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. 54                                     [X]


                                    and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940                                                               [
]


      Amendment No. 56                                                    [X]


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

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

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

                             Robert G. Zack, Esq.
                            OppenheimerFunds, Inc.
  Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New
                               York 10281-1008
                   (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)
     [  ] ____________ pursuant to paragraph (b)
     [X]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 FundSM


Prospectus dated February 28, 2005


                                      Oppenheimer Quest Opportunity Value
                                      Fund is a mutual fund that seeks
                                      growth of capital as its objective. It
                                      invests in a diversified portfolio of
                                      stocks, bonds and cash equivalents,
                                      but primarily focuses on stocks.
                                            This Prospectus contains
                                      important information about the Fund's
                                      objective, its investment policies,
                                      strategies and risks. It also contains
                                      important information about how to buy
                                      and sell shares of the Fund and other
                                      account features. Please read this
                                      Prospectus carefully before you invest
                                      and keep it for future reference about
                                      your account.



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




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CONTENTS


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              ABOUT THE FUND

              The Fund's Investment Objective and Principal Investment
              Strategies
              Main Risks of Investing in the Fund
              The Fund's Past Performance
              Fees and Expenses of the Fund
              About the Fund's Investments
              How the Fund is Managed


              ABOUT YOUR ACCOUNT

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

              Special Investor Services
              AccountLink
              PhoneLink
              OppenheimerFunds Internet Website
              Retirement Plans

              How to Sell Shares
              By Mail
              By Telephone
              By Wire

              How to Exchange Shares
              Shareholder Account Rules and Policies
              Dividends, Capital Gains and Taxes
              Financial Highlights

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

The Fund's Investment Objective and Principal Investment 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 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
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 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 and
large capitalizations. It can also buy securities of small-capitalization
companies, which may have more volatile stock prices than large companies,
but does not anticipate investing a significant portion of its assets in
these 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
outstanding debt securities generally rise.  When interest rates rise, the
values of outstanding debt securities generally fall, and those securities
may sell at a discount from their face value. The magnitude of these
fluctuations will often be greater for longer-term debt securities than
shorter-term debt securities.  The Fund's share prices can go up or down when
interest rates change because of the effect of the changes on the value of
the Fund's investments in debt securities. Also, if interest rates fall, the
Fund's investment in new securities at lower yields will reduce the Fund's
income.

CREDIT RISK.  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 that of the Fund's shares may be
reduced. While the Fund's investments in U.S. government securities are
subject to little credit risk, the Fund's other investments in debt
securities are subject to risks of default.  A downgrade in an issuer's
credit rating or other adverse news about an issuer can reduce a security's
market value.

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form
the risk profile of the Fund, and can affect the value of the Fund's
investments, its investment performance and its prices per share. Particular
investments and investment strategies also have risks. These risks mean that
you can lose money by investing in the Fund. When you redeem your shares,
they may be worth more or less than what you paid for them. There is no
assurance that the Fund will achieve its investment objective. In the short
term, the stock markets can be volatile, and the prices of the Fund's shares
can go up and down substantially.  The Fund's income-oriented investments may
help cushion the Fund's total return from changes in stock prices, but
fixed-income securities have their own risks 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 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 a broad-based market index. The after-tax
returns for the other classes of shares will vary.

      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.  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 may
result 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 annual total
returns]

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

As of December 31, 2004, the year to date return before taxes for Class A
shares was 9.50%.
During the period shown in the bar chart,  the highest return (not annualized)
before taxes for a calendar  quarter was 14.45% (2Qtr95) and the lowest return
(not annualized) before taxes for a calendar quarter was -12.98% (3Qtr98).


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Average Annual Total Returns       1 Year          5 Years            10 Years
for    the    periods    ended                   (or life of     (or life of class,
December 31, 2004                              class, if less)        if less)
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Class  A   Shares   (inception

1/03/89)                           3.21%            1.67%              10.35%
  Return Before Taxes              2.16%            0.77%               9.14%
  Return After Taxes on
  Distributions                    3.41%            1.10%               8.68%
  Return    After   Taxes   on
  Distributions  and  Sale  of
  Fund Shares

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S&P 500(R)Index (reflects no
deduction for fees, expenses

or taxes)                          10.87%           -2.30%             12.07%1

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Class  B   Shares   (inception     3.63%            1.83%              10.66%

9/1/93)
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Class  C   Shares   (inception     7.69%            2.21%              10.35%

9/1/93)
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Class  N   Shares   (inception     8.07%            1.25%                N/A

3/1/01)
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Class  Y   Shares   (inception     9.62%            3.16%               6.87%

12/16/96)
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1. From 12/31/94


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 years); and for
Class C and Class N , 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(R)Index, an unmanaged index of equity securities. The index
performance includes reinvestment of income but does not reflect transaction
costs, fees, expenses or taxes. 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 expenses directly, such as sales charges. The numbers below are based
on the Fund's expenses during its fiscal year ended October 31, 2004.







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)
 ------------------------------------------------------------------------------

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               0.81%     0.81%      0.81%     0.81%     0.81%

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution  and/or Service  0.25%     1.00%      1.00%     0.50%      None
(12b-1) Fees
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Other Expenses                0.26%     0.30%      0.25%     0.42%     0.35%

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

Total    Annual    Operating  1.32%     2.11%      2.06%     1.73%     1.16%
Expenses

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


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 0.38% and 1.69% for Class N shares.  Class A,
Class B, Class C and Class Y were the same as shown above.


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  gradually  declines  from  5% to 1% in  years  one
   through six and is eliminated after that.
3.    Applies to shares redeemed within 12 months of purchase.
4.    Applies  to shares  redeemed  within 18  months of a  retirement  plan's
   first purchase of Class N shares.

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

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







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

Class A Shares               $703          $972         $1,261        $2,084

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

Class B Shares               $716          $968         $1,346       $2,0741

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

Class C Shares               $311          $652         $1,120        $2,414

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

Class N Shares               $277          $550          $947         $2,058

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

Class Y Shares               $119          $371          $642         $1,417

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

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

Class A Shares               $703          $972         $1,261        $2,084

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

Class B Shares               $216          $668         $1,146       $2,0741

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

Class C Shares               $211          $652         $1,120        $2,414

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

Class N Shares               $177          $550          $947         $2058

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

Class Y Shares               $119          $371          $642         $1,417

--------------------------------------------------------------------------------
 In the first example,  expenses  include the initial sales charge for Class A
 and the  applicable  Class B, Class C and 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  contingent
 deferred sales charges. There is no sales charge on Class Y shares.
 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 tries to reduce risks by carefully researching securities
before they are purchased. The Fund attempts to reduce its exposure to market
risks by diversifying its investments, that is, by not holding a substantial
amount of 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 prices of the Fund will
change daily based on changes in market prices of securities and market
conditions, and in response to other economic events.

Stock and Other Equity 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 appreciation. 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 under "Debt Securities,"
      but the credit rating has less impact on the investment decision than
      in the case of other debt securities.

Debt Securities. The Fund can also invest in debt securities, such as U.S.
      government securities and mortgage-backed securities, as more fully
      described below, and domestic and foreign corporate bonds, notes and
      debentures.  The Fund will make these investments when the portfolio
      manager believes they present opportunities for seeking the Fund's
      objective of growth of capital, 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
      Manager 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"). Securities issued by
      agencies and instrumentalities of the U.S. government such as the
      Federal Home Loan Mortgage Corporation, the Federal National Mortgage
      Association and the Federal Home Loan Banks are neither guaranteed or
      insured by the U.S. government, but generally are considered to have
      low credit risks.

   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 and is not required to use them to achieve
its objective. These techniques have certain risks, although some are
designed to help reduce overall investment or market risks.


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. The Fund also can invest
      in emerging markets, which have greater risks than developed 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.

      Additionally, if a fund invests a significant amount of its assets in
      foreign securities, it might expose the fund to "time-zone arbitrage"
      attempts by investors seeking to take advantage of the differences in
      value of foreign securities that might result from events that occur
      after the close of the foreign securities market on which a foreign
      security is traded and the close of The New York Stock Exchange that
      day, when the Fund's net asset value is calculated. If such time-zone
      arbitrage were successful, it might dilute the interests of other
      shareholders. However, the Fund's use of "fair value pricing" to adjust
      the closing market prices of foreign securities under certain
      circumstances, to reflect what the Manager and the Board believe to be
      the fair value of the foreign securities may help deter those
      activities.


Derivative Investments. The Fund can invest in a number of different kinds of
      "derivative" investments. In general terms, a derivative investment is
      an investment contract whose value depends on (or is derived from) the
      value of an underlying asset, interest rate or index. In the broadest
      sense, options, futures contracts, and other hedging instruments the
      Fund might use may be considered "derivative" investments. In addition
      to using derivatives for hedging, the Fund might use other derivative
      investments because they offer the potential for increased value. The
      Fund currently does not use derivatives to a substantial degree and is
      not required to use them in seeking its objective.

      Derivatives have risks. If the issuer of the derivative investment does
      not pay the amount due, the Fund can lose money on the investment. The
      underlying security or investment on which a derivative is based, and
      the derivative itself, may not perform the way the Manager expected it
      to. As a result of these risks, the Fund could realize less principal
      or income from the investment than expected or its hedge might be
      unsuccessful. As a result, the Fund's share prices could fall. Certain
      derivative investments held by the Fund might be illiquid.

Hedging. The Fund can buy and sell futures contracts, put and call options,
      and forward contracts. These are all referred to as "hedging
      instruments."  Underlying investments for these hedging instruments
      included securities, securities indices and currencies.  The Fund is
      not required to use hedging instruments to seek its objective. The Fund
      does not use hedging instruments for speculative purposes, and has
      limits on its use of them.

      Some of these strategies would hedge the Fund's portfolio against price
      fluctuations.  Other hedging strategies, shuc as buying futures and
      call options, would tend to increase the Fund's exposure to the
      securities market.

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

"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 monitors 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
      may affect brokerage costs the Fund pays (and may reduce performance).
      If the Fund realizes capital gains when it sells its portfolio
      investments, it must generally pay those gains out to shareholders,
      increasing their taxable distributions. 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 investments that are inconsistent with
      the Fund's principal investment strategies. 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 growth of
      capital.

Loans of Portfolio Securities. The Fund has entered into a Securities Lending
      Agreement ("Securities Lending Agreement") with JP Morgan Chase. Under
      that agreement portfolio securities of the Fund may be loaned to
      brokers, dealers and other financial institutions.  The Securities
      Lending Agreement provides that loans must be adequately collateralized
      and may be made only in conformity with the Fund's Securities Lending
      Guidelines, adopted by the Fund's Board of Trustees. The value of the
      securities loaned may not exceed 25% of the value of the Fund's net
      assets.


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


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

How the Fund Is Managed


THE MANAGER. The Manager supervises the Fund's investment program and handles
its day-to-day business.  The Manager carries out its duties, subject to the
policies established by the Board of Trustees, under an investment advisory
agreement that states the Manager's responsibilities.  The agreement sets the
fees paid by the Fund to the Manager and describes the expenses that the Fund
pays to conduct its business. The Manager became the Fund's investment
advisor on November 22, 1995. Under a sub-advisory agreement with OpCap
Advisors that expired effective December 31, 2004, the Manager, not the Fund,
paid the sub-advisor an annual fee. That fee was calculated as a percentage
of the fee the Fund paid the Manager. The rate was 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 Manager has operated as an investment advisor since January 1960.
The Manager and its subsidiaries and controlled affiliates managed more than
$170 billion in assets as of December 31, 2004, including other Oppenheimer
funds with more than 7 million shareholder accounts.  The Manager is located
at Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New
York 10281-1008.

The Manager's Fees.  The Fund pays the Manager an advisory fee at an annual
      rate that declines as the Fund's assets grow: 0.85% of the first $1
      billion of average annual net assets of the Fund, 0.80% of the next
      $500 million, 0.75% of the next $500 million, 0.70% of the next $500
      million, 0.65% of the next $500 million, 0.60% of the next $500
      million, 0.55% of the next $500 million and 0.50% of average annual net
      assets in excess of $4 billion. The Fund's management fee for its last
      fiscal year ended October 31, 2004 was 0.81% of average annual net
      assets for each class of shares.

      Effective January 1, 2005, the Manager has voluntarily agreed to waive
      advisory fees at an annual rate that further declines as the Fund's
      assets grow: 0.75% of the first $200 million of average annual net
      assets of the Fund, 0.72% of the $200 million, 0.69% of the next $200
      million, 0.66% of the next $200 million, 0.60% of the next $700
      million, 0.58% of the next $1 billion and 0.56% of average annual net
      assets in excess of $2.5 billion.

Portfolio Manager.  The portfolio manager of the Fund is Emmanuel Ferreira
      and he is primarily responsible for the day-to-day management of the
      Fund's portfolio. Mr. Ferreria has been a Vice President of the Manager
      since January 2003. Prior to joining the Manager in January 2003, Mr.
      Ferreira was a portfolio manager at Lashire Investments (1999-2003)..

PENDING LITIGATION.  A consolidated amended complaint has been filed as
putative derivative and class actions against the Manager, Distributor
and Transfer Agent, as well as 51 of the Oppenheimer funds (collectively
the "funds") including the Fund, 31 present and former Directors or
Trustees and 9 present and former officers of certain of the Funds. This
complaint, filed in the U.S. District Court for the Southern District of
New York on January 10, 2005, consolidates into a single action and
amends six individual previously-filed putative derivative and class
action complaints. Like those prior complaints, the complaint alleges
that the Manager charged excessive fees for distribution and other
costs, improperly used assets of the funds in the form of directed
brokerage commissions and 12b-1 fees to pay brokers to promote sales of
the funds, and failed to properly disclose the use of fund assets to
make those payments in violation of the Investment Company Act and the
Investment Advisers Act of 1940. Also, like those prior complaints, the
complaint further alleges that by permitting and/or participating in
those actions, the Directors/Trustees and the Officers breached their
fiduciary duties to Fund shareholders under the Investment Company Act
and at common law.  The complaint seeks unspecified compensatory and
punitive damages, rescission of the funds' investment advisory
agreements, an accounting of all fees paid, and an award of attorneys'
fees and litigation expenses.


      The Manager and the Distributor believe the claims asserted in these
law suits to be without merit, and intend to defend the suits vigorously. The
Manager and the Distributor do not believe that the pending actions are
likely to have a material adverse effect on the Fund or on their ability to
perform their respective investment advisory or distribution agreements with
the Fund.

ABOUT YOUR ACCOUNT

How to Buy Shares

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

Buying Shares Through Your Dealer. You can buy shares through any dealer,
      broker or financial institution that has a sales agreement with the
      Distributor. Your dealer will place your order with the Distributor on
      your behalf. A broker or dealer may charge for that service.
Buying Shares Through the Distributor. Complete an OppenheimerFunds new
      account application and return it with a check payable to
      "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
      Colorado 80217. If you 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 (the "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 for a class of shares on a "regular
      business day" is determined by dividing the value of the Fund's net
      assets attributable to that class by the number of shares of that class
      outstanding on that day.  To determine net asset values, the Fund
      assets are valued primarily on the basis of current market quotations.
      If market quotations are not readily available or do not accurately
      reflect fair value for a security (in the Manager's judgment) or if a
      security's value has been materially affected by events occurring after
      the close of the exchange or market on which the security is
      principally traded, that security may be valued by another method that
      the Board of Trustees believes accurately reflects the fair value.
      Because some foreign securities trade in markets and on exchanges that
      operate on weekends and U.S. holidays, the values of some of the Fund's
      foreign investments may change on days when investors cannot buy or
      redeem Fund shares.

      The Board has adopted valuation procedures for the Fund and has
      delegated the day-to-day responsibility for fair value determinations
      to the Manager's Valuation Committee.  Fair value determinations by the
      Manager are subject to review, approval and ratification by the Board
      at its next scheduled meeting after the fair valuations are
      determined.  In determining whether current market prices are readily
      available and reliable, the Manager monitors the information it
      receives in the ordinary course of its investment management
      responsibilities for significant events that it believes in good faith
      will affect the market prices of the securities of issuers held by the
      Fund.  Those may include events affecting specific issuers (for
      example, a halt in trading of the securities of an issuer on an
      exchange during the trading day) or events affecting securities markets
      (for example, a foreign securities market closes early because of a
      natural disaster).

      If, after the close of the principal market on which a security held by
      the Fund is traded and before the time as of which the Fund's net asset
      values are calculated that day, a significant event occurs that the
      Manager learns of and believes in the exercise of its judgment will
      cause a material change in the value of that security from the closing
      price of the security on the principal market on which it is traded,
      the Manager will use its best judgment to determine a fair value for
      that security.

      The Manager believes that foreign securities values may be affected by
      volatility that occurs in U.S. markets on a trading day after the close
      of foreign securities markets.  The Manager's fair valuation procedures
      therefore include a procedure whereby foreign securities prices may be
      "fair valued" to take those factors into account.

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

Buying Through a Dealer. If you buy shares through a dealer, your dealer must
      receive the order by the close of the 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 a special agreement 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 most likely invest in Class A or Class C shares
      rather than Class B shares. That is because of the effect of the Class
      B contingent deferred sales charge if you redeem within six years, as
      well as the effect of the Class B asset-based sales charge on the
      investment return for that class in the short-term. Class C shares
      might be the appropriate choice (especially for investments of less
      than $100,000), because there is no initial sales charge on Class C
      shares, and the contingent deferred sales charge does not apply to
      amounts you sell after holding them one year.

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

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

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

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

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

How Do Share Classes Affect Payments to Your Broker? A financial 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.

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


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


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

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

o     Right of Accumulation. To qualify for the reduced Class A sales charge
         that would apply to a larger purchase than you are currently
         making (as shown in the table above), you can add the value of
         any Class A, Class B or, effective March 18, 2005, Class C
         shares of the Fund or other Oppenheimer funds that you or your
         spouse currently own, or are currently purchasing, to the
         value of your Class A share purchase. Your Class A shares of
         Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash
         Reserves on which you did not pay a sales charge will not be
         counted for this purpose. In totaling your holdings, you may
         count shares held in your individual accounts (including IRAs
         and 403(b) plans), your joint accounts with your spouse, or
         accounts you or your spouse hold as trustees or custodians on
         behalf of your children who are minors. A fiduciary can count
         all shares purchased for a trust, estate or other fiduciary
         account (including employee benefit plans for the same
         employer) that has multiple accounts. To qualify for this
         Right of Accumulation, if you are buying shares directly from
         the Fund you must inform the Fund's Distributor of your
         eligibility and holdings at the time of your purchase. If you
         are buying shares through your financial intermediary you must
         notify your intermediary of your eligibility for this Right of
         Accumulation at the time of your purchase.


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


o     Letters of Intent. You may also qualify for reduced Class A sales
         charges by submitting a Letter of Intent to the Distributor. A
         Letter of Intent is a written statement of your intention to
         purchase a specified value of Class A, Class B or (effective
         March 18, 2005) Class C shares of the Fund or other
         Oppenheimer funds over a 13-month period. The total amount of
         your intended purchases of Class A, Class B and (effective
         March 18, 2005) Class C shares will determine the reduced
         sales charge rate that will apply to your Class A share
         purchases of the Fund during that period. You can choose to
         include purchases made up to 90 days before the date that you
         submit a Letter.  Your Class A shares of Oppenheimer Money
         Market Fund, Inc. or Oppenheimer Cash Reserves on which you
         did not pay a sales charge will not be counted for this
         purpose. Submitting a Letter of Intent does not obligate you
         to purchase the specified amount of shares. You can also apply
         the Right of Accumulation to these purchases.


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

Other Special Sales Charge Arrangements and Waivers.  The Fund and the
Distributor offer other opportunities to purchase shares without
front-end or contingent deferred sales charges under the programs
described below. The Fund reserves the right to amend or discontinue
these programs at any time without prior notice.
o     Dividend Reinvestment.  Dividends and/or capital gains distributions
         received by a shareholder from the Fund may be reinvested in
         shares of the Fund or any of the other Oppenheimer funds
         without a sales charge, at the net asset value per share in
         effect on the payable date. You must notify the Transfer Agent
         in writing to elect this option and must have an existing
         account in the fund selected for reinvestment.
o     Exchanges of Shares.  Shares of the Fund may be exchanged for shares of
         certain other Oppenheimer funds at net asset value per share
         at the time of exchange, without sales charge, and shares of
         the Fund can be purchased by exchange of shares of certain
         other Oppenheimer funds on the same basis. Please refer to
         "How to Exchange Shares" in this Prospectus and in the
         Statement of Additional Information for more details,
         including a discussion of circumstances in which sales charges
         may apply on exchanges.
o     Reinvestment Privilege.  Within six months of a redemption of certain
         Class A and Class B shares, the proceeds may be reinvested in
         Class A shares of the Fund without sales charge. This
         privilege applies to redemptions of Class A shares that were
         subject to an initial sales charge or Class A or Class B
         shares that were subject to a contingent deferred sales charge
         when redeemed. The investor must ask the Transfer Agent for
         that privilege at the time of reinvestment and must identify
         the account from which the redemption was made.

      Other Special Reductions and Waivers. The Fund and the Distributor
      offer additional arrangements to reduce or eliminate front-end sales
      charges or to waive contingent deferred sales charges for certain types
      of transactions and for certain classes of investors (primarily
      retirement plans that purchase shares in special programs through the
      Distributor). These are described in greater detail in Appendix C to
      the Statement of Additional Information, which may be ordered by
      calling 800.225.5677 or through the OppenheimerFunds website, at
      www.oppenheimerfunds.com (under the hyperlinks "Access Accounts and
      ------------------------
      Services - Forms & Literature" - "Order Literature" - "Statement of
      Additional Information"). A description of these waivers and special
      sales charge arrangements is also available for viewing on the
      OppenheimerFunds website (under the hyperlinks "Research Fund - Fund
      Documents - View a description..."). To receive a waiver or special
      sales charge rate under these programs, the purchaser must notify the
      Distributor (or other financial intermediary through which shares are
      being purchased) at the time of purchase or notify the Transfer Agent
      at the time of redeeming shares for those waivers that apply to
      contingent deferred sales charges.


o     Purchases by Certain Retirement Plans. There is no initial sales charge
         on purchases of Class A shares of the Fund by (1) retirement plans
         that have $10 million or more in plan assets and that have entered
         into a special agreement with the Distributor and by (2) retirement
         plans that are part of a retirement plan product or platform offered
         by banks, broker-dealers, financial advisors, insurance companies or
         record-keepers that have entered into a special agreement with the
         Distributor for this purpose. 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
         described in "Retirement Plans" in the Statement of Additional
         Information. No contingent deferred sales charge is charged upon the
         redemption of such shares.

Class A Contingent Deferred Sales Charge. There is no initial
      sales charge on purchases of Class A shares of any one or
      more of the Oppenheimer funds aggregating $1 million or
      more, or on purchases of Class A shares by certain
      retirement plans that satisfied certain requirements prior
      to March 1, 2001 ("grandfathered retirement accounts").
      However, those Class A shares may be subject to a Class A
      contingent deferred sales charge, as described below.
      Retirement plans holding shares of Oppenheimer funds in an
      omnibus account(s) for the benefit of plan participants in
      the name of a fiduciary or financial intermediary (other
      than OppenheimerFunds-sponsored Single DB Plus plans) are
      not permitted to make initial purchases of Class A shares
      subject to a contingent deferred sales charge.

      The Distributor pays dealers of record concessions in an
      amount equal to 1.0% of purchases of $1 million or more
      other than purchases by grandfathered retirement accounts.
      For grandfathered retirement accounts, the concession is
      0.75% of the first $2.5 million of purchases plus 0.25% of
      purchases in excess of $2.5 million.  In either case, the
      concession will not be paid on purchases of shares by
      exchange or that were previously subject to a front-end
      sales charge and dealer concession.

      If you redeem any of those shares within an 18-month "holding period"
      measured from the beginning of the calendar month of their purchase, a
      contingent deferred sales charge (called the "Class A contingent
      deferred sales charge") may be deducted from the redemption proceeds.
      That sales charge will be equal to 1.0% 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.

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.

            Class N shares are sold at net asset value without an initial
sales charge. A contingent deferred sales charge of 1.0% will be imposed upon
the redemption of Class N shares, if:
o     The group retirement plan is terminated or Class N shares of all
      Oppenheimer funds are terminated as an investment option of the plan
      and Class N shares are redeemed within 18 months after the plan's first
      purchase of Class N shares of any Oppenheimer fund, or
o     With respect to an IRA or 403(b) plan, Class N shares are redeemed
      within 18 months of the plan's first purchase of Class N shares of any
      Oppenheimer fund.

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

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

      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.


Service Plan for Class A Shares. The Fund has adopted a Distribution and
      Service Plan for Class A shares. The Fund 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 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. The plan also provides for the Fund
      to pay an asset-based sales charge to the Distributor at an annual rate
      of 0.25% of average annual net assets of Class A shares the Fund (the
      Board of Trustees has set that rate at zero).


      With respect to Class A shares subject to a Class A contingent deferred
      sales charge purchased by grandfathered retirement accounts, the
      Distributor pays the 0.25% service fee to dealers in advance for the
      first year after the shares are sold by the dealer. The Distributor
      retains the first year's service fee paid by the Fund. After the shares
      have been held by grandfathered retirement accounts 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 normally pays the 0.25% service fees to
      dealers in advance for the first year after the shares are sold by the
      dealer. After the shares have been held for a year, the Distributor
      pays the service fees to dealers on a quarterly basis.

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

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

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

      Under certain circumstances, the Distributor will pay the full Class B,
      Class C or Class N asset-based sales charge and the service fee to the
      dealer beginning in the first year after purchase of such shares in
      lieu of paying the dealer the sales concession and the advance of the
      first year's service fee at the time of purchase, if there is a special
      agreement between the dealer and the Distributor.  In those
      circumstances, the sales concession will not be paid to the dealer.

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

      In addition, the Manager and the Distributor may make substantial
      payments to dealers or other financial intermediaries and service
      providers for distribution and/or shareholder servicing activities, out
      of their own resources, including the profits from the advisory fees
      the Manager receives from the Fund.  Some of these distribution-related
      payments may be made to dealers or financial intermediaries for
      marketing, promotional or related expenses; these payments are often
      referred to as "revenue sharing."  In some circumstances, those types
      of payments may create an incentive for a dealer or financial
      intermediary or its representatives to recommend or offer shares of the
      Fund or other Oppenheimer funds to its customers.  You should ask your
      dealer or financial intermediary for more details about any such
      payments it receives.

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.

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.

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

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

HOW DO YOU SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of the 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-sponsored qualified retirement plan
account or under a share certificate by telephone.
   o  To redeem shares through a service representative or automatically on
      PhoneLink, call 1.800.225.5677.
      Whichever method you use, you may have a check sent to the address on
the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

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

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

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

CAN  YOU  SELL  SHARES  THROUGH  YOUR  DEALER?   The   Distributor   has  made
arrangements  to repurchase  Fund shares from dealers and brokers on behalf of
their  customers.  Brokers or dealers  may  charge 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


If you want to change all or part of your investment from one Oppenheimer
fund to another, you can exchange your shares for shares of the same class of
another Oppenheimer fund that offers the exchange privilege. For example, you
can exchange Class A shares of the Fund only for Class A shares of another
fund. To exchange shares, you must meet several conditions:

   o  Shares of the fund selected for exchange must be available for sale in
      your state of residence.
   o  The prospectus of  the selected fund must offer the exchange privilege.
   o  When you establish an account, you must hold the shares you buy for at
      least seven days before you can exchange them. After your account is
      open for seven days, you can exchange shares on any regular business
      day, subject to the limitations described below.
   o  You must meet the minimum purchase requirements for the selected fund.
   o  Generally,  exchanges  may be made only between  identically  registered
      accounts,  unless all account owners send written exchange  instructions
      with a signature guarantee.
   o  Before exchanging into a fund, you must obtain its prospectus and
      should read it.

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

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

In some  cases,  sales  charges may be imposed on  exchange  transactions.  In
general,  a  contingent  deferred  sales  charge  (CDSC)  is  not  imposed  on
exchanges  of shares  that are  subject to a CDSC.  However,  if you  exchange
shares that are  subject to a CDSC,  the CDSC  holding  period will be carried
over to the acquired  shares,  and the CDSC may be imposed if those shares are
redeemed before the end of the CDSC holding period.

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

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

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

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

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


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

ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?

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

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

o     Timing of Exchanges.  Exchanged shares are normally redeemed from one
      fund and the proceeds are reinvested in the fund selected for exchange
      on the same regular business day on which the Transfer Agent or its
      agent (such as a financial intermediary holding the investor's shares
      in an "omnibus" or "street name" account) receives an exchange request
      that conforms to these policies. The request must be received by the
      close of The New York Stock Exchange that day, which is normally 4:00
      p.m. Eastern time, but may be earlier on some days. However, the
      Transfer Agent may delay the reinvestment of proceeds from an exchange
      for up to five business days if it determines, in its discretion, that
      an earlier transmittal of the redemption proceeds to the receiving fund
      would be detrimental to either the fund from which the exchange is made
      or the fund to which the exchange is made.

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

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

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

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

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

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



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

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



Additional Policies and Procedures. The Fund's Board has adopted additional
policies and procedures to detect and prevent frequent and/or excessive
exchanges and purchase and redemption activity. Those additional policies and
procedures will take effect on June 20, 2005:

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

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

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

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

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


Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual "Minimum Balance Fee" is assessed on each Fund account with a
      value of less than $500. The fee is automatically deducted from each
      applicable Fund account annually on or about the second to last
      "regular business day" of September.  See the Statement of Additional
      Information to learn how you can avoid this fee and for circumstances
      under which this fee will not be assessed.
The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is
      in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
      be modified, suspended or terminated by the Fund at any time. The Fund
      will provide you notice whenever it is required to do so by applicable
      law. If an account has more than one owner, the Fund and the Transfer
      Agent may rely on the instructions of any one owner. Telephone
      privileges apply to each owner of the account and the dealer
      representative of record for the account unless the Transfer Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the
      Fund will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements
      for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating
      in NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders
      of the Fund if the dealer performs any transaction erroneously or
      improperly.
The redemption price for shares will vary from day to day because the value
      of the securities in the Fund's portfolio fluctuates. The redemption
      price, which is the net asset value per share, will normally differ for
      each class of shares. The redemption value of your shares may be more
      or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink or by Federal Funds wire (as elected by
      the shareholder) within seven days after the Transfer Agent receives
      redemption instructions in proper form. However, under unusual
      circumstances determined by the 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.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack
      of liquidity in the Fund's portfolio to meet redemptions). This means
      that the redemption proceeds will be paid with liquid securities from
      the Fund's portfolio. If the Fund redeems your shares in kind, you may
      bear transaction costs and will bear market risks until such time as
      such securities are converted into cash.
Federal regulations may require the Fund to obtain your name, your date of
      birth (for a natural person), your residential street address or
      principal place of business and your Social Security Number, Employer
      Identification Number or other government issued identification when
      you open an account. Additional information may be required in certain
      circumstances or to open corporate accounts.  The Fund or the Transfer
      Agent may use this information to attempt to verify your identity.  The
      Fund may not be able to establish an account if the necessary
      information is not received.  The Fund may also place limits on account
      transactions while it is in the process of attempting to verify your
      identity.  Additionally, if the Fund is unable to verify your identity
      after your account is established, the Fund may be required to redeem
      your shares and close your account.
"Backup withholding" of federal income tax may be applied against taxable
      dividends, distributions and redemption proceeds (including exchanges)
      if you fail to furnish the Fund your correct, certified Social Security
      or Employer Identification Number when you sign your application, or if
      you under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will
      mail only one copy of each prospectus, annual and semi-annual report
      and annual notice of the Fund's privacy policy to shareholders having
      the same last name and address on the Fund's records. The consolidation
      of these mailings, called householding, benefits the Fund through
      reduced mailing expense.

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

Dividends, Capital Gains and Taxes

DIVIDENDS.  The Fund intends to declare dividends separately for each class of
shares  from net  investment  income  on 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 shares.  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.

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

Avoid "Buying a Distribution." If you buy shares on or just before the
      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 five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by KPMG LLP, the Fund's
independent registered public accounting firm, whose report, along with the
Fund's financial statements, is included in the Statement of Additional
Information, which is available upon request.

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

CLASS  A        YEAR ENDED OCTOBER 31,                             2004           2003           2002           2001          2000
------------------------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 30.00        $ 26.41        $ 31.30        $ 36.04      $ 39.96
------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                              .07 1          .14            .24            .33          .59
 Net realized and unrealized gain (loss)                           2.41           3.71          (4.74)         (1.19)         .34
                                                                --------------------------------------------------------------------
 Total from investment operations                                  2.48           3.85          (4.50)          (.86)         .93
------------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                              (.07)          (.26)          (.39)          (.58)        (.20)
 Distributions from net realized gain                                --             --             --          (3.30)       (4.65)
                                                                --------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                                   (.07)          (.26)          (.39)         (3.88)       (4.85)
------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 32.41        $ 30.00        $ 26.41        $ 31.30      $ 36.04
                                                                ====================================================================

------------------------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 2                                8.30%         14.70%        (14.60)%        (2.79)%       2.82%

------------------------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                    $1,459,053     $1,429,157     $1,181,014     $1,285,953   $1,325,552
------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                           $1,497,594     $1,292,117     $1,300,422     $1,348,895   $1,486,116
------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                             0.23%          0.53%          0.82%          1.01%        1.42%
 Total expenses                                                    1.32% 4,5      1.44% 4,5      1.52% 4,5      1.51% 4      1.53% 4
------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%            73%            42%          63%

1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                  27 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS  CONTINUED
--------------------------------------------------------------------------------


CLASS B         YEAR ENDED OCTOBER 31,                             2004           2003           2002           2001         2000
------------------------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 29.36        $ 25.79        $ 30.56        $ 35.25      $ 39.19
------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                      (.17) 1        (.11)           .03            .15          .32
 Net realized and unrealized gain (loss)                           2.36           3.68          (4.63)         (1.20)         .39
                                                                --------------------------------------------------------------------
 Total from investment operations                                  2.19           3.57          (4.60)         (1.05)         .71
------------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                --             --           (.17)          (.34)          --
 Distributions from net realized gain                                --             --             --          (3.30)       (4.65)
                                                                --------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                                     --             --           (.17)         (3.64)       (4.65)
------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 31.55        $ 29.36        $ 25.79        $ 30.56      $ 35.25
                                                                ====================================================================

------------------------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 2                                7.46%         13.84%        (15.16)%        (3.40)%       2.23%

------------------------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                      $278,215       $424,121       $693,380      $1,157,671  $1,393,095
------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                             $342,847       $527,653       $981,593      $1,326,222  $1,585,561
------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                                     (0.54)%        (0.19)%         0.17%           0.42%       0.82%
 Total expenses                                                    2.11% 4,5      2.20% 4,5      2.17% 4,5       2.11% 4     2.13% 4
------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%            73%             42%         63%

1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                  28 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND



 CLASS C                YEAR ENDED OCTOBER 31,                     2004           2003          2002           2001          2000
------------------------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 29.29        $ 25.77       $ 30.55        $ 35.24       $ 39.17
------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                      (.16) 1        (.06)          .05            .14           .35
 Net realized and unrealized gain (loss)                           2.35           3.63         (4.65)         (1.18)          .37
                                                                --------------------------------------------------------------------
 Total from investment operations                                  2.19           3.57         (4.60)         (1.04)          .72
------------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                --           (.05)         (.18)          (.35)           --
 Distributions from net realized gain                                --             --            --          (3.30)        (4.65)
                                                                --------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                                     --           (.05)         (.18)         (3.65)        (4.65)
------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 31.48        $ 29.29       $ 25.77        $ 30.55       $ 35.24
                                                                ====================================================================

------------------------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 2                                7.48%         13.88%       (15.16)%        (3.37)%        2.26%

------------------------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                      $190,426       $205,336      $203,490       $257,556      $287,103
------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                             $203,073       $198,226      $245,055       $280,327      $336,213
------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                                     (0.51)%        (0.19)%        0.18%          0.41%         0.86%
 Total expenses                                                    2.06% 4,5      2.17% 4,5     2.16% 4,5      2.11% 4       2.08% 4
------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%           73%            42%           63%

1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  29 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS  CONTINUED
--------------------------------------------------------------------------------


CLASS N                 YEAR ENDED OCTOBER 31,                     2004           2003          2002           2001 1
-----------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 29.72        $ 26.21       $ 31.26        $ 33.48
-----------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                      (.05) 2         .09           .49            .03
 Net realized and unrealized gain (loss)                           2.39           3.65         (5.02)         (2.25)
                                                                -------------------------------------------------------
 Total from investment operations                                  2.34           3.74         (4.53)         (2.22)
-----------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                -- 3         (.23)         (.52)            --
 Distributions from net realized gain                                --             --            --             --
                                                                -------------------------------------------------------
 Total dividends and/or distributions to shareholders                --           (.23)         (.52)            --
-----------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 32.06        $ 29.72       $ 26.21        $ 31.26
                                                                =======================================================

-----------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 4                                7.89%         14.39%       (14.78)%        (6.63)%

-----------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                       $26,382        $19,538       $14,843         $2,292
-----------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                              $23,702        $17,677       $10,295         $  646
-----------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 5
 Net investment income (loss)                                     (0.15)%         0.23%         0.55%          0.47%
 Total expenses                                                    1.73%          2.14%         1.76%          1.63%
 Expenses after payments and waivers and
 reduction to custodian expenses                                   1.69%          1.73%          N/A 6,7        N/A 6
-----------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%           73%            42%

1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
5. Annualized for periods of less than one full year.
6. Reduction to custodian expenses less than 0.01%.
7. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                  30 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


CLASS Y       YEAR ENDED OCTOBER 31,                               2004           2003          2002           2001         2000
------------------------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 30.11        $ 26.53       $ 31.40        $ 36.21      $ 40.17
------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                              .12 1          .20           .56            .45          .71
 Net realized and unrealized gain (loss)                           2.41           3.72         (4.99)         (1.21)         .39
                                                                --------------------------------------------------------------------
 Total from investment operations                                  2.53           3.92         (4.43)          (.76)        1.10
------------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                              (.12)          (.34)         (.44)          (.75)        (.41)
 Distributions from net realized gain                                --             --            --          (3.30)       (4.65)
                                                                --------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                                   (.12)          (.34)         (.44)         (4.05)       (5.06)
------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 32.52        $ 30.11       $ 26.53        $ 31.40      $ 36.21
                                                                ====================================================================

------------------------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 2                                8.42%         14.97%       (14.34)%        (2.48)%       3.30%

------------------------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                       $30,831        $30,124       $24,458        $46,942      $39,945
------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                              $30,649        $27,078       $28,726        $45,797      $43,926
------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                             0.38%          0.74%         1.17%          1.32%        1.87%
 Total expenses                                                    1.16%          1.33%         1.34%          1.17%        1.07%
 Expenses after payments and waivers and
 reduction to custodian expenses                                    N/A 4         1.23%         1.23%           N/A 4        N/A 4
------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%           73%            42%          63%

1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

            INFORMATION AND SERVICES

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

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

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

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

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

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

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

Information about the Fund including the Statement of Additional Information
can be reviewed and copied at the 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:
The Fund's SEC File No. 811-5225
PR0236.001.0205
Printed on recycled paper                  [logo] OppenheimerFunds
Distributor, Inc.

                          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 Return
(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 each of the last 10 calendar years, without deducting sales
charges or taxes. Set forth below are the relevant data points that will
appear in the bar chart:


Year Ended                               Annual Total Return
----------                               -------------------
12/31/94                                  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%
12/31/02                                 -17.57%
12/31/03                                 21.91%
12/31/04                                 9.50%

Oppenheimer
Small Cap Value Fund


Prospectus dated February 28, 2005



                                      Oppenheimer Small Cap Value Fund is a
                                      mutual fund that seeks capital
                                      appreciation as its objective. It
                                      emphasizes investments in common
                                      stocks and other equity securities of
                                      "small-cap" companies.
                                            This Prospectus contains
                                      important information about the Fund's
                                      objective, its investment policies,
                                      strategies and risks. It also contains
                                      important information about how to buy
                                      and sell shares of the Fund and other
                                      account features. Please read this
                                      Prospectus carefully before you invest
                                      and keep it for future reference about
                                      your account.


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




                                                                          1234








CONTENTS


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


              ABOUT THE FUND

              The Fund's Investment Objective and Principal Investment
              Strategies
              Main Risks of Investing in the Fund
              The Fund's Past Performance
              Fees and Expenses of the Fund
              About the Fund's Investments
              How the Fund is Managed


              ABOUT YOUR ACCOUNT

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

              Special Investor Services
              AccountLink
              PhoneLink
              OppenheimerFunds Internet Website
              Retirement Plans

              How to Sell Shares
              By Mail
              By Telephone
              By Wire

              How to Exchange Shares
              Shareholder Account Rules and Policies
              Dividends, Capital Gains and Taxes
              Financial Highlights

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







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

The Fund's Investment Objective and Principal Investment 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 $3.0 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.

      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 industries or its industry.

Special Risks of Small-Cap Stocks. The Fund emphasizes its investments in
      securities of companies having a market capitalization under $3.0
      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. To
      some extent that risk may be limited by the Fund's policy of not
      concentrating its assets in investments in any one 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 a broad-based market index. The after-tax
returns for the other classes of shares will vary.

      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. 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 may
result 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 annual total
returns]

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

As of December 31, 2004, the year to date return before taxes for Class A
shares was 28.30%.
During the period shown in the bar chart,  the highest return (not annualized)
before taxes for a calendar  quarter was 17.22% (2Qtr99) and the lowest return
(not annualized) before taxes for a calendar quarter was -17.88% (3Qtr98).









-------------------------------------------------------------------------------------
Average Annual Total Returns       1 Year          5 Years            10 Years
for    the    periods    ended                   (or life of     (or life of class,
December 31, 2004                              class, if less)        if less)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  A   Shares   (inception

1/3/89)                            20.92%           15.60%             11.80%
  Return Before Taxes              17.62%           14.34%             10.15%
  Return After Taxes on            14.26%
  Distributions                                     13.02%              9.45%
  Return    After   Taxes   on
  Distributions  and  Sale  of
  Fund Shares

-------------------------------------------------------------------------------------
Russell 2000(R)Index (reflects
no deduction for fees,

expenses or taxes)                 18.33%           6.61%              11.54%1

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

Class  B   Shares   (inception     22.21%           15.97%             12.11%

9/1/93)
-------------------------------------------------------------------------------------

Class  C   Shares   (inception     26.21%           16.20%             11.80%

9/1/93)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Class  N   Shares   (inception     26.55%           17.29%               N/A

3/1/01)
-------------------------------------------------------------------------------------

1 From 12/31/94


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 charges of 5% (1-year) and 2% (5 years); and for
Class C and Class N , 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(R)Index, an unmanaged index of equity securities.  The
index performance includes reinvestment of income but does not reflect
transaction costs, fees, expenses or taxes. 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 expenses directly, such as sales charges. The numbers below are based
on the Fund's expenses during its fiscal year ended October 31, 2004.

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)
 -------------------------------------------------------------------
 -------------------------------------------------------------------
 Redemption Fee (as a
 percentage of total         2.00%     2.00%      2.00%     2.00%
 redemption proceeds)5
 -------------------------------------------------------------------

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               0.78%     0.78%      0.78%     0.78%

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

Other Expenses                0.32%     0.40%      0.38%     0.42%

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

Total    Annual    Operating  1.35%     2.18%      2.16%     1.70%
Expenses

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


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
that 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 0.38% and 1.66% for Class N shares.  Class A,
Class B and Class C were the same as above.


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  gradually  declines  from  5% to 1% in  years  one
   through six and is eliminated after that.
3.    Applies to shares redeemed within 12 months of purchase.
4.    Applies  to shares  redeemed  within 18  months of a  retirement  plan's
   first purchase of Class N shares.
5.    The  redemption  fee  applies to the  proceeds  of Fund  shares that are
   redeemed  (either by selling or  exchanging  to another  Oppenheimer  fund)
   within  30 days of  their  purchase.  See  "How to Sell  Shares"  for  more
   information on when the redemption fee will apply.

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

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







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

Class A Shares               $705          $981         $1,276        $2,116

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

Class B Shares               $723          $989         $1,382       $2,1301

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

Class C Shares               $321          $683         $1,172        $2,519

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

Class N Shares               $274          $540          $931         $2,025

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

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

Class A Shares               $705          $981         $1,276        $2,116

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

Class B Shares               $223          $689         $1,182       $2,1301

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

Class C Shares               $221          $683         $1,172        $2,519

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

Class N Shares               $174          $540          $931         $2,025

--------------------------------------------------------------------------------
 In the first example,  expenses  include the initial sales charge for Class A
 and the  applicable  Class B, Class C and 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  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.

      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.

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.


To the extent that a fund invests significantly in high yield bonds or
small-cap equity securities, because those types of securities may be traded
infrequently, investors may seek to trade fund shares based on their
knowledge or understanding of the value of those types of securities (this is
sometimes referred to as "price arbitrage"). Certain Oppenheimer funds that
invest a significant amount of their assets in high yield bonds and/or
small-cap equity securities impose a 2% redemption fee in certain
circumstances to attempt to deter such price arbitrage. Such price arbitrage,
if otherwise successful, might interfere with the efficient management of a
fund's portfolio to a greater degree than would be the case for funds that
invest in more liquid securities, because the fund may have difficulty
selling those securities at advantageous times or prices to satisfy the
liquidity requirements created by large and/or frequent trading activity.
Successful price arbitrage activities might also dilute the value of fund
shares held by other shareholders.


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.

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 and is not required to use them to achieve its
objective. 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. These securities are more fully
      described in the Statement of Additional Information. The Fund will
      hold foreign currency only in connection with buying and selling
      foreign securities.

o     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.


      Additionally, if a fund invests a significant amount of its assets in
      foreign securities, it might expose the fund to "time-zone arbitrage"
      attempts by investors seeking to take advantage of the differences in
      value of foreign securities that might result from events that occur
      after the close of the foreign securities market on which a foreign
      security is traded and the close of The New York Stock Exchange that
      day, when the Fund's net asset value is calculated. If such time-zone
      arbitrage were successful, it might dilute the interests of other
      shareholders. However, the Fund's use of "fair value pricing" to adjust
      the closing market prices of foreign securities under certain
      circumstances, to reflect what the Manager and the Board believe to be
      the fair value of the foreign securities may help deter those
      activities.


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 in
      seeking its objective 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.


      To the extent that a fund invests significantly in high yield bonds or
      small-cap equity securities, because those types of securities may be
      traded infrequently, investors may seek to trade fund shares based on
      their knowledge or understanding of the value of those types of
      securities (this is sometimes referred to as "price arbitrage").
      Certain Oppenheimer funds that invest a significant amount of their
      assets in high yield bonds and/or small-cap equity securities impose a
      2% redemption fee in certain circumstances to attempt to deter such
      price arbitrage. Such price arbitrage, if otherwise successful, might
      interfere with the efficient management of a fund's portfolio to a
      greater degree than would be the case for funds that invest in more
      liquid securities, because the fund may have difficulty selling those
      securities at advantageous times or prices to satisfy the liquidity
      requirements created by large and/or frequent trading activity.
      Successful price arbitrage activities might also dilute the value of
      fund shares held by other shareholders.


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 such as the Federal Home
      Loan Mortgage Corporation, the Federal National Mortgage Association
      and the Federal Home Loan Banks are neither guaranteed or insured by
      the U.S. government, but generally are considered to have low credit
      risks.

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.

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.

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 monitors holdings of illiquid securities on an
      ongoing basis to determine whether to sell any holdings to maintain
      adequate liquidity.

Hedging. The Fund can use certain hedging instruments such as options,
      futures and forward contracts to try to hedge investment risks. The
      Fund does not use hedging instruments for speculative purposes and is
      not required to hedge in seeking its objective. The Fund has limits on
      its use of hedging instruments and currently does not use them to a
      significant degree.

      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.  Hedging can
      cause the Fund to lose money on its investments and/or increase the
      volatility of its share prices.

Portfolio Turnover.  A change in the securities held by the Fund is known as
      "portfolio turnover." The Fund may engage in active and frequent
      short-term trading to try to achieve its objective, with a resulting
      high rate of portfolio turnover.  Portfolio turnover increases
      brokerage costs the Fund pays (and may reduce performance).  If the
      Fund realizes capital gains when it sells its portfolio investments, it
      must generally pay those gains out to shareholders, increasing their
      taxable distributions.  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 investments that are inconsistent with
      the Fund's principal investment strategy. Generally they would be
      short-term 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.

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

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

How the Fund Is Managed

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


      The Manager has operated as an investment advisor since January 1960.
The Manager and its subsidiaries and controlled affiliates managed more than
$170 billion in assets as of December 31, 2004, including other Oppenheimer
funds with more than 7 million shareholder accounts.  The Manager is located
at Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New
York 10281-1008.


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). Before joining the Manager in September 2001, Mr.
      Damian was an equity analyst at Citigroup Asset Management (from 1999
      to September 2001).

Advisory Fees. The Fund pays the Manager an advisory fee at an annual rate
      that declines on additional assets as the Fund grows: 0.80% 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. The Fund's management fee for its last fiscal year
      ended October 31, 2004 was 0.78% of average annual net assets for each
      class of shares.

PENDING LITIGATION.  A consolidated amended complaint has been filed as
putative derivative and class actions against the Manager, Distributor
and Transfer Agent, as well as 51 of the Oppenheimer funds (collectively
the "funds") including the Fund, 31 present and former Directors or
Trustees and 9 present and former officers of certain of the Funds. This
complaint, filed in the U.S. District Court for the Southern District of
New York on January 10, 2005, consolidates into a single action and
amends six individual previously-filed putative derivative and class
action complaints. Like those prior complaints, the complaint alleges
that the Manager charged excessive fees for distribution and other
costs, improperly used assets of the funds in the form of directed
brokerage commissions and 12b-1 fees to pay brokers to promote sales of
the funds, and failed to properly disclose the use of fund assets to
make those payments in violation of the Investment Company Act and the
Investment Advisers Act of 1940. Also, like those prior complaints, the
complaint further alleges that by permitting and/or participating in
those actions, the Directors/Trustees and the Officers breached their
fiduciary duties to Fund shareholders under the Investment Company Act
and at common law.  The complaint seeks unspecified compensatory and
punitive damages, rescission of the funds' investment advisory
agreements, an accounting of all fees paid, and an award of attorneys'
fees and litigation expenses.


      The Manager and the Distributor believe the claims asserted in these
law suits to be without merit, and intend to defend the suits vigorously. The
Manager and the Distributor do not believe that the pending actions are
likely to have a material adverse effect on the Fund or on their ability to
perform their respective investment advisory or distribution agreements with
the Fund.

ABOUT YOUR ACCOUNT

How to Buy Shares

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

Buying Shares Through Your Dealer. You can buy shares through any dealer,
      broker or financial institution that has a sales agreement with the
      Distributor. Your dealer will place your order with the Distributor on
      your behalf. A broker or dealer may charge for that service.
Buying Shares Through the Distributor. Complete an OppenheimerFunds new
      account application and return it with a check payable to
      "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
      Colorado 80217. If you 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 (the "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 for a class of shares on a "regular
      business day" is determined by dividing the value of the Fund's net
      assets attributable to that class by the number of shares of that class
      outstanding on that day.  To determine net asset values, the Fund
      assets are valued primarily on the basis of current market quotations.
      If market quotations are not readily available or do not accurately
      reflect fair value for a security (in the Manager's judgment) or if a
      security's value has been materially affected by events occurring after
      the close of the exchange or market on which the security is
      principally traded, that security may be valued by another method that
      the Board of Trustees believes accurately reflects the fair value.
      Because some foreign securities trade in markets and on exchanges that
      operate on weekends and U.S. holidays, the values of some of the Fund's
      foreign investments may change on days when investors cannot buy or
      redeem Fund shares.

      The Board has adopted valuation procedures for the Fund and has
      delegated the day-to-day responsibility for fair value determinations
      to the Manager's Valuation Committee.  Fair value determinations by the
      Manager are subject to review, approval and ratification by the Board
      at its next scheduled meeting after the fair valuations are
      determined.  In determining whether current market prices are readily
      available and reliable, the Manager monitors the information it
      receives in the ordinary course of its investment management
      responsibilities for significant events that it believes in good faith
      will affect the market prices of the securities of issuers held by the
      Fund.  Those may include events affecting specific issuers (for
      example, a halt in trading of the securities of an issuer on an
      exchange during the trading day) or events affecting securities markets
      (for example, a foreign securities market closes early because of a
      natural disaster).

      If, after the close of the principal market on which a security held by
      the Fund is traded and before the time as of which the Fund's net asset
      values are calculated that day, a significant event occurs that the
      Manager learns of and believes in the exercise of its judgment will
      cause a material change in the value of that security from the closing
      price of the security on the principal market on which it is traded,
      the Manager will use its best judgment to determine a fair value for
      that security.

      The Manager believes that foreign securities values may be affected by
      volatility that occurs in U.S. markets on a trading day after the close
      of foreign securities markets.  The Manager's fair valuation procedures
      therefore include a procedure whereby foreign securities prices may be
      "fair valued" to take those factors into account.

The Offering Price. To receive the offering price for a particular day, the
      Distributor or its designated agent must receive your order by the time
      the Exchange closes that day. If your order is received on a day when
      the Exchange is closed or after it has closed, the order will receive
      the next offering price that is determined after your order is received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
      receive the order by the close of the 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.


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

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

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

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

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

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

How Do Share Classes Affect Payments to Your Broker? A financial 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.

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


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


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

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

o     Right of Accumulation. To qualify for the reduced Class A sales charge
         that would apply to a larger purchase than you are currently
         making (as shown in the table above), you can add the value of
         any Class A, Class B or, effective March 18, 2005, Class C
         shares of the Fund or other Oppenheimer funds that you or your
         spouse currently own, or are currently purchasing, to the
         value of your Class A share purchase. Your Class A shares of
         Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash
         Reserves on which you did not pay a sales charge will not be
         counted for this purpose. In totaling your holdings, you may
         count shares held in your individual accounts (including IRAs
         and 403(b) plans), your joint accounts with your spouse, or
         accounts you or your spouse hold as trustees or custodians on
         behalf of your children who are minors. A fiduciary can count
         all shares purchased for a trust, estate or other fiduciary
         account (including employee benefit plans for the same
         employer) that has multiple accounts. To qualify for this
         Right of Accumulation, if you are buying shares directly from
         the Fund you must inform the Fund's Distributor of your
         eligibility and holdings at the time of your purchase. If you
         are buying shares through your financial intermediary you must
         notify your intermediary of your eligibility for this Right of
         Accumulation at the time of your purchase.


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


o     Letters of Intent. You may also qualify for reduced Class A sales
         charges by submitting a Letter of Intent to the Distributor. A
         Letter of Intent is a written statement of your intention to
         purchase a specified value of Class A, Class B or (effective
         March 18, 2005) Class C shares of the Fund or other
         Oppenheimer funds over a 13-month period. The total amount of
         your intended purchases of Class A, Class B and (effective
         March 18, 2005) Class C shares will determine the reduced
         sales charge rate that will apply to your Class A share
         purchases of the Fund during that period. You can choose to
         include purchases made up to 90 days before the date that you
         submit a Letter.  Your Class A shares of Oppenheimer Money
         Market Fund, Inc. or Oppenheimer Cash Reserves on which you
         did not pay a sales charge will not be counted for this
         purpose. Submitting a Letter of Intent does not obligate you
         to purchase the specified amount of shares. You can also apply
         the Right of Accumulation to these purchases.


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

Other Special Sales Charge Arrangements and Waivers.  The Fund and the
Distributor offer other opportunities to purchase shares without
front-end or contingent deferred sales charges under the programs
described below. The Fund reserves the right to amend or discontinue
these programs at any time without prior notice.
o     Dividend Reinvestment.  Dividends and/or capital gains distributions
         received by a shareholder from the Fund may be reinvested in
         shares of the Fund or any of the other Oppenheimer funds
         without a sales charge, at the net asset value per share in
         effect on the payable date. You must notify the Transfer Agent
         in writing to elect this option and must have an existing
         account in the fund selected for reinvestment.
o     Exchanges of Shares.  Shares of the Fund may be exchanged for shares of
         certain other Oppenheimer funds at net asset value per share
         at the time of exchange, without sales charge, and shares of
         the Fund can be purchased by exchange of shares of certain
         other Oppenheimer funds on the same basis. Please refer to
         "How to Exchange Shares" in this Prospectus and in the
         Statement of Additional Information for more details,
         including a discussion of circumstances in which sales charges
         may apply on exchanges.
o     Reinvestment Privilege.  Within six months of a redemption of certain
         Class A and Class B shares, the proceeds may be reinvested in
         Class A shares of the Fund without sales charge. This
         privilege applies to redemptions of Class A shares that were
         subject to an initial sales charge or Class A or Class B
         shares that were subject to a contingent deferred sales charge
         when redeemed. The investor must ask the Transfer Agent for
         that privilege at the time of reinvestment and must identify
         the account from which the redemption was made.

o     Other Special Reductions and Waivers. The Fund and the Distributor
         offer additional arrangements to reduce or eliminate front-end
         sales charges or to waive contingent deferred sales charges
         for certain types of transactions and for certain classes of
         investors (primarily retirement plans that purchase shares in
         special programs through the Distributor). These are described
         in greater detail in Appendix C to the Statement of Additional
         Information, which may be ordered by calling 800.225.5677 or
         through the OppenheimerFunds website, at
         www.oppenheimerfunds.com (under the hyperlinks "Access
         ------------------------
         Accounts and Services - Forms & Literature" - "Order
         Literature" - "Statement of Additional Information"). A
         description of these waivers and special sales charge
         arrangements is also available for viewing on the
         OppenheimerFunds website (under the hyperlinks "Research Fund
         - Fund Documents - View a description..."). To receive a waiver
         or special sales charge rate under these programs, the
         purchaser must notify the Distributor (or other financial
         intermediary through which shares are being purchased) at the
         time of purchase or notify the Transfer Agent at the time of
         redeeming shares for those waivers that apply to contingent
         deferred sales charges.


Purchases by Certain Retirement Plans. There is no initial sales charge on
      purchases of Class A shares of the Fund by (1) retirement plans that
      have $10 million or more in plan assets and that have entered into a
      special agreement with the Distributor and by (2) retirement plans that
      are part of a retirement plan product or platform offered by banks,
      broker-dealers, financial advisors, insurance companies or
      record-keepers that have entered into a special agreement with the
      Distributor for this purpose. 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 described in "Retirement
      Plans" in the Statement of Additional Information. No contingent
      deferred sales charge is charged upon the redemption of such shares.

Class A Contingent Deferred Sales Charge. There is no initial sales charge on
      purchases of Class A shares of any one or more of the Oppenheimer funds
      aggregating $1 million or more, or on purchases of Class A shares by
      certain retirement plans that satisfied certain requirements prior to
      March 1, 2001 ("grandfathered retirement accounts").  However, those
      Class A shares may be subject to a Class A contingent deferred sales
      charge, as described below.  Retirement plans holding shares of
      Oppenheimer funds in an  omnibus account(s) for the benefit of plan
      participants in the name of a fiduciary or financial intermediary
      (other than OppenheimerFunds-sponsored Single DB Plus plans) are not
      permitted to make initial purchases of Class A shares subject to a
      contingent deferred sales charge.

      The Distributor pays dealers of record concessions in an amount equal
      to 1.0% of purchases of $1 million or more other than purchases by
      grandfathered retirement accounts.  For grandfathered retirement
      accounts, the concession is 0.75% of the first $2.5 million of
      purchases plus 0.25% of purchases in excess of $2.5 million.  In either
      case, the concession will not be paid on purchases of shares by
      exchange or that were previously subject to a front-end sales charge
      and dealer concession.

      If you redeem any of those shares within an 18-month "holding period"
      measured from the beginning of the calendar month of their purchase, a
      contingent deferred sales charge (called the "Class A contingent
      deferred sales charge") may be deducted from the redemption proceeds.
      That sales charge will be equal to 1.0% 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.

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.

      Class N shares are sold at net asset value without an initial sales
charge. A contingent deferred sales charge of 1.0% will be imposed upon the
redemption of Class N shares, if:
o     The group retirement plan is terminated or Class N shares of all
      Oppenheimer funds are terminated as an investment option of the plan
      and Class N shares are redeemed within 18 months after the plan's first
      purchase of Class N shares of any Oppenheimer fund, or
o     With respect to an IRA or 403(b) plan, Class N shares are redeemed
      within 18 months of the plan's first purchase of Class N shares of any
      Oppenheimer fund.

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

DISTRIBUTION AND SERVICE (12b-1) PLANS.


Service Plan for Class A Shares. The Fund has adopted a Distribution and
      Service Plan for Class A shares. The Fund 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 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. The plan also provides for the Fund
      to pay an asset-based sales charge to the Distributor at an annual rate
      of 0.25% of average annual net assets of Class A shares the Fund (the
      Board of Trustees has set that rate at zero).


            With respect to Class A shares subject to a Class A contingent
      deferred sales charge purchased by grandfathered retirement accounts,
      the Distributor pays the 0.25% service fee to dealers in advance for
      the first year after the shares are sold by the dealer. The Distributor
      retains the first year's service fee paid by the Fund. After the shares
      have been held by grandfathered retirement accounts 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 normally pays the 0.25% service fees to
      dealers in advance for the first year after the shares are sold by the
      dealer. After the shares have been held for a year, the Distributor
      pays the service fees to dealers on a quarterly basis.

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

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

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

      Under certain circumstances, the Distributor will pay the full Class B,
      Class C or Class N asset-based sales charge and the service fee to the
      dealer beginning in the first year after purchase of such shares in
      lieu of paying the dealer the sales concession and the advance of the
      first year's service fee at the time of purchase, if there is a special
      agreement between the dealer and the Distributor.  In those
      circumstances, the sales concession will not be paid to the dealer.

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

      In addition, the Manager and the Distributor may make substantial
      payments to dealers or other financial intermediaries and service
      providers for distribution and/or shareholder servicing activities, out
      of their own resources, including the profits from the advisory fees
      the Manager receives from the Fund.  Some of these distribution-related
      payments may be made to dealers or financial intermediaries for
      marketing, promotional or related expenses; these payments are often
      referred to as "revenue sharing."  In some circumstances, those types
      of payments may create an incentive for a dealer or financial
      intermediary or its representatives to recommend or offer shares of the
      Fund or other Oppenheimer funds to its customers.  You should ask your
      dealer or financial intermediary for more details about any such
      payments it receives.

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.

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.

Redemption Fee. The Fund imposes a 2% redemption fee on the proceeds of Fund
shares that are redeemed within 30 days of their purchase. The fee applies in
the case of shares redeemed in exchange transactions.  The redemption fee is
collected by the Transfer Agent and paid to the Fund.  It is intended to help
offset the trading, market impact, and administrative costs associated with
short-term money movements into and out of the Fund, and to help deter
excessive short term trading.  The fee is imposed to the extent that Fund
shares redeemed exceed Fund shares that have been held more than 30 days.
For shares of the Fund that were acquired by exchange, the holding period is
measured from the date the shares were acquired in the exchange transaction.
Shares held the longest will be redeemed first.

      The redemption fee is not imposed on shares:
o     held in omnibus accounts of a financial intermediary, such as a
      broker-dealer or a retirement plan fiduciary (however, shares
      held in retirement plans that are not in omnibus accounts,
      Oppenheimer-sponsored retirement plans such as IRAs, and
      403(b)(7) plans are subject to the fee), if those institutions
      have not implemented the system changes necessary to be capable
      of processing the redemption fee;
o     held by investors in certain asset allocation programs that offer
      automatic re-balancing or wrap-fee or similar fee-based programs
      and that have been identified to the Distributor and the Transfer
      Agent;
o     redeemed for rebalancing transactions under the OppenheimerFunds
      Portfolio Builder program;
o     redeemed pursuant to an OppenheimerFunds automatic withdrawal plan;
o     redeemed due to the death or disability of the shareholder;
o     redeemed as part of an automatic dividend exchange election established
      in advance of the exchange;
o     redeemed to pay fees assessed by the Fund or the Transfer Agent against
      the account;
o     redeemed from accounts for which the dealer, broker or financial
      institution of record has entered into an agreement with the
      Distributor that permits such redemptions without the imposition
      of these fees, such as asset allocation programs;
o     redeemed for conversion of Class B shares to Class A shares or pursuant
      to fund mergers; and
o     involuntary redemptions resulting from failure to meet account minimums.

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

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

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

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

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

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

HOW DO YOU SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of the 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-sponsored qualified retirement plan
account or under a share certificate by telephone.
   o  To redeem shares through a service representative or automatically on
      PhoneLink, call 1.800.225.5677.
      Whichever method you use, you may have a check sent to the address on
the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

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

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

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

CAN  YOU  SELL  SHARES  THROUGH  YOUR  DEALER?   The   Distributor   has  made
arrangements  to repurchase  Fund shares from dealers and brokers on behalf of
their  customers.  Brokers or dealers  may  charge 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


If you want to change all or part of your investment from one Oppenheimer
fund to another, you can exchange your shares for shares of the same class of
another Oppenheimer fund that offers the exchange privilege. For example, you
can exchange Class A shares of the Fund only for Class A shares of another
fund. To exchange shares, you must meet several conditions:

   o  Shares of the fund selected for exchange must be available for sale in
      your state of residence.
   o  The prospectus of  the selected fund must offer the exchange privilege.
   o  When you establish an account, you must hold the shares you buy for at
      least seven days before you can exchange them. After your account is
      open for seven days, you can exchange shares on any regular business
      day, subject to the limitations described below.
   o  You must meet the minimum purchase requirements for the selected fund.
   o  Generally,  exchanges  may be made only between  identically  registered
      accounts,  unless all account owners send written exchange  instructions
      with a signature guarantee.
   o  Before exchanging into a fund, you must obtain its prospectus and
      should read it.

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

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

In some  cases,  sales  charges may be imposed on  exchange  transactions.  In
general,  a  contingent  deferred  sales  charge  (CDSC)  is  not  imposed  on
exchanges  of shares  that are  subject to a CDSC.  However,  if you  exchange
shares that are  subject to a CDSC,  the CDSC  holding  period will be carried
over to the acquired  shares,  and the CDSC may be imposed if those shares are
redeemed before the end of the CDSC holding period.

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

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

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

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

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


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

ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?

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

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

o     Timing of Exchanges.  Exchanged shares are normally redeemed from one
      fund and the proceeds are reinvested in the fund selected for exchange
      on the same regular business day on which the Transfer Agent or its
      agent (such as a financial intermediary holding the investor's shares
      in an "omnibus" or "street name" account) receives an exchange request
      that conforms to these policies. The request must be received by the
      close of The New York Stock Exchange that day, which is normally 4:00
      p.m. Eastern time, but may be earlier on some days. However, the
      Transfer Agent may delay the reinvestment of proceeds from an exchange
      for up to five business days if it determines, in its discretion, that
      an earlier transmittal of the redemption proceeds to the receiving fund
      would be detrimental to either the fund from which the exchange is made
      or the fund to which the exchange is made.

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

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

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

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

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

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



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

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



Additional Policies and Procedures. The Fund's Board has adopted additional
policies and procedures to detect and prevent frequent and/or excessive
exchanges and purchase and redemption activity. Those additional policies and
procedures will take effect on June 20, 2005:

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

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

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

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

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


Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual "Minimum Balance Fee" is assessed on each Fund account with a
      value of less than $500. The fee is automatically deducted from each
      applicable Fund account annually on or about the second to last
      "regular business day" of September.  See the Statement of Additional
      Information to learn how you can avoid this fee and for circumstances
      under which this fee will not be assessed.
The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is
      in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
      be modified, suspended or terminated by the Fund at any time. The Fund
      will provide you notice whenever it is required to do so by applicable
      law. If an account has more than one owner, the Fund and the Transfer
      Agent may rely on the instructions of any one owner. Telephone
      privileges apply to each owner of the account and the dealer
      representative of record for the account unless the Transfer Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the
      Fund will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements
      for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating
      in NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders
      of the Fund if the dealer performs any transaction erroneously or
      improperly.
The redemption price for shares will vary from day to day because the value
      of the securities in the Fund's portfolio fluctuates. The redemption
      price, which is the net asset value per share, will normally differ for
      each class of shares. The redemption value of your shares may be more
      or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink or by Federal Funds wire (as elected by
      the shareholder) within seven days after the Transfer Agent receives
      redemption instructions in proper form. However, under unusual
      circumstances determined by the 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.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack
      of liquidity in the Fund's portfolio to meet redemptions). This means
      that the redemption proceeds will be paid with liquid securities from
      the Fund's portfolio. If the Fund redeems your shares in kind, you may
      bear transaction costs and will bear market risks until such time as
      such securities are converted into cash.
Federal regulations may require the Fund to obtain your name, your date of
      birth (for a natural person), your residential street address or
      principal place of business and your Social Security Number, Employer
      Identification Number or other government issued identification when
      you open an account. Additional information may be required in certain
      circumstances or to open corporate accounts.  The Fund or the Transfer
      Agent may use this information to attempt to verify your identity.  The
      Fund may not be able to establish an account if the necessary
      information is not received.  The Fund may also place limits on account
      transactions while it is in the process of attempting to verify your
      identity.  Additionally, if the Fund is unable to verify your identity
      after your account is established, the Fund may be required to redeem
      your shares and close your account.
"Backup withholding" of federal income tax may be applied against taxable
      dividends, distributions and redemption proceeds (including exchanges)
      if you fail to furnish the Fund your correct, certified Social Security
      or Employer Identification Number when you sign your application, or if
      you under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will
      mail only one copy of each prospectus, annual and semi-annual report
      and annual notice of the Fund's privacy policy to shareholders having
      the same last name and address on the Fund's records. The consolidation
      of these mailings, called householding, benefits the Fund through
      reduced mailing expense.

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

Dividends, Capital Gains and Taxes

DIVIDENDS. The Fund intends to declare dividends separately for each class of
shares from net investment income on 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.

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.

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

Avoid "Buying a Distribution." If you buy shares on or just before the
      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 five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by KPMG LLP, the Fund's
independent registered public accounting firm, whose report, along with the
Fund's financial statements, is included in the Statement of Additional
Information, which is available on request.

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

CLASS A    YEAR ENDED OCTOBER 31,                          2004            2003            2002            2001             2000
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     26.11     $     19.18     $     19.53     $     21.26      $     16.82
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.17) 1         (.04)           (.19)           (.23)            (.16)
Net realized and unrealized gain (loss)                    5.42            6.97            (.09)           (.47)            4.60
                                                    ------------------------------------------------------------------------------
Total from investment operations                           5.25            6.93            (.28)           (.70)            4.44
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.28)             --            (.07)          (1.03)              -- 2
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     30.08     $     26.11     $     19.18     $     19.53      $     21.26
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                        20.90%          36.13%          (1.45)%         (3.02)%          26.40%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   543,999     $   330,215     $   222,029     $   172,395      $   157,759
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   436,617     $   245,319     $   231,657     $   163,007      $   147,952
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                       (0.61)%         (0.12)%         (0.69)%         (1.06)%          (0.95)%
Total expenses                                             1.35%           1.59%           1.68%           1.86%            1.90%
Expenses after payments and waivers and
reduction to custodian expenses                             N/A 5          1.56%           1.66%            N/A 5,6          N/A 5
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     163%            163%            151%            162%             166%

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

2. Less than $0.005 per share.

3. 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      27 | OPPENHEIMER SMALL CAP VALUE FUND

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

CLASS B   YEAR ENDED OCTOBER 31,                           2004            2003            2002            2001             2000
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     24.59     $     18.20     $     18.65     $     20.47      $     16.28
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                       (.37) 1          (.17)           (.18)           (.23)            (.33)
Net realized and unrealized gain (loss)                    5.07            6.56            (.20)           (.56)            4.52
                                                    ------------------------------------------------------------------------------
Total from investment operations                           4.70            6.39            (.38)           (.79)            4.19
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.28)             --            (.07)          (1.03)              -- 2
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     28.01     $     24.59     $     18.20     $     18.65      $     20.47
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                        19.91%          35.11%          (2.06)%         (3.60)%          25.74%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   198,971     $   171,896     $   129,885     $    95,418      $    83,859
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   190,251     $   137,734     $   134,304     $    88,235      $    79,526
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                       (1.43)%         (0.85)%         (1.34)%         (1.65)%          (1.48)%
Total expenses                                             2.18%           2.42%           2.34%           2.45%            2.44%
Expenses after payments and waivers and
reduction to custodian expenses                             N/A 5          2.29%           2.32%            N/A 5,6          N/A 5
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     163%            163%            151%            162%             166%

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

2. Less than $0.005 per share.

3. 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      28 | OPPENHEIMER SMALL CAP VALUE FUND

CLASS C     YEAR ENDED OCTOBER 31,                         2004            2003            2002            2001             2000
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     24.55     $     18.17     $     18.62     $     20.44      $     16.25
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.37) 1         (.13)           (.10)           (.19)            (.33)
Net realized and unrealized gain (loss)                    5.07            6.51            (.28)           (.60)            4.52
                                                    ------------------------------------------------------------------------------
Total from investment operations                           4.70            6.38            (.38)           (.79)            4.19
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.28)             --            (.07)          (1.03)              -- 2
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     27.97     $     24.55     $     18.17     $     18.62      $     20.44
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                        19.95%          35.11%          (2.06)%         (3.61)%          25.79%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   122,329     $    71,779     $    46,360     $    26,604      $    22,173
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $    96,555     $    53,649     $    45,455     $    24,134      $    20,521
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                       (1.42)%         (0.85)%         (1.33)%         (1.64)%          (1.49)%
Total expenses                                             2.16%           2.40%           2.33%           2.45%            2.44%
Expenses after payments and waivers and
reduction to custodian expenses                             N/A 5          2.30%           2.31%            N/A 5,6          N/A 5
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     163%            163%            151%            162%             166%

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

2. Less than $0.005 per share.

3. 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      29 | OPPENHEIMER SMALL CAP VALUE FUND

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

CLASS N     YEAR ENDED OCTOBER 31,                      2004           2003           2002         2001 1
-------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
-------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $    25.98     $    19.13     $    19.51     $    19.58
-------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                     (.26) 2        (.11)          (.27)          (.04)
Net realized and unrealized gain (loss)                 5.33           6.96           (.04)          (.03)
                                                  -----------------------------------------------------------
Total from investment operations                        5.07           6.85           (.31)          (.07)
-------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                   (1.28)            --           (.07)            --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $    29.77     $    25.98     $    19.13     $    19.51
                                                  ===========================================================

-------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                     20.29%         35.81%         (1.61)%        (0.36)%
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $   36,322     $   11,216     $    4,558     $      409
-------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $   21,951     $    6,722     $    2,882     $      106
-------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                    (0.93)%        (0.36)%        (0.78)%        (1.14)%
Total expenses                                          1.70%          2.01%          1.82%          2.01%
Expenses after payments and waivers and
reduction to custodian expenses                         1.66%          1.80%          1.80%           N/A 5,6
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                  163%           163%           151%           162%

1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.

