07 1,3,5 8,000,000 1,520,000
-----------------------------------------------------------------------------------
Duke Energy Field Services LLC:
5.75% Sr. Nts., 11/15/06 5,910,000 5,653,813
7.875% Unsec. Nts., 8/16/10 17,800,000 17,546,617
-----------------------------------------------------------------------------------
Electronic Data Systems Corp., 6.85% Nts., 10/15/04 16,000,000 15,866,912
-----------------------------------------------------------------------------------
FirstEnergy Corp., 5.50% Sr. Unsub. Nts., Series A,
11/15/06 15,000,000 14,499,600
-----------------------------------------------------------------------------------
Ford Motor Co., 7.45% Bonds, 7/16/31 31,000,000 23,742,528
-----------------------------------------------------------------------------------
General Electric Capital Corp., 6% Nts., 6/15/12 19,700,000 20,965,173
-----------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.75% Nts., 1/15/06 33,775,000 33,481,935
-----------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The), 5.70% Sr. Unsec.
Nts., 9/1/12 15,000,000 15,374,325
-----------------------------------------------------------------------------------
Goodyear Tire & Rubber Co., 7.857% Nts., 8/15/11 15,000,000 11,079,195
-----------------------------------------------------------------------------------
Household Finance Corp., 7% Nts., 5/15/12 20,000,000 17,940,520
-----------------------------------------------------------------------------------
News America Holdings, Inc., 9.25% Sr. Debs., 2/1/13 8,500,000 9,623,215
-----------------------------------------------------------------------------------
Qwest Corp., 8.875% Nts., 3/15/12 5 90,400,000 82,716,000
-----------------------------------------------------------------------------------
Sears Roebuck Acceptance Corp., 6.70% Unsec. Unsub.
Nts., 4/15/12 20,000,000 18,401,620
-----------------------------------------------------------------------------------
Sprint Capital Corp.:
5.875% Nts., 5/1/04 10,000,000 9,397,330
8.375% Nts., 3/15/12 42,100,000 35,483,690
8.75% Nts., 3/15/32 65,510,000 49,939,780
-----------------------------------------------------------------------------------
Textron Financial Corp., 7.125% Nts., 12/9/04 12,300,000 13,024,409
-----------------------------------------------------------------------------------
Verizon Global Funding Corp.:
7.375% Sr. Nts., 9/1/12 15,000,000 16,545,075
7.75% Sr. Unsub. Nts., 12/1/30 59,490,000 63,972,274

15 | OPPENHEIMER QUEST BALANCED VALUE FUND

STATEMENT OF INVESTMENTS Continued

Principal Market Value
Amount See Note 1
=====================================================================================

Non-Convertible Corporate Bonds and Notes Continued
Waste Management, Inc.:
6.50% Sr. Unsub. Nts., 11/15/08 $ 8,740,000 $ 8,929,466
7.75% Bonds, 5/15/32 5 8,000,000 7,840,864
-------------------------------------------------------------------------------------
Weyerhaeuser Co., 7.375% Debs., 3/15/32 15,000,000 15,197,205
-------------------------------------------------------------------------------------
Williams Cos., Inc. (The), 9.25% Sr. Unsec. Unsub.
Nts., 3/15/04 20,575,000 14,916,875
-------------
Total Non-Convertible Corporate Bonds and Notes (Cost $900,309,817) 792,715,335

=====================================================================================
Short-Term Notes--1.8%
American Express Credit Corp.:
2%, 11/1/02 20,000,000 20,000,000
2%, 11/15/02 15,000,000 14,990,375
-------------------------------------------------------------------------------------
Federal Home Loan Bank, 1.63%, 11/4/02 30,000,000 29,995,925
-------------------------------------------------------------------------------------
Student Loan Marketing Assn., 1.72%, 11/1/02 13,361,000 13,361,000
-------------
Total Short-Term Notes (Cost $78,347,300) 78,347,300

-------------------------------------------------------------------------------------
Total Investments, at Value (Cost $4,933,136,576) 99.6% 4,376,242,819
-------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.4 17,216,308
------------------------------
Net Assets 100.0% $4,393,459,127
==============================

Footnotes to Statement of Investments

1. Non-income producing security.
2. Denotes an inflation-indexed security: coupon and principal are indexed to
the consumer price index. 3. Issuer is in default.
4. Identifies issues considered to be illiquid--See Note 5 of Notes to Financial
Statements. 5. 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 $92,076,864 or 2.10% of the Fund's net
assets as of October 31, 2002.
6. Represents the current interest rate for a variable or increasing rate
security.

