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

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                  FORM N-1A



REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                    [X]
Pre-Effective Amendment No.                                              [   ]
Post-Effective Amendment No. 59                                            [X]


                                    and/or

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

      Amendment No. 61


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

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

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

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


It is proposed that this filing will become effective (check appropriate box):
     [   ] immediately upon filing pursuant to paragraph (b)
     [X]   on February 26, 2007 pursuant to paragraph (b)
     [   ] 60 days after filing pursuant to paragraph (a)(1)
     [   ] on _______________ pursuant to paragraph (a)(1)
     [   ] 75 days after filing pursuant to paragraph (a)(2)
     [   ] on _______________ pursuant to paragraph (a)(2) of Rule 485.


If appropriate, check the following box:
     [   ] this post-effective amendment designates a new effective date for a previously
filed post-effective amendment.

Oppenheimer
Quest Opportunity Value FundSM



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Prospectus dated February 26, 2007

                                        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.

                                            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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                                                                         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

      How to Exchange Shares

      Shareholder Account Rules and Policies

      Dividends, Capital Gains and Taxes

      Financial Highlights







42

ABOUT THE FUND

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 securities and debt securities that are expected to increase in
value. The Fund normally invests mainly in securities that the portfolio
manager believes are undervalued in the marketplace. The Fund's investment
manager, OppenheimerFunds, Inc. (the "Manager"), can allocate the Fund's
investments among these different types of securities in different
proportions at different times to seek the Fund's objective. The Fund's
Manager exercises a flexible strategy in the selection of securities, and
the Fund is not required to allocate its investments among stocks and bonds
in any fixed proportion or limited by investment style or by the issuer's
location, size, market capitalization or industry sector. The Fund may have
none or some of its assets invested in each asset class in relative
proportions that change over time based on market and economic conditions.

      The Fund may invest a substantial portion of its assets in foreign
securities. Further, the Fund may sell securities short. The Fund also uses
derivative investments for hedging purposes or to seek higher investment
returns. These include options, futures, forward contracts and swaps. 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 may have substantial
investments in equity securities, the value of the Fund's portfolio will be
affected by changes in the stock markets in which it invests. Market risk
will affect the 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.

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

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

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

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 those of 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. The after-tax returns are calculated based on
certain assumptions mandated by regulation and your actual after-tax returns
may differ from those shown, depending on your individual tax situation. The
after-tax returns set forth below are not relevant to investors who hold
their fund shares through tax-deferred arrangements such as 401(k) plans or
IRAs or to institutional investors not subject to tax. The Fund's past
investment performance, before and after taxes, is not necessarily an
indication of how the Fund will perform in the future.

Annual Total Returns (Class A) (as of 12/31 each year)
[See appendix to prospectus for data in bar chart showing the annual total
return]

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


For the period from 1/1/06  through  12/31/06,  the  cumulative  return before
taxes for Class A shares was 11.24%.


During the period shown in the bar chart,  the highest return (not annualized)
before  taxes for a calendar  quarter  was 12.58% (4th Qtr `98) and the lowest
return (not  annualized)  before taxes for a calendar quarter was -12.98% (3rd
Qtr `98).

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Average Annual Total Returns       1 Year           5 Years            10 Years
for    the    periods    ended

December 31, 2006

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Class  A   Shares   (inception
1/03/89)
  Return Before Taxes
  Return After Taxes on

  Distributions                     4.84%            3.27%              5.69%
  Return    After   Taxes   on      3.58%            2.17%              4.27%
  Distributions  and  Sale  of
  Fund Shares                       3.77%            2.46%              4.38%

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Class  B   Shares   (inception      5.42%            3.41%              5.96%

9/1/93)
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Class  C   Shares   (inception      9.42%            3.75%              5.65%

9/1/93)
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Class  N   Shares   (inception      9.86%            4.17%              2.87%

3/1/01)
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Class  Y   Shares   (inception     11.41%            4.70%              6.65%

12/16/96)
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S&P 500(R)Index  (reflects  no     15.78%            6.18%             9.07%(1)
deduction  for fees,  expenses
or taxes)

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(1) From 12/31/95.

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 "10 years"
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 transaction expenses directly, such as sales charges. The numbers below
are based on the Fund's expenses during its fiscal year ended October 31,
2006.