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

3. 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

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:

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 these documents by
                              e-mail or read or through the OppenheimerFunds
                              website. You may also download certain
                              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:
The Fund's SEC File No. 811-5225

PR0251.001.0205

Printed on recycled paper                  [logo] OppenheimerFunds
Distributor, Inc.

                          Appendix to Prospectus of
                        Oppenheimer Small Cap Value Fund

      Graphic material included in the Prospectus of Oppenheimer Small Cap
Value Fund (the "Fund") under the heading: "Annual Total Return (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 each of the last 10 calendar years, without deducting sales
charges or taxes. Set forth below are the relevant data points that will
appear in the bar chart:


Year Ended                                Annual Total Return
----------                                -------------------
12/31/95                                  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%
12/31/02                                  -10.52%
12/31/03                                  46.06%
12/31/04                                  28.30%

Oppenheimer

Quest Balanced FundSM

Prospectus dated February 28, 2005



                                      Oppenheimer Quest Balanced 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, 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.




                                                                          1234




CONTENTS


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


              ABOUT THE FUND

              The Fund's Investment Objective and Principal Investment
              Strategies
              Main Risks of Investing in the Fund
              The Fund's Past Performance
              Fees and Expenses of the Fund
              About the Fund's Investments
              How the Fund is Managed


              ABOUT YOUR ACCOUNT

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

              Special Investor Services
              AccountLink
              PhoneLink
              OppenheimerFunds Internet Website
              Retirement Plans

              How to Sell Shares
              By Mail
              By Telephone
              By Wire

              How to Exchange Shares
              Shareholder Account Rules and Policies
              Dividends, Capital Gains and Taxes
              Financial Highlights

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







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

The Fund's Investment Objective and Principal Investment 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 long term growth of net asset
value per share, the Fund normally invests 50% or more of its total assets in
common stocks that the portfolio manager believes are undervalued in the
marketplace, mainly the common stocks of U.S. issuers or companies with
significant U.S. operations.  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 and capital appreciation, which can
include non-investment grade securities.

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 75% 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, Oppenheimer Capital LLP, 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 Fund 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
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 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- or larger-size capitalization. It also can invest in
small-capitalization companies, which may have more volatile stock prices
than larger companies, but does not anticipate investing a significant
portion of assets in these 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.

INTEREST RATE RISK. The values of debt securities are subject to change when
prevailing interest rates change.  When interest rates fall, the value of
outstanding debt securities generally rise.  When interest rates rise, the
values of outstanding debt securities generally fall, and these securities
may sell at a discount from their face value. The magnitude of these
fluctuations will often be greater for longer-term debt securities than
shorter-term debt securities.  The Fund's share prices can go up or down when
interest rates change because of the effect of the changes on the value of
the Fund's investments in debt securities. Also, if interest rates fall, the
Fund's investments in new securities at lower yields will reduce the Fund's
income.

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 that of the Fund's shares may be
reduced. While the Fund's investments in U.S. government securities are
subject to little credit risk, the Fund's other investments in debt
securities, 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.

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 prices per share. Particular
investments and investment strategies also have risks. These risks mean that
you can lose money by investing in the Fund. When you redeem your shares,
they may be worth more or less than what you paid for them. There is no
assurance that the Fund will achieve its investment objective. In the short
term, stock markets can be volatile, and the prices of the Fund's shares can
go up and down substantially. The Fund's income-oriented investments may help
cushion the Fund's total return from changes in stock prices, but
fixed-income securities have their own risks that can affect their values and
the income they pay. In the OppenheimerFunds spectrum, the Fund is more
conservative than funds that invest only in growth stocks, but has greater
risks 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 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 a broad-based market index. The after-tax
returns for the other classes of shares will vary.

      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.  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 may
result 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 annual total
returns]

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

As of December 31, 2004, the year to date return before taxes for Class A
shares was 10.29%.
During the period shown in the bar chart,  the highest return (not annualized)
before taxes for a calendar  quarter was 21.44%  (4Qtr98)and the lowest return
(not annualized) before taxes for a calendar quarter was -14.73% (2Qtr02).


-------------------------------------------------------------------------------------
Average Annual Total Returns       1 Year          5 Years            10 Years
for    the    periods    ended                   (or life of     (or life of class,
December 31, 2004                              class, if less)        if less)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  A   Shares   (inception

11/1/91)                           3.95%            3.90%              13.10%
  Return Before Taxes              3.94%            3.10%              10.76%
  Return After Taxes on
  Distributions                    2.58%            2.86%              10.11%
  Return    After   Taxes   on
  Distributions  and  Sale  of
  Fund Shares

-------------------------------------------------------------------------------------
S&P 500(R)Index (reflects no
deduction for fees, expenses

or taxes)                          10.87%           -2.30%             12.07%1

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

Class  B   Shares   (inception     4.39%            4.07%              13.38%

9/1/93)
-------------------------------------------------------------------------------------

Class  C   Shares   (inception     8.45%            4.45%              13.04%

9/1/93)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Class  N   Shares   (inception     8.90%            3.34%                N/A

3/1/01)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Class  Y   Shares   (inception     10.62%           6.09%                N/A

5/1/00)
-------------------------------------------------------------------------------------

1 From 12/31/94


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 years); and for
Class C and Class N , 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(R)Index, an unmanaged index of equity securities. The index
performance includes reinvestment of income but does not reflect transaction
costs, fees, expenses or taxes. 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 expenses directly, such as sales charges. The numbers below are based
on the Fund's expenses during its fiscal year ended October 31, 2004.

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)
 ------------------------------------------------------------------------------

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               0.68%     0.68%      0.68%     0.68%     0.68%

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution  and/or Service  0.25%     1.00%      1.00%     0.50%      None
(12b-1) Fees
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Other Expenses                0.20%     0.24%      0.18%     0.29%     0.14%

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

Total    Annual    Operating  1.13%     1.92%      1.86%     1.47%     0.82%
Expenses

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


Effective January 1, 2005, the management fee schedule was revised as
described below in "How the Fund is Managed - The Manager- The Manager's
Fees."  "Management Fees" in the table above assume that the revised
management fee schedule, effective January 1, 2005, was in effect for the
Fund's fiscal year ended October 31, 2004.  During the fiscal year ended
October 31, 2004, the actual management fees were 0.75% for each class of
shares, and the "Total Annual Operating Expenses " (before the expense waiver
discussed below) were 1.21% for Class A shares, _2.00% for Class B shares,
1.94% for Class C shares, 1.55% for Class N shares and 0.90% for Class Y
shares.

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 fees that the Fund would have paid if the transfer agent had not waived a
portion of its fee under a voluntary to the Fund to limit these fess to 0.35%
of average daily net assets per fiscal year for all classes. That undertaking
may be amended or withdrawn at any time.


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  gradually  declines  from  5% to 1% in  years  one
   through six and is eliminated after that.
3.    Applies to shares redeemed within 12 months of purchase.
4.    Applies  to shares  redeemed  within 18  months of a  retirement  plan's
   first purchase of Class N shares.

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

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







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

Class A Shares               $692          $939         $1,205        $1,965

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

Class B Shares               $705          $934         $1,288       $1,9531

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

Class C Shares               $299          $615         $1,057        $2,286

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

Class N Shares               $259          $493          $851         $1,860

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

Class Y Shares               $92           $288          $501         $1,113

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

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

Class A Shares               $692          $939         $1,205        $1,965

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

Class B Shares               $205          $634         $1,088       $1,9531

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

Class C Shares               $199          $615         $1,057        $2,286

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

Class N Shares               $159          $493          $851         $1,860

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

Class Y Shares               $92           $288          $501         $1,113

--------------------------------------------------------------------------------
 In the first example,  expenses  include the initial sales charge for Class A
 and the  applicable  Class B, Class C and 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  contingent
 deferred sales charges. There is no sales charge on Class Y shares.
 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. The Fund attempts to reduce its 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.

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

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- and larger-size 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 under "Special Risks of
      Lower-Grade Securities," but the credit rating 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 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.

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
Sub-Advisor might not always use all of them and is not required to use them
to achieve its objective. These techniques have certain risks, although some
are designed to help reduce overall investment or market risks.

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"). Securities issued by
      agencies and instrumentalities of the U.S. government such as the
      Federal Home Loan Mortgage Corporation, the Federal National Mortgage
      Association and the Federal Home Loan Banks are neither guaranteed or
      insured by the U.S. government, but generally are considered to have
      low credit risks.

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.

      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.

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 prices 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.

      Additionally, if a fund invests a significant amount of its assets in
      foreign securities, it might expose the fund to "time-zone arbitrage"
      attempts by investors seeking to take advantage of the differences in
      value of foreign securities that might result from events that occur
      after the close of the foreign securities market on which a foreign
      security is traded and the close of The New York Stock Exchange that
      day, when the Fund's net asset value is calculated. If such time-zone
      arbitrage were successful, it might dilute the interests of other
      shareholders. However, the Fund's use of "fair value pricing" to adjust
      the closing market prices of foreign securities under certain
      circumstances, to reflect what the Manager and the Board believe to be
      the fair value of the foreign securities may help deter those
      activities.


"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.

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 is one that has a contractual restriction on its resale or
      which cannot be sold publicly until it is registered under the
      Securities Act of 1933. The 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 may engage in active and frequent
      short-term trading to try to achieve its objective. Portfolio turnover
      may increase brokerage costs the Fund pays (and may reduce
      performance). If the Fund realizes capital gains when it sells its
      portfolio investments, it must generally pay those gains out to
      shareholders, increasing their taxable distributions. 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 investments that are inconsistent with
      the Fund's principal investment strategies. 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 growth of
      capital.

Loans of Portfolio Securities. The Fund has entered into a Securities Lending
      Agreement ("Securities Lending Agreement") with JP Morgan Chase. Under
      that agreement portfolio securities of the Fund may be loaned to
      brokers, dealers and other financial institutions.  The Securities
      Lending Agreement provides that loans must be adequately collateralized
      and may be made only in conformity with the Fund's Securities Lending
      Guidelines, adopted by the Fund's Board of Trustees. The value of the
      securities loaned may not exceed 25% of the value of the Fund's net
      assets.

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

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

How the Fund is Managed

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


      The Manager has operated as an investment advisor since January 1960.
The Manager and its subsidiaries and controlled affiliates managed more than
$170 billion in assets as of January 31, 2004, including other Oppenheimer
funds with more than 7 million shareholder accounts.  The Manager is located
at Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New
York 10281-1008.

The Manager's Fees. Effective January 1, 2005, the Fund pays the Manager an
      advisory fee at an annual rate that declines as the Fund's assets grow:
      0.80% of the first $1 billion of average annual net assets of the Fund,
      0.76% of the next $2 billion, 0.71% of the next $1 billion, 0.66% of
      the next $1 billion, 0.60% of the next $1 billion, 0.55% of the next $1
      billion, 0.50% of average annual net assets in excess of $7 billion.
      The Fund's management fee for its last fiscal year ended October 31,
      2004 was 0.75% of average annual net assets for each class of shares.

The Sub-Advisor.  Effective January 1, 2005, Oppenheimer Capital LLC replaced
      OpCap Advisors as the Fund's Sub-Advisor, and assumed its
      responsibility for providing day-to-day portfolio management for the
      Fund. Oppenheimer Capital LLC is the parent company of OpCap Advisors.
      From the Fund's inception on April 30, 1980 until February 26, 1997,
      OpCap Advisors (which was then named Quest for Value Advisors) served
      as the Fund's investment advisor. On February 28, 1997, the Manager
      retained OpCap Advisors to continue providing day-to-day portfolio
      management for the Fund.

      The Sub-Advisor has operated as an investment advisor to investment
      companies and other investors since its organization. As of September
      30, 2004, the Sub-Advisor, advised accounts having assets in excess of
      $24 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 Allianz Dresdner Asset Management
      U.S. Equities LLC, a subsidiary of 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 the Sub-Advisor.


Portfolio Manager.  The portfolio manager of the Fund is Colin Glinsman, who
      is 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 Managing Director and 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.


PENDING LITIGATION.  A consolidated amended complaint has been filed as
putative derivative and class actions against the Manager, Distributor
and Transfer Agent, as well as 51 of the Oppenheimer funds (collectively
the "funds") including the Fund, 31 present and former Directors or
Trustees and 9 present and former officers of certain of the Funds. This
complaint, filed in the U.S. District Court for the Southern District of
New York on January 10, 2005, consolidates into a single action and
amends six individual previously-filed putative derivative and class
action complaints. Like those prior complaints, the complaint alleges
that the Manager charged excessive fees for distribution and other
costs, improperly used assets of the funds in the form of directed
brokerage commissions and 12b-1 fees to pay brokers to promote sales of
the funds, and failed to properly disclose the use of fund assets to
make those payments in violation of the Investment Company Act and the
Investment Advisers Act of 1940. Also, like those prior complaints, the
complaint further alleges that by permitting and/or participating in
those actions, the Directors/Trustees and the Officers breached their
fiduciary duties to Fund shareholders under the Investment Company Act
and at common law.  The complaint seeks unspecified compensatory and
punitive damages, rescission of the funds' investment advisory
agreements, an accounting of all fees paid, and an award of attorneys'
fees and litigation expenses.


      The Manager and the Distributor believe the claims asserted in these
law suits to be without merit, and intend to defend the suits vigorously. The
Manager and the Distributor do not believe that the pending actions are
likely to have a material adverse effect on the Fund or on their ability to
perform their respective investment advisory or distribution agreements with
the Fund.
ABOUT YOUR ACCOUNT

How to Buy Shares

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

Buying Shares Through Your Dealer. You can buy shares through any dealer,
      broker or financial institution that has a sales agreement with the
      Distributor. Your dealer will place your order with the Distributor on
      your behalf. A broker or dealer may charge for that service.
Buying Shares Through the Distributor. Complete an OppenheimerFunds new
      account application and return it with a check payable to
      "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
      Colorado 80217. If you 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 (the "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 for a class of shares on a "regular
      business day" is determined by dividing the value of the Fund's net
      assets attributable to that class by the number of shares of that class
      outstanding on that day.  To determine net asset values, the Fund
      assets are valued primarily on the basis of current market quotations.
      If market quotations are not readily available or do not accurately
      reflect fair value for a security (in the Manager's judgment) or if a
      security's value has been materially affected by events occurring after
      the close of the exchange or market on which the security is
      principally traded, that security may be valued by another method that
      the Board of Trustees believes accurately reflects the fair value.
      Because some foreign securities trade in markets and on exchanges that
      operate on weekends and U.S. holidays, the values of some of the Fund's
      foreign investments may change on days when investors cannot buy or
      redeem Fund shares.

      The Board has adopted valuation procedures for the Fund and has
      delegated the day-to-day responsibility for fair value determinations
      to the Manager's Valuation Committee.  Fair value determinations by the
      Manager are subject to review, approval and ratification by the Board
      at its next scheduled meeting after the fair valuations are
      determined.  In determining whether current market prices are readily
      available and reliable, the Manager monitors the information it
      receives in the ordinary course of its investment management
      responsibilities for significant events that it believes in good faith
      will affect the market prices of the securities of issuers held by the
      Fund.  Those may include events affecting specific issuers (for
      example, a halt in trading of the securities of an issuer on an
      exchange during the trading day) or events affecting securities markets
      (for example, a foreign securities market closes early because of a
      natural disaster).

      If, after the close of the principal market on which a security held by
      the Fund is traded and before the time as of which the Fund's net asset
      values are calculated that day, a significant event occurs that the
      Manager learns of and believes in the exercise of its judgment will
      cause a material change in the value of that security from the closing
      price of the security on the principal market on which it is traded,
      the Manager will use its best judgment to determine a fair value for
      that security.

      The Manager believes that foreign securities values may be affected by
      volatility that occurs in U.S. markets on a trading day after the close
      of foreign securities markets.  The Manager's fair valuation procedures
      therefore include a procedure whereby foreign securities prices may be
      "fair valued" to take those factors into account.

The Offering Price. To receive the offering price for a particular day, the
      Distributor or its designated agent must receive your order by the time
      the Exchange closes that day. If your order is received on a day when
      the Exchange is closed or after it has closed, the order will receive
      the next offering price that is determined after your order is received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
      receive the order by the close of the 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 a special agreement 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 most likely invest in Class A or Class C shares
      rather than Class B shares. That is because of the effect of the Class
      B contingent deferred sales charge if you redeem within six years, as
      well as the effect of the Class B asset-based sales charge on the
      investment return for that class in the short-term. Class C shares
      might be the appropriate choice (especially for investments of less
      than $100,000), because there is no initial sales charge on Class C
      shares, and the contingent deferred sales charge does not apply to
      amounts you sell after holding them one year.

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

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

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

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

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

How Do Share Classes Affect Payments to Your Broker? A financial 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.

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


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


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

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

o     Right of Accumulation. To qualify for the reduced Class A sales charge
         that would apply to a larger purchase than you are currently making
         (as shown in the table above), you can add the value of any Class A,
         Class B or, effective March 18, 2005, Class C shares of the Fund or
         other Oppenheimer funds that you or your spouse currently own, or
         are currently purchasing, to the value of your Class A share
         purchase. Your Class A shares of Oppenheimer Money Market Fund, Inc.
         or Oppenheimer Cash Reserves on which you did not pay a sales charge
         will not be counted for this purpose. In totaling your holdings, you
         may count shares held in your individual accounts (including IRAs
         and 403(b) plans), your joint accounts with your spouse, or accounts
         you or your spouse hold as trustees or custodians on behalf of your
         children who are minors. A fiduciary can count all shares purchased
         for a trust, estate or other fiduciary account (including employee
         benefit plans for the same employer) that has multiple accounts. To
         qualify for this Right of Accumulation, if you are buying shares
         directly from the Fund you must inform the Fund's Distributor of
         your eligibility and holdings at the time of your purchase. If you
         are buying shares through your financial intermediary you must
         notify your intermediary of your eligibility for this Right of
         Accumulation at the time of your purchase.


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


o     Letters of Intent. You may also qualify for reduced Class A sales
         charges by submitting a Letter of Intent to the Distributor. A
         Letter of Intent is a written statement of your intention to
         purchase a specified value of Class A, Class B or (effective March
         18, 2005) Class C shares of the Fund or other Oppenheimer funds over
         a 13-month period. The total amount of your intended purchases of
         Class A, Class B and (effective March 18, 2005) Class C shares will
         determine the reduced sales charge rate that will apply to your
         Class A share purchases of the Fund during that period. You can
         choose to include purchases made up to 90 days before the date that
         you submit a Letter.  Your Class A shares of Oppenheimer Money
         Market Fund, Inc. or Oppenheimer Cash Reserves on which you did not
         pay a sales charge will not be counted for this purpose. Submitting
         a Letter of Intent does not obligate you to purchase the specified
         amount of shares. You can also apply the Right of Accumulation to
         these purchases.


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

Other Special Sales Charge Arrangements and Waivers.  The Fund and the
Distributor offer other opportunities to purchase shares without front-end or
contingent deferred sales charges under the programs described below. The
Fund reserves the right to amend or discontinue these programs at any time
without prior notice.
o     Dividend Reinvestment.  Dividends and/or capital gains distributions
         received by a shareholder from the Fund may be reinvested in shares
         of the Fund or any of the other Oppenheimer funds without a sales
         charge, at the net asset value per share in effect on the payable
         date. You must notify the Transfer Agent in writing to elect this
         option and must have an existing account in the fund selected for
         reinvestment.
o     Exchanges of Shares.  Shares of the Fund may be exchanged for shares of
         certain other Oppenheimer funds at net asset value per share at the
         time of exchange, without sales charge, and shares of the Fund can
         be purchased by exchange of shares of certain other Oppenheimer
         funds on the same basis. Please refer to "How to Exchange Shares" in
         this Prospectus and in the Statement of Additional Information for
         more details, including a discussion of circumstances in which sales
         charges may apply on exchanges.
o     Reinvestment Privilege.  Within six months of a redemption of certain
         Class A and Class B shares, the proceeds may be reinvested in Class
         A shares of the Fund without sales charge. This privilege applies to
         redemptions of Class A shares that were subject to an initial sales
         charge or Class A or Class B shares that were subject to a
         contingent deferred sales charge when redeemed. The investor must
         ask the Transfer Agent for that privilege at the time of
         reinvestment and must identify the account from which the redemption
         was made.

o     Other Special Reductions and Waivers. The Fund and the Distributor
         offer additional arrangements to reduce or eliminate front-end sales
         charges or to waive contingent deferred sales charges for certain
         types of transactions and for certain classes of investors
         (primarily retirement plans that purchase shares in special programs
         through the Distributor). These are described in greater detail in
         Appendix C to the Statement of Additional Information, which may be
         ordered by calling 800.225.5677 or through the OppenheimerFunds
         website, at www.oppenheimerfunds.com (under the hyperlinks "Access
                     ------------------------
         Accounts and Services - Forms & Literature" - "Order Literature" -
         "Statement of Additional Information"). A description of these
         waivers and special sales charge arrangements is also available for
         viewing on the OppenheimerFunds website (under the hyperlinks
         "Research Fund - Fund Documents - View a description..."). To receive
         a waiver or special sales charge rate under these programs, the
         purchaser must notify the Distributor (or other financial
         intermediary through which shares are being purchased) at the time
         of purchase or notify the Transfer Agent at the time of redeeming
         shares for those waivers that apply to contingent deferred sales
         charges.

Purchases by Certain Retirement Plans. There is no initial sales charge on
      purchases of Class A shares of the Fund by (1) retirement plans that
      have $10 million or more in plan assets and that have entered into a
      special agreement with the Distributor and by (2) retirement plans that
      are part of a retirement plan product or platform offered by banks,
      broker-dealers, financial advisors, insurance companies or
      record-keepers that have entered into a special agreement with the
      Distributor for this purpose. 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 described in "Retirement
      Plans" in the Statement of Additional Information. No contingent
      deferred sales charge is charged upon the redemption of such shares.
Class A Contingent Deferred Sales Charge. There is no initial sales charge on
      purchases of Class A shares of any one or more of the Oppenheimer funds
      aggregating $1 million or more, or on purchases of Class A shares by
      certain retirement plans that satisfied certain requirements prior to
      March 1, 2001 ("grandfathered retirement accounts").  However, those
      Class A shares may be subject to a Class A contingent deferred sales
      charge, as described below.  Retirement plans holding shares of
      Oppenheimer funds in an  omnibus account(s) for the benefit of plan
      participants in the name of a fiduciary or financial intermediary
      (other than OppenheimerFunds-sponsored Single DB Plus plans) are not
      permitted to make initial purchases of Class A shares subject to a
      contingent deferred sales charge.

      The Distributor pays dealers of record concessions in an amount equal
      to 1.0% of purchases of $1 million or more other than purchases by
      grandfathered retirement accounts.  For grandfathered retirement
      accounts, the concession is 0.75% of the first $2.5 million of
      purchases plus 0.25% of purchases in excess of $2.5 million.  In either
      case, the concession will not be paid on purchases of shares by
      exchange or that were previously subject to a front-end sales charge
      and dealer concession.

      If you redeem any of those shares within an 18-month "holding period"
      measured from the beginning of the calendar month of their purchase, a
      contingent deferred sales charge (called the "Class A contingent
      deferred sales charge") may be deducted from the redemption proceeds.
      That sales charge will be equal to 1.0% 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.

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.

            Class N shares are sold at net asset value without an initial
sales charge. A contingent deferred sales charge of 1.0% will be imposed upon
the redemption of Class N shares, if:
o     The group retirement plan is terminated or Class N shares of all
      Oppenheimer funds are terminated as an investment option of the plan
      and Class N shares are redeemed within 18 months after the plan's first
      purchase of Class N shares of any Oppenheimer fund, or
o     With respect to an IRA or 403(b) plan, Class N shares are redeemed
      within 18 months of the plan's first purchase of Class N shares of any
      Oppenheimer fund.

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

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

      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. The Fund 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 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. The plan also
      provides for the Fund to pay an asset-based sales charge to the
      Distributor at an annual rate of 0.15% of average annual net assets of
      Class A shares the Fund (the Board of Trustees has set that rate at
      zero).


      With respect to Class A shares subject to a Class A contingent deferred
      sales charge purchased by grandfathered retirement accounts, the
      Distributor pays the 0.25% service fee to dealers in advance for the
      first year after the shares are sold by the dealer. The Distributor
      retains the first year's service fee paid by the Fund. After the shares
      have been held by grandfathered retirement accounts 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 normally pays the 0.25% service fees to
      dealers in advance for the first year after the shares are sold by the
      dealer. After the shares have been held for a year, the Distributor
      pays the service fees to dealers on a quarterly basis.

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

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

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

      Under certain circumstances, the Distributor will pay the full Class B,
      Class C or Class N asset-based sales charge and the service fee to the
      dealer beginning in the first year after purchase of such shares in
      lieu of paying the dealer the sales concession and the advance of the
      first year's service fee at the time of purchase, if there is a special
      agreement between the dealer and the Distributor.  In those
      circumstances, the sales concession will not be paid to the dealer.

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

      In addition, the Manager and the Distributor may make substantial
      payments to dealers or other financial intermediaries and service
      providers for distribution and/or shareholder servicing activities, out
      of their own resources, including the profits from the advisory fees
      the Manager receives from the Fund.  Some of these distribution-related
      payments may be made to dealers or financial intermediaries for
      marketing, promotional or related expenses; these payments are often
      referred to as "revenue sharing."  In some circumstances, those types
      of payments may create an incentive for a dealer or financial
      intermediary or its representatives to recommend or offer shares of the
      Fund or other Oppenheimer funds to its customers.  You should ask your
      dealer or financial intermediary for more details about any such
      payments it receives.

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.

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.

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

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

HOW DO YOU SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of the 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-sponsored qualified retirement plan
account or under a share certificate by telephone.
   o  To redeem shares through a service representative or automatically on
      PhoneLink, call 1.800.225.5677.
      Whichever method you use, you may have a check sent to the address on
the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

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

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

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

CAN  YOU  SELL  SHARES  THROUGH  YOUR  DEALER?   The   Distributor   has  made
arrangements  to repurchase  Fund shares from dealers and brokers on behalf of
their  customers.  Brokers or dealers  may  charge 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


If you want to change all or part of your investment from one Oppenheimer
fund to another, you can exchange your shares for shares of the same class of
another Oppenheimer fund that offers the exchange privilege. For example, you
can exchange Class A shares of the Fund only for Class A shares of another
fund. To exchange shares, you must meet several conditions:

   o  Shares of the fund selected for exchange must be available for sale in
      your state of residence.
   o  The prospectus of  the selected fund must offer the exchange privilege.
   o  When you establish an account, you must hold the shares you buy for at
      least seven days before you can exchange them. After your account is
      open for seven days, you can exchange shares on any regular business
      day, subject to the limitations described below.
   o  You must meet the minimum purchase requirements for the selected fund.
   o  Generally,  exchanges  may be made only between  identically  registered
      accounts,  unless all account owners send written exchange  instructions
      with a signature guarantee.
   o  Before exchanging into a fund, you must obtain its prospectus and
      should read it.

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

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

In some  cases,  sales  charges may be imposed on  exchange  transactions.  In
general,  a  contingent  deferred  sales  charge  (CDSC)  is  not  imposed  on
exchanges  of shares  that are  subject to a CDSC.  However,  if you  exchange
shares that are  subject to a CDSC,  the CDSC  holding  period will be carried
over to the acquired  shares,  and the CDSC may be imposed if those shares are
redeemed before the end of the CDSC holding period.

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

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

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

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

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


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

ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?

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

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

o     Timing of Exchanges.  Exchanged shares are normally redeemed from one
      fund and the proceeds are reinvested in the fund selected for exchange
      on the same regular business day on which the Transfer Agent or its
      agent (such as a financial intermediary holding the investor's shares
      in an "omnibus" or "street name" account) receives an exchange request
      that conforms to these policies. The request must be received by the
      close of The New York Stock Exchange that day, which is normally 4:00
      p.m. Eastern time, but may be earlier on some days. However, the
      Transfer Agent may delay the reinvestment of proceeds from an exchange
      for up to five business days if it determines, in its discretion, that
      an earlier transmittal of the redemption proceeds to the receiving fund
      would be detrimental to either the fund from which the exchange is made
      or the fund to which the exchange is made.

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

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

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

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

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

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



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

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



Additional Policies and Procedures. The Fund's Board has adopted additional
policies and procedures to detect and prevent frequent and/or excessive
exchanges and purchase and redemption activity. Those additional policies and
procedures will take effect on June 20, 2005:

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

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

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

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

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


Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual "Minimum Balance Fee" is assessed on each Fund account with a
      value of less than $500. The fee is automatically deducted from each
      applicable Fund account annually on or about the second to last
      "regular business day" of September.  See the Statement of Additional
      Information to learn how you can avoid this fee and for circumstances
      under which this fee will not be assessed.
The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is
      in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
      be modified, suspended or terminated by the Fund at any time. The Fund
      will provide you notice whenever it is required to do so by applicable
      law. If an account has more than one owner, the Fund and the Transfer
      Agent may rely on the instructions of any one owner. Telephone
      privileges apply to each owner of the account and the dealer
      representative of record for the account unless the Transfer Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the
      Fund will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements
      for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating
      in NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders
      of the Fund if the dealer performs any transaction erroneously or
      improperly.
The redemption price for shares will vary from day to day because the value
      of the securities in the Fund's portfolio fluctuates. The redemption
      price, which is the net asset value per share, will normally differ for
      each class of shares. The redemption value of your shares may be more
      or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink or by Federal Funds wire (as elected by
      the shareholder) within seven days after the Transfer Agent receives
      redemption instructions in proper form. However, under unusual
      circumstances determined by the 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.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack
      of liquidity in the Fund's portfolio to meet redemptions). This means
      that the redemption proceeds will be paid with liquid securities from
      the Fund's portfolio. If the Fund redeems your shares in kind, you may
      bear transaction costs and will bear market risks until such time as
      such securities are converted into cash.
Federal regulations may require the Fund to obtain your name, your date of
      birth (for a natural person), your residential street address or
      principal place of business and your Social Security Number, Employer
      Identification Number or other government issued identification when
      you open an account. Additional information may be required in certain
      circumstances or to open corporate accounts.  The Fund or the Transfer
      Agent may use this information to attempt to verify your identity.  The
      Fund may not be able to establish an account if the necessary
      information is not received.  The Fund may also place limits on account
      transactions while it is in the process of attempting to verify your
      identity.  Additionally, if the Fund is unable to verify your identity
      after your account is established, the Fund may be required to redeem
      your shares and close your account.
"Backup withholding" of federal income tax may be applied against taxable
      dividends, distributions and redemption proceeds (including exchanges)
      if you fail to furnish the Fund your correct, certified Social Security
      or Employer Identification Number when you sign your application, or if
      you under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will
      mail only one copy of each prospectus, annual and semi-annual report
      and annual notice of the Fund's privacy policy to shareholders having
      the same last name and address on the Fund's records. The consolidation
      of these mailings, called householding, benefits the Fund through
      reduced mailing expense.

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

Dividends, Capital Gains and Taxes

DIVIDENDS.  The Fund intends to declare dividends separately for each class of
shares  from net  investment  income  on 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 shares.  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.

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.

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

Avoid "Buying a Distribution." If you buy shares on or just before the
      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 five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This has been audited by KPMG LLP, the Fund's independent
registered public accounting firm, whose report, along with the Fund's
financial statements, is included in the Statement of Additional Information,
which is available upon request.

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

CLASS A     YEAR ENDED OCTOBER 31,                     2004                2003             2002             2001            2000
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $    15.69       $       12.02       $    16.09       $    16.66    $      16.41
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                   .07                 .16              .17              .46             .36
Net realized and unrealized gain (loss)                1.46                3.64            (3.53)            (.20)            .55
                                                 -----------------------------------------------------------------------------------
Total from investment operations                       1.53                3.80            (3.36)             .26             .91
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                   (.03)               (.13)            (.27)            (.53)           (.28)
Distributions from net realized gain                     --                  --             (.44)            (.30)           (.38)
                                                 -----------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                        (.03)               (.13)            (.71)            (.83)           (.66)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $    17.19       $       15.69       $    12.02       $    16.09    $      16.66
                                                 ===================================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1                     9.79%              31.87%          (21.88)%           1.64%           5.78%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $3,054,761       $   2,287,707       $1,667,143       $1,763,404    $  1,027,560
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $2,759,594       $   1,902,499       $1,960,568       $1,353,860    $  1,020,483
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                                  0.38%               1.60%            1.20%            2.61%           2.24%
Total expenses                                         1.21% 3,4           1.38% 3,4        1.51% 3,4        1.47% 3         1.45% 3
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 106%                 92%             108%              88%            105%

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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

3. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      29 | OPPENHEIMER QUEST BALANCED FUND

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

CLASS B     YEAR ENDED OCTOBER 31,                     2004               2003            2002            2001             2000
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $    15.61       $       11.98       $    16.00       $    16.52     $   16.28
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                           (.07)                .06              .07              .35           .25
Net realized and unrealized gain (loss)                1.47                3.63            (3.52)            (.19)          .55
                                                 ---------------------------------------------------------------------------------
Total from investment operations                       1.40                3.69            (3.45)             .16           .80
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     --                (.06)            (.13)            (.38)         (.18)
Distributions from net realized gain                     --                  --             (.44)            (.30)         (.38)
                                                 ---------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                          --                (.06)            (.57)            (.68)         (.56)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $    17.01       $       15.61       $    11.98       $    16.00     $   16.52
                                                 =================================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1                     8.97%              30.89%          (22.38)%           1.03%         5.10%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $2,549,069       $   2,306,366       $1,759,167       $1,836,130     $ 925,476
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $2,495,872       $   1,985,215       $2,068,300       $1,307,367     $ 873,470
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)                          (0.40)%              0.84%            0.56%            2.00%         1.64%
Total expenses                                         2.00% 3,4           2.15% 3,4        2.15% 3,4        2.07% 3       2.06% 3
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 106%                 92%             108%              88%          105%

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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

3. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      30 | OPPENHEIMER QUEST BALANCED FUND

CLASS C     YEAR ENDED OCTOBER 31,                     2004               2003             2002             2001             2000
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $    15.60       $       11.97        $    16.00        $    16.51     $   16.27
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                           (.06)                .07               .07               .34           .25
Net realized and unrealized gain (loss)                1.48                3.62             (3.52)             (.18)          .55
                                                 -----------------------------------------------------------------------------------
Total from investment operations                       1.42                3.69             (3.45)              .16           .80
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     --                (.06)             (.14)             (.37)         (.18)
Distributions from net realized gain                     --                  --              (.44)             (.30)         (.38)
                                                 -----------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                          --                (.06)             (.58)             (.67)         (.56)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $    17.02       $       15.60        $    11.97        $    16.00     $   16.51
                                                 ===================================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1                     9.10%              30.99%           (22.40)%            1.05%         5.10%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period (in thousands)         $1,207,729       $     982,288        $  763,338        $  751,229     $ 341,824
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $1,129,522       $     835,198        $  903,426        $  502,037     $ 336,336
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)                          (0.34)%              0.92%             0.58%             2.00%         1.64%
Total expenses                                         1.94% 3,4           2.08% 3,4         2.13% 3,4         2.07% 3       2.06% 3
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 106%                 92%              108%               88%          105%

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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

3. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      31 | OPPENHEIMER QUEST BALANCED FUND

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

CLASS N     YEAR ENDED OCTOBER 31,                               2004         2003        2002           2001 1
-----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
-----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                       $    15.58     $   11.94     $  16.05      $   16.84
-----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                             .03           .11          .20            .22
Net realized and unrealized gain (loss)                          1.45          3.63        (3.56)          (.83)
                                                           ------------------------------------------------------
Total from investment operations                                 1.48          3.74        (3.36)          (.61)
-----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                             (.01)         (.10)        (.31)          (.18)
Distributions from net realized gain                               --            --         (.44)            --
                                                           ------------------------------------------------------
Total dividends and/or distributions to shareholders             (.01)         (.10)        (.75)          (.18)
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period                             $    17.05     $   15.58     $  11.94      $   16.05
                                                           ======================================================

-----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                               9.47%        31.50%      (21.99)%        (3.71)%
-----------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                   $  207,450     $ 142,866     $ 85,744      $  19,649
-----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                          $  180,201     $ 112,416     $ 70,477      $   4,977
-----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                            0.04%         1.23%        1.07%          2.75%
Total expenses                                                   1.55%         1.74%        1.67%          1.58%
Expenses after payments and waivers and
reduction to custodian expenses                                   N/A 4        1.70%         N/A 4,5        N/A 4
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                           106%           92%         108%            88%

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, 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

4. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      32 | OPPENHEIMER QUEST BALANCED FUND

CLASS Y     YEAR ENDED OCTOBER 31,                     2004               2003            2002            2001           2000 1
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $    15.62      $       11.96      $    16.05       $    16.67     $       15.65
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                   .12                .20             .25              .74               .15
Net realized and unrealized gain (loss)                1.46               3.64           (3.52)            (.40)              .99
                                                 -----------------------------------------------------------------------------------
Total from investment operations                       1.58               3.84           (3.27)             .34              1.14
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                   (.06)              (.18)           (.38)            (.66)             (.12)
Distributions from net realized gain                     --                 --            (.44)            (.30)               --
                                                 -----------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                        (.06)              (.18)           (.82)            (.96)             (.12)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $    17.14      $       15.62      $    11.96       $    16.05     $       16.67
                                                 ===================================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                    10.17%             32.40%         (21.48)%           2.14%             7.32%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $  238,775      $     182,409      $  118,068       $  134,654     $         144
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $  216,973      $     145,793      $  137,322       $   77,394     $          32
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                  0.70%              1.89%           1.75%            2.97%             2.46%
Total expenses                                         0.90% 4            1.05% 4         0.96% 4,5        1.00% 4           0.98% 4
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 106%                92%            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, 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

4. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

INFORMATION AND SERVICES

For More Information on Oppenheimer Quest Balanced FundSM
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 these documents by
                              e-mail or read or through the OppenheimerFunds
                              website. You may also download certain
                              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:
The Fund's SEC File No. 811-5225
PR0257.001.0205
Printed on recycled paper                  [logo] OppenheimerFunds
Distributor, Inc.
                          Appendix to Prospectus of
                        Oppenheimer Quest Balanced Fund

      Graphic material included in the Prospectus of Oppenheimer Quest
Balanced Fund (the "Fund") under the heading: "Annual Total Return (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 each of the last 10 calendar years, without deducting sales
charges or taxes. Set forth below are the relevant data points that will
appear in the bar chart:


Year Ended                               Annual Total Return
----------                               -------------------
12/31/95                                  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 %
12/31/02                                  -19.92%
12/31/03                                  30.56%
12/31/04                                  10.29%

------------------------------------------------------------------------------
Oppenheimer Quest Opportunity Value FundSM                    (A series of
Oppenheimer Quest for Value Funds)
------------------------------------------------------------------------------

6803 S. Tucson Way, Centennial, CO 80112
1.800.CALL OPP (225.5677)


Statement of Additional Information dated February 28, 2005

      This Statement of Additional Information is not a Prospectus.  This
document contains additional information about the Fund and supplements
information in the Prospectus dated February 28, 2005.  It should be read
together with the Prospectus, which may be obtained by writing to the Fund's
Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado
80217, or by calling the Transfer Agent at the toll-free number shown above,
or by downloading it from the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.


Contents
                                                                      Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks.....
    The Fund's Investment Policies........................................
    Other Investment Techniques and Strategies............................
    Other Investment Restrictions.........................................
    Disclosure of Portfolio Holdings......................................
How the Fund is Managed ..................................................
    Organization and History..............................................
    Board of Trustees and Oversight Committees............................
    Trustees and Officers of the Fund.....................................
    The Manager...........................................................
    Brokerage Policies of the Fund........................................
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 Registered Public Accounting Firm's 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., (the "Manager"), can select for the Fund.  Additional
information is also provided about the strategies that the Fund may use to
try to achieve its objective.

The Fund's Investment Policies. The composition of the Fund's portfolio and
the techniques and strategies that the Manager, may use in selecting
portfolio securities will vary over time. The Fund is not required to use 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 portfolio 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, when evaluating
the securities of issuers in a particular country, 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 in a
country or region, the effect of taxes, the efficiencies and costs of
particular markets and other factors.

|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 Manager 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.

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

o     Preferred Stocks. Preferred stocks are equity securities but have
certain attributes of debt securities. Preferred stock, unlike common stock,
has a stated dividend rate payable from the corporation's earnings. Preferred
stock dividends may be cumulative or non-cumulative, participating, or
auction rate. "Cumulative" dividend provisions require all or a portion of
prior unpaid dividends to be paid before the issuer can pay dividends on
common shares.

      If interest rates rise, the fixed dividend on preferred stocks may be
less attractive, causing the price of preferred stocks to decline. Preferred
stock may have mandatory sinking fund provisions, as well as provisions for
their call or redemption prior to maturity which can have a negative effect
on their prices when interest prior to maturity rates decline. Preferred
stock may be "participating" stock, which means that it may be entitled to a
dividend exceeding the stated dividend in certain cases.

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

o     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.

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

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

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

|X|   Investments in Debt Securities. The Fund can invest in a variety of
domestic and foreign debt securities, including mortgage-backed securities,
investment-grade corporate debt securities and U.S. 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.

o     Credit Risk.  Credit risk relates to the ability of the issuer to meet
interest or principal payment obligations as they become due. In making
investments in debt securities, the Manager may rely to some extent on the
ratings of 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. ("Moody's"), at least "BBB" by
Standard & Poor's Rating Service ("Standard & Poor's") or Fitch Inc.
("Fitch"), 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 Manager to be of comparable quality to bonds rated as
investment grade by a rating organization.  The debt security ratings
definitions of the Moody's, Standard &Poor's and Fitch are included in
Appendix A of this Statement of Additional Information.

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

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

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

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

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

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

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

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

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

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

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

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

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

o     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.

o     Obligations Issued or Guaranteed by U.S. Government Agencies or
 Instrumentalities. These include direct obligations and mortgage-related
 securities that have different levels of credit support from the government.
 Some are supported by the full faith and credit of the U.S. government, such
 as Government National Mortgage Association 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").

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

o     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.

o     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.

o     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 U.S. 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.

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

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

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

o     Commercial Paper.  The Fund can invest in commercial paper if it is
 rated within the top two rating categories of 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.

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

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

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

|X|   Portfolio Turnover.  "Portfolio turnover" describes the rate at which
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, but the Fund expects to have a
portfolio turnover rate less than 100% or more annually.

      Increased portfolio turnover creates higher brokerage and transaction
costs for the Fund. 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.

|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.

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

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

o     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.

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

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

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

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

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

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

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

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

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

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

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

Derivatives. The Fund can invest in a variety of derivative investments to
seek income or for hedging purposes. Some derivative investments the Fund can
use are the hedging instruments described below in this Statement of
Additional Information. However, the Fund is not obligated to use derivatives
in seeking its objective.

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

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

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

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

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

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

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

      The Fund will invest no more than 25% of its total assets in  "unfunded"
credit default swaps.  The Fund will limit its  investments in "funded" credit
default swap notes to no more than 10% of its total assets.

      Other  risks of credit  default  swaps  include  the cost of paying  for
credit  protection if there are no credit events,  pricing  transparency  when
assessing the cost of a credit default swap,  counterparty  risk, and the need
to  fund  the  delivery  obligation  (either  cash  or  the  defaulted  bonds,
depending on whether the Fund is long or short the swap, respectively).

      |X| Hedging. Although the Fund can use hedging instruments, it is not
obligated to use them in seeking its objective. 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 may also be
         used to increase the Fund's income, but the Manager does not expect
         to engage extensively in that practice.

      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 such 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.

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

      A broadly-based stock index is used as the basis for trading stock
index futures. They may in some cases be based on stocks of issuers in a
particular industry or group of industries. A stock index assigns relative
values to the common stocks included in the index and its value fluctuates in
response to the changes in value of the underlying stocks. A stock index
cannot be purchased or sold directly. Bond index futures are similar
contracts based on the future value of the basket of securities that comprise
the index. These contracts obligate the seller to deliver, and the purchaser
to take, cash to settle the futures transaction. There is no delivery made of
the underlying securities to settle the futures obligation. Either party may
also settle the transaction by entering into an offsetting contract.

      An interest rate future obligates the seller to deliver (and the
purchaser to take) cash or a specified type of debt security to settle the
futures transaction. Either party could also enter into an offsetting
contract to close out the position.  Similarly, a single stock future
obligates the seller to deliver (and the purchaser to take) cash or a
specified equity security to settle the futures transaction.  Either party
could also enter into an offsetting contract to close out the position.
Single stock futures trade on a very limited number of exchanges, with
contracts typically not fungible among the exchanges.

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

      No money is paid or received by the Fund on the purchase or sale of a
future. Upon entering into a futures transaction, the Fund will be required
to deposit an initial margin payment with the futures commission merchant
(the "futures broker"). 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.

      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.

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

      |_| Writing Covered Call Options. The Fund can write (that is, sell)
covered calls. If the Fund sells a call option, it must be covered. That
means the Fund must own the security subject to the call while the call is
outstanding, or, for certain types of calls, the call may be covered by
segregating liquid assets to enable the Fund to satisfy its obligations if
the call is exercised. Up to 35% of the Fund's total assets may be subject to
calls the Fund writes.

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

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

      The Fund's custodian, or 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 underlying security and
the premium it received when it wrote the call. Any such profits are
considered short-term capital gains for federal income tax purposes, as are
the premiums on lapsed calls. When distributed by the Fund they are taxable
as ordinary income. If the Fund cannot effect a closing purchase transaction
due to the lack of a market, it will have to hold the callable securities
until the call expires or is exercised.

      The Fund may also write calls on a futures contract without owning the
futures contract or securities deliverable under the contract. To do so, at
the time the call is written, the Fund must cover the call by segregating an
equivalent dollar amount of liquid assets. The Fund will segregate additional
liquid assets if the value of the segregated assets drops below 100% of the
current value of the future. Because of this segregation requirement, in no
circumstances would the Fund's receipt of an exercise notice as to that
future require the Fund to deliver a futures contract. It would simply put
the Fund in a short futures position, which is permitted by the Fund's
hedging policies.

      |_| Writing Put Options. The Fund can sell put options. A put option on
securities gives the purchaser the right to sell, and the writer the
obligation to buy, the underlying investment at the exercise price during the
option period. The Fund will not write puts if, as a result, more than 25% of
the Fund's net assets would be required to be segregated to cover such put
options.

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

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

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

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

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

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

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

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

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

      The Fund may buy a call or put only if, after the purchase, the value
of all call and put options held by the Fund will not exceed 5% of the Fund's
total assets.

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

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

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

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

      |_| Risks of Hedging with Options and Futures. The use of hedging
instruments requires special skills and knowledge of investment techniques
that are different than what is required for normal portfolio management. If
the Manager uses a hedging instrument at the wrong time or judges market
conditions incorrectly, hedging strategies may reduce the Fund's return. The
Fund could also experience losses if the prices of its futures and options
positions were not correlated with its other investments.

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

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

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

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

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

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

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

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

      |_| 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
on its books liquid 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 may
have to purchase additional foreign currency on the "spot" (that is, cash)
market to settle the security trade. If the market value of the security
instead exceeds the amount of foreign currency the Fund is obligated to
deliver to settle the trade, the Fund might have to sell on the spot market
some of the foreign currency received upon the sale of the security. There
will be additional transaction costs on the spot market in those cases.

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

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

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

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

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

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

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

      |_| Regulatory Aspects of Hedging Instruments. The Commodities Futures
Trading Commission (the "CFTC") recently eliminated limitations on futures
trading by certain regulated entities including registered investment
companies and consequently registered investment companies may engage in
unlimited futures transactions and options thereon provided that the Fund
claims an exclusion from regulation as a commodity pool operator. The Fund
has claimed such an exclusion from registration as a commodity pool operator
under the Commodity Exchange Act ("CEA"). The Fund may use futures and
options for hedging and non-hedging purposes to the extent consistent with
its investment objective, internal risk management guidelines adopted by the
Fund's investment advisor (as they may be amended from time to time), and as
otherwise set forth in the Fund's prospectus or this statement of additional
information.

      Transactions in options by the Fund are subject to limitations
established by the option exchanges. The exchanges limit the maximum number
of options that may be written or held by a single investor or group of
investors acting in concert. Those limits apply regardless of whether the
options were written or purchased on the same or different exchanges or are
held in one or more accounts or through one or more different exchanges or
through one or more brokers. Thus, the number of options that the Fund may
write or hold may be affected by options written or held by other entities,
including other investment companies having the same advisor as the Fund (or
an advisor that is an affiliate of the Fund's advisor). The exchanges also
impose position limits on futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.

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

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

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

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

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

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

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

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

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

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

o     Reverse Repurchase Agreements. The Fund can use reverse repurchase
agreements on debt obligations it owns. Under a reverse repurchase agreement,
the Fund sells an underlying debt obligation and simultaneously agrees to
repurchase the same security at an agreed-upon price at an agreed-upon date.
The Fund will identify on its books liquid assets in an amount sufficient to
cover its obligations under reverse repurchase agreements, including
interest, until payment is made to the seller.

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

|X|   Illiquid and Restricted Securities.  To enable the Fund to sell its
holdings of a restricted security not registered under 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
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 may lend its portfolio
securities pursuant to the Securities Lending Agreement  (the "Securities
Lending Agreement") with JP Morgan Chase, subject to the restrictions
stated in the Prospectus. The Fund will lend such portfolio securities to
attempt to increase the Fund's income. Under the Securities Lending
Agreement and applicable regulatory requirements (which are subject to
change), the loan collateral must, on each business day, be at least equal
to the value of the loaned securities and must consist of cash, bank
letters of credit or securities of the U.S. government  (or its agencies
or instrumentalities), or other cash equivalents in which the Fund is
permitted to invest.  To be acceptable as collateral, letters of credit
must obligate a bank to pay to JP Morgan Chase, as agent, amounts demanded
by the Fund if the demand meets the terms of the letter.  Such terms of
the letter of credit and the issuing bank must be satisfactory to JP
Morgan Chase and the Fund.  The Fund will receive, pursuant to the
Securities Lending Agreement, 80% of all annual net income (i.e., net of
rebates to the Borrower) from securities lending transactions. JP Morgan
Chase has agreed, in general, to guarantee the obligations of borrowers to
return loaned securities and to be responsible for expenses relating to
securities lending. The Fund will be responsible, however, for risks
associated with the investment of cash collateral, including the risk that
the issuer of the security in which the cash collateral has been invested
defaults.  The Securities Lending Agreement may be terminated by either JP
Morgan Chase or the Fund on 30 days' written notice. The terms of the
Fund's loans must also meet applicable tests under the Internal Revenue
Code and permit the Fund to reacquire loaned securities on five business
days' notice or in time to vote on any important matter.

|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 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 Fund's portfolio, at times when the Fund may not be able
to buy those portfolio securities directly.

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

|X|   Temporary Defensive and Interim Investments.  When market, economic or
political conditions are unstable, or the Manager believes it is otherwise
appropriate to reduce holdings in stocks, the Fund can invest in a variety of
debt securities for defensive purposes and the types of money market
instruments described above. The Fund can also purchase these securities for
liquidity purposes to meet cash needs due to the redemption of Fund shares,
or to hold while waiting to reinvest cash received from the sale of other
portfolio securities. The Fund's temporary defensive investments can include
the following short-term (maturing in one year or less) dollar-denominated
debt obligations:
o     obligations issued or guaranteed by the U. S. government or its
         instrumentalities or agencies,
o     commercial paper (short-term, unsecured, promissory notes of domestic
         or foreign companies) rated in the top two rating categories of a
         nationally-recognized rating organization,
o     short-term debt obligations of corporate issuers, rated investment
         grade (rated at least Baa by Moody's or at least BBB by Standard &
         Poor's, or a comparable rating by another rating organization), or
         unrated securities judged by the Manager to have a comparable
         quality to rated securities in those categories,
o     certificates of deposit and bankers' acceptances of domestic and
         foreign banks  having total assets in excess of $1 billion, and
o     repurchase agreements.

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

Other Investment Restrictions

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

      The Fund's investment objective is a fundamental policy. Other policies
described in the Prospectus or this 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 principal investment policies are
described in the Prospectus.

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

o     The Fund cannot buy securities 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.

o     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.

o     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."

o     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.

o     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.

o     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.

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

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

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

o     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.

o     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.

o     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.

o     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.

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

o     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.

o     The Fund cannot invest in securities of other registered investment
companies or registered unit investment trusts in reliance on sub-paragraph
(F) or (G) of section 12(d)(1) of the Investment Company Act.

      Unless the Prospectus or this 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 (except in the case of
borrowing and investments in illiquid securities). The Fund need not sell
securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund.

      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.


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


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


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


A list of the top 20 portfolio securities holdings (based on invested
assets), listed by security or by issuer, as of the end of each month, may be
disclosed to third parties (subject to the procedures below) no sooner than
15 days after month-end.  The top 20 holdings also shall be posted on the
Companies' website at www.oppenheimerfunds.com in the "Fund Profiles"
section.  Other general information about a Fund's portfolio investments,
such as portfolio composition by asset class, industry, country, currency,
credit rating or maturity, may also be posted with a 15-day lag.

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

o     The third-party recipient must first submit a request for release of
         Fund portfolio holdings, explaining the business reason for the
         request;

o     Senior officers (a Senior Vice President or above) in the Manager's
         Portfolio and Legal departments must approve the completed request
         for release of Fund portfolio holdings; and
o     The third-party recipient must sign the Manager's portfolio holdings
         non-disclosure agreement before receiving the data, agreeing to keep
         confidential information that is not publicly available regarding a
         Fund's holdings and agreeing not to trade directly or indirectly
         based on the information.

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

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

o     The Fund's certified public accountants and auditors,
o     Members of the Fund's Board and the Board's legal counsel,
o     The Fund's custodian bank,

o     A proxy voting service designated by the Fund and its Board,
o     Rating/ranking organizations (such as Lipper and Morningstar),
o     Portfolio pricing services retained by the Manager to provide portfolio

         security prices, and
o     Dealers, to obtain bids (price quotations, because securities are not
         priced by the Fund's regular pricing services).


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

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


o     Brokers and dealers in connection with portfolio transactions
         (purchases and sales)
o     Brokers and dealers to obtain bids or bid and asked prices (if
         securities held by a Fund are not priced by the fund's regular
         pricing services)
o     Dealers to obtain price quotations where the fund is not identified as
         the owner


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


o     Response to legal process in litigation matters, such as responses to
         subpoenas or in class action matters where the Fund may be part of
         the plaintiff class (and seeks recovery for losses on a security) or
         a defendant,
o     Response to regulatory requests for information (the SEC, NASD, state
         securities regulators, and/or foreign securities authorities,
         including without limitation requests for information in inspections
         or for position reporting purposes),
o     To potential sub-advisors of portfolios (but only pursuant to
         confidentiality agreements),
o     To consultants for retirement plans for plan sponsors/discussions at
         due diligence meetings (if entire portfolio holdings are provided,
         however, it shall be done only pursuant to a confidentiality
         agreement),
o     Investment bankers in connection with merger discussions (but only
         pursuant to confidentiality agreements)


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


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


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

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


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

          A.G. Edwards & Sons           Keijser Securities

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

          ABG Securities                Kempen & Co. USA Inc.

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

          ABN AMRO                      Kepler Equities/Julius
                                        Baer Sec

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

          Advest                        KeyBanc Capital Markets

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

          AG Edwards                    Leerink Swan

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

          American Technology Research  Legg Mason

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

          Auerbach Grayson              Lehman

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

          Banc of America Securities    Lehman Brothers

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

          Barclays                      Lipper

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

          Baseline                      Loop Capital Markets

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

          Bear Stearns                  MainFirst Bank AG

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

          Belle Haven                   Makinson Cowell US Ltd

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

          Bloomberg                     Maxcor Financial

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

          BNP Paribas                   Merrill

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

          BS Financial Services         Merrill Lynch

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

          Buckingham Research Group     Midwest Research

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

          Caris & Co.                   Mizuho Securities

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

          CIBC World Markets            Morgan Stanley

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

          Citigroup                     Morningstar

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

          Citigroup Global Markets      Natexis Bleichroeder

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

          Collins Stewart               Ned Davis Research Group

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

          Craig-Hallum Capital Group LLCNomura Securities

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

          Credit Agricole Cheuvreux     Pacific Crest
          N.A. Inc.

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

          Credit Suisse First Boston    Pacific Crest Securities

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

          Daiwa Securities              Pacific Growth Equities

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

          Davy                          Petrie Parkman

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

          Deutsche Bank                 Pictet

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

          Deutsche Bank Securities      Piper Jaffray Inc.

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

          Dresdner Kleinwort WassersteinPlexus

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

          Emmet & Co                    Prager Sealy & Co.

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

          Empirical Research            Prudential Securities

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

          Enskilda Securities           Ramirez & Co.

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

          Essex Capital Markets         Raymond James

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

          Exane BNP Paribas             RBC Capital Markets

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

          Factset                       RBC Dain Rauscher

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

          Fidelity Capital Markets      Research Direct

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

          Fimat USA Inc.                Robert W. Baird

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

          First Albany                  Roosevelt & Cross

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

          First Albany Corporation      Russell Mellon

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

          Fixed Income Securities       Ryan Beck & Co.

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

          Fortis Securities             Sanford C. Bernstein

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

          Fox-Pitt, Kelton              Scotia Capital Markets

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

          Friedman, Billing, Ramsey     SG Cowen & Co.

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

          Fulcrum Global Partners       SG Cowen Securities

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

          Garp Research                 Soleil Securities Group

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

          George K Baum & Co.           Standard & Poors

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

          Goldman                       Stone & Youngberg

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

          Goldman Sachs                 SWS Group

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

          HSBC                          Taylor Rafferty

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

          HSBC Securities Inc           Think Equity Partners

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

          ING Barings                   Thomas Weisel Partners

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

          ISI Group                     UBS

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

          Janney Montgomery             Wachovia

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

          Jefferies                     Wachovia Corp

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

          Jeffries & Co.                Wachovia Securities

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

          JP Morgan                     Wescott Financial

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

          JP Morgan Securities          William Blair

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

          JPP Eurosecurities            Yieldbook

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

          Keefe, Bruyette & Woods

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


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.

|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 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, but may do so from time to time on important matters or when
required to do so by the Investment Company Act or other applicable law.
Shareholders have the right, upon vote of two-thirds of the outstanding
shares of the Fund, to remove a Trustee or to take other action described in
the Fund's Declaration of Trust.

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

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

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

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


     The Board of Trustees has an Audit Committee  which is comprised  solely of
Independent  Trustees.  The members of the Audit  Committee  are Paul Y. Clinton
(Chairman),  Thomas W.  Courtney,  Robert B. Galli,  Lacy B.  Herrmann and Brian
Wruble.  The Audit  Committee  met 5 times  during the Fund's  fiscal year ended
October 31, 2004. 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  auditor  concerning  the Fund's  internal
accounting procedures and controls and reviews reports of the Manager's internal
auditor, among other duties as set forth in the Committee's charter.


      The Audit Committee furnishes 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 among other duties as set forth in the Committee's charter.

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

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

Trustees and Officers of the Fund. Each of the Trustees is an "Independent
Trustee" under 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"):

Oppenheimer  Quest  For  Value  Funds,  a
series  fund having the  following  three
series:
  Oppenheimer Small Cap Value Fund,       Oppenheimer Quest International Value
                                          Fund, Inc.
  Oppenheimer  Quest  Balanced Fund       Oppenheimer Quest Capital Value Fund,
  and                                     Inc.
  Oppenheimer   Quest  Opportunity  Value Oppenheimer Quest Value Fund, Inc.
  Fund
Rochester   Portfolio  Series,  a  series Bond Fund Series,  a series fund having
fund having one                           one
   series:    Limited-Term    New    York    series:    Oppenheimer   Convertible
Municipal Fund                            Securities Fund
Rochester Fund Municipals                 Oppenheimer MidCap Fund

      In addition to being a trustee or director of the Board III Funds, Mr.
Galli is also a director or trustee of 25 other portfolios in the
OppenheimerFunds complex. Present or former officers, directors, trustees and
employees (and their immediate family members) of the Fund, the Manager and
its affiliates, and retirement plans established by them for their employees
are permitted to purchase Class A shares of the Fund and the other
Oppenheimer funds at net asset value without sales charge. The sales charge
on Class A shares is waived for that group because of the economies of sales
efforts realized by the Distributor.


      Messrs. Gillespie, Murphy, Petersen, Vandehey, Vottiero, Wixted and
Zack and Meses. Bloomberg 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 February 2, 2005, 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 their immediate family members), do not own
securities of either the Manager, Distributor of the Board III Funds or any
person directly or indirectly controlling, controlled by or under common
control with the Manager, Distributor.


      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,
                                                                       2004
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

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 1987 of   Investment    Counseling    Federated
Age: 71            Investors,  Inc.; Trustee of the following

                   open-end   investment   companies:    Cash
                   Assets  Trust,  PIMCO  ADVISORS  VIT,  Tax
                   Free Trust of Arizona  and 4 funds for the
                   Hawaiian  Tax  Free  Trust.   Oversees  10
                   portfolios    in   the    OppenheimerFunds
                   complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Paul Y. Clinton,   Principal     of    Clinton     Management $0         $0
Trustee, since     Associates   (1996-present)  (a  financial
1987               and  venture  capital   consulting  firm);
Age: 74            Trustee of PIMCO  ADVISORS  VIT  (open-end
                   investment  company).  Formerly a director
                   or  trustee  of  the  following   open-end
                   investment  companies:  OCC Cash Reserves,
                   Inc.  (1989-December  2002),  Capital Cash
                   Management  Trust  (1979-December   2004),
                   Prime Cash Fund and  Narragansett  Insured
                   Tax-Free   Income   Fund    (1996-December
                   2004).   Oversees  10  portfolios  in  the
                   OppenheimerFunds complex.

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

Robert G. Galli,   A   trustee   or    director    of   other $0         Over
Trustee since 1998 Oppenheimer funds.  Oversees 35 portfolios            $100,000
Age: 71            in the OppenheimerFunds complex.

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

Lacy B. Herrmann,  Chairman     of     Aquila      Management $0         $10,001-$50,000
Trustee since 1987 Corporation,  the sponsoring  organization
Age: 75            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,  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,  and  Aquila  Rocky  Mountain
                   Equity Fund and PIMCO  ADVISORS  VIT; 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
                   Chief   Executive    Officer   of   Aquila
                   Investment     Management     (1986-2004),
                   sub-adviser  and  administrator  of  Prime
                   Cash Fund and Short Term  Asset  Reserves;
                   Trustee  Emeritus  of  Brown   University.
                   Formerly   Chairman   of  the   Board   of
                   Trustees   and   President   of   Hawaiian
                   Tax-Free Trust.  Oversees 10 portfolios in
                   the OppenheimerFunds complex.

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

Brian Wruble,      General Partner (since  September 1995) of $10,001-$50Over
Trustee since 2001 Odyssey  Partners,  L.P.  (hedge  fund  in            $100,000
Age: 61            distribution   since   1/1/97);   Director

                   (since  September  2004) of Special  Value
                   Opportunities    Fund,   LLC;   Investment
                   Advisory  Board  (since  October  2004) of
                   Zurich   Financial   Services;   Board  of
                   Governing  Trustees (since August 1990) of
                   The    Jackson    Laboratory     (genetics
                   laboratory,  non profit);  Trustee  (since
                   May 1992) of Institute for Advanced  Study
                   (educational institute);  Formerly Special
                   Limited  Partner  (1999-2004) and Managing
                   Principal   (through   December  1998)  of
                   Odyssey Investment Partners,  LLC (private
                   equity  investment);  Trustee  (2000-2002)
                   of    Research    Foundation    of    AIMR
                   (investment     research,     non-profit);
                   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. Gillespie, Maio, Murphy, and Zack and Ms. Bloomberg, Two World
Financial Center, 225 Liberty Street, 11th Floor, New York, New York
10281-1008, for Messrs. Vandehey, Vottiero, Petersen and Wixted and Ms. Ives,
6803 S. Tucson Way, Centennial, CO 80112-3924.  Each Officer serves for an
indefinite term or until his or her earlier resignation, retirement, death or
removal.

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

Emmanuel Ferreira,      Vice  President  of  the  Manager  since  January  2003.  An
Vice President and      officer of 5  portfolios  in the  OppenheimerFunds  complex.
Portfolio Manager       Formerly,  Portfolio  Manager at Lashire  Investments  (July
since 2005              1999-December 2002).
Age: 38

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
John V. Murphy,         Chairman,  Chief Executive  Officer and director (since June
President since 2001    2001) and President  (since  September 2000) of the Manager;
Age: 55                 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 following  investment advisory  subsidiaries
                        of the Manager:  OFI Institutional  Asset Management,  Inc.,
                        Centennial Asset Management Corporation,  Trinity Investment
                        Management Corporation and Tremont Capital Management,  Inc.
                        (since  November   2001),   HarbourView   Asset   Management
                        Corporation  and OFI Private  Investments,  Inc. (since July
                        2001);  President  (since  November  1, 2001) and a director
                        (since  July 2001) of  Oppenheimer  Real  Asset  Management,
                        Inc.;  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 Babson  Capital  Management  LLC); a member of the
                        Investment  Company  Institute's Board of Governors (elected
                        to serve from October 3, 2003 through  September  30, 2006).
                        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.   Oversees  62   portfolios   as
                        Trustee/Director and 21 additional  portfolios as Officer in
                        the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Mark S. Vandehey,       Senior Vice  President and Chief  Compliance  Officer (since
Vice President and      March  2004) of the  Manager;  Vice  President  (since  June
Chief Compliance        1983)  of  OppenheimerFunds  Distributor,  Inc.,  Centennial
Officer since 2004      Asset Management Corporation and Shareholder Services,  Inc.
Age:  54                Formerly  (until  February 2004) Vice President and Director

                        of  Internal  Audit  of  the  Manager.   An  officer  of  83
                        portfolios in the Oppenheimer funds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian W. Wixted,        Senior Vice  President and  Treasurer  (since March 1999) of
Treasurer since 1999    the  Manager;  Treasurer  of  HarbourView  Asset  Management
Age: 45                 Corporation,    Shareholder   Financial   Services,    Inc.,

                        Shareholder   Services,   Inc.,   Oppenheimer   Real   Asset
                        Management   Corporation,    and   Oppenheimer   Partnership
                        Holdings,   Inc.   (since  March   1999),   of  OFI  Private
                        Investments,  Inc. (since March 2000),  of  OppenheimerFunds
                        International  Ltd.  and  OppenheimerFunds  plc  (since  May
                        2000), of OFI Institutional  Asset  Management,  Inc. (since
                        November 2000),  and of  OppenheimerFunds  Legacy Program (a
                        Colorado   non-profit   corporation)   (since   June  2003);
                        Treasurer and Chief  Financial  Officer  (since May 2000) of
                        OFI  Trust  Company  (a  trust  company  subsidiary  of  the
                        Manager);   Assistant   Treasurer   (since  March  1999)  of
                        Oppenheimer  Acquisition Corp.  Formerly Assistant Treasurer
                        of   Centennial   Asset   Management    Corporation   (March
                        1999-October  2003)  and  OppenheimerFunds   Legacy  Program
                        (April  2000-June  2003). An officer of 83 portfolios in the
                        OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian Petersen,         Assistant  Vice  President of the Manager since August 2002;
Assistant Treasurer     formerly   Manager/Financial  Product  Accounting  (November

since 2004              1998-July 2002) of the Manager.  An officer of 83 portfolios
Age: 34                 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). An officer of 83 portfolios
Age: 41                 in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Zack,         Executive  Vice  President  (since January 2004) and General
Secretary since 2001    Counsel  (since  February  2002)  of  the  Manager;  General
Age: 56                 Counsel  and  a  director   (since  November  2001)  of  the

                        Distributor;   General  Counsel  (since  November  2001)  of
                        Centennial   Asset  Management   Corporation;   Senior  Vice
                        President  and  General  Counsel  (since  November  2001) of
                        HarbourView  Asset  Management  Corporation;  Secretary  and
                        General   Counsel  (since   November  2001)  of  Oppenheimer
                        Acquisition  Corp.;   Assistant  Secretary  and  a  director
                        (since October 1997) of OppenheimerFunds  International Ltd.
                        and  OppenheimerFunds  plc;  Vice  President  and a director
                        (since November 2001) of Oppenheimer  Partnership  Holdings,
                        Inc.; a director (since  November 2001) of Oppenheimer  Real
                        Asset  Management,  Inc.;  Senior  Vice  President,  General
                        Counsel and a director  (since November 2001) of Shareholder
                        Financial Services,  Inc.,  Shareholder Services,  Inc., OFI
                        Private  Investments,  Inc.  and  OFI  Trust  Company;  Vice
                        President (since November 2001) of  OppenheimerFunds  Legacy
                        Program;  Senior Vice  President and General  Counsel (since
                        November 2001) of OFI Institutional Asset Management,  Inc.;
                        a  director  (since  June 2003) of  OppenheimerFunds  (Asia)
                        Limited.  Formerly Senior Vice President (May  1985-December
                        2003), Acting General Counsel (November  2001-February 2002)
                        and Associate  General  Counsel (May  1981-October  2001) of
                        the Manager;  Assistant  Secretary of Shareholder  Services,
                        Inc.  (May  1985-November   2001),   Shareholder   Financial
                        Services,    Inc.   (November   1989-November   2001);   and
                        OppenheimerFunds  International Ltd. (October  1997-November
                        2001).  An officer of 83 portfolios in the  OppenheimerFunds
                        complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Kathleen T. Ives,       Vice  President  (since  June 1998) and Senior  Counsel  and
Assistant Secretary     Assistant  Secretary  (since  October  2003) of the Manager;
since 2001              Vice President  (since 1999) and Assistant  Secretary (since
Age: 39                 October  2003)  of  the  Distributor;   Assistant  Secretary

                        (since   October  2003)  of  Centennial   Asset   Management
                        Corporation;  Vice President and Assistant  Secretary (since
                        1999) of Shareholder  Services,  Inc.;  Assistant  Secretary
                        (since  December  2001) of  OppenheimerFunds  Legacy Program
                        and of Shareholder  Financial  Services,  Inc..  Formerly an
                        Assistant Counsel (August  1994-October 2003). An officer of
                        83 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Lisa I. Bloomberg,      Vice  President and  Associate  Counsel of the Manager since
Assistant Secretary     May  2004;  formerly  First  Vice  President  and  Associate
since 2004              General  Counsel of UBS Financial  Services Inc.  (formerly,
Age:  37                PaineWebber  Incorporated)  (May  1999  -  April  2004).  An

                        officer of 83 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Phillip S. Gillespie,   Senior  Vice  President  and Deputy  General  Counsel of the
Assistant Secretary     Manager since  September 2004.  Formerly Mr.  Gillespie held
since 2004              the  following   positions  at  Merrill   Lynch   Investment
Age:  41                Management:  First  Vice  President  (2001-September  2004);

                        Director  (from  2000) and Vice  President  (1998-2000).  An
                        officer of 83 portfolios in the OppenheimerFunds complex.