See accompanying Notes to Financial Statements.

16 | OPPENHEIMER QUEST BALANCED VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES October 31, 2002

===================================================================================
Assets

Investments, at value (cost $4,933,136,576)--see accompanying
statement $4,376,242,819
-----------------------------------------------------------------------------------
Cash 1,248,713
-----------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 21,276,560
Investments sold 15,520,354
Shares of beneficial interest sold 8,454,624
Other 26,791
---------------
Total assets 4,422,769,861

===================================================================================
Liabilities Payables and other liabilities:
Shares of beneficial interest redeemed 13,271,407
Investments purchased 12,652,264
Transfer and shareholder servicing agent fees 1,070,288
Distribution and service plan fees 878,053
Shareholder reports 665,106
Trustees' compensation 360,177
Other 413,439
---------------
Total liabilities 29,310,734

===================================================================================
Net Assets $4,393,459,127
===============

===================================================================================
Composition of Net Assets
Par value of shares of beneficial interest $ 3,664,171
-----------------------------------------------------------------------------------
Additional paid-in capital 6,084,380,878
-----------------------------------------------------------------------------------
Overdistributed net investment income (2,801,778)
-----------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (1,134,890,387)
-----------------------------------------------------------------------------------
Net unrealized depreciation on investments (556,893,757)
---------------
Net Assets $4,393,459,127
===============

17 | OPPENHEIMER QUEST BALANCED VALUE FUND

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
$1,667,142,626 and 138,751,050 shares of beneficial interest outstanding) $12.02
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $12.75
--------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $1,759,166,739 and
146,863,718 shares of beneficial interest outstanding) $11.98
--------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $763,337,896 and
63,753,730 shares of beneficial interest outstanding) $11.97
--------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $85,743,532 and
7,179,866 shares of beneficial interest outstanding) $11.94
--------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $118,068,334 and 9,868,775 shares of beneficial interest outstanding)
$11.96

See accompanying Notes to Financial Statements.

18 | OPPENHEIMER QUEST BALANCED VALUE FUND

STATEMENT OF OPERATIONS For the Year Ended October 31, 2002

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

Investment Income
-----------------------------------------------------------------------------------
Interest $ 88,293,504
-----------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $303,750) 50,733,586
----------------
Total investment income 139,027,090

===================================================================================
Expenses
-----------------------------------------------------------------------------------
Management fees 43,436,918
-----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 6,990,513
Class B 20,684,949
Class C 9,033,822
Class N 351,477
-----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 4,825,662
Class B 5,180,584
Class C 2,034,957
Class N 192,690
Class Y 85,025
-----------------------------------------------------------------------------------
Shareholder reports 1,801,975
-----------------------------------------------------------------------------------
Trustees' compensation 177,736
-----------------------------------------------------------------------------------
Custodian fees and expenses 107,142
-----------------------------------------------------------------------------------
Other 699,251
----------------
Total expenses 95,602,701 Less reduction to custodian expenses (32,838) Less
voluntary waiver of transfer and shareholder servicing agent fees--Classes A, B,
C and N (15,005) Less voluntary waiver of transfer and shareholder servicing
agent fees--Class Y (6,638)
----------------
Net expenses 95,548,220

===================================================================================
Net Investment Income 43,478,870

===================================================================================
Realized and Unrealized Loss
-----------------------------------------------------------------------------------
Net realized loss on investments (1,100,608,969)
-----------------------------------------------------------------------------------
Net change in unrealized depreciation on investments (320,675,076)
----------------
Net realized and unrealized loss (1,421,284,045)

===================================================================================
Net Decrease in Net Assets Resulting from Operations $(1,377,805,175)
================

See accompanying Notes to Financial Statements.