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

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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
----------------------------------------------------------------------------------
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Management Fees                  0.83%      0.83%     0.83%     0.83%     0.83%

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

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Other Expenses                   0.35%      0.35%     0.35%     0.44%     0.41%

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Acquired Fund Fees and           0.02%      0.02%     0.02%     0.02%     0.02%
Expenses (5)

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

Total Annual Operating           1.45%      2.20%     2.20%     1.79%     1.26%
Expenses

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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 0.40% and 1.23% for Class Y, Class A, Class
B, Class C, and Class N were as shown above.


Effective January 1, 2003, the Board voluntarily reduced the Class A
asset-based sales charge to zero resulting in a 12b-1 fee of 0.25%. The Board
of Trustees can set the rate of the asset-based sales charge on Class A
shares is 0.25% of average annual net assets.

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.     For purposes of this table, the calculation of the Acquired Fund Fees
   and Expenses are based on the Fund's estimated holdings of Acquired Funds
   during its current fiscal year. The Manager will waive its management fees
   in an amount equal to the indirectly incurred management fees from the
   Fund's investments in Institutional Money Market Fund. Based on the
   estimated fee calculations reflected in the table, that waiver would equal
   0.02% for the current fiscal year. For purposes of this table, the term
   "Acquired Funds" is intended to cover mutual funds, hedge funds, private
   equity fund, and certain other pooled investment vehicles, but not
   securities, such as structured finance products, collateralized debt
   obligations or other securities not traditionally considered investment
   companies or private investment companies. These estimates of the Acquired
   Fund Fees and Expenses, which will be incurred indirectly by the Fund, are
   based on estimates of the total annual expense ratios, without giving
   effect to any waivers or reimbursements, of the Acquired Funds in which
   the Fund expects to invest during its current year.


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               $715         $1,010        $1,327        $2,222

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

Class B Shares               $726          $996         $1,392        $2,191

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

Class C Shares               $326          $696         $1,192        $2,561

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

Class N Shares               $283          $568          $987         $2,124

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

Class Y Shares               $129          $402          $696         $1,532

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

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

Class A Shares               $715         $1,010        $1,327        $2,222

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

Class B Shares               $226          $696         $1,192      $2,191(1)

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

Class C Shares               $226          $696         $1,192        $2,561

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

Class N Shares               $183          $568          $978         $2,124

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

Class Y Shares               $129          $402          $696         $1,532

--------------------------------------------------------------------------------
 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 AND RISKS. 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 company. Also, the Fund does not
concentrate 25% or more of its assets in investments in any one industry.
That limit does not apply to securities issued or guaranteed by the U.S.
government or its agencies and instrumentalities or securities issued by
investment companies.


      However, changes in the overall market prices of securities can occur
at any time. The share prices of the Fund may 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. 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.
   o  Value Stocks. These are stocks that appear to be temporarily
      undervalued, by various measures such as price/earnings ratios. Value
      investing seeks stocks with prices that are low relative to what the
      Manager believes to be their real worth or future prospects. The hope
      is that the Fund will realize appreciation in the value of its holdings
      when other investors realize the intrinsic value of the stock. However,
      there is the risk that the stock will not appreciate in value as
      anticipated.
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") and 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. The Fund has no limits on the amounts it can invest in
      foreign securities, and it may invest a substantial portion of its
      assets in foreign securities. The Fund can buy foreign securities that
      are listed on a domestic or foreign stock exchange, traded in domestic
      or foreign over-the-counter markets, or represented by 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 may be exposed to "time-zone arbitrage" attempts
      by investors seeking to take advantage of the differences in value of
      foreign securities that might result from events that occur after the
      close of the foreign securities market on which a foreign security is
      traded and before the close of the New York Stock Exchange (the "NYSE")
      that day, when its net asset value is calculated. If such time-zone
      arbitrage were successful, it might dilute the interests of other
      shareholders. However, the Fund's use of "fair value pricing" to adjust
      the closing market prices of foreign securities under certain
      circumstances, to reflect what the Manager and the Board believe to be
      their fair value may help deter those activities.
Derivative Investments. The Fund can invest in a number of different kinds of
      "derivative" investments. In general terms, a derivative investment is
      an investment contract whose value depends on (or is derived from) the
      value of an underlying asset, interest rate or index. 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.