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

Wayne Miao,             Assistant  Vice  President  and  Assistant  Counsel  of  the
Assistant Secretary     Manager since June 2004.  Formerly an Associate  with Sidley
since 2004              Austin  Brown & Wood LLP  (September  1999 - May  2004).  An
Age:  32                officer of 83 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, 2004. The compensation
from all 10 of the Board III Funds (including the Fund) represents
compensation received for serving as a director or trustee and member of a
committee (if applicable) of the boards of those funds during the calendar
year ended December 31, 2004.









-------------------------------------------------------------------------------
Trustee Name and        Aggregate    Retirement   Estimated        Total
                                                                Compensation
                                                               From Fund and
                                                    Annual      Fund Complex
                                      Benefits    Retirement     Including
                                     Accrued as  Benefits to      Accrued

Other Fund                            Part of      be Paid       Retirement
Position(s)           Compensation      Fund         Upon      Benefits Paid
(as applicable)        From Fund1     Expenses   Retirement2   to Trustees*,8

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

Thomas W. Courtney       $12,078      $24,705      $78,862       $262,2313,

Chairman and Audit
Committee Member
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Paul Y. Clinton          $11,599      $28,468      $76,994       $271,6444

Audit Committee
Chairman
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Robert G. Galli

Audit Committee          $10,820      $14,294      $80,9235      $198,3866
Member

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lacy B. Herrmann

Audit Committee          $11,120      $21,986      $74,648       $268,5317
Member

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Brian Wruble

Audit Committee          $11,120       $6,979      $22,238        $95,626
Member

-------------------------------------------------------------------------------
1.    Aggregate   Compensation   From   Fund   includes   fees  and   deferred
   compensation, if any, for a Trustee.
2.    Estimated  Annual  Retirement  Benefits  to be Paid Upon  Retirement  is
   based on a straight life payment plan election with the  assumption  that a
   Trustee  will  retire  at the age of 75 and is  eligible  (after 7 years of
   service)  to receive  retirement  plan  benefits as  described  below under
   "Retirement Plan for Trustees."

3.    Includes $158,362 ($48,699  compensation and $109,663 accrued retirement
   benefits) paid to Mr.  Courtney for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT for  which  the  Fund's  former,  sub-advisor  acts  as the  investment
   advisor.
4.    Includes $171,851 ($75,677  compensation and $96,174 accrued  retirement
   benefits)  paid to Mr.  Clinton for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT)  for  which  the  Fund's  former  sub-advisor  acts as the  investment
   advisor.
5.    Includes  $43,933  estimated  to be paid to Mr.  Galli for  serving as a
   trustee or  director of 31 other  Oppenheimer  funds that are not Board III
   Funds.
6.    Includes  $129,312  paid to Mr. Galli for serving as trustee or director
   of 31 other Oppenheimer funds that are not Board III Funds.
7.    Includes $175,905 ($62,188  compensation and $113,717 accrued retirement
   benefits) paid to Mr.  Herrmann for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT)  for  which  the  Fund's  former  sub-advisor  acts as the  investment
   advisor.
8.    Total Compensation paid to Trustees for the calendar year 2004.

* For purposes of this section only, "Fund Complex" includes the Oppenheimer
funds, PIMCO Advisors VIT and OCC Cash Reserves, Inc. in accordance with the
instructions for Form N-1A. The Manager does not consider PIMCO Advisors VIT
or OCC Cash Reserves, Inc. to be part of the OppenheimerFunds "Fund Complex"
as that term may be otherwise interpreted.


|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 I Funds for at least seven years in order to be eligible for
retirement plan benefits and must serve for at least 15 years to be eligible
for the maximum benefit. Each Trustee's retirement benefits will depend on
the amount of the Trustee's future compensation and length of service.

|X|   Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the
Trustee. The amount paid to the Trustee under the plan is determined based
upon the performance of the selected funds.

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


|X|   Major Shareholders.  As of February 2, 2005, 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,  381,524.852 Class C shares  (representing
      6.16% 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  64,969.402  Class N
      shares (representing 7.22% 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 119,206.755
      Class  Y  shares  (representing  12.66%  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 813,800.696
      Class  Y  shares  (representing  86.47%  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, a
global, diversified insurance and financial services organization.

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

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

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

o     The Fund votes with the recommendation of the issuer's management on
            routine matters, including election of directors nominated by
            management and ratification of auditors, unless circumstances indicate
            otherwise.
o     In general, the Fund opposes anti-takeover proposals and supports
            elimination of anti-takeover proposals, absent unusual circumstances.
o     The Fund supports shareholder proposals to reduce a super-majority vote
            requirement, and opposes management proposals to add a super-majority
            vote requirement.
o     The Fund opposes proposals to classify the board of directors.
o     The Fund supports proposals to eliminate cumulative voting.
o     The Fund opposes re-pricing of stock options.
o     The Fund generally considers executive compensation questions such as
            stock option plans and bonus plans to be ordinary business activity.
            The Fund analyzes stock option plans, paying particular attention to
            their dilutive effect. While the Fund generally supports management
            proposals, the Fund opposes plans it considers to be excessive.

      The Fund is required to file Form N-PX, with its complete proxy voting
record for the 12 months ended June 30th, no later than August 31st of each
year. The Fund's Form N-PX filing is available (i) without charge, upon
request, by calling the Fund toll-free at  1.800.525-7048 and (ii) on the
SEC's website at www.sec.gov.
                 -----------

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

      The investment advisory 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. Prior to December 31, 2004, the
Manager retained OpCap Advisors (the "Former Sub-Advisor") pursuant to a
separate Sub-Advisory Agreement, under which the Sub-Advisor bought and sold
portfolio securities for the Fund. The Sub-Advisory Agreement expired on
December 31, 2004.

      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. The management fees paid by
the Fund to the Manager during its last three fiscal years were:

    ---------------------------------------------------------------
    Fiscal Year ended 10/31:        Management Fees Paid to
                                   OppenheimerFunds, Inc. 1
    ---------------------------------------------------------------
    ---------------------------------------------------------------
              2002                        $22,626,612
    ---------------------------------------------------------------
    ---------------------------------------------------------------
              2003                        $17,971,564
    ---------------------------------------------------------------
    ---------------------------------------------------------------

              2004                        $17,071,617

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

         1.The Manager, not the Fund, paid the Sub-Advisor an annual
           sub-advisory fee. For fiscal years 2002, 2003 and 2004,
           this sub-advisory fee was $6,711,712, $6,316,831 and
           $5,758,487, respectively.


      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  Directors,  including a majority of the  Independent  Directors,  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  agreements.  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 agreements. 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 they 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 Directors,
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, including the Independent
Directors, concluded that it was in the best interest of shareholders to
continue the investment advisory agreements 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 agreements, including the investment advisory fee, in light of all
of the surrounding circumstances. After deliberating the Board approved the
following new fee schedule effective January 1, 2005: the Fund will pay the
Manager an advisory fee at an annual rate that declines as the Fund's assets
grow: 0.85% of the first $1 billion of average annual net assets of the Fund,
0.80% of the next $500 million, 0.75% of the next $500 million, 0.70% of the
next $500 million, 0.65% of the next $500 million, 0.60% of the next $500
million, 0.55% of the next $500 million and 0.50% of average annual net
assets in excess of $4 billion.

The Former Sub-Advisor. From the Fund's inception on April 30, 1980 until
November 22, 1995, the Sub-Advisor (which was then named Quest for Value
Advisors) served as the Fund's investment advisor. On November 22, 1995, the
Manager became the Fund's investment advisor and retained OpCap Advisor to
continue providing day-to-day portfolio management for the Fund from that
date, until December 31, 2004.

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

    Under the investment advisory agreement, in choosing brokers to execute
portfolio transactions for the Fund, the Manager may select brokers (other
than affiliates) that provide brokerage and/or research services to the Fund
and/or the other accounts over which the Manager or its affiliates have
investment discretion.  The commissions paid to those brokers may be higher
than another qualified broker would charge, if the Manager makes a good faith
determination that the concession is fair and reasonable in relation to the
services provided.

Rule 12b-1 under the Investment Company Act prohibits any fund from
compensating a broker or dealer for promoting or selling the fund's shares by
(1) directing to that broker or dealer any of the fund's portfolio
transactions, or (2) directing any other remuneration to that broker or
dealer, such as commissions, mark-ups, mark downs or other fees from the
fund's portfolio transactions, that were effected by another broker or dealer
(these latter arrangements are considered to be a type of "step-out"
transaction). In other words, a fund and its investment advisor cannot use
the fund's brokerage for the purpose of rewarding broker-dealers for selling
the fund's shares. However, the Rule permits funds to effect brokerage
transactions through firms that also sell fund shares, provided that certain
procedures are adopted to prevent a quid pro quo with respect to portfolio
brokerage allocations. As permitted by the Rule, the Manager has adopted
procedures (and the Fund's Board of Trustees has approved those procedures)
that permit the Fund to direct portfolio securities transactions to brokers
or dealers that also promote or sell shares of the Fund, subject to the "best
execution" considerations discussed above. Those procedures are designed to
prevent: (1) the Manager's personnel who effect the Fund's portfolio
transactions from taking into account a broker's or dealer's promotion or
sales of the Fund shares when allocating the Fund's portfolio transactions,
and (2) the Fund, the Manager and the Distributor from entering into
agreements or understandings under which the Manager directs or is expected
to direct the Fund's brokerage directly, or through a "step-out" arrangement,
to any broker or dealer in consideration of that broker's or dealer's
promotion or sale of the Fund's shares or the shares of any of the other
Oppenheimer funds.


Brokerage Practices. Brokerage for the Fund is allocated subject to the
provisions of the investment advisory agreement and the Manager's 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 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 Manager 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 Manager 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
Manager 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 Manager  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 Manager determines that a better price or execution can be
obtained by using the services of a broker. Purchases of portfolio securities
from underwriters include a commission or concession paid by the issuer to
the underwriter. Purchases from dealers include a spread between the bid and
asked prices. The Fund seeks to obtain prompt execution of these orders at
the most favorable net price.

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

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

      The research services provided by brokers broaden the scope and
supplement the research activities of the Manager. That research provides
additional views and comparisons for consideration, and helps the Manager to
obtain market information for the valuation of securities that are either
held in the Fund's portfolio or are being considered for purchase. The
Manager provides information to the Manager and the Board about the
commissions paid to brokers furnishing such services, together with the
Manager's representation that the amount of such commissions was reasonably
related to the value or benefit of such services.









   ---------------------------------------------------------------------
      Fiscal Year Ended      Total Brokerage Commissions Paid by the
           10/31:                             Fund1
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------
            2002                            $3,238,510
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------
            2003                            $4,048,815
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------

            2004                            $2,830,144

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

Distribution and Service Plans

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

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

-------------------------------------------
Fiscal    Aggregate        Class A
                           Front-End
Year      Front-End Sales  Sales Charges
Ended     Charges on       Retained by
10/31:    Class A Shares   Distributor1
-------------------------------------------
-------------------------------------------
  2002       $2,242,946       $604,564
-------------------------------------------
-------------------------------------------
  2003       $1,359,505       $383,133
-------------------------------------------
-------------------------------------------

  2004       $1,336,120       $410,667

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

-----------------------------------------------------------------------------
Fiscal    Concessions on   Concessions on  Concessions on   Concessions on
Year      Class A Shares   Class B Shares  Class C Shares   Class N Shares
Ended     Advanced by      Advanced by     Advanced by      Advanced by
10/31:    Distributor1     Distributor1    Distributor1     Distributor1
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
  2002        $521,551       $2,313,084        $320,261         $136,828
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
  2003        $293,848       $1,292,892        $163,255         $65,552
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

  2004        $184,600       $1,072,528        $141,161         $72,001

-----------------------------------------------------------------------------
1.    The  Distributor  advances  concession  payments  to dealers for certain
   sales  of  Class A shares  and for  sales  of Class B and  Class C shares
   from its own resources at the time of sale.
2.    The inception date of Class N shares was March 1, 2001.

------------------------------------------------------------------------------
Fiscal    Class A          Class B         Class C           Class N
          Contingent       Contingent                        Contingent
Year      Deferred Sales   Deferred Sales  Contingent        Deferred Sales
Ended     Charges          Charges         Deferred Sales    Charges
10/31:    Retained by      Retained by     Charges Retained  Retained by
          Distributor      Distributor     by Distributor    Distributor
------------------------------------------------------------------------------
------------------------------------------------------------------------------
  2002        $18,383        $1,972,164         $26,211          $12,689
------------------------------------------------------------------------------
------------------------------------------------------------------------------
  2003        $19,454        $1,407,485         $23,232          $37,651
------------------------------------------------------------------------------
------------------------------------------------------------------------------

  2004        $21,040         $641,979          $11,221           $9,198

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


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 pays the Distributor
for all or a portion of its costs incurred in connection with the
distribution and/or servicing of the shares of the particular class. Each
plan has been approved by a vote of the Board of Trustees, including a
majority of the Independent Trustees1, cast in person at a meeting called for
the purpose of voting on that plan.

      Under the Plans, the Manager and the Distributor may make payments to
affiliates.  In their sole discretion, they may also from time to time make
substantial payments from their own resources, which include the profits the
Manager derives from the advisory fees it receives from the Fund, to
compensate brokers, dealers, financial institutions and other intermediaries
for providing distribution assistance and/or administrative services or that
otherwise promote sales of the Fund's shares.  These payments, some of which
may be referred to as "revenue sharing," may relate to the Fund's inclusion
on a financial intermediary's preferred list of funds offered to its clients.

      Financial intermediaries, brokers and dealers may receive other
payments from the Distributor or the Manager from their own resources in
connection with the promotion and/or sale of shares of the Fund, including
payments to defray expenses incurred in connection with educational seminars
and meetings.  The Manager or Distributor may share expenses incurred by
financial intermediaries in conducting training and educational meetings
about aspects of the Fund for employees of the intermediaries or for hosting
client seminars or meetings at which the Fund is discussed.  In their sole
discretion, the Manager and/or the Distributor may increase or decrease the
amount of payments they make from their own resources for these purposes.

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

      The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount
of payments to be made under a plan must be approved by shareholders of the
class affected by the amendment. Because Class B shares of the Fund
automatically convert into Class A shares 72 months after purchase, the Fund
must obtain the approval of both Class A and Class B shareholders for a
proposed material amendment to the Class A the plan that would materially
increase payments under the plan. That approval must be by a majority of the
shares of each class, voting separately by class.

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

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

      Under the plans for a class, no payment will be made to any recipient
in any 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|   Class A Service Plan Fees. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions for personal services and account
maintenance services they provide for their customers who hold Class A
shares. The services include, among others, answering customer inquiries
about the Fund, assisting in establishing and maintaining accounts in the
Fund, making the Fund's investment plans available and providing other
services at the request of the Fund or the Distributor. The Class A service
plan permits compensation to the Distributor at a rate of up to 0.25% of
average annual net assets of Class A shares. The Distributor does not receive
or retain the service fee on Class A shares in accounts for which the
Distributor has been listed as the broker-dealer of record. The Board
Trustees has set that rate. While the plan permits the Board to authorize
payments to the Distributor to reimburse itself for services under the plan,
the Board has not yet done so, except in the case of the special arrangement
described below, regarding grandfathered retirement accounts. The Distributor
makes payments to plan recipients quarterly at an annual rate not to exceed
0.25% of the average annual net assets consisting of Class A shares held in
the accounts of the recipients or their customers.


      Under the Class A distribution plan, the plan provides for the Fund to
pay an asset-based sales charge to the Distributor at an annual rate of 0.25%
of average annual net assets of Class A shares of the Fund (the Board has set
that rate at zero).



      With respect to purchases of Class A shares subject to a contingent
deferred sales charge by certain retirement plans that purchased such shares
prior to March 1, 2001 ("grandfathered retirement accounts"), the Distributor
currently intends to pay the service fee to recipients in advance for the
first year after the shares are purchased. During the first year the shares
are sold, the Distributor retains the service fee to reimburse itself for the
costs of distributing the shares. After the first year shares are
outstanding, the Distributor makes service fee payments to recipients
quarterly on those shares. The advance payment is based on the net asset
value of shares sold. Shares purchased by exchange do not qualify for the
advance service fee payment. If Class A shares purchased by grandfathered
retirement accounts are redeemed during the first year after their purchase,
the recipient of the service fees on those shares will be obligated to repay
the Distributor a pro rata portion of the advance payment of the service fee
made on those shares.


      For the fiscal year ended October 31, 2004 payments under the Class A
distribution and service plan totaled $3,706,206, of which $212,178 was paid
to an affiliate of the Distributor's parent company. In addition, $94,264 was
retained for the asset-based sales charge, as allowed under the plan prior to
January 1, 2003. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in
subsequent years. The Distributor may not use payments received under the
Class A plan to pay any of its interest expenses, carrying charges, or other
financial costs, or allocation of overhead.


|X|   Class B, Class C and Class N Distribution and Service Plan Fees. Under
each plan, distribution and service fees are computed on the average of the
net asset value of shares in the respective class, determined as of the close
of each regular business day during the period. Each plan provides for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund
under the plan during the period for which the fee is paid. The types of
services that recipients provide are similar to the services provided under
the Class A service plan, described above.

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

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

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

      The asset-based sales charge on Class B, Class C and Class N shares
allow investors to buy shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares. The Fund pays
the asset-based sales charge to the Distributor for its services rendered in
distributing Class B, Class C and Class N shares. The payments are made to
the Distributor in recognition that the Distributor:
o     pays sales concessions to authorized brokers and dealers at the time of
         sale and pays service fees as described above,
o     may finance payment of sales concessions and/or the advance of the
         service fee payment to recipients under the plans, or may provide
         such financing from its own resources or from the resources of an
         affiliate,
o     employs personnel to support distribution of Class B, Class C and Class
         N shares,
o     bears the costs of sales literature, advertising and prospectuses
         (other than those furnished to current shareholders) and state "blue
         sky" registration fees and certain other distribution expenses,
o     may not be able to adequately compensate dealers that sell Class B,
         Class C and Class N shares without receiving payment under the plans
         and therefore may not be able to offer such Classes for sale absent
         the plans,
o     receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that
         charge 12b-1 fees,
o     may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund
         shares,
o     may experience increased difficulty selling the Fund's shares if
         payments under the plan are discontinued because most competitor
         funds have plans that pay dealers for rendering distribution
         services as much or more than the amounts currently being paid by
         the Fund, and
o     may not be able to continue providing, at the same or at a lesser cost,
         the same quality distribution sales efforts and services, or to
         obtain such services from brokers and dealers, if the plan payments
         were to be discontinued.

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

 -------------------------------------------------------------------------------
  Distribution Fees Paid to the Distributor in the Fiscal Year Ended 10/31/04
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Class:            Total          Amount         Distributor's    Distributor's
                                                                  Unreimbursed
                                                                   Expenses as
                                                   Aggregate        % of Net
                  Payments      Retained by      Unreimbursed       Assets of
                Under Plan1     Distributor   Expenses Under Plan     Class
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------

 Class B Plan    $3,431,214    $2,649,679 1           $0              0.00%

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

 Class C Plan    $2,030,004     $177,722 2        $6,432,924          3.38%

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

 Class N Plan     $118,228       $75,036 3         $493,309           1.87%

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

1.    Includes  $60,758  paid  to an  affiliate  of the  Distributor's  parent
   company.
2.    Includes  $68,332  paid  to an  affiliate  of the  Distributor's  parent
   company.
3.    Includes  $4,594  paid  to an  affiliate  of  the  Distributor's  parent
   company.


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

Performance of the Fund

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

      The Fund's illustrations of its performance data in advertisements must
comply with rules of the SEC. Those rules describe the types of performance
data that may be used and how it is to be calculated. In general, any
advertisement by the Fund of its performance data must include the average
annual total returns for the advertised class of shares of the Fund.

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

      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 those
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" in the formula below) (unless the return is
shown without sales charge, as described below). For Class B shares, payment
of the applicable contingent deferred sales charge is applied, depending on
the period for which the return is shown: 5.0% in the first year, 4.0% in the
second year, 3.0% in the third and fourth years, 2.0% in the fifth year, 1.0%
in the sixth year and none thereafter. For Class C shares, the 1.0%
contingent deferred sales charge is deducted for returns for the one-year
period. For Class N shares, the 1.0% contingent deferred sales charge is
deducted for returns for the one-year period, and total returns for the
periods prior to 03/01/01 (the inception date for Class N shares) are 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.

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

ERV   l/n - 1  Average Annual Total
               Return
  P

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

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

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

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

o     Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an
annual basis. Cumulative total return is determined as follows:

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

o     Total Returns at Net Asset Value. From time to time the Fund may also
quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for Class A, Class B, Class C 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 10/31/04
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class of  Cumulative Total              Average Annual Total Returns
             Returns (10
              years or
Shares     life-of-class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
                                 1-Year            5-Year           10-Year
                                                (or life of       (or life of
                                                   class)           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   142.13%  156.90%    2.08%    8.30%   -0.02%   1.18%    9.25%    9.89%

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

Class B2   149.04%  149.04%    2.46%    7.46%    0.17%   0.49%    9.55%    9.55%

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

Class C3   142.22%  142.22%    6.48%    7.48%    0.52%   0.52%    9.25%    9.25%

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

Class N    -1.80%4  -1.80%4    6.89%    7.89%  -0.49%4 -0.49%4      N/A      N/A

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

Class Y    59.63%5  59.63%5    8.42%    8.42%    1.47%   1.47%   6.12%5   6.12%5

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

-----------------------------------------------------------------------------
    Average Annual Total Returns for Class A Shares (After Sales Charge)
                       For the Periods Ended 10/31/04
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
                                 1-Year          5-Year          10-Year
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

After Taxes on Distributions     2.04%           -1.23%           8.02%

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

After Taxes on                   1.39%           -0.49%           7.60%

Distributions and
Redemption of Fund Shares
-----------------------------------------------------------------------------
1.    Inception of Class A: 1/3/89

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"). Lipper
is a widely-recognized independent mutual fund monitoring service. Lipper
monitors the performance of regulated investment companies, including the
Fund, and ranks their performance for various periods in categories based on
investment styles. The Lipper performance rankings are based on total returns
that include the reinvestment of capital gain distributions and income
dividends but do not take sales charges or taxes into consideration. Lipper
also publishes "peer-group" indices of the performance of all mutual funds in
a category that it monitors and averages of the performance of the funds in
particular categories.

|X|   Morningstar Ratings. From time to time the Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., 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.

When you purchase shares of the Fund, your ownership interest in the shares
of the Fund will be recorded as a book entry on the records of the Fund.  The
Fund will not issue or re-register physical share certificates.

AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $50 and shareholders must invest at least $500 before an
                     ---
Asset Builder Plan (described below) can be established on a new account.
Accounts established prior to November 1, 2002 will remain at $25 for
additional purchases. Shares will be purchased on the regular business day
the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares. Dividends will begin to accrue on shares
purchased with the proceeds of ACH transfers on the business day the Fund
receives Federal Funds for the purchase through the ACH system before the
close of The New York Stock Exchange (the "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.

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

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


Oppenheimer AMT-Free Municipals             Oppenheimer Limited Term Municipal Fund
Oppenheimer AMT-Free New York Municipals    Oppenheimer Main Street Fund
Oppenheimer Balanced Fund                   Oppenheimer Main Street Opportunity Fund
Oppenheimer Bond Fund                       Oppenheimer Main Street Small Cap Fund
Oppenheimer California Municipal Fund       Oppenheimer MidCap Fund
Oppenheimer Capital Appreciation Fund       Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Income Fund             Oppenheimer Pennsylvania Municipal Fund

                                            Oppenheimer   Principal   Protected  Main

Oppenheimer Champion Income Fund            Street Fund

                                            Oppenheimer   Principal   Protected  Main

Oppenheimer Convertible Securities Fund     Street Fund II

                                            Oppenheimer   Principal   Protected  Main

Oppenheimer Developing Markets Fund         Street Fund III
Oppenheimer Disciplined Allocation Fund     Oppenheimer Quest Balanced Fund
                                            Oppenheimer  Quest  Capital  Value  Fund,
Oppenheimer Discovery Fund                  Inc.

                                            Oppenheimer  Quest   International  Value

Oppenheimer Emerging Growth Fund            Fund, Inc.
Oppenheimer Emerging Technologies Fund      Oppenheimer Quest Opportunity Value Fund
Oppenheimer Enterprise Fund                 Oppenheimer Quest Value Fund, Inc.
Oppenheimer Equity Fund, Inc.               Oppenheimer Real Asset Fund
Oppenheimer Global Fund                     Oppenheimer Real Estate Fund
Oppenheimer Global Opportunities Fund       Oppenheimer Rochester National Municipals
Oppenheimer Gold & Special Minerals Fund    Oppenheimer Select Value Fund
Oppenheimer Growth Fund                     Oppenheimer Senior Floating Rate Fund
Oppenheimer High Yield Fund                 Oppenheimer Small Cap Value Fund
Oppenheimer International Bond Fund         Oppenheimer Strategic Income Fund
Oppenheimer International Growth Fund       Oppenheimer Total Return Bond Fund
Oppenheimer   International  Small  Company
Fund                                        Oppenheimer U.S. Government Trust
Oppenheimer International Value Fund        Oppenheimer Value Fund
Oppenheimer    Limited   Term    California
Municipal Fund                              Limited-Term New York Municipal Fund

                                            Rochester Fund Municipals
And the following money market funds:


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


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


Letters of Intent.  Under a Letter of Intent ("Letter"), you can reduce the
sales charge rate that applies to your purchases of Class A shares if you
purchase Class A, Class B or (effective March 18, 2005) Class C shares of the
Fund or other Oppenheimer funds during a 13-month period. The total amount of
your purchases of Class A, Class B and (effective March 18, 2005) Class C
shares will determine the sales charge rate that applies to your Class A
share purchases during that period. You can choose to include purchases made
up to 90 days before the date of the Letter. Class A shares of Oppenheimer
Money Market Fund, Inc. and Oppenheimer Cash Reserves fund on which you did
not pay a sales charge and any Class N shares you purchase, or may have
purchased, will not be counted towards satisfying the purchases specified in
a Letter.

      A Letter is an investor's statement in writing to the Distributor of
his or her intention to purchase a specified value of Class A, Class B and
(effective March 18, 2005) Class C shares of the Fund and other Oppenheimer
funds during a 13-month period (the "Letter period"). At the investor's
request, this may include purchases made up to 90 days prior to the date of
the Letter. The Letter states the investor's intention to make the aggregate
amount of purchases of shares which, 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 capital gains
distributions and purchases made at net asset value (i.e. without a sales
charge) do not count toward satisfying the amount of the Letter.

      Each purchase of Class A shares under the Letter will be made at the
offering price (including the sales charge) that would apply to a single
lump-sum purchase of shares in the amount intended to be purchased under the
Letter.


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

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

      The  Transfer  Agent  will not hold  shares in escrow for  purchases  of
shares of the Fund and other Oppenheimer funds by  OppenheimerFunds  prototype
401(k) plans under a Letter.  If the intended  purchase  amount under a Letter
entered into by an OppenheimerFunds  prototype 401(k) plan is not purchased by
the plan by the end of the  Letter  period,  there  will be no  adjustment  of
concessions paid to the  broker-dealer or financial  institution of record for
accounts held in the name of that plan.

      In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter when placing any purchase
orders for the investor during the Letter period. All of such purchases must
be made through the Distributor.

      |X|   Terms of Escrow That Apply to Letters of Intent.

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

      2. If the total minimum investment specified under the Letter is
completed within the 13-month Letter period, the escrowed shares will be
promptly released to the investor.

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

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

5.    The shares eligible for purchase under the Letter (or the holding of
which may be counted toward completion of a Letter) include:
(a)   Class A shares sold with a front-end sales charge or subject to a Class
            A contingent deferred sales charge,
(b)   Class B 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 charges or at reduced sales charge rates, as
described in an Appendix 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 $1 million in assets invested in
applicable investments (other than assets invested in money market funds),
then the retirement plan may purchase only Class C shares of the Oppenheimer
funds.  If on the date the plan sponsor signed the Merrill Lynch record
keeping service agreement the plan has $1 million or more in assets but less
than $5 million in assets invested in applicable investments (other than
assets invested in money market funds), then the retirement plan may purchase
only Class N shares of the Oppenheimer funds.  If on the date the plan
sponsor signed the Merrill Lynch record keeping service agreement the plan
has $5 million or more in assets invested in applicable investments (other
than assets invested in money market funds), then the retirement plan may
purchase only Class A shares of the Oppenheimer funds.

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

Cancellation of Purchase Orders. Cancellation of purchase orders for the
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 purchase order of $100,000 or more for
Class B shares or a purchase order of $1 million or more to purchase Class C
shares on behalf of a single investor (not including dealer "street name" or
omnibus accounts).

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

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

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

      The sales concession and the advance of the service fee, as described
in the Prospectus, will not be paid to dealers of record on sales of Class N
shares on:
         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),
         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
         on purchases of Class N shares by an OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k) plan made with the redemption
            proceeds of Class A shares of one or more Oppenheimer funds.

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

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

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

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

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

      Listed below are certain cases in which the Fund has elected, in its
discretion, not to assess the Fund Account Fees.  These exceptions are
subject to change:
o     A fund account whose shares were acquired after September 30th of the
            prior year;
o     A fund account that has a balance below $500 due to the automatic
            conversion of shares from Class B to Class A shares. However,
            once all Class B shares held in the account have been converted
            to Class A shares the new account balance may become subject to
            the Minimum Balance Fee;
o     Accounts of shareholders who elect to access their account documents
            electronically via eDoc Direct;
o     A fund account that has only certificated shares and, has a balance
            below $500 and is being escheated;
o     Accounts of shareholders that are held by broker-dealers under the NSCC
            Fund/SERV system;
o     Accounts held under the Oppenheimer Legacy Program and/or holding
            certain Oppenheimer Variable Account Funds;
o     Omnibus accounts holding shares pursuant to the Pinnacle, Ascender,
            Custom Plus, Recordkeeper Pro and Pension Alliance Retirement
            Plan programs; and
o     A fund account that falls below the $500 minimum solely due to market
            fluctuations within the 12-month period preceding the date the
            fee is deducted.

      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.

      The Fund reserves the authority to modify Fund Account Fees in its
discretion.

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

      Dealers other than Exchange members may conduct trading in certain
securities on days on which the Exchange is closed (including weekends and
holidays) or after 4:00 P.M. on a regular business day. Because the Fund's
net asset values will not be calculated on those days, the Fund's net asset
values per share may be significantly affected on such days when shareholders
may not purchase or redeem shares. 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(R), as applicable, on that day, or
(2)   if last sale information is not available on a valuation date, they are
               valued at the last reported sale price preceding the valuation
               date if it is within the spread of the closing "bid" and
               "asked" prices on the valuation date or, if not,  at the
               closing "bid" price on the valuation date.
o     Equity securities traded on a foreign securities exchange generally are
valued in one of the following ways:
(1)   at the last sale price available to the pricing service approved by the
               Board of Trustees, or
(2)   at the last sale price obtained by the Manager from the report of the
               principal exchange on which the security is traded at its last
               trading session on or immediately before the valuation date, or
(3)   at the mean between the "bid" and "asked" prices obtained from the
               principal exchange on which the security is traded or, on the
               basis of reasonable inquiry, from two market makers in the
               security.
o     Long-term debt securities having a remaining maturity in excess of 60
days are valued based on the mean between the "bid" and "asked" prices
determined by a portfolio pricing service approved by 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(R), as applicable, as
determined by a pricing service approved by the Board of Trustees or by the
Manager. If there were no sales that day, they shall be valued at the last
sale price on the preceding trading day if it is within the spread of the
closing "bid" and "asked" prices on the principal exchange or on Nasdaq(R)on
the valuation date. If not, the value shall be the closing bid price on the
principal exchange or on Nasdaq(R)on the valuation date. If the put, call or
future is not traded on an exchange or on Nasdaq(R), it shall be valued by the
mean between "bid" and "asked" prices obtained by the Manager from two active
market makers. In certain cases that may be at the "bid" price if no "asked"
price is available.

      When 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.

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


How to Exchange Shares

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

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

   The following funds only offer Class A shares:

   Centennial California Tax Exempt Trust    Centennial Tax Exempt Trust
   Centennial Government Trust               Oppenheimer Money Market Fund,
                                             Inc.
   Centennial New York Tax Exempt Trust



   The following funds do not offer Class N shares:
   Limited Term New York Municipal Fund       Oppenheimer Money Market Fund, Inc
   Oppenheimer AMT-Free Municipals            Oppenheimer New Jersey Municipal Fund
   Oppenheimer California Municipal Fund      Oppenheimer Principal Protected Main
                                              Street Fund II
   Oppenheimer California Municipal Fund      Oppenheimer Pennsylvania Municipal
                                              Fund
   Oppenheimer International Value Fund       Oppenheimer Rochester National
                                              Municipals
   Oppenheimer Limited Term California        Oppenheimer Senior Floating Rate Fund
   Municipal Fund
   Oppenheimer Limited Term Municipal Fund    Rochester Fund Municipals

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

o     Oppenheimer Money Market Fund, Inc. only offers Class A and Class Y
      shares.
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  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 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.
o     Shares of Oppenheimer Principal Protected Main Street Fund may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund until after the expiration of the warranty period
      (8/5/2010).
o     Shares of Oppenheimer Principal Protected Main Street Fund II may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund II until after the expiration of the warranty period
      (2/4/2011).
o     Shares of Oppenheimer Principal Protected Main Street Fund III may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund III until after the expiration of the warranty period
      (12/6/2011).

      The 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 except for the funds listed in the next
item immediately below, 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 B shares of Limited-Term Government Fund, Limited
Term Municipal Fund, Limited Term New York Municipal Fund, Oppenheimer Senior
Floating Rate Fund and Cash Reserves that were initially purchased as shares
of Oppenheimer Capital Preservation Fund, the Class B contingent deferred
sales charge is imposed on Class B shares acquired by exchange if they are
redeemed within 5 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.

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

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

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 28% of ordinary
income dividends, capital gains distributions and the proceeds of the
redemption of shares, paid to any shareholder (1) who has failed to provide a
correct taxpayer identification number or to properly certify that number
-------
when required, (2) who is subject to backup withholding for failure to report
the receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that the shareholder is not subject to backup withholding
or is an "exempt recipient" (such as a corporation). Any tax withheld by the
Fund is remitted by the Fund to the U.S. Treasury and all income and any tax
withheld is identified in reports mailed to shareholders in January of each
year with a copy sent to the IRS.


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

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

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


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


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

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

Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the
same class of any of the other Oppenheimer funds 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 Registered Public Accounting Firm. KPMG LLP serves as the
Independent Registered Public Accounting Firm for the Fund. KPMG LLP audits
the Fund's financial statements and performs other related audit services.
KPMG LLP also acts as the independent registered public accounting firm for
certain other funds advised by the Manager and its affiliates. Audit and
non-audit services provided by KPMG LLP to the Fund must be pre-approved by
the Audit Committee.

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

--------------------------------------------------------------------------------
 THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER QUEST FOR VALUE FUNDS:
 We have audited the accompanying statement of assets and liabilities of
 Oppenheimer Quest Opportunity Value Fund, (one of the portfolios constituting
 the Oppenheimer Quest For Value Funds) including the statement of investments,
 as of October 31, 2004, 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 five
 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.
    We conducted our audits in accordance with the standards of the Public
 Company Accounting Oversight Board (United States). Those standards require
 that we plan and perform the audit to obtain reasonable assurance about whether
 the financial statements and financial highlights are free of material
 misstatement. An audit includes examining, on a test basis, evidence supporting
 the amounts and disclosures in the financial statements. Our procedures
 included confirmation of securities owned as of October 31, 2004, by
 correspondence with the custodian. 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, 2004, 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 five years in the period then ended, in conformity with U.S.
 generally accepted accounting principles.


 KPMG LLP

 Denver, Colorado
 December 16, 2004




--------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS  OCTOBER 31, 2004
--------------------------------------------------------------------------------

                                                                         VALUE
                                                 SHARES             SEE NOTE 1
--------------------------------------------------------------------------------
 COMMON STOCKS--88.4%
--------------------------------------------------------------------------------
 CONSUMER DISCRETIONARY--11.9%
--------------------------------------------------------------------------------
 AUTOMOBILES--0.4%
 Honda Motor Co.
 Ltd., Sponsored
 ADR                                           295,000            $  7,165,550
--------------------------------------------------------------------------------
 HOTELS, RESTAURANTS & LEISURE--4.0%
 Carnival Corp.                                664,400              33,592,064
--------------------------------------------------------------------------------
 Marriott
 International, Inc.,
 Cl. A                                         840,900              45,820,641
                                                                  --------------
                                                                    79,412,705

--------------------------------------------------------------------------------
 LEISURE EQUIPMENT & PRODUCTS--0.7%
 Mattel, Inc.                                  778,000              13,622,780
--------------------------------------------------------------------------------
 MEDIA--3.1%
 EchoStar
 Communications
 Corp., Cl. A 1                                346,000              10,940,520
--------------------------------------------------------------------------------
 Liberty Media
 Corp., Cl. A 1                              2,011,000              17,938,120
--------------------------------------------------------------------------------
 Omnicom Group,
 Inc.                                           80,600               6,359,340
--------------------------------------------------------------------------------
 Time Warner, Inc. 1                           897,000              14,926,080
--------------------------------------------------------------------------------
 Viacom, Inc., Cl. B                           340,000              12,406,600
                                                                  --------------
                                                                    62,570,660

--------------------------------------------------------------------------------
 MULTILINE RETAIL--1.6%
 Dollar General
 Corp.                                       1,693,300              32,596,025
--------------------------------------------------------------------------------
 SPECIALTY RETAIL--2.1%
 Home Depot, Inc.                              357,000              14,665,560
--------------------------------------------------------------------------------
 Office Depot, Inc. 1                        1,653,900              26,776,641
                                                                  --------------
                                                                    41,442,201

--------------------------------------------------------------------------------
 CONSUMER STAPLES--5.5%
--------------------------------------------------------------------------------
 FOOD & STAPLES RETAILING--4.0%
 Sysco Corp.                                   202,000               6,518,540
--------------------------------------------------------------------------------
 Wal-Mart
 Stores, Inc.                                1,367,000              73,708,640
                                                                  --------------
                                                                    80,227,180

                                                                         VALUE
                                                 SHARES             SEE NOTE 1
--------------------------------------------------------------------------------
 FOOD PRODUCTS--1.5%
 Dean Foods Co. 1                              996,700            $ 29,751,495
--------------------------------------------------------------------------------
 ENERGY--9.8%
--------------------------------------------------------------------------------
 ENERGY EQUIPMENT & SERVICES--2.3%
 Nabors Industries
 Ltd. 1                                        942,000              46,271,040
--------------------------------------------------------------------------------
 OIL & GAS--7.5%
 BP plc, ADR                                   870,500              50,706,625
--------------------------------------------------------------------------------
 ConocoPhillips                                641,100              54,051,141
--------------------------------------------------------------------------------
 Exxon Mobil Corp.                             886,000              43,608,920
                                                                  --------------
                                                                   148,366,686

--------------------------------------------------------------------------------
 FINANCIALS--18.3%
--------------------------------------------------------------------------------
 DIVERSIFIED FINANCIAL SERVICES--5.1%
 Citigroup, Inc.                               942,133              41,802,441
--------------------------------------------------------------------------------
 Merrill Lynch
 & Co., Inc.                                   388,000              20,928,720
--------------------------------------------------------------------------------
 Morgan Stanley                                249,000              12,721,410
--------------------------------------------------------------------------------
 Schwab (Charles)
 Corp.                                       2,903,000              26,562,450
                                                                  --------------
                                                                   102,015,021

--------------------------------------------------------------------------------
 INSURANCE--5.7%
 AFLAC, Inc.                                 1,433,000              51,416,040
--------------------------------------------------------------------------------
 UnumProvident
 Corp.                                         726,000               9,917,160
--------------------------------------------------------------------------------
 XL Capital Ltd.,
 Cl. A                                         703,000              50,967,500
                                                                  --------------
                                                                   112,300,700

--------------------------------------------------------------------------------
 THRIFTS & MORTGAGE FINANCE--7.5%
 Fannie Mae                                  1,070,000              75,060,500
--------------------------------------------------------------------------------
 Freddie Mac                                 1,112,200              74,072,520
                                                                  --------------
                                                                   149,133,020

--------------------------------------------------------------------------------
 HEALTH CARE--12.2%
--------------------------------------------------------------------------------
 BIOTECHNOLOGY--2.8%
 Amgen, Inc. 1                                 180,000              10,224,000
--------------------------------------------------------------------------------
 Wyeth                                       1,138,200              45,129,630
                                                                  --------------
                                                                    55,353,630



                 20 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND



                                                                         VALUE
                                                 SHARES             SEE NOTE 1
--------------------------------------------------------------------------------
 HEALTH CARE PROVIDERS & SERVICES--2.6%
 Anthem, Inc. 1                                642,000            $ 51,616,800
--------------------------------------------------------------------------------
 PHARMACEUTICALS--6.8%
 Pfizer, Inc.                                2,360,000              68,322,000
--------------------------------------------------------------------------------
 Sanofi-Aventis
 SA, ADR                                     1,803,000              65,809,500
                                                                  --------------
                                                                   134,131,500

--------------------------------------------------------------------------------
 INDUSTRIALS--8.0%
--------------------------------------------------------------------------------
 COMMERCIAL SERVICES & SUPPLIES--1.3%
 ChoicePoint, Inc. 1                           628,100              26,147,803
--------------------------------------------------------------------------------
 INDUSTRIAL CONGLOMERATES--6.7%
 General Electric Co.                        2,706,900              92,359,428
--------------------------------------------------------------------------------
 Tyco International
 Ltd.                                        1,274,000              39,685,100
                                                                  --------------
                                                                   132,044,528

--------------------------------------------------------------------------------
 INFORMATION TECHNOLOGY--12.9%
--------------------------------------------------------------------------------
 COMMUNICATIONS EQUIPMENT--4.4%
 Cisco Systems, Inc. 1                         789,000              15,156,690
--------------------------------------------------------------------------------
 JDS Uniphase
 Corp. 1                                     6,777,600              21,484,992
--------------------------------------------------------------------------------
 Nokia Corp.,
 Sponsored ADR                               3,300,000              50,886,000
                                                                  --------------
                                                                    87,527,682

--------------------------------------------------------------------------------
 COMPUTERS & PERIPHERALS--2.0%
 EMC Corp. 1                                 1,837,000              23,642,190
--------------------------------------------------------------------------------
 International
 Business Machines
 Corp.                                         188,000              16,873,000
                                                                  --------------
                                                                    40,515,190

--------------------------------------------------------------------------------
 ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4%
 Agilent
 Technologies, Inc. 1                          324,000               8,119,440


                                                                         VALUE
                                                 SHARES             SEE NOTE 1
--------------------------------------------------------------------------------
 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.8%
 Agere Systems,
 Inc., Cl. A 1                               1,455,900            $  1,761,639
--------------------------------------------------------------------------------
 Applied
 Materials, Inc. 1                           1,464,000              23,570,400
--------------------------------------------------------------------------------
 Intel Corp.                                   869,000              19,343,940
--------------------------------------------------------------------------------
 Texas Instruments,
 Inc.                                        1,215,000              29,706,750
                                                                  --------------
                                                                    74,382,729

--------------------------------------------------------------------------------
 SOFTWARE--2.3%
 Cadence Design
 Systems, Inc. 1                             1,282,300              15,951,812
--------------------------------------------------------------------------------
 Dassault Systemes
 SA, ADR                                       578,866              29,319,563
                                                                  --------------
                                                                    45,271,375

--------------------------------------------------------------------------------
 MATERIALS--9.8%
--------------------------------------------------------------------------------
 METALS & MINING--6.7%
 Alcan, Inc.                                   955,000              44,235,600
--------------------------------------------------------------------------------
 Alcoa, Inc.                                   651,000              21,157,500
--------------------------------------------------------------------------------
 Inco Ltd. 1                                 1,373,200              48,611,280
--------------------------------------------------------------------------------
 Nucor Corp.                                   438,000              18,496,740
                                                                  --------------
                                                                   132,501,120

--------------------------------------------------------------------------------
 PAPER & FOREST PRODUCTS--3.1%
 International
 Paper Co.                                   1,230,000              47,367,300
--------------------------------------------------------------------------------
 MeadWestvaco
 Corp.                                         491,000              15,481,230
                                                                  --------------
                                                                    62,848,530
                                                                  --------------
 Total Common Stocks
 (Cost $1,590,170,241)                                           1,755,335,390


                 21 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


--------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS  CONTINUED
--------------------------------------------------------------------------------

                                              PRINCIPAL                  VALUE
                                               AMOUNT               SEE NOTE 1
--------------------------------------------------------------------------------
 U.S. GOVERNMENT OBLIGATIONS--3.7%

 U.S. Treasury Nts.,
 5.75%, 11/15/05
 (Cost $72,390,137)                        $70,000,000            $ 72,523,850

--------------------------------------------------------------------------------
 SHORT-TERM NOTES--6.3%

 American Express
 Credit Corp.,
 1.81%, 11/29/04                            25,000,000              24,964,806
--------------------------------------------------------------------------------
 Federal Home Loan Bank:
 1.69%, 11/1/04                             25,049,000              25,049,000
 1.72%, 11/17/04                            50,000,000              49,961,778
 1.75%, 11/12/04                            25,000,000              24,986,937
                                                                  --------------
 Total Short-Term Notes
 (Cost $124,962,521)                                               124,962,521

--------------------------------------------------------------------------------
 Total Investments,
 at Value (excluding
 investments
 purchased with
 cash collateral from
 securities loaned)
 (Cost $1,787,522,899)                                           1,952,821,761

--------------------------------------------------------------------------------
 INVESTMENTS PURCHASED WITH CASH COLLATERAL
 FROM SECURITIES LOANED--1.5%
--------------------------------------------------------------------------------
 MASTER FLOATING NOTE--0.2%
 Merrill Lynch
 Mortgage Capital 2                          3,500,000               3,500,000
--------------------------------------------------------------------------------
 MEDIUM-TERM FLOATING NOTE--0.1%
 American Express
 Credit Corp. 2                              1,833,484               1,833,484


                                              PRINCIPAL                  VALUE
                                               AMOUNT               SEE NOTE 1
--------------------------------------------------------------------------------
 TIME DEPOSIT--0.1%
 Bank Nederlandse
 Gemeenten BNG 2                           $ 3,000,000          $    3,000,000
--------------------------------------------------------------------------------
 REPURCHASE AGREEMENTS--1.1%
 Greenwich Capital 2                        11,273,653              11,273,653
--------------------------------------------------------------------------------
 UBS Securities LLC 2                       10,813,000              10,813,000
                                                                  --------------
                                                                    22,086,653
                                                                  --------------
 Total Investments Purchased
 with Cash Collateral from
 Securities Loaned
 (Cost $30,420,137)                                                 30,420,137

--------------------------------------------------------------------------------
 TOTAL INVESTMENTS,
 AT VALUE
 (COST $1,817,943,036)                           99.9%           1,983,241,898
--------------------------------------------------------------------------------
 OTHER ASSETS
 NET OF LIABILITIES                               0.1                1,664,500
                                               ---------------------------------
 NET ASSETS                                     100.0%          $1,984,906,398
                                               =================================


FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 5 of Notes to Financial
Statements.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                 22 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES  OCTOBER 31, 2004
--------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
 ASSETS

 Investments, at value (including securities loaned of $80,709,365)
 (cost $1,817,943,036)--see accompanying statement of investments                           $ 1,983,241,898
-------------------------------------------------------------------------------------------------------------
 Cash                                                                                             1,111,701
-------------------------------------------------------------------------------------------------------------
 Collateral for securities loaned                                                                51,723,190
-------------------------------------------------------------------------------------------------------------
 Receivables and other assets:
 Investments sold                                                                                33,748,146
 Interest and dividends                                                                           4,009,988
 Shares of beneficial interest sold                                                                 364,763
 Other                                                                                               53,216
                                                                                            -----------------
 Total assets                                                                                 2,074,252,902

-------------------------------------------------------------------------------------------------------------
 LIABILITIES

 Return of collateral for securities loaned                                                      82,143,327
-------------------------------------------------------------------------------------------------------------
 Payables and other liabilities:
 Shares of beneficial interest redeemed                                                           5,690,212
 Distribution and service plan fees                                                                 409,956
 Transfer and shareholder servicing agent fees                                                      397,156
 Trustees' compensation                                                                             388,731
 Shareholder communications                                                                         205,484
 Management and administrative fees                                                                     170
 Other                                                                                              111,468
                                                                                            -----------------
 Total liabilities                                                                               89,346,504

-------------------------------------------------------------------------------------------------------------
 NET ASSETS                                                                                 $ 1,984,906,398
                                                                                            =================

-------------------------------------------------------------------------------------------------------------
 COMPOSITION OF NET ASSETS

 Par value of shares of beneficial interest                                                 $       616,594
-------------------------------------------------------------------------------------------------------------
 Additional paid-in capital                                                                   1,682,451,897
-------------------------------------------------------------------------------------------------------------
 Accumulated net investment income                                                                1,244,760
-------------------------------------------------------------------------------------------------------------
 Accumulated net realized gain on investments                                                   135,294,285
-------------------------------------------------------------------------------------------------------------
 Net unrealized appreciation on investments                                                     165,298,862
                                                                                            -----------------
 NET ASSETS                                                                                 $ 1,984,906,398
                                                                                            =================


                 23 | 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 $1,459,052,719 and
 45,022,154 shares of beneficial interest outstanding)                                                 $32.41
 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)       $34.39
--------------------------------------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent deferred sales charge)
 and offering price per share (based on net assets of $278,215,116 and 8,817,935 shares
 of beneficial interest outstanding)                                                                   $31.55
--------------------------------------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent deferred sales charge)
 and offering price per share (based on net assets of $190,425,569 and 6,048,373 shares
 of beneficial interest outstanding)                                                                   $31.48
--------------------------------------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent deferred sales charge)
 and offering price per share (based on net assets of $26,381,907 and 822,988 shares
 of beneficial interest outstanding)                                                                   $32.06
--------------------------------------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price per share (based on net assets
 of $30,831,087 and 947,983 shares of beneficial interest outstanding)                                 $32.52


 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                 24 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS  FOR THE YEAR ENDED OCTOBER 31, 2004
--------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------
 INVESTMENT INCOME

 Dividends (net of foreign withholding taxes of $437,088)                                      $   25,995,766
---------------------------------------------------------------------------------------------------------------
 Interest                                                                                           6,172,602
---------------------------------------------------------------------------------------------------------------
 Portfolio lending fees                                                                               349,152
                                                                                               ----------------
 Total investment income                                                                           32,517,520

---------------------------------------------------------------------------------------------------------------
 EXPENSES

 Management fees                                                                                   17,071,617
---------------------------------------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                                            3,706,206
 Class B                                                                                            3,431,214
 Class C                                                                                            2,030,004
 Class N                                                                                              118,228
---------------------------------------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                                            3,412,981
 Class B                                                                                              748,523
 Class C                                                                                              434,435
 Class N                                                                                               94,438
 Class Y                                                                                              103,423
---------------------------------------------------------------------------------------------------------------
 Shareholder communications:
 Class A                                                                                              212,461
 Class B                                                                                              182,820
 Class C                                                                                               30,782
 Class N                                                                                                1,552
---------------------------------------------------------------------------------------------------------------
 Trustees' compensation                                                                                96,432
---------------------------------------------------------------------------------------------------------------
 Custodian fees and expenses                                                                           31,240
---------------------------------------------------------------------------------------------------------------
 Other                                                                                                238,053
                                                                                               ----------------
 Total expenses                                                                                    31,944,409
 Less reduction to custodian expenses                                                                  (6,430)
 Less payments and waivers of expenses                                                                (22,394)
                                                                                               ----------------
 Net expenses                                                                                      31,915,585

---------------------------------------------------------------------------------------------------------------
 NET INVESTMENT INCOME                                                                                601,935

---------------------------------------------------------------------------------------------------------------
 REALIZED AND UNREALIZED GAIN (LOSS)

 Net realized gain on:
 Investments                                                                                      265,973,218
 Net increase from payment by affiliate                                                             1,620,795
                                                                                               ----------------
 Net realized gain                                                                                267,594,013
---------------------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation on investments                                            (103,338,932)

---------------------------------------------------------------------------------------------------------------
 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                                          $  164,857,016
                                                                                               ================

 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                 25 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


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


 YEAR ENDED OCTOBER 31,                                                                 2004               2003
-----------------------------------------------------------------------------------------------------------------
 OPERATIONS

 Net investment income                                                       $       601,935     $    5,714,355
-----------------------------------------------------------------------------------------------------------------
 Net realized gain                                                               267,594,013         83,270,706
-----------------------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation                                          (103,338,932)       186,989,138
                                                                             ------------------------------------
 Net increase in net assets resulting from operations                            164,857,016        275,974,199

-----------------------------------------------------------------------------------------------------------------
 DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS

 Dividends from net investment income:
 Class A                                                                          (3,608,269)       (11,712,436)
 Class B                                                                                  --                 --
 Class C                                                                                  --           (389,823)
 Class N                                                                              (2,466)          (132,979)
 Class Y                                                                            (113,219)          (317,784)

-----------------------------------------------------------------------------------------------------------------
 BENEFICIAL INTEREST TRANSACTIONS

 Net increase (decrease) in net assets resulting from
 beneficial interest transactions:
 Class A                                                                         (84,052,807)        75,115,637
 Class B                                                                        (174,228,779)      (328,186,775)
 Class C                                                                         (29,787,194)       (23,354,332)
 Class N                                                                           5,217,886          2,256,746
 Class Y                                                                          (1,652,234)         1,839,588

-----------------------------------------------------------------------------------------------------------------
 NET ASSETS

 Total decrease                                                                 (123,370,066)        (8,907,959)
-----------------------------------------------------------------------------------------------------------------
 Beginning of period                                                           2,108,276,464      2,117,184,423
                                                                             ------------------------------------
 End of period (including accumulated net investment income
 of $1,244,760 and $3,284,257, respectively)                                 $ 1,984,906,398     $2,108,276,464
                                                                             ====================================

 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  26 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

CLASS  A        YEAR ENDED OCTOBER 31,                             2004           2003           2002           2001          2000
------------------------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 30.00        $ 26.41        $ 31.30        $ 36.04      $ 39.96
------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                              .07 1          .14            .24            .33          .59
 Net realized and unrealized gain (loss)                           2.41           3.71          (4.74)         (1.19)         .34
                                                                --------------------------------------------------------------------
 Total from investment operations                                  2.48           3.85          (4.50)          (.86)         .93
------------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                              (.07)          (.26)          (.39)          (.58)        (.20)
 Distributions from net realized gain                                --             --             --          (3.30)       (4.65)
                                                                --------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                                   (.07)          (.26)          (.39)         (3.88)       (4.85)
------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 32.41        $ 30.00        $ 26.41        $ 31.30      $ 36.04
                                                                ====================================================================

------------------------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 2                                8.30%         14.70%        (14.60)%        (2.79)%       2.82%

------------------------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                    $1,459,053     $1,429,157     $1,181,014     $1,285,953   $1,325,552
------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                           $1,497,594     $1,292,117     $1,300,422     $1,348,895   $1,486,116
------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                             0.23%          0.53%          0.82%          1.01%        1.42%
 Total expenses                                                    1.32% 4,5      1.44% 4,5      1.52% 4,5      1.51% 4      1.53% 4
------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%            73%            42%          63%

1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                  27 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS  CONTINUED
--------------------------------------------------------------------------------


CLASS B         YEAR ENDED OCTOBER 31,                             2004           2003           2002           2001         2000
------------------------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 29.36        $ 25.79        $ 30.56        $ 35.25      $ 39.19
------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                      (.17) 1        (.11)           .03            .15          .32
 Net realized and unrealized gain (loss)                           2.36           3.68          (4.63)         (1.20)         .39
                                                                --------------------------------------------------------------------
 Total from investment operations                                  2.19           3.57          (4.60)         (1.05)         .71
------------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                --             --           (.17)          (.34)          --
 Distributions from net realized gain                                --             --             --          (3.30)       (4.65)
                                                                --------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                                     --             --           (.17)         (3.64)       (4.65)
------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 31.55        $ 29.36        $ 25.79        $ 30.56      $ 35.25
                                                                ====================================================================

------------------------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 2                                7.46%         13.84%        (15.16)%        (3.40)%       2.23%

------------------------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                      $278,215       $424,121       $693,380      $1,157,671  $1,393,095
------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                             $342,847       $527,653       $981,593      $1,326,222  $1,585,561
------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                                     (0.54)%        (0.19)%         0.17%           0.42%       0.82%
 Total expenses                                                    2.11% 4,5      2.20% 4,5      2.17% 4,5       2.11% 4     2.13% 4
------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%            73%             42%         63%

1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                  28 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND



 CLASS C                YEAR ENDED OCTOBER 31,                     2004           2003          2002           2001          2000
------------------------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 29.29        $ 25.77       $ 30.55        $ 35.24       $ 39.17
------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                      (.16) 1        (.06)          .05            .14           .35
 Net realized and unrealized gain (loss)                           2.35           3.63         (4.65)         (1.18)          .37
                                                                --------------------------------------------------------------------
 Total from investment operations                                  2.19           3.57         (4.60)         (1.04)          .72
------------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                --           (.05)         (.18)          (.35)           --
 Distributions from net realized gain                                --             --            --          (3.30)        (4.65)
                                                                --------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                                     --           (.05)         (.18)         (3.65)        (4.65)
------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 31.48        $ 29.29       $ 25.77        $ 30.55       $ 35.24
                                                                ====================================================================

------------------------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 2                                7.48%         13.88%       (15.16)%        (3.37)%        2.26%

------------------------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                      $190,426       $205,336      $203,490       $257,556      $287,103
------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                             $203,073       $198,226      $245,055       $280,327      $336,213
------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                                     (0.51)%        (0.19)%        0.18%          0.41%         0.86%
 Total expenses                                                    2.06% 4,5      2.17% 4,5     2.16% 4,5      2.11% 4       2.08% 4
------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%           73%            42%           63%

1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  29 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS  CONTINUED
--------------------------------------------------------------------------------


CLASS N                 YEAR ENDED OCTOBER 31,                     2004           2003          2002           2001 1
-----------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 29.72        $ 26.21       $ 31.26        $ 33.48
-----------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                      (.05) 2         .09           .49            .03
 Net realized and unrealized gain (loss)                           2.39           3.65         (5.02)         (2.25)
                                                                -------------------------------------------------------
 Total from investment operations                                  2.34           3.74         (4.53)         (2.22)
-----------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                -- 3         (.23)         (.52)            --
 Distributions from net realized gain                                --             --            --             --
                                                                -------------------------------------------------------
 Total dividends and/or distributions to shareholders                --           (.23)         (.52)            --
-----------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 32.06        $ 29.72       $ 26.21        $ 31.26
                                                                =======================================================

-----------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 4                                7.89%         14.39%       (14.78)%        (6.63)%

-----------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                       $26,382        $19,538       $14,843         $2,292
-----------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                              $23,702        $17,677       $10,295         $  646
-----------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 5
 Net investment income (loss)                                     (0.15)%         0.23%         0.55%          0.47%
 Total expenses                                                    1.73%          2.14%         1.76%          1.63%
 Expenses after payments and waivers and
 reduction to custodian expenses                                   1.69%          1.73%          N/A 6,7        N/A 6
-----------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%           73%            42%

1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Less than $0.005 per share.
4. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distribu- tions 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
5. Annualized for periods of less than one full year.
6. Reduction to custodian expenses less than 0.01%.
7. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                  30 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


CLASS Y       YEAR ENDED OCTOBER 31,                               2004           2003          2002           2001         2000
------------------------------------------------------------------------------------------------------------------------------------
 PER SHARE OPERATING DATA

 Net asset value, beginning of period                           $ 30.11        $ 26.53       $ 31.40        $ 36.21      $ 40.17
------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                              .12 1          .20           .56            .45          .71
 Net realized and unrealized gain (loss)                           2.41           3.72         (4.99)         (1.21)         .39
                                                                --------------------------------------------------------------------
 Total from investment operations                                  2.53           3.92         (4.43)          (.76)        1.10
------------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                              (.12)          (.34)         (.44)          (.75)        (.41)
 Distributions from net realized gain                                --             --            --          (3.30)       (4.65)
                                                                --------------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                                   (.12)          (.34)         (.44)         (4.05)       (5.06)
------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                 $ 32.52        $ 30.11       $ 26.53        $ 31.40      $ 36.21
                                                                ====================================================================

------------------------------------------------------------------------------------------------------------------------------------
 TOTAL RETURN, AT NET ASSET VALUE 2                                8.42%         14.97%       (14.34)%        (2.48)%       3.30%

------------------------------------------------------------------------------------------------------------------------------------
 RATIOS/SUPPLEMENTAL DATA

 Net assets, end of period (in thousands)                       $30,831        $30,124       $24,458        $46,942      $39,945
------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                              $30,649        $27,078       $28,726        $45,797      $43,926
------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                             0.38%          0.74%         1.17%          1.32%        1.87%
 Total expenses                                                    1.16%          1.33%         1.34%          1.17%        1.07%
 Expenses after payments and waivers and
 reduction to custodian expenses                                    N/A 4         1.23%         1.23%           N/A 4        N/A 4
------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                             64%            63%           73%            42%          63%

1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                  31 | 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, however, the institutional investor
 may impose charges on those accounts. All classes of shares have identical
 rights and voting privileges with respect to the Fund in general and exclusive
 voting rights on matters that affect that class alone. Earnings, net assets and
 net asset value per share may differ due to each class having its own expenses,
 such as transfer and shareholder servicing agent fees and shareholder
 communications, directly attributable to that class. Class A, B, C 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. The Fund calculates the net asset value of its shares as
 of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
 Eastern time, on each day the Exchange is open for business. Securities 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. Securities traded on
 NASDAQ are valued based on the closing price provided by NASDAQ prior to the
 time when the Fund's assets are valued. In the absence of a sale, the security
 is valued at the last sale price on the prior trading day, if it is within the
 spread of the closing bid and asked prices, and if not, at the closing bid
 price. Corporate, government and municipal debt instruments having a remaining
 maturity in excess of 60 days and all mortgage-backed securities will be valued
 at the mean between the "bid" and "asked" prices. Securities may be valued
 primarily using dealer-supplied valuations or a portfolio pricing service
 authorized by the Board of Trustees. Securities (including restricted
 securities) for which market quotations are not readily available are valued at
 their fair value. Foreign and domestic securities whose values have been
 materially affected by what the Manager identifies as a significant event
 occurring before the Fund's assets are valued but after the close of their
 respective exchanges will be fair valued. Fair


                 32 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

 value is determined in good faith using 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 Fund's accounting records are maintained in
 U.S. dollars. Prices of securities denominated in foreign currencies are
 translated into U.S. dollars as of the close of The New York Stock Exchange
 (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is
 open for business. Amounts related to the purchase and sale of foreign
 securities and investment income are translated at the rates of exchange
 prevailing on the respective dates of such transactions. Foreign exchange rates
 may be valued primarily using dealer supplied valuations or a portfolio pricing
 service authorized by the Board of Trustees.
    Reported net realized foreign exchange gains or losses arise from sales of
 portfolio securities, sales and maturities of short-term securities, sales of
 foreign currencies, currency gains or losses realized between the trade and
 settlement dates on securities transactions, and the difference between the
 amounts of dividends, interest, and foreign withholding taxes recorded on the
 Fund's books and the U.S. dollar equivalent of the amounts actually received or
 paid. Net unrealized foreign exchange gains and losses arise from changes in
 the values of assets and liabilities, including investments in securities at
 fiscal period end, resulting from changes in exchange rates.
    The effect of changes in foreign currency exchange rates on investments is
 separately identified from the fluctuations arising from changes in market
 values of securities held and reported with all other foreign currency gains
 and losses in the Fund's Statement of Operations.
--------------------------------------------------------------------------------
 ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
 those attributable to a specific class), gains and losses are allocated on a
 daily basis to each class of shares based upon the relative proportion of net
 assets represented by such class. Operating expenses directly attributable to a
 specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
 FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
 Revenue Code applicable to regulated investment companies and to distribute
 substantially all of its investment company taxable income, including any net
 realized gain on investments not offset by capital loss carryforwards, if any,
 to shareholders, therefore, no federal income or excise tax provision is
 required.

 The tax components of capital shown in the table below represent distribution
 requirements the Fund must satisfy under the income tax regulations, losses the
 Fund may be able to offset against income and gains realized in future years
 and unrealized appreciation or depreciation of securities and other investments
 for federal income tax purposes.


                 33 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

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


                                                                         NET UNREALIZED
                                                                           APPRECIATION
                                                                       BASED ON COST OF
                                                                         SECURITIES AND
              UNDISTRIBUTED    UNDISTRIBUTED         ACCUMULATED      OTHER INVESTMENTS
              NET INVESTMENT       LONG-TERM                LOSS     FOR FEDERAL INCOME
              INCOME                    GAIN    CARRYFORWARD 1,2           TAX PURPOSES
              -------------------------------------------------------------------------
              $1,629,195        $135,294,288                 $--           $165,298,862
 1. During the fiscal year ended October 31, 2004, the Fund utilized
 $110,007,031 of capital loss carryforward to offset capital gains realized in
 that fiscal year.
 2. During the fiscal year ended October 31, 2003, the Fund utilized $72,470,684
 of capital loss carryforward to offset capital gains realized in that fiscal
 year.

 Net investment income (loss) and net realized gain (loss) may differ for
 financial statement and tax purposes. The character of dividends and
 distributions made during the fiscal year from net investment income or net
 realized gains may differ from their ultimate characterization for federal
 income tax purposes. Also, due to timing of dividends and distributions, the
 fiscal year in which amounts are distributed may differ from the fiscal year in
 which the income or net realized gain was recorded by the Fund. Accordingly,
 the following amounts have been reclassified for October 31, 2004. Net assets
 of the Fund were unaffected by the reclassifications.


                                          INCREASE TO             REDUCTION TO
                                          ACCUMULATED          ACCUMULATED NET
                 INCREASE TO           NET INVESTMENT            REALIZED GAIN
                 PAID-IN CAPITAL               INCOME         ON INVESTMENTS 3
                 -------------------------------------------------------------
                 $20,222,688               $1,082,522              $21,305,210

 3. $20,222,688, including $19,684,415 of long-term capital gain, was
 distributed in connection with Fund share redemptions.

 The tax character of distributions paid during the years ended October 31, 2004
 and October 31, 2003 was as follows:

                                                    YEAR ENDED        YEAR ENDED
                                              OCTOBER 31, 2004  OCTOBER 31, 2003
                 ---------------------------------------------------------------
                 Distributions paid from:
                 Ordinary income                    $3,723,954       $12,553,022

 The aggregate cost of securities and other investments and the composition of
 unrealized appreciation and depreciation of securities and other investments
 for federal income tax purposes as of October 31, 2004 are noted below. The
 primary difference between book and tax appreciation or depreciation of
 securities and other investments, if applicable, is attributable to the tax
 deferral of losses or tax realization of financial statement unrealized gain or
 loss.

                 34 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


                 Federal tax cost of securities     $1,817,943,036
                                                    ==============
                 Gross unrealized appreciation      $  214,937,642
                 Gross unrealized depreciation         (49,638,780)
                                                    --------------
                 Net unrealized appreciation        $  165,298,862
                                                    ==============
--------------------------------------------------------------------------------
 TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for
 the Fund's independent trustees. Benefits are based on years of service and
 fees paid to each trustee during the years of service. During the year ended
 October 31, 2004, the Fund's projected benefit obligations were increased by
 $38,787 and payments of $8,954 were made to retired trustees, resulting in an
 accumulated liability of $371,627 as of October 31, 2004.
    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 the annual compensation they are entitled to receive from the
 Fund. For purposes of determining the amount owed to the Trustee under the
 plan, deferred amounts are treated as though equal dollar amounts had been
 invested in shares of the Fund or in other Oppenheimer funds selected by the
 Trustee. The Fund purchases shares of the funds selected for deferral by the
 Trustee in amounts equal to his or her deemed investment, resulting in a Fund
 asset equal to the deferred compensation liability. Such assets are included as
 a component of "Other" within the asset section of the Statement of Assets and
 Liabilities. Deferral of trustees' fees under the plan will not affect the net
 assets of the Fund, and will not materially affect the Fund's assets,
 liabilities or net investment income per share. Amounts will be deferred until
 distributed in accordance to the Plan.
--------------------------------------------------------------------------------
 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
 shareholders, which are determined in accordance with income tax regulations,
 are recorded on the ex-dividend date. Income and capital gain distributions, if
 any, are declared and paid annually.
--------------------------------------------------------------------------------
 INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
 ex-dividend notification in the case of certain foreign dividends where the
 ex-dividend date may have passed. Non-cash dividends included in dividend
 income, if any, are recorded at the fair market value of the securities
 received. Interest income, which includes accretion of discount and
 amortization of premium, is accrued as earned.
--------------------------------------------------------------------------------
 CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
 include interest expense incurred by the Fund on any cash overdrafts of its
 custodian account during the period. The Fund pays interest to its custodian on
 such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The
 Reduction to Custodian Expenses line item, if applicable, represents earnings
 on cash balances maintained by the Fund during the period. Such interest
 expense and other custodian fees may be paid with these earnings.
--------------------------------------------------------------------------------
 SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
 Realized gains and losses on securities sold are determined on the basis of
 identified cost.

                 35 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


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

--------------------------------------------------------------------------------
 1. SIGNIFICANT ACCOUNTING POLICIES Continued
 OTHER. The preparation of financial statements in conformity with U.S.
 generally accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and liabilities and
 disclosure of contingent assets and liabilities at the date of the financial
 statements and the reported amounts of income and expenses during the reporting
 period. Actual results could differ from those estimates.

--------------------------------------------------------------------------------
 2. SHARES OF BENEFICIAL INTEREST
 The Fund has authorized an unlimited number of $0.01 par value shares of
 beneficial interest of each class. Transactions in shares of beneficial
 interest were as follows:


                                  YEAR ENDED OCTOBER 31, 2004           YEAR ENDED OCTOBER 31, 2003
                                    SHARES             AMOUNT             SHARES             AMOUNT
-----------------------------------------------------------------------------------------------------
 CLASS A
 Sold                            8,115,941    $   257,114,536         15,512,162    $   418,441,325
 Dividends and/or
 distributions reinvested          110,183          3,344,067            414,020         10,892,875
 Redeemed                      (10,835,364)      (344,511,410)       (13,009,920)      (354,218,563)
                               ----------------------------------------------------------------------
 Net increase (decrease)        (2,609,240)   $   (84,052,807)         2,916,262    $    75,115,637
                               ======================================================================

-----------------------------------------------------------------------------------------------------
 CLASS B
 Sold                            1,110,689    $    34,361,333          1,759,775    $    46,740,716
 Dividends and/or
 distributions reinvested               --                 --                 --                 --
 Redeemed                       (6,736,531)      (208,590,112)       (14,198,043)      (374,927,491)
                               ----------------------------------------------------------------------
 Net decrease                   (5,625,842)   $  (174,228,779)       (12,438,268)   $  (328,186,775)
                               ======================================================================

-----------------------------------------------------------------------------------------------------
 CLASS C
 Sold                              584,805    $    18,064,684            839,530    $    22,356,887
 Dividends and/or
 distributions reinvested               --                 --             13,425            347,059
 Redeemed                       (1,546,263)       (47,851,878)        (1,738,392)       (46,058,278)
                               ----------------------------------------------------------------------
 Net decrease                     (961,458)   $   (29,787,194)          (885,437)   $   (23,354,332)
                               ======================================================================

-----------------------------------------------------------------------------------------------------
 CLASS N
 Sold                              332,734    $    10,461,951            313,856    $     8,489,890
 Dividends and/or
 distributions reinvested               81              2,455              5,090            132,970
 Redeemed                         (167,204)        (5,246,520)          (227,811)        (6,366,114)
                               -----------------------------------------------------------------------
 Net increase                      165,611    $     5,217,886             91,135    $     2,256,746
                               =======================================================================

------------------------------------------------------------------------------------------------------
 CLASS Y
 Sold                              247,467    $     7,884,122            360,532    $     9,593,522
 Dividends and/or
 distributions reinvested            3,721            113,218             12,055            317,784
 Redeemed                         (303,824)        (9,649,574)          (293,840)        (8,071,718)
                               ------------------------------------------------------------------------
 Net increase (decrease)           (52,636)   $    (1,652,234)            78,747    $     1,839,588
                               ========================================================================


                 36 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


--------------------------------------------------------------------------------
 3. PURCHASES AND SALES OF SECURITIES
 The aggregate cost of purchases and proceeds from sales of securities, other
 than U.S. government obligations and short-term obligations, for the year ended
 October 31, 2004, were $1,289,314,372 and $1,257,623,299, respectively. There
 were sales of $337,180,094 of U.S. government and government agency obligations
 for the year ended October 31, 2004.