19 | OPPENHEIMER QUEST BALANCED VALUE FUND

STATEMENTS OF CHANGES IN NET ASSETS

Year Ended October 31, 2002 2001
====================================================================================

Operations
Net investment income $ 43,478,870 $ 73,909,701
------------------------------------------------------------------------------------
Net realized gain (loss) (1,100,608,969) 134,086,514
------------------------------------------------------------------------------------
Net change in unrealized depreciation (320,675,076) (287,851,709)
------------------------------
Net decrease in net assets resulting from operations (1,377,805,175) (79,855,494)

====================================================================================
Dividends and/or Distributions to Shareholders Dividends from net investment
income:
Class A (35,137,431) (36,055,747)
Class B (19,021,719) (23,546,689)
Class C (8,785,498) (8,682,006)
Class N (1,253,866) (36,119)
Class Y (3,511,298) (1,361,483)
------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (51,374,614) (18,817,048)
Class B (54,075,958) (17,273,729)
Class C (22,607,352) (6,317,572)
Class N (1,111,533) --
Class Y (3,693,332) (5,528)

====================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from beneficial interest transactions:
Class A 504,567,658 810,674,363
Class B 554,626,572 988,096,602
Class C 292,955,277 441,840,859
Class N 90,711,420 20,339,051
Class Y 23,910,940 141,061,324

====================================================================================
Net Assets
Total increase (decrease) (111,605,909) 2,210,060,784
------------------------------------------------------------------------------------
Beginning of period 4,505,065,036 2,295,004,252
------------------------------
End of period [including undistributed (overdistributed)
net investment income of $(2,801,778) and $21,584,428,
respectively] $4,393,459,127 $4,505,065,036
==============================

See accompanying Notes to Financial Statements.

20 | OPPENHEIMER QUEST BALANCED VALUE FUND

FINANCIAL HIGHLIGHTS

Class A Year Ended October 31 2002 2001 2000 1999 1998
================================================================================================

================================================================================================
Total Return, at Net Asset Value 1 (21.88)% 1.64% 5.78% 21.48% 27.91%

See accompanying Notes to Financial Statements.

21 | OPPENHEIMER QUEST BALANCED VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class B Year Ended October 31 2002 2001 2000 1999 1998
================================================================================================

================================================================================================
Total Return, at Net Asset Value 1 (22.38)% 1.03% 5.10% 20.84% 27.08%

================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,759,167 $1,836,130 $925,476 $801,485 $60,807
------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,068,300 $1,307,367 $873,470 $355,797 $39,165
------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.56% 2.00% 1.64% 1.21% 1.53%
------------------------------------------------------------------------------------------------
Expenses 2.15% 2.07% 2.06% 2.10% 2.15% 3
------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 88% 105% 58% 165%

See accompanying Notes to Financial Statements.

22 | OPPENHEIMER QUEST BALANCED VALUE FUND

Class C Year Ended October 31 2002 2001 2000 1999 1998
================================================================================================

================================================================================================
Total Return, at Net Asset Value 1 (22.40)% 1.05% 5.10% 20.80% 27.12%

================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $763,338 $751,229 $341,824 $313,506 $20,910
------------------------------------------------------------------------------------------------
Average net assets (in thousands) $903,426 $502,037 $336,336 $139,356 $11,598
------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.58% 2.00% 1.64% 1.21% 1.60%
Expenses 2.13% 2.07% 2.06% 2.10% 2.15% 3
------------------------------------------------------------------------------------------------
Portfolio turnover rate 108% 88% 105% 58% 165%

See accompanying Notes to Financial Statements.

23 | OPPENHEIMER QUEST BALANCED VALUE FUND

FINANCIAL HIGHLIGHTS Continued

Class N Year Ended October 31 2002 2001 1
=======================================================================================

=======================================================================================
Total Return, at Net Asset Value 2 (21.99)% (3.71)%

See accompanying Notes to Financial Statements.