      Derivatives have special risks. If the issuer of the derivative
      investment does not pay the amount due, the Fund can lose money on the
      investment. The underlying security or investment on which the
      derivative is based, and the derivative itself, may not perform the way
      the Manager expected it to perform. Interest rate and stock market
      changes in the U.S. and abroad may also influence the performance of
      derivatives. As a result of these risks the Fund could realize less
      principal or income from the investment than expected or its hedge
      might be unsuccessful. If that happens, the Fund's share prices could
      fall. Certain derivative investments held by the Fund may 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
      include securities, securities indices and currencies. The Fund is not
      required to use hedging instruments to seek its objective.

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

      There are also special risks in particular hedging strategies. Options
      trading involves the payment of premiums and can increase portfolio
      turnover, and can have special tax effects on the Fund. If the Manager
      used a hedging instrument at the wrong time or judged market conditions
      incorrectly, the strategy could reduce the Fund's return. The Fund
      could also experience losses if the prices of its futures and options
      positions were not correlated with its other investments or if it could
      not close out a position because of an illiquid market for the future
      or option.
"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. Restricted
      securities may have terms that limit their resale to other investors or
      may require registration under applicable securities laws before they
      may be sold publicly. The Fund cannot invest more than 15% of its net
      assets in illiquid or restricted securities. Certain restricted
      securities that are eligible for resale to qualified institutional
      purchasers may not be subject to that limit. The Manager monitors
      holdings of illiquid securities on an ongoing basis to determine
      whether to sell any holdings to maintain adequate liquidity.

Portfolio Turnover. The Fund may engage in active and frequent short-term
      trading to achieve its objective. A change in the securities held by
      the Fund is known as "portfolio turnover." 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.

  Investments in Oppenheimer Institutional Money Market Fund. The Fund
      can invest its free cash balances in the Class E shares of
      Oppenheimer Institutional Money Market Fund, to seek current
      income while preserving liquidity. The Oppenheimer Institutional
      Money Market Fund is a registered open-end management investment
      company, regulated as a money market fund under the Investment
      Company Act of 1940, as amended. It invests in a variety of
      short-term, high-quality, dollar-denominated money market
      instruments issued by the U.S. government, domestic and foreign
      corporations and financial institutions, and other entities. As a
      shareholder, the Fund will be subject to its proportional share
      of the Oppenheimer Institutional Money Market Fund's Class E
      expenses, including its advisory fee. However, the Manager will
      waive a portion of the Fund's advisory fee to the extent of the
      Fund's share of the advisory fee paid by the Oppenheimer
      Institutional Money Market Fund.

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 discloses its portfolio holdings in its Statements of Investments
on Form N-Q, which are filed with the Securities and Exchange Commission no
later than 60 days after the close of its first and third fiscal quarters.
These required filings are publicly available at the Securities and Exchange
Commission. Therefore, portfolio holdings of the Fund are made publicly
available no later than 60 days after the close of each of the Fund's fiscal
quarters.


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

How the Fund is Managed


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

      The Manager has been an investment adviser since 1960. The Manager and
its subsidiaries and controlled affiliates managed more than $235 billion in
assets as of December 31, 2006, including other Oppenheimer funds, with more
than 6 million shareholder accounts. The Manager is located at Two World
Financial Center, 225 Liberty Street, 11th Floor, New York, New York
10281-1008.

Advisory Fees. Under the Investment Advisory Agreement, the Fund pays the
      Manager an advisory fee, calculated on the daily net assets of the
      Fund, 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, 0.80% 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 advisory fee for its last fiscal year ended October 31, 2006 was
      0.83% of average annual net assets for each class of shares.

      Effective January 1, 2007, the Manager has voluntarily agreed to reduce
      its advisory fee rate for any quarter during the calendar year ending
      December 31, 2007, by .10% of the Fund's average daily net assets if
      the Funds trailing one-year total return performance, measured at the
      end of the prior calendar quarter, is in the fifth quintile of the
      Fund's Lipper peer group. If the Fund's total return performance at the
      end of a subsequent calendar quarter improves to the fourth quintile of
      the Fund's Lipper peer group, the advisory fee reduction will be .05%
      if the Fund's average daily net assets for the remainder of the
      calendar year. If the Fund's total return performance in a subsequent
      calendar quarter improves to the third higher quintile of the Fund's
      Lipper peer group, the advisory fee reduction will be terminated for
      the remainder of the calendar year. The advisory fee reduction is a
      voluntary undertaking and may be terminated by the Manager at any time.