--------------------------------------------------------------------------------
 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 January 1, 2004, the
 agreement provides for a fee at an annual rate of 0.85% of the first $1 billion
 of average annual net assets of the Fund, 0.80% of the next $500 million, 0.75%
 of the next $500 million, 0.70% of the next $500 million, 0.65% of the next
 $500 million, 0.60% of the next $500 million, 0.55% of the next $500 million
 and 0.50% of average annual net assets in excess of $4 billion. From June 15,
 2003 through December 31, 2003, the annual advisory fee rate was: 0.91% of the
 first $400 million of average annual net assets of the Fund, 0.86% of the next
 $400 million, 0.85% of the next $200 million, 0.81% of the next $2 billion,
 0.70% of the next $1 billion, 0.65% of the next $1 billion and 0.60% of average
 annual net assets in excess of $5 billion.
--------------------------------------------------------------------------------
 ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
 preparing and filing the Fund's tax returns.
--------------------------------------------------------------------------------
 SUB-ADVISOR FEES. The Manager retains OpCap Advisors (the Sub-Advisor) to
 provide the day-to-day portfolio management of the Fund. The Manager pays the
 Sub-Advisor a monthly fee based on the fee schedule set forth in the Fund's
 prospectus. For the year ended October 31, 2004, the Manager paid $5,758,487 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 per account fee. For the year ended October 31, 2004, the Fund
 paid $4,870,162 to OFS for services to the Fund.
    Additionally, Class Y shares are subject to minimum fees of $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.
--------------------------------------------------------------------------------
 DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
 Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
 acts as the Fund's principal underwriter in the continuous public offering of
 the Fund's classes of shares.
--------------------------------------------------------------------------------
 SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class
 A shares. Under the Plan, the Fund pays a service fee to the Distributor of up
 to 0.25% of the average annual net assets of Class A shares. The Distributor
 currently uses all of those fees to

                 37 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


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

--------------------------------------------------------------------------------
 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
 pay dealers, brokers, banks and other financial institutions quarterly for
 providing personal services and maintenance of accounts of their customers that
 hold Class A shares. Under the Plan, the Fund may also pay an asset-based sales
 charge to the Distributor. Beginning January 1, 2003, the Board of Trustees set
 the annual asset-based sales charge rate at zero. Fees incurred by the Fund
 under the Plan are detailed in the Statement of Operations.
--------------------------------------------------------------------------------
 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 compensate the Distributor for its services in connection with the
 distribution of those shares and servicing accounts. Under the plans, the Fund
 pays the Distributor an annual asset-based sales charge of 0.75% per year on
 Class B and Class C shares and 0.25% per year on Class N shares. The
 Distributor also receives a service fee of up to 0.25% per year under each
 plan. If either the Class B, Class C or Class N plan is terminated by the Fund
 or by the shareholders of a class, the Board of Trustees and its independent
 trustees must determine whether the Distributor shall be entitled to payment
 from the Fund of all or a portion of the service fee and/or asset-based sales
 charge in respect to shares sold prior to the effective date of such
 termination. The Distributor's aggregate uncompensated expenses under the plan
 at October 31, 2004 for Class C and Class N shares were $6,432,924 and
 $493,309, respectively. Fees incurred by the Fund under the plans are detailed
 in the Statement of Operations.
--------------------------------------------------------------------------------
 SALES CHARGES. Front-end sales charges and contingent deferred sales charges
 (CDSC) do not represent expenses of the Fund. They are deducted from the
 proceeds of sales of Fund shares prior to investment or from redemption
 proceeds prior to remittance, as applicable. The sales charges retained by the
 Distributor from the sale of shares and the CDSC retained by the Distributor on
 the redemption of shares is shown in the table below for the period indicated.


                                            CLASS A           CLASS B          CLASS C         CLASS N
                           CLASS A       CONTINGENT        CONTINGENT       CONTINGENT      CONTINGENT
                         FRONT-END         DEFERRED          DEFERRED         DEFERRED        DEFERRED
                     SALES CHARGES    SALES CHARGES     SALES CHARGES    SALES CHARGES   SALES CHARGES
                       RETAINED BY      RETAINED BY       RETAINED BY      RETAINED BY     RETAINED BY
 YEAR ENDED            DISTRIBUTOR      DISTRIBUTOR       DISTRIBUTOR      DISTRIBUTOR     DISTRIBUTOR
--------------------------------------------------------------------------------------------------------
 October 31, 2004         $410,667          $21,040          $641,979          $11,221          $9,198
--------------------------------------------------------------------------------------------------------
 PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage
 commissions for sales that is permitted under its investment advisory
 agreement, the Fund's Manager terminated that practice in July 2003.
 Subsequently, the Manager paid the Fund $1,620,795, an amount equivalent to
 certain of such commissions incurred in prior years.
    OFS has voluntarily agreed to limit transfer and shareholder servicing agent
 fees for all classes to 0.35% of average annual net assets per class. During
 the year ended October 31, 2004, OFS waived $5,767, $4,532, $1,081 and $11,014
 for Class A, Class B, Class C, and Class N shares, respectively. This
 undertaking may be amended or withdrawn at any time.

                 38 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND


--------------------------------------------------------------------------------
 5. SECURITIES LENDING
 The Fund lends portfolio securities from time to time in order to earn
 additional income. In return, the Fund receives collateral in the form of US
 Treasury obligations or cash, against the loaned securities and maintains
 collateral in an amount not less than 100% of the market value of the loaned
 securities during the period of the loan. The market value of the loaned
 securities is determined at the close of business of the funds and any
 additional required collateral is delivered to the Fund on the next business
 day. If the borrower defaults on its obligation to return the securities loaned
 because of insolvency or other reasons, the Fund could experience delays and
 cost in recovering the securities loaned or in gaining access to the
 collateral. Cash collateral is invested in cash equivalents. The Fund retains a
 portion of the interest earned from the collateral. The Fund also continues to
 receive interest or dividends paid on the securities loaned. As of October 31,
 2004, the Fund had on loan securities valued at $80,709,365. Cash of
 $82,143,327 was received as collateral for the loans, of which $30,420,137 has
 been invested in approved instruments.

--------------------------------------------------------------------------------
 6. LITIGATION
 Six complaints have been filed as putative derivative and class actions against
 the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as
 well as 51 of the Oppenheimer funds (collectively, the "Funds") including this
 Fund, and nine Directors/ Trustees of certain of the Funds other than this Fund
 (collectively, the "Directors/Trustees"). The complaints allege that the
 Manager charged excessive fees for distribution and other costs, improperly
 used assets of the Funds in the form of directed brokerage commissions and
 12b-1 fees to pay brokers to promote sales of the Funds, and failed to properly
 disclose the use of Fund assets to make those payments in violation of the
 Investment Company Act of 1940 and the Investment Advisers Act of 1940. The
 complaints further allege that by permitting and/or participating in those
 actions, the Directors/Trustees breached their fiduciary duties to Fund
 shareholders under the Investment Company Act of 1940 and at common law. By
 order dated October 27, 2004, these six actions, and future related actions,
 were consolidated by the U.S. District Court for the Southern District of New
 York into a single consolidated proceeding in contemplation of the filing of a
 superseding consolidated and amended complaint.
    OppenheimerFunds believes that it is premature to render any opinion as to
 the likelihood of an outcome unfavorable to them, the Funds or the
 Directors/Trustees and that no estimate can yet be made with any degree of
 certainty as to the amount or range of any potential loss. However,
 OppenheimerFunds, the Funds and the Directors/Trustees believe that the
 allegations contained in the complaints are without merit and intend to defend
 these lawsuits vigorously.

--------------------------------------------------------------------------------
 7. SUBSEQUENT EVENT
The subadvisory agreement between the Manager and OpCap Advisors will terminate
on December 31, 2004. Effective January 1, 2005, the Manager will assume
day-to-day investment management of the Fund.

                                     A-7
                                     A-1
                                  Appendix A

                             RATINGS DEFINITIONS
                             -------------------

Below are summaries of the rating definitions used by the
nationally-recognized rating agencies listed below. Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate.
The summaries below are based upon publicly available information provided by
the rating organizations.

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM RATINGS: BONDS AND PREFERRED STOCK ISSUER RATINGS

Aaa: Bonds and preferred stock rated "Aaa" are judged to be the best quality.
They carry the smallest degree of investment risk.  Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure.  While the various protective elements are likely to change, the
changes that can be expected are most unlikely to impair the fundamentally
strong position of such issues.

Aa: Bonds and preferred stock rated "Aa" are judged to be of high quality by
all standards. Together with the "Aaa" group, they comprise what are
generally known as high-grade bonds.  They are rated lower than the best
bonds because margins of protection may not be as large as with "Aaa"
securities or fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term risk appear
somewhat larger than that of "Aaa" securities.

A: Bonds and preferred stock rated "A" possess many favorable investment
attributes and are to be considered as upper-medium grade obligations.
Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment some
time in the future.

Baa: Bonds and preferred stock rated "Baa" are considered medium-grade
obligations; that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and have speculative characteristics as well.

Ba: Bonds and preferred stock rated "Ba" are judged to have speculative
elements. Their future cannot be considered well-assured.  Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Bonds and preferred stock rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.

Caa: Bonds and preferred stock rated "Caa" are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds and preferred stock rated "Ca" represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C:  Bonds and preferred stock rated "C" are the lowest class of rated bonds
and can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a
ranking in the lower end of that generic rating category. Advanced refunded
issues that are secured by certain assets are identified with a # symbol.

PRIME RATING SYSTEM (SHORT-TERM RATINGS - TAXABLE DEBT)
These ratings are opinions of the ability of issuers to honor senior
financial obligations and contracts. Such obligations generally have an
original maturity not exceeding one year, unless explicitly noted.

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions
may be more pronounced. Variability in earnings and profitability may result
in changes in the level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate liquidity is
maintained.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The
McGraw-Hill Companies, Inc.

LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based in varying degrees, on the following
considerations:
o     Likelihood of payment-capacity and willingness of the obligor to meet
      its financial commitment on an obligation in accordance with the terms
      of the obligation;
o     Nature of and provisions of the obligation; and
o     Protection afforded by, and relative position of, the obligation in the
      event of bankruptcy, reorganization, or other arrangement under the
      laws of bankruptcy and other laws affecting creditors' rights.
   The issue ratings definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority
in bankruptcy, as noted above.

AAA: An obligation  rated "AAA" have the highest rating assigned by Standard &
Poor's.  The  obligor's  capacity  to meet  its  financial  commitment  on the
obligation is extremely strong.

AA: An obligation  rated "AA" differ from the highest rated  obligations  only
in small degree.  The obligor's  capacity to meet its financial  commitment on
the obligation is very strong.

A: An  obligation  rated "A" are  somewhat  more  susceptible  to the  adverse
effects of changes in circumstances  and economic  conditions than obligations
in  higher-rated  categories.  However,  the  obligor's  capacity  to meet its
financial commitment on the obligation is still strong.

BBB:  An  obligation  rated  "BBB"  exhibit  adequate  protection  parameters.
However,  adverse  economic  conditions  or  changing  circumstances  are more
likely to lead to a weakened  capacity  of the  obligor to meet its  financial
commitment on the obligation.

BB, B, CCC, CC, and C
An obligation rated `BB', `B', `CCC', `CC', and `C' are regarded as having
significant speculative characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: An obligation  rated "BB" are less  vulnerable  to  nonpayment  than other
speculative  issues.   However,  they  face  major  ongoing  uncertainties  or
exposure to adverse business,  financial,  or economic  conditions which could
lead to the obligor's  inadequate capacity to meet its financial commitment on
the obligation.

B: An obligation  rated "B" are more vulnerable to nonpayment than obligations
rated "BB",  but the obligor  currently has the capacity to meet its financial
commitment  on  the  obligation.  Adverse  business,  financial,  or  economic
conditions  will likely impair the obligor's  capacity or  willingness to meet
its financial commitment on the obligation.

CCC: An obligation  rated "CCC" are currently  vulnerable to  nonpayment,  and
are dependent upon favorable business,  financial, and economic conditions for
the obligor to meet its financial  commitment on the obligation.  In the event
of adverse business,  financial,  or economic  conditions,  the obligor is not
likely  to  have  the  capacity  to  meet  its  financial  commitment  on  the
obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

C:  Subordinated  debt or preferred stock  obligations rated "C" are currently
highly  vulnerable  to  nonpayment.  The "C"  rating  may be  used to  cover a
situation where a bankruptcy  petition has been filed or similar action taken,
but  payments  on this  obligation  are  being  continued.  A "C" also will be
assigned to a preferred  stock issue in arrears on  dividends  or sinking fund
payments, but that is currently paying.

D: An obligation rated "D" are in payment default.  The "D" rating category is
used when payments on an  obligation  are not made on the date due even if the
applicable  grace period has not expired,  unless  Standard & Poor's  believes
that such payments will be made during such grace period.  The "D" rating also
will be used  upon the  filing of a  bankruptcy  petition  or the  taking of a
similar action if payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating
categories.

c: The `c' subscript is used to provide additional information to investors
that the bank may terminate its obligation to purchase tendered bonds if the
long-term credit rating of the issuer is below an investment-grade level
and/or the issuer's bonds are deemed taxable.

p: The letter `p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the debt
being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of or the risk
of default upon failure of such completion. The investor should exercise his
own judgment with respect to such likelihood and risk.

Continuance of the ratings is contingent upon Standard & Poor's receipt of an
executed copy of the escrow agreement or closing documentation confirming
investments and cash flows.

r: The `r' highlights derivative, hybrid, and certain other obligations that
Standard & Poor's believes may experience high volatility or high variability
in expected returns as a result of noncredit risks. Examples of such
obligations are securities with principal or interest return indexed to
equities, commodities, or currencies; certain swaps and options; and
interest-only and principal-only mortgage securities. The absence of an `r'
symbol should not be taken as an indication that an obligation will exhibit
no volatility or variability in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present commercial bank regulations issued by the Comptroller of the
Currency, bonds rated in the top four categories (`AAA', `AA', `A', `BBB',
commonly known as investment-grade ratings) generally are regarded as
eligible for bank investment. Also, the laws of various states governing
legal investments impose certain rating or other standards for obligations
eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries in general

SHORT-TERM ISSUE CREDIT RATINGS
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 days-including
commercial paper.

A-1: A short-term obligation rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

B: A short-term obligation rated "B" is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.

C: A short-term obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

NOTES:
A Standard & Poor's note rating reflects the liquidity factors and market
access risks unique to notes. Notes due in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in
making that assessment:
o     Amortization schedule-the larger the final maturity relative to other
      maturities, the more likely it will
      be treated as a note; and
o     Source of payment-the more dependent the issue is on the market for its
      refinancing, the more likely
      it will be treated as a note.

SP-1: Strong capacity to pay principal and interest. An issue with a very
strong capacity to pay debt service is given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.
International credit ratings assess the capacity to meet foreign currency or
local currency commitments. Both "foreign currency" and "local currency"
ratings are internationally comparable assessments. The local currency rating
measures the probability of payment within the relevant sovereign state's
currency and jurisdiction and therefore, unlike the foreign currency rating,
does not take account of the possibility of foreign exchange controls
limiting transfer into foreign currency.

INTERNATIONAL LONG-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings.

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.


B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk.  Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are
based on their prospects for achieving partial or full recovery in a
reorganization or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision, the
following serve as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued
interest. "DD" indicates potential recoveries in the range of 50%-90%, and
"D" the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy
a higher portion of their outstanding obligations, while entities rated "D"
have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the major rating categories.  Plus and minus signs are
not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings. A short-term rating has a time horizon of less than 12 months for
most obligations, or up to three years for U.S. public finance securities,
and thus places greater emphasis on the liquidity necessary to meet financial
commitments in a timely manner.

F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments
is adequate. However, near-term adverse changes could result in a reduction
to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.

D: Default. Denotes actual or imminent payment default.









                                     B-1
                                  Appendix B

                           Industry Classifications

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







                                     C-11
                                  Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers
--------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class
A shares2 of the Oppenheimer funds or the contingent deferred sales charge
that may apply to Class A, Class B or Class C shares may be waived.3  That is
because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors.

Not all waivers apply to all funds. For 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 plans4
         4) Group Retirement Plans5
         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."6 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 by the reinvestment of loan repayments by a
         participant in a Retirement Plan for which the Manager or an
         affiliate acts as sponsor.

|_|   Shares purchased in amounts of less than $5.


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

The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
|_|   To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|   Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account
         Rules and Policies," in the applicable fund Prospectus).
|_|   For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established.
         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact.
4)    Hardship withdrawals, as defined in the plan.7
         5) Under a Qualified Domestic Relations Order, as defined in the
            Internal Revenue Code, or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.
         9) Separation from service.8
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) if the plan has made special
            arrangements with the Distributor.
         11)      Plan termination or "in-service distributions," if the
            redemption proceeds are rolled over directly to an
            OppenheimerFunds-sponsored IRA.
|_|   For distributions from 401(k) plans sponsored by broker-dealers that
         have entered into a special agreement with the Distributor allowing
         this waiver.
|_|   For distributions from retirement plans that have $10 million or more
         in plan assets and that have entered into a special agreement with
         the Distributor.
|_|   For distributions from retirement plans which are part of a retirement
         plan product or platform offered by certain banks, broker-dealers,
         financial advisors, insurance companies or record keepers which have
         entered into a special agreement with the Distributor.
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 of Class C shares of an Oppenheimer fund in amounts of $1
         million or more requested in writing by a Retirement Plan sponsor
         and submitted more than 12 months after the Retirement Plan's first
         purchase of Class C shares, if the redemption proceeds are invested
         to purchase Class N shares of one or more Oppenheimer funds.
|_|   Distributions9 from Retirement Plans or other employee benefit plans
         for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established in an Oppenheimer fund.
         2) To return excess contributions made to a participant's account.
         3) To return contributions made due to a mistake of fact.
         4) To make hardship withdrawals, as defined in the plan.10
         5) To make distributions required under a Qualified Domestic
            Relations Order or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.11
         9) On account of the participant's separation from service.12
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) offered as an investment option in a
            Retirement Plan if the plan has made special arrangements with
            the Distributor.
         11)      Distributions made on account of a plan termination or
            "in-service" distributions, if the redemption proceeds are rolled
            over directly to an OppenheimerFunds-sponsored IRA.
         12)      For distributions from a participant's account under an
            Automatic Withdrawal Plan after the participant reaches age 59 1/2,
            as long as the aggregate value of the distributions does not
            exceed 10% of the account's value, adjusted annually.
         13)      Redemptions of Class B shares under an Automatic Withdrawal
            Plan for an account other than a Retirement Plan, if the
            aggregate value of the redeemed shares does not exceed 10% of the
            account's value, adjusted annually.
         14)      For distributions from 401(k) plans sponsored by
            broker-dealers that have entered into a special arrangement with
            the Distributor allowing this waiver.
|_|   Redemptions of Class B shares or Class C shares under an Automatic
         Withdrawal Plan from an account other than a Retirement Plan if the
         aggregate value of the redeemed shares does not exceed 10% of the
         account's value annually.

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 Fund              Oppenheimer Quest
   International Value Fund, Inc.
   Oppenheimer Quest Opportunity Value Fund

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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

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

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to
purchase those shares at net asset value without sales charge:
|_|   the Manager and its affiliates,
|_|   present or former officers, directors, trustees and employees (and
         their "immediate families" as defined in the Fund's Statement of
         Additional Information) of the Fund, the Manager and its affiliates,
         and retirement plans established by them or the prior investment
         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 FundSM

Internet Website
      www.oppenheimerfunds.com
      ------------------------

Investment Advisor
      OppenheimerFunds, Inc.
      Two World Financial Center
      225 Liberty Street, 11th Floor
      New York, New York 10281-1008

Distributor
      OppenheimerFunds Distributor, Inc.
      Two World Financial Center
      225 Liberty Street, 11th Floor
      New York, New York 10281-1008

Transfer Agent
      OppenheimerFunds Services
      P.O. Box 5270
      Denver, Colorado 80217
      1.800.CALL OPP(225.5677)

Custodian Bank
      Citibank, N.A.
      111 Wall Street
      New York, New York 10005

Independent Registered Public Accounting Firm
      KPMG LLP
      707 Seventeenth Street
      Denver, Colorado 80202

Legal Counsel
      Mayer, Brown, Rowe & Maw LLP
      1675 Broadway
      New York, New York 10019

1234
PX0236.0205


--------
1 In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund and who do not
have any direct or indirect financial interest in the operation of the
distribution plan or any agreement under the plan.
2 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
3 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred sales
charges mean the Fund's Early Withdrawal Charges and references to
"redemptions" mean "repurchases" of shares.
4 An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class N shares of
an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example, medical
savings accounts, payroll deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator purchasing
the shares for the benefit of participants in the plan.
5 The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase shares of an Oppenheimer fund or funds through a single investment
dealer, broker or other financial institution designated by the group. Such
plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans
other than plans for public school employees. The term "Group Retirement
Plan" also includes qualified retirement plans and non-qualified deferred
compensation plans and IRAs that purchase shares of an Oppenheimer fund or
funds through a single investment dealer, broker or other financial
institution that has made special arrangements with the Distributor.
6 However, that concession will not be paid on purchases of shares in amounts
of $1 million or more (including any right of accumulation) by a Retirement
Plan that pays for the purchase with the redemption proceeds of Class C
shares of one or more Oppenheimer funds held by the Plan for more than one
year.
7 This provision does not apply to IRAs.
8 This provision only applies to qualified retirement plans and 403(b)(7)
custodial plans after your separation from service in or after the year you
reached age 55.
9 The distribution must be requested prior to Plan termination or the
elimination of the Oppenheimer funds as an investment option under the Plan.
10 This provision does not apply to IRAs.
11 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan.
12 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.

------------------------------------------------------------------------------
Oppenheimer Small Cap Value Fund
------------------------------------------------------------------------------
(A series of Oppenheimer Quest for Value Funds)

6803 S. Tucson Way, Centennial, CO 80112
1.800.CALL OPP (225.5677)


Statement of Additional Information dated February 28, 2005

      This Statement of Additional Information is not a Prospectus.  This
document contains additional information about the Fund and supplements
information in the Prospectus dated February 28, 2005.  It should be read
together with the Prospectus, which may be obtained by writing to the Fund's
Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado
80217, or by calling the Transfer Agent at the toll-free number shown above,
or by downloading it from the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.


Contents
                                                                      Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks.....
    The Fund's Investment Policies........................................
    Other Investment Techniques and Strategies............................
    Other Investment Restrictions.........................................
    Disclosure of Portfolio Holdings......................................
How the Fund is Managed ..................................................
    Organization and History..............................................
    Board of Trustees and Oversight Committees............................
    Trustees and Officers of the Fund.....................................
    The Manager...........................................................
Brokerage Policies of the Fund............................................
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 Registered Public Accounting Firm's 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. (the "Manager"), can select for the Fund. Additional
information is also provided about the strategies that the Fund may use to
try to achieve its objective.

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

|X|   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 $3.0 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.

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

o     Preferred Stocks. Preferred stocks are equity securities but have
certain attributes of debt securities. Preferred stock, unlike common stock,
has a stated dividend rate payable from the corporation's earnings. Preferred
stock dividends may be cumulative or non-cumulative, participating, or
auction rate. "Cumulative" dividend provisions require all or a portion of
prior unpaid dividends to be paid before the issuer can pay dividends on
common shares.

      If interest rates rise, the fixed dividend on preferred stocks may be
less attractive, causing the price of preferred stocks to decline. Preferred
stock may have mandatory sinking fund provisions, as well as provisions for
their call or redemption prior to maturity which can have a negative effect
on their prices when interest prior to maturity rates decline. Preferred
stock may be "participating" stock, which means that it may be entitled to a
dividend exceeding the stated dividend in certain cases.

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

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

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

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

|X|   Investments in Debt Securities. 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.

o     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).

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

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

o     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 ("Standard & Poor's") or less than "Baa" by Moody's
Investors Service, Inc. ("Moody's"), 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|   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 agency or
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 are high-quality, short-term debt instruments that are issued by
the U.S. government, corporations, banks or other entities.  They may have
fixed, variable or floating interest rates.

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

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

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

o     Commercial Paper.  The Fund can invest in commercial paper if it is
 rated within the top two rating categories of 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.

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

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

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

|X|   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.

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

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

      o     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.

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

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

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

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

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

|X|   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.

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.

|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 Special Situations. Periodically, the Fund might use
aggressive investment techniques. These might include seeking to benefit from
what the portfolio manager perceives to be "special situations," such as
mergers, reorganizations, restructurings or other unusual events expected to
affect a particular issuer. However, there is a risk in investing in special
situations that the change or event might not occur, which could have a
negative impact on the price of the issuer's securities. The Fund's
investment might not produce the expected gains or could incur a loss for the
portfolio.

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

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

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

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

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

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

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

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

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

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

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

o     Reverse Repurchase Agreements. The Fund can use reverse repurchase
agreements on debt obligations it owns. Under a reverse repurchase agreement,
the Fund sells an underlying debt obligation and simultaneously agrees to
repurchase the same security at an agreed-upon price at an agreed-upon date.
The Fund will identify on its books liquid assets in an amount sufficient to
cover its obligations under reverse repurchase agreements, including
interest, until payment is made to the seller.

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

|X|   Illiquid and Restricted Securities.  To enable the Fund to sell its
holdings of a restricted security not registered under 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
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
buyer's 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 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.

|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:
o     sell futures contracts,
o     buy puts on such futures or on securities, or
o     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:
o     buy futures, or
o     buy calls on such 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 is permissible under applicable
regulations governing the Fund.

o     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"), an (3) individual stock ("single stock futures") and (4)
commodities (these are referred to as "commodity 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.

      A  single  stock  future  obligates  the  seller  to  deliver  (and  the
purchaser to take) cash or a specified  equity  security to settle the futures
transaction.  Either  party  could also enter into an  offsetting  contract to
close out the position.  Single stock  futures trade on a very limited  number
of exchanges, with contracts typically not fungible among the exchanges.

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

      No money is paid or received by the Fund on the purchase or sale of a
future.  Upon entering into a futures transaction, the Fund will be required
to deposit an initial margin payment with the futures commission merchant
(the "futures broker").  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.

      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.

o     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. 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.

o     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 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, 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.

      If 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").  If 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.

o     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.

      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.

      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.

o     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 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. The Fund may buy
a call or put only if, after the purchase, the value of all call and put
options held by the Fund will not exceed 5% of the Fund's total assets.

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

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

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

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

o     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.

o     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
on its books liquid 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 transaction 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.


o     Regulatory Aspects of Hedging Instruments.  The Commodities Futures
Trading Commission (the "CFTC") recently eliminated limitations on futures
trading by certain regulated entities including registered investment
companies. Consequently registered investment companies may engage in
unlimited futures transactions and options thereon provided that the Fund
claims an exclusion from regulation as a commodity pool operator. The Fund
has claimed such an exclusion from registration as a commodity pool operator
under the Commodity Exchange Act ("CEA"). The Fund may use futures and
options for hedging and non-hedging purposes to the extent consistent with
its investment objective, internal risk management guidelines adopted by the
Fund's investment advisor (as they may be amended from time to time), and as
otherwise set forth in the Fund's prospectus or this statement of additional
information.


      Transactions in options by the Fund are subject to limitations
established by the option exchanges. The exchanges limit the maximum number
of options that may be written or held by a single investor or group of
investors acting in concert. Those limits apply regardless of whether the
options were written or purchased on the same or different exchanges or are
held in one or more accounts or through one or more different exchanges or
through one or more brokers.  Thus, the number of options that the Fund may
write or hold may be affected by options written or held by other entities,
including other investment companies having the same Advisor as the Fund (or
an Advisor that is an affiliate of the Fund's Advisor).  The exchanges also
impose position limits on futures transactions.  An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.

      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.

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

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

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

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

Investment 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.

      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
Fund's portfolio, at times when the Fund may not be able to buy those
portfolio securities directly.

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

|X|   Temporary Defensive and Interim Investments.  When market, economic or
political conditions are unstable, or the Manager believes it is otherwise
appropriate to reduce holdings in stocks, the Fund can invest in a variety of
debt securities for defensive purposes and the types of money market
instruments described above. The Fund can also purchase these securities for
liquidity purposes to meet cash needs due to the redemption of Fund shares,
or to hold while waiting to reinvest cash received from the sale of other
portfolio securities. The Fund can buy:
o     obligations issued or guaranteed by the U. S. government or its
         instrumentalities or agencies,
o     commercial paper (short-term, unsecured, promissory notes of domestic
         or foreign companies) rated in the top two rating categories of a
         nationally-recognized rating organization,
o     short-term debt obligations of corporate issuers, rated investment
         grade (rated at least Baa by Moody's or at least BBB by Standard &
         Poor's, or a comparable rating by another rating organization), or
         unrated securities judged by the Manager to have a comparable
         quality to rated securities in those categories,
o     certificates of deposit and bankers' acceptances of domestic and
         foreign banks  having total assets in excess of $1 billion, and
o     repurchase agreements.

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

Other Investment Restrictions

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

      The Fund's investment objective is a fundamental policy. Other policies
described in the Prospectus or this 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 principal investment policies are
described in the Prospectus.

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

o     The Fund cannot invest 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.

o     The Fund cannot purchase more than 10% of the voting securities of any
one 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.

o     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.

o     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.

o     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.

o     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.

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

o     The Fund cannot 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.

o     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.

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

o     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.

o     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.

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

o     The Fund cannot 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.

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

o     The Fund cannot invest in the securities of other registered investment
companies or registered unit investment trusts in reliance on sub-paragraph
(F) or (G) of section 12(d)(1) of the Investment Company Act.

      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 (except in the case of
borrowing and investments in illiquid securities). The Fund need not sell
securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund.

      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.


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


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


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

      A list of the top 10 or more portfolio securities holdings (based on
                        ----------
invested assets), listed by security or by issuer, as of the end of each
month may be disclosed to third parties (subject to the procedures below) no
sooner than 15 days after month-end.  The top 10 or more holdings also shall
be posted on the OppenheimerFunds' website at www.oppenheimerfunds.com in the
"Fund Profiles" section.  Other general information about a Fund's portfolio
investments, such as portfolio composition by asset class, industry, country,
currency, credit rating or maturity, may also be posted with a 15-day lag.


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

o     The third-party recipient must first submit a request for release of
            Fund portfolio holdings, explaining the business reason for the
            request;

o     Senior officers (a Senior Vice President or above) in the Manager's
            Portfolio and Legal departments must approve the completed
            request for release of Fund portfolio holdings; and
o     The third-party recipient must sign the Manager's portfolio holdings
            non-disclosure agreement before receiving the data, agreeing to
            keep confidential information that is not publicly available
            regarding a Fund's holdings and agreeing not to trade directly or
            indirectly based on the information.

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

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

o     The Fund's certified public accountants and auditors,
o     Members of the Fund's Board and the Board's legal counsel,
o     The Fund's custodian bank,

o     A proxy voting service designated by the Fund and its Board,
o     Rating/ranking organizations (such as Lipper and Morningstar),
o     Portfolio pricing services retained by the Manager to provide portfolio

            security prices, and
o     Dealers, to obtain bids (price quotations, because securities are not
            priced by the Fund's regular pricing services).


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

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


o     Brokers and dealers in connection with portfolio transactions
            (purchases and sales)
o     Brokers and dealers to obtain bids or bid and asked prices (if
            securities held by a Fund are not priced by the fund's regular
            pricing services)
o     Dealers to obtain price quotations where the fund is not identified as
            the owner


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


o     Response to legal process in litigation matters, such as responses to
            subpoenas or in class action matters where the Fund may be part
            of the plaintiff class (and seeks recovery for losses on a
            security) or a defendant,
o     Response to regulatory requests for information (the SEC, NASD, state
            securities regulators, and/or foreign securities authorities,
            including without limitation requests for information in
            inspections or for position reporting purposes),
o     To potential sub-advisors of portfolios (but only pursuant to
            confidentiality agreements),
o     To consultants for retirement plans for plan sponsors/discussions at
            due diligence meetings (if entire portfolio holdings are
            provided, however, it shall be done only pursuant to a
            confidentiality agreement),
o     Investment bankers in connection with merger discussions (but only
            pursuant to confidentiality agreements)


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


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


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

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


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

            A.G. Edwards & Sons         Keijser Securities

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

            ABG Securities              Kempen & Co. USA Inc.

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

            ABN AMRO                    Kepler Equities/Julius
                                        Baer Sec

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

            Advest                      KeyBanc Capital Markets

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

            AG Edwards                  Leerink Swan

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

            American Technology ResearchLegg Mason

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

            Auerbach Grayson            Lehman

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

            Banc of America Securities  Lehman Brothers

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

            Barclays                    Lipper

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

            Baseline                    Loop Capital Markets

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

            Bear Stearns                MainFirst Bank AG

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

            Belle Haven                 Makinson Cowell US Ltd

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

            Bloomberg                   Maxcor Financial

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

            BNP Paribas                 Merrill

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

            BS Financial Services       Merrill Lynch

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

            Buckingham Research Group   Midwest Research

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

            Caris & Co.                 Mizuho Securities

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

            CIBC World Markets          Morgan Stanley

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

            Citigroup                   Morningstar

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

            Citigroup Global Markets    Natexis Bleichroeder

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

            Collins Stewart             Ned Davis Research Group

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

            Craig-Hallum Capital Group  Nomura Securities
            LLC

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

            Credit Agricole Cheuvreux   Pacific Crest
            N.A. Inc.

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

            Credit Suisse First Boston  Pacific Crest Securities

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

            Daiwa Securities            Pacific Growth Equities

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

            Davy                        Petrie Parkman

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

            Deutsche Bank               Pictet

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

            Deutsche Bank Securities    Piper Jaffray Inc.

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

            Dresdner Kleinwort          Plexus
            Wasserstein

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

            Emmet & Co                  Prager Sealy & Co.

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

            Empirical Research          Prudential Securities

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

            Enskilda Securities         Ramirez & Co.

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

            Essex Capital Markets       Raymond James

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

            Exane BNP Paribas           RBC Capital Markets

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

            Factset                     RBC Dain Rauscher

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

            Fidelity Capital Markets    Research Direct

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

            Fimat USA Inc.              Robert W. Baird

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

            First Albany                Roosevelt & Cross

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

            First Albany Corporation    Russell Mellon

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

            Fixed Income Securities     Ryan Beck & Co.

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

            Fortis Securities           Sanford C. Bernstein

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

            Fox-Pitt, Kelton            Scotia Capital Markets

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

            Friedman, Billing, Ramsey   SG Cowen & Co.

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

            Fulcrum Global Partners     SG Cowen Securities

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

            Garp Research               Soleil Securities Group

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

            George K Baum & Co.         Standard & Poors

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

            Goldman                     Stone & Youngberg

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

            Goldman Sachs               SWS Group

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

            HSBC                        Taylor Rafferty

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

            HSBC Securities Inc         Think Equity Partners

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

            ING Barings                 Thomas Weisel Partners

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

            ISI Group                   UBS

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

            Janney Montgomery           Wachovia

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

            Jefferies                   Wachovia Corp

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

            Jeffries & Co.              Wachovia Securities

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

            JP Morgan                   Wescott Financial

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

            JP Morgan Securities        William Blair

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

            JPP Eurosecurities          Yieldbook

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

            Keefe, Bruyette & Woods

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



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.

      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, but may do so from time to time on important matters or when
required to do so by the Investment Company Act or other applicable law.
Shareholders have the right, upon vote of two-thirds of the outstanding
shares of the Fund, to remove a Trustee or to take other action described in
the Fund's Declaration of Trust.

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

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

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

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


      The Board of Trustees has an Audit Committee which is comprised solely
of Independent Trustees.  The members of the Audit Committee are Paul Y.
Clinton (Chairman), Thomas W. Courtney, Robert G. Galli, Lacy B. Herrmann and
Brian Wruble.  The Audit Committee met 5 times during the Fund's fiscal year
ended October 31, 2004. 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 auditor
concerning the Fund's internal accounting procedures, and controls, and
                                                                  -
reviews reports of the Manager's internal auditor, among other duties as set
forth in the Committee's charter.

      The Audit Committee furnishes 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 among other duties as set forth in the Committee's charter.


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

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

Trustees and Officers of the Fund. Each of the Trustees is an "Independent
Trustee" under 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"):

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 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

      In addition to being a trustee or director of the Board III Funds, Mr.
Galli is also a director or trustee of 25 other portfolios in the
OppenheimerFunds complex. Present or former officers, directors, trustees and
employees (and their immediate family members) of the Fund, the Manager and
its affiliates, and retirement plans established by them for their employees
are permitted to purchase Class A shares of the Fund and the other
Oppenheimer funds at net asset value without sales charge. The sales charge
on Class A shares is waived for that group because of the economies of sales
efforts realized by the Distributor.

      Messrs. Damian, Leavy, Murphy, Petersen, Vandehey, Vottiero, Wixted and
Zack and Messes. Bloomberg, 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 January 31, 2004, 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.

      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,
                                                                       2004
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Thomas W.          Principal  of  Courtney  Associates,  Inc. $          $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 1987 of   Investment    Counseling    Federated
Age: 71            Investors,  Inc.; Trustee of the following

                   open-end   investment   companies:    Cash
                   Assets  Trust,  PIMCO  ADVISORS  VIT,  Tax
                   Free Trust of Arizona  and 4 funds for the
                   Hawaiian  Tax  Free  Trust.   Oversees  10
                   portfolios    in   the    OppenheimerFunds
                   complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Paul Y. Clinton,   Principal     of    Clinton     Management $0         $0
Trustee since 1987 Associates   (1996-present)  (a  financial
Age: 73            and  venture  capital   consulting  firm);
                   Trustee of PIMCO  ADVISORS  VIT  (open-end
                   investment  company).  Formerly a director
                   or  trustee  of  the  following   open-end
                   investment  companies:  OCC Cash Reserves,
                   Inc.  (1989-December  2002),  Capital Cash
                   Management  Trust  (1979-December   2004),
                   Prime Cash Fund and  Narragansett  Insured
                   Tax-Free   Income   Fund    (1996-December
                   2004).   Oversees  10  portfolios  in  the
                   OppenheimerFunds complex.

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

Robert G. Galli,   A   trustee   or    director    of   other $          Over
Trustee since 1998 Oppenheimer funds.  Oversees 35 portfolios            $100,000
Age: 71            in the OppenheimerFunds complex.

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

Lacy B. Herrmann,  Chairman of Aquila Management              $0         $10,001-$50,000
Trustee since 1987 Corporation, the sponsoring organization
Age: 75            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, 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, and Aquila Rocky Mountain
                   Equity Fund and PIMCO ADVISORS VIT; 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
                   Chief Executive Officer of Aquila
                   Investment Management (1986-2004),
                   sub-adviser and administrator of Prime
                   Cash Fund and Short Term Asset Reserves;
                   Trustee Emeritus of Brown University.
                   Formerly Chairman of the Board of
                   Trustees and President of Hawaiian
                   Tax-Free Trust. Oversees 10 portfolios in
                   the OppenheimerFunds complex.

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

Brian Wruble,       General Partner (since September 1995)    $50,001-$10Over0
Trustee since 2001 of Odyssey Partners, L.P. (hedge fund in              $100,000
Age: 61            distribution since 1/1/97); Director

                   (since September 2004) of Special Value
                   Opportunities Fund, LLC; Investment
                   Advisory Board (since October 2004) of
                   Zurich Financial Services; Board of
                   Governing Trustees (since August 1990) of
                   The Jackson Laboratory (genetics
                   laboratory, non profit); Trustee (since
                   May 1992) of Institute for Advanced Study
                   (educational institute); Formerly Special
                   Limited Partner (1999-2004) and Managing
                   Principal (through December 1998) of
                   Odyssey Investment Partners, LLC (private
                   equity investment); Trustee (2000-2002)
                   of Research Foundation of AIMR
                   (investment research, non-profit);
                   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, Gillespie, Miao, Murphy and Zack and Ms. Bloomberg,
Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New
York 10281-1008, for Messrs. Vandehey, Vottiero and Wixted and Ms. Ives, 6803
S. Tucson Way, Centennial, CO 80112-3924.  Each Officer serves for an
indefinite term or until his or her earlier resignation, retirement, death or
removal.

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

John Damian Vice        Vice President (since September 2001) of the Manager; an
President and           officer of 1 portfolio in the OppenheimerFunds complex;
Portfolio Manager       formerly Senior Analyst/Director for Citigroup Asset
since October 2001      Management (November 1999 - September 2001).

Age: 35
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Christopher Leavy,      Senior Vice President (since September 2000) of the
Vice President and      Manager; an officer of 7 portfolios in the OppenheimerFunds
Portfolio Manager       complex; prior to joining the Manager in September 2000, he
since March 2001        was a portfolio manager of Morgan Stanley Dean Witter
Age: 32                 Investment Management (1997 - September 2000).
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
John V. Murphy,         Chairman,  Chief Executive  Officer and director (since June
President since 2001    2001) and President  (since  September 2000) of the Manager;
Age: 55                 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 following  investment advisory  subsidiaries
                        of the Manager:  OFI Institutional  Asset Management,  Inc.,
                        Centennial Asset Management Corporation,  Trinity Investment
                        Management Corporation and Tremont Capital Management,  Inc.
                        (since  November   2001),   HarbourView   Asset   Management
                        Corporation  and OFI Private  Investments,  Inc. (since July
                        2001);  President  (since  November  1, 2001) and a director
                        (since  July 2001) of  Oppenheimer  Real  Asset  Management,
                        Inc.;  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 Babson  Capital  Management  LLC); a member of the
                        Investment  Company  Institute's Board of Governors (elected
                        to serve from October 3, 2003 through  September  30, 2006).
                        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.   Oversees  62   portfolios   as
                        Trustee/Director and 21 additional  portfolios as Officer in
                        the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Mark S. Vandehey,       Senior Vice  President and Chief  Compliance  Officer (since
Vice President and      March  2004) of the  Manager;  Vice  President  (since  June
Chief Compliance        1983)  of  OppenheimerFunds  Distributor,  Inc.,  Centennial
Officer since 2004      Asset Management Corporation and Shareholder Services,  Inc.
Age:  54                Formerly  (until  February 2004) Vice President and Director

                        of  Internal  Audit  of  the  Manager.   An  officer  of  83
                        portfolios in the Oppenheimer funds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian W. Wixted,        Senior Vice  President and  Treasurer  (since March 1999) of
Treasurer since 1999    the  Manager;  Treasurer  of  HarbourView  Asset  Management
Age: 45                 Corporation,    Shareholder   Financial   Services,    Inc.,

                        Shareholder   Services,   Inc.,   Oppenheimer   Real   Asset
                        Management   Corporation,    and   Oppenheimer   Partnership
                        Holdings,   Inc.   (since  March   1999),   of  OFI  Private
                        Investments,  Inc. (since March 2000),  of  OppenheimerFunds
                        International  Ltd.  and  OppenheimerFunds  plc  (since  May
                        2000), of OFI Institutional  Asset  Management,  Inc. (since
                        November 2000),  and of  OppenheimerFunds  Legacy Program (a
                        Colorado   non-profit   corporation)   (since   June  2003);
                        Treasurer and Chief  Financial  Officer  (since May 2000) of
                        OFI  Trust  Company  (a  trust  company  subsidiary  of  the
                        Manager);   Assistant   Treasurer   (since  March  1999)  of
                        Oppenheimer  Acquisition Corp.  Formerly Assistant Treasurer
                        of   Centennial   Asset   Management    Corporation   (March
                        1999-October  2003)  and  OppenheimerFunds   Legacy  Program
                        (April  2000-June  2003). An officer of 83 portfolios in the
                        OppenheimerFunds complex.

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

Brian Petersen,         Assistant  Vice  President of the Manager since August 2002;
Assistant Treasurer     formerly   Manager/Financial  Product  Accounting  (November
since 2004              1998-July 2002) of the Manager.  An officer of 83 portfolios
Age: 34                 in the OppenheimerFunds complex.

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

Philip Vottiero         Vice President/Fund Accounting of the Manager since March
Age: 41                 2002. Formerly Vice President/Corporate Accounting of the
                        Manager (July 1999-March 2002). An officer of 83 portfolios
                        in the OppenheimerFunds complex.

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

Robert G. Zack,         Executive  Vice  President  (since January 2004) and General
Secretary since 2001    Counsel  (since  February  2002)  of  the  Manager;  General
Age: 56                 Counsel  and  a  director   (since  November  2001)  of  the
                        Distributor;   General  Counsel  (since  November  2001)  of
                        Centennial   Asset  Management   Corporation;   Senior  Vice
                        President  and  General  Counsel  (since  November  2001) of
                        HarbourView  Asset  Management  Corporation;  Secretary  and
                        General   Counsel  (since   November  2001)  of  Oppenheimer
                        Acquisition  Corp.;   Assistant  Secretary  and  a  director
                        (since October 1997) of OppenheimerFunds  International Ltd.
                        and  OppenheimerFunds  plc;  Vice  President  and a director
                        (since November 2001) of Oppenheimer  Partnership  Holdings,
                        Inc.; a director (since  November 2001) of Oppenheimer  Real
                        Asset  Management,  Inc.;  Senior  Vice  President,  General
                        Counsel and a director  (since November 2001) of Shareholder
                        Financial Services,  Inc.,  Shareholder Services,  Inc., OFI
                        Private  Investments,  Inc.  and  OFI  Trust  Company;  Vice
                        President (since November 2001) of  OppenheimerFunds  Legacy
                        Program;  Senior Vice  President and General  Counsel (since
                        November 2001) of OFI Institutional Asset Management,  Inc.;
                        a  director  (since  June 2003) of  OppenheimerFunds  (Asia)
                        Limited.  Formerly Senior Vice President (May  1985-December
                        2003), Acting General Counsel (November  2001-February 2002)
                        and Associate  General  Counsel (May  1981-October  2001) of
                        the Manager;  Assistant  Secretary of Shareholder  Services,
                        Inc.  (May  1985-November   2001),   Shareholder   Financial
                        Services,    Inc.   (November   1989-November   2001);   and
                        OppenheimerFunds  International Ltd. (October  1997-November
                        2001).  An officer of 83 portfolios in the  OppenheimerFunds
                        complex.

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

Kathleen T. Ives,       Vice  President  (since  June 1998) and Senior  Counsel  and
Assistant Secretary     Assistant  Secretary  (since  October  2003) of the Manager;
since 2001              Vice President  (since 1999) and Assistant  Secretary (since
Age: 39                 October  2003)  of  the  Distributor;   Assistant  Secretary
                        (since   October  2003)  of  Centennial   Asset   Management
                        Corporation;  Vice President and Assistant  Secretary (since
                        1999) of Shareholder  Services,  Inc.;  Assistant  Secretary
                        (since  December  2001) of  OppenheimerFunds  Legacy Program
                        and of Shareholder  Financial  Services,  Inc..  Formerly an
                        Assistant Counsel (August  1994-October 2003). An officer of
                        83 portfolios in the OppenheimerFunds complex.

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

Lisa I. Bloomberg,      Vice President and Associate Counsel of the Manager since
Assistant Secretary     May 2004; formerly First Vice President and Associate
since 2004              General Counsel of UBS Financial Services Inc. (formerly,
Age:  37                PaineWebber Incorporated) (May 1999 - April 2004). An
                        officer of 83 portfolios in the OppenheimerFunds complex.

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

Wayne Miao,             Senior Vice President and Deputy General Counsel of the
Assistant Secretary     Manager since September 2004. Formerly Mr. Gillespie held
since 2004              the following positions at Merrill Lynch Investment
Age:  31                Management: First Vice President (2001-September 2004);
                        Director (from 2000) and Vice President (1998-2000). An
                        officer of 83 portfolios in the OppenheimerFunds complex.

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

Wayne Miao,             Assistant Vice President and Assistant Counsel of the
Assistant Secretary     Manager since June 2004. Formerly an Associate with Sidley
since 2004              Austin Brown & Wood LLP (September 1999 - May 2004). An
Age:  32                officer of 83 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, 2004. The compensation
from all 10 of the Oppenheimer funds (including the Fund) represents
compensation received for serving as a director or trustee and member of a
committee (if applicable) of the boards of those funds during the calendar
year ended December 31, 2004.










--------------------------------------------------------------------------------
Trustee Name and        Aggregate    Retirement   Estimated         Total
                                                                Compensation
                                                                  From All
                                                    Annual       Oppenheimer
                                      Benefits    Retirement   Funds For Which
                                     Accrued as  Benefits to     Individual

Other Fund                            Part of      be Paid        Serves As
Position(s)           Compensation      Fund         Upon     Trustee/Director8,
(as applicable)        From Fund1     Expenses   Retirement2          *

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

Thomas W. Courtney       $7,007       $11,865      $78,862        $279,3623

Chairman and Audit
Committee Member
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Paul Y. Clinton          $6,843       $13,671      $76,994        $287,8514

Audit Committee
Chairman
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Robert G. Galli

Audit Committee          $6,378        $6,865      $80,9235
Member                                                            $237,3126

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lacy B. Herrmann

Audit Committee          $6,678       $10,559      $74,648
Member                                                            $286,9057

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Brian Wruble

Audit Committee          $6,678        $3,352      $22,238
Member                                                            $111,000

--------------------------------------------------------------------------------
1.    Aggregate   Compensation   From   Fund   includes   fees  and   deferred
   compensation, if any, for a Trustee.
2.    Estimated  Annual  Retirement  Benefits  to be Paid Upon  Retirement  is
   based on a straight life payment plan election with the  assumption  that a
   Trustee  will  retire  at the age of 75 and is  eligible  (after 7 years of
   service)  to receive  retirement  plan  benefits as  described  below under
   "Retirement Plan for Trustees."

3.    Includes $158,362 ($48,699  compensation and $109,663 accrued retirement
   benefits) paid to Mr.  Courtney for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT for which the Fund's former sub-advisor acts as the investment advisor.
4.    Includes $171,851 ($75,677  compensation and $96,174 accrued  retirement
   benefits)  paid to Mr.  Clinton for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT)  for  which  the  Fund's  former  sub-advisor  acts as the  investment
   advisor.
5.    Include  $43,933  estimated  to be paid to Mr.  Galli for  serving  as a
   trustee or  director of 25 other  Oppenheimer  funds that are not Board III
   Funds.
6.    Includes  $129,312  paid to Mr. Galli for serving as trustee or director
   of 25 other Oppenheimer funds) that are not Board III Funds.
7.    Includes $175,905 ($62,188  compensation and $113,717 accrued retirement
   benefits) paid to Mr.  Herrmann for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT)  for  which  the  Fund's  former  sub-advisor  acts as the  investment
   advisor.
8.    Total Compensation paid to Trustees for the calendar year 2004.

* For purposes of this section only, "Fund Complex" includes the Oppenheimer
funds, PIMCO Advisors VIT and OCC Cash Reserves, Inc. in accordance with the
instructions for Form N-1A. The Manager does not consider PIMCO Advisors VIT
or OCC Cash Reserves, Inc. to be part of the OppenheimerFunds "Fund Complex"
as that term may be otherwise interpreted.


|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 I Funds for at least seven years in order to be eligible for
retirement plan benefits and must serve for at least 15 years to be eligible
for the maximum benefit. Each Trustee's retirement benefits will depend on
the amount of the Trustee's future compensation and length of service.

|X|   Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the
Trustee. The amount paid to the Trustee under the plan is determined based
upon the performance of the selected funds.

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


|X|   Major Shareholders.  As of February 2, 2005, 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 2,388,803.141 Class A shares
      (representing 10.45% of the Class A shares then outstanding);

      Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of Customers,
      Attn: Mutual Funds, 101 Montgomery Street, San Francisco, CA
      94104-4122, which owned 605,352.985 Class C shares (representing 10.82%
      of the Class C shares then outstanding).

      Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of its
      Customers, Attn: Fund Admin. 4800 Deer Lake Drive E Fl. 3,
      Jacksonville, FL 32246-6484; which owned 165,613.805 Class N shares
      (representing 9.68% of the Class N shares then outstanding).


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

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

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

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

o     The Fund votes with the recommendation of the issuer's management on
            routine matters, including election of directors nominated by
            management and ratification of auditors, unless circumstances
            indicate otherwise.
o     In general, the Fund opposes anti-takeover proposals and supports
            elimination of anti-takeover proposals, absent unusual
            circumstances.
o     The Fund supports shareholder proposals to reduce a super-majority vote
            requirement, and opposes management proposals to add a
            super-majority vote requirement.
o     The Fund opposes proposals to classify the board of directors.
o     The Fund supports proposals to eliminate cumulative voting.
o     The Fund opposes re-pricing of stock options.
o     The Fund generally considers executive compensation questions such as
            stock option plans and bonus plans to be ordinary business
            activity. The Fund analyzes stock option plans, paying particular
            attention to their dilutive effect. While the Fund generally
            supports management proposals, the Fund opposes plans it
            considers to be excessive.

      The Fund is required to file Form N-PX, with its complete proxy voting
record for the 12 months ended June 30th, no later than August 31st of each
year. The Fund's Form N-PX filing is available (i) without charge, upon
request, by calling the Fund toll-free at  1.800.525-7048 and (ii) on the
SEC's website at www.sec.gov.
                 -----------

      |X|   The Investment Advisory Agreement.  The Manager provides
investment advisory and management services to the Fund under an investment
advisory agreement between the Manager and the Fund. The Manager selects
securities for the Fund's portfolio and handles its day-to-day business. The
portfolio 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. Other members of the Manager's Equity Portfolio Team
provide the portfolio managers with counsel and support in managing the
Fund's portfolio.

      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. The management fees paid by
the Fund to the Manager during its last three fiscal years were:

    ---------------------------------------------------------------
    Fiscal Year ended 10/31:        Management Fees Paid to
                                    OppenheimerFunds, Inc.
    ---------------------------------------------------------------
    ---------------------------------------------------------------
              2002                        $3,656,726
    ---------------------------------------------------------------
    ---------------------------------------------------------------
              2003                         $3,717,654
    ---------------------------------------------------------------
    ---------------------------------------------------------------

              2004                         $5,805,595

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

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

         |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, including the Independent
Trustees, concluded that it was in the best interest 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.

Brokerage Policies of the Fund

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

      Under the investment advisory agreement, in choosing brokers to execute
portfolio transactions for the Fund, the Manager may select brokers (other
than affiliates) that provide brokerage and/or research services to the Fund
and/or the other accounts over which the Manager or its affiliates have
investment discretion.  The commissions paid to those brokers may be higher
than another qualified broker would charge, if the Manager makes a good faith
determination that the concession is fair and reasonable in relation to the
services provided.

Rule 12b-1 under the Investment Company Act prohibits any fund from
compensating a broker or dealer for promoting or selling the fund's shares by
(1) directing to that broker or dealer any of the fund's portfolio
transactions, or (2) directing any other remuneration to that broker or
dealer, such as commissions, mark-ups, mark downs or other fees from the
fund's portfolio transactions, that were effected by another broker or dealer
(these latter arrangements are considered to be a type of "step-out"
transaction). In other words, a fund and its investment advisor cannot use
the fund's brokerage for the purpose of rewarding broker-dealers for selling
the fund's shares.

However, the Rule permits funds to effect brokerage transactions through
firms that also sell fund shares, provided that certain procedures are
adopted to prevent a quid pro quo with respect to portfolio brokerage
allocations. As permitted by the Rule, the Manager has adopted procedures
(and the Fund's Board of Trustees has approved those procedures) that permit
the Fund to direct portfolio securities transactions to brokers or dealers
that also promote or sell shares of the Fund, subject to the "best execution"
considerations discussed above. Those procedures are designed to prevent: (1)
the Manager's personnel who effect the Fund's portfolio transactions from
taking into account a broker's or dealer's promotion or sales of the Fund
shares when allocating the Fund's portfolio transactions, and (2) the Fund,
the Manager and the Distributor from entering into agreements or
understandings under which the Manager directs or is expected to direct the
Fund's brokerage directly, or through a "step-out" arrangement, to any broker
or dealer in consideration of that broker's or dealer's promotion or sale of
the Fund's shares or the shares of any of the other Oppenheimer funds.

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

      Transactions in securities other than those for which an exchange is
the primary market are generally done with principals or market makers. In
transactions on foreign exchanges, the Fund may be required to pay fixed
brokerage commissions and therefore would not have the benefit of negotiated
commissions 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. In an option transaction, the Fund ordinarily uses the
same broker for the purchase or sale of the option and any transaction in the
securities to which the option relates.

      Other funds advised by the Manager have investment policies similar to
those of the Fund. Those other funds may purchase or sell the same securities
as the Fund at the same time as the Fund, which could affect the supply and
price of the securities. If two or more funds advised by the Manager purchase
the same security on the same day from the same dealer, the transactions
under those combined orders are averaged as to price and allocated in
accordance with the purchase or sale orders actually placed for each
account.

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

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

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

      The Board of Trustees permits the Manager to use stated commissions on
secondary fixed-income agency trades to obtain research if the broker
represents to the Manager that: (i) the trade is not from or for the broker's
own inventory, (ii) the trade was executed by the broker on an agency basis
at the stated commission, and (iii) the trade is not a riskless principal
transaction. The Board of Trustees permits the Manager to use commissions on
fixed-price offerings to obtain research, in the same manner as is permitted
for agency transactions.

      The research services provided by brokers broaden the scope and
supplements the research activities of the Manager.  That research provides
additional views and comparisons for consideration, and helps the Manager to
obtain market information for the valuation of securities that are either
held in the Fund's portfolio or are being considered for purchase.  The
Manager provides information to the Board about the commissions paid to
brokers furnishing such services, together with the Manager's representation
that the amount of such commissions was reasonably related to the value or
benefit of such services.








   ---------------------------------------------------------------------
   Fiscal Year Ended 10/31   Total Brokerage Commissions Paid by the
                                              Fund1
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------
            2002                            $2,850,138
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------
            2003                           $3,893,0122
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------

            2004                            $4,288,825

   ---------------------------------------------------------------------
1.    Amounts do not include spreads or commissions on principal  transactions
   on a net trade basis.
2.    In the fiscal year ended 10/31/03,  the amount of transactions  directed
      to brokers for research  services was  $71,988,314 and the amount
      of the  commissions  paid to  broker-dealers  for those  services
      was $214,794.

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 the Fund's classes of shares. The Distributor bears the
expenses normally attributable to sales, including advertising and the cost
of printing and mailing prospectuses, other than those furnished to existing
shareholders. The Distributor is not obligated to sell a specific number of
shares.

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

-------------------------------------------
Fiscal    Aggregate        Class A
                           Front-End
Year      Front-End Sales  Sales Charges
Ended     Charges on       Retained by
10/31:    Class A Shares   Distributor1
-------------------------------------------
-------------------------------------------
  2002       $1,277,747       $364,089
-------------------------------------------
-------------------------------------------
  2003        $862,941        $249,984
-------------------------------------------
-------------------------------------------

  2004       $2,237,599       $609,190

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

-----------------------------------------------------------------------------
Fiscal    Concessions on   Concessions on  Concessions on   Concessions on
Year      Class A Shares   Class B Shares  Class C Shares   Class N Shares
Ended     Advanced by      Advanced by     Advanced by      Advanced by
10/31:    Distributor1     Distributor1    Distributor1     Distributor1
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
  2002        $136,926       $1,601,790        $237,568         $43,172
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
  2003        $81,212         $826,834         $147,073         $41,153
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

  2004        $195,869       $1,229,769        $349,158         $120,457

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

------------------------------------------------------------------------------
Fiscal    Class A          Class B         Class C           Class N
          Contingent       Contingent                        Contingent
Year      Deferred Sales   Deferred Sales  Contingent        Deferred Sales
Ended     Charges          Charges         Deferred Sales    Charges
10/31:    Retained by      Retained by     Charges Retained  Retained by
          Distributor      Distributor     by Distributor    Distributor
------------------------------------------------------------------------------
------------------------------------------------------------------------------
  2002        $12,049         $369,914          $19,284           $4,079
------------------------------------------------------------------------------
------------------------------------------------------------------------------
  2003         $6,212         $375,487          $11,524          $14,320
------------------------------------------------------------------------------
------------------------------------------------------------------------------

  2004         $2,832         $304,373          $16,341          $10,762

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

Distribution and Service Plans. The Fund has adopted a Service Plan for Class
A shares and Distribution and Service Plans for Class B, Class C and Class N
shares under Rule 12b-1 of the Investment Company Act. Under those plans the
Fund pays the Distributor for all or a portion of its costs incurred in
connection with the distribution and/or servicing of the shares of the
particular class. Each plan has been approved by a vote of the Board of
Trustees, including a majority of the Independent Trustees1, cast in person
at a meeting called for the purpose of voting on that plan.

      Under the Plans, the Manager and the Distributor may make payments to
affiliates.  In their sole discretion, they may also from time to time make
substantial payments from their own resources, which include the profits the
Manager derives from the advisory fees it receives from the Fund, to
compensate brokers, dealers, financial institutions and other intermediaries
for providing distribution assistance and/or administrative services or that
otherwise promote sales of the Fund's shares.  These payments, some of which
may be referred to as "revenue sharing," may relate to the Fund's inclusion
on a financial intermediary's preferred list of funds offered to its clients.

      Financial intermediaries, brokers and dealers may receive other
payments from the Distributor or the Manager from their own resources in
connection with the promotion and/or sale of shares of the Fund, including
payments to defray expenses incurred in connection with educational seminars
and meetings.  The Manager or Distributor may share expenses incurred by
financial intermediaries in conducting training and educational meetings
about aspects of the Fund for employees of the intermediaries or for hosting
client seminars or meetings at which the Fund is discussed.  In their sole
discretion, the Manager and/or the Distributor may increase or decrease the
amount of payments they make from their own resources for these purposes.

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


      The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount
of payments to be made under a plan must be approved by shareholders of the
class affected by the amendment. Because Class B shares of the Fund
automatically convert into Class A shares 72 months after purchase, the Fund
must obtain the approval of both Class A and Class B shareholders for a
proposed material amendment to the Class A the plan that would materially
increase payments under the plan. That approval must be by a majority of the
shares of each class, voting separately by class.

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

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

      Under the plans for a class, no payment will be made to any recipient
in any 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|   Class A Service Plan Fees and Distribution Plan Fees. Under the Class A
service plan, the Distributor currently uses the fees it receives from the
Fund to pay brokers, dealers and other financial institutions (they are
referred to as "recipients") for personal services and account maintenance
services they provide for their customers who hold Class A shares. The
services include, among others, answering customer inquiries about the Fund,
assisting in establishing and maintaining accounts in the Fund, making the
Fund's investment plans available and providing other services at the request
of the Fund or the Distributor. The Class A service plan permits
reimbursements to the Distributor at a rate of up to 0.25% of average annual
net assets of Class A shares. The Board has set the rate at that level. The
Distributor does not receive or retain the service fee on Class A shares in
accounts for which the Distributor has been listed as the broker-dealer of
record. While the plan permits the Board to authorize payments to the
Distributor to reimburse itself for services under the plan, the Board has
not yet done so, except in the case of the special arrangement described
below, regarding grandfathered retirement accounts. The Distributor makes
payments to recipients quarterly at an annual rate not to exceed 0.25% of the
average annual net assets consisting of Class A shares held in the accounts
of the recipients or their customers.


      Under the Class A distribution plan, the plan provides for the Fund to
pay an asset-based sales charge to the Distributor at an annual rate of 0.25%
of average annual net assets of Class A shares of the Fund (the Board has set
that rate at zero).


      With respect to purchases of Class A shares subject to a contingent
deferred sales charge by certain retirement plans that purchased such shares
prior to March 1, 2001 ("grandfathered retirement accounts"), the Distributor
currently intends to pay the service fee to recipients in advance for the
first year after the shares are purchased. During the first year the shares
are sold, the Distributor retains the service fee to reimburse itself for the
costs of distributing the shares. After the first year shares are
outstanding, the Distributor makes service fee payments to recipients
quarterly on those shares. The advance payment is based on the net asset
value of shares sold. Shares purchased by exchange do not qualify for the
advance service fee payment. If Class A shares purchased by grandfathered
retirement accounts are redeemed during the first year after their purchase,
the recipient of the service fees on those shares will be obligated to repay
the Distributor a pro rata portion of the advance payment of the service fee
made on those shares.


      For the fiscal year ended October 31, 2004 payments under the Class A
plan totaled $1,072,829, of which $61,900 was paid to an affiliate of the
Distributor's parent company. In addition, $22,011 was retained for the
asset-based sales charge, as allowed under the plan prior to January 1, 2003.
Any unreimbursed expenses the Distributor incurs with respect to Class A
shares in any fiscal year cannot be recovered in subsequent years. The
Distributor may not use payments received under the Class A plan to pay any
of its interest expenses, carrying charges, or other financial costs, or
allocation of overhead.


|X|   Class B, Class C and Class N Distribution and Service Plan Fees. Under
 each plan, distribution and service fees are computed on the average of the
 net asset value of shares in the respective class, determined as of the
 close of each regular business day during the period. Each plan provides for
 the Distributor to be compensated at a flat rate, whether the Distributor's
 distribution expenses are more or less than the amounts paid by the Fund
 under the plan during the period for which the fee is paid. The types of
 services that recipients provide are similar to the services provided under
 the Class A service plan, described above.

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

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

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

      The asset-based sales charge on Class B, Class C and Class N shares
allow investors to buy shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares. The Fund pays
the asset-based sales charge to the Distributor for its services rendered in
distributing Class B, Class C and Class N shares. The payments are made to
the Distributor in recognition that the Distributor:
o     pays sales concessions to authorized brokers and dealers at the time of
         sale and pays service fees as described above,
o     may finance payment of sales concessions and/or the advance of the
         service fee payment to recipients under the plans, or may provide
         such financing from its own resources or from the resources of an
         affiliate,
o     employs personnel to support distribution of Class B, Class C and Class
         N shares,
o     bears the costs of sales literature, advertising and prospectuses
         (other than those furnished to current shareholders) and state "blue
         sky" registration fees and certain other distribution expenses,
o     may not be able to adequately compensate dealers that sell Class B,
         Class C and Class N shares without receiving payment under the plans
         and therefore may not be able to offer such Classes for sale absent
         the plans,
o     receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that
         charge 12b-1 fees,
o     may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund
         shares,
o     may experience increased difficulty selling the Fund's shares if
         payments under the plan are discontinued because most competitor
         funds have plans that pay dealers for rendering distribution
         services as much or more than the amounts currently being paid by
         the Fund, and
o     may not be able to continue providing, at the same or at a lesser cost,
         the same quality distribution sales efforts and services, or to
         obtain such services from brokers and dealers, if the plan payments
         were to be discontinued.

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

 -------------------------------------------------------------------------------
  Distribution Fees Paid to the Distributor in the Fiscal Year Ended 10/31/04
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Class:            Total      Amount Retained   Distributor's    Distributor's
                                                  Aggregate      Unreimbursed
                                                 Unreimbursed    Expenses as %
                  Payments                      Expenses Under   of Net Assets
                 Under Plan    by Distributor        Plan          of Class
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------

 Class B Plan    $1,901,18      $1,487,7291       $2,005,361         1.01%

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

 Class C Plan     $963,669       $266,5402        $1,355,190         1.11%

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

 Class N Plan     $109,390        $71,9033         $344,483          0.95%

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

1.    Includes  $61,900  paid  to an  affiliate  of the  Distributor's  parent
   company.
2.    Includes  $26,454  paid  to an  affiliate  of the  Distributor's  parent
   company.
3.    Includes  $2,523  paid  to an  affiliate  of  the  Distributor's  parent
    company.


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

Performance of the Fund

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

      The Fund's illustrations of its performance data in advertisements must
comply with rules of the SEC. Those rules describe the types of performance
data that may be used and how it is to be calculated. In general, any
advertisement by the Fund of its performance data must include the average
annual total returns for the advertised class of shares of the Fund.

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

      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 those
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" in the formula below) (unless the return is
shown without sales charge, as described below). For Class B shares, payment
of the applicable contingent deferred sales charge is applied, depending on
the period for which the return is shown: 5.0% in the first year, 4.0% in the
second year, 3.0% in the third and fourth years, 2.0% in the fifth year, 1.0%
in the sixth year and none thereafter. For Class C shares, the 1.0%
contingent deferred sales charge is deducted for returns for the one-year
period. For Class N shares, the 1.0% contingent deferred sales charge is
deducted for returns for the one-year period, and total returns for the
periods prior to 03/01/01 (the inception date for Class N shares) are based
on the Fund's Class A returns, adjusted to reflect the higher Class N 12b-1
fees.

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

ERV   l/n - 1  Average Annual Total
               Return
  P

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

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

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

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

o     Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an
annual basis. Cumulative total return is determined as follows:


 ERV - P   = Total Return
-----------
    P
o     Total Returns at Net Asset Value. From time to time the Fund may also
quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for Class A, Class B, Class C 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 10/31/04
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class of  Cumulative Total              Average Annual Total Returns
             Returns (10
              years or
Shares     life-of-class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
                                 1-Year            5-Year           10-Year
                                                (or life of       (or life of
                                                   class)           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   170.41%  186.90%   13.95%   20.90%   13.38%  14.74%   10.46%   11.12%

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

Class B2   178.16%  178.16%   14.91%   19.91%   13.74%  13.98%   10.77%   10.77%

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

Class C3   170.64%  170.64%   18.95%   19.95%   13.99%  13.99%   10.47%   10.47%

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

Class N    60.16%4  60.16%4   19.29%   20.29%  13.71%4 13.71%4      N/A      N/A

---------------------------------------------------------------------------------
1. Inception of Class A:      01/03/89
2. Inception of Class B:      9/1/93
3. Inception of Class C:      9/1/93
4. Inception of Class N:      3/01/01

-----------------------------------------------------------------------------
    Average Annual Total Returns for Class A Shares (After Sales Charge)
                       For the Periods Ended 10/31/04
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
                                 1-Year          5-Year          10-Year
                                              (or life of      (or life of
                                                 class)          class)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

After Taxes on Distributions     12.83%          12.77%           9.02%

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

After Taxes on                   9.62%           11.37%           8.32%

Distributions and
Redemption of Fund Shares
-----------------------------------------------------------------------------
1.    Inception of Class A: 01/03/89

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"). Lipper
is a widely-recognized independent mutual fund monitoring service. Lipper
monitors the performance of regulated investment companies, including the
Fund, and ranks their performance for various periods in categories based on
investment styles. The Lipper performance rankings are based on total returns
that include the reinvestment of capital gain distributions and income
dividends but do not take sales charges or taxes into consideration. Lipper
also publishes "peer-group" indices of the performance of all mutual funds in
a category that it monitors and averages of the performance of the funds in
particular categories.

|X|   Morningstar Ratings. From time to time the Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., an
independent mutual fund monitoring service. Morningstar rates mutual funds in
their specialized market sector. The Fund is include rated among small blend
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"). 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.

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

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


Oppenheimer AMT-Free Municipals           Oppenheimer Limited Term Municipal Fund
Oppenheimer AMT-Free New York Municipals  Oppenheimer Main Street Fund
Oppenheimer Balanced Fund                 Oppenheimer Main Street Opportunity Fund
Oppenheimer Bond Fund                     Oppenheimer Main Street Small Cap Fund
Oppenheimer California Municipal Fund     Oppenheimer MidCap Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Income Fund           Oppenheimer Pennsylvania Municipal Fund

                                          Oppenheimer   Principal  Protected  Main

Oppenheimer Champion Income Fund          Street Fund

                                          Oppenheimer   Principal  Protected  Main

Oppenheimer Convertible Securities Fund   Street Fund II

                                          Oppenheimer   Principal  Protected  Main

Oppenheimer Developing Markets Fund       Street Fund III
Oppenheimer Disciplined Allocation Fund   Oppenheimer Quest Balanced Fund

                                          Oppenheimer  Quest  Capital  Value Fund,

Oppenheimer Discovery Fund                Inc.

                                          Oppenheimer  Quest  International  Value

Oppenheimer Emerging Growth Fund          Fund, Inc.
Oppenheimer Emerging Technologies Fund    Oppenheimer Quest Opportunity Value Fund
Oppenheimer Enterprise Fund               Oppenheimer Quest Value Fund, Inc.
Oppenheimer Equity Fund, Inc.             Oppenheimer Real Asset Fund
Oppenheimer Global Fund                   Oppenheimer Real Estate Fund

                                          Oppenheimer      Rochester      National

Oppenheimer Global Opportunities Fund     Municipals
Oppenheimer Gold & Special Minerals Fund  Oppenheimer Select Value Fund
Oppenheimer Growth Fund                   Oppenheimer Senior Floating Rate Fund
Oppenheimer High Yield Fund               Oppenheimer Small Cap Value Fund
Oppenheimer International Bond Fund       Oppenheimer Strategic Income Fund
Oppenheimer International Growth Fund     Oppenheimer Total Return Bond Fund
Oppenheimer  International  Small Company
Fund                                      Oppenheimer U.S. Government Trust
Oppenheimer International Value Fund      Oppenheimer Value Fund
Oppenheimer   Limited   Term   California
Municipal Fund                            Limited-Term New York Municipal Fund
Oppenheimer Limited-Term Government Fund  Rochester Fund Municipals


And the following money market funds:


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


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


Letters of Intent. Under a Letter of Intent ("Letter"), you can reduce the
sales charge rate that applies to your purchases of Class A shares if you
purchase Class A, Class B or (effective March 18, 2005) Class C shares of the
Fund or other Oppenheimer funds during a 13-month period. The total amount of
your purchases of Class A, Class B and (effective March 18, 2005) Class C
shares will determine the sales charge rate that applies to your Class A
share purchases during that period. You can choose to include purchases made
up to 90 days before the date of the Letter. Class A shares of Oppenheimer
Money Market Fund, Inc. and Oppenheimer Cash Reserves fund on which you did
not pay a sales charge and any Class N shares you purchase, or may have
purchased, will not be counted towards satisfying the purchases specified in
a Letter.