24 | OPPENHEIMER QUEST BALANCED VALUE FUND

Class Y Year Ended October 31 2002 2001 2000 1
======================================================================================

======================================================================================
Total Return, at Net Asset Value 2 (21.48)% 2.14% 7.32%

See accompanying Notes to Financial Statements.

25 | OPPENHEIMER QUEST BALANCED VALUE FUND

NOTES TO FINANCIAL STATEMENTS

================================================================================
1. Significant Accounting Policies
Oppenheimer Quest Balanced Value Fund (the Fund), a series of Oppenheimer Quest
For Value Funds, is an open-end management investment company registered under
the Investment Company Act of 1940, as amended. The Fund's investment objective
is to seek a combination of growth of capital and investment income. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager has
entered into a sub-advisory agreement with OpCap Advisors.
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those accounts.
Class Y shares are sold to certain institutional investors without either a
front-end sales charge or a CDSC. All classes of shares have identical rights
and voting privileges. Earnings, net assets and net asset value per share may
differ by minor amounts due to each class having its own expenses directly
attributable to that class. Classes A, B, C and N have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class B
shares will automatically convert to Class A shares six years after the date of
purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.

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

--------------------------------------------------------------------------------
Security Credit Risk. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of 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 October 31, 2002, securities with an
aggregate market value of $2,102,156, representing 0.05% of the Fund's net
assets, were in default.

26 | OPPENHEIMER QUEST BALANCED VALUE FUND

--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.

As of October 31, 2002, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:

Expiring
-----------------------
2010 $1,087,512,098

--------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted a nonfunded 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 October
31, 2002, the Fund's projected benefit obligations were increased by $67,031 and
payments of $8,643 were made to retired trustees, resulting in an accumulated
liability of $355,916 as of October 31, 2002.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of annual compensation they are entitled to receive from the Fund. Under
the plan, the compensation deferred is invested for the Board of Trustees in
shares of one or more Oppenheimer funds selected by the trustee. The amount paid
to the Board of Trustees under the plan will be determined based upon the
performance of the selected funds. Deferral of trustees' fees under the plan
will not affect the net assets of the Fund, and will not materially affect the
Fund's assets, liabilities or net investment income per share.

27 | OPPENHEIMER QUEST BALANCED VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

================================================================================
1. Significant Accounting Policies Continued
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended October 31, 2002, amounts have been reclassified to reflect an
increase in overdistributed net investment income of $155,264. Accumulated net
realized loss on investments was decreased by the same amount. Net assets of the
Fund were unaffected by the reclassifications.

The tax character of distributions paid during the year ended October 31, 2002
and year ended October 31, 2001 was as follows:

Year Ended Year Ended
October 31, 2002 October 31, 2001
------------------------------------------------------
Distributions paid from:
Ordinary income $ 91,935,261 $102,475,611
Long-term capital gain 108,637,340 9,620,310
Return of capital -- --
------------------------------
Total $200,572,601 $112,095,921
==============================

As of October 31, 2002, the components of distributable earnings on a tax basis
were as follows:

Overdistributed net investment income $ (2,801,778)
Accumulated net realized loss (1,134,890,387)
Net unrealized depreciation (556,893,757)
----------------
Total $(1,694,585,922)
================

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

28 | OPPENHEIMER QUEST BALANCED VALUE FUND

================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:

Year Ended October 31, 2002 Year Ended October 31, 2001 1
Shares Amount Shares Amount
------------------------------------------------------------------------------------

Class A
Sold 76,270,446 $1,136,914,035 64,338,039 $1,086,739,570
Dividends and/or
distributions reinvested 4,844,872 74,947,527 2,914,348 46,783,526
Redeemed (51,991,218) (707,293,904) (19,320,599) (322,848,733)
---------------------------------------------------------
Net increase 29,124,100 $ 504,567,658 47,931,788 $ 810,674,363
=========================================================

------------------------------------------------------------------------------------
Class B
Sold 69,354,980 $1,043,042,694 67,633,037 $1,137,736,227
Dividends and/or
distributions reinvested 3,838,605 59,980,758 2,193,098 34,890,525
Redeemed (41,078,794) (548,396,880) (11,102,212) (184,530,150)
---------------------------------------------------------
Net increase 32,114,791 $ 554,626,572 58,723,923 $ 988,096,602
=========================================================