      A discussion regarding the basis for the Board of Trustees' approval of
the Fund's investment advisory contract is available in the Fund's
Semi-Annual Report to shareholders for the year ended October 31, 2006.
     Portfolio Manager.  The Fund's portfolio is managed by Emmanuel Ferreira
     who is the person primarily responsible for the day-to-day management of
     the Fund's investments.

     Mr. Ferreira has been a Vice President and portfolio manager of the Fund
     since December 2004 and a Vice President of the Manager since January
     2003.  He is a portfolio manager and officer of other portfolios in the
     OppenheimerFunds complex. He was formerly Portfolio Manager at Lashire
     Investments from July 1999 through December 2002.

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

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

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

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


ABOUT YOUR ACCOUNT

How to Buy Shares

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

Buying Shares Through Your Dealer. You can buy shares through any dealer,
      broker or financial institution that has a sales agreement with the
      Distributor. Your dealer will place your order with the Distributor on
      your behalf. A broker or dealer may charge a processing fee for that
      service.
Buying Shares Through the Distributor. Complete an OppenheimerFunds new
      account application and return it with a check payable to
      "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
      Colorado 80217. If you do not list a dealer on the application, Class A
      shares are your only purchase option. The Distributor will act as your
      agent in buying Class A shares. However, we recommend that you discuss
      your investment with a financial adviser before you make a purchase to
      be sure that the Fund is appropriate for you. Class B, Class C or Class
      N shares may not be purchased by a new investor directly from the
      Distributor without the investor designating another registered
      broker-dealer. If a current investor no longer has another
      broker-dealer of record for an existing Class B, Class C or Class N
      account, the Distributor is automatically designated as the
      broker-dealer of record, but solely for the purpose of acting as the
      investor's agent to purchase the shares.

o     Paying by Federal Funds Wire. Shares purchased through the Distributor
      may be paid for by Federal Funds wire. The minimum 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 can pay for shares by electronic funds transfers from your bank
      account. Shares are purchased for your account by a transfer of money
      from your bank account through the Automated Clearing House (ACH)
      system. You can provide share purchase instructions automatically,
      under an Asset Builder Plan, described below, or by telephone
      instructions using OppenheimerFunds PhoneLink, also described below.
      Please refer to "AccountLink," below for more details.

o     Buying Shares Through Asset Builder Plans. You may purchase shares of
      the Fund automatically from your account at a bank or other financial
      institution under an Asset Builder Plan with AccountLink. Details are
      in the Asset Builder application and the Statement of Additional
      Information.

WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
o     If you establish one of the many types of retirement plan accounts that
      OppenheimerFunds offers, more fully described below under "Special
      Investor Services," you can start your account with as little as $500.

o     By using an Asset Builder Plan or Automatic Exchange Plan (details are
      in the Statement of Additional Information), or government allotment
      plan, you can make an initial investment for as little as $500. The
      minimum subsequent investment is $50, except that for any account
      established under one of these plans prior to November 1, 2002, the
      minimum additional investment will remain $25.
o     A minimum initial investment of $250 applies to certain fee based
      programs that have an agreement with the Distributor. The minimum
      subsequent investment for those programs is $50.
o     The minimum investment requirement does not apply to reinvesting
      dividends from the Fund or other Oppenheimer funds (a list of them
      appears in the Statement of Additional Information, or you can ask your
      dealer or call the Transfer Agent), or reinvesting distributions from
      unit investment trusts that have made arrangements with the Distributor.

AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price which
is the net asset value per share plus any initial sales charge that applies.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the
Distributor receives the purchase order at its offices in Colorado, or after
any agent appointed by the Distributor receives the order. Your financial
adviser can provide you with more information regarding the time you must
submit your purchase order and whether the adviser is an authorized agent for
the receipt of purchase orders.
Net Asset Value. The Fund calculates the net asset value of each class of
      shares as of the close of the NYSE, on each day the NYSE is open for
      trading (referred to in this prospectus as a "regular business day").
      The NYSE normally closes at 4:00 p.m., Eastern time, but may close
      earlier on some days. All references to time in this prospectus 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 market on which the security is principally traded,
      that security may be valued by another method that the Board of
      Trustees believes accurately reflects the fair value. Because some
      foreign securities trade in markets and on exchanges that operate on
      weekends and U.S. holidays, the values of some of the Fund's foreign
      investments may change on days when investors cannot buy or redeem Fund
      shares.