      A Letter is an investor's statement in writing to the Distributor of
his or her intention to purchase a specified value of Class A, Class B and
(effective March 18, 2005) Class C shares of the Fund and other Oppenheimer
funds during a 13-month period (the "Letter period"). At the investor's
request, this may include purchases made up to 90 days prior to the date of
the Letter. The Letter states the investor's intention to make the aggregate
amount of purchases of shares which, 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 capital gains
distributions and purchases made at net asset value (i.e. without a sales
charge) do not count toward satisfying the amount of the Letter.

      Each purchase of Class A shares under the Letter will be made at the
offering price (including the sales charge) that would apply to a single
lump-sum purchase of shares in the amount intended to be purchased under the
Letter.


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

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

      The  Transfer  Agent  will not hold  shares in escrow for  purchases  of
shares of the Fund and other Oppenheimer funds by  OppenheimerFunds  prototype
401(k) plans under a Letter.  If the intended  purchase  amount under a Letter
entered into by an OppenheimerFunds  prototype 401(k) plan is not purchased by
the plan by the end of the  Letter  period,  there  will be no  adjustment  of
concessions paid to the  broker-dealer or financial  institution of record for
accounts held in the name of that plan.

      In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter when placing any purchase
orders for the investor during the Letter period. All of such purchases must
be made through the Distributor.

      |X|   Terms of Escrow That Apply to Letters of Intent.

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

      2. If the total minimum investment specified under the Letter is
completed within the 13-month Letter period, the escrowed shares will be
promptly released to the investor.

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

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

5.    The shares eligible for purchase under the Letter (or the holding of
which may be counted toward completion of a Letter) include:
(a)   Class A shares sold with a front-end sales charge or subject to a Class
            A contingent deferred sales charge,
(b)   Class B 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 charges or at reduced sales charge rates, as
described in an Appendix 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 $1 million in assets invested in
applicable investments (other than assets invested in money market funds),
then the retirement plan may purchase only Class C shares of the Oppenheimer
funds.  If on the date the plan sponsor signed the Merrill Lynch record
keeping service agreement the plan has $1 million or more in assets but less
than $5 million in assets invested in applicable investments (other than
assets invested in money market funds), then the retirement plan may purchase
only Class N shares of the Oppenheimer funds.  If on the date the plan
sponsor signed the Merrill Lynch record keeping service agreement the plan
has $5 million or more in assets invested in applicable investments (other
than assets invested in money market funds), then the retirement plan may
purchase only Class A shares of the Oppenheimer funds.

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

Cancellation of Purchase Orders. Cancellation of purchase orders for the
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 purchase order of $100,000 or more for
Class B shares or a purchase order of $1 million or more to purchase Class C
shares on behalf of a single investor (not including dealer "street name" or
omnibus accounts).

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

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

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

      The sales concession and the advance of the service fee, as described
in the Prospectus, will not be paid to dealers of record on sales of Class N
shares on:
         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),
         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
         on purchases of Class N shares by an OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k) plan made with the redemption
            proceeds of Class A shares of one or more Oppenheimer funds.

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

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

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

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

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

      Listed below are certain cases in which the Fund has elected, in its
discretion, not to assess the Fund Account Fees.  These exceptions are
subject to change:
o     A fund account whose shares were acquired after September 30th of the
            prior year;
o     A fund account that has a balance below $500 due to the automatic
            conversion of shares from Class B to Class A shares. However,
            once all Class B shares held in the account have been converted
            to Class A shares the new account balance may become subject to
            the Minimum Balance Fee;
o     Accounts of shareholders who elect to access their account documents
            electronically via eDoc Direct;
o     A fund account that has only certificated shares and, has a balance
            below $500 and is being escheated;
o     Accounts of shareholders that are held by broker-dealers under the NSCC
            Fund/SERV system;
o     Accounts held under the Oppenheimer Legacy Program and/or holding
            certain Oppenheimer Variable Account Funds;
o     Omnibus accounts holding shares pursuant to the Pinnacle, Ascender,
            Custom Plus, Recordkeeper Pro and Pension Alliance Retirement
            Plan programs; and
o     A fund account that falls below the $500 minimum solely due to market
            fluctuations within the 12-month period preceding the date the
            fee is deducted.

      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.

      The Fund reserves the authority to modify Fund Account Fees
in its discretion.

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

      Dealers other than Exchange members may conduct trading in certain
securities on days on which the Exchange is closed (including weekends and
holidays) or after 4:00 P.M. on a regular business day. Because the Fund's
net asset values will not be calculated on those days, the Fund's net asset
values per share may be significantly affected on such days when shareholders
may not purchase or redeem shares. 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(R), as applicable, on that day, or
(2)   if last sale information is not available on a valuation date, they are
               valued at the last reported sale price preceding the valuation
               date if it is within the spread of the closing "bid" and
               "asked" prices on the valuation date or, if not,  at the
               closing "bid" price on the valuation date.
o     Equity securities traded on a foreign securities exchange generally are
valued in one of the following ways:
(1)   at the last sale price available to the pricing service approved by the
               Board of Trustees, or
(2)   at the last sale price obtained by the Manager from the report of the
               principal exchange on which the security is traded at its last
               trading session on or immediately before the valuation date, or
(3)   at the mean between the "bid" and "asked" prices obtained from the
               principal exchange on which the security is traded or, on the
               basis of reasonable inquiry, from two market makers in the
               security.
o     Long-term debt securities having a remaining maturity in excess of 60
days are valued based on the mean between the "bid" and "asked" prices
determined by a portfolio pricing service approved by 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(R), as applicable, as
determined by a pricing service approved by the Board of Trustees or by the
Manager. If there were no sales that day, they shall be valued at the last
sale price on the preceding trading day if it is within the spread of the
closing "bid" and "asked" prices on the principal exchange or on Nasdaq(R)on
the valuation date. If not, the value shall be the closing bid price on the
principal exchange or on Nasdaq(R)on the valuation date. If the put, call or
future is not traded on an exchange or on Nasdaq(R), it shall be valued by the
mean between "bid" and "asked" prices obtained by the Manager from two active
market makers. In certain cases that may be at the "bid" price if no "asked"
price is available.

      When 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 and Class N shares. The Fund may amend, suspend or cease
offering this reinvestment privilege at any time as to shares redeemed after
the date of such amendment, suspension or cessation.

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

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

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

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


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

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

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

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

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

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

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

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.

      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.

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

How to Exchange Shares

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

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

   The following funds only offer Class A shares:
   Centennial California Tax Exempt Trust    Centennial New York Tax Exempt
                                             Trust

   Centennial Government Trust               Centennial Tax Exempt Trust
   Centennial Money Market Trust


   The following funds do not offer Class N shares:
   Limited Term New York Municipal Fund      Oppenheimer New Jersey Municipal Fund
   Oppenheimer AMT-Free Municipals           Oppenheimer Principal Protected Main
                                             Street Fund II
   Oppenheimer AMT-Free New York             Oppenheimer Pennsylvania Municipal Fund
   Municipals
   Oppenheimer California Municipal Fund     Oppenheimer Rochester National
                                             Municipals
   Oppenheimer International Value Fund      Oppenheimer Senior Floating Rate Fund
   Oppenheimer Limited Term California       Rochester Fund Municipals
   Fund
   Oppenheimer Limited Term Municipal
   Fund
   Oppenheimer Money Market Fund, Inc.

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


o     Oppenheimer Money Market Fund, Inc. only offers Class A and Class Y
      shares.
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 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 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.
o     Shares of Oppenheimer Principal Protected Main Street Fund may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund until after the expiration of the warranty period
      (8/5/2010).
o     Shares of Oppenheimer Principal Protected Main Street Fund II may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund II until after the expiration of the warranty period
      (2/4/2011).
o     Shares of Oppenheimer Principal Protected Main Street Fund III may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund III until after the expiration of the warranty period
      (12/6/2011).

      The 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 except for the funds listed in the next
item immediately below, 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 B shares of Limited-Term Government Fund, Limited
Term Municipal Fund, Limited Term New York Municipal Fund, Oppenheimer Senior
Floating Rate Fund and Cash Reserves that were initially purchased as shares
of Oppenheimer Capital Preservation Fund, the Class B contingent deferred
sales charge is imposed on Class B shares acquired by exchange if they are
redeemed within 5 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.

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

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

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 28% of ordinary
income dividends, capital gains distributions and the proceeds of the
redemption of shares, paid to any shareholder (1) who has failed to provide a
correct taxpayer identification number or to properly certify that number
-------
when required, (2) who is subject to backup withholding for failure to report
the receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that the shareholder is not subject to backup withholding
or is an "exempt recipient" (such as a corporation). Any tax withheld by the
Fund is remitted by the Fund to the U.S. Treasury and all income and any tax
withheld is identified in reports mailed to shareholders in January of each
year with a copy sent to the IRS.


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

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

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


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

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


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

Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the
same class of any of the other Oppenheimer funds 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 serves as the Independent Registered Public
Accounting Firm for the Fund. KPMG LLP audits the Fund's financial statements
and performs other related audit services. KPMG LLP  also acts as the
independent registered public accounting firm for certain other funds advised
by the Manager and its affiliates. Audit and non-audit services provided by
KPMG LLP to the Fund must be pre-approved by the Audit Committee.

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

--------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER QUEST FOR VALUE FUNDS:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Small Cap Value Fund, (one of the portfolios constituting the
Oppenheimer Quest For Value Funds) including the statement of investments, as of
October 31, 2004, 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 five 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.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 2004, 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, 2004, 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 five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.


KPMG LLP

Denver, Colorado
December 16, 2004





STATEMENT OF INVESTMENTS  October 31, 2004
--------------------------------------------------------------------------------

                                                                           VALUE
                                                          SHARES      SEE NOTE 1
--------------------------------------------------------------------------------
COMMON STOCKS--96.2%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--13.5%
--------------------------------------------------------------------------------
DISTRIBUTORS--1.0%
Source Information
Management Co.
(The) 1                                                  900,000   $   9,072,000
--------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--6.6%
AFC Enterprises, Inc. 1                                  876,000      18,991,680
--------------------------------------------------------------------------------
Dave & Buster's, Inc. 1                                  391,200       6,943,800
--------------------------------------------------------------------------------
Intrawest Corp.                                          299,600       5,827,220
--------------------------------------------------------------------------------
Lodgian, Inc. 1                                          900,000       9,270,000
--------------------------------------------------------------------------------
Scientific Games
Corp., Cl. A 1                                           875,000      18,532,500
                                                                   -------------
                                                                      59,565,200

--------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.8%
Celebrate
Express, Inc. 1                                           50,000         849,500
--------------------------------------------------------------------------------
ValueVision Media,
Inc., Cl. A 1                                            600,000       6,264,000
                                                                   -------------
                                                                       7,113,500

--------------------------------------------------------------------------------
MEDIA--2.7%
Carmike Cinemas,
Inc.                                                      25,000         895,000
--------------------------------------------------------------------------------
DreamWorks
Animation SKG, Inc. 1                                     23,800         929,390
--------------------------------------------------------------------------------
UnitedGlobalCom,
Inc., Cl. A 1                                          3,000,000      22,440,000
                                                                   -------------
                                                                      24,264,390

--------------------------------------------------------------------------------
MULTILINE RETAIL--0.7%
Dollar Tree
Stores, Inc. 1                                           200,000       5,780,000
--------------------------------------------------------------------------------
SPECIALTY RETAIL--1.5%
Advance Auto
Parts, Inc. 1                                            150,000       5,868,000
--------------------------------------------------------------------------------
Build-A-Bear-
Workshop, Inc. 1                                          37,100         905,611
--------------------------------------------------------------------------------
Pacific Sunwear of
California, Inc. 1                                       300,000       7,032,000
                                                                   -------------
                                                                      13,805,611

--------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.2%
Oxford Industries,
Inc.                                                      50,000       1,854,500
--------------------------------------------------------------------------------
CONSUMER STAPLES--3.5%
--------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.1%
Pantry, Inc. (The) 1                                     611,400      14,056,086
--------------------------------------------------------------------------------
Performance Food
Group Co. 1                                              200,000       4,652,000
                                                                   -------------
                                                                      18,708,086

--------------------------------------------------------------------------------
FOOD PRODUCTS--1.4%
Gold Kist
Holdings, Inc. 1                                         600,000       6,600,000
--------------------------------------------------------------------------------
J.M. Smucker Co.
(The)                                                    150,000       6,675,000
                                                                   -------------
                                                                      13,275,000

--------------------------------------------------------------------------------
ENERGY--4.4%
--------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.4%
Pride International,
Inc. 1                                                   700,000      12,936,000
--------------------------------------------------------------------------------
OIL & GAS--3.0%
Energy Partners Ltd. 1                                   800,000      14,048,000
--------------------------------------------------------------------------------
Frontier Oil Corp.                                       300,000       7,374,000
--------------------------------------------------------------------------------
KCS Energy, Inc. 1                                       400,000       5,444,000
                                                                   -------------
                                                                      26,866,000

--------------------------------------------------------------------------------
FINANCIALS--21.9%
--------------------------------------------------------------------------------
CAPITAL MARKETS--0.5%
National Financial
Partners Corp.                                           145,900       4,484,966
--------------------------------------------------------------------------------
COMMERCIAL BANKS--3.7%
BankAtlantic
Bancorp, Inc.                                            485,000       8,482,650
--------------------------------------------------------------------------------
Cullen/Frost
Bankers, Inc.                                            180,000       8,820,000
--------------------------------------------------------------------------------
Independence
Community
Bank Corp.                                               127,622       4,802,416
--------------------------------------------------------------------------------
Sterling Financial
Corp., Western US                                        300,000      11,271,000
                                                                   -------------
                                                                      33,376,066


                      19 | OPPENHEIMER SMALL CAP VALUE FUND

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

                                                                           VALUE
                                                          SHARES      SEE NOTE 1
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--5.7%
Affiliated Managers
Group, Inc. 1                                            265,600   $  14,831,104
--------------------------------------------------------------------------------
Apollo Investment
Corp.                                                    700,000       9,520,000
--------------------------------------------------------------------------------
Assured Guaranty
Ltd.                                                     547,000       8,981,740
--------------------------------------------------------------------------------
Gabelli Asset
Management, Inc.                                         200,000       9,220,000
--------------------------------------------------------------------------------
Knight Trading
Group, Inc. 1                                            833,500       8,660,065
                                                                   -------------
                                                                      51,212,909

--------------------------------------------------------------------------------
INSURANCE--3.0%
Platinum
Underwriters
Holdings Ltd.                                            500,000      14,625,000
--------------------------------------------------------------------------------
Protective Life Corp.                                    312,700      12,289,110
                                                                   -------------
                                                                      26,914,110

--------------------------------------------------------------------------------
REAL ESTATE--5.6%
BioMed Realty
Trust, Inc.                                              250,000       4,545,000
--------------------------------------------------------------------------------
Kite Realty
Group Trust                                              140,000       1,848,000
--------------------------------------------------------------------------------
New Century
Financial Corp.                                          225,000      12,408,750
--------------------------------------------------------------------------------
Newcastle
Investment Corp.                                         375,000      11,478,750
--------------------------------------------------------------------------------
NorthStar Realty
Finance Corp. 1,2                                      1,689,000      14,829,420
--------------------------------------------------------------------------------
U-Store-It Trust 1                                       325,000       5,430,750
                                                                   -------------
                                                                      50,540,670

--------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--3.4%
Bank Mutual Corp.                                        700,000       8,596,000
--------------------------------------------------------------------------------
Franklin Bank Corp. 1                                    550,000       9,075,000
--------------------------------------------------------------------------------
NewAlliance
Bancshares, Inc.                                         925,000      12,839,000
                                                                   -------------
                                                                      30,510,000

--------------------------------------------------------------------------------
HEALTH CARE--4.8%
--------------------------------------------------------------------------------
BIOTECHNOLOGY--0.6%
MedImmune, Inc. 1                                        175,000       4,973,500

--------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.5%
Bio-Rad Laboratories,
Inc., Cl. A 1                                             80,000       4,161,600
--------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--2.8%
Capital Senior
Living Corp. 1                                           800,000       4,240,000
--------------------------------------------------------------------------------
Manor Care, Inc.                                         375,000      12,277,500
--------------------------------------------------------------------------------
PacifiCare Health
Systems, Inc. 1                                          250,000       8,905,000
                                                                   -------------
                                                                      25,422,500

--------------------------------------------------------------------------------
PHARMACEUTICALS--0.9%
Watson
Pharmaceuticals,
Inc. 1                                                   300,000       8,409,000
--------------------------------------------------------------------------------
INDUSTRIALS--16.5%
--------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.4%
BE Aerospace, Inc. 1                                     183,900       1,577,862
--------------------------------------------------------------------------------
Orbital Sciences
Corp. 1                                                1,066,200      11,035,170
                                                                   -------------
                                                                      12,613,032

--------------------------------------------------------------------------------
BUILDING PRODUCTS--1.1%
Jacuzzi Brands, Inc. 1                                 1,100,000       9,515,000
--------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.2%
Huron Consulting
Group, Inc. 1                                             80,200       1,563,900
--------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--2.5%
Perini Corp. 1                                           375,000       5,925,000
--------------------------------------------------------------------------------
Quanta Services,
Inc. 1                                                 1,200,000       8,064,000
--------------------------------------------------------------------------------
URS Corp. 1                                              325,000       8,970,000
                                                                   -------------
                                                                      22,959,000

--------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.6%
AMETEK, Inc.                                             425,000      13,991,000
--------------------------------------------------------------------------------
MACHINERY--6.3%
Actuant Corp., Cl. A 1                                   110,000       4,363,700
--------------------------------------------------------------------------------
Albany International
Corp., Cl. A                                             225,000       6,754,500
--------------------------------------------------------------------------------
Chicago Bridge
& Iron Co. NV                                            300,000       9,285,000
--------------------------------------------------------------------------------
Harsco Corp.                                             185,000       8,963,250
--------------------------------------------------------------------------------
Idex Corp.                                               223,200       8,236,080


                      20 | OPPENHEIMER SMALL CAP VALUE FUND

                                                                           VALUE
                                                          SHARES      SEE NOTE 1
--------------------------------------------------------------------------------
MACHINERY Continued
Kennametal, Inc.                                         200,000   $   9,306,000
--------------------------------------------------------------------------------
Oshkosh Truck Corp.                                      175,000      10,307,500
                                                                   -------------
                                                                      57,216,030

--------------------------------------------------------------------------------
ROAD & RAIL--2.0%
Old Dominion
Freight Line, Inc. 1                                     300,000       8,407,500
--------------------------------------------------------------------------------
Pacer International,
Inc. 1                                                   550,000       9,762,500
                                                                   -------------
                                                                      18,170,000

--------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--1.4%
Hughes Supply, Inc.                                      450,000      12,784,500
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--13.9%
--------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.3%
Carrier Access Corp. 1                                   700,000       6,188,000
--------------------------------------------------------------------------------
Packeteer, Inc. 1                                        450,000       5,553,000
                                                                   -------------
                                                                      11,741,000

--------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.1%
Amphenol Corp.,
Cl. A 1                                                  270,000       9,269,100
--------------------------------------------------------------------------------
Lipman Electronic
Engineering Ltd.                                         250,000       5,955,000
--------------------------------------------------------------------------------
Richardson
Electronics Ltd.                                         390,000       3,237,000
                                                                   -------------
                                                                      18,461,100

--------------------------------------------------------------------------------
IT SERVICES--3.9%
Ceridian Corp. 1                                         375,000       6,468,750
--------------------------------------------------------------------------------
CSG Systems
International, Inc. 1                                    800,000      13,448,000
--------------------------------------------------------------------------------
Ness Technologies,
Inc. 1                                                   501,000       6,623,220
--------------------------------------------------------------------------------
Titan Corp. (The) 1                                      600,000       8,904,000
                                                                   -------------
                                                                      35,443,970

--------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.0%
National
Semiconductor
Corp. 1                                                  550,000       9,185,000

--------------------------------------------------------------------------------
SOFTWARE--5.6%
Activision, Inc. 1                                       850,000      12,308,000
--------------------------------------------------------------------------------
Compuware Corp. 1                                        800,000       4,632,000
--------------------------------------------------------------------------------
Novell, Inc. 1                                           600,000       4,314,000
--------------------------------------------------------------------------------
Take-Two Interactive
Software, Inc. 1                                         878,600      28,958,656
                                                                   -------------
                                                                      50,212,656

--------------------------------------------------------------------------------
MATERIALS--8.0%
--------------------------------------------------------------------------------
CHEMICALS--2.7%
Airgas, Inc.                                             400,000       9,840,000
--------------------------------------------------------------------------------
FMC Corp. 1                                              150,000       6,577,500
--------------------------------------------------------------------------------
Millennium
Chemicals, Inc. 1                                        300,000       6,444,000
--------------------------------------------------------------------------------
Westlake Chemical
Corp. 1                                                   50,000       1,153,500
                                                                   -------------
                                                                      24,015,000

--------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.7%
Smurfit-Stone
Container Corp. 1                                        375,000       6,510,000
--------------------------------------------------------------------------------
METALS & MINING--3.3%
Century
Aluminum Co. 1                                           492,000      11,384,880
--------------------------------------------------------------------------------
International Steel
Group, Inc. 1                                             59,600       2,201,028
--------------------------------------------------------------------------------
Oregon Steel
Mills, Inc. 1                                          1,120,300      16,266,756
                                                                   -------------
                                                                      29,852,664

--------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--1.3%
Bowater, Inc.                                            325,000      11,973,000
--------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.8%
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--2.5%
IDT Corp., Cl. B 1                                     1,300,000      17,966,000
--------------------------------------------------------------------------------
PTEK Holdings, Inc. 1                                    500,000       4,980,000
                                                                   -------------
                                                                      22,946,000

--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.3%
SBA Communications
Corp. 1                                                  300,000       2,511,000


                      21 | OPPENHEIMER SMALL CAP VALUE FUND

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

                                                                           VALUE
                                                          SHARES      SEE NOTE 1
--------------------------------------------------------------------------------
UTILITIES--6.9%
--------------------------------------------------------------------------------
ELECTRIC UTILITIES--4.0%
AES Corp. (The) 1                                        800,000   $   8,720,000
--------------------------------------------------------------------------------
CMS Energy Corp. 1                                     1,000,000       9,360,000
--------------------------------------------------------------------------------
NRG Energy, Inc. 1                                       320,000       8,876,800
--------------------------------------------------------------------------------
Reliant Energy, Inc. 1                                   850,000       8,738,000
                                                                   -------------
                                                                      35,694,800

--------------------------------------------------------------------------------
GAS UTILITIES--1.0%
Southern Union Co. 1                                     420,000       9,227,400
--------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--1.9%
Equitable
Resources, Inc.                                          160,000       8,848,000
--------------------------------------------------------------------------------
Questar Corp.                                            175,200       8,409,600
                                                                   -------------
                                                                      17,257,600
                                                                   -------------

Total Common Stocks
(Cost $763,240,111)                                                  867,089,260

                                                      PRINCIPAL           VALUE
                                                         AMOUNT      SEE NOTE 1
--------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--4.0%
--------------------------------------------------------------------------------
Undivided interest of 63.18% in joint
repurchase agreement (Principal Amount/
Value $57,987,000, with a maturity value
of $57,995,553) with Zions Bank/Capital
Markets Group, 1.77%, dated 10/29/04,
to be repurchased at $36,641,404 on
11/1/04, collateralized by U.S. Treasury
Nts., 2.375%, 8/15/06, with a
value of $59,191,443
(Cost $36,636,000)                                 $ 36,636,000   $  36,636,000
--------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $799,876,111)                                       100.2%    903,725,260
--------------------------------------------------------------------------------
LIABILITIES
IN EXCESS OF
OTHER ASSETS                                               (0.2)     (2,103,924)
                                                   -----------------------------
NET ASSETS                                                100.0%  $ 901,621,336
                                                   =============================

FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Non-income producing security.

2. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended October 31, 2004.
The aggregate fair value of securities of affiliated companies held by the Fund
as of October 31, 2004 amounts to $14,829,420. Transactions during the period in
which the issuer was an affiliate are as follows:

                                       SHARES                                     SHARES
                                  OCTOBER 31,        GROSS         GROSS     OCTOBER 31,     UNREALIZED    DIVIDEND
                                         2003    ADDITIONS    REDUCTIONS            2004   DEPRECIATION      INCOME
-------------------------------------------------------------------------------------------------------------------
COMMON STOCKS
NorthStar Realty Finance Corp.             --    1,689,000            --       1,689,000      $ 371,580        $ --

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      22 | OPPENHEIMER SMALL CAP VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES  October 31, 2004
--------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
ASSETS
-------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $784,675,111)                                         $ 888,895,840
Affiliated companies (cost $15,201,000)                                               14,829,420
                                                                                   --------------
                                                                                     903,725,260
-------------------------------------------------------------------------------------------------
Cash                                                                                     269,077
-------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold                                                                       6,609,722
Shares of beneficial interest sold                                                     3,437,614
Interest and dividends                                                                   121,309
Other                                                                                     51,365
                                                                                   --------------
Total assets                                                                         914,214,347

-------------------------------------------------------------------------------------------------
LIABILITIES
-------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                                 10,998,972
Shares of beneficial interest redeemed                                                   994,590
Transfer and shareholder servicing agent fees                                            209,643
Distribution and service plan fees                                                       184,122
Shareholder communications                                                               115,594
Trustees' compensation                                                                    49,984
Other                                                                                     40,106
                                                                                   --------------
Total liabilities                                                                     12,593,011

-------------------------------------------------------------------------------------------------
NET ASSETS                                                                         $ 901,621,336
                                                                                   ==============

-------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
-------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest                                         $     307,809
-------------------------------------------------------------------------------------------------
Additional paid-in capital                                                           695,192,607
-------------------------------------------------------------------------------------------------
Accumulated net investment loss                                                          (48,262)
-------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions       102,320,033
-------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments                                           103,849,149
                                                                                   --------------
NET ASSETS                                                                         $ 901,621,336
                                                                                   ==============


                      23 | 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 $543,999,330
and 18,083,646 shares of beneficial interest outstanding)                               $   30.08
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price)                                                                         $   31.92
-------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $198,971,123
and 7,103,289 shares of beneficial interest outstanding)                                $   28.01
-------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $122,329,169
and 4,373,831 shares of beneficial interest outstanding)                                $   27.97
-------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $36,321,714
and 1,220,089 shares of beneficial interest outstanding)                                $   29.77

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      24 | OPPENHEIMER SMALL CAP VALUE FUND

STATEMENT OF OPERATIONS  For the Year Ended October 31, 2004
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
INVESTMENT INCOME
--------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $24,509)           $   5,216,533
--------------------------------------------------------------------------------
Interest                                                                312,149
                                                                  -------------
Total investment income                                               5,528,682

--------------------------------------------------------------------------------
EXPENSES
--------------------------------------------------------------------------------
Management fees                                                       5,805,595
--------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                               1,072,829
Class B                                                               1,901,118
Class C                                                                 963,669
Class N                                                                 109,390
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                               1,187,370
Class B                                                                 612,972
Class C                                                                 308,881
Class N                                                                  85,156
--------------------------------------------------------------------------------
Shareholder communications:
Class A                                                                 100,696
Class B                                                                  90,652
Class C                                                                  31,278
Class N                                                                   2,579
--------------------------------------------------------------------------------
Trustees' compensation                                                   46,313
--------------------------------------------------------------------------------
Custodian fees and expenses                                              21,207
--------------------------------------------------------------------------------
Other                                                                   147,436
                                                                  --------------
Total expenses                                                       12,487,141
Less reduction to custodian expenses                                     (7,478)
Less payments and waivers of expenses                                    (8,455)
                                                                  --------------
Net expenses                                                         12,471,208

--------------------------------------------------------------------------------
NET INVESTMENT LOSS                                                  (6,942,526)

--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
--------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments                                                         124,451,145
Foreign currency transactions                                           (43,653)
Net increase from payment by affiliate                                   21,870
                                                                  --------------
Net realized gain                                                   124,429,362
--------------------------------------------------------------------------------
Net change in unrealized appreciation on investments                 14,520,760

--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS              $ 132,007,596
                                                                  ==============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      25 | OPPENHEIMER SMALL CAP VALUE FUND

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

YEAR ENDED OCTOBER 31,                                                  2004             2003
----------------------------------------------------------------------------------------------
OPERATIONS
----------------------------------------------------------------------------------------------
Net investment loss                                           $   (6,942,526)  $   (1,946,080)
----------------------------------------------------------------------------------------------
Net realized gain                                                124,429,362       56,185,756
----------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)              14,520,760       90,036,665
                                                              --------------------------------
Net increase in net assets resulting from operations             132,007,596      144,276,341

----------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
----------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A                                                          (16,996,526)              --
Class B                                                           (9,005,226)              --
Class C                                                           (3,905,268)              --
Class N                                                             (673,503)              --

----------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A                                                          152,733,067       27,564,749
Class B                                                            2,246,042       (1,650,967)
Class C                                                           38,042,967        7,875,626
Class N                                                           22,066,171        4,208,196

----------------------------------------------------------------------------------------------
NET ASSETS
----------------------------------------------------------------------------------------------
Total increase                                                   316,515,320      182,273,945
----------------------------------------------------------------------------------------------
Beginning of period                                              585,106,016      402,832,071
                                                              --------------------------------
End of period (including accumulated net investment loss of
$48,262 and $32,137, respectively)                            $  901,621,336   $  585,106,016
                                                              ==============   ===============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      26 | OPPENHEIMER SMALL CAP VALUE FUND

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

CLASS A    YEAR ENDED OCTOBER 31,                          2004            2003            2002            2001             2000
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     26.11     $     19.18     $     19.53     $     21.26      $     16.82
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.17) 1         (.04)           (.19)           (.23)            (.16)
Net realized and unrealized gain (loss)                    5.42            6.97            (.09)           (.47)            4.60
                                                    ------------------------------------------------------------------------------
Total from investment operations                           5.25            6.93            (.28)           (.70)            4.44
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.28)             --            (.07)          (1.03)              -- 2
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     30.08     $     26.11     $     19.18     $     19.53      $     21.26
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                        20.90%          36.13%          (1.45)%         (3.02)%          26.40%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   543,999     $   330,215     $   222,029     $   172,395      $   157,759
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   436,617     $   245,319     $   231,657     $   163,007      $   147,952
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                       (0.61)%         (0.12)%         (0.69)%         (1.06)%          (0.95)%
Total expenses                                             1.35%           1.59%           1.68%           1.86%            1.90%
Expenses after payments and waivers and
reduction to custodian expenses                             N/A 5          1.56%           1.66%            N/A 5,6          N/A 5
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     163%            163%            151%            162%             166%

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

2. Less than $0.005 per share.

3. 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      27 | OPPENHEIMER SMALL CAP VALUE FUND

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

CLASS B   YEAR ENDED OCTOBER 31,                           2004            2003            2002            2001             2000
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     24.59     $     18.20     $     18.65     $     20.47      $     16.28
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                       (.37) 1          (.17)           (.18)           (.23)            (.33)
Net realized and unrealized gain (loss)                    5.07            6.56            (.20)           (.56)            4.52
                                                    ------------------------------------------------------------------------------
Total from investment operations                           4.70            6.39            (.38)           (.79)            4.19
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.28)             --            (.07)          (1.03)              -- 2
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     28.01     $     24.59     $     18.20     $     18.65      $     20.47
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                        19.91%          35.11%          (2.06)%         (3.60)%          25.74%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   198,971     $   171,896     $   129,885     $    95,418      $    83,859
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   190,251     $   137,734     $   134,304     $    88,235      $    79,526
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                       (1.43)%         (0.85)%         (1.34)%         (1.65)%          (1.48)%
Total expenses                                             2.18%           2.42%           2.34%           2.45%            2.44%
Expenses after payments and waivers and
reduction to custodian expenses                             N/A 5          2.29%           2.32%            N/A 5,6          N/A 5
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     163%            163%            151%            162%             166%

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

2. Less than $0.005 per share.

3. 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      28 | OPPENHEIMER SMALL CAP VALUE FUND

CLASS C     YEAR ENDED OCTOBER 31,                         2004            2003            2002            2001             2000
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     24.55     $     18.17     $     18.62     $     20.44      $     16.25
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.37) 1         (.13)           (.10)           (.19)            (.33)
Net realized and unrealized gain (loss)                    5.07            6.51            (.28)           (.60)            4.52
                                                    ------------------------------------------------------------------------------
Total from investment operations                           4.70            6.38            (.38)           (.79)            4.19
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.28)             --            (.07)          (1.03)              -- 2
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     27.97     $     24.55     $     18.17     $     18.62      $     20.44
                                                    ==============================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                        19.95%          35.11%          (2.06)%         (3.61)%          25.79%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   122,329     $    71,779     $    46,360     $    26,604      $    22,173
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $    96,555     $    53,649     $    45,455     $    24,134      $    20,521
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                       (1.42)%         (0.85)%         (1.33)%         (1.64)%          (1.49)%
Total expenses                                             2.16%           2.40%           2.33%           2.45%            2.44%
Expenses after payments and waivers and
reduction to custodian expenses                             N/A 5          2.30%           2.31%            N/A 5,6          N/A 5
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     163%            163%            151%            162%             166%

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

2. Less than $0.005 per share.

3. 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      29 | OPPENHEIMER SMALL CAP VALUE FUND

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

CLASS N     YEAR ENDED OCTOBER 31,                      2004           2003           2002         2001 1
-------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
-------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $    25.98     $    19.13     $    19.51     $    19.58
-------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                     (.26) 2        (.11)          (.27)          (.04)
Net realized and unrealized gain (loss)                 5.33           6.96           (.04)          (.03)
                                                  -----------------------------------------------------------
Total from investment operations                        5.07           6.85           (.31)          (.07)
-------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                   (1.28)            --           (.07)            --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $    29.77     $    25.98     $    19.13     $    19.51
                                                  ===========================================================

-------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                     20.29%         35.81%         (1.61)%        (0.36)%
-------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $   36,322     $   11,216     $    4,558     $      409
-------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $   21,951     $    6,722     $    2,882     $      106
-------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                    (0.93)%        (0.36)%        (0.78)%        (1.14)%
Total expenses                                          1.70%          2.01%          1.82%          2.01%
Expenses after payments and waivers and
reduction to custodian expenses                         1.66%          1.80%          1.80%           N/A 5,6
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                  163%           163%           151%           162%

1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.

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

3. 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      30 | 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 with respect to the Fund in
general and exclusive voting rights on matters that affect that class alone.
Earnings, net assets and net asset value per share may differ due to each class
having its own expenses, such as transfer and shareholder servicing agent fees
and shareholder communications, directly attributable to that class. Class A, B,
C 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 Fund assesses a 2% fee on the proceeds of fund shares that are redeemed
(either by selling or exchanging to another Oppenheimer fund) within 30 days of
their purchase. The fee, which is retained by the Fund, is accounted for as an
addition to paid-in capital.

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

--------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities 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. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of 60 days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of Trustees. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially affected by
what the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued. Fair value is determined in good faith using consistently applied
procedures under the supervision of the Board of Trustees. Short-term "money
market type" debt securities with


                      31 | OPPENHEIMER SMALL CAP VALUE FUND

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

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

remaining maturities of sixty days or less are valued at amortized cost (which
approximates market value).

--------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars as of the close of The New York Stock Exchange (the
Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for
business. Amounts related to the purchase and sale of foreign securities and
investment income are translated at the rates of exchange prevailing on the
respective dates of such transactions. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.

      Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.

      The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.

--------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. 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. 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 on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.

--------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments


                      32 | OPPENHEIMER SMALL CAP VALUE FUND

not offset by capital loss carry forwards, if any, to shareholders, therefore,
no federal income or excise tax provision is required.

The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.

                                                              NET UNREALIZED
                                                                APPRECIATION
                                                            BASED ON COST OF
                                                              SECURITIES AND
    UNDISTRIBUTED    UNDISTRIBUTED          ACCUMULATED    OTHER INVESTMENTS
    NET INVESTMENT       LONG-TERM                 LOSS   FOR FEDERAL INCOME
    INCOME                    GAIN     CARRYFORWARD 1,2         TAX PURPOSES
    ------------------------------------------------------------------------
    $ 66,322,978      $ 36,175,708                 $ --        $ 103,670,496

1. During the fiscal year ended October 31, 2004, the Fund did not utilize any
capital loss carryforward.

2. During the fiscal year ended October 31, 2003, the Fund utilized $18,203,203
of capital loss carryforward to offset capital gains realized in that fiscal
year.

Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for October 31, 2004. Net assets of the
Fund were unaffected by the reclassifications.

                                                         REDUCTION TO
                                     REDUCTION TO     ACCUMULATED NET
               INCREASE TO        ACCUMULATED NET       REALIZED GAIN
               PAID-IN CAPITAL    INVESTMENT LOSS    ON INVESTMENTS 3
               ------------------------------------------------------
               $ 14,197,981           $ 6,926,401        $ 21,124,382

3. $14,197,981, including $5,011,011 of long-term capital gain, was distributed
in connection with Fund share redemptions.

The tax character of distributions paid during the years ended October 31, 2004
and October 31, 2003 was as follows:

                                                 YEAR ENDED          YEAR ENDED
                                           OCTOBER 31, 2004    OCTOBER 31, 2003
               ----------------------------------------------------------------
               Distributions paid from:
               Ordinary income             $      8,874,298            $     --
               Long-term capital gain            21,706,225                  --
                                           ------------------------------------
               Total                       $     30,580,523            $     --
                                           ====================================

The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of October 31, 2004 are noted below. The primary
difference between


                      33 | OPPENHEIMER SMALL CAP VALUE FUND

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

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

book and tax appreciation or depreciation of securities and other investments,
if applicable, is attributable to the tax deferral of losses or tax realization
of financial statement unrealized gain or loss.

               Federal tax cost of securities          $  800,054,764
                                                       ===============

               Gross unrealized appreciation           $  118,737,789
               Gross unrealized depreciation              (15,067,293)
                                                       ---------------
               Net unrealized appreciation             $  103,670,496
                                                       ===============

--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended October
31, 2004, the Fund's projected benefit obligations were increased by $11,181 and
payments of $745 were made to retired trustees, resulting in an accumulated
liability of $42,574 as of October 31, 2004.

      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 the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the Plan.

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.

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

--------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. The Fund pays interest to its custodian on
such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The
Reduction to Custodian Expenses line item, if applicable, represents earnings on
cash balances maintained by the


                      34 | OPPENHEIMER SMALL CAP VALUE FUND

Fund during the period. Such interest expense and other custodian fees may be
paid with these earnings.

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

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

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

The Fund has authorized an unlimited number of $0.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:

                             YEAR ENDED OCTOBER 31, 2004      YEAR ENDED OCTOBER 31, 2003
                                SHARES            AMOUNT          SHARES           AMOUNT
------------------------------------------------------------------------------------------
CLASS A
Sold                         8,776,725    $  247,299,487       5,916,521    $ 125,928,724
Dividends and/or
distributions reinvested       633,321        16,346,018              --               --
Redeemed                    (3,975,589)     (110,912,438) 1   (4,844,173)     (98,363,975)
                            --------------------------------------------------------------
Net increase                 5,434,457    $  152,733,067       1,072,348    $  27,564,749
                            ==============================================================

------------------------------------------------------------------------------------------
CLASS B
Sold                         2,234,686    $   58,583,041       2,100,067    $  42,422,540
Dividends and/or
distributions reinvested       344,832         8,348,406              --               --
Redeemed                    (2,467,247)      (64,682,405) 1   (2,247,539)     (44,073,507)
                            --------------------------------------------------------------
Net increase (decrease)        112,271    $    2,246,042        (147,472)   $  (1,650,967)
                            ==============================================================

------------------------------------------------------------------------------------------
CLASS C
Sold                         2,120,967    $   55,844,893       1,493,876    $  29,360,313
Dividends and/or
distributions reinvested       146,833         3,549,968              --               --
Redeemed                      (817,988)      (21,351,894) 1   (1,121,795)     (21,484,687)
                            --------------------------------------------------------------
Net increase                 1,449,812    $   38,042,967         372,081    $   7,875,626
                            ==============================================================

------------------------------------------------------------------------------------------
CLASS N
Sold                           942,361    $   26,412,337         288,753    $   6,214,235
Dividends and/or
distributions reinvested        24,717           634,506              --               --
Redeemed                      (178,716)       (4,980,672) 1      (95,267)      (2,006,039)
                            --------------------------------------------------------------
Net increase                   788,362    $   22,066,171         193,486    $   4,208,196
                            ==============================================================

1. Net of redemption fees of $7,733, $3,369, $1,710 and $389 for Class A, Class
B, Class C and Class N, respectively.


                      35 | OPPENHEIMER SMALL CAP 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, 2004, were
$1,333,539,394 and $1,185,208,883, respectively.

--------------------------------------------------------------------------------
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 January 1, 2004, the
agreement provides for a fee at an annual rate of 0.80% 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
January 1, 2004 the annual advisory fee was: 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.

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

--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended October 31, 2004, the Fund paid
$2,118,544 to OFS for services to the Fund.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.

--------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. Under the Plan, the Fund pays a service fee to the Distributor of up to
0.25% of the average annual net assets of Class A shares. The Distributor
currently uses all of those fees to pay dealers, brokers, banks and other
financial institutions quarterly for providing personal services and maintenance
of accounts of their customers that hold Class A shares. Under the Plan, the
Fund may also pay an asset-based sales charge to the Distributor. Beginning
January 1, 2003, the Board of Trustees set the annual asset-based sales charge
rate at zero. Fees incurred by the Fund under the Plan are detailed in the
Statement of Operations.

--------------------------------------------------------------------------------
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 compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B and Class C shares and 0.25% per year on Class N shares. The Distributor
also receives a service fee of up to 0.25% per year under each plan. If either
the Class B, Class C or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Trustees and its independent trustees must


                      36 | OPPENHEIMER SMALL CAP VALUE FUND

determine whether the Distributor shall be entitled to payment from the Fund of
all or a portion of the service fee and/or asset-based sales charge in respect
to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at October 31,
2004 for Class B, Class C and Class N shares were $2,005,361, $1,355,190 and
$344,483, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.

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

                                         CLASS A         CLASS B         CLASS C         CLASS N
                         CLASS A      CONTINGENT      CONTINGENT      CONTINGENT      CONTINGENT
                       FRONT-END        DEFERRED        DEFERRED        DEFERRED        DEFERRED
                   SALES CHARGES   SALES CHARGES   SALES CHARGES   SALES CHARGES   SALES CHARGES
                     RETAINED BY     RETAINED BY     RETAINED BY     RETAINED BY     RETAINED BY
YEAR ENDED           DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR
------------------------------------------------------------------------------------------------
October 31, 2004       $ 609,190         $ 2,832       $ 304,373        $ 16,341        $ 10,762

--------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage
commissions for sales that is permitted under its investment advisory agreement,
the Fund's Manager terminated that practice in July 2003. Subsequently, the
Manager paid the Fund $21,870, an amount equivalent to certain of such
commissions incurred in prior years.

      OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class.
During the year ended October 31, 2004, OFS waived $8,455 for Class N shares.
This undertaking may be amended or withdrawn at any time.

--------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS

A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.

      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.


                      37 | OPPENHEIMER SMALL CAP VALUE FUND

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

--------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued

      The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.

      As of October 31, 2004, the Fund had no outstanding foreign currency
contracts.

--------------------------------------------------------------------------------
6. LITIGATION

Six complaints have been filed as putative derivative and class actions against
the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as well
as 51 of the Oppenheimer funds (collectively, the "Funds") including this Fund,
and nine Directors/Trustees of certain of the Funds other than this Fund
(collectively, the "Directors/Trustees"). The complaints allege that the Manager
charged excessive fees for distribution and other costs, improperly used assets
of the Funds in the form of directed brokerage commissions and 12b-1 fees to pay
brokers to promote sales of the Funds, and failed to properly disclose the use
of Fund assets to make those payments in violation of the Investment Company Act
of 1940 and the Investment Advisers Act of 1940. The complaints further allege
that by permitting and/or participating in those actions, the Directors/Trustees
breached their fiduciary duties to Fund shareholders under the Investment
Company Act of 1940 and at common law. By order dated October 27, 2004, these
six actions, and future related actions, were consolidated by the U.S. District
Court for the Southern District of New York into a single consolidated
proceeding in contemplation of the filing of a superseding consolidated and
amended complaint.

      OppenheimerFunds believes that it is premature to render any opinion as to
the likelihood of an outcome unfavorable to them, the Funds or the
Directors/Trustees and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss. However,
OppenheimerFunds, the Funds and the Directors/Trustees believe that the
allegations contained in the complaints are without merit and intend to defend
these lawsuits vigorously.

                                     A-7

                                     A-1
                                  Appendix A

                             RATINGS DEFINITIONS
                             -------------------

Below are summaries of the rating definitions used by the
nationally-recognized rating agencies listed below. Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate.
The summaries below are based upon publicly available information provided by
the rating organizations.

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM RATINGS: BONDS AND PREFERRED STOCK ISSUER RATINGS

Aaa: Bonds and preferred stock rated "Aaa" are judged to be the best quality.
They carry the smallest degree of investment risk.  Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure.  While the various protective elements are likely to change, the
changes that can be expected are most unlikely to impair the fundamentally
strong position of such issues.

Aa: Bonds and preferred stock rated "Aa" are judged to be of high quality by
all standards. Together with the "Aaa" group, they comprise what are
generally known as high-grade bonds.  They are rated lower than the best
bonds because margins of protection may not be as large as with "Aaa"
securities or fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term risk appear
somewhat larger than that of "Aaa" securities.

A: Bonds and preferred stock rated "A" possess many favorable investment
attributes and are to be considered as upper-medium grade obligations.
Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment some
time in the future.

Baa: Bonds and preferred stock rated "Baa" are considered medium-grade
obligations; that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and have speculative characteristics as well.

Ba: Bonds and preferred stock rated "Ba" are judged to have speculative
elements. Their future cannot be considered well-assured.  Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Bonds and preferred stock rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.

Caa: Bonds and preferred stock rated "Caa" are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds and preferred stock rated "Ca" represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C:  Bonds and preferred stock rated "C" are the lowest class of rated bonds
and can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a
ranking in the lower end of that generic rating category. Advanced refunded
issues that are secured by certain assets are identified with a # symbol.

PRIME RATING SYSTEM (SHORT-TERM RATINGS - TAXABLE DEBT)
These ratings are opinions of the ability of issuers to honor senior
financial obligations and contracts. Such obligations generally have an
original maturity not exceeding one year, unless explicitly noted.

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions
may be more pronounced. Variability in earnings and profitability may result
in changes in the level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate liquidity is
maintained.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The
McGraw-Hill Companies, Inc.

LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based in varying degrees, on the following
considerations:
o     Likelihood of payment-capacity and willingness of the obligor to meet
      its financial commitment on an obligation in accordance with the terms
      of the obligation;
o     Nature of and provisions of the obligation; and
o     Protection afforded by, and relative position of, the obligation in the
      event of bankruptcy, reorganization, or other arrangement under the
      laws of bankruptcy and other laws affecting creditors' rights.
   The issue ratings definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority
in bankruptcy, as noted above.

AAA: An obligation  rated "AAA" have the highest rating assigned by Standard &
Poor's.  The  obligor's  capacity  to meet  its  financial  commitment  on the
obligation is extremely strong.

AA: An obligation  rated "AA" differ from the highest rated  obligations  only
in small degree.  The obligor's  capacity to meet its financial  commitment on
the obligation is very strong.

A: An  obligation  rated "A" are  somewhat  more  susceptible  to the  adverse
effects of changes in circumstances  and economic  conditions than obligations
in  higher-rated  categories.  However,  the  obligor's  capacity  to meet its
financial commitment on the obligation is still strong.

BBB:  An  obligation  rated  "BBB"  exhibit  adequate  protection  parameters.
However,  adverse  economic  conditions  or  changing  circumstances  are more
likely to lead to a weakened  capacity  of the  obligor to meet its  financial
commitment on the obligation.

BB, B, CCC, CC, and C
An obligation rated `BB', `B', `CCC', `CC', and `C' are regarded as having
significant speculative characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: An obligation  rated "BB" are less  vulnerable  to  nonpayment  than other
speculative  issues.   However,  they  face  major  ongoing  uncertainties  or
exposure to adverse business,  financial,  or economic  conditions which could
lead to the obligor's  inadequate capacity to meet its financial commitment on
the obligation.

B: An obligation  rated "B" are more vulnerable to nonpayment than obligations
rated "BB",  but the obligor  currently has the capacity to meet its financial
commitment  on  the  obligation.  Adverse  business,  financial,  or  economic
conditions  will likely impair the obligor's  capacity or  willingness to meet
its financial commitment on the obligation.

CCC: An obligation  rated "CCC" are currently  vulnerable to  nonpayment,  and
are dependent upon favorable business,  financial, and economic conditions for
the obligor to meet its financial  commitment on the obligation.  In the event
of adverse business,  financial,  or economic  conditions,  the obligor is not
likely  to  have  the  capacity  to  meet  its  financial  commitment  on  the
obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

C:  Subordinated  debt or preferred stock  obligations rated "C" are currently
highly  vulnerable  to  nonpayment.  The "C"  rating  may be  used to  cover a
situation where a bankruptcy  petition has been filed or similar action taken,
but  payments  on this  obligation  are  being  continued.  A "C" also will be
assigned to a preferred  stock issue in arrears on  dividends  or sinking fund
payments, but that is currently paying.

D: An obligation rated "D" are in payment default.  The "D" rating category is
used when payments on an  obligation  are not made on the date due even if the
applicable  grace period has not expired,  unless  Standard & Poor's  believes
that such payments will be made during such grace period.  The "D" rating also
will be used  upon the  filing of a  bankruptcy  petition  or the  taking of a
similar action if payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating
categories.

c: The `c' subscript is used to provide additional information to investors
that the bank may terminate its obligation to purchase tendered bonds if the
long-term credit rating of the issuer is below an investment-grade level
and/or the issuer's bonds are deemed taxable.

p: The letter `p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the debt
being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of or the risk
of default upon failure of such completion. The investor should exercise his
own judgment with respect to such likelihood and risk.

Continuance of the ratings is contingent upon Standard & Poor's receipt of an
executed copy of the escrow agreement or closing documentation confirming
investments and cash flows.

r: The `r' highlights derivative, hybrid, and certain other obligations that
Standard & Poor's believes may experience high volatility or high variability
in expected returns as a result of noncredit risks. Examples of such
obligations are securities with principal or interest return indexed to
equities, commodities, or currencies; certain swaps and options; and
interest-only and principal-only mortgage securities. The absence of an `r'
symbol should not be taken as an indication that an obligation will exhibit
no volatility or variability in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present commercial bank regulations issued by the Comptroller of the
Currency, bonds rated in the top four categories (`AAA', `AA', `A', `BBB',
commonly known as investment-grade ratings) generally are regarded as
eligible for bank investment. Also, the laws of various states governing
legal investments impose certain rating or other standards for obligations
eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries in general

SHORT-TERM ISSUE CREDIT RATINGS
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 days-including
commercial paper.

A-1: A short-term obligation rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

B: A short-term obligation rated "B" is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.

C: A short-term obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

NOTES:
A Standard & Poor's note rating reflects the liquidity factors and market
access risks unique to notes. Notes due in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in
making that assessment:
o     Amortization schedule-the larger the final maturity relative to other
      maturities, the more likely it will
      be treated as a note; and
o     Source of payment-the more dependent the issue is on the market for its
      refinancing, the more likely
      it will be treated as a note.

SP-1: Strong capacity to pay principal and interest. An issue with a very
strong capacity to pay debt service is given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.
International credit ratings assess the capacity to meet foreign currency or
local currency commitments. Both "foreign currency" and "local currency"
ratings are internationally comparable assessments. The local currency rating
measures the probability of payment within the relevant sovereign state's
currency and jurisdiction and therefore, unlike the foreign currency rating,
does not take account of the possibility of foreign exchange controls
limiting transfer into foreign currency.

INTERNATIONAL LONG-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings.

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.


B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk.  Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are
based on their prospects for achieving partial or full recovery in a
reorganization or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision, the
following serve as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued
interest. "DD" indicates potential recoveries in the range of 50%-90%, and
"D" the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy
a higher portion of their outstanding obligations, while entities rated "D"
have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the major rating categories.  Plus and minus signs are
not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings. A short-term rating has a time horizon of less than 12 months for
most obligations, or up to three years for U.S. public finance securities,
and thus places greater emphasis on the liquidity necessary to meet financial
commitments in a timely manner.

F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments
is adequate. However, near-term adverse changes could result in a reduction
to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.

D: Default. Denotes actual or imminent payment default.









                                     B-1
                                  Appendix B

                           Industry Classifications

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







                                     C-10
                                  Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers
--------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class
A shares2 of the Oppenheimer funds or the contingent deferred sales charge
that may apply to Class A, Class B or Class C shares may be waived.3  That is
because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors.

Not all waivers apply to all funds. For 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 plans4
         4) Group Retirement Plans5
         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."6 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 by the reinvestment of loan repayments by a
         participant in a Retirement Plan for which the Manager or an
         affiliate acts as sponsor.

|_|   Shares purchased in amounts of less than $5.


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

The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
|_|   To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|   Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account
         Rules and Policies," in the applicable fund Prospectus).
|_|   For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established.
         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact.
4)    Hardship withdrawals, as defined in the plan.7
         5) Under a Qualified Domestic Relations Order, as defined in the
            Internal Revenue Code, or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.
         9) Separation from service.8
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) if the plan has made special
            arrangements with the Distributor.
         11)      Plan termination or "in-service distributions," if the
            redemption proceeds are rolled over directly to an
            OppenheimerFunds-sponsored IRA.
|_|   For distributions from 401(k) plans sponsored by broker-dealers that
         have entered into a special agreement with the Distributor allowing
         this waiver.
|_|   For distributions from retirement plans that have $10 million or more
         in plan assets and that have entered into a special agreement with
         the Distributor.
|_|   For distributions from retirement plans which are part of a retirement
         plan product or platform offered by certain banks, broker-dealers,
         financial advisors, insurance companies or record keepers which have
         entered into a special agreement with the Distributor.
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 of Class C shares of an Oppenheimer fund in amounts of $1
         million or more requested in writing by a Retirement Plan sponsor
         and submitted more than 12 months after the Retirement Plan's first
         purchase of Class C shares, if the redemption proceeds are invested
         to purchase Class N shares of one or more Oppenheimer funds.
|_|   Distributions9 from Retirement Plans or other employee benefit plans
         for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established in an Oppenheimer fund.
         2) To return excess contributions made to a participant's account.
         3) To return contributions made due to a mistake of fact.
         4) To make hardship withdrawals, as defined in the plan.10
         5) To make distributions required under a Qualified Domestic
            Relations Order or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.11
         9) On account of the participant's separation from service.12
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) offered as an investment option in a
            Retirement Plan if the plan has made special arrangements with
            the Distributor.
         11)      Distributions made on account of a plan termination or
            "in-service" distributions, if the redemption proceeds are rolled
            over directly to an OppenheimerFunds-sponsored IRA.
         12)      For distributions from a participant's account under an
            Automatic Withdrawal Plan after the participant reaches age 59 1/2,
            as long as the aggregate value of the distributions does not
            exceed 10% of the account's value, adjusted annually.
         13)      Redemptions of Class B shares under an Automatic Withdrawal
            Plan for an account other than a Retirement Plan, if the
            aggregate value of the redeemed shares does not exceed 10% of the
            account's value, adjusted annually.
         14)      For distributions from 401(k) plans sponsored by
            broker-dealers that have entered into a special arrangement with
            the Distributor allowing this waiver.
|_|   Redemptions of Class B shares or Class C shares under an Automatic
         Withdrawal Plan from an account other than a Retirement Plan if the
         aggregate value of the redeemed shares does not exceed 10% of the
         account's value annually.

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 Fund              Oppenheimer Quest
   International Value Fund, Inc.
   Oppenheimer Quest Opportunity Value Fund

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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

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

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to
purchase those shares at net asset value without sales charge:
|_|   the Manager and its affiliates,
|_|   present or former officers, directors, trustees and employees (and
         their "immediate families" as defined in the Fund's Statement of
         Additional Information) of the Fund, the Manager and its affiliates,
         and retirement plans established by them or the prior investment
         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 Small Cap Value Fund

Internet Website
      www.oppenheimerfunds.com
      ------------------------

Investment Advisor
      OppenheimerFunds, Inc.
      Two World Financial Center
      225 Liberty Street, 11th Floor
      New York, New York 10281-1008

Distributor
      OppenheimerFunds Distributor, Inc.
      Two World Financial Center
      225 Liberty Street, 11th Floor
      New York, New York 10281-1008

Transfer Agent
      OppenheimerFunds Services
      P.O. Box 5270
      Denver, Colorado 80217
      1.800.CALL OPP(225.5677)

Custodian Bank
      Citibank, N.A.
      111 Wall Street
      New York, New York 10005

Independent Registered Public Accounting Firm
      KPMG LLP
      707 Seventeenth Street
      Denver, Colorado 80202

Legal Counsel
      Mayer, Brown, Rowe & Maw LLP
      1675 Broadway
      New York, New York 10019


1234

PX0251.0205

--------
1 In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund and who do not
have any direct or indirect financial interest in the operation of the
distribution plan or any agreement under the plan.
2 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
3 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred sales
charges mean the Fund's Early Withdrawal Charges and references to
"redemptions" mean "repurchases" of shares.
4 An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class N shares of
an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example, medical
savings accounts, payroll deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator purchasing
the shares for the benefit of participants in the plan.
5 The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase shares of an Oppenheimer fund or funds through a single investment
dealer, broker or other financial institution designated by the group. Such
plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans
other than plans for public school employees. The term "Group Retirement
Plan" also includes qualified retirement plans and non-qualified deferred
compensation plans and IRAs that purchase shares of an Oppenheimer fund or
funds through a single investment dealer, broker or other financial
institution that has made special arrangements with the Distributor.
6 However, that concession will not be paid on purchases of shares in amounts
of $1 million or more (including any right of accumulation) by a Retirement
Plan that pays for the purchase with the redemption proceeds of Class C
shares of one or more Oppenheimer funds held by the Plan for more than one
year.
7 This provision does not apply to IRAs.
8 This provision only applies to qualified retirement plans and 403(b)(7)
custodial plans after your separation from service in or after the year you
reached age 55.
9 The distribution must be requested prior to Plan termination or the
elimination of the Oppenheimer funds as an investment option under the Plan.
10 This provision does not apply to IRAs.
11 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan.
12 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.

------------------------------------------------------------------------------
Oppenheimer Quest Balanced FundSM
------------------------------------------------------------------------------
(A series of Oppenheimer Quest for Value Funds)

6803 S. Tucson Way, Centennial, CO 80112
1.800.CALL OPP (225.5677)


Statement of Additional Information dated February 28, 2005

      This Statement of Additional Information is not a Prospectus.  This
document contains additional information about the Fund and supplements
information in the Prospectus dated February 28, 2005.  It should be read
together with the Prospectus, which may be obtained by writing to the Fund's
Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado
80217, or by calling the Transfer Agent at the toll-free number shown above,
or by downloading it from the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.


Contents
                                                                      Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks.....
    The Fund's Investment Policies........................................
    Other Investment Techniques and Strategies............................
    Other Investment Restrictions.........................................
    Disclosure of Portfolio Holdings
How the Fund is Managed ..................................................
    Organization and History..............................................
    Board of Trustees and Oversight Committees............................
    Trustees and Officers of the Fund.....................................
    The Manager...........................................................
    The Sub-Advisor.......................................................
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 Registered Public Accounting Firm's 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., (the "Manager") and sub-advisor, Oppenheimer Capital
LLP (the "Sub-Advisor"), can select for the Fund.  Additional information is
also provided about the strategies that the Fund might 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 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, when evaluating
the securities of issuers in a particular country, 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.

|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.

o     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.

o     Preferred Stocks. Preferred stocks are equity securities but have
certain attributes of debt securities. Preferred stock, unlike common stock,
has a stated dividend rate payable from the corporation's earnings. Preferred
stock dividends may be cumulative or non-cumulative, participating, or
auction rate. "Cumulative" dividend provisions require all or a portion of
prior unpaid dividends to be paid before the issuer can pay dividends on
common shares.

      If interest rates rise, the fixed dividend on preferred stocks may be
less attractive, causing the price of preferred stocks to decline. Preferred
stock may have mandatory sinking fund provisions, as well as provisions for
their call or redemption prior to maturity which can have a negative effect
on their prices when interest prior to maturity rates decline. Preferred
stock may be "participating" stock, which means that it may be entitled to a
dividend exceeding the stated dividend in certain cases.

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

o     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.

o     Convertible Securities.  Convertible securities are debt securities
that are convertible into an issuer's common stock. Convertible securities
rank senior to common stock in a corporation's capital structure and
therefore are subject to less risk than common stock in case of the issuer's
bankruptcy or liquidation.
      The value of a convertible security is a function of its "investment
value" and its "conversion value." If the investment value exceeds the
conversion value, the security will behave more like a debt security, and the
security's price will likely increase when interest rates fall and decrease
when interest rates rise. If the conversion value exceeds the investment
value, the security will behave more like an equity security: it will likely
sell at a premium over its conversion value, and its price will tend to
fluctuate directly with the price of the underlying security. Convertible
securities are subject to credit risks and interest rate risk as discussed
below under "Investments in Debt Securities."
      While some convertible securities are a form of debt security in many
cases, their conversion feature (allowing conversion into equity securities)
causes them to be regarded by the Manager more as "equity equivalents."  In
those cases, the credit rating assigned to the security has less impact on
the Manager's investment decision than in the case of non-convertible
fixed-income securities. To determine whether convertible securities should
be regarded as "equity equivalents," the Manager examines the following
factors:
(1)   whether, at the option of the investor, the convertible security can be
         exchanged for a fixed number of shares of common stock of the
         issuer,
(2)   whether the issuer of the convertible securities has restated its
         earnings per share of common stock on a fully diluted basis
         (considering the effect of conversion of the convertible
         securities), and
(3)   the extent to which the convertible security may be a defensive "equity
         substitute," providing the ability to participate in any
         appreciation in the price of the issuer's common stock.

|X|   Investments in Debt Securities. The Fund 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
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.

o     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. ("Moody's"), at least
"BBB" by Standard & Poor's Rating Services ("Standard & Poor's") or Fitch,
Inc. ("Fitch"), 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 Moody's, Standard & Poor's and Fitch are included
in Appendix A to this Statement of Additional Information.

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

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

o     Special Risks of Lower-Grade Securities. The Fund can invest up to 25%
of its total assets in lower-grade debt securities.  Because lower-grade
securities tend to offer higher yields than investment-grade securities, the
Fund may invest in lower-grade 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 Fitch, or similar ratings by other nationally
recognized 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 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 Fitch are investment grade and are not regarded as junk bonds, those
 securities may be subject to special risks, and have some speculative
 characteristics.

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

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

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

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

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

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

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

o     Collateralized Mortgage Obligations. CMOs are multi-class bonds that
 are backed by pools of mortgage loans or mortgage pass-through certificates.
 They may be collateralized by:
(1)   pass-through certificates issued or guaranteed by Ginnie Mae, Fannie
               Mae, or Freddie Mac,
(2)   unsecuritized mortgage loans insured by the Federal Housing
               Administration or guaranteed by the Department of Veterans'
               Affairs,
(3)   unsecuritized conventional mortgages,
(4)   other mortgage-related securities, or
(5)   any combination of these.
      Each class of CMO, referred to as a "tranche," is issued at a specific
coupon rate and has a stated maturity or final distribution date. Principal
prepayments on the underlying mortgages may cause the CMO to be retired much
earlier than the stated maturity or final distribution date. The principal
and interest on the underlying mortgages may be allocated among the several
classes of a series of a CMO in different ways. One or more tranches may have
coupon rates that reset periodically at a specified increase over an index.
These are floating rate CMOs, and typically have a cap on the coupon rate.
Inverse floating rate CMOs have a coupon rate that moves in the reverse
direction to an applicable index. The coupon rate on these CMOs will increase
as general interest rates decrease. These are usually much more volatile than
fixed rate CMOs or floating rate CMOs.

|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.

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

o     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.

o     Obligations Issued or Guaranteed by U.S. Government Agencies or
 Instrumentalities. These include direct obligations and mortgage-related
 securities that have different levels of credit support from the government.
 Some are supported by the full faith and credit of the U.S. government, such
 as Government National Mortgage Association 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").

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

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

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

o     Bank Obligations.  The Fund can buy time deposits, certificates of
deposit and bankers' acceptances.  Time deposits, other than overnight
deposits, may be subject to withdrawal penalties, and if so, they are deemed
to be "illiquid" investments.

      The Fund can purchase bank obligations that are fully insured by the
Federal Deposit Insurance Corporation. The FDIC insures the deposits of
member banks up to $100,000 per account. Insured bank obligations may have a
limited market and a particular investment of this type may be deemed
"illiquid" unless the Board of Trustees of the Fund determines that a
readily-available market exists for that particular obligation, or unless the
obligation is payable at principal amount plus accrued interest on demand or
within seven days after demand.

o     Commercial Paper.  The Fund can invest in commercial paper if it is
 rated within the top two rating categories of 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.

o     Variable Amount Master Demand Notes.  Master demand notes are corporate
 obligations that permit the investment of fluctuating amounts by the Fund at
 varying rates of interest under direct arrangements between the Fund, as
 lender, and the borrower.  They permit daily changes in the amounts
 borrowed.  The Fund has the right to increase the amount under the note at
 any time up to the full amount provided by the note agreement, or to
 decrease the amount. The borrower may prepay up to the full amount of the
 note without penalty.  These notes may or may not be backed by bank letters
 of credit.

      Because these notes are direct lending arrangements between the lender
and borrower, it is not expected that there will be a trading market for
them. There is no secondary market for these notes, although they are
redeemable (and thus are immediately repayable by the borrower) at principal
amount, plus accrued interest, at any time.  Accordingly, the Fund's right to
redeem such notes is dependent upon the ability of the borrower to pay
principal and interest on demand.
      The Fund has no limitations on the type of issuer from whom these notes
will be purchased. However, in connection with such purchases and on an
ongoing basis, the 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|   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.  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.

|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.

o     Foreign Debt Obligations. The debt obligations of foreign governments
 and their agencies and instrumentalities may or may not be supported by the
 full faith and credit of the foreign government. The Fund can buy securities
 issued by certain "supra-national" entities, which include entities
 designated or supported by governments to promote economic reconstruction or
 development, international banking organizations and related government
 agencies. Examples are the International Bank for Reconstruction and
 Development (commonly called the "World Bank"), the Asian Development Bank
 and the Inter-American Development Bank.

      The governmental members of these supra-national entities are
"stockholders" that typically make capital contributions and may be committed
to make additional capital contributions if the entity is unable to repay its
borrowings. A supra-national entity's lending activities may be limited to a
percentage of its total capital, reserves and net income. There can be no
assurance that the constituent foreign governments will continue to be able
or willing to honor their capitalization commitments for those entities.

o     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.

o     Special Risks of Emerging Markets. Emerging and developing markets
 abroad may also offer special opportunities for growth investing but have
 greater risks than more developed foreign markets, such as those in Europe,
 Canada, Australia, New Zealand and Japan. There may be even less liquidity
 in their securities markets, and settlements of purchases and sales of
 securities may be subject to additional delays. They are subject to greater
 risks of limitations on the repatriation of income and profits because of
 currency restrictions imposed by local governments. Those countries may also
 be subject to the risk of greater political and economic instability, which
 can greatly affect the volatility of prices of securities in those
 countries. 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 and investment
 income.

|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|   "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. There is a risk of loss to the Fund if the value of
the security changes prior to the settlement date, and there is the risk that
the other party may not perform

      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 ("SEC"), the Fund, along with other affiliated entities managed by
the Manager, may transfer uninvested cash balances into one or more joint
repurchase accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities that are
pledged as collateral for repurchase agreements are held by a custodian bank
until the agreements mature. Each joint repurchase arrangement requires that
the market value of the collateral be sufficient to cover payments of
interest and principal; however, in the event of default by the other party
to the agreement, retention or sale of the collateral may be subject to legal
proceedings.

o     Reverse Repurchase Agreements. The Fund can use reverse repurchase
agreements on debt obligations it owns. Under a reverse repurchase agreement,
the Fund sells an underlying debt obligation and simultaneously agrees to
repurchase the same security at an agreed-upon price at an agreed-upon date.
The Fund will identify on its books liquid assets in an amount sufficient to
cover its obligations under reverse repurchase agreements, including
interest, until payment is made to the seller.

      These transactions involve the risk that the market value of the
securities sold by the Fund under a reverse repurchase agreement could
decline below the price at which the Fund is obligated to repurchase them.
These agreements are considered borrowings by the Fund and will be subject to
the asset coverage requirement under the Fund's policy on borrowing discussed
below.

|X|   Illiquid and Restricted Securities.  To enable the Fund to sell its
holdings of a restricted security not registered under 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|   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
buyer's 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 may lend its portfolio
securities pursuant to the Securities Lending Agreement  (the "Securities
Lending Agreement") with JP Morgan Chase, subject to the restrictions
stated in the Prospectus. The Fund will lend such portfolio securities to
attempt to increase the Fund's income. Under the Securities Lending
Agreement and applicable regulatory requirements (which are subject to
change), the loan collateral must, on each business day, be at least equal
to the value of the loaned securities and must consist of cash, bank
letters of credit or securities of the U.S. government (or its agencies or
instrumentalities), or other cash equivalents in which the Fund is
permitted to invest.  To be acceptable as collateral, letters of credit
must obligate a bank to pay to JP Morgan Chase, as agent, amounts demanded
by the Fund if the demand meets the terms of the letter.  Such terms of
the letter of credit and the issuing bank must be satisfactory to JP
Morgan Chase and the Fund.  The Fund will receive, pursuant to the
Securities Lending Agreement, 80% of all annual net income (i.e., net of
rebates to the Borrower) from securities lending transactions. JP Morgan
Chase has agreed, in general, to guarantee the obligations of borrowers to
return loaned securities and to be responsible for expenses relating to
securities lending. The Fund will be responsible, however, for risks
associated with the investment of cash collateral, including the risk that
the issuer of the security in which the cash collateral has been invested
defaults.  The Securities Lending Agreement may be terminated by either JP
Morgan Chase or the Fund on 30 days' written notice. The terms of the
Fund's loans must also meet applicable tests under the Internal Revenue
Code and permit the Fund to reacquire loaned securities on five business
days' notice or in time to vote on any important matter.

|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:
o     sell futures contracts,
o     buy puts on such futures or on securities, or
o     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 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:
o     buy futures, or
o     buy calls on such 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.

o     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"), an (3) individual stock ("single stock futures") and (4)
commodities (these are referred to as "commodity 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.

      A  single  stock  future  obligates  the  seller  to  deliver  (and  the
purchaser to take) cash or a specified  equity  security to settle the futures
transaction.  Either  party  could also enter into an  offsetting  contract to
close out the position.  Single stock  futures trade on a very limited  number
of exchanges, with contracts typically not fungible among the exchanges.

      The Fund can invest a portion of its assets in commodity futures
contracts. Commodity futures may be based upon commodities within five main
commodity groups: (1) energy, which includes crude oil, natural gas, gasoline
and heating oil; (2) livestock, which includes cattle and hogs; (3)
agriculture, which includes wheat, corn, soybeans, cotton, coffee, sugar and
cocoa; (4) industrial metals, which includes aluminum, copper, lead, nickel,
tin and zinc; and (5) precious metals, which includes gold, platinum and
silver.  The Fund may purchase and sell commodity futures contracts, options
on futures contracts and options and futures on commodity indices with
respect to these five main commodity groups and the individual commodities
within each group, as well as other types of commodities.

      No money is paid or received by the Fund on the purchase or sale of a
future.  Upon entering into a futures transaction, the Fund will be required
to deposit an initial margin payment with the futures commission merchant
(the "futures broker").  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.