------------------------------------------------------------------------------------
Class C
Sold 35,498,231 $ 536,176,064 30,430,120 $ 511,658,741
Dividends and/or
distributions reinvested 1,571,290 24,519,188 781,514 12,445,845
Redeemed (20,268,479) (267,739,975) (4,960,353) (82,263,727)
---------------------------------------------------------
Net increase 16,801,042 $ 292,955,277 26,251,281 $ 441,840,859
=========================================================

------------------------------------------------------------------------------------
Class N
Sold 8,276,594 $ 121,525,612 1,303,598 $ 21,674,792
Dividends and/or
distributions reinvested 156,819 2,362,733 2,179 36,108
Redeemed (2,477,684) (33,176,925) (81,640) (1,371,849)
---------------------------------------------------------
Net increase 5,955,729 $ 90,711,420 1,224,137 $ 20,339,051
=========================================================

------------------------------------------------------------------------------------
Class Y
Sold 4,615,777 $ 65,893,788 9,750,120 $ 164,240,847
Dividends and/or
distributions reinvested 470,717 7,204,577 80,494 1,366,949
Redeemed (3,607,330) (49,187,425) (1,449,611) (24,546,472)
---------------------------------------------------------
Net increase 1,479,164 $ 23,910,940 8,381,003 $ 141,061,324
=========================================================

1. For the year ended October 31, 2001, for Class A, B, C and Y shares and for
the period from March 1, 2001 (inception of offering) to October 31, 2001, for
Class N shares.

29 | OPPENHEIMER QUEST BALANCED VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended October 31, 2002, were
$6,584,855,106 and $4,817,664,426, respectively.

As of October 31, 2002, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $4,980,514,862 was composed of:

Gross unrealized appreciation $ 192,272,866
Gross unrealized depreciation (796,544,909)
-------------
Net unrealized depreciation $(604,272,043)
=============

The difference between book-basis and tax-basis unrealized appreciation and
depreciation, if applicable, is attributable primarily to the tax deferral of
losses on wash sales, or return of capital dividends, and the realization for
tax purposes of unrealized gain (loss) on certain futures contracts, investments
in passive foreign investment companies, and forward foreign currency exchange
contracts.

================================================================================
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. Effective March 1, 2002, the
agreement provides for an annual fee of 0.85% of the first $5 billion of average
annual net assets of the Fund; 0.75% of the next $1 billion; 0.65% of the next
$1 billion; and 0.60% of average annual net assets in excess of $7 billion.
Prior to March 1, 2002, the management fee rate was 0.85% of average annual net
assets.

--------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager retains OpCap Advisors (the Sub-Advisor) to
provide the day-to-day portfolio management of the Fund. For the year ended
October 31, 2002, the Manager paid $13,154,575 to the Sub-Advisor for its
services to the Fund.

--------------------------------------------------------------------------------
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 $19.75 per account fee.
Additionally, Class Y shares are subject to minimum fees of $5,000 for assets
of less than $10 million and $10,000 for assets of $10 million or more. The
Class Y shares are subject to the minimum fees in the event that the per account
fee does not equal or exceed the applicable minimum fees. OFS may voluntarily
waive the minimum fees.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.25% of average net assets of Class Y shares and
for all other classes, up to an annual rate of 0.35% of average net assets of
each class. Beginning November 1, 2002, transfer agent fees for Class Y shares
are limited to 0.35% of the Fund's average daily net assets. This undertaking
may be amended or withdrawn at any time.

30 | OPPENHEIMER QUEST BALANCED VALUE FUND

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

October 31, 2002 $14,121,824 $3,513,191 $1,237,651 $32,336,348 $4,801,712 $983,606

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

--------------------------------------------------------------------------------
Class A Distribution and Service Plan Fees. The Fund has adopted a Distribution
and Service Plan for Class A shares. Under the plan the Fund currently pays an
asset-based sales charge to the Distributor at an annual rate equal to 0.10% of
average annual net assets of Class A shares of the Fund. (The Board of Trustees
can set this rate up to 0.15%.) Effective January 1, 2002, the asset-based sales
charge rate for Class A shares was voluntarily reduced from 0.15% to 0.10% of
average annual net assets representing Class A shares. The Fund also pays a
service fee to the Distributor of 0.25% of the average annual net assets of
Class A shares. For the year ended October 31, 2002, payments under the Class A
plan totaled $6,990,513, all of which were paid by the Distributor to
recipients, and included $246,589 paid to an affiliate of the Manager.