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

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


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

The Offering Price. To receive the offering price for a particular day, the
      Distributor or its designated agent must receive your order, in proper
      form as described in this prospectus, by the time the NYSE closes that
      day. If your order is received on a day when the NYSE is closed or
      after it has closed, the order will receive the next offering price
      that is determined after your order is received.
Buying Through a Dealer. If you buy shares through an authorized dealer, your
      dealer must receive the order by the close of the NYSE for you to
      receive that day's offering price. If your order is received on a day
      when the NYSE is closed or after it is closed, the order will receive
      the next offering price that is determined.


------------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors five
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject
to different expenses and will likely have different share prices. When you
buy shares, be sure to specify the class of shares. If you do not choose a
class, your investment will be made in Class A shares.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class A Shares. If you buy Class A shares, you pay an initial sales charge
      (on investments up to $1 million for regular accounts or lesser amounts
      for certain retirement plans). The amount of that sales charge will
      vary depending on the amount you invest. The sales charge rates are
      listed in "How Can You Buy Class A Shares?" below.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales charge at the
      time of purchase, but you will pay an annual asset-based sales charge.
      If you sell your shares within 6 years of buying them, you will
      normally pay a contingent deferred sales charge. That contingent
      deferred sales charge varies depending on how long you own your shares,
      as described in "How Can You Buy Class B Shares?" below.
------------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at the
      time of purchase, but you will pay an annual asset-based sales charge.
      If you sell your shares within 12 months of buying them, you will
      normally pay a contingent deferred sales charge of 1.0%, as described
      in "How Can You Buy Class C Shares?" below.
Class 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 adviser. Some factors to consider are how much
you plan to invest and how long you plan to hold your investment. If your
goals and objectives change over time and you plan to purchase additional
shares, you should re-evaluate those factors to see if you should consider
another class of shares. The Fund's operating costs that apply to a class of
shares and the effect of the different types of sales charges on your
investment will vary your investment results over time.

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

      cannot be predicted with certainty, knowing how long you expect to hold
      your investment will assist you in selecting the appropriate class of
      shares. Because of the effect of class-based expenses, your choice will
      also depend on how much you plan to invest. For example, the reduced
      sales charges available for larger purchases of Class A 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 more than $100,000 of Class B shares or $1 million
      or more of Class C shares from a single investor. Dealers or other
      financial intermediaries purchasing shares for their customers in
      omnibus accounts are responsible for compliance with those limits.
o     Investing for the Longer Term.  If you are investing  less than $100,000
      for the  longer-term,  for example for retirement,  and do not expect to
      need  access to your money for seven  years or more,  Class B shares may
      be appropriate.
Are There  Differences  in Account  Features  That Matter to You? Some account
      features  may  not  be  available  to  Class  B,  Class  C and  Class  N
      shareholders.  Other  features  may  not be  advisable  (because  of the
      effect of the  contingent  deferred  sales  charge) for Class B, Class C
      and Class N shareholders.  Therefore,  you should  carefully  review how
      you plan to use your  investment  account before deciding which class of
      shares to buy.

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

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


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

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

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

SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix C to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified
retirement plan arrangements or in other special types of transactions. To
receive a waiver or special sales charge rate, you must advise the
Distributor when purchasing shares or the Transfer Agent when redeeming
shares that a special condition applies.
CAN YOU REDUCE CLASS A SALES CHARGES? You and your spouse may be eligible to
buy Class A shares of the Fund at reduced sales charge rates set forth in the
table above under the Fund's "Right of Accumulation" or a "Letter of Intent."
The Fund reserves the right to modify or to cease offering these programs at
any time.
o     Right of Accumulation. To qualify for the reduced Class A sales charge
      that would apply to a larger purchase than you are currently making (as
      shown in the table above), you can add the value of any Class A, Class
      B or, 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 have not
      paid a sales charge will not be counted for this purpose. In totaling
      your holdings, you may count shares held in your individual accounts
      (including IRAs and 403(b) plans), your joint accounts with your
      spouse, or accounts you or your spouse hold as trustees or custodians
      on behalf of your children who are minors. A fiduciary can count all
      shares purchased for a trust, estate or other fiduciary account that
      has multiple accounts (including employee benefit plans for the same
      employer). If you are buying shares directly from the Fund, you must
      inform the Distributor of your eligibility and holdings at the time of
      your purchase in order to qualify for the Right of Accumulation. If you
      are buying shares through your financial intermediary you must notify
      your intermediary of your eligibility for the Right of Accumulation at
      the time of your purchase.