      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.

o     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.

o     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 Fund 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.

      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, 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.

      If 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").  If 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.

o     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.

      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.

      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.

o     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 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. The Fund may buy
a call or put only if, after the purchase, the value of all call and put
options held by the Fund will not exceed 5% of the Fund's total assets.

|X|   Buying and Selling Options on Foreign Currency. 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.

      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.

      The Fund could write a call on a foreign currency to provide a hedge
against a decline in the U.S. dollar value of a security which the Fund owns
or has the right to acquire and which is denominated in the currency
underlying the option. That decline might be one that occurs due to an
expected adverse change in the exchange rate.  This is known as a
"cross-hedging" strategy.  In those circumstances, the Fund covers the option
by identifying on its books cash, U.S. government securities or other liquid
securities in an amount equal to the exercise price of the option.
o     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.

      The Fund's option activities could affect its portfolio turnover rate
and brokerage commissions. The exercise of calls written by the Fund might
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate.  The exercise by the Fund of puts on securities will cause the
sale of underlying investments, increasing portfolio turnover.  Although the
decision whether to exercise a put it holds is within the Fund's control,
holding a put might cause the Fund to sell the related investments for
reasons that would not exist in the absence of the put.

      The Fund could pay a brokerage commission each time it buys a call or
put, sells a call or put, or buys or sells an underlying investment in
connection with the exercise of a call or put.  Those commissions could be
higher on a relative basis than the commissions for direct purchases or sales
of the underlying investments.  Premiums paid for options are small in
relation to the market value of the underlying investments. Consequently, put
and call options offer large amounts of leverage. The leverage offered by
trading in options could result in the Fund's net asset value being more
sensitive to changes in the value of the underlying investment.

      If a covered  call  written by the Fund is  exercised  on an  investment
that has increased in value,  the Fund will be required to sell the investment
at the  call  price.  It  will  not be  able  to  realize  any  profit  if the
investment has increased in value above the call price.

      An option position may be closed out only on a market that provides
secondary trading for options of the same series, and there is no assurance
that a liquid secondary market will exist for any particular option.  The
Fund might experience losses if it could not close out a position because of
an illiquid market for the future or option.

      There is a risk in using short hedging by selling futures or purchasing
puts on broadly-based indices or futures to attempt to protect against
declines in the value of the Fund's portfolio securities. The risk is that
the prices of the futures or the applicable index will correlate imperfectly
with the behavior of the cash prices of the Fund's securities.  For example,
it is possible that while the Fund has used hedging instruments in a short
hedge, the market may advance and the value of the securities held in the
Fund's portfolio might decline. If that occurred, the Fund would lose money
on the hedging instruments and also experience a decline in the value of its
portfolio securities. However, while this could occur for a very brief period
or to a very small degree, over time the value of a diversified portfolio of
securities will tend to move in the same direction as the indices upon which
the hedging instruments are based.

      The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the price
of the portfolio securities being hedged and movements in the price of the
hedging instruments, the Fund might use hedging instruments in a greater
dollar amount than the dollar amount of portfolio securities being hedged. It
might do so if the historical volatility of the prices of the portfolio
securities being hedged is more than the historical volatility of the
applicable index.

      The ordinary spreads between prices in the cash and futures markets are
subject to distortions, due to differences in the nature of those markets.
First, all participants in the futures market are subject to margin deposit
and maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the cash and
futures markets.  Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or
taking delivery.  To the extent participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing distortion.
Third, from the point of view of speculators, the deposit requirements in the
futures market are less onerous than margin requirements in the securities
markets.  Therefore, increased participation by speculators in the futures
market may cause temporary price distortions.

      The Fund can use hedging instruments to establish a position in the
securities markets as a temporary substitute for the purchase of individual
securities (long hedging) by buying futures and/or calls on such futures,
broadly-based indices or on securities. It is possible that when the Fund
does so the market might decline.  If the Fund then concludes not to invest
in securities because of concerns that the market might decline further or
for other reasons, the Fund will realize a loss on the hedging instruments
that is not offset by a reduction in the price of the securities purchased.

o     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 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 Fund will cover its short positions in these cases by identifying
on its books liquid assets having a value equal to the aggregate amount of
the Fund's commitment under forward contracts. 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 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.

      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 transaction 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.

o     Regulatory Aspects of Hedging Instruments.  The Commodities Futures
Trading Commission (the "CFTC") recently eliminated limitations on futures
trading by certain regulated entities including registered investment
companies and consequently registered investment companies may engage in
unlimited futures transactions and options thereon provided that the Fund
claims an exclusion from regulation as a commodity pool operator. The Fund
has claimed such an exclusion from registration as a commodity pool operator
under the Commodity Exchange Act ("CEA"). The Fund may use futures and
options for hedging and non-hedging purposes to the extent consistent with
its investment objective, internal risk management guidelines adopted by the
Fund's investment advisor (as they may be amended from time to time), and as
otherwise set forth in the Fund's prospectus or this statement of additional
information.

      Transactions in options by the Fund are subject to limitations
established by the option exchanges. The exchanges limit the maximum number
of options that may be written or held by a single investor or group of
investors acting in concert. Those limits apply regardless of whether the
options were written or purchased on the same or different exchanges or are
held in one or more accounts or through one or more different exchanges or
through one or more brokers.  Thus, the number of options that the Fund may
write or hold may be affected by options written or held by other entities,
including other investment companies having the same Advisor as the Fund (or
an Advisor that is an affiliate of the Fund's Advisor).  The exchanges also
impose position limits on futures transactions.  An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.

      Under interpretations of staff members of the SEC regarding applicable
provisions of the Investment Company Act, when the Fund purchases a future,
it must segregate cash or readily marketable short-term debt instruments in
an amount equal to the securities purchase price of 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.

o     Tax Aspects of Certain Hedging Instruments. Certain foreign currency
exchange contracts in which the Fund may invest are treated as "Section 1256
contracts" under the Internal Revenue Code.  In general, gains or losses
relating to Section 1256 contracts are characterized as 60% long-term and 40%
short-term capital gains or losses under the Code.  However, foreign currency
gains or losses arising from Section 1256 contracts that are forward
contracts generally are treated as ordinary income or loss.  In addition,
Section 1256 contracts held by the Fund at the end of each taxable year are
"marked-to-market," and unrealized gains or losses are treated as though they
were realized.  These contracts also may be marked-to-market for purposes of
determining the excise tax applicable to investment company distributions and
for other purposes under rules prescribed pursuant to the Internal Revenue
Code.  An election can be made by the Fund to exempt those transactions from
this marked-to-market treatment.

      Certain forward contracts the Fund enters into may result in
"straddles" for federal income tax purposes.  The straddle rules may affect
the character and timing of gains (or losses) recognized by the Fund on
straddle positions.  Generally, a loss sustained on the disposition of a
position making up a straddle is allowed only to the extent that the loss
exceeds any unrecognized gain in the offsetting positions making up the
straddle.  Disallowed loss is generally allowed at the point where there is
no unrecognized gain in the offsetting positions making up the straddle, or
the offsetting position is disposed of.

      Under the Internal Revenue Code, the following gains or losses are
treated as ordinary income or loss:
1.    gains or losses attributable to fluctuations in exchange rates that
         occur between the time the Fund accrues interest or other
         receivables or accrues expenses or other liabilities denominated in
         a foreign currency and the time the Fund actually collects such
         receivables or pays such liabilities, and
2.    gains or losses attributable to fluctuations in the value of a foreign
         currency between the date of acquisition of a debt security
         denominated in a foreign currency or foreign currency forward
         contracts and the date of disposition.

      Currency gains and losses are offset against market gains and losses on
each trade before determining a net "Section 988" gain or loss under the
Internal Revenue Code for that trade, which may increase or decrease the
amount of the Fund's investment income available for distribution to its
shareholders.

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 Fund's 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
Sub-Advisor believes that the potential benefits of the investment justify
the payment of any premiums or sales charges.  As a shareholder of an
investment company, the Fund would be subject to its ratable share of that
investment company's expenses, including its advisory and administration
expenses.  The Fund does not anticipate investing a substantial amount of its
net assets in shares of other investment companies.

|X|   Temporary Defensive and Interim Investments.  When market, economic or
political conditions are unstable, or the Sub-Advisor believes it is
otherwise appropriate to reduce holdings in stocks, the Fund can invest in a
variety of debt securities for defensive purposes and the types of money
market instruments described above. The Fund can also purchase these
securities for liquidity purposes to meet cash needs due to the redemption of
Fund shares, or to hold while waiting to reinvest cash received from the sale
of other portfolio securities. The Fund can buy:
o     obligations issued or guaranteed by the U. S. government or its
         instrumentalities or agencies,
o     commercial paper (short-term, unsecured, promissory notes of domestic
         or foreign companies) rated in the top two rating categories of a
         nationally-recognized rating organization,
o     short-term debt obligations of corporate issuers, rated investment
         grade (rated at least Baa by Moody's or at least BBB by Standard &
         Poor's, or a comparable rating by another rating organization), or
         unrated securities judged by the Sub-Advisor to have a comparable
         quality to rated securities in those categories,
o     certificates of deposit and bankers' acceptances of domestic and
         foreign banks  having total assets in excess of $1 billion, and
o     repurchase agreements.

      Short-term debt securities would normally be selected for defensive or
cash management purposes because they can normally be disposed of quickly,
are not generally subject to significant fluctuations in principal value and
their value will be less subject to interest rate risk than longer-term debt
securities.

Other Investment Restrictions

|X|   What Are "Fundamental Policies"? Fundamental policies are those
policies that the Fund has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Fund's outstanding voting
securities.  Under the Investment Company Act, a "majority" vote is defined
as the vote of the holders of the lesser of:
o     67% or more of the shares present or represented by proxy at a
         shareholder meeting, if the holders of more than 50% of the
         outstanding shares are present or represented by proxy, or
o     more than 50% of the outstanding shares.

      The Fund's investment objective is a fundamental policy. Other policies
described in the Prospectus or this 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 principal investment policies are
described in the Prospectus.

|X|   Does the Fund Have Additional Fundamental Policies?  The following
investment restrictions are fundamental policies of the Fund.

o     The Fund cannot invest 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.

o     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.

o     The Fund cannot underwrite securities of other companies. A permitted
exception is in case it is deemed to be an underwriter under the Securities
Act of 1933 when reselling any securities held in its own portfolio.

o     The Fund cannot 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.

o     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.

o     The Fund cannot invest for the purpose of exercising control or
management of another company.

o     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.
o     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.

o     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.

o     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.

o     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.

o     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.

|X|   Does the Fund Have Any Restrictions That Are Not Fundamental? The Fund
has a number of other investment restrictions that are not fundamental
policies, which means that they can be changed by the Board of Trustees
without shareholder approval.

o     The Fund cannot 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.

o     The Fund cannot invest in interests in oil, gas or other mineral
exploration or development programs or leases.

o     The Fund cannot invest in the securities of other registered investment
companies or registered unit investment trusts in reliance on sub-paragraph
(F) or (G) of section 12(d)(1) of the Investment Company Act.

      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 (except in the case of
borrowing and investments in illiquid securities). The Fund need not sell
securities to meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund.

      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.


Disclosure of Portfolio Holdings.  The Fund has adopted policies and
procedures concerning the dissemination by employees, officers and/or
directors of the Manager, Sub-Advisor, Distributor, and Transfer Agent of
information about the portfolio securities holdings of the Funds.  These
policies are designed to assure that dissemination of non-public information
about portfolio securities is distributed for a legitimate business purpose,
and is done in a manner that (a) conforms to applicable laws and regulations
and (b) is designed to prevent that information from being used in a way that
could negatively affect the Fund's investment program or enable third parties
to use that information in a manner that is harmful to a Fund.


Until publicly disclosed, a Fund's portfolio holdings are proprietary,
confidential business information. While recognizing the importance of
providing Fund shareholders with information about their Fund's investments
and providing portfolio information to a variety of third parties to assist
with the management, distribution and administrative process, such need for
transparency must be balanced against the risk that third parties who gain
access to a Fund's portfolio holdings information could attempt to use that
information to trade ahead of or against the Fund, which could negatively
affect the prices the Fund is able to obtain in portfolio transactions or the
availability of the portfolio securities that portfolio managers are trading
in on a Fund's behalf.


The Manager and its subsidiaries and affiliates, employees, officers, and
directors, shall neither solicit nor accept any compensation or other
consideration (including any agreement to maintain assets in the Fund or in
other investment companies or accounts managed by the Manager or any
affiliated person of the Manager) in connection with the disclosure a Fund's
non-public portfolio holdings. The receipt of investment advisory fees or
other fees and compensation paid to the Manager and their subsidiaries
pursuant to agreements approved by the Fund's Board shall not be deemed to be
"compensation" or "consideration" for these purposes.  It is a violation of
the Code of Ethics for any covered person to release holdings in
contravention of portfolio holdings disclosure policies and procedures
adopted by the Fund.

A list of the top 10 or more portfolio securities holdings (based on invested
                  ----------
assets), listed by security or by issuer, as of the end of each month may be
disclosed to third parties (subject to the procedures below) no sooner than
15 days after month-end.  The top 10 or more holdings also shall be posted on
the OppenheimerFunds' website at www.oppenheimerfunds.com in the "Fund
Profiles" section.  Other general information about a Fund's portfolio
investments, such as portfolio composition by asset class, industry, country,
currency, credit rating or maturity, may also be posted with a 15-day lag.


Except under special limited circumstances discussed below, month-end lists
of a Fund's complete portfolio holdings may be disclosed no sooner than
30-days after the relevant month-end, subject to the procedures below. If
they have not been disclosed publicly, they may be disclosed pursuant to
special requests for legitimate business reasons, provided that:

o     The third-party recipient must first submit a request for release of
            Fund portfolio holdings, explaining the business reason for the
            request;

o     Senior officers (a Senior Vice President or above) in the Manager's
            Portfolio and Legal departments must approve the completed
            request for release of Fund portfolio holdings; and
o     The third-party recipient must sign the Manager's portfolio holdings
            non-disclosure agreement before receiving the data, agreeing to
            keep confidential information that is not publicly available
            regarding a Fund's holdings and agreeing not to trade directly or
            indirectly based on the information.

Complete Fund portfolio holdings positions may be released to the following
categories of entities or individuals on an ongoing basis, provided that such
entity or individual either (1) has signed an agreement to keep such
information confidential and not trade on the basis of such information or
(2) is subject to fiduciary obligations, as a member of the Fund's Board, or
as an employee, officer and/or director of the Manager, Sub-Advisor,
Distributor, or Transfer Agent, or their respective legal counsel, not to
disclose such information except in conformity with these policies and
procedures and not to trade for his/her personal account on the basis of such
information:

o     Employees of the Fund's Manager, Sub-Advisor, Distributor and Transfer
            Agent who need to have access to such information (as determined
            by senior officers of such entity),

o     The Fund's certified public accountants and auditors,
o     Members of the Fund's Board and the Board's legal counsel,
o     The Fund's custodian bank,

o     A proxy voting service designated by the Fund and its Board,
o     Rating/ranking organizations (such as Lipper and Morningstar),
o     Portfolio pricing services retained by the Manager to provide portfolio

            security prices, and
o     Dealers, to obtain bids (price quotations, because securities are not
            priced by the Fund's regular pricing services).


Portfolio holdings information of a Fund may be provided, under limited
circumstances, to brokers and dealers or with whom the Fund trades and/or
entities that provide investment coverage and/or analytical information
regarding the Fund's portfolio, provided that there is a legitimate
investment reason for providing the information to the broker or dealer or
other entity.  Month-end portfolio holdings information may, under this
procedure, be provided to vendors providing research information and/or
analytics to the fund, with at least a 15-day delay after the month end, but
in certain cases may be provided to a broker or analytical vendor with a 1- 2
day lag to facilitate the provision of requested investment information to
the manager to facilitate a particular trade or the portfolio manager's
investment process for the Fund.  Any third party receiving such information
must first sign the Manager's portfolio holdings non-disclosure agreement as
a pre-condition to receiving this information.

Portfolio holdings information (which may include information on individual
securities positions or multiple securities) may be provided to the entities
listed below (1) by portfolio traders employed by the Manager in connection
with portfolio trading, and (2) by the members of the Manager's Security
Valuation Group and Accounting Departments in connection with portfolio
pricing or other portfolio evaluation purposes:


o     Brokers and dealers in connection with portfolio transactions
            (purchases and sales)
o     Brokers and dealers to obtain bids or bid and asked prices (if
            securities held by a Fund are not priced by the fund's regular
            pricing services)
o     Dealers to obtain price quotations where the fund is not identified as
            the owner


Portfolio holdings information (which may include information on a Fund's
entire portfolio or individual securities therein) may be provided by senior
officers of the Manager or attorneys on the legal staff of the Manager,
Distributor, or Transfer Agent, in the following circumstances:


o     Response to legal process in litigation matters, such as responses to
            subpoenas or in class action matters where the Fund may be part
            of the plaintiff class (and seeks recovery for losses on a
            security) or a defendant,
o     Response to regulatory requests for information (the SEC, NASD, state
            securities regulators, and/or foreign securities authorities,
            including without limitation requests for information in
            inspections or for position reporting purposes),
o     To potential sub-advisors of portfolios (but only pursuant to
            confidentiality agreements),
o     To consultants for retirement plans for plan sponsors/discussions at
            due diligence meetings (if entire portfolio holdings are
            provided, however, it shall be done only pursuant to a
            confidentiality agreement),
o     Investment bankers in connection with merger discussions (but only
            pursuant to confidentiality agreements)


Portfolio managers and analysts may, subject to the Manager's policies on
communications with the press and other media, discuss portfolio information
in interviews with members of the media, or in due diligence or similar
meetings with clients or prospective purchasers of Fund shares or their
financial intermediary representatives.


The Fund's shareholders may, under unusual circumstances (such as a lack of
liquidity in the Fund's portfolio to meet redemptions), receive redemption
proceeds of their Fund shares paid as pro rata shares of securities held in
the Fund's portfolio.  In such circumstances, disclosure of the Fund's
portfolio holdings may be made to such shareholders.


The Chief Compliance Officer of the Fund and the Manager, Distributor, and
Transfer Agent (the "CCO") shall oversee the compliance by the Manager,
Sub-Advisor, Distributor, Transfer Agent, and their personnel with these
policies and procedures. At least annually, the CCO shall report to the Fund
Board on such compliance oversight and on the categories of entities and
individuals to which disclosure of portfolio holdings of the Funds has been
made during the preceding year pursuant to these policies. The CCO shall
report to the Fund Board any material violation of these policies and
procedures during the previous calendar quarter and shall make
recommendations to the Companies and to the Boards as to any amendments that
the CCO believes are necessary and desirable to carry out or improve these
policies and procedures.

The Manager and/or the Fund have entered into ongoing arrangements to make
available information about the Fund's portfolio holdings.  One or more of
the Oppenheimer funds may currently disclose portfolio holdings information
based on ongoing arrangements to the following parties:


            -------------------------------------------------------

            A.G. Edwards & Sons         Keijser Securities

            -------------------------------------------------------
            -------------------------------------------------------

            ABG Securities              Kempen & Co. USA Inc.

            -------------------------------------------------------
            -------------------------------------------------------

            ABN AMRO                    Kepler Equities/Julius
                                        Baer Sec

            -------------------------------------------------------
            -------------------------------------------------------

            Advest                      KeyBanc Capital Markets

            -------------------------------------------------------
            -------------------------------------------------------

            AG Edwards                  Leerink Swan

            -------------------------------------------------------
            -------------------------------------------------------

            American Technology ResearchLegg Mason

            -------------------------------------------------------
            -------------------------------------------------------

            Auerbach Grayson            Lehman

            -------------------------------------------------------
            -------------------------------------------------------

            Banc of America Securities  Lehman Brothers

            -------------------------------------------------------
            -------------------------------------------------------

            Barclays                    Lipper

            -------------------------------------------------------
            -------------------------------------------------------

            Baseline                    Loop Capital Markets

            -------------------------------------------------------
            -------------------------------------------------------

            Bear Stearns                MainFirst Bank AG

            -------------------------------------------------------
            -------------------------------------------------------

            Belle Haven                 Makinson Cowell US Ltd

            -------------------------------------------------------
            -------------------------------------------------------

            Bloomberg                   Maxcor Financial

            -------------------------------------------------------
            -------------------------------------------------------

            BNP Paribas                 Merrill

            -------------------------------------------------------
            -------------------------------------------------------

            BS Financial Services       Merrill Lynch

            -------------------------------------------------------
            -------------------------------------------------------

            Buckingham Research Group   Midwest Research

            -------------------------------------------------------
            -------------------------------------------------------

            Caris & Co.                 Mizuho Securities

            -------------------------------------------------------
            -------------------------------------------------------

            CIBC World Markets          Morgan Stanley

            -------------------------------------------------------
            -------------------------------------------------------

            Citigroup                   Morningstar

            -------------------------------------------------------
            -------------------------------------------------------

            Citigroup Global Markets    Natexis Bleichroeder

            -------------------------------------------------------
            -------------------------------------------------------

            Collins Stewart             Ned Davis Research Group

            -------------------------------------------------------
            -------------------------------------------------------

            Craig-Hallum Capital Group  Nomura Securities
            LLC

            -------------------------------------------------------
            -------------------------------------------------------

            Credit Agricole Cheuvreux   Pacific Crest
            N.A. Inc.

            -------------------------------------------------------
            -------------------------------------------------------

            Credit Suisse First Boston  Pacific Crest Securities

            -------------------------------------------------------
            -------------------------------------------------------

            Daiwa Securities            Pacific Growth Equities

            -------------------------------------------------------
            -------------------------------------------------------

            Davy                        Petrie Parkman

            -------------------------------------------------------
            -------------------------------------------------------

            Deutsche Bank               Pictet

            -------------------------------------------------------
            -------------------------------------------------------

            Deutsche Bank Securities    Piper Jaffray Inc.

            -------------------------------------------------------
            -------------------------------------------------------

            Dresdner Kleinwort          Plexus
            Wasserstein

            -------------------------------------------------------
            -------------------------------------------------------

            Emmet & Co                  Prager Sealy & Co.

            -------------------------------------------------------
            -------------------------------------------------------

            Empirical Research          Prudential Securities

            -------------------------------------------------------
            -------------------------------------------------------

            Enskilda Securities         Ramirez & Co.

            -------------------------------------------------------
            -------------------------------------------------------

            Essex Capital Markets       Raymond James

            -------------------------------------------------------
            -------------------------------------------------------

            Exane BNP Paribas           RBC Capital Markets

            -------------------------------------------------------
            -------------------------------------------------------

            Factset                     RBC Dain Rauscher

            -------------------------------------------------------
            -------------------------------------------------------

            Fidelity Capital Markets    Research Direct

            -------------------------------------------------------
            -------------------------------------------------------

            Fimat USA Inc.              Robert W. Baird

            -------------------------------------------------------
            -------------------------------------------------------

            First Albany                Roosevelt & Cross

            -------------------------------------------------------
            -------------------------------------------------------

            First Albany Corporation    Russell Mellon

            -------------------------------------------------------
            -------------------------------------------------------

            Fixed Income Securities     Ryan Beck & Co.

            -------------------------------------------------------
            -------------------------------------------------------

            Fortis Securities           Sanford C. Bernstein

            -------------------------------------------------------
            -------------------------------------------------------

            Fox-Pitt, Kelton            Scotia Capital Markets

            -------------------------------------------------------
            -------------------------------------------------------

            Friedman, Billing, Ramsey   SG Cowen & Co.

            -------------------------------------------------------
            -------------------------------------------------------

            Fulcrum Global Partners     SG Cowen Securities

            -------------------------------------------------------
            -------------------------------------------------------

            Garp Research               Soleil Securities Group

            -------------------------------------------------------
            -------------------------------------------------------

            George K Baum & Co.         Standard & Poors

            -------------------------------------------------------
            -------------------------------------------------------

            Goldman                     Stone & Youngberg

            -------------------------------------------------------
            -------------------------------------------------------

            Goldman Sachs               SWS Group

            -------------------------------------------------------
            -------------------------------------------------------

            HSBC                        Taylor Rafferty

            -------------------------------------------------------
            -------------------------------------------------------

            HSBC Securities Inc         Think Equity Partners

            -------------------------------------------------------
            -------------------------------------------------------

            ING Barings                 Thomas Weisel Partners

            -------------------------------------------------------
            -------------------------------------------------------

            ISI Group                   UBS

            -------------------------------------------------------
            -------------------------------------------------------

            Janney Montgomery           Wachovia

            -------------------------------------------------------
            -------------------------------------------------------

            Jefferies                   Wachovia Corp

            -------------------------------------------------------
            -------------------------------------------------------

            Jeffries & Co.              Wachovia Securities

            -------------------------------------------------------
            -------------------------------------------------------

            JP Morgan                   Wescott Financial

            -------------------------------------------------------
            -------------------------------------------------------

            JP Morgan Securities        William Blair

            -------------------------------------------------------
            -------------------------------------------------------

            JPP Eurosecurities          Yieldbook

            -------------------------------------------------------
            -------------------------------------------------------

            Keefe, Bruyette & Woods

            -------------------------------------------------------


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 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, but may do so from time to time on important matters or when
required to do so by the Investment Company Act or other applicable law.
Shareholders have the right, upon vote of two-thirds of the outstanding
shares of the Fund, to remove a Trustee or to take other action described in
the Fund's Declaration of Trust.

      The Trustees will call a meeting of shareholders to vote on the removal
of a Trustee upon the written request of the record holders of 10% of its
outstanding shares.  If the Trustees receive a request from at least 10
shareholders stating that they wish to communicate with other shareholders to
request a meeting to remove a Trustee, the Trustees will then either make the
Fund's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense. The
shareholders making the request must have been shareholders for at least six
months and must hold shares of the Fund valued at $25,000 or more or
constituting at least 1% of the Fund's outstanding shares. The Trustees may
also take other action as permitted by the Investment Company Act.


Shareholder and Trustee Liability.  The Fund's Declaration of Trust contains
an express disclaimer of shareholder or Trustee liability for the Fund's
obligations. It also provides for indemnification and reimbursement of
expenses out of the Fund's property for any shareholder held personally
liable for its obligations.  The Declaration of Trust also states that upon
request, the Fund shall assume the defense of any claim made against a
shareholder for any act or obligation of the Fund and shall satisfy any
judgment on that claim.  Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner"
under certain circumstances. However, the risk that a Fund shareholder will
incur financial loss from being held liable as a "partner" of the Fund is
limited to the relatively remote circumstances in which the Fund would be
unable to meet its obligations.

      The Fund's contractual arrangements state that any person doing
business with the Fund (and each shareholder of the Fund) agrees under its
Declaration of Trust to look solely to the assets of the Fund for
satisfaction of any claim or demand that may arise out of any dealings with
the Fund. Additionally, the Trustees shall have no personal liability to any
such person, to the extent permitted by law.

Board of Trustees and Oversight Committees. The Fund is governed by a Board
of Trustees, which is responsible for protecting the interests of
shareholders under Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Fund's activities, review its performance,
and review the actions of the Manager.


      The Board of Trustees has an Audit Committee which is comprised solely
of Independent Trustees. The members of the Audit Committee Paul Y. Clinton
(Chairman), Thomas W. Courtney, Robert G. Galli, Lacy B. Herrmann and Brian
Wruble.  The Audit Committee met 5 times during the Fund's fiscal year ended
October 31, 2004. 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 auditor concerning the
Fund's internal accounting procedures, and controls, and reviews reports of
                                                   -
the Manager's internal auditor, among other duties as set forth in the
Committee's charter.

      The Audit Committee furnishes 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 among other duties as set forth in the Committee's charter.


      The Audit Committee's functions include selecting and nominating, to
the full Board, nominees for election as Directors and selecting and
nominating Independent Trustees for election.  The Audit Committee may, but
need not, consider the advice and recommendation of the Manager and its
affiliates in selecting nominees.  The full Board elects new Trustees except
for those instances when a shareholder vote is required.

      To date, the Committee has been able to identify from its own resources
an ample number of qualified candidates.  Nonetheless, shareholders may
submit names of individuals, accompanies by complete and properly supported
resumes, for the Audit Committee's consideration by mailing such information
to the Committee in care of the Fund.  The Committee may consider such
persons at such time as it meets to consider possible nominees.  The
Committee, however, reserves sole discretion to determine the candidates to
present to the Board and/or shareholders when it meets for the purpose of
considering potential nominees.

Trustees and Officers of the Fund. Each of the Trustees is an "Independent
Trustee" under 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"):

Oppenheimer  Quest  For  Value  Funds,  a
series  fund having the  following  three
series:
  Oppenheimer Small Cap Value Fund,       Oppenheimer Quest International Value
                                          Fund, Inc.
  Oppenheimer  Quest  Balanced Fund       Oppenheimer Quest Capital Value Fund,
  and                                     Inc.
  Oppenheimer   Quest  Opportunity  Value Oppenheimer Quest Value Fund, Inc.
  Fund
Rochester   Portfolio  Series,  a  series Bond Fund Series,  a series fund having
fund having one series:  Limited-Term New one  series:   Oppenheimer  Convertible
York Municipal Fund                       Securities Fund
Rochester Fund Municipals                 Oppenheimer MidCap Fund

      In addition to being a trustee or director of the Board III Funds, Mr.
Galli is also a director or trustee of 25 other portfolios in the
OppenheimerFunds complex. Present or former officers, directors, trustees and
employees (and their immediate family members) of the Fund, the Manager and
its affiliates, and retirement plans established by them for their employees
are permitted to purchase Class A shares of the Fund and the other
Oppenheimer funds at net asset value without sales charge. The sales charge
on Class A shares is waived for that group because of the economies of sales
efforts realized by the Distributor.


      Messrs. Murphy, Petersen, Vandehey, Vottiero, Wixted and Zack and Mses.
Bloomberg 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
February 2, 2005, 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 their family
members, do not own securities of either the Manager or 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,
                                                                       2004
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

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 1987 of Investment Counseling Federated
Age: 71            Investors, Inc.; Trustee of the following

                   open-end investment companies: Cash
                   Assets Trust, PIMCO ADVISORS VIT, Tax
                   Free Trust of Arizona and 4 funds for the
                   Hawaiian Tax Free Trust. Oversees 10
                   portfolios in the OppenheimerFunds
                   complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Paul Y. Clinton,   Principal of Clinton Management            $0         $0
Trustee, since     Associates (1996-present) (a financial
1987               and venture capital consulting firm);
Age: 73            Trustee of PIMCO ADVISORS VIT (open-end
                   investment company). Formerly a director
                   or trustee of the following open-end
                   investment companies: OCC Cash Reserves,
                   Inc. (1989-December 2002), Capital Cash
                   Management Trust (1979-December 2004),
                   Prime Cash Fund and Narragansett Insured
                   Tax-Free Income Fund (1996-December
                   2004). Oversees 10 portfolios in the
                   OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Robert G. Galli,   A   trustee   or    director    of   other $0         Over
Trustee since 1998 Oppenheimer funds.  Oversees 35 portfolios            $100,000
Age: 71            in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Lacy B. Herrmann,  Chairman of Aquila Management              $0         $10,001-$50,000
Trustee since 1987 Corporation, the sponsoring organization
Age: 75            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, 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, and Aquila Rocky Mountain
                   Equity Fund and PIMCO ADVISORS VIT; 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
                   Chief Executive Officer of Aquila
                   Investment Management (1986-2004),
                   sub-adviser and administrator of Prime
                   Cash Fund and Short Term Asset Reserves;
                   Trustee Emeritus of Brown University.
                   Formerly Chairman of the Board of
                   Trustees and President of Hawaiian
                   Tax-Free Trust. Oversees 10 portfolios in
                   the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Brian Wruble,      General Partner (since  September 1995) of $10,001-   $Over
Trustee since 2001 Odyssey  Partners,  L.P.  (hedge  fund  in $50,000    $100,00
Age: 61            distribution   since   1/1/97);   Director

                   (since  September  2004) of Special  Value
                   Opportunities    Fund,   LLC;   Investment
                   Advisory  Board  (since  October  2004) of
                   Zurich   Financial   Services;   Board  of
                   Governing  Trustees (since August 1990) of
                   The    Jackson    Laboratory     (genetics
                   laboratory,  non profit);  Trustee  (since
                   May 1992) of Institute for Advanced  Study
                   (educational institute);  Formerly Special
                   Limited  Partner  (1999-2004) and Managing
                   Principal   (through   December  1998)  of
                   Odyssey Investment Partners,  LLC (private
                   equity  investment);  Trustee  (2000-2002)
                   of    Research    Foundation    of    AIMR
                   (investment     research,     non-profit);
                   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. Gillespie, Miao, Murphy and Zack and Ms. Bloomberg, Two World
Financial Center, 225 Liberty Street, 11th Floor, New York, New York
10281-1008, for Messrs. Vandehey, Vottiero, Petersen and Wixted and Ms. Ives,
6803 S. Tucson Way, Centennial, CO 80112-3924.  Each Officer serves for an
indefinite term or until his or her earlier resignation, retirement, death or
removal.

-------------------------------------------------------------------------------------
                                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: 55                 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 following  investment advisory  subsidiaries
                        of the Manager:  OFI Institutional  Asset Management,  Inc.,
                        Centennial Asset Management Corporation,  Trinity Investment
                        Management Corporation and Tremont Capital Management,  Inc.
                        (since  November   2001),   HarbourView   Asset   Management
                        Corporation  and OFI Private  Investments,  Inc. (since July
                        2001);  President  (since  November  1, 2001) and a director
                        (since  July 2001) of  Oppenheimer  Real  Asset  Management,
                        Inc.;  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 Babson  Capital  Management  LLC); a member of the
                        Investment  Company  Institute's Board of Governors (elected
                        to serve from October 3, 2003 through  September  30, 2006).
                        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.   Oversees  62   portfolios   as
                        Trustee/Director and 21 additional  portfolios as Officer in
                        the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Mark S. Vandehey,       Senior Vice  President and Chief  Compliance  Officer (since
Vice President and      March  2004) of the  Manager;  Vice  President  (since  June
Chief Compliance        1983)  of  OppenheimerFunds  Distributor,  Inc.,  Centennial
Officer since 2004      Asset Management Corporation and Shareholder Services,  Inc.
Age:  54                Formerly  (until  February 2004) Vice President and Director

                        of  Internal  Audit  of  the  Manager.   An  officer  of  83
                        portfolios in the Oppenheimer funds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian W. Wixted,        Senior Vice  President and  Treasurer  (since March 1999) of
Treasurer since 1999    the  Manager;  Treasurer  of  HarbourView  Asset  Management
Age: 45                 Corporation,    Shareholder   Financial   Services,    Inc.,

                        Shareholder   Services,   Inc.,   Oppenheimer   Real   Asset
                        Management   Corporation,    and   Oppenheimer   Partnership
                        Holdings,   Inc.   (since  March   1999),   of  OFI  Private
                        Investments,  Inc. (since March 2000),  of  OppenheimerFunds
                        International  Ltd.  and  OppenheimerFunds  plc  (since  May
                        2000), of OFI Institutional  Asset  Management,  Inc. (since
                        November 2000),  and of  OppenheimerFunds  Legacy Program (a
                        Colorado   non-profit   corporation)   (since   June  2003);
                        Treasurer and Chief  Financial  Officer  (since May 2000) of
                        OFI  Trust  Company  (a  trust  company  subsidiary  of  the
                        Manager);   Assistant   Treasurer   (since  March  1999)  of
                        Oppenheimer  Acquisition Corp.  Formerly Assistant Treasurer
                        of   Centennial   Asset   Management    Corporation   (March
                        1999-October  2003)  and  OppenheimerFunds   Legacy  Program
                        (April  2000-June  2003). An officer of 83 portfolios in the
                        OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian Petersen,         Assistant  Vice  President of the Manager since August 2002;
Assistant Treasurer     formerly   Manager/Financial  Product  Accounting  (November

since 2004              1998-July 2002) of the Manager.  An officer of 83 portfolios
Age: 34                 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). An officer of 83 portfolios
Age:  41                in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Zack,         Executive  Vice  President  (since January 2004) and General
Secretary since 2001    Counsel  (since  February  2002)  of  the  Manager;  General
Age: 56                 Counsel  and  a  director   (since  November  2001)  of  the

                        Distributor;   General  Counsel  (since  November  2001)  of
                        Centennial   Asset  Management   Corporation;   Senior  Vice
                        President  and  General  Counsel  (since  November  2001) of
                        HarbourView  Asset  Management  Corporation;  Secretary  and
                        General   Counsel  (since   November  2001)  of  Oppenheimer
                        Acquisition  Corp.;   Assistant  Secretary  and  a  director
                        (since October 1997) of OppenheimerFunds  International Ltd.
                        and  OppenheimerFunds  plc;  Vice  President  and a director
                        (since November 2001) of Oppenheimer  Partnership  Holdings,
                        Inc.; a director (since  November 2001) of Oppenheimer  Real
                        Asset  Management,  Inc.;  Senior  Vice  President,  General
                        Counsel and a director  (since November 2001) of Shareholder
                        Financial Services,  Inc.,  Shareholder Services,  Inc., OFI
                        Private  Investments,  Inc.  and  OFI  Trust  Company;  Vice
                        President (since November 2001) of  OppenheimerFunds  Legacy
                        Program;  Senior Vice  President and General  Counsel (since
                        November 2001) of OFI Institutional Asset Management,  Inc.;
                        a  director  (since  June 2003) of  OppenheimerFunds  (Asia)
                        Limited.  Formerly Senior Vice President (May  1985-December
                        2003), Acting General Counsel (November  2001-February 2002)
                        and Associate  General  Counsel (May  1981-October  2001) of
                        the Manager;  Assistant  Secretary of Shareholder  Services,
                        Inc.  (May  1985-November   2001),   Shareholder   Financial
                        Services,    Inc.   (November   1989-November   2001);   and
                        OppenheimerFunds  International Ltd. (October  1997-November
                        2001).  An officer of 83 portfolios in the  OppenheimerFunds
                        complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Kathleen T. Ives,       Vice  President  (since  June 1998) and Senior  Counsel  and
Assistant Secretary     Assistant  Secretary  (since  October  2003) of the Manager;
since 2001              Vice President  (since 1999) and Assistant  Secretary (since
Age: 39                 October  2003)  of  the  Distributor;   Assistant  Secretary

                        (since   October  2003)  of  Centennial   Asset   Management
                        Corporation;  Vice President and Assistant  Secretary (since
                        1999) of Shareholder  Services,  Inc.;  Assistant  Secretary
                        (since  December  2001) of  OppenheimerFunds  Legacy Program
                        and of Shareholder  Financial  Services,  Inc..  Formerly an
                        Assistant Counsel (August  1994-October 2003). An officer of
                        83 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Lisa I. Bloomberg,      Vice President and Associate Counsel of the Manager since
Assistant Secretary     May 2004; formerly First Vice President and Associate
since 2004              General Counsel of UBS Financial Services Inc. (formerly,
Age:  37                PaineWebber Incorporated) (May 1999 - April 2004). An
                        officer of 83 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Phillip S. Gillespie,   Senior Vice President and Deputy General Counsel of the
Assistant Secretary     Manager since September 2004. Formerly Mr. Gillespie held
since 2004              the following positions at Merrill Lynch Investment
Age:  41                Management: First Vice President (2001-September 2004);

                        Director (from 2000) and Vice President (1998-2000). An
                        officer of 83 portfolios in the OppenheimerFunds complex.

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------

Wayne Miao,             Assistant Vice President and Assistant Counsel of the
Assistant Secretary     Manager since June 2004. Formerly an Associate with Sidley
since 2004              Austin Brown & Wood LLP (September 1999 - May 2004). An
Age:  32                officer of 83 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, 2004. The compensation
from all 10 of the Oppenheimer funds (including the Fund) represents
compensation received for serving as a director or trustee and member of a
committee (if applicable) of the boards of those funds during the calendar
year ended December 31, 2004.










-------------------------------------------------------------------------------
Trustee Name and        Aggregate    Retirement   Estimated        Total
                                                                Compensation
                                                               From Fund and
                                                    Annual      Fund Complex
                                      Benefits    Retirement     Including
                                     Accrued as  Benefits to      Accrued

Other Fund                            Part of      be Paid       Retirement
Position(s)           Compensation      Fund         Upon      Benefits Paid
(as applicable)        From Fund1     Expenses   Retirement2   to Trustees8,*

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Thomas W. Courtney       $26,761      $60,075      $78,862       $279,3623

Chairman and Audit
Committee Member
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Paul Y. Clinton          $25,780      $69,223      $76,994       $287,8514

Audit Committee
Chairman
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Robert G. Galli

Audit Committee          $23,962      $34,759      $80,9235      $237,3126
Member

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Lacy B. Herrmann

Audit Committee          $23,962      $53,463      $74,648       $268,9057
Member

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Brian Wruble

Audit Committee          $24,262      $16,970      $22,238        $111,000
Member

-------------------------------------------------------------------------------
1.    Aggregate   Compensation   From   Fund   includes   fees  and   deferred
   compensation, if any, for a Trustee.
2.    Estimated  Annual  Retirement  Benefits  to be Paid Upon  Retirement  is
   based on a straight life payment plan election with the  assumption  that a
   Trustee  will  retire  at the age of 75 and is  eligible  (after 7 years of
   service)  to receive  retirement  plan  benefits as  described  below under
   "Retirement Plan for Trustees."

3.    Includes $158,362 ($48,699  compensation and $109,663 accrued retirement
   benefits) paid to Mr.  Courtney for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT (for which the Fund's Sub-Advisor acts as the investment advisor.
4.    Includes $171,851 ($75,677  compensation and $96,174 accrued  retirement
   benefits)  paid to Mr.  Clinton for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT) for which the Fund's Sub-Advisor acts as the investment advisor.
5.    Includes  $43,933  estimated  to be paid to Mr.  Galli for  serving as a
   trustee or  director of 31 other  Oppenheimer  funds that are not Board III
   Funds.
6.    Includes  $129,312  paid to Mr. Galli for serving as trustee or director
   of 25 other Oppenheimer funds that are not Board III Funds.
7.    Includes $175,905 ($62,188  compensation and $113,717 accrued retirement
   benefits) paid to Mr.  Herrmann for serving as a trustee or director by two
   open-end investment  companies (OCC Cash Reserves,  Inc. and PIMCO Advisors
   VIT) for which the Fund's Sub-Advisor acts as the investment advisor.
8.    Total Compensation paid to Trustees for the calendar year 2004..

* For purposes of this section only, "Fund Complex" includes the Oppenheimer
funds, PIMCO Advisors VIT (formerly OCC Accumulation Trust) and OCC Cash
Reserves, Inc. in accordance with the instructions for Form N-1A. The Manager
does not consider PIMCO Advisors VIT or OCC Cash Reserves, Inc. to be part of
the OppenheimerFunds "Fund Complex" as that term may be otherwise interpreted.


|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 I Funds for at least seven years in order to be eligible for
retirement plan benefits and must serve for at least 15 years to be eligible
for the maximum benefit. Each Trustee's retirement benefits will depend on
the amount of the Trustee's future compensation and length of service.


|X|   Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the
Trustee. The amount paid to the Trustee under the plan is determined based
upon the performance of the selected funds.

      Deferral of Trustees' fees under the plan will not materially affect
the Fund's assets, liabilities or net income per share. The plan will not
obligate the Fund to retain the services of any Trustee or to pay any
particular level of compensation to any Trustee. Pursuant to an Order issued
by the SEC, the Fund may invest in the funds selected by the Trustee under
the plan without shareholder approval for the limited purpose of determining
the value of the Trustee's deferred fee account.


|X|   Major Shareholders.  As of February 2, 2005, 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 14,344,444.679 Class A shares
      (representing 7.89% of the Class A shares then outstanding).

      Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of Customers,
      Attn: Fund Admn/#971H3, 4800 Deer Lake Drive E. Fl 3, Jacksonville, FL
      32246-6484, which owned 13,939,295.813 Class A shares (representing
      7.67% of the Class A shares then outstanding).

      Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of Customers,
      Attn: Fund Admn/#97CK8, 4800 Deer Lake Drive E. Fl 3, Jacksonville, FL
      32246-6484, which owned 19,813,703.379 Class B shares (representing
      13.56% of the Class B shares then outstanding).

      Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of Customers,
      Attn: Fund Admn/#97HX9, 4800 Deer Lake Drive E. Fl 3, Jacksonville, FL
      32246-6484, which owned 10,911,889.202 Class C shares (representing
      15.23% of the Class C shares then outstanding);

      Citigroup Global Mkts Inc., 00109801250, Attn: Cindy Tepesta-7th Floor,
      333 West 34th Street, New York, NY 10001-2483, which owned
      4,664,570.817 Class C shares (representing 6.51% of the Class C shares
      then outstanding);

      Mass Mutual Life Insurance Co. Separate Investment Acct, Attn: N225,
      1295 State Street, Springfield, MA 01111-0001, which owned
      8,010,831.949 Class Y shares (representing 57.47% of the Class Y shares
      then outstanding);

      Vanguard Fiduciary Trust Company, Attn: Outside Funds, Oppenheimer
      Quest Balanced Fund Y 24VM 613, P.O. Box 2600, Boston, MA 02117-9130,
      which owned 4,475,970.056 Class Y shares (representing 32.10% of the
      Class Y shares then outstanding);

      Taynik & Co., c/o Investors Bank & Trust, FPG90, P.O. Box 9130, Boston,
      MA 02117-9130, which owned 1,003,564.090 Class Y shares (representing
      7.19% 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, a
global, diversified insurance and financial services organization.


|X|   Code of Ethics. The Fund, the Manager and the Distributor have a Code
of Ethics. It is designed to detect and prevent improper personal trading by
certain employees, including portfolio managers, that would compete with or
take advantage of the Fund's portfolio transactions. Covered persons include
persons with knowledge of the investments and investment intentions of the
Fund and other funds advised by the Manager. The Code of Ethics does permit
personnel subject to the Code to invest in securities, including securities
that may be purchased or held by the Fund, subject to a number of
restrictions and controls. Compliance with the Code of Ethics is carefully
monitored and enforced by the Manager.

      The Code of Ethics is an exhibit to the Fund's registration statement
filed with the SEC and can be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. You can obtain information about the hours
of operation of the Public Reference Room by calling the SEC at
1.202.942.8090. The Code of Ethics can also be viewed as part of the Fund's
registration statement on the SEC's EDGAR database at the SEC's Internet
website at www.sec.gov. Copies may be obtained, after paying a duplicating
           -----------
fee, by electronic request at the following E-mail address:
publicinfo@sec.gov., or by writing to the SEC's Public Reference Section,
-------------------
Washington, D.C. 20549-0102.

|X|   Portfolio Proxy Voting.  The Fund has adopted Portfolio Proxy Voting
Policies and Procedures under which the Fund votes proxies relating to
securities ("portfolio proxies") held by the Fund. The Fund's primary
consideration in voting portfolio proxies is the financial interests of the
Fund and its shareholders. The Fund has retained an unaffiliated third-party
as its agent to vote portfolio proxies in accordance with the Fund's
Portfolio Proxy Voting Guidelines and to maintain records of such portfolio
proxy voting. The Proxy Voting Guidelines include provisions to address
conflicts of interest that may arise between the Fund and OFI where an OFI
directly-controlled affiliate manages or administers the assets of a pension
plan of a company soliciting the proxy. The Fund's Portfolio Proxy Voting
Guidelines on routine and non-routine proxy proposals are summarized below.

o     The Fund votes with the recommendation of the issuer's management on
            routine matters, including election of directors nominated by
            management and ratification of auditors, unless circumstances
            indicate otherwise.
o     In general, the Fund opposes anti-takeover proposals and supports
            elimination of anti-takeover proposals, absent unusual
            circumstances.
o     The Fund supports shareholder proposals to reduce a super-majority vote
            requirement, and opposes management proposals to add a
            super-majority vote requirement.
o     The Fund opposes proposals to classify the board of directors.
o     The Fund supports proposals to eliminate cumulative voting.
o     The Fund opposes re-pricing of stock options.
o     The Fund generally considers executive compensation questions such as
            stock option plans and bonus plans to be ordinary business
            activity. The Fund analyzes stock option plans, paying particular
            attention to their dilutive effect. While the Fund generally
            supports management proposals, the Fund opposes plans it
            considers to be excessive.

      The Fund is required to file Form N-PX, with its complete proxy voting
record for the 12 months ended June 30th, no later than August 31st of each
year. The Fund's Form N-PX filing is available (i) without charge, upon
request, by calling the Fund toll-free at  1.800.525-7048 and (ii) on the
SEC's website at www.sec.gov.
                 -----------

|X|   The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Fund under an investment advisory
agreement between the Manager and 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.  If 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 investment 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.
The management fees paid by the Fund to the Manager during its last three
fiscal years were:

    ---------------------------------------------------------------
    Fiscal Year ended 10/31:        Management Fees Paid to
                                    OppenheimerFunds, Inc.1
    ---------------------------------------------------------------
    ---------------------------------------------------------------
              2002                        $43,436,918
    ---------------------------------------------------------------
    ---------------------------------------------------------------
              2003                        $40,756,593
    ---------------------------------------------------------------
    ---------------------------------------------------------------

              2004                        $50,570,841

    ---------------------------------------------------------------

         1.The Manager, not the Fund, pays the Sub-Advisor an annual
           sub-advisory fee. For fiscal year 2002, 2003 and 2004, this
           sub-advisory fee was $13,154,575 $11,559,829 and
           $15,004,710, respectively.


      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 and Sub-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 and sub-advisory agreement. The Investment Company Act
requires that the Board request and evaluate the Manager and Sub-Advisor and
provide such information as may be reasonably necessary to evaluate the terms
of the investment advisory and sub-advisory agreements.  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 and sub-advisory agreements.  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 and Sub-Advisor;
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
         and Sub-Advisor;
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 Sub-Advisor, and
o     The direct and indirect benefits the Manager and Sub-Advisor 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 and Sub-Advisor 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 and Sub-Advisor is important so that the
Manager and Sub-Advisor 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 and
Sub-Advisor. The Board is aware that there are alternatives to the use of the
Manager and Sub-Advisor.

      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 and Sub-Advisor within the meaning and intent of the SEC Rules
regarding the independence of counsel.

      After careful deliberation the Board concluded that it was in the best
interest of shareholders to continue the investment advisory and sub-advisory
agreements 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 agreements, including the
investment advisory fees, in light of all of the surrounding circumstances.
After deliberating the Board approved the following fee schedule: effective
January 1, 2004, 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 $1
billion of average annual net assets of the Fund, 0.81% of the next $2
billion, 0.76% of the next $1 billion, 0.71% of the next $1 billion, 0.65% of
the next $1 billion, 0.60% of the next $1 billion, 0.55% of the next $1
billion and 0.50% of average annual net assets in excess of $8 billion.


The Sub-Advisor.  As of January 1, 2005, the Fund's Sub-Advisor is
Oppenheimer Capital LLC, a registered investment advisor. The Sub-Advisor is
a Delaware limited liability company with one member, Allianz Dresdner Asset
Management U.S. Equities LLC. Allianz Dresdner Asset Management U.S. Equities
LLC is a wholly-owned subsidiary of Allianz Dresdner Asset Management of
America L.P. ("ADAM LP"). ADAM LP 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 three members, ADAM
U.S. Holding LLC, a Delaware limited liability company, Pacific Asset
Management LLC, a Delaware limited liability company and Pacific Life
Insurance Company, a California stock life insurance company.  The sole
member of ADAM U.S. Holding LLC is Allianz Dresdner Asset Management of
America LLC. Allianz Dresdner Asset Management of America LLC has two
members, Allianz of America, Inc., a Delaware corporation which owns 99.9%
non-managing interest and Allianz Dresdner Asset Management of America
Holding Inc., a Delaware corporation which owns a 0.01% managing interest.
Allianz Dresdner Asset Management of America Holding Inc. is a wholly-owned
subsidiary of ADAM GmbH, which is wholly owned by Allianz Aktiengesellschaft
("Allianz AG"). Allianz of America, Inc. is wholly-owned by Allianz AG.
Pacific Asset Management LLC is a wholly-owned subsidiary of Pacific Life
Insurance Company, a wholly-owned subsidiary of Pacific Mutual Holding
Company. Allianz AG indirectly holds a controlling interest in Allianz
Dresdner Asset Management of America LP. 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 LP and is
a California-based insurance company.

      The Sub-Advisor has operated as an investment advisor to investment
companies and other investors since its organization in 1969. As of September
30, 2004, the Sub-Advisor advised accounts having assets in excess of $24
billion. The Sub-Advisor is located at 1345 Avenue of the Americas, 49th
Floor, New York, New York 10105-4800.

    Prior to January 1, 2005, the Fund's Sub-Advisor was OpCap Advisors
("OpCap"), a wholly-owned subsidiary of the Sub-Advisor. From the Fund's
inception on April 30, 1980 until November 22, 1995, OpCap (which was then
named Quest for Value Advisors) served as the Fund's investment advisor. On
November 22, 1995, the Manager retained OpCap to provide day-to-day portfolio
management for the Fund.


|X|   The Sub-Advisor's Code of Ethics. Each employee of the Sub-Advisor is
subject to a Code of Ethics which has been adopted by the Sub-Advisor to
comply with the provisions of Rule 17j-1 under the Investment Company Act.
The Codes of Ethics are designed to detect and prevent improper personal
trading. The Codes of Ethics permit personnel subject to the Codes to invest
in securities, including securities that may be purchased, sold or held by
the Fund, subject to a number of restrictions and controls including
prohibitions against purchases of securities in an Initial Public Offering
and a preclearance requirement with respect to certain personal securities
transactions.

|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.

      Under the investment advisory and sub-advisory agreements, in choosing
brokers to execute portfolio transactions for the Fund, the Manager and
Sub-Adviser may select brokers (other than affiliates) that provide brokerage
and/or research services to the Fund and/or the other accounts over which the
Manager or its affiliates have investment discretion.  The concessions paid
to those brokers may be higher than another qualified broker would charge, if
the Manager or Sub-Adviser makes a good faith determination that the
concession is fair and reasonable in relation to the services provided.

      Rule 12b-1 under the Investment Company Act prohibits any fund from
compensating a broker or dealer for promoting or selling the fund's shares by
(1) directing to that broker or dealer any of the fund's portfolio
transactions, or (2) directing any other remuneration to that broker or
dealer, such as commissions, mark-ups, mark downs or other fees from the
fund's portfolio transactions, that were effected by another broker or dealer
(these latter arrangements are considered to be a type of "step-out"
transaction). In other words, a fund and its investment advisor cannot use
the fund's brokerage for the purpose of rewarding broker-dealers for selling
the fund's shares.

      However, the Rule permits funds to effect brokerage transactions
through firms that also sell fund shares, provided that certain procedures
are adopted to prevent a quid pro quo with respect to portfolio brokerage
allocations. As permitted by the Rule, the Manager has adopted procedures
(and the Fund's Board of Trustees has approved those procedures) that permit
the Fund to direct portfolio securities transactions to brokers or dealers
that also promote or sell shares of the Fund, subject to the "best execution"
considerations discussed above. Those procedures are designed to prevent: (1)
the Manager's personnel who effect the Fund's portfolio transactions from
taking into account a broker's or dealer's promotion or sales of the Fund
shares when allocating the Fund's portfolio transactions, and (2) the Fund,
the Manager and the Distributor from entering into agreements or
understandings under which the Manager directs or is expected to direct the
Fund's brokerage directly, or through a "step-out" arrangement, to any broker
or dealer in consideration of that broker's or dealer's promotion or sale of
the Fund's shares or the shares of any of the other Oppenheimer funds.

      The 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 broaden the scope and
supplement 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
commissions paid to brokers furnishing such services, together with the
Sub-Advisor's representation that the amount of such commissions was
reasonably related to the value or benefit of such services.









   ---------------------------------------------------------------------
   Fiscal Year Ended 10/31   Total Brokerage Commissions Paid by the
                                              Fund1
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------
            2002                           $14,892,886
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------
            2003                           $11,814,870
   ---------------------------------------------------------------------
   ---------------------------------------------------------------------

            2004                           $11,883,706

   ---------------------------------------------------------------------
1.    Amounts do not include spreads or commissions on principal  transactions
   on a net trade basis.


Distribution and Service Plans

The Distributor.  Under its General Distributor's Agreement with the Trust,
the Distributor acts as the Fund's principal underwriter in the continuous
public offering of the Fund's classes of shares. The Distributor bears the
expenses normally attributable to sales, including advertising and the cost
of printing and mailing prospectuses, other than those furnished to existing
shareholders. The Distributor is not obligated to sell a specific number of
shares.

      The sales charges and concessions paid to, or retained by, the
Distributor from the sale of shares and the contingent deferred sales charges
retained by the Distributor on the redemption of shares during the Fund's
three most recent fiscal years are shown in the tables below.

-------------------------------------------
Fiscal    Aggregate        Class A
                           Front-End
Year      Front-End Sales  Sales Charges
Ended     Charges on       Retained by
10/31:    Class A Shares   Distributor1
-------------------------------------------
-------------------------------------------
  2002      $14,121,824      $3,513,191
-------------------------------------------
-------------------------------------------
  2003       $6,082,038      $1,693,081
-------------------------------------------
-------------------------------------------

  2004      $12,316,772      $3,479,343

-------------------------------------------
1.    Includes amounts  retained by a broker-dealer  that is an affiliate or a
    parent of the Distributor.

-----------------------------------------------------------------------------
Fiscal    Concessions on   Concessions on  Concessions on   Concessions on
Year      Class A Shares   Class B Shares  Class C Shares   Class N Shares
Ended     Advanced by      Advanced by     Advanced by      Advanced by
10/31:    Distributor1     Distributor1    Distributor1     Distributor1
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

  2002       $1,237,651      $32,336,348      $4,801,712        $983,606

-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

  2003        $611,237       $8,142,875       $1,397,803        $475,836

-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

  2004        $792,990       $10,578,513      $2,508,475        $858,034

-----------------------------------------------------------------------------
1.    The  Distributor  advances  concession  payments  to dealers for certain
   sales  of  Class A shares  and for  sales  of Class B and  Class C shares
   from its own resources at the time of sale.

------------------------------------------------------------------------------
Fiscal    Class A          Class B         Class C           Class N
          Contingent       Contingent                        Contingent
Year      Deferred Sales   Deferred Sales  Contingent        Deferred Sales
Ended     Charges          Charges         Deferred Sales    Charges
10/31     Retained by      Retained by     Charges Retained  Retained by
          Distributor      Distributor     by Distributor    Distributor
------------------------------------------------------------------------------
------------------------------------------------------------------------------

  2002        $83,677        $7,504,572        $559,091          $236,911

------------------------------------------------------------------------------
------------------------------------------------------------------------------

  2003        $38,817        $6,310,225        $216,014          $354,859

------------------------------------------------------------------------------
------------------------------------------------------------------------------

  2004        $55,427        $4,944,985        $146,159          $276,218

------------------------------------------------------------------------------

Distribution and Service Plans. The Fund has adopted a Service Plan for Class
A shares and Distribution and Service Plans for Class B, Class C and Class N
shares under Rule 12b-1 of the Investment Company Act. Under those plans the
Fund pays the Distributor for all or a portion of its costs incurred in
connection with the distribution and/or servicing of the shares of the
particular class. Each plan has been approved by a vote of the Board of
Trustees, including a majority of the Independent Trustees1, cast in person
at a meeting called for the purpose of voting on that plan.

      Under the Plans, the Manager and the Distributor may make payments to
affiliates.  In their sole discretion, they may also from time to time make
substantial payments from their own resources, which include the profits the
Manager derives from the advisory fees it receives from the Fund, to
compensate brokers, dealers, financial institutions and other intermediaries
for providing distribution assistance and/or administrative services or that
otherwise promote sales of the Fund's shares.  These payments, some of which
may be referred to as "revenue sharing," may relate to the Fund's inclusion
on a financial intermediary's preferred list of funds offered to its clients.

      Financial intermediaries, brokers and dealers may receive other
payments from the Distributor or the Manager from their own resources in
connection with the promotion and/or sale of shares of the Fund, including
payments to defray expenses incurred in connection with educational seminars
and meetings.  The Manager or Distributor may share expenses incurred by
financial intermediaries in conducting training and educational meetings
about aspects of the Fund for employees of the intermediaries or for hosting
client seminars or meetings at which the Fund is discussed.  In their sole
discretion, the Manager and/or the Distributor may increase or decrease the
amount of payments they make from their own resources for these purposes.

      Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if the Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose
of voting on continuing the plan. A plan may be terminated at any time by the
vote of a majority of the Independent Trustees or by the vote of the holders
of a "majority" (as defined in the Investment Company Act) of the outstanding
shares of that class.

      The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount
of payments to be made under a plan must be approved by shareholders of the
class affected by the amendment. Because Class B shares of the Fund
automatically convert into Class A shares 72 months after purchase, the Fund
must obtain the approval of both Class A and Class B shareholders for a
proposed material amendment to the Class A the plan that would materially
increase payments under the plan. That approval must be by a majority of the
shares of each class, voting separately by class.

      While the plans are in effect, the Treasurer of the Fund shall provide
separate written reports on the plans to the Board of Trustees at least
quarterly for its review. The reports shall detail the amount of all payments
made under a plan and the purpose for which the payments were made. Those
reports are subject to the review and approval of the Independent Trustees.

      Each plan states that while it is in effect, the selection and
nomination of those Trustees of the Fund who are not "interested persons" of
the Fund is committed to the discretion of the Independent Trustees. This
does not prevent the involvement of others in the selection and nomination
process as long as the final decision as to selection or nomination is
approved by a majority of the Independent Trustees.

      Under the plans for a class, no payment will be made to any recipient
in any 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|   Class A Service Plan Fees. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions for personal services and account
maintenance services they provide for their customers who hold Class A
shares. The services include, among others, answering customer inquiries
about the Fund, assisting in establishing and maintaining accounts in the
Fund, making the Fund's investment plans available and providing other
services at the request of the Fund or the Distributor. The Class A service
plan permits compensation to the Distributor at a rate of up to 0.25% of
average annual net assets of Class A shares. The Distributor does not receive
or retain the service fee on Class A shares in accounts for which the
Distributor has been listed as the broker-dealer of record. The Board
Trustees has set that rate. While the plan permits the Board to authorize
payments to the Distributor to reimburse itself for services under the plan,
the Board has not yet done so, except in the case of the special arrangement
described below, regarding grandfathered retirement accounts. The Distributor
makes payments to plan recipients quarterly at an annual rate not to exceed
0.25% of the average annual net assets consisting of Class A shares held in
the accounts of the recipients or their customers.

      Under the Class A distribution plan, the plan provides for the Fund to
pay an asset-based sales charge to the Distributor at an annual rate of 0.25%
of average annual net assets of Class A shares of the Fund. Effective January
1, 2003, the Board set that rate to zero. Prior to that date, the Fund paid
the Distributor an annual asset-based sales charge equal to 0.10% of average
annual net assets representing Class A shares. The Distributor paid the
entire asset-based sales charge to brokers, dealers and financial
institutions.

      With respect to purchases of Class A shares subject to a contingent
deferred sales charge by certain retirement plans that purchased such shares
prior to March 1, 2001 ("grandfathered retirement accounts"), the Distributor
currently intends to pay the service fee to recipients in advance for the
first year after the shares are purchased. During the first year the shares
are sold, the Distributor retains the service fee to reimburse itself for the
costs of distributing the shares. After the first year shares are
outstanding, the Distributor makes service fee payments to recipients
quarterly on those shares. The advance payment is based on the net asset
value of shares sold. Shares purchased by exchange do not qualify for the
advance service fee payment. If Class A shares purchased by grandfathered
retirement accounts are redeemed during the first year after their purchase,
the recipient of the service fees on those shares will be obligated to repay
the Distributor a pro rata portion of the advance payment of the service fee
made on those shares.


      For the fiscal year ended October 31, 2004 payments under the Class A
distribution and service plan totaled $6,845,930, of which $354,388 was paid
to an affiliate of the Distributor's parent company. In addition, $172,007
was retained for the asset-based sales charge, as allowed under the plan
prior to January 1, 2003. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years. The Distributor may not use payments received under the
Class A plan to pay any of its interest expenses, carrying charges, or other
financial costs, or allocation of overhead.


|X|   Class B, Class C and Class N Distribution and Service Plan Fees. Under
each plan, distribution and service fees are computed on the average of the
net asset value of shares in the respective class, determined as of the close
of each regular business day during the period. Each plan provides for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund
under the plan during the period for which the fee is paid. The types of
services that recipients provide are similar to the services provided under
the Class A service plan, described above.

      Each plan permits the Distributor to retain both the asset-based sales
charges and the service fees or to pay recipients the service fee on a
quarterly basis, without payment in advance. However, the Distributor
currently intends to pay the service fee to recipients in advance for the
first year after Class B, Class C and Class N shares are purchased. After the
first year Class B, Class C or Class N shares are outstanding, after their
purchase, the Distributor makes service fee payments quarterly on those
shares. The advance payment is based on the net asset value of shares sold.
Shares purchased by exchange do not qualify for the advance service fee
payment. If Class B, Class C or Class N shares are redeemed during the first
year after their purchase, the recipient of the service fees on those shares
will be obligated to repay the Distributor a pro rata portion of the advance
payment of the service fee made on those shares. Class B, Class C or Class N
shares may not be purchased by an investor directly from the Distributor
without the investor designating another broker-dealer of record.  If the
investor no longer has another broker-dealer of record for an existing
account, the Distributor is automatically designated as the broker-dealer of
record, but solely for the purpose of acting as the investor's agent to
purchase the shares.  In those cases, the Distributor retains the asset-based
sales charge paid on Class B, Class C and Class N shares, but does not retain
any service fees as to the assets represented by that account.

      The asset-based sales charge and service fees increase Class B and
Class C expenses by 1.00% and the asset-based sales charge and service fees
increase Class N expenses by 0.50% of the net assets per year of the
respective classes.

      The Distributor retains the asset-based sales charge on Class B and
Class N shares. The Distributor retains the asset-based sales charge on Class
C shares during the first year the shares are outstanding. It pays the
asset-based sales charge as an ongoing concession to the recipient on Class C
shares outstanding for a year or more. If a dealer has a special agreement
with the Distributor, the Distributor will pay the Class B, Class C or Class
N service fee and the asset-based sales charge to the dealer quarterly in
lieu of paying the sales concession and service fee in advance at the time of
purchase.

      The asset-based sales charge on Class B, Class C and Class N shares
allow investors to buy shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares. The Fund pays
the asset-based sales charge to the Distributor for its services rendered in
distributing Class B, Class C and Class N shares. The payments are made to
the Distributor in recognition that the Distributor:
o     pays sales concessions to authorized brokers and dealers at the time of
         sale and pays service fees as described above,
o     may finance payment of sales concessions and/or the advance of the
         service fee payment to recipients under the plans, or may provide
         such financing from its own resources or from the resources of an
         affiliate,
o     employs personnel to support distribution of Class B, Class C and Class
         N shares,
o     bears the costs of sales literature, advertising and prospectuses
         (other than those furnished to current shareholders) and state "blue
         sky" registration fees and certain other distribution expenses,
o     may not be able to adequately compensate dealers that sell Class B,
         Class C and Class N shares without receiving payment under the plans
         and therefore may not be able to offer such Classes for sale absent
         the plans,
o     receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that
         charge 12b-1 fees,
o     may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund
         shares,
o     may experience increased difficulty selling the Fund's shares if
         payments under the plan are discontinued because most competitor
         funds have plans that pay dealers for rendering distribution
         services as much or more than the amounts currently being paid by
         the Fund, and
o     may not be able to continue providing, at the same or at a lesser cost,
         the same quality distribution sales efforts and services, or to
         obtain such services from brokers and dealers, if the plan payments
         were to be discontinued.

      The Distributor's actual expenses in selling Class B, Class C and Class
N shares may be more than the payments it receives from the contingent
deferred sales charges collected on redeemed shares and from the Fund under
the plans. If either the Class B, Class C or Class N plan is terminated by
the Fund, the Board of Trustees may allow the Fund to continue payments of
the asset-based sales charge to the Distributor for distributing shares
before the plan was terminated.

 -------------------------------------------------------------------------------
  Distribution Fees Paid to the Distributor in the Fiscal Year Ended 10/31/04
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Class:            Total      Amount Retained   Distributor's    Distributor's
                                                  Aggregate      Unreimbursed
                                                 Unreimbursed    Expenses as %
                  Payments                      Expenses Under   of Net Assets
                 Under Plan    by Distributor        Plan          of Class
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------

 Class B Plan   $24,952,922     $19,251,9801     $60,959,378         2.39%

 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------

 Class C Plan   $11,290,179     $2,280,3592      $20,556,604         1.70%

 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------

 Class N Plan     $898,689       $570,7523        $3,804,005         1.83%

 -------------------------------------------------------------------------------

1.    Includes  $354,388  paid to an  affiliate  of the  Distributor's  parent
   company.
2.    Includes  $193,832  paid to an  affiliate  of the  Distributor's  parent
   company.
3.    Includes  $16,600  paid  to an  affiliate  of the  Distributor's  parent
    company.


      All payments under the Class B, Class C and Class N plans are subject
to the limitations imposed by the Conduct Rules of the National Association
of Securities Dealers, Inc. on payments of asset-based sales charges and
service fees.


Performance of the Fund

Explanation of Performance Terminology. The Fund uses a variety of terms to
illustrate its investment performance. Those terms include "cumulative total
return," "average annual total return," "average annual total return at net
asset value" and "total return at net asset value." An explanation of how
total returns are calculated is set forth below. The charts below show the
Fund's performance as of the Fund's most recent fiscal year end. You can
obtain current performance information by calling the Fund's Transfer Agent
at 1.800.225.5677 or by visiting the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.

      The Fund's illustrations of its performance data in advertisements must
comply with rules of the SEC. Those rules describe the types of performance
data that may be used and how it is to be calculated. In general, any
advertisement by the Fund of its performance data must include the average
annual total returns for the advertised class of shares of the Fund.

      Use of standardized performance calculations enables an investor to
compare the Fund's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using the
Fund's performance information as a basis for comparison with other
investments:
o     Total returns measure the performance of a hypothetical account in the
         Fund over various periods and do not show the performance of each
         shareholder's account. Your account's performance will vary from the
         model performance data if your dividends are received in cash, or
         you buy or sell shares during the period, or you bought your shares
         at a different time and price than the shares used in the model.
o     The Fund's performance returns do not reflect the effect of taxes on
         dividends and capital gains distributions.
o     An investment in the Fund is not insured by the FDIC or any other
         government agency.
o     The principal value of the Fund's shares, and total returns are not
         guaranteed and normally will fluctuate on a daily basis.
o     When an investor's shares are redeemed, they may be worth more or less
         than their original cost.
o     Total returns for any given past period represent historical
         performance information and are not, and should not be considered, a
         prediction of future returns.

      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 those
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" in the formula below) (unless the return is
shown without sales charge, as described below). For Class B shares, payment
of the applicable contingent deferred sales charge is applied, depending on
the period for which the return is shown: 5.0% in the first year, 4.0% in the
second year, 3.0% in the third and fourth years, 2.0% in the fifth year, 1.0%
in the sixth year and none thereafter. For Class C shares, the 1.0%
contingent deferred sales charge is deducted for returns for the one-year
period. For Class N shares, the 1.0% contingent deferred sales charge is
deducted for returns for the one-year period, and total returns for the
periods prior to 03/01/01 (the inception date for Class N shares) are 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.

o     Average Annual Total Return. The "average annual total return" of each
class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P" in the formula
below) held for a number of years ("n" in the formula) to achieve an Ending
Redeemable Value ("ERV" in the formula) of that investment, according to the
following formula:

ERV   l/n - 1  Average Annual Total
               Return
  P

o     Average Annual Total Return (After Taxes on Distributions). The
"average annual total return (after taxes on distributions)" of Class A
shares is an average annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of federal taxes
(calculated using the highest individual marginal federal income tax rates in
effect on any reinvestment date) on any distributions made by the Fund during
the specified period. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n" in the formula) to achieve an ending value
("ATVD" in the formula) of that investment, after taking into account the
effect of taxes on Fund distributions, but not on the redemption of Fund
shares, according to the following formula:

           - 1 = Average Annual Total Return (After Taxes on
ATVD   l/n     Distributions)
---
  P

o     Average Annual Total Return (After Taxes on Distributions and
Redemptions). The "average annual total return (after taxes on distributions
and redemptions)" of Class A shares is an average annual compounded rate of
return for each year in a specified number of years, adjusted to show the
effect of federal taxes (calculated using the highest individual marginal
federal income tax rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period and the effect of
capital gains taxes or capital loss tax benefits (each calculated using the
highest federal individual capital gains tax rate in effect on the redemption
date) resulting from the redemption of the shares at the end of the period.
It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVDR" in the
formula) of that investment, after taking into account the effect of taxes on
fund distributions and on the redemption of Fund shares, according to the
following formula:

ATVDR       - 1  = Average Annual Total Return (After Taxes on Distributions
---
l/n              and Redemptions)
  P

o     Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an
annual basis. Cumulative total return is determined as follows:

 ERV - P   = Total Return
-----------
    P
o     Total Returns at Net Asset Value. From time to time the Fund may also
quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for Class A, Class B, Class C 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 10/31/04
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Class of  Cumulative Total              Average Annual Total Returns
             Returns (10
              years or
Shares     life-of-class)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
                                 1-Year            5-Year           10-Year
                                                (or life of       (or life of
                                                   class)           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   216.05%  235.34%    3.48%    9.79%    2.77%   3.99%   12.20%   12.86%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class B2   223.67%  223.67%    3.97%    8.97%    2.93%   3.29%   12.46%   12.46%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class C3   214.32%  214.32%    8.10%    9.10%    3.33%   3.33%   12.13%   12.13%

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class N     8.14%4   8.14%4    8.47%    9.47%   2.16%4  2.16%4      N/A      N/A

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class Y    25.55%5   25.55%   10.17%   10.17%   5.19%5  5.19%5      N/A      N/A

---------------------------------------------------------------------------------
1. Inception of Class A:      11/01/91
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:      05/01/00

-----------------------------------------------------------------------------
    Average Annual Total Returns for Class A Shares (After Sales Charge)
                       For the Periods Ended 10/31/04
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
                                 1-Year          5-Year          10-Year
                                              (or life of      (or life of
                                                 class)          class)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

After Taxes on Distributions     3.44%           1.73%            9.67%

-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

After Taxes on                   2.30%           1.74%            9.13%

Distributions and
Redemption of Fund Shares
-----------------------------------------------------------------------------
1.    Inception of Class A: 11/01/91

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"). Lipper
is a widely-recognized independent mutual fund monitoring service. Lipper
monitors the performance of regulated investment companies, including the
Fund, and ranks their performance for various periods in categories based on
investment styles. The Lipper performance rankings are based on total returns
that include the reinvestment of capital gain distributions and income
dividends but do not take sales charges or taxes into consideration. Lipper
also publishes "peer-group" indices of the performance of all mutual funds in
a category that it monitors and averages of the performance of the funds in
particular categories.

|X|   Morningstar Ratings. From time to time the Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., an
independent mutual fund monitoring service. Morningstar rates mutual funds in
their specialized market sector. The Fund is include rated among moderate
allocation 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"). 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.