--------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per year
under each plan.

31 | OPPENHEIMER QUEST BALANCED VALUE FUND

NOTES TO FINANCIAL STATEMENTS Continued

================================================================================
4. Fees and Other Transactions with Affiliates Continued
Distribution fees paid to the Distributor for the year ended October 31, 2002,
were as follows:

================================================================================
5. Illiquid Securities
As of October 31, 2002, 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 intends to invest no more than 15% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of October
31, 2002 was $582,156, which represents 0.01% of the Fund's net assets.

================================================================================
6. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes, provided
asset coverage for borrowings exceeds 300%. The Fund has entered into an
agreement which enables it to participate with other Oppenheimer funds in an
unsecured line of credit with a bank, which permits borrowings up to $400
million, collectively. Interest is charged to each fund, based on its
borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Borrowings are
payable within 30 days after such loan is executed. The Fund also pays a
commitment fee equal to its pro rata share of the average unutilized amount of
the credit facility at a rate of 0.08% per annum.
The Fund had no borrowings outstanding during the year ended or at October
31, 2002.

Appendix A

RATINGS DEFINITIONS

Moody's Investors Service, Inc.

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

Long-Term (Taxable) Bond Ratings

Caa: Bonds rated Caa are of poor standing and may be in default or there may
be present elements of danger with respect to principal or interest.

Ca: Bonds rated Ca represent obligations which are speculative in a high
degree and are often in default or have other marked shortcomings.

C: Bonds 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.

Short-Term Ratings - Taxable Debt

These ratings apply to the ability of issuers to repay punctually senior debt
obligations having an original maturity not exceeding one year:

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Rating Services

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

Long-Term Credit Ratings

AAA: Bonds 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: Bonds 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.

B: A bond rated B is more vulnerable to nonpayment than an obligation rated BB,
but the obligor currently has the capacity to meet its financial commitment on
the obligation.

C: The C rating may used where a bankruptcy petition has been filed or similar
action has been taken, but payments on this obligation are being continued.

D: Bonds rated D are in default. Payments on the obligation are not being made
on the date due.

Short-Term Issue Credit Ratings

C: 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.

Fitch, Inc.

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

International Long-Term Credit Ratings

Speculative Grade:

International Short-Term Credit Ratings

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 Durables
Air Freight & Couriers Household Products
Airlines Industrial Conglomerates
Auto Components Insurance
Automobiles Internet & Catalog Retail
Banks Internet Software & Services
Beverages Information Technology Consulting &
Services
Biotechnology Leisure Equipment & Products
Building Products Machinery
Chemicals Marine
Commercial Services & Supplies Media
Communications Equipment Metals & Mining
Computers & Peripherals Multiline Retail
Construction & Engineering Multi-Utilities
Construction Materials Office Electronics
Containers & Packaging Oil & Gas
Distributors Paper & Forest Products
Diversified Financials Personal Products
Diversified Telecommunication Services Pharmaceuticals
Electric Utilities Real Estate
C-12B-1 Road & Rail
Electrical Equipment
Electronic Equipment & Instruments Semiconductor Equipment & Products
Energy Equipment & Services Software
Food & Drug Retailing Specialty Retail
Food Products Textiles & Apparel
Gas Utilities Tobacco
Health Care Equipment & Supplies Trading Companies & Distributors
Health Care Providers & Services Transportation Infrastructure
Hotels Restaurants & Leisure Water Utilities
Wireless Telecommunication Services

C-11

Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers

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

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

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

that has made special arrangements with the Distributor for those
purchases, or

II. Waivers of Class A Sales Charges of Oppenheimer Funds
------------------------------------------------------------------------------