A fiduciary can count all shares purchased for a trust, estate or other
fiduciary account (including one or more employee benefit plans of the same
employer) that has multiple accounts. The Distributor will add the value, at
current offering price, of the shares you previously purchased and currently
own to the value of current purchases to determine the sales charge rate that
applies. The reduced sales charge will apply only to current purchases. You
must request it when you buy shares.

The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for which
the Distributor acts as the distributor and currently include the following:


Oppenheimer AMT-Free Municipals           Oppenheimer Limited Term Municipal Fund
Oppenheimer AMT-Free New York Municipals  Oppenheimer Main Street Fund
Oppenheimer Balanced Fund                 Oppenheimer Main Street Opportunity Fund
Oppenheimer Bond Fund                     Oppenheimer Main Street Small Cap Fund
Oppenheimer California Municipal Fund     Oppenheimer MidCap Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Income Fund           Oppenheimer Pennsylvania Municipal Fund

                                          Oppenheimer   Principal  Protected  Main

Oppenheimer Champion Income Fund          Street Fund

                                          Oppenheimer   Principal  Protected  Main

Oppenheimer Convertible Securities Fund   Street Fund II

                                          Oppenheimer   Principal  Protected  Main

Oppenheimer Developing Markets Fund       Street Fund III
Oppenheimer Disciplined Allocation Fund   Oppenheimer Quest Balanced Fund

                                          Oppenheimer  Quest  Capital  Value Fund,

Oppenheimer Discovery Fund                Inc.

                                          Oppenheimer  Quest  International  Value

Oppenheimer Emerging Growth Fund          Fund, Inc.
Oppenheimer Emerging Technologies Fund    Oppenheimer Quest Opportunity Value Fund
Oppenheimer Enterprise Fund               Oppenheimer Quest Value Fund, Inc.
Oppenheimer Equity Fund, Inc.             Oppenheimer Real Asset Fund
Oppenheimer Global Fund                   Oppenheimer Real Estate Fund

                                          Oppenheimer      Rochester      National

Oppenheimer Global Opportunities Fund     Municipals
Oppenheimer Gold & Special Minerals Fund  Oppenheimer Select Value Fund
Oppenheimer Growth Fund                   Oppenheimer Senior Floating Rate Fund
Oppenheimer High Yield Fund               Oppenheimer Small Cap Value Fund
Oppenheimer International Bond Fund       Oppenheimer Strategic Income Fund
Oppenheimer International Growth Fund     Oppenheimer Total Return Bond Fund
Oppenheimer  International  Small Company
Fund                                      Oppenheimer U.S. Government Trust
Oppenheimer International Value Fund      Oppenheimer Value Fund
Oppenheimer   Limited   Term   California
Municipal Fund                            Limited-Term New York Municipal Fund
Oppenheimer Limited-Term Government Fund  Rochester Fund Municipals


And the following money market funds:


Oppenheimer Cash Reserves                 Centennial Money Market Trust
Oppenheimer Money Market Fund, Inc.       Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust    Centennial Tax Exempt Trust
Centennial Government Trust


      There is an initial sales charge on the purchase of Class A shares of
each of the Oppenheimer funds described above except the money market funds.
Under certain circumstances described in this Statement of Additional
Information, redemption proceeds of certain money market fund shares may be
subject to a contingent deferred sales charge.


   Letters of Intent.  Under a Letter of Intent ("Letter"), you can reduce
   the sales charge rate that applies to your purchases of Class A shares if
   you purchase Class A, Class B or (effective March 18, 2005) Class C shares
   of the Fund or other Oppenheimer funds during a 13-month period. The total
   amount of your purchases of Class A, Class B and (effective March 18,
   2005) Class C shares will determine the sales charge rate that applies to
   your Class A share purchases during that period. You can choose to include
   purchases made up to 90 days before the date of the Letter. Class A shares
   of Oppenheimer Money Market Fund, Inc. and Oppenheimer Cash Reserves fund
   on which you did not pay a sales charge and any Class N shares you
   purchase, or may have purchased, will not be counted towards satisfying
   the purchases specified in a Letter.

         A Letter is an investor's statement in writing to the Distributor of
   his or her intention to purchase a specified value of Class A, Class B and
   (effective March 18, 2005) Class C shares of the Fund and other
   Oppenheimer funds during a 13-month period (the "Letter period"). At the
   investor's request, this may include purchases made up to 90 days prior to
   the date of the Letter. The Letter states the investor's intention to make
   the aggregate amount of purchases of shares which, 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 capital gains distributions and purchases made at net asset
   value (i.e. without a sales charge) do not count toward satisfying the
   amount of the Letter.

      Each purchase of Class A shares under the Letter will be made at the
offering price (including the sales charge) that would apply to a single
lump-sum purchase of shares in the amount intended to be purchased under the
Letter.


      In submitting a Letter, the investor makes no commitment to purchase
shares. However, if the investor's purchases of shares within the Letter
period, when added to the value (at offering price) of the investor's
holdings of shares on the last day of that period, do not equal or exceed the
intended purchase amount, the investor agrees to pay the additional amount of
sales charge applicable to such purchases. That amount is described in "Terms
of Escrow," below (those terms may be amended by the Distributor from time to
time). The investor agrees that shares equal in value to 5% of the intended
purchase amount will be held in escrow by the Transfer Agent subject to the
Terms of Escrow. Also, the investor agrees to be bound by the terms of the
Prospectus, this Statement of Additional Information and the application used
for a Letter. If those terms are amended, as they may be from time to time by
the Fund, the investor agrees to be bound by the amended terms and that those
amendments will apply automatically to existing Letters.

      If the total eligible purchases made during the Letter period do not
equal or exceed the intended purchase amount, the concessions previously paid
to the dealer of record for the account and the amount of sales charge
retained by the Distributor will be adjusted to the rates applicable to
actual total purchases. If total eligible purchases during the Letter period
exceed the intended purchase amount and exceed the amount needed to qualify
for the next sales charge rate reduction set forth in the Prospectus, the
sales charges paid will be adjusted to the lower rate. That adjustment will
be made only if and when the dealer returns to the Distributor the excess of
the amount of concessions allowed or paid to the dealer over the amount of
concessions that apply to the actual amount of purchases. The excess
concessions returned to the Distributor will be used to purchase additional
shares for the investor's account at the net asset value per share in effect
on the date of such purchase, promptly after the Distributor's receipt
thereof.

      The  Transfer  Agent  will not hold  shares in escrow for  purchases  of
shares of the Fund and other Oppenheimer funds by  OppenheimerFunds  prototype
401(k) plans under a Letter.  If the intended  purchase  amount under a Letter
entered into by an OppenheimerFunds  prototype 401(k) plan is not purchased by
the plan by the end of the  Letter  period,  there  will be no  adjustment  of
concessions paid to the  broker-dealer or financial  institution of record for
accounts held in the name of that plan.

      In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter when placing any purchase
orders for the investor during the Letter period. All of such purchases must
be made through the Distributor.

      |X|   Terms of Escrow That Apply to Letters of Intent.

      1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value up to 5% of the
intended purchase amount specified in the Letter shall be held in escrow by
the Transfer Agent. For example, if the intended purchase amount is $50,000,
the escrow shall be shares valued in the amount of $2,500 (computed at the
offering price adjusted for a $50,000 purchase). Any dividends and capital
gains distributions on the escrowed shares will be credited to the investor's
account.

      2. If the total minimum investment specified under the Letter is
completed within the 13-month Letter period, the escrowed shares will be
promptly released to the investor.

      3. If, at the end of the 13-month Letter period the total purchases
pursuant to the Letter are less than the intended purchase amount specified
in the Letter, the investor must remit to the Distributor an amount equal to
the difference between the dollar amount of sales charges actually paid and
the amount of sales charges which would have been paid if the total amount
purchased had been made at a single time. That sales charge adjustment will
apply to any shares redeemed prior to the completion of the Letter. If the
difference in sales charges is not paid within twenty days after a request
from the Distributor or the dealer, the Distributor will, within sixty days
of the expiration of the Letter, redeem the number of escrowed shares
necessary to realize such difference in sales charges. Full and fractional
shares remaining after such redemption will be released from escrow. If a
request is received to redeem escrowed shares prior to the payment of such
additional sales charge, the sales charge will be withheld from the
redemption proceeds.

      4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for redemption
any or all escrowed shares.

5.    The shares eligible for purchase under the Letter (or the holding of
which may be counted toward completion of a Letter) include:
(a)   Class A shares sold with a front-end sales charge or subject to a Class
            A contingent deferred sales charge,
(b)   Class B 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 charges or at reduced sales charge rates, as
described in an Appendix 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 $1 million in assets invested in
applicable investments (other than assets invested in money market funds),
then the retirement plan may purchase only Class C shares of the Oppenheimer
funds.  If on the date the plan sponsor signed the Merrill Lynch record
keeping service agreement the plan has $1 million or more in assets but less
than $5 million in assets invested in applicable investments (other than
assets invested in money market funds), then the retirement plan may purchase
only Class N shares of the Oppenheimer funds.  If on the date the plan
sponsor signed the Merrill Lynch record keeping service agreement the plan
has $5 million or more in assets invested in applicable investments (other
than assets invested in money market funds), then the retirement plan may
purchase only Class A shares of the Oppenheimer funds.

      OppenheimerFunds has entered into arrangements with certain record
keepers whereby the Transfer Agent compensates the record keeper for its
record keeping and account servicing functions that it performs on behalf of
the participant level accounts of a retirement plan. While such compensation
may act to reduce the record keeping fees charged by the retirement plan's
record keeper, that compensation arrangement may be terminated at any time,
potentially affecting the record keeping fees charged by the retirement
plan's record keeper.

Cancellation of Purchase Orders. Cancellation of purchase orders for the
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 purchase order of $100,000 or more for
Class B shares or a purchase order of $1 million or more to purchase Class C
shares on behalf of a single investor (not including dealer "street name" or
omnibus accounts).

|X|   Class A Shares Subject to a Contingent Deferred Sales Charge. For
purchases of Class A shares at net asset value whether or not subject to a
contingent deferred sales charge as described in the Prospectus, no sales
concessions will be paid to the broker-dealer of record, as described in the
Prospectus, on sales of Class A shares purchased with the redemption proceeds
of shares of another mutual fund offered as an investment option in a
retirement plan in which Oppenheimer funds are also offered as investment
options under a special arrangement with the Distributor, if the purchase
occurs more than 30 days after the Oppenheimer funds are added as an
investment option under that plan. Additionally, that concession will not be
paid on purchases of Class A shares by a retirement plan made with the
redemption proceeds of Class N shares of one or more Oppenheimer funds held
by the plan for more than 18 months.

      |X|   Class B Conversion. Under current interpretations of applicable
federal income tax law by the Internal Revenue Service, the conversion of
Class B shares to Class A shares 72 months after purchase is not treated as a
taxable event for the shareholder. If those laws or the IRS interpretation of
those laws should change, the automatic conversion feature may be suspended.
In that event, no further conversions of Class B shares would occur while
that suspension remained in effect. Although Class B shares could then be
exchanged for Class A shares on the basis of relative net asset value of the
two classes, without the imposition of a sales charge or fee, such exchange
could constitute a taxable event for the shareholder, and absent such
exchange, Class B shares might continue to be subject to the asset-based
sales charge for longer than six years.

      |X|   Availability of Class N Shares. In addition to the description of
the types of retirement plans which may purchase Class N shares contained in
the prospectus, Class N shares also are offered to the following:
o     to all rollover IRAs (including SEP IRAs and SIMPLE IRAs),
o     to all rollover contributions made to Individual 401(k) plans,
            Profit-Sharing Plans and Money Purchase Pension Plans,
o     to all direct rollovers from OppenheimerFunds-sponsored Pinnacle and
            Ascender retirement plans,
o     to all trustee-to-trustee IRA transfers,
o     to all 90-24 type 403(b) transfers,
o     to Group Retirement Plans (as defined in Appendix C to this Statement
            of Additional Information) which have entered into a special
            agreement with the Distributor for that purpose,
o     to Retirement Plans qualified under Sections 401(a) or 401(k) of the
            Internal Revenue Code, the recordkeeper or the plan sponsor for
            which has entered into a special agreement with the Distributor,
o     to Retirement Plans of a plan sponsor where the aggregate assets of all
            such plans invested in the Oppenheimer funds is $500,000 or more,
o     to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
            purchase with the redemption proceeds of Class A shares of one or
            more Oppenheimer funds, and
o     to certain customers of broker-dealers and financial advisors that are
            identified in a special agreement between the broker-dealer or
            financial advisor and the Distributor for that purpose.

      The sales concession and the advance of the service fee, as described
in the Prospectus, will not be paid to dealers of record on sales of Class N
shares on:
         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),
         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
         on purchases of Class N shares by an OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k) plan made with the redemption
            proceeds of Class A shares of one or more Oppenheimer funds.

      No sales concessions will be paid to the broker-dealer of record, as
described in the Prospectus, on sales of Class N shares purchased with the
redemption proceeds of shares of another mutual fund offered as an investment
option in a retirement plan in which Oppenheimer funds are also offered as
investment options under a special arrangement with the Distributor, if the
purchase occurs more than 30 days after the Oppenheimer funds are added as an
investment option under that plan.

      |X|   Allocation of Expenses. The Fund pays expenses related to its
daily operations, such as custodian fees, Trustees' fees, transfer agency
fees, legal fees and auditing costs. Those expenses are paid out of the
Fund's assets and are  not paid directly by shareholders. However, those
expenses reduce the net asset values of shares, and therefore are indirectly
borne by shareholders through their investment.

      The methodology for calculating the net asset value, dividends and
distributions of the Fund's share classes recognizes two types of expenses.
General expenses that do not pertain specifically to any one class are
allocated pro rata to the shares of all classes. The allocation is based on
the percentage of the Fund's total assets that is represented by the assets
of each class, and then equally to each outstanding share within a given
class. Such general expenses include management fees, legal, bookkeeping and
audit fees, printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current
shareholders, fees to unaffiliated Trustees, custodian expenses, share
issuance costs, organization and start-up costs, interest, taxes and
brokerage commissions, and non-recurring expenses, such as litigation costs.

      Other expenses that are directly attributable to a particular class are
allocated equally to each outstanding share within that class. Examples of
such expenses include distribution and  service plan (12b-1) fees, transfer
and shareholder servicing agent fees and expenses, and shareholder meeting
expenses (to the extent that such expenses pertain only to a specific class).

Fund Account Fees. As stated in the Prospectus, a $12 annual "Minimum Balance
Fee" is assessed on each Fund account with a share balance valued under $500.
The Minimum Balance Fee is automatically deducted from each such Fund account
on or about the second to last business day of September.

      Listed below are certain cases in which the Fund has elected, in its
discretion, not to assess the Fund Account Fees.  These exceptions are
subject to change:
o     A fund account whose shares were acquired after September 30th of the
            prior year;
o     A fund account that has a balance below $500 due to the automatic
            conversion of shares from Class B to Class A shares. However,
            once all Class B shares held in the account have been converted
            to Class A shares the new account balance may become subject to
            the Minimum Balance Fee;
o     Accounts of shareholders who elect to access their account documents
            electronically via eDoc Direct;
o     A fund account that has only certificated shares and, has a balance
            below $500 and is being escheated;
o     Accounts of shareholders that are held by broker-dealers under the NSCC
            Fund/SERV system;
o     Accounts held under the Oppenheimer Legacy Program and/or holding
            certain Oppenheimer Variable Account Funds;
o     Omnibus accounts holding shares pursuant to the Pinnacle, Ascender,
            Custom Plus, Recordkeeper Pro and Pension Alliance Retirement
            Plan programs; and
o     A fund account that falls below the $500 minimum solely due to market
            fluctuations within the 12-month period preceding the date the
            fee is deducted.

      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.

      The Fund reserves the authority to modify Fund Account Fees in its
discretion.

Determination of Net Asset Values Per Share. The net asset values per share
of each class of shares of the Fund are determined as of the close of
business of the Exchange on each day that the Exchange is open. The
calculation is done by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that class that are
outstanding. The Exchange normally closes at 4:00 P.M., Eastern time, but may
close earlier on some other days (for example, in case of weather emergencies
or on days falling before a U.S. holiday). All references to time in this
Statement of Additional Information mean "Eastern time." The Exchange's most
recent annual announcement (which is subject to change) states that it will
close on New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. It may also close on other days.

      Dealers other than Exchange members may conduct trading in certain
securities on days on which the Exchange is closed (including weekends and
holidays) or after 4:00 P.M. on a regular business day. Because the Fund's
net asset values will not be calculated on those days, the Fund's net asset
values per share may be significantly affected on such days when shareholders
may not purchase or redeem shares. 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(R), as applicable, on that day, or
(2)   if last sale information is not available on a valuation date, they are
               valued at the last reported sale price preceding the valuation
               date if it is within the spread of the closing "bid" and
               "asked" prices on the valuation date or, if not,  at the
               closing "bid" price on the valuation date.
o     Equity securities traded on a foreign securities exchange generally are
valued in one of the following ways:
(1)   at the last sale price available to the pricing service approved by the
               Board of Trustees, or
(2)   at the last sale price obtained by the Manager from the report of the
               principal exchange on which the security is traded at its last
               trading session on or immediately before the valuation date, or
(3)   at the mean between the "bid" and "asked" prices obtained from the
               principal exchange on which the security is traded or, on the
               basis of reasonable inquiry, from two market makers in the
               security.
o     Long-term debt securities having a remaining maturity in excess of 60
days are valued based on the mean between the "bid" and "asked" prices
determined by a portfolio pricing service approved by 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(R), as applicable, as
determined by a pricing service approved by the Board of Trustees or by the
Manager. If there were no sales that day, they shall be valued at the last
sale price on the preceding trading day if it is within the spread of the
closing "bid" and "asked" prices on the principal exchange or on Nasdaq(R)on
the valuation date. If not, the value shall be the closing bid price on the
principal exchange or on Nasdaq(R)on the valuation date. If the put, call or
future is not traded on an exchange or on Nasdaq(R), it shall be valued by the
mean between "bid" and "asked" prices obtained by the Manager from two active
market makers. In certain cases that may be at the "bid" price if no "asked"
price is available.

      When 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.

      If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to
act as agent in administering the plan.

How to Exchange Shares

As stated in the Prospectus, shares of a particular class of Oppenheimer
funds having more than one class of shares may be exchanged only for shares
of the same class of other Oppenheimer funds. Shares of Oppenheimer funds
that have a single class without a class designation are deemed "Class A"
shares for this purpose. You can obtain a current list showing which funds
offer which classes of shares by calling the Distributor.

o     All of the Oppenheimer funds currently offer Class A, B, C, N and Y
      shares with the following exceptions:

   The following funds only offer Class A shares:
   Centennial California Tax Exempt Trust    Centennial New York Tax Exempt
                                             Trust

   Centennial Government Trust               Centennial Tax Exempt Trust
   Centennial Money Market Trust



   The following funds do not offer Class N shares:
   Limited Term New York Municipal Fund      Oppenheimer New Jersey Municipal Fund
   Oppenheimer AMT-Free Municipals           Oppenheimer Principal Protected Main
                                             Street Fund II
   Oppenheimer AMT-Free New York             Oppenheimer Pennsylvania Municipal
   Municipals                                Fund
   Oppenheimer California Municipal Fund     Oppenheimer Rochester National
                                             Municipals
   Oppenheimer International Value Fund      Oppenheimer Senior Floating Rate Fund
   Oppenheimer Limited Term California       Rochester Fund Municipals
   Municipal Fund
   Oppenheimer Limited Term Municipal
   Fund
   Oppenheimer Money Market Fund, Inc.

   The following funds do not offer Class Y shares:
   Limited Term New York Municipal Fund      Oppenheimer International Small Company
                                             Fund
   Oppenheimer AMT-Free Municipals          Oppenheimer Limited Term Municipal Fund
   Oppenheimer AMT-Free New York Municipals Oppenheimer New Jersey Municipal Fund
   Oppenheimer Balanced Fund                Oppenheimer Pennsylvania Municipal Fund
   Oppenheimer California Municipal Fund    Oppenheimer Principal Protected Main
                                            Street Fund
   Oppenheimer Capital Income Fund          Oppenheimer Principal Protected Main
                                            Street Fund II
   Oppenheimer Cash Reserves                Oppenheimer Principal Protected Main
                                            Street Fund III
   Oppenheimer Champion Income Fund         Oppenheimer Quest Capital Value Fund,
                                            Inc.
   Oppenheimer Convertible Securities Fund  Oppenheimer Quest International Value
                                            Fund, Inc.
   Oppenheimer Disciplined Allocation Fund  Oppenheimer Rochester National Municipals
   Oppenheimer Developing Markets Fund      Oppenheimer Senior Floating Rate Fund
   Oppenheimer Gold & Special Minerals Fund Oppenheimer Small Cap Value Fund
   Oppenheimer International Growth Fund    Oppenheimer Total Return Bond Fund


o     Oppenheimer Money Market Fund, Inc. only offers Class A and Class Y
      shares.
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 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 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.
o     Shares of Oppenheimer Principal Protected Main Street Fund may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund until after the expiration of the warranty period
      (8/5/2010).
o     Shares of Oppenheimer Principal Protected Main Street Fund II may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund II until after the expiration of the warranty period
      (2/4/2011).
o     Shares of Oppenheimer Principal Protected Main Street Fund III may be
      exchanged at net asset value for shares of any of the Oppenheimer
      funds. However, shareholders are not permitted to exchange shares of
      other Oppenheimer funds for shares of Oppenheimer Principal Protected
      Main Street Fund III until after the expiration of the warranty period
      (12/6/2011).

      The 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 except for the funds listed in the next
item immediately below, 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 B shares of Limited-Term Government Fund, Limited
Term Municipal Fund, Limited Term New York Municipal Fund, Oppenheimer Senior
Floating Rate Fund and Cash Reserves that were initially purchased as shares
of Oppenheimer Capital Preservation Fund, the Class B contingent deferred
sales charge is imposed on Class B shares acquired by exchange if they are
redeemed within 5 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.

      |X|   Telephone Exchange Requests. When exchanging shares by telephone,
a shareholder must have an existing account in the fund to which the exchange
is to be made. Otherwise, the investors must obtain a prospectus of that fund
before the exchange request may be submitted. If all telephone lines are busy
(which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.

Processing  Exchange  Requests.  Shares to be  exchanged  are  redeemed on the
regular  business  day the  Transfer  Agent  receives an  exchange  request in
proper  form  (the  "Redemption  Date").  Normally,  shares  of the fund to be
acquired are  purchased on the  Redemption  Date,  but such  purchases  may be
delayed  by either  fund up to five  business  days if it  determines  that it
would be  disadvantaged by an immediate  transfer of the redemption  proceeds.
The Fund  reserves  the  right,  in its  discretion,  to refuse  any  exchange
request  that may  disadvantage  it. For  example,  if the receipt of multiple
exchange  requests  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.

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 28% of ordinary
income dividends, capital gains distributions and the proceeds of the
redemption of shares, paid to any shareholder (1) who has failed to provide a
correct taxpayer identification number or to properly certify that number
-------
when required, (2) who is subject to backup withholding for failure to report
the receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that the shareholder is not subject to backup withholding
or is an "exempt recipient" (such as a corporation). Any tax withheld by the
Fund is remitted by the Fund to the U.S. Treasury and all income and any tax
withheld is identified in reports mailed to shareholders in January of each
year with a copy sent to the IRS.


Tax Effects of Redemptions of Shares. If a shareholder redeems all or a
portion of his/her shares, the shareholder will recognize a gain or loss on
the redeemed shares in an amount equal to the difference between the proceeds
of the redeemed shares and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss recognized in that manner may be
disallowed if the shareholder purchases other shares of the Fund within 30
days before or after the redemption.

      In general, any gain or loss arising from the redemption of shares of
the Fund will be considered capital gain or loss, if the shares were held as
a capital asset. It will be long-term capital gain or loss if the shares were
held for more than one year. However, any capital loss arising from the
redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of the amount of capital gain dividends
received on those shares. Special holding period rules under the Internal
Revenue Code apply in this case to determine the holding period of shares and
there are limits on the deductibility of capital losses in any year.

Foreign Shareholders. Under U.S. tax law, taxation of a shareholder who is a
foreign person (to include, but not limited to, a nonresident alien
individual, a foreign trust, a foreign estate, a foreign corporation, or a
foreign partnership) primarily depends on whether the foreign person's income
from the Fund is effectively connected with the conduct of a U.S. trade or
business. Typically, ordinary income dividends paid from a mutual fund are
not considered "effectively connected" income.


      Ordinary income dividends that are paid by the Fund (and are deemed not
"effectively connected income") to foreign persons will be subject to a U.S.
tax withheld by the Fund at a rate of 30%, provided the Fund obtains a
properly completed and signed Certificate of Foreign Status. The tax rate may
be reduced if the foreign person's country of residence has a tax treaty with
the U.S. allowing for a reduced tax rate on ordinary income dividends paid by
the Fund. Any tax withheld by the Fund is remitted by the Fund to the U.S.
Treasury and all income and any tax withheld is identified in reports mailed
to shareholders in March of each year with a copy sent to the IRS.

      If the ordinary income dividends from the Fund are effectively
                                                     ---
connected with the conduct of a U.S. trade or business, then the foreign
person may claim an exemption from the U.S. tax described above provided the
Fund obtains a properly completed and signed Certificate of Foreign Status.
If the foreign person fails to provide a certification of his/her foreign
status, the Fund will be required to withhold U.S. tax at a rate of 28% on
ordinary income dividends, capital gains distributions and the proceeds of
the redemption of shares, paid to any foreign person. 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 with a copy sent to the IRS.


      The tax consequences to foreign persons entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisors or the U.S.
Internal Revenue Service with respect to the particular tax consequences to
them of an investment in the Fund, including the applicability of the U.S.
withholding taxes described above.

Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the
same class of any of the other Oppenheimer funds 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 Registered Public Accounting Firm. KPMG LLP serves as the
independent registered public accounting firm for the Fund. KPMG LLP audits
the Fund's financial statements and performs other related audit services.
KPMG LLP also acts as the independent registered public accounting firm for
certain other funds advised by the Manager and its affiliates. Audit and
non-audit services provided by KPMG LLP to the Fund must be pre-approved by
the Audit Committee.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER QUEST FOR VALUE FUNDS:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Quest Balanced Fund formerly Oppenheimer Quest Balanced Value Fund
(one of the portfolios constituting the Oppenheimer Quest For Value Funds),
including the statement of investments, as of October 31, 2004, 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 five 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.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 2004, 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 Fund as of October 31, 2004, 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 five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.


KPMG LLP

Denver, Colorado
December 16, 2004





STATEMENT OF INVESTMENTS  October 31, 2004
--------------------------------------------------------------------------------

                                                                           VALUE
                                                          SHARES      SEE NOTE 1
--------------------------------------------------------------------------------
COMMON STOCKS--72.5%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--11.9%
--------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--3.8%
Royal Caribbean Cruises Ltd.                           5,845,400   $ 272,395,640
--------------------------------------------------------------------------------
MEDIA--3.7%
DirecTV Group, Inc. (The) 1                           16,000,000     268,320,000
--------------------------------------------------------------------------------
MULTILINE RETAIL--1.3%
Dollar General Corp.                                   5,200,000     100,100,000
--------------------------------------------------------------------------------
SPECIALTY RETAIL--3.1%
Abercrombie & Fitch Co., Cl. A                         1,344,600      52,681,428
--------------------------------------------------------------------------------
Office Depot, Inc. 1                                  10,098,500     163,494,715
--------------------------------------------------------------------------------
Tiffany & Co.                                            294,800       8,646,484
                                                                   -------------
                                                                     224,822,627

--------------------------------------------------------------------------------
CONSUMER STAPLES--4.5%
--------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--4.5%
Wal-Mart Stores, Inc.                                  6,000,000     323,520,000
--------------------------------------------------------------------------------
ENERGY--9.1%
--------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.3%
Nabors Industries Ltd. 1                                 500,000      24,560,000
--------------------------------------------------------------------------------
OIL & GAS--8.8%
BP plc, ADR                                            3,000,000     174,750,000
--------------------------------------------------------------------------------
ChevronTexaco Corp.                                    2,000,000     106,120,000
--------------------------------------------------------------------------------
ConocoPhillips                                         4,250,000     358,317,500
                                                                   -------------
                                                                     639,187,500

--------------------------------------------------------------------------------
FINANCIALS--12.2%
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.2%
American Express Co.                                   3,000,000     159,210,000
--------------------------------------------------------------------------------
INSURANCE--10.0%
AMBAC Financial Group, Inc.                            2,000,000     156,120,000
--------------------------------------------------------------------------------
American International Group, Inc.                     3,000,000     182,130,000
--------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The)          4,500,000     263,160,000
--------------------------------------------------------------------------------
UnumProvident Corp.                                    9,000,000     122,940,000
                                                                   -------------
                                                                     724,350,000

--------------------------------------------------------------------------------
HEALTH CARE--10.7%
--------------------------------------------------------------------------------
BIOTECHNOLOGY--2.8%
Amgen, Inc. 1                                          2,000,000     113,600,000
--------------------------------------------------------------------------------
Wyeth                                                  2,206,400      87,483,760
                                                                   -------------
                                                                     201,083,760


                      19 | OPPENHEIMER QUEST BALANCED FUND

STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------
                                                                           VALUE
                                                          SHARES      SEE NOTE 1
--------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.4%
Anthem, Inc. 1                                         1,300,000   $ 104,520,000
--------------------------------------------------------------------------------
PHARMACEUTICALS--6.5%
Pfizer, Inc.                                           5,000,000     144,750,000
--------------------------------------------------------------------------------
Sanofi-Aventis SA, ADR                                 9,000,000     328,500,000
                                                                   -------------
                                                                     473,250,000

--------------------------------------------------------------------------------
INDUSTRIALS--2.4%
--------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.3%
ChoicePoint, Inc. 1                                    2,200,000      91,586,000
--------------------------------------------------------------------------------
MACHINERY--1.1%
SPX Corp.                                              2,157,700      82,747,795
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--13.3%
--------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--3.5%
Cisco Systems, Inc. 1                                  9,624,400     184,884,724
--------------------------------------------------------------------------------
JDS Uniphase Corp. 1                                  22,000,000      69,740,000
                                                                   -------------
                                                                     254,624,724

--------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.1%
Flextronics International Ltd. 1                      12,400,000     149,420,000
--------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--6.9%
Freescale Semiconductor, Inc., Cl. A 1                 4,500,000      69,930,000
--------------------------------------------------------------------------------
Intel Corp.                                            8,500,000     189,210,000
--------------------------------------------------------------------------------
Texas Instruments, Inc.                               10,000,000     244,500,000
                                                                   -------------
                                                                     503,640,000

--------------------------------------------------------------------------------
SOFTWARE--0.8%
Cadence Design Systems, Inc. 1                         4,394,400      54,666,336
--------------------------------------------------------------------------------
MATERIALS--8.4%
--------------------------------------------------------------------------------
METALS & MINING--5.9%
Alcan, Inc.                                            4,700,000     217,704,000
--------------------------------------------------------------------------------
Inco Ltd. 1                                            5,900,000     208,860,000
                                                                   -------------
                                                                     426,564,000

--------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--2.5%
International Paper Co.                                4,800,000     184,848,000
                                                                   -------------
Total Common Stocks (Cost $4,906,569,793)                          5,263,416,382

                                                           UNITS
--------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
--------------------------------------------------------------------------------
Conseco, Inc. Wts., Exp. 9/10/08 1 (Cost $1,000,000)     200,000         472,000


                      20 | OPPENHEIMER QUEST BALANCED FUND

                                                       PRINCIPAL           VALUE
                                                          AMOUNT      SEE NOTE 1
--------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--3.9%
--------------------------------------------------------------------------------
U.S. Treasury Nts.:
1.625%, 3/31/05                                     $221,200,000   $ 220,871,739
2.625%, 3/15/09                                       65,155,000      63,724,652
                                                                   -------------
Total U.S. Government Obligations
 (Cost $280,949,359)                                                 284,596,391

--------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--22.4%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--2.9%
--------------------------------------------------------------------------------
AUTOMOBILES--1.4%
DaimlerChrysler North America Holding Corp.:
3.40% Nts., Series D, 12/15/04                        19,480,000      19,493,227
7.40% Unsec. Nts., 1/20/05                            14,600,000      14,755,329
--------------------------------------------------------------------------------
Ford Motor Co., 7.45% Bonds, 7/16/31                   7,610,000       7,432,337
--------------------------------------------------------------------------------
Ford Motor Credit Co., 6.125% Unsec. Nts., 1/9/06     20,060,000      20,732,792
--------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.75% Nts., 1/15/06  38,505,000      39,861,570
                                                                   -------------
                                                                     102,275,255

--------------------------------------------------------------------------------
MEDIA--1.5%
News America Holdings, Inc., 9.25% Sr. Debs., 2/1/13   8,500,000      11,016,697
--------------------------------------------------------------------------------
Time Warner, Inc., 5.625% Sr. Unsec. Nts., 5/1/05     29,270,000      29,715,606
--------------------------------------------------------------------------------
Viacom, Inc., 6.40% Sr. Nts., 1/30/06                 38,950,000      40,730,171
--------------------------------------------------------------------------------
Walt Disney Co. (The), 7.30% Nts., 2/8/05             24,340,000      24,660,655
                                                                   -------------
                                                                     106,123,129

--------------------------------------------------------------------------------
CONSUMER STAPLES--3.9%
--------------------------------------------------------------------------------
BEVERAGES--0.6%
Coca-Cola Enterprises, Inc., 5.25% Unsec. Unsub.
 Nts., 5/15/07                                        41,139,000      43,297,399
--------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.9%
CVS Corp., 3.875% Unsec. Nts., 11/1/07                24,360,000      24,786,032
--------------------------------------------------------------------------------
Safeway, Inc., 6.15% Sr. Unsec. Nts., 3/1/06          40,125,000      41,805,555
                                                                   -------------
                                                                      66,591,587

--------------------------------------------------------------------------------
FOOD PRODUCTS--1.9%
General Mills, Inc., 2.625% Unsec. Unsub.
 Nts., 10/24/06                                       43,810,000      43,398,142
--------------------------------------------------------------------------------
Kellogg Co., 2.875% Nts., 6/1/08                      33,760,000      33,117,277
--------------------------------------------------------------------------------
Kraft Foods, Inc., 4.625% Nts., 11/1/06               36,610,000      37,698,598
--------------------------------------------------------------------------------
Tyson Foods, Inc., 7.25% Sr. Unsec. Nts., 10/1/06     24,350,000      26,145,545
                                                                   -------------
                                                                     140,359,562

--------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.5%
Proctor & Gamble Co. (The), 3.50% Nts., 12/15/08      33,490,000      33,685,180


                      21 | OPPENHEIMER QUEST BALANCED FUND

STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

                                                       PRINCIPAL           VALUE
                                                          AMOUNT      SEE NOTE 1
--------------------------------------------------------------------------------
ENERGY--1.2%
--------------------------------------------------------------------------------
OIL & GAS--1.2%
ChevronTexaco Capital Co., 3.50% Nts., 9/17/07      $ 43,790,000   $  44,357,037
--------------------------------------------------------------------------------
ConocoPhillips, 3.625% Sr. Unsec. Nts., 10/15/07      40,890,000      41,329,731
                                                                   -------------
                                                                      85,686,768

--------------------------------------------------------------------------------
FINANCIALS--6.8%
--------------------------------------------------------------------------------
CAPITAL MARKETS--0.5%
Credit Suisse First Boston, Inc. (USA), 5.75%
 Nts., 4/15/07                                        32,620,000      34,638,982
--------------------------------------------------------------------------------
COMMERCIAL BANKS--2.0%
Household Finance Corp., 7% Nts., 5/15/12             20,000,000      23,140,420
--------------------------------------------------------------------------------
KeyCorp, 2.75% Sr. Nts., Series G, 2/27/07            43,615,000      43,262,329
--------------------------------------------------------------------------------
US Bank NA, 2.85% Nts., 11/15/06                      40,300,000      40,295,325
--------------------------------------------------------------------------------
Wachovia Corp., 4.95% Nts., 11/1/06                   40,680,000      42,303,010
                                                                   -------------
                                                                     149,001,084

--------------------------------------------------------------------------------
CONSUMER FINANCE--0.3%
American Express Credit Corp., 3% Nts., 5/16/08       19,460,000      19,196,434
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--3.4%
American Express Co., 5.50% Nts., 9/12/06             41,100,000      43,062,607
--------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The), 6.25% Sr. Unsec.
 Nts., 7/15/05                                        24,860,000      25,513,122
--------------------------------------------------------------------------------
CIT Group, Inc., 7.75% Sr. Unsec. Unsub.
 Nts., 4/2/12                                         15,000,000      17,881,845
--------------------------------------------------------------------------------
Citigroup, Inc.:
5% Nts., 3/6/07                                       26,426,000      27,587,978
6% Nts., 2/21/12                                      15,000,000      16,667,625
--------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The), 5.70%
 Sr. Unsec. Nts., 9/1/12                              25,000,000      26,670,525
--------------------------------------------------------------------------------
JPMorgan Chase & Co., 5.25% Nts., 5/30/07             46,725,000      49,033,589
--------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.15% Nts.,
 Series B, 1/26/06                                    38,390,000      40,016,815
                                                                   -------------
                                                                     246,434,106

--------------------------------------------------------------------------------
INSURANCE--0.6%
International Lease Finance Corp., 4% Nts.,
 Series O, 1/17/06                                    41,660,000      42,272,027
--------------------------------------------------------------------------------
HEALTH CARE--1.0%
--------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.4%
Tenet Healthcare Corp., 5% Sr. Nts., 7/1/07           32,275,000      32,275,000
--------------------------------------------------------------------------------
PHARMACEUTICALS--0.6%
Bristol-Myers Squibb Co., 4.75% Nts., 10/1/06         38,950,000      40,260,668
--------------------------------------------------------------------------------
INDUSTRIALS--3.2%
--------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.2%
Boeing Capital Corp., 6.50% Nts., 2/15/12             10,000,000      11,270,740
--------------------------------------------------------------------------------
General Dynamics Corp., 2.125% Nts., 5/15/06          40,930,000      40,578,207
--------------------------------------------------------------------------------
Northrop Grumman Corp., 4.079% Nts., 11/16/06         34,100,000      34,721,166
                                                                   -------------
                                                                      86,570,113


                      22 | OPPENHEIMER QUEST BALANCED FUND

                                                       PRINCIPAL           VALUE
                                                          AMOUNT      SEE NOTE 1
--------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.6%
FedEx Corp., 2.65% Unsec. Nts., 4/1/07              $ 43,830,000   $  43,315,260
--------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.4%
Cendant Corp., 6.875% Sr. Unsec. Nts., 8/15/06        15,100,000      16,095,135
--------------------------------------------------------------------------------
Waste Management, Inc., 6.50% Sr.
 Unsub. Nts., 11/15/08                                 8,740,000       9,647,256
                                                                   -------------
                                                                      25,742,391

--------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.6%
General Electric Capital Corp.:
5.35% Nts., Series A, 3/30/06                         24,340,000      25,243,744
6% Nts., 6/15/12                                      19,700,000      21,663,046
                                                                   -------------
                                                                      46,906,790

--------------------------------------------------------------------------------
MACHINERY--0.4%
John Deere Capital Corp., 3.125% Sr. Nts.,
 Series D, 12/15/05                                   29,200,000      29,314,084
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--0.5%
--------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.5%
Motorola, Inc., 4.608% Nts., 11/16/07                 38,960,000      40,145,748
--------------------------------------------------------------------------------
MATERIALS--0.8%
--------------------------------------------------------------------------------
METALS & MINING--0.6%
Alcoa, Inc., 4.25% Sr. Unsec. Nts., 8/15/07           44,705,000      45,996,662
--------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.2%
Weyerhaeuser Co., 5.50% Unsec. Unsub. Nts., 3/15/05   11,091,000      11,207,866
--------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.5%
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.2%
SBC Communications, Inc., 5.75% Sr. Nts., 5/2/06      39,450,000      41,186,786
--------------------------------------------------------------------------------
Verizon Global Funding Corp.:
6.75% Sr. Unsec. Unsub. Nts., 12/1/05                 24,350,000      25,438,007
7.375% Sr. Nts., 9/1/12                               15,000,000      17,845,860
                                                                   -------------
                                                                      84,470,653

--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.3%
AT&T Wireless Services, Inc., 7.35%
 Sr. Unsec. Nts., 3/1/06                              24,740,000      26,212,822
--------------------------------------------------------------------------------
UTILITIES--0.6%
--------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.2%
Dominion Resources, Inc., 7.625% Sr. Unsec.
 Unsub. Nts., Series B, 7/15/05                       14,440,000      14,942,859
--------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.4%
Duke Capital LLC, 4.302% Sr. Unsec. Nts., 5/18/06     28,130,000      28,624,216
                                                                   -------------
Total Non-Convertible Corporate Bonds and Notes
 (Cost $1,606,757,969)                                             1,625,546,645


                      23 | OPPENHEIMER QUEST BALANCED FUND

STATEMENT OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

                                                      PRINCIPAL           VALUE
                                                         AMOUNT      SEE NOTE 1
--------------------------------------------------------------------------------
SHORT-TERM NOTES--1.2%
--------------------------------------------------------------------------------
American Express Credit Corp., 1.70%, 11/2/04      $ 13,000,000  $   12,999,381
--------------------------------------------------------------------------------
Canadian Imperial Holdings, Inc., 1.89%, 12/1/04     25,000,000      24,960,624
--------------------------------------------------------------------------------
Federal Home Loan Bank, 1.69%, 11/1/04               48,003,000      48,003,000
                                                                 ---------------
Total Short-Term Notes (Cost $85,963,005)                            85,963,005

--------------------------------------------------------------------------------
Total Investments, at Value (excluding investments
 purchased with cash collateral from securities
 loaned) (Cost $6,881,240,126)                                    7,259,994,423

--------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES LOANED--5.1%
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--0.3%
Trust Money Market Securities 2                      10,000,000      10,000,000
White Hawk CDO Funding Corp. 2                       12,000,000      12,000,000
                                                                 ---------------
                                                                     22,000,000
--------------------------------------------------------------------------------
FUNDING AGREEMENT/GIC--0.0%
Protective Life Insurance Co. 2                       2,000,000       2,000,000
--------------------------------------------------------------------------------
MEDIUM-TERM NOTES--0.9%
Deutsche Bank AG (GE) 2                              25,000,000      25,000,000
International Lease Finance Corp. 2                  40,127,968      40,127,968
                                                                 ---------------
                                                                     65,127,968
--------------------------------------------------------------------------------
TIME DEPOSITS--0.5%
Bank Nederlandse Gemeenten BNG 2                     25,000,000      25,000,000
Caja de Madrid 2                                     14,000,000      14,000,000
                                                                 ---------------
                                                                     39,000,000
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--3.4%
Greenwich Capital 2                                   8,291,990       8,291,990
UBS Securities LLC 2                                 30,764,400      30,764,400
UBS Securities LLC 2                                203,860,000     203,860,000
                                                                 ---------------
                                                                    242,916,390
Total Investments Purchased with Cash Collateral
from Securities Loaned (Cost $371,044,358)                          371,044,358

--------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $7,252,284,484)        105.1%   7,631,038,781
--------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS                     (5.1)   (373,255,491)
                                                   -----------------------------

NET ASSETS                                               100.0%  $7,257,783,290
                                                   =============================
FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Non-income producing security.

2. The security has been segregated to satisfy the forward commitment to return
the cash collateral received in securities lending transactions upon the
borrower's return of the securities loaned. See Note 5 of Notes to Financial
Statements.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      24 | OPPENHEIMER QUEST BALANCED FUND

STATEMENT OF ASSETS AND LIABILITIES  October 31, 2004
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------------------------------
Investments, at value (including securities loaned of $391,744,555)
(cost $7,252,284,484)--see accompanying statement of investments                       $  7,631,038,781
--------------------------------------------------------------------------------------------------------
Cash                                                                                          1,354,443
--------------------------------------------------------------------------------------------------------
Collateral for securities loaned                                                             27,744,753
--------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold                                                                             49,309,329
Interest and dividends                                                                       25,505,722
Shares of beneficial interest sold                                                            7,927,456
Other                                                                                           151,094
                                                                                       -----------------
Total assets                                                                              7,743,031,578

--------------------------------------------------------------------------------------------------------
LIABILITIES
--------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned                                                  398,789,111
--------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                                        70,294,980
Shares of beneficial interest redeemed                                                       12,334,325
Distribution and service plan fees                                                            1,471,082
Transfer and shareholder servicing agent fees                                                 1,262,383
Trustees' compensation                                                                          530,289
Shareholder communications                                                                      394,914
Other                                                                                           171,204
                                                                                       -----------------
Total liabilities                                                                           485,248,288

--------------------------------------------------------------------------------------------------------
NET ASSETS                                                                             $  7,257,783,290
                                                                                       =================

--------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
--------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest                                             $     4,245,788
--------------------------------------------------------------------------------------------------------
Additional paid-in capital                                                                7,058,641,728
--------------------------------------------------------------------------------------------------------
Accumulated net investment loss                                                                (518,804)
--------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments                                               (183,339,719)
--------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments                                                  378,754,297
                                                                                       -----------------
NET ASSETS                                                                             $  7,257,783,290
                                                                                       =================


                      25 | OPPENHEIMER QUEST BALANCED 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 $3,054,761,474 and
177,656,623 shares of beneficial interest outstanding)                                         $  17.19
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price)                                                                       $  18.24
-------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $2,549,068,929 and 149,851,508
shares of beneficial interest outstanding)                                                     $  17.01
-------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $1,207,728,547 and 70,974,694
shares of beneficial interest outstanding)                                                     $  17.02
-------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $207,449,822 and 12,165,656
shares of beneficial interest outstanding)                                                     $  17.05
-------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of
$238,774,518 and 13,930,350 shares of beneficial interest outstanding)                         $  17.14

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      26 | OPPENHEIMER QUEST BALANCED FUND

STATEMENT OF OPERATIONS  For the Year Ended October 31, 2004
--------------------------------------------------------------------------------

------------------------------------------------------------------------------
INVESTMENT INCOME
------------------------------------------------------------------------------
Interest                                                     $     53,905,201
------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $1,056,744)         52,980,496
------------------------------------------------------------------------------
Portfolio lending fees                                              1,244,910
                                                             -----------------
Total investment income                                           108,130,607

------------------------------------------------------------------------------
EXPENSES
------------------------------------------------------------------------------
Management fees                                                    50,570,841
------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                             6,845,930
Class B                                                            24,952,922
Class C                                                            11,290,179
Class N                                                               898,689
------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                             5,581,622
Class B                                                             5,660,443
Class C                                                             1,936,187
Class N                                                               525,000
Class Y                                                               323,294
------------------------------------------------------------------------------
Shareholder communications:
Class A                                                               271,924
Class B                                                               486,354
Class C                                                               136,633
Class N                                                                 5,120
------------------------------------------------------------------------------
Trustees' compensation                                                234,490
------------------------------------------------------------------------------
Custodian fees and expenses                                            89,533
------------------------------------------------------------------------------
Other                                                                 184,452
                                                             -----------------
Total expenses                                                    109,993,613
Less reduction to custodian expenses                                  (18,426)
Less payments and waivers of expenses                                 (22,255)
                                                             -----------------
Net expenses                                                      109,952,932

------------------------------------------------------------------------------
NET INVESTMENT LOSS                                                (1,822,325)

------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
------------------------------------------------------------------------------
Net realized gain on:
Investments                                                       875,445,667
Net increase from payment by affiliate                              2,628,259
                                                             -----------------
Net realized gain                                                 878,073,926
------------------------------------------------------------------------------
Net change in unrealized appreciation on investments             (298,061,553)

------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS         $    578,190,048
                                                             =================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      27 | OPPENHEIMER QUEST BALANCED FUND

STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------

YEAR ENDED OCTOBER 31,                                                   2004               2003
-------------------------------------------------------------------------------------------------
OPERATIONS
-------------------------------------------------------------------------------------------------
Net investment income (loss)                                 $     (1,822,325)   $    37,392,073
-------------------------------------------------------------------------------------------------
Net realized gain                                                 878,073,926         76,105,001
-------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)             (298,061,553)     1,233,709,607
                                                             ------------------------------------
Net increase in net assets resulting from operations              578,190,048      1,347,206,681

-------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
-------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A                                                            (5,329,694)       (18,094,923)
Class B                                                                    --         (8,058,436)
Class C                                                                    --         (3,846,362)
Class N                                                               (50,738)          (766,994)
Class Y                                                              (811,934)        (1,843,901)

-------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
-------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A                                                           531,512,099        116,535,156
Class B                                                            33,158,209         24,803,540
Class C                                                           132,642,652           (900,239)
Class N                                                            49,356,993         27,405,091
Class Y                                                            37,480,083         25,736,832

-------------------------------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------------------------------
Total increase                                                  1,356,147,718      1,508,176,445
-------------------------------------------------------------------------------------------------
Beginning of period                                             5,901,635,572      4,393,459,127
                                                             ------------------------------------
End of period (including accumulated net investment income
(loss) of $(518,804) and $1,979,679, respectively)           $  7,257,783,290    $ 5,901,635,572
                                                             ====================================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      28 | OPPENHEIMER QUEST BALANCED FUND

FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

CLASS A     YEAR ENDED OCTOBER 31,                     2004                2003             2002             2001            2000
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $    15.69       $       12.02       $    16.09       $    16.66    $      16.41
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                   .07                 .16              .17              .46             .36
Net realized and unrealized gain (loss)                1.46                3.64            (3.53)            (.20)            .55
                                                 -----------------------------------------------------------------------------------
Total from investment operations                       1.53                3.80            (3.36)             .26             .91
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                   (.03)               (.13)            (.27)            (.53)           (.28)
Distributions from net realized gain                     --                  --             (.44)            (.30)           (.38)
                                                 -----------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                        (.03)               (.13)            (.71)            (.83)           (.66)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $    17.19       $       15.69       $    12.02       $    16.09    $      16.66
                                                 ===================================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1                     9.79%              31.87%          (21.88)%           1.64%           5.78%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $3,054,761       $   2,287,707       $1,667,143       $1,763,404    $  1,027,560
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $2,759,594       $   1,902,499       $1,960,568       $1,353,860    $  1,020,483
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                                  0.38%               1.60%            1.20%            2.61%           2.24%
Total expenses                                         1.21% 3,4           1.38% 3,4        1.51% 3,4        1.47% 3         1.45% 3
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 106%                 92%             108%              88%            105%

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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

2. Annualized for periods of less than one full year.

3. Reduction to custodian expenses less than 0.01%.

4. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      29 | OPPENHEIMER QUEST BALANCED FUND

FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------

CLASS B     YEAR ENDED OCTOBER 31,                     2004               2003            2002            2001             2000
----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $    15.61       $       11.98       $    16.00       $    16.52     $   16.28
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                           (.07)                .06              .07              .35           .25
Net realized and unrealized gain (loss)                1.47                3.63            (3.52)            (.19)          .55
                                                 ---------------------------------------------------------------------------------
Total from investment operations                       1.40                3.69            (3.45)             .16           .80
----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     --                (.06)            (.13)            (.38)         (.18)
Distributions from net realized gain                     --                  --             (.44)            (.30)         (.38)
                                                 ---------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                          --                (.06)            (.57)            (.68)         (.56)
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $    17.01       $       15.61       $    11.98       $    16.00     $   16.52
                                                 =================================================================================

----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1                     8.97%              30.89%          (22.38)%           1.03%         5.10%
----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $2,549,069       $   2,306,366       $1,759,167       $1,836,130     $ 925,476
----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $2,495,872       $   1,985,215       $2,068,300       $1,307,367     $ 873,470
----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)                          (0.40)%              0.84%            0.56%            2.00%         1.64%
Total expenses                                         2.00% 3,4           2.15% 3,4        2.15% 3,4        2.07% 3       2.06% 3
----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 106%                 92%             108%              88%          105%

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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

2. Annualized for periods of less than one full year.

3. Reduction to custodian expenses less than 0.01%.

4. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      30 | OPPENHEIMER QUEST BALANCED FUND

CLASS C     YEAR ENDED OCTOBER 31,                     2004               2003             2002             2001             2000
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $    15.60       $       11.97        $    16.00        $    16.51     $   16.27
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                           (.06)                .07               .07               .34           .25
Net realized and unrealized gain (loss)                1.48                3.62             (3.52)             (.18)          .55
                                                 -----------------------------------------------------------------------------------
Total from investment operations                       1.42                3.69             (3.45)              .16           .80
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     --                (.06)             (.14)             (.37)         (.18)
Distributions from net realized gain                     --                  --              (.44)             (.30)         (.38)
                                                 -----------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                          --                (.06)             (.58)             (.67)         (.56)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $    17.02       $       15.60        $    11.97        $    16.00     $   16.51
                                                 ===================================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1                     9.10%              30.99%           (22.40)%            1.05%         5.10%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------

Net assets, end of period (in thousands)         $1,207,729       $     982,288        $  763,338        $  751,229     $ 341,824
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $1,129,522       $     835,198        $  903,426        $  502,037     $ 336,336
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)                          (0.34)%              0.92%             0.58%             2.00%         1.64%
Total expenses                                         1.94% 3,4           2.08% 3,4         2.13% 3,4         2.07% 3       2.06% 3
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 106%                 92%              108%               88%          105%

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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

2. Annualized for periods of less than one full year.

3. Reduction to custodian expenses less than 0.01%.

4. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      31 | OPPENHEIMER QUEST BALANCED FUND

FINANCIAL HIGHLIGHTS  Continued
--------------------------------------------------------------------------------

CLASS N     YEAR ENDED OCTOBER 31,                               2004         2003        2002           2001 1
-----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
-----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                       $    15.58     $   11.94     $  16.05      $   16.84
-----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                             .03           .11          .20            .22
Net realized and unrealized gain (loss)                          1.45          3.63        (3.56)          (.83)
                                                           ------------------------------------------------------
Total from investment operations                                 1.48          3.74        (3.36)          (.61)
-----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                             (.01)         (.10)        (.31)          (.18)
Distributions from net realized gain                               --            --         (.44)            --
                                                           ------------------------------------------------------
Total dividends and/or distributions to shareholders             (.01)         (.10)        (.75)          (.18)
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period                             $    17.05     $   15.58     $  11.94      $   16.05
                                                           ======================================================

-----------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                               9.47%        31.50%      (21.99)%        (3.71)%
-----------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                   $  207,450     $ 142,866     $ 85,744      $  19,649
-----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                          $  180,201     $ 112,416     $ 70,477      $   4,977
-----------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                            0.04%         1.23%        1.07%          2.75%
Total expenses                                                   1.55%         1.74%        1.67%          1.58%
Expenses after payments and waivers and
reduction to custodian expenses                                   N/A 4        1.70%         N/A 4,5        N/A 4
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                           106%           92%         108%            88%

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, 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

4. Reduction to custodian expenses less than 0.01%.

5. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      32 | OPPENHEIMER QUEST BALANCED FUND

CLASS Y     YEAR ENDED OCTOBER 31,                     2004               2003            2002            2001           2000 1
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $    15.62      $       11.96      $    16.05       $    16.67     $       15.65
------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                   .12                .20             .25              .74               .15
Net realized and unrealized gain (loss)                1.46               3.64           (3.52)            (.40)              .99
                                                 -----------------------------------------------------------------------------------
Total from investment operations                       1.58               3.84           (3.27)             .34              1.14
------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                   (.06)              (.18)           (.38)            (.66)             (.12)
Distributions from net realized gain                     --                 --            (.44)            (.30)               --
                                                 -----------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                        (.06)              (.18)           (.82)            (.96)             (.12)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $    17.14      $       15.62      $    11.96       $    16.05     $       16.67
                                                 ===================================================================================

------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                    10.17%             32.40%         (21.48)%           2.14%             7.32%
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $  238,775      $     182,409      $  118,068       $  134,654     $         144
------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $  216,973      $     145,793      $  137,322       $   77,394     $          32
------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                  0.70%              1.89%           1.75%            2.97%             2.46%
Total expenses                                         0.90% 4            1.05% 4         0.96% 4,5        1.00% 4           0.98% 4
------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 106%                92%            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, 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. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.

3. Annualized for periods of less than one full year.

4. Reduction to custodian expenses less than 0.01%.

5. Voluntary waiver of transfer agent fees less than 0.01%.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                      33 | OPPENHEIMER QUEST BALANCED FUND

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES

Oppenheimer Quest Balanced Fund (the Fund), formerly Oppenheimer Quest Balanced
Value 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 subadvisory
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, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C 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. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities 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. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of 60 days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of Trustees. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially affected by
what the Manager identifies as a significant event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued. Fair


                      34 | OPPENHEIMER QUEST BALANCED FUND

value is determined in good faith using 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 Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars as of the close of The New York Stock Exchange (the
Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for
business. Amounts related to the purchase and sale of foreign securities and
investment income are translated at the rates of exchange prevailing on the
respective dates of such transactions. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.

      Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.

      The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.

--------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.

--------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.

The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.


                      35 | OPPENHEIMER QUEST BALANCED FUND

NOTES TO FINANCIAL STATEMENTS  Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued


                                                             NET UNREALIZED
                                                               APPRECIATION
                                                           BASED ON COST OF
                                                             SECURITIES AND
   UNDISTRIBUTED    UNDISTRIBUTED          ACCUMULATED    OTHER INVESTMENTS
   NET INVESTMENT       LONG-TERM                 LOSS   FOR FEDERAL INCOME
   INCOME                    GAIN   CARRYFORWARD 1,2,3         TAX PURPOSES
   ------------------------------------------------------------------------
   $ --                      $ --        $ 181,820,457        $ 377,235,039

1. As of October 31, 2004, the Fund had $181,820,457 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of October 31, 2004,
details of the capital loss carryforward were as follows:

                       EXPIRING
                       ------------------------
                       2010       $ 181,820,457

2. During the fiscal year ended October 31, 2004, the Fund utilized
$876,964,925 of capital loss carryforward to offset capital gains realized in
that fiscal year.

3. During the fiscal year ended October 31, 2003, the Fund utilized $28,726,716
of capital loss carryforward to offset capital gains realized in that fiscal
year.

Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly,
the following amounts have been reclassified for October 31, 2004. Net assets
of the Fund were unaffected by the reclassifications.
                                                            INCREASE TO
                                      REDUCTION TO      ACCUMULATED NET
                REDUCTION TO       ACCUMULATED NET        REALIZED LOSS
                PAID-IN CAPITAL    INVESTMENT LOSS       ON INVESTMENTS
                -------------------------------------------------------
                $ 2,887,949            $ 5,516,208          $ 2,628,259

The tax character of distributions paid during the years ended October 31, 2004
and October 31, 2003 was as follows:

                                        YEAR ENDED           YEAR ENDED
                                  OCTOBER 31, 2004     OCTOBER 31, 2003
      -----------------------------------------------------------------
      Distributions paid from:
      Ordinary income                  $ 6,192,366         $ 32,610,616

The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments
for federal income tax purposes as of October 31, 2004 are noted below. The
primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.


                      36 | OPPENHEIMER QUEST BALANCED FUND

                 Federal tax cost of securities    $  7,253,803,742
                                                   =================

                 Gross unrealized appreciation     $    489,766,765
                 Gross unrealized depreciation         (112,531,726)
                                                   -----------------
                 Net unrealized appreciation       $    377,235,039
                                                   =================

--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for
the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
October 31, 2004, the Fund's projected benefit obligations were increased by
$105,807 and payments of $8,643 were made to retired trustees, resulting in an
accumulated liability of $493,757 as of October 31, 2004.

      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 the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the Plan.

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
and paid quarterly. Capital gain distributions, if any, are declared and paid
annually.

--------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.

--------------------------------------------------------------------------------
CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. The Fund pays interest to its custodian on
such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The
Reduction to Custodian Expenses line item, if applicable, represents earnings on
cash balances maintained by the Fund during the period. Such interest expense
and other custodian fees may be paid with these earnings.

--------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.


                      37 | OPPENHEIMER QUEST BALANCED FUND

NOTES TO FINANCIAL STATEMENTS  Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

OTHER. The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.

--------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST

The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:

                              YEAR ENDED OCTOBER 31, 2004        YEAR ENDED OCTOBER 31, 2003
                                 SHARES            AMOUNT          SHARES             AMOUNT
---------------------------------------------------------------------------------------------
CLASS A
Sold                         63,546,703    $1,061,970,225      44,599,273     $  625,350,191
Dividends and/or
distributions reinvested        289,741         4,693,898       1,211,270         15,682,192
Redeemed                    (32,026,858)     (535,152,024)    (38,714,556)      (524,497,227)
                            -----------------------------------------------------------------
Net increase                 31,809,586      $531,512,099       7,095,987     $  116,535,156
                            =================================================================

---------------------------------------------------------------------------------------------
CLASS B
Sold                         25,825,685    $  427,597,730      26,928,476     $  374,945,073
Dividends and/or
distributions reinvested             --                --         526,821          6,544,923
Redeemed                    (23,752,602)     (394,439,521)    (26,540,590)      (356,686,456)
                            -----------------------------------------------------------------
Net increase                  2,073,083    $   33,158,209         914,707     $   24,803,540
                            =================================================================

---------------------------------------------------------------------------------------------
CLASS C
Sold                         18,943,131    $  313,720,431      13,717,232     $  193,481,707
Dividends and/or
distributions reinvested             --                --         237,055          2,946,014
Redeemed                    (10,924,983)     (181,077,779)    (14,751,471)      (197,327,960)
                            -----------------------------------------------------------------
Net increase (decrease)       8,018,148    $  132,642,652        (797,184)    $     (900,239)
                            =================================================================

---------------------------------------------------------------------------------------------
CLASS N
Sold                          6,779,800    $  112,445,795       4,959,184     $   68,509,566
Dividends and/or
distributions reinvested          3,094            49,396          59,656            756,892
Redeemed                     (3,787,108)      (63,138,198)     (3,028,836)       (41,861,367)
                            -----------------------------------------------------------------
Net increase                  2,995,786    $   49,356,993       1,990,004     $   27,405,091
                            =================================================================

---------------------------------------------------------------------------------------------
CLASS Y
Sold                          5,092,722    $   84,840,588       3,864,165     $   53,749,796
Dividends and/or
distributions reinvested         50,227           811,929         141,014          1,843,889
Redeemed                     (2,893,159)      (48,172,434)     (2,193,394)       (29,856,853)
                            -----------------------------------------------------------------
Net increase                  2,249,790    $   37,480,083       1,811,785     $   25,736,832
                            =================================================================


                      38 | OPPENHEIMER QUEST BALANCED FUND

--------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES

The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the year ended
October 31, 2004, were $5,989,574,445 and $4,418,554,146, respectively. There
were purchases of $1,497,698,090 and sales of $1,974,055,866 of U.S. government
and government agency obligations for the year ended October 31, 2004.

--------------------------------------------------------------------------------
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 January 1, 2004, the
agreement provides for a fee at an annual rate of 0.85% of the first $1 billion
of average annual net assets of the Fund, 0.81% of the next $2 billion, 0.76% of
the next $1 billion, 0.71% of the next $1 billion, 0.65% of the next $1 billion,
0.60% of the next $1 billion, 0.55% of the next $1 billion and 0.50% of average
annual net assets in excess of $8 billion. From June 15, 2003 through December
31, 2003, the annual advisory fee rate was: 0.85% of the first $1 billion of
average annual net assets of the Fund, 0.81% of the next $2 billion, 0.76% of
the next $1 billion, 0.71% of the next $1 billion, 0.65% of the next $1 billion
and 0.60% of average annual net assets in excess of $6 billion.

--------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.

--------------------------------------------------------------------------------
SUB-ADVISOR FEES. The Manager retains OpCap Advisors (the Sub-Advisor) to
provide the day-to-day portfolio management of the Fund. The Manager pays the
Sub-Advisor a monthly fee based on the fee schedule set forth in the Fund's
prospectus. For the year ended October 31, 2004, the Manager paid $15,004,710 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 per account fee. For the year ended October 31, 2004, the Fund paid
$13,967,672 to OFS for services to the Fund.

      Additionally, Class Y shares are subject to minimum fees of $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.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.

--------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. Under the Plan, the Fund pays a service fee to the Distributor of up to
0.25% of the average annual net assets of Class A shares. The Distributor
currently uses all of those fees to


                      39 | OPPENHEIMER QUEST BALANCED FUND

NOTES TO FINANCIAL STATEMENTS  Continued
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued

pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Under the Plan, the Fund may also pay an asset-based sales
charge to the Distributor. Beginning January 1, 2003, the Board of Trustees set
the annual asset-based sales charge rate at zero. Fees incurred by the Fund
under the Plan are detailed in the Statement of Operations.

--------------------------------------------------------------------------------
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 compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B and Class C shares and 0.25% per year on Class N shares. The Distributor
also receives a service fee of up to 0.25% per year under each plan. If either
the Class B, Class C or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Trustees and its independent trustees must
determine whether the Distributor shall be entitled to payment from the Fund of
all or a portion of the service fee and/or asset-based sales charge in respect
to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at October 31,
2004 for Class B, Class C and Class N shares were $60,959,378, $20,556,604 and
$3,804,005, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.

--------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.

                                           CLASS A         CLASS B         CLASS C        CLASS N
                           CLASS A      CONTINGENT      CONTINGENT      CONTINGENT     CONTINGENT
                         FRONT-END        DEFERRED        DEFERRED        DEFERRED       DEFERRED
                     SALES CHARGES   SALES CHARGES   SALES CHARGES   SALES CHARGES  SALES CHARGES
                       RETAINED BY     RETAINED BY     RETAINED BY     RETAINED BY    RETAINED BY
YEAR ENDED             DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR    DISTRIBUTOR
-------------------------------------------------------------------------------------------------
October 31, 2004       $ 3,479,343        $ 55,427     $ 4,944,985       $ 146,159      $ 276,218

--------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage
commissions for sales that is permitted under its investment advisory
agreement, the Fund's Manager terminated that practice in July 2003.
Subsequently, the Manager paid the Fund $2,628,259, an amount equivalent to
certain of such commissions incurred in prior years.

      OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees for all classes to 0.35% of average annual net assets per class.
During the year ended October 31, 2004, OFS waived $7,944, $11,955 and $2,356
for Class A, Class B and Class C shares, respectively. This undertaking may be
amended or withdrawn at any time.


                      40 | OPPENHEIMER QUEST BALANCED FUND

--------------------------------------------------------------------------------
5. SECURITIES LENDING

The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of US
Treasury obligations or cash, against the loaned securities and maintains
collateral in an amount not less than 100% of the market value of the loaned
securities during the period of the loan. The market value of the loaned
securities is determined at the close of business of the funds and any
additional required collateral is delivered to the Fund on the next business
day. If the borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the Fund could experience delays and
cost in recovering the securities loaned or in gaining access to the collateral.
Cash collateral is invested in cash equivalents. The Fund retains a portion of
the interest earned from the collateral. The Fund also continues to receive
interest or dividends paid on the securities loaned. As of October 31, 2004, the
Fund had on loan securities valued at $391,744,555. Cash of $398,789,111 was
received as collateral for the loans, of which $371,044,358 has been invested in
approved instruments.

--------------------------------------------------------------------------------
6. LITIGATION

Six complaints have been filed as putative derivative and class actions against
the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as well
as 51 of the Oppenheimer funds (collectively, the "Funds") including this Fund,
and nine Directors/ Trustees of certain of the Funds other than this Fund
(collectively, the "Directors/Trustees"). The complaints allege that the Manager
charged excessive fees for distribution and other costs, improperly used assets
of the Funds in the form of directed brokerage commissions and 12b-1 fees to pay
brokers to promote sales of the Funds, and failed to properly disclose the use
of Fund assets to make those payments in violation of the Investment Company Act
of 1940 and the Investment Advisers Act of 1940. The complaints further allege
that by permitting and/or participating in those actions, the Directors/Trustees
breached their fiduciary duties to Fund shareholders under the Investment
Company Act of 1940 and at common law. By order dated October 27, 2004, these
six actions, and future related actions, were consolidated by the U.S. District
Court for the Southern District of New York into a single consolidated
proceeding in contemplation of the filing of a superseding consolidated and
amended complaint.

      OppenheimerFunds believes that it is premature to render any opinion as to
the likelihood of an outcome unfavorable to them, the Funds or the
Directors/Trustees and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss. However,
OppenheimerFunds, the Funds and the Directors/Trustees believe that the
allegations contained in the complaints are without merit and intend to defend
these lawsuits vigorously.

                                     A-7
                                     A-1
                                  Appendix A

                             RATINGS DEFINITIONS
                             -------------------

Below are summaries of the rating definitions used by the
nationally-recognized rating agencies listed below. Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate.
The summaries below are based upon publicly available information provided by
the rating organizations.

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM RATINGS: BONDS AND PREFERRED STOCK ISSUER RATINGS

Aaa: Bonds and preferred stock rated "Aaa" are judged to be the best quality.
They carry the smallest degree of investment risk.  Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure.  While the various protective elements are likely to change, the
changes that can be expected are most unlikely to impair the fundamentally
strong position of such issues.

Aa: Bonds and preferred stock rated "Aa" are judged to be of high quality by
all standards. Together with the "Aaa" group, they comprise what are
generally known as high-grade bonds.  They are rated lower than the best
bonds because margins of protection may not be as large as with "Aaa"
securities or fluctuation of protective elements may be of greater amplitude
or there may be other elements present which make the long-term risk appear
somewhat larger than that of "Aaa" securities.

A: Bonds and preferred stock rated "A" possess many favorable investment
attributes and are to be considered as upper-medium grade obligations.
Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment some
time in the future.

Baa: Bonds and preferred stock rated "Baa" are considered medium-grade
obligations; that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and have speculative characteristics as well.

Ba: Bonds and preferred stock rated "Ba" are judged to have speculative
elements. Their future cannot be considered well-assured.  Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Bonds and preferred stock rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.

Caa: Bonds and preferred stock rated "Caa" are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds and preferred stock rated "Ca" represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C:  Bonds and preferred stock rated "C" are the lowest class of rated bonds
and can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a
ranking in the lower end of that generic rating category. Advanced refunded
issues that are secured by certain assets are identified with a # symbol.

PRIME RATING SYSTEM (SHORT-TERM RATINGS - TAXABLE DEBT)
These ratings are opinions of the ability of issuers to honor senior
financial obligations and contracts. Such obligations generally have an
original maturity not exceeding one year, unless explicitly noted.

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions
may be more pronounced. Variability in earnings and profitability may result
in changes in the level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate liquidity is
maintained.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The
McGraw-Hill Companies, Inc.

LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based in varying degrees, on the following
considerations:
o     Likelihood of payment-capacity and willingness of the obligor to meet
      its financial commitment on an obligation in accordance with the terms
      of the obligation;
o     Nature of and provisions of the obligation; and
o     Protection afforded by, and relative position of, the obligation in the
      event of bankruptcy, reorganization, or other arrangement under the
      laws of bankruptcy and other laws affecting creditors' rights.
   The issue ratings definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority
in bankruptcy, as noted above.

AAA: An obligation  rated "AAA" have the highest rating assigned by Standard &
Poor's.  The  obligor's  capacity  to meet  its  financial  commitment  on the
obligation is extremely strong.

AA: An obligation  rated "AA" differ from the highest rated  obligations  only
in small degree.  The obligor's  capacity to meet its financial  commitment on
the obligation is very strong.

A: An  obligation  rated "A" are  somewhat  more  susceptible  to the  adverse
effects of changes in circumstances  and economic  conditions than obligations
in  higher-rated  categories.  However,  the  obligor's  capacity  to meet its
financial commitment on the obligation is still strong.

BBB:  An  obligation  rated  "BBB"  exhibit  adequate  protection  parameters.
However,  adverse  economic  conditions  or  changing  circumstances  are more
likely to lead to a weakened  capacity  of the  obligor to meet its  financial
commitment on the obligation.

BB, B, CCC, CC, and C
An obligation rated `BB', `B', `CCC', `CC', and `C' are regarded as having
significant speculative characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: An obligation  rated "BB" are less  vulnerable  to  nonpayment  than other
speculative  issues.   However,  they  face  major  ongoing  uncertainties  or
exposure to adverse business,  financial,  or economic  conditions which could
lead to the obligor's  inadequate capacity to meet its financial commitment on
the obligation.

B: An obligation  rated "B" are more vulnerable to nonpayment than obligations
rated "BB",  but the obligor  currently has the capacity to meet its financial
commitment  on  the  obligation.  Adverse  business,  financial,  or  economic
conditions  will likely impair the obligor's  capacity or  willingness to meet
its financial commitment on the obligation.

CCC: An obligation  rated "CCC" are currently  vulnerable to  nonpayment,  and
are dependent upon favorable business,  financial, and economic conditions for
the obligor to meet its financial  commitment on the obligation.  In the event
of adverse business,  financial,  or economic  conditions,  the obligor is not
likely  to  have  the  capacity  to  meet  its  financial  commitment  on  the
obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

C:  Subordinated  debt or preferred stock  obligations rated "C" are currently
highly  vulnerable  to  nonpayment.  The "C"  rating  may be  used to  cover a
situation where a bankruptcy  petition has been filed or similar action taken,
but  payments  on this  obligation  are  being  continued.  A "C" also will be
assigned to a preferred  stock issue in arrears on  dividends  or sinking fund
payments, but that is currently paying.

D: An obligation rated "D" are in payment default.  The "D" rating category is
used when payments on an  obligation  are not made on the date due even if the
applicable  grace period has not expired,  unless  Standard & Poor's  believes
that such payments will be made during such grace period.  The "D" rating also
will be used  upon the  filing of a  bankruptcy  petition  or the  taking of a
similar action if payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating
categories.

c: The `c' subscript is used to provide additional information to investors
that the bank may terminate its obligation to purchase tendered bonds if the
long-term credit rating of the issuer is below an investment-grade level
and/or the issuer's bonds are deemed taxable.

p: The letter `p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the debt
being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of or the risk
of default upon failure of such completion. The investor should exercise his
own judgment with respect to such likelihood and risk.

Continuance of the ratings is contingent upon Standard & Poor's receipt of an
executed copy of the escrow agreement or closing documentation confirming
investments and cash flows.

r: The `r' highlights derivative, hybrid, and certain other obligations that
Standard & Poor's believes may experience high volatility or high variability
in expected returns as a result of noncredit risks. Examples of such
obligations are securities with principal or interest return indexed to
equities, commodities, or currencies; certain swaps and options; and
interest-only and principal-only mortgage securities. The absence of an `r'
symbol should not be taken as an indication that an obligation will exhibit
no volatility or variability in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present commercial bank regulations issued by the Comptroller of the
Currency, bonds rated in the top four categories (`AAA', `AA', `A', `BBB',
commonly known as investment-grade ratings) generally are regarded as
eligible for bank investment. Also, the laws of various states governing
legal investments impose certain rating or other standards for obligations
eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries in general

SHORT-TERM ISSUE CREDIT RATINGS
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 days-including
commercial paper.

A-1: A short-term obligation rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

B: A short-term obligation rated "B" is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.

C: A short-term obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

NOTES:
A Standard & Poor's note rating reflects the liquidity factors and market
access risks unique to notes. Notes due in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in
making that assessment:
o     Amortization schedule-the larger the final maturity relative to other
      maturities, the more likely it will
      be treated as a note; and
o     Source of payment-the more dependent the issue is on the market for its
      refinancing, the more likely
      it will be treated as a note.

SP-1: Strong capacity to pay principal and interest. An issue with a very
strong capacity to pay debt service is given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.
International credit ratings assess the capacity to meet foreign currency or
local currency commitments. Both "foreign currency" and "local currency"
ratings are internationally comparable assessments. The local currency rating
measures the probability of payment within the relevant sovereign state's
currency and jurisdiction and therefore, unlike the foreign currency rating,
does not take account of the possibility of foreign exchange controls
limiting transfer into foreign currency.

INTERNATIONAL LONG-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings.

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.


B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk.  Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are
based on their prospects for achieving partial or full recovery in a
reorganization or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision, the
following serve as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued
interest. "DD" indicates potential recoveries in the range of 50%-90%, and
"D" the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy
a higher portion of their outstanding obligations, while entities rated "D"
have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the major rating categories.  Plus and minus signs are
not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings. A short-term rating has a time horizon of less than 12 months for
most obligations, or up to three years for U.S. public finance securities,
and thus places greater emphasis on the liquidity necessary to meet financial
commitments in a timely manner.

F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments
is adequate. However, near-term adverse changes could result in a reduction
to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.

D: Default. Denotes actual or imminent payment default.









                                     B-1
                                  Appendix B

                           Industry Classifications

Aerospace & Defense                  Household Products
Air Freight & Couriers               Industrial Conglomerates
Airlines                             Insurance
Auto Components                      Internet & Catalog Retail
Automobiles                          Internet Software & Services
Beverages                            IT Services
Biotechnology                        Leisure Equipment & Products
Building Products                    Machinery
Chemicals                            Marine
Consumer Finance                     Media
Commercial Banks                     Metals & Mining
Commercial Services & Supplies       Multiline Retail
Communications Equipment             Multi-Utilities
Computers & Peripherals              Office Electronics
Construction & Engineering           Oil & Gas
Construction Materials               Paper & Forest Products
Containers & Packaging               Personal Products
Distributors                         Pharmaceuticals
Diversified Financial Services       Real Estate
Diversified Telecommunication        Road & Rail
Services
Electric Utilities                   Semiconductors and Semiconductor
                                     Equipment
Electrical Equipment                 Software
Electronic Equipment & Instruments   Specialty Retail
Energy Equipment & Services          Textiles, Apparel & Luxury Goods
Food & Staples Retailing             Thrifts & Mortgage Finance
Food Products                        Tobacco
Gas Utilities                        Trading Companies & Distributors
Health Care Equipment & Supplies     Transportation Infrastructure
Health Care Providers & Services     Water Utilities
Hotels Restaurants & Leisure         Wireless Telecommunication Services
Household Durables







                                     C-10
                                  Appendix C

OppenheimerFunds Special Sales Charge Arrangements and Waivers
--------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class
A shares2 of the Oppenheimer funds or the contingent deferred sales charge
that may apply to Class A, Class B or Class C shares may be waived.3  That is
because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors.

Not all waivers apply to all funds. For 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 plans4
         4) Group Retirement Plans5
         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."6 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 by the reinvestment of loan repayments by a
         participant in a Retirement Plan for which the Manager or an
         affiliate acts as sponsor.

|_|   Shares purchased in amounts of less than $5.


C. Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions.

The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
|_|   To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|   Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account
         Rules and Policies," in the applicable fund Prospectus).
|_|   For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established.
         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact.
4)    Hardship withdrawals, as defined in the plan.7
         5) Under a Qualified Domestic Relations Order, as defined in the
            Internal Revenue Code, or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.
         9) Separation from service.8
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) if the plan has made special
            arrangements with the Distributor.
         11)      Plan termination or "in-service distributions," if the
            redemption proceeds are rolled over directly to an
            OppenheimerFunds-sponsored IRA.
|_|   For distributions from 401(k) plans sponsored by broker-dealers that
         have entered into a special agreement with the Distributor allowing
         this waiver.
|_|   For distributions from retirement plans that have $10 million or more
         in plan assets and that have entered into a special agreement with
         the Distributor.
|_|   For distributions from retirement plans which are part of a retirement
         plan product or platform offered by certain banks, broker-dealers,
         financial advisors, insurance companies or record keepers which have
         entered into a special agreement with the Distributor.
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 of Class C shares of an Oppenheimer fund in amounts of $1
         million or more requested in writing by a Retirement Plan sponsor
         and submitted more than 12 months after the Retirement Plan's first
         purchase of Class C shares, if the redemption proceeds are invested
         to purchase Class N shares of one or more Oppenheimer funds.
|_|   Distributions9 from Retirement Plans or other employee benefit plans
         for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established in an Oppenheimer fund.
         2) To return excess contributions made to a participant's account.
         3) To return contributions made due to a mistake of fact.
         4) To make hardship withdrawals, as defined in the plan.10
         5) To make distributions required under a Qualified Domestic
            Relations Order or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.11
         9) On account of the participant's separation from service.12
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) offered as an investment option in a
            Retirement Plan if the plan has made special arrangements with
            the Distributor.
         11)      Distributions made on account of a plan termination or
            "in-service" distributions, if the redemption proceeds are rolled
            over directly to an OppenheimerFunds-sponsored IRA.
         12)      For distributions from a participant's account under an
            Automatic Withdrawal Plan after the participant reaches age 59 1/2,
            as long as the aggregate value of the distributions does not
            exceed 10% of the account's value, adjusted annually.
         13)      Redemptions of Class B shares under an Automatic Withdrawal
            Plan for an account other than a Retirement Plan, if the
            aggregate value of the redeemed shares does not exceed 10% of the
            account's value, adjusted annually.
         14)      For distributions from 401(k) plans sponsored by
            broker-dealers that have entered into a special arrangement with
            the Distributor allowing this waiver.
|_|   Redemptions of Class B shares or Class C shares under an Automatic
         Withdrawal Plan from an account other than a Retirement Plan if the
         aggregate value of the redeemed shares does not exceed 10% of the
         account's value annually.

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 Fund              Oppenheimer Quest
   International Value Fund, Inc.
   Oppenheimer Quest Opportunity Value Fund

      These arrangements also apply to shareholders of the following funds
when they merged (were reorganized) into various Oppenheimer funds on
November 24, 1995:

   Quest for Value U.S. Government Income Fund  Quest for Value New York
   Tax-Exempt Fund
   Quest for Value Investment Quality Income Fund     Quest for Value
   National Tax-Exempt Fund
   Quest for Value Global Income Fund     Quest for Value California
   Tax-Exempt Fund

      All of the funds listed above are referred to in this Appendix as the
"Former Quest for Value Funds."  The waivers of initial and contingent
deferred sales charges described in this Appendix apply to shares of an
Oppenheimer fund that are either:
|_|   acquired by such shareholder pursuant to an exchange of shares of an
         Oppenheimer fund that was one of the Former Quest for Value Funds,
         or
|_|   purchased by such shareholder by exchange of shares of another
         Oppenheimer fund that were acquired pursuant to the merger of any of
         the Former Quest for Value Funds into that other Oppenheimer fund on
         November 24, 1995.

A. Reductions or Waivers of Class A Sales Charges.

|X|   Reduced Class A Initial Sales Charge Rates for Certain Former Quest for
Value Funds Shareholders.

Purchases by Groups and Associations.  The following table sets forth the
initial sales charge rates for Class A shares purchased by members of
"Associations" formed for any purpose other than the purchase of securities.
The rates in the table apply if that Association purchased shares of any of
the Former Quest for Value Funds or received a proposal to purchase such
shares from OCC Distributors prior to November 24, 1995.

--------------------------------------------------------------------------------
                      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 AMT-Free Municipals, Oppenheimer U.S. Government
Trust, Oppenheimer Strategic Income Fund and Oppenheimer Capital Income Fund
who acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those
Oppenheimer funds on October 18, 1991, and who held shares of Advance America
Funds, Inc. on March 30, 1990, may purchase Class A shares of those four
Oppenheimer funds at a maximum sales charge rate of 4.50%.
VII.     Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer
                            Convertible Securities Fund
------------------------------------------------------------------------------

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to
purchase those shares at net asset value without sales charge:
|_|   the Manager and its affiliates,
|_|   present or former officers, directors, trustees and employees (and
         their "immediate families" as defined in the Fund's Statement of
         Additional Information) of the Fund, the Manager and its affiliates,
         and retirement plans established by them or the prior investment
         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 Balanced FundSM

Internet Website
      www.oppenheimerfunds.com
      ------------------------

Investment Advisor
      OppenheimerFunds, Inc.
      Two World Financial Center
      225 Liberty Street, 11th Floor
      New York, New York 10281-1008

Sub-Advisor

      Oppenheimer Capital LLP
      1345 Avenue of the Americas, 49th Floor
      New York, New York 10105-4800


Distributor
      OppenheimerFunds Distributor, Inc.
      Two World Financial Center
      225 Liberty Street, 11th Floor
      New York, New York 10281-1008

Transfer Agent
      OppenheimerFunds Services
      P.O. Box 5270
      Denver, Colorado 80217
      1.800.CALL OPP(225.5677)

Custodian Bank
      Citibank, N.A.
      111 Wall Street
      New York, New York 10005

Independent Registered Public Accounting Firm
      KPMG LLP
      707 Seventeenth Street
      Denver, Colorado 80202

Legal Counsel
      Mayer, Brown, Rowe & Maw LLP
      1675 Broadway
      New York, New York 10019
1234
PX0257.0205

--------
1 In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund and who do not
have any direct or indirect financial interest in the operation of the
distribution plan or any agreement under the plan.
2 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
3 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred sales
charges mean the Fund's Early Withdrawal Charges and references to
"redemptions" mean "repurchases" of shares.
4 An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class N shares of
an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example, medical
savings accounts, payroll deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator purchasing
the shares for the benefit of participants in the plan.
5 The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase shares of an Oppenheimer fund or funds through a single investment
dealer, broker or other financial institution designated by the group. Such
plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans
other than plans for public school employees. The term "Group Retirement
Plan" also includes qualified retirement plans and non-qualified deferred
compensation plans and IRAs that purchase shares of an Oppenheimer fund or
funds through a single investment dealer, broker or other financial
institution that has made special arrangements with the Distributor.
6 However, that concession will not be paid on purchases of shares in amounts
of $1 million or more (including any right of accumulation) by a Retirement
Plan that pays for the purchase with the redemption proceeds of Class C
shares of one or more Oppenheimer funds held by the Plan for more than one
year.
7 This provision does not apply to IRAs.
8 This provision only applies to qualified retirement plans and 403(b)(7)
custodial plans after your separation from service in or after the year you
reached age 55.
9 The distribution must be requested prior to Plan termination or the
elimination of the Oppenheimer funds as an investment option under the Plan.
10 This provision does not apply to IRAs.
11 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan.
12 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.

                      OPPENHEIMER QUEST FOR VALUE FUNDS

                                  FORM N-1A

                                    PART C

                              OTHER INFORMATION


Item 23.  Exhibits
------------------


(a)   (i)   Declaration  of  Trust  dated  3/13/87:   Previously   filed  with
            Registrant's   Post-Effective   Amendment  No.  33,  6/23/95,  and
            refiled  with  Registrant's   Post-Effective   Amendment  No.  36,
            2/9/96,  pursuant to Item 102 of Regulation S-T, and  incorporated
            herein by reference.

(ii)  Amendment No. 1 to Declaration of Trust dated 4/11/88:  Previously filed
            on 4/14/88, and incorporated herein by reference.

(iii) Amendment No. 2 to Declaration of Trust dated 4/18/88:  Previously filed
            on 4/20/88, and incorporated herein by reference.

(iv)  Amendment to Declaration of Trust dated 10/19/88:  Previously filed with
            Registrant's   Post-Effective   Amendment  No.  36,  2/9/96,   and
            incorporated herein by reference.

(v)   Amendment to Declaration of Trust dated 9/12/95:  Previously  filed with
            Registrant's   Post-Effective   Amendment  No.  36,  2/9/96,   and
            incorporated herein by reference.

(vi)  Amendment to Declaration of Trust dated 11/22/95:  Previously filed with
            Registrant's   Post-Effective   Amendment  No.  36,  2/9/96,   and
            incorporated herein by reference.

(vii) Amendment to Declaration of Trust dated 10/16/96:  Previously filed with
            Registrant's   Post-Effective  Amendment  No.  37,  10/16/96,  and
            incorporated herein by reference.

(viii)      Amendment to Declaration of Trust dated 4/30/98:  Previously filed
            with Registrant's  Post-Effective  Amendment No. 43, 12/21/98, and
            incorporated herein by reference.

(ix)  Form of  Amendment  to  Declaration  of Trust dated  3/2/00:  Previously
            filed with Registrant's  Post-Effective Amendment No. 46, 2/28/00,
            and incorporated herein by reference.


(x)   Amendment to Declaration of Trust dated 2/27/04: Filed herewith.


(b)   (i)   By-Laws  of  the  Fund:   Previously   filed   with   Registrant's
            Post-Effective   Amendment  No.  33,  6/23/95,  and  refiled  with
            Post-Effective  Amendment No. 36, 2/9/96,  pursuant to Item 102 of
            Regulation S-T, and incorporated herein by reference.

(ii)  Amendment  No.  1  to  By-Laws  dated  2/4/97:   Previously  filed  with
            Registrant's   Post-Effective  Amendment  No.  41,  11/21/97,  and
            incorporated herein by reference.

(iii) Amendment  No.  2  to  By-Laws  dated  7/22/98:  Previously  filed  with
            Registrant's   Post-Effective  Amendment  No.  43,  12/21/98,  and
            incorporated herein by reference.

(c)   (i)   Specimen  Class A Share  Certificate  for  Oppenheimer  Small  Cap
            Value  Fund  ("Small  Cap  Value  Fund"):  Previously  filed  with
            Registrant's   Post-Effective  Amendment  No.  37,  10/16/96,  and
            incorporated herein by reference.

(ii)  Specimen   Class  B  Share   Certificate   for  Small  Cap  Value  Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            37, 10/16/96, and incorporated herein by reference.

(iii) Specimen   Class  C  Share   Certificate   for  Small  Cap  Value  Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            37, 10/16/96, and incorporated herein by reference.

(iv)     Specimen  Class  N  Share  Certificate  for  Small  Cap  Value  Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            48, 12/06/00, and incorporated herein by reference.

(v)   Specimen Class A Share  Certificate for Oppenheimer  Quest Balanced Fund
            ("Balanced    Fund"):    Previously   filed   with    Registrant's
            Post-Effective   Amendment  No.  41,  11/21/97,  and  incorporated
            herein by reference.

(vi)  Specimen Class B Share  Certificate for Balanced Fund:  Previously filed
            with Registrant's  Post-Effective  Amendment No. 41, 11/21/97, and
            incorporated herein by reference.

(vii) Specimen Class C Share  Certificate for Balanced Fund:  Previously filed
            with Registrant's  Post-Effective  Amendment No. 41, 11/21/97, and
            incorporated herein by reference.

(viii)      Specimen Class N Share  Certificate for Balanced Fund:  Previously
            filed  with   Registrant's   Post-Effective   Amendment   No.  48,
            12/06/00, and incorporated herein by reference.

(ix)  Specimen Class Y Share  Certificate for Balanced Fund:  Previously filed
            with  Post-Effective  Amendment No. 46, 2/28/00,  and incorporated
            herein by reference.

(x)   Specimen Class A Share  Certificate  for Oppenheimer  Opportunity  Value
            Fund   ("Opportunity   Value   Fund"):   Previously   filed   with
            Registrant's   Post-Effective  Amendment  No.  37,  10/16/96,  and
            incorporated herein by reference.

(xi)  Specimen  Class  B  Share   Certificate  for  Opportunity   Value  Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            37, 10/16/96, and incorporated herein by reference.

(xii) Specimen  Class  C  Share   Certificate  for  Opportunity   Value  Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            37, 10/16/96, and incorporated herein by reference.

(xiii)      Specimen Class N Share  Certificate  for  Opportunity  Value Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            48, 12/06/00, and incorporated herein by reference.

(xiv) Specimen  Class  Y  Share   Certificate  for  Opportunity   Value  Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            37, 10/16/96, and incorporated herein by reference.


(d)   (i)   Amended   and   Restated   Investment   Advisory   Agreement   for
            Oppenheimer Balanced Fund dated 1/01/05: Filed herewith.

      (ii)  Amended   and   Restated   Investment   Advisory   Agreement   for
            Oppenheimer Opportunity Value Fund dated 1/01/05: Filed herewith.

      (iii) Amended   and   Restated   Investment   Advisory   Agreement   for
            Oppenheimer Small Cap Value Fund dated 1/01/05: Filed herewith.

 (e)  (i)   General Distributor's  Agreement dated 11/22/95:  Previously filed
            with  Registrant's  Post-Effective  Amendment No. 36, 2/9/96,  and
            incorporated herein by reference.


(ii)  Form  of  Dealer  Agreement  of  OppenheimerFunds   Distributor,   Inc.:
            Previously  filed  with  Post-Effective  Amendment  No.  45 to the
            Registration  Statement of  Oppenheimer  High Yield Fund (Reg. No.
            2-62076), 10/26/01, and incorporated herein by reference.

(iii) Form  of  Broker  Agreement  of  OppenheimerFunds   Distributor,   Inc.:
            Previously  filed  with  Post-Effective  Amendment  No.  45 to the
            Registration  Statement of  Oppenheimer  High Yield Fund (Reg. No.
            2-62076), 10/26/01, and incorporated herein by reference.

(iv)  Form  of  Agency  Agreement  of  OppenheimerFunds   Distributor,   Inc.:
            Previously  filed  with  Post-Effective  Amendment  No.  45 to the
            Registration  Statement of  Oppenheimer  High Yield Fund (Reg. No.
            2-62076), 10/26/01, and incorporated herein by reference.

(v)   Form of Trust Company Fund/SERV Purchase  Agreement of  OppenheimerFunds
            Distributor,  Inc.: Previously filed with Post-Effective Amendment
            No. 45 to the  Registration  Statement of  Oppenheimer  High Yield
            Fund (Reg. No.  2-62076),  10/26/01,  and  incorporated  herein by
            reference.

(vi)  Form of Trust Company Agency Agreement of OppenheimerFunds  Distributor,
            Inc.:  Previously  filed with  Post-Effective  Amendment No. 45 to
            the  Registration  Statement of Oppenheimer  High Yield Fund (Reg.
            No. 2-62076), 10/26/01, and incorporated herein by reference.

(f)   (i)   Amended and Restated  Retirement Plan for Non-Interested  Trustees
            or Directors dated 12/12/00:  Previously  filed with  Registrant's
            Post-Effective  Amendment No. 49, 2/09/01, and incorporated herein
            by reference.

(ii)  Form    of    Deferred     Compensation     Plan    for    Disinterested
            Trustees/Directors:    Previously   filed   with    Post-Effective
            Amendment  No. 43 to the  Registration  Statement  of  Oppenheimer
            Quest  For  Value  Funds  (Reg.  No.  33-15489),   12/21/98,   and
            incorporated herein by reference.

(g)   (i)   Global Custodial Services Agreement dated July 15, 2003, between
            Registrant and Citibank, N.A.: Previously filed with the
            Pre-Effective Amendment No. 1 to the Registration Statement of
            Oppenheimer International Large-Cap Core Trust (Reg. No.
            333-106014), 8/5/03, and incorporated herein by reference.

(ii)  Amended and Restated Foreign Custody Manager Agreement dated May 31,
            2001, as amended July 15, 2003, between Registrant and Citibank,
            N.A: Previously filed with the Pre-Effective Amendment No. 1 to
            the Registration Statement of Oppenheimer International Large-Cap
            Core Trust (Reg. No. 333-106014), 8/5/03, and incorporated herein
            by reference.

(h)   Not applicable.

(i)   Opinion  and Consent of Counsel  dated  7/12/91:  Previously  filed with
Registrant's  Post-Effective  Amendment  No. 33 to  Registrant's  Registration
Statement, 6/23/95, and incorporated herein by reference.


(j)   Independent Registered Public Accounting Firm's Consent: Filed herewith.


(k)   Not applicable.

(l)   Investment  Letter  from  OppenheimerFunds,   Inc.  to  Registrant  date
10/13/87:  Previously filed with Registrant's Post-Effective Amendment No. 33,
6/23/95, and incorporated herein by reference.


(m)   (i)   Amended  and  Restated  Service  Plan and  Agreement  for  Class A
            shares  of  Quest  Balanced  Fund  dated  April  5,  2004:   Filed
            herewith.

(ii)  Amended and Restated  Service Plan and  Agreement  for Class A shares of
            Quest Opportunity Value Fund dated April 5, 2004: Filed herewith.

(iii) Amended and Restated  Service Plan and  Agreement  for Class A shares of
            Quest Small Cap Value Fund dated April 5, 2004: Filed herewith.


(iv)  Amended and Restated  Distribution  and Service Plan and Agreement dated
            2/3/98  with   respect  to  Class  B  shares  of  Balanced   Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            43, 12/21/98, and incorporated herein by reference.

(v)   Amended and Restated  Distribution  and Service Plan and Agreement dated
            2/3/98 with respect to Class B shares of  Opportunity  Value Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            43, 12/21/98, and incorporated herein by reference.

(vi)  Amended and Restated  Distribution  and Service Plan and Agreement dated
            2/3/98  with  respect  to Class B shares of Small Cap Value  Fund:
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            43, 12/21/98, and incorporated herein by reference.


(vii) Amended and Restated  Distribution  and Service Plan and  Agreement  for
            Class  C  shares  of  Balanced  Fund  dated   February  11,  2004:
            Previously filed with  Registrant's  Post Effective  Amendment No.
            No. 53, 12/20/04, and incorporated herein.

(viii)      Amended and Restated  Distribution  and Service Plan and Agreement
            for Class C shares of  Opportunity  Value Fund dated  February 11,
            2004:  Previously filed with Registrant's Post Effective Amendment
            No. 53, 12/20/04, and incorporated herein.

(ix)  Amended and Restated  Distribution  and Service Plan and  Agreement  for
            Class C shares of Small Cap Value Fund dated  February  11,  2004:
            Previously filed with  Registrant's  Post Effective  Amendment No.
            53, 12/20/04, and incorporated herein.

(x)   Distribution  and Service Plan and  Agreement  dated 2/9/01 with respect
            to  Class  N  Shares  of  Balanced  Fund:  Previously  filed  with
            Registrant's   Post-Effective   Amendment  No.  49,  2/09/01,  and
            incorporated herein by reference.

(xi)  Distribution  and Service Plan and  Agreement  dated 2/9/01 with respect
            to Class N Shares of  Opportunity  Value  Fund:  Previously  filed
            with Registrant's  Post-Effective  Amendment No. 49, 2/09/01,  and
            incorporated herein by reference.

(ii)  Distribution  and Service Plan and  Agreement  dated 2/9/01 with respect
            to  Class  N  Shares  of  Balanced  Fund:  Previously  filed  with
            Registrant's   Post-Effective   Amendment  No.  49,  2/09/01,  and
            incorporated herein by reference.


(n)   Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated through
9/15/04: Previously filed with Post-Effective Amendment No. 24 to the
Registration Statement of Oppenheimer Cash Reserves Fund (Reg. No. 33-23223),
9/27/04, and incorporated herein by reference.

(o)   (i)   Powers  of  Attorney  (including   Certified  Board  resolutions):
            Previously filed with  Registrant's  Post-Effective  Amendment No.
            35, 11/24/95, and incorporated herein by reference.

      (ii)  Power of  Attorney  (including  Certified  Board  resolution)  for
            Robert   G.   Galli:    Previously    filed   with    Registrant's
            Post-Effective   Amendment  No.  43,  12/21/98,  and  incorporated
            herein by reference.

      (iii) Power of  Attorney  for Brian W.  Wixted:  Previously  filed  with
            Post-Effective  Amendment No. 5 to the  Registration  Statement of
            Oppenheimer Quest Capital Value Fund, Inc., (Reg. No.  333-16881),
            2/22/00, and incorporated herein by reference.

      (iv)  Powers  of  Attorney   for  Brian   Wruble  and  John  V.  Murphy:
            Previously  filed  with  Post  Effective  Amendment  No. 49 to the
            Registration  Statement  of  Oppenheimer  Quest Value Fund,  Inc.,
            (Reg. No. 2-65223), 2/26/02, and incorporated herein by reference.


(p)   (i)   Amended  and  Restated  Code of  Ethics of the  Oppenheimer  Funds
            dated February 1, 2005 under Rule 17j-1 of the Investment  Company
            Act of  1940:  Previously  filed  with  the  Initial  Registration
            Statement  of   Oppenheimer   Dividend   Growth  Fund  (Reg.   No.
            333-122902), 2/18/05, and incorporated herein by reference.

      (ii)  Code of Ethics  dated  July 1,  2003 for  Allianz  Dresdner  Asset
            Management  of America  L.P.,  the parent  company of  Oppenheimer
            Capital  LLP  (the   "Sub-Advisor"):   Filed  with  post-Effective
            Amendment  No. 10 to the  Registration  Statement  of  Oppenheimer
            Quest Capital  Value,  Inc. (Reg. No.  333-16881),  12/23/03,  and
            incorporated herein by reference.


Item 24.  Persons Controlled by or Under Common Control with the Fund
---------------------------------------------------------------------


None.

Item 25.  Indemnification
-------------------------


      Reference is made to the  provisions  of Article  Seven of  Registrant's
Articles  of  Amendment  and  Restatement  filed  as  Exhibit  23(a)  to  this
Registration Statement, and incorporated herein by reference.

      Insofar as indemnification  for liabilities arising under the Securities
Act of 1933 may be permitted to trustees,  officers and controlling persons of
Registrant pursuant to the foregoing  provisions or otherwise,  Registrant has
been advised  that in the opinion of the  Securities  and Exchange  Commission
such  indemnification  is against public policy as expressed in the Securities
Act of 1933 and is,  therefore,  unenforceable.  In the event that a claim for
indemnification   against  such   liabilities   (other  than  the  payment  by
Registrant of expenses  incurred or paid by a trustee,  officer or controlling
person  of  Registrant  in the  successful  defense  of any  action,  suit  or
proceeding)  is  asserted  by such  trustee,  officer or  controlling  person,
Registrant  will,  unless in the  opinion of its  counsel  the matter has been
settled  by   controlling   precedent,   submit  to  a  court  of  appropriate
jurisdiction  the  question  whether  such  indemnification  by it is  against
public policy as expressed in the  Securities Act of 1933 and will be governed
by the final adjudication of such issue.


Item 26.  Business and Other Connections of the Investment Adviser
------------------------------------------------------------------


(a)   OppenheimerFunds,  Inc. is the investment adviser of the Registrant;  it
and certain  subsidiaries  and  affiliates  act in the same  capacity to other
investment companies,  including without limitation those described in Parts A
and B hereof and listed in Item 26(b) below.


      (i)   The directors and executive  officers of  Oppenheimer  Capital LLP
Advisors,  their positions and their other business  affiliations and business
experience for the past two years are listed in Item 26(b) below.


(b)   There  is  set  forth  below  information  as  to  any  other  business,
profession,  vocation  or  employment  of a  substantial  nature in which each
officer and director of  OppenheimerFunds,  Inc. is, or at any time during the
past two fiscal  years has been,  engaged  for  his/her  own account or in the
capacity of director, officer, employee, partner or trustee.

-----------------------------------------------------------------------------------
Name and Current  Position with
OppenheimerFunds, Inc.          Other Business and Connections During the Past
                                Two Years
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lizbeth Aaron-DiGiovanni        Formerly  Vice  President  (April  2000) and First
Vice President                  Vice  President   (February   2003-July  2004)  of
                                Citigroup Global Markets Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Timothy L. Abbuhl,              Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Emeline S. Adwers,              Formerly   Senior  Analyst  at  Palantir   Capital
Vice President                  (November 1999-January 2003).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Robert Agan,                    Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.,  Shareholder  Financial Services,  Inc., OFI
                                Private  Investments,  Inc. and  Centennial  Asset
                                Management  Corporation;  Senior Vice President of
                                Shareholders Services, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Carl Algermissen,               Formerly  Associate  Counsel and Legal  Compliance
Assistant Vice President &      Officer  at Great  West-Life  & Annuity  Insurance
Assistant Counsel               Co. (February 2004-October 2004);  previously with
                                INVESCO  Funds  Group,  Inc.  (June  1993-December
                                2003) most recently as Senior Staff Attorney.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michael Amato,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Erik Anderson,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Tracey Beck Apostolopoulos,     Assistant  Vice   President  of   OppenheimerFunds
Assistant Vice President        Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Janette Aprilante,              Secretary     (since     December     2001)    of:
Vice President & Secretary      OppenheimerFunds  Distributor,   Inc.,  Centennial
                                Asset    Management    Corporation,    Oppenheimer
                                Partnership  Holdings,   Inc.,   Oppenheimer  Real
                                Asset  Management,   Inc.,  Shareholder  Financial
                                Services,  Inc.,  Shareholder  Services,  Inc. and
                                OppenheimerFunds Legacy Program.  Secretary (since
                                June  2003)  of:   HarbourView   Asset  Management
                                Corporation,  OFI Private  Investments,  Inc.  and
                                OFI   Institutional    Asset   Management,    Inc.
                                Assistant  Secretary  (since December 2001) of OFI
                                Trust Company.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Hany S. Ayad,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Robert Baker,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John Michael Banta,             None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Joanne Bardell,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kevin Baum,                     None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jeff Baumgartner,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Connie Bechtolt,                None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lalit K. Behal                  Assistant    Secretary   of   HarbourView    Asset
Assistant Vice President        Management Corporation.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kathleen Beichert,              Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Gerald Bellamy,                 Assistant  Vice  President  of  OFI  Institutional
Assistant Vice President        Asset Management, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Erik S. Berg,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Rajeev Bhaman,                  None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Craig Billings,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Mark Binning,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Robert J. Bishop,               Treasurer      (since     October     2003)     of
Vice President                  OppenheimerFunds  Distributor, Inc. and Centennial
                                Asset Management Corporation.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John R. Blomfield,              None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lisa I. Bloomberg,              Formerly   First  Vice   President  and  Associate
Vice President & Associate      General  Counsel of UBS  Financial  Services  Inc.
Counsel                         (May 1999-May 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Veronika Boesch,                Formerly  (until  February  2004)  an  independent
Assistant Vice President        consultant/coach in organizational development.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Chad Boll,                      None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Antulio N. Bomfim,              A senior  economist with the Federal Reserve Board
Vice President                  (June 1992-October 2003).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John C. Bonnell,                Vice  President  of  Centennial  Asset  Management
Vice President                  Corporation.   Formerly  a  Portfolio  Manager  at
                                Strong Financial Corporation (May 1999-May 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michelle Borre Massick,         None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lori Bostrom,                   Formerly Vice  President and Corporate  Counsel at
Vice President & Senior Counsel Prudential   Financial   Inc.   (October   2002  -
                                November 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John Boydell,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michael Bromberg,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lowell Scott Brooks,            Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Joan Brunelle,                  None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Richard Buckmaster,             None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Paul Burke,                     None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Mark Burns,                     None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jeoffrey Caan,                  Formerly  Vice  President  of ABN  AMRO  NA,  Inc.
Vice President                  (June 2002-August 2003).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Catherine Carroll,              None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Debra Casey,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lisa Chaffee,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Charles Chibnik,                None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Brett Clark,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
H.C. Digby Clements,            None
Vice President: Rochester
Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Peter V. Cocuzza,               None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Susan Cornwell,                 Vice  President  of  Centennial  Asset  Management
Vice President                  Corporation,  Shareholder Financial Services, Inc.
                                and OppenheimerFunds  Legacy Program;  Senior Vice
                                President of Shareholder Services, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Scott Cottier,                  None
Vice President: Rochester
Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Laura Coulston,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Julie C. Cusker,                None
Assistant Vice President:
Rochester Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
George Curry,                   None.
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John Damian,                    None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John M. Davis,                  Assistant  Vice   President  of   OppenheimerFunds
Assistant Vice President        Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Craig P. Dinsell,               None
Executive Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Randall C. Dishmon,             None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Rebecca K. Dolan                None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Steven D. Dombrower,            Senior Vice President of OFI Private  Investments,
Vice President                  Inc.;    Vice   President   of    OppenheimerFunds
                                Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Thomas Doyle,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Bruce C. Dunbar,                None
Senior Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Brian Dvorak,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Richard Edmiston,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Daniel R. Engstrom,             None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
James Robert Erven              None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
George R. Evans,                None
Senior Vice President and
Director of International
Equities
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Edward N. Everett,              None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kathy Faber,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David Falicia,                  Assistant   Secretary   (as  of  July   2004)   of
Assistant Vice President        HarbourView Asset Management Corporation.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Scott T. Farrar,                Vice President of OFI Private Investments, Inc.
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Thomas Farrell,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Emmanuel Ferreira,              Formerly  a   portfolio   manager   with   Lashire
Vice President                  Investments (July 1999-December 2002).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Ronald H. Fielding,             Vice  President of  OppenheimerFunds  Distributor,
Senior Vice President;          Inc.;  Director of ICI Mutual  Insurance  Company;
Chairman of the Rochester       Governor of St.  John's  College;  Chairman of the
Division                        Board of  Directors  of  International  Museum  of
                                Photography at George Eastman House.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Bradley G. Finkle,              Formerly  Head of Business  Management/Proprietary
Vice President                  Distribution   at   Citigroup   Asset   Management
                                (August 1986-September 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Brian Finley,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John E. Forrest,                Senior   Vice   President   of    OppenheimerFunds
Senior Vice President           Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jordan Hayes Foster,            Vice   President   of  OFI   Institutional   Asset
Vice President                  Management, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David Foxhoven,                 Assistant  Vice   President  of   OppenheimerFunds
Vice President                  Legacy Program.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Colleen M. Franca,              None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Dominic Freud,                  Formerly,  a Partner and European Equity Portfolio
Vice President                  manager at SLS Management  (January  2002-February
                                2003).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Dan Gagliardo,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Hazem Gamal,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Seth Gelman,                    Formerly  an  Associate  in the  Asset  Management
Vice President                  Legal  Department at Goldman Sachs & Co. (February
                                2003-August 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Subrata Ghose,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Charles W. Gilbert,             None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Phillip S. Gillespie,           Formerly  First Vice  President  of Merrill  Lynch
Senior Vice President & Deputy  Investment Management (2001 to September 2004).
General Counsel
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Alan C. Gilston,                None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jill E. Glazerman,              None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Bejamin J. Gord,                Vice  President of  HarbourView  Asset  Management
Vice President                  Corporation   and  of  OFI   Institutional   Asset
                                Management, Inc..
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Laura Granger,                  None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Robert B. Grill,                None
Senior Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Robert Gwynn,                   None
Vice President: Rochester
                                    Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Robert Haley,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Marilyn Hall,                   None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kelly Haney,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Steve Hauenstein,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Thomas B. Hayes,                None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Dennis Hess,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Joseph Higgins,                 Vice   President   of  OFI   Institutional   Asset
Vice President                  Management, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Dorothy F. Hirshman,            None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Daniel Hoelscher,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Edward Hrybenko,                Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Scott T. Huebl,                 Assistant  Vice   President  of   OppenheimerFunds
Vice President                  Legacy Program.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Margaret Hui,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John Huttlin,                   Senior   Vice    President    (Director   of   the
Vice President                  International  Division)  (since  January 2004) of
                                OFI   Institutional   Asset   Management,    Inc.;
                                Director  (since  June  2003) of  OppenheimerFunds
                                (Asia) Limited
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Corry E. Hyer,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
James G. Hyland,                None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Steve P. Ilnitzki,              Vice  President of  OppenheimerFunds  Distributor,
Senior Vice President           Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kelly Bridget Ireland,          Vice    President    (since   January   2004)   of
Vice President                  OppenheimerFunds    Distributor   Inc.   Formerly,
                                Director  of  INVESCO   Distributors  Inc.  (April
                                2000-December 2003).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kathleen T. Ives,               Vice   President   and   Assistant   Secretary  of
Vice President, Senior Counsel  OppenheimerFunds     Distributor,     Inc.     and
and Assistant Secretary         Shareholder  Services,  Inc.;  Assistant Secretary
                                of  Centennial   Asset   Management   Corporation,
                                OppenheimerFunds  Legacy  Program and  Shareholder
                                Financial Services, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
William Jaume,                  Senior  Vice   President  of   HarbourView   Asset
Vice President                  Management   Corporation  and  OFI   Institutional
                                Asset  Management,  Inc.;  Director  of OFI  Trust
                                Company.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Frank V. Jennings,              None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John Jennings,                  None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John Michael Johnson,           None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Charles Kandilis,               None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jennifer E. Kane,               None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lynn O. Keeshan,                Assistant  Treasurer  of  OppenheimerFunds  Legacy
Senior Vice President           Program
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Thomas W. Keffer,               None
Senior Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Cristina J. Keller,             Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michael Keogh,                  Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Martin S. Korn,                 Formerly  a  Senior  Vice  President  at  Bank  of
Senior Vice President           America   (Wealth   and   Investment    Management
                                Technology Group) (March 2002-August 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
James Kourkoulakos,             None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Brian Kramer,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Paul Kunz,                      None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lisa Lamentino,                 None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John W. Land,                   Formerly Human Resources  Manager at Goldman Sachs
Assistant Vice President        (October 2000-July 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Tracey Lange,                   Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John Latino,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kristina Lawrence,              Formerly     Assistant     Vice    President    of
Vice President                  OppenheimerFunds, Inc. (November 2002-March 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Guy E. Leaf,                    None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Gayle Leavitt,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Christopher M. Leavy,           None
Senior Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Randy Legg,                     Formerly an associate  with Dechert LLP (September
Assistant Vice President &      1998-January 2004).
Assistant Counsel
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Laura Leitzinger,               Senior Vice  President  of  Shareholder  Services,
Vice President                  Inc.;  Vice  President  of  Shareholder  Financial
                                Services, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Justin Leverenz,                Formerly,   a   research/technology   analyst   at
Vice President                  Goldman Sachs, Taiwan (May 2002-May 2004)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michael S. Levine,              None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Gang Li,                        None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Shanquan Li,                    None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Daniel Lifshey,                 Formerly a  Marketing  Manager  at PIMCO  Advisors
Assistant Vice President        (January 2002-September 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Mitchell J. Lindauer,           None
Vice President & Assistant
General Counsel
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Bill Linden,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Malissa B. Lischin,             Assistant  Vice   President  of   OppenheimerFunds
Assistant Vice President        Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David P. Lolli,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Daniel G. Loughran              None
Vice President: Rochester
Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Patricia Lovett,                Vice President of Shareholder  Financial Services,
Vice President                  Inc.  and Senior  Vice  President  of  Shareholder
                                Services, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Dongyan Ma,                     Formerly  an   Assistant   Vice   President   with
Assistant Vice President        Standish   Mellon   Asset   Management    (October
                                2001-October 2003).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Steve Macchia,                  None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Mark H. Madden,                 Formerly   Senior   Vice   President   and  Senior
Vice President                  Portfolio Manager with Pioneer  Investments,  Inc.
                                (July 1990-July 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michael Magee,                  None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kathleen Mandzij,               Formerly   Marketing   Manager   -   Sales   Force
Assistant Vice President        Marketing     (March     2003-June     2004)    of
                                OppenheimerFunds, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jerry Mandzij,                  None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Angelo G. Manioudakis           Senior  Vice   President  of   HarbourView   Asset
Senior Vice President           Management  Corporation  and of OFI  Institutional
                                Asset   Management,    Inc.   Formerly   Executive
                                Director   and   portfolio   manager  for  Miller,
                                Anderson & Sherrerd,  a division of Morgan Stanley
                                Investment Management (August 1993-April 2002).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
LuAnn Mascia,                   Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Susan Mattisinko,               Assistant    Secretary   of   HarbourView    Asset
Vice President & Associate      Management  Corporation,  OppenheimerFunds  Legacy
Counsel                         Program,  OFI  Private   Investments,   Inc.,  OFI
                                Institutional    Asset   Management,    Inc.   and
                                Oppenheimer Real Asset  Management,  Inc. Formerly
                                an Associate  at Sidley  Austin Brown and Wood LLP
                                (1995 - October 2003).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Elizabeth McCormack,            Vice   President   and   Assistant   Secretary  of
Vice President                  HarbourView Asset Management Corporation.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Joseph McGovern,                None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Charles L. McKenzie,            Chairman  of the Board and  Director  of OFI Trust
Senior Vice President           Company;   Chief  Executive  Officer,   President,
                                Senior   Managing   Director   and   Director   of
                                HarbourView  Asset Management  Corporation and OFI
                                Institutional Asset Management,  Inc.;  President,
                                Chairman  and   Director  of  Trinity   Investment
                                Management Corporation
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lucienne Mercogliano,           None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Wayne Miao,                     Formerly an Associate  with Sidley  Austin Brown &
Assistant Vice President and    Wood LLP (September 1999 - May 2004).
Assistant Counsel
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Andrew J. Mika,                 None
Senior Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Nikolaos D. Monoyios,           None
Senior Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Charles Moon,                   Vice  President of  HarbourView  Asset  Management
Vice President                  Corporation   and  of  OFI   Institutional   Asset
                                Management, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John Murphy,                    President and Director of Oppenheimer  Acquisition
Chairman, President, Chief      Corp. and Oppenheimer  Partnership Holdings,  Inc.
Executive Officer & Director    Director   of    Centennial    Asset    Management
                                Corporation,  OppenheimerFunds Distributor,  Inc.;
                                Chairman  Director of Shareholder  Services,  Inc.
                                and   Shareholder   Financial   Services,    Inc.;
                                President and Director f  OppenheimerFunds  Legacy
                                Program;   Director  of  OFI  Institutional  Asset
                                Management,  Inc., Trinity  Investment  Management
                                Corporation,  Tremont  Capital  Management,  Inc.,
                                HarbourView  Asset  Management  Corporation,   OFI
                                Private Investments,  Inc.; President and Director
                                of  Oppenheimer  Real  Asset   Management,   Inc.;
                                Executive Vice President of  Massachusetts  Mutual
                                Life   Insurance   Company;    Director   of   DLB
                                Acquisition   Corporation;   a   member   of   the
                                Investment Company Institute's Board of Governors.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Meaghan Murphy,                 Formerly Marketing Professional,  RFP Writer at JP
Assistant Vice President        Morgan  Fleming  Asset   Management  (May  2002  -
                                October 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Thomas J. Murray,               None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kenneth Nadler,                 None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Christina Nasta,                Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jesper Nergaard,                None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Richard Nichols,                None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
William Norman,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Matthew O'Donnell,              None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John O'Hare,                    Formerly  Executive  Vice  President and Portfolio
Vice President                  Manager  (June  2000  -  August  2003)  at  Geneva
                                Capital Management, Ltd.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John J. Okray,                  Formerly Vice President,  Head of Trust Operations
Vice President                  at Lehman Brothers (June  2004-October 2004) prior
                                to  which  he was  an  Assistant  Vice  President,
                                Director  of Trust  Services  at  Cambridge  Trust
                                Company (October 2002-June 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lerae A. Palumbo,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David P. Pellegrino,            None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Allison C. Pells,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Robert H. Pemble,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lori L. Penna,                  Formerly  an  RFP  Manager/Associate  at  JPMorgan
Assistant Vice President        Chase & Co. (June 2001-September 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Brian Petersen,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Marmeline Petion-Midy,          Formerly a Senior  Financial  Analyst with General
Assistant Vice President        Motors,  NY  Treasurer's  Office (July  2000-Augut
                                2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David Pfeffer,                  Senior  Vice   President  of   HarbourView   Asset
Senior Vice President and       Management   Corporation   since   February  2004.
Chief Financial Officer         Formerly,  Director and Chief Financial Officer at
                                Citigroup     Asset      Management      (February
                                2000-February 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
James F. Phillips,              None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Scott Phillips,                 Formerly   Vice   President   at   Merrill   Lynch
Vice President                  Investment Management (June 2000-July 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Gary Pilc,                      None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jason Pizzorusso,               Formerly   a   Vice   President,    Research   and
Assistant Vice President        Development  at  Crucial   Security  Inc.  (August
                                2000-May 2002;  part-time while  attending  school
                                until 2003).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David Poiesz,                   Formerly  a Senior  Portfolio  Manager  at Merrill
Senior Vice President, Head of  Lynch (October  2002-May 2004).  Founding  partner
Growth Equity Investments       of   RiverRock,   a  hedge  fund  product   (April
                                1999-July 2001).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jeffrey Portnoy,                None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Raghaw Prasad,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David Preuss,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jane C. Putnam,                 None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michael E. Quinn,               None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Julie S. Radtke,                None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Norma J. Rapini,                None
Assistant Vice President:
Rochester Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Brian N. Reid,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Marc Reinganum,                 Formerly   (until  August  2002)  Vaughn  Rauscher
Vice President                  Chair  in  Financial   Investments  and  Director,
                                Finance    Institute    of   Southern    Methodist
                                University, Texas.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jill Reiter,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Claire Ring,                    None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David Robertson,                Senior   Vice   President   of    OppenheimerFunds
Senior Vice President           Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Antoinette Rodriguez,           None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Stacey Roode,                   None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jeffrey S. Rosen,               None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Stacy Roth,                     None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
James H. Ruff,                  President   and   Director   of   OppenheimerFunds
Executive Vice President        Distributor,  Inc. and Centennial Asset Management
                                Corporation;   Executive  Vice  President  of  OFI
                                Private Investments, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Andrew Ruotolo,                 Vice Chairman,  Treasurer, Chief Financial Officer
Executive Vice President and    and    Management    Director    of    Oppenheimer
Director                        Acquisition  Corp.;   President  and  Director  of
                                Shareholder   Services,   Inc.   and   Shareholder
                                Financial  Services,  Inc.;  Director  of  Trinity
                                Investment Management  Corporation and Director of
                                OFI Trust Company.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kim Russomanno,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Timothy Ryan,                   Formerly a research  analyst in the large equities
Vice President                  group at Credit  Suisse Asset  Management  (August
                                2001-June 2004)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Rohit Sah,                      None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Valerie Sanders,                None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Karen Sandler,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Rudi W. Schadt,                 None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Ellen P. Schoenfeld,            None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maria Schulte,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Scott A. Schwegel,              None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Allan P. Sedmak                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jennifer L. Sexton,             Senior Vice President of OFI Private  Investments,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Navin Sharma,                   None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Bonnie Sherman,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
David C. Sitgreaves,            None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Edward James Sivigny            None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Enrique H. Smith,               None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Louis Sortino,                  None
Assistant Vice President:
Rochester Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Keith J. Spencer,               None
Senior Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Marco Antonio Spinar,           None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Richard A. Stein,               None
Vice President: Rochester
Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Arthur P. Steinmetz,            Senior  Vice   President  of   HarbourView   Asset
Senior Vice President           Management Corporation.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jennifer Stevens,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
John P. Stoma,                  Senior   Vice   President   of    OppenheimerFunds
Senior Vice President           Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michael Stricker,               Vice President of Shareholder Services, Inc.
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Deborah A. Sullivan,            Secretary of OFI Trust Company.
Assistant Vice President &
Assistant Counsel
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Mary Sullivan,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Michael Sussman,                Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Susan B. Switzer,               None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Brian C. Szilagyi,              Manager of  Compliance at Berger  Financial  Group
Assistant Vice President        LLC (May 2001-March  2003);  Director of Financial
                                Reporting    and    Compliance   at   First   Data
                                Corporation (April 2003-June 2004).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Martin Telles,                  Senior   Vice   President   of    OppenheimerFunds
Senior Vice President           Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Paul Temple,                    None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jeaneen Terrio,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Vincent Toner,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Eamon Tubridy,                  None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Keith Tucker,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Cameron Ullyat,                 None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Angela Uttaro,                  None
Assistant Vice President:
Rochester Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Mark S. Vandehey,               Vice  President of  OppenheimerFunds  Distributor,
Senior Vice President and       Inc., Centennial Asset Management  Corporation and
Chief Compliance Officer        Shareholder  Services,  Inc. Formerly (until March
                                2004) Vice President of OppenheimerFunds, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maureen Van Norstrand,          None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Rene Vecka,                     Formerly Vice President of  Shareholder  Services,
Assistant Vice President,       Inc. (September 2000-July 2003).
Rochester Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Vincent Vermette,               Vice  President of  OppenheimerFunds  Distributor,
Assistant Vice President        Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Phillip F. Vottiero,            None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lisa Walsh,                     None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Patricia Walters,               None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Teresa M. Ward,                 Vice  President of  OppenheimerFunds  Distributor,
Vice President                  Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jerry A. Webman,                Senior  Vice   President  of   HarbourView   Asset
Senior Vice President           Management Corporation.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Christopher D. Weiler,          None
Vice President: Rochester
Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Adam Weiner,                    Formerly a Vice  President  at AIG Trading  (March
Assistant Vice President        2003-May  2004)  prior to which he was a  Managing
                                Director  at ING Barings  (December  1999-February
                                203).
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Barry D. Weiss,                 Vice  President of  HarbourView  Asset  Management
Vice President                  Corporation  and of  Centennial  Asset  Management
                                Corporation.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Melissa Lynn Weiss,             None
Vice President & Associate
Counsel
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Christine Wells,                None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Joseph J. Welsh,                Vice  President of  HarbourView  Asset  Management
Vice President                  Corporation.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Diederick Wermolder,            Director of  OppenheimerFunds  International  Ltd.
Senior Vice President           and  OppenheimerFunds  plc;  Senior Vice President
                                (Managing Director of the International  Division)
                                of  OFI  Institutional  Asset  Management,   Inc.;
                                Director of OppenheimerFunds (Asia) Limited.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Catherine M. White,             Assistant  Vice   President  of   OppenheimerFunds
Assistant Vice President        Distributor,  Inc.; member of the American Society
                                of Pension Actuaries (ASPA) since 1995.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Annabel Whiting,                None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
William L. Wilby,               None
Senior Vice President and
Senior Investment Officer,
Director of Equities
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Donna M. Winn,                  President,  Chief  Executive  Officer and Director
Senior Vice President           of OFI Private  Investments,  Inc.;  Director  and
                                President  of  OppenheimerFunds   Legacy  Program;
                                Senior   Vice   President   of    OppenheimerFunds
                                Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Philip  Philip Witkower,        Senior   Vice   President   of    OppenheimerFunds
Senior Vice President           Distributor, Inc.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Brian   Brian W. Wixted,        Treasurer of HarbourView Asset Management
Senior Vice President and       Corporation; OppenheimerFunds International Ltd.,
Treasurer                       Oppenheimer Partnership Holdings, Inc.,
                                Oppenheimer Real Asset Management, Inc.,
                                Shareholder Services, Inc., Shareholder Financial
                                Services, Inc., OFI Private Investments, Inc.,
                                OFI Institutional Asset Management, Inc.,
                                OppenheimerFunds plc and OppenheimerFunds Legacy
                                Program; Treasurer and Chief Financial Officer of
                                OFI Trust Company; Assistant Treasurer of
                                Oppenheimer Acquisition Corp.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Carol E. Wolf,                  Senior  Vice   President  of   HarbourView   Asset
Senior Vice President           Management  Corporation  and of  Centennial  Asset
                                Management  Corporation;  serves  on the  Board of
                                the Colorado Ballet.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Kurt Wolfgruber,                Director  of  Tremont  Capital  Management,  Inc.,
Executive Vice President,       HarbourView  Asset Management  Corporation and OFI
Chief Investment Officer and    Institutional  Asset Management,  Inc. (since June
Director                        2003)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Caleb C. Wong,                  None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Edward C. Yoensky,              None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Jill Zachman,                   Vice  President of  OppenheimerFunds  Distributor,
Vice President: Rochester       Inc.
Division
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Lucy Zachman,                   None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Robert G. Zack                  General  Counsel and Director of  OppenheimerFunds
Executive Vice President and    Distributor,  Inc.;  General Counsel of Centennial
General Counsel                 Asset   Management   Corporation;    Senior   Vice
                                President  and  General   Counsel  of  HarbourView
                                Asset     Management     Corporation    and    OFI
                                Institutional Asset Management,  Inc.; Senior Vice
                                President,   General   Counsel  and   Director  of
                                Shareholder Financial Services,  Inc., Shareholder
                                Services, Inc., OFI Private Investments,  Inc. and
                                OFI Trust Company;  Vice President and Director of
                                Oppenheimer  Partnership Holdings,  Inc.; Director
                                and Assistant Secretary of  OppenheimerFunds  plc;
                                Secretary  and  General   Counsel  of  Oppenheimer
                                Acquisition   Corp.;    Director   and   Assistant
                                Secretary of OppenheimerFunds  International Ltd.;
                                Director  of  Oppenheimer  Real Asset  Management,
                                Inc. and  OppenheimerFunds  (Asia) Limited);  Vice
                                President of OppenheimerFunds Legacy Program.
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Neal A. Zamore,                 None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Mark D. Zavanelli,              None
Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Alex Zhou,                      None
Assistant Vice President
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Arthur J. Zimmer,               Senior  Vice  President   (since  April  1999)  of
Senior Vice President           HarbourView Asset Management Corporation.
-----------------------------------------------------------------------------------

The Oppenheimer Funds include the following:

Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Limited Term New York Municipal Fund (Rochester Portfolio Series)
OFI Tremont Core Strategies Hedge Fund
OFI Tremont Market Neutral Hedge Fund
Oppenheimer AMT-Free Municipals
Oppenheimer AMT-Free New York Municipals
Oppenheimer Balanced Fund
Oppenheimer Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Convertible Securities Fund (Bond Fund Series)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Fund, Inc.
Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer International Large-Cap Core Fund (a series of Oppenheimer
International Large-
    Cap Core Trust)
Oppenheimer International Small Company Fund
Oppenheimer International Value Fund (a series of Oppenheimer International
Value Trust)
Oppenheimer Limited Term California Municipal Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal
Fund)
Oppenheimer Main Street Fund (a series of Oppenheimer Main Street Funds, Inc.)
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals
Oppenheimer Principal Protected Main Street Fund (a series of Oppenheimer
Principal
     Protected Trust)
Oppenheimer Principal Protected Main Street Fund II (a series of Oppenheimer
     Principal Protected Trust II)
Oppenheimer Principal Protected Main Street Fund III (a series of Oppenheimer
     Principal Protected Trust III)
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small Cap Value Fund
Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Select Value Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (2 series):
     Oppenheimer Disciplined Allocation Fund
     Oppenheimer Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Bond Fund
Oppenheimer Tremont Market Neutral Fund, LLC
Oppenheimer Tremont Opportunity Fund, LLC
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (11 series):
     Oppenheimer Aggressive Growth Fund/VA
     Oppenheimer Balanced Fund/VA
     Oppenheimer Bond Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Strategic Bond Fund/VA
     Oppenheimer Value Fund/VA
Panorama Series Fund, Inc. (4 series):
     Growth Portfolio
     Government Securities Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio
Rochester Fund Municipals

The address of the  Oppenheimer  funds  listed  above,  Shareholder  Financial
Services,  Inc.,  Shareholder  Services,  Inc.,   OppenheimerFunds   Services,
Centennial   Asset   Management   Corporation,   Centennial   Capital   Corp.,
Oppenheimer Real Asset Management,  Inc. and  OppenheimerFunds  Legacy Program
is 6803 South Tucson Way, Centennial, Colorado 80112-3924.

The address of OppenheimerFunds,  Inc.,  OppenheimerFunds  Distributor,  Inc.,
HarbourView Asset Management  Corporation,  Oppenheimer  Partnership Holdings,
Inc.,  Oppenheimer  Acquisition  Corp.,  OFI Private  Investments,  Inc.,  OFI
Institutional Asset Management,  Inc. and Oppenheimer Trust Company is 2 World
Financial  Center,  225  Liberty  Street,  11th  Floor,  New  York,  New  York
10281-1008.

The address of Tremont  Advisers,  Inc. is 555 Theodore  Fremd  Avenue,  Suite
206-C, Rye, New York 10580.

The  address  of  OppenheimerFunds  International  Ltd.  is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment  Management  Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.


Item 27.  Principal Underwriter
-------------------------------


(a)   OppenheimerFunds   Distributor,   Inc.   is  the   Distributor   of  the
Registrant's  shares.  It is  also  the  Distributor  of  each  of  the  other
registered open-end investment companies for which  OppenheimerFunds,  Inc. is
the  investment  adviser,  as described  in Part A and B of this  Registration
Statement  and listed in Item 26(b)  above  (except  Oppenheimer  Multi-Sector
Income Trust and Panorama Series Fund, Inc.) and for MassMutual  Institutional
Funds.

(b)   The directors  and officers of the  Registrant's  principal  underwriter
are:

---------------------------------------------------------------------------------
Name & Principal                Position & Office         Position and Office
Business Address                with Underwriter          with Registrant
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Timothy Abbhul(1)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Agan(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante(2)            Secretary                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Barker                    Vice President            None
2901B N. Lakewood Avenue
Chicago, IL 60657
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Beichert(1)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Bishop(1)             Treasurer                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas S. Blankenship          Vice President            None
17011 Wood Bark Road
Springs, TX 77379
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Blinzler(1)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David A Borrelli                Vice President            None
105 Black Calla Ct.
San Ramon, CA 94583
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michelle Brennan(2)             Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
L. Scott Brooks(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin E. Brosmith               Senior Vice President     None
5 Deer Path
South Natlick, MA 01760
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey W. Bryan                Vice President            None
1048 Malaga Avenue
Coral Gables, FL 33134
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick Campbell(1)             Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew Chonofsky                Vice President            None
300 West Fifth Street, Apt. 118
Charlotte, NC 28202
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Melissa Clayton(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julian C. Curry(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey D. Damia(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Davis(2)                   Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stephen J. Demetrovits(2)       Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph A. DiMauro               Vice President            None
522 Lakeland Avenue
Grosse Pointe, MI 48230
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven Dombrower(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George P. Dougherty             Vice President            None
328 Regency Drive
North Wales, PA 19454
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ryan Drier(2)                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cliff H. Dunteman               Vice President            None
N 53 27761 Bantry Road
Sussex, WI 53089-45533
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Eiler(2)                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent M. Elwell                  Vice President            None
35 Crown Terrace
Yardley, PA 19067
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gregg A. Everett                Vice President            None
4328 Auston Way
Palm Harbor, FL 34685-4017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George R. Fahey                 Senior Vice President     None
2 Pheasant Drive
Ringoes, NJ 08551
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric C. Fallon                  Vice President            None
10 Worth Circle
Newton, MA 02458
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph Fernandez                Vice President            None
1717 Richbourg Park Drive
Brentwood, TN 37027
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark J. Ferro(2)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald H. Fielding(3)           Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Fishel                     Vice President            None
3A Lawnwood Place, Apt. 1
Charlestown, MA 02129
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick W. Flynn (1)            Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John E. Forrest(2)              Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John ("J) Fortuna(2)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucio Giliberti                 Vice President            None
6 Cyndi Court
Flemington, NJ 08822
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Raquel Granahan(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ralph Grant                     Senior Vice President     None
10 Boathouse Close
Mt. Pleasant, SC 29464
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael D. Guman                Vice President            None
3913 Pleasant Avenue
Allentown, PA 18103
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James E. Gunther(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Healy(2)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Clifford W. Heidinger           Vice President            None
111 Ipswich Road
Boxford, MA 01921
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Phillipe D. Hemery              Vice President            None
5 Duck Pond Lane
Ramsey, NJ 07446
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Hennessey                 Vice President            None
10206 Emerald Woods Avenue
Orlando, FL 32836
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elyse R. Jurman Herman          Vice President            None
5486 NW 42 Avenue
Boca Raton, FL 33496
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy G. Hetson                 Vice President            None
4 Craig Street
Jericho, NY 11753
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William E. Hortz(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Hrybenko(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew Humble                   Vice President            None
419 Phillips Avenue
len Ellyn, IL 60137
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian F. Husch(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stephen Ilnitzki(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen T. Ives(1)             Vice President &          Assistant Secretary
                                Assistant Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nivan Jaleeli                   Vice President            None
13622 E. Geronimo Rd.
Scottsdale, AZ 85259
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric K. Johnson(1)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark D. Johnson                 Vice President            None
15792 Scenic Green Court
Chesterfield, MO 63017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina J. Keller(2)          Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Keogh(2)                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Klassen(1)                 Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Klein                   Senior Vice President     None
4820 Fremont Avenue So.
Minneapolis, MN 55409
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Knott(1)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dean Kopperud(2)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brent A. Krantz                 Senior Vice President     None
61500 Tam McArthurLoop
Bend, OR 97702
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David T. Kuzia                  Vice President            None
19102 Miranda Circle
Omaha, NE 68130
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Lange(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul R. LeMire(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric J. Liberman(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malissa Lischin(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James V. Loehle                 Vice President            None
30 Wesley Hill Lane
Warwick, NY 10990
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Loncar(1)                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Montana W. Low                  Vice President            None
1636 N. Wells Street, Apt. 3411
Chicago, IL 60614
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Lyman                     Vice President            None
3930 Swenson St. #502
Las Vegas, NV 89119
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John J. Lynch                   Vice President            None
6325 Bryan Parkway
Dallas, TX 75214
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Malik                   Vice President            None
126 Bernard Street
San Francisco, CA 94109
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven C. Manns                 Vice President            None
1627 N. Hermitage Avenue
Chicago, IL 60622
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Todd A. Marion                  Vice President            None
24 Midland Avenue
Cold Spring Harbor, NY 11724
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
LuAnn Mascia(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Theresa-Marie Maynier           Vice President            None
2421 Charlotte Drive
Charlotte, NC 28203
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Anthony P. Mazzariello          Vice President            None
8 Fairway Road
Sewickley, PA 15143
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John C. McDonough               Vice President            None
3812 Leland Street
Chevy Chase, MD 20815
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent C. McGowan                 Vice President            None
9510 190th Place SW
Edmonds, WA 98020
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian F. Medina(1)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Meister                   Vice President            None
1880 Hemlock Cricle
Abinston, PA 19001
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Melehan                  Vice President            None
906 Bridgeport Court
San Marcos, CA 92069
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Mezzanotte                 Vice President            None
16 Cullen Way
Exeter, NH 03833
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Clint Modler(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David W. Mountford(2)           Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Moser(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gzim Muja(2)                    Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John V. Murphy(2)               Director                  President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy Jean Murray               Vice President            None
32 Carolin Road
Upper Montclair, NJ 07043
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John S. Napier(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina Nasta(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin P. Neznek(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bradford Norford                Vice President            None
4607 Timberglen Rd.
Dallas, TX 75287
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alan Panzer                     Vice President            None
6755 Ridge Mill Lane
Atlanta, GA 30328
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Perkes                 Vice President            None
6 Lawton Ct.
Frisco, TX 75034
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles K. Pettit               Vice President            None
22 Fall Meadow Drive
Pittsford, NY 14534
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elaine Puleo-Carter(2)          Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Minnie Ra                       Vice President            None
100 Dolores Street, #203
Carmel, CA 93923
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dusting Raring                  Vice President            None
27 Blakemore Drive
Ladera Ranch, CA 92797
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael A. Raso                 Vice President            None
3 Vine Place
Larchmont, NY 10538
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Rath                    Vice President            None
46 Mt. Vernon Ave.
Alexandria, VA 22301
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas Rentschler              Vice President            None
677 Middlesex Road
Grosse Pointe Park, MI 48230
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ruxandra Risko(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David R. Robertson(2)           Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ian M. Roche                    Vice President            None
7070 Bramshill Circle
Bainbridge, OH 44023
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth A. Rosenson             Vice President            None
24753 Vantage Pt. Terrace
Malibu, CA 90265
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James H. Ruff(2)                President & Director      None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Matthew Rutig                   Vice President            None
199 North Street
Ridgefield, CT 06877
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William R. Rylander             Vice President            None
85 Evergreen Road
Vernon, CT 06066
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Sabow                    Vice President            None
6617 Southcrest Drive
Edina, MN 55435
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Saunders                   Vice President            None
911 North Orange Avenue #401
Orlando, FL 32801
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Schmitt(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Schmitt(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Schories(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Sharp                      Vice President            None
862 McNeill Circle
Woodland, CA 95695
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Debbie A. Simon                 Vice President            None
1 W. Superior Street, Apt. 4101
Chicago, IL 60610
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas Bruce Smith             Vice President            None
8927 35th Street W.
University Place, WA 98466
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Spensley(2)                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryan Stein(2)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Stoma(2)                   Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wayne Strauss(3)                Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Summe                  Vice President            None
2479 Legends Way
Crestview Hills, KY 41017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Sussman(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George T. Sweeney               Senior Vice President     None
5 Smokehouse Lane
Hummelstown, PA 17036
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Taylor(2)                 Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin Telles(2)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David G. Thomas                 Vice President            None
16628 Elk Run Court
Leesburg, VA 20176
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barrie L. Tiedemann(2)          Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryan K.Toma                    Vice President            None
7311 W. 145th Terrace
Overland Park, KS 66223
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Vandehey(1)                Vice President            Vice President and
                                                          Chief Compliance
                                                          Officer
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Vermete(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Lediard Ward            Vice President            None
1400 Cottonwood Valley Circle
N.
Irving, TX 75038
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Teresa Ward(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael J. Weigner              Vice President            None
4905 W. San Nicholas Street
Tampa, FL 33629
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donn Weise                      Vice President            None
3249 Earlmar Drive
Los Angeles, CA 90064
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Chris Werner(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine White(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Wilson(2)                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donna Winn(2)                   Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Philip Witkower(2)              Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cary Patrick Wozniak            Vice President            None
18808 Bravata Court
San Diego, CA 92128
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Charles Young              Vice President            None
3914 Southwestern
Houston, TX 77005
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Zachman(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Zack(2)               General Counsel &         Secretary
                                Director
---------------------------------------------------------------------------------
(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)Two World Financial  Center,  225 Liberty Street,  11th Floor, New York, NY
10281-1008
(3)350 Linden Oaks, Rochester, NY 14623

(c)   Not applicable.


Item 28.  Location of Accounts and Records
------------------------------------------

The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of OppenheimerFunds,
Inc. at its offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.


Item 29.  Management Services
-----------------------------

Not applicable


Item 30.  Undertakings
----------------------

Not applicable.










                                  SIGNATURES


Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on
the 23rd day of February, 2005.


                        OPPENHEIMER QUEST FOR VALUE FUNDS

                        By:  /s/ John V. Murphy*
                        -------------------------------------------
                        John V. Murphy, President &
                        Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures                   Title                       Date
----------                   -----                       ----


/s/ Thomas W. Courtney *     Chairman of the             February 23, 2005
-----------------------------                            Board of Trustees
Thomas W. Courtney


/s/ John V. Murphy*

------------------------------                           President & Principal
February 23, 2005
John V. Murphy               Executive Officer


/s/ Brian W. Wixted *        Treasurer and Chief

-----------------------------                            Financial and
February 23, 2005
Brian W. Wixted              Accounting Officer

/s/ Paul Y. Clinton *        Trustee                     February 23, 2005

---------------------------
Paul Y. Clinton

/s/ Robert G. Galli *

---------------------------- Trustee                     February 23, 2005
Robert G. Galli

/s/ Lacy B. Herrmann *       Trustee                     February 23, 2005

----------------------------
Lacy B. Herrmann


/s/ Brian Wruble             Trustee                     February 23, 2005

---------------------------
Brian Wruble


*By: /s/ Mitchell J. Lindauer

----------------------------

Mitchell J. Lindauer, Attorney-in-Fact








                      OPPENHEIMER QUEST FOR VALUE FUNDS

                     Registration Statement No. 33-15489

                                EXHIBIT INDEX


Exhibit No.                         Description
----------                          -----------



a(x)              Amendment to Declaration of Trust of Oppenheimer Quest for
                  Value  Funds

d(i)              Amended and Restated Investment Advisory Agreement of
                  Oppenheimer Quest Balanced Fund

d(ii)             Amended and Restated Investment Advisory Agreement of
                  Oppenheimer Small Cap Value Fund

d(iii)            Amended and Restated Investment Advisory Agreement of
                  Oppenheimer Quest Opportunity Value Fund

j                 Independent Registered Public Accounting Firm's Consent

m(i)              Amended and Restated Service Plan and Agreement for Class A
                  shares of Oppenheimer Balanced Fund

m(ii)             Amended and Restated Service Plan and Agreement for Class A
                  shares of Oppenheimer Small Cap Value Fund

m(iii)            Amended and Restated Service Plan and Agreement for Class A
                  shares of Oppenheimer Quest Opportunity Value Fund














QFV_Part C_485b(Feb2005)redline.doc