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

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


o     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.

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

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

o     Reinvestment Privilege. Within six months of a redemption of certain
      Class A and Class B shares, the proceeds may be reinvested in Class A
      shares of the Fund, or any of the other Oppenheimer funds into which
      shares of the Fund may be exchanged, without a sales charge. This
      privilege applies to redemptions of Class A shares that were subject to
      an initial sales charge or Class A or Class B shares that were subject
      to a contingent deferred sales charge when redeemed. The investor must
      ask the Transfer Agent or his or her financial intermediary for that
      privilege at the time of reinvestment and must identify the account
      from which the redemption was made.
o     Other Special Reductions and Waivers. The Fund and the Distributor
      offer additional arrangements to reduce or eliminate front-end sales
      charges or to waive contingent deferred sales charges for certain types
      of transactions and for certain categories of investors (primarily
      retirement plans that purchase shares in special programs through the
      Distributor). These are described in greater detail in Appendix B to
      the Statement of Additional Information, which may be ordered by
      calling 1.800.225.5677 or may be accessed through the OppenheimerFunds
      website, at www.oppenheimerfunds.com (under the heading "I Want To,"
      follow the hyperlink "Access Fund Documents" and click on the icon in
      the column "SAI" next to the Fund's name). A description of these
      waivers and special sales charge arrangements is also available for
      viewing on the OppenheimerFunds website (under the heading "Fund
      Information," click on the hyperlink "Sales Charge Waivers"). To
      receive a waiver or special sales charge rate under these programs, the
      purchaser must notify the Distributor (or other financial intermediary
      through which shares are being purchased) at the time of purchase, or
      notify the Transfer Agent at the time of redeeming shares for waivers
      that apply to contingent deferred sales charges.

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


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

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

      The Distributor pays dealers of record concessions in an amount equal
      to 1.0% 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 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). 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 periodically for providing personal service and
      maintenance of accounts of their customers that hold Class A shares.
      Prior to January 1, 2003, the Fund paid the Distributor an annual
      asset-based sales charge equal to 0.15% of average annual net assets
      representing Class A shares purchased before September 1, 1993, and
      0.10% of average annual net assets representing Class A shares
      purchased on or after that date. The Distributor paid the entire
      asset-based sales charge to brokers.


      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 periodically.
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 periodically.

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

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

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

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


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

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


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

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

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

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


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


Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account
with an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
    o transmit funds electronically to purchase shares by telephone (through
      a service representative or by PhoneLink) or automatically under Asset
      Builder Plans, or
    o have the Transfer Agent send redemption proceeds or transmit dividends
      and distributions directly to your bank account. Please call the
      Transfer Agent for more information.

      You may purchase shares by telephone only after your account has been
established. To purchase shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1.800.225.5677. The purchase payment
will be debited from your bank account.

      AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a dealer.
After your account is established, you can request AccountLink privileges by
sending signature-guaranteed instructions and proper documentation to the
Transfer Agent. AccountLink privileges will apply to each shareholder listed
in the registration on your account as well as to your dealer representative
of record unless and until the Transfer Agent receives written instructions
terminating or changing those privileges. After you establish AccountLink for
your account, any change you make to the bank account information must be
made by signature-guaranteed instructions to the Transfer Agent signed by all
shareholders who own the account.

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification
Number (PIN), by calling the PhoneLink number, 1.800.225.5677.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by
      phone, by calling 1.800.225.5677. You must have established AccountLink
      privileges to link your bank account with the Fund to pay for these
      purchases.
Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
      below, you can exchange shares automatically by phone from your Fund
      account to another OppenheimerFunds account you have already
      established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling
      the PhoneLink number and the Fund will send the proceeds directly to
      your AccountLink bank account. Please refer to "How to Sell Shares,"
      below for details.


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


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

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

RETIREMENT PLANS. You may buy shares of the Fund for your retirement plan
account. If you participate in a plan sponsored by your employer, the plan
trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans that
individuals and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs,
      SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business
      owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for employees of
      eligible tax-exempt organizations, such as schools, hospitals and
      charitable organizations.
401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for businesses and
      self-employed individuals.

      Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.

How to Sell Shares


You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your
order is received by the Distributor or your authorized financial
intermediary, in proper form (which means that it must comply with the
procedures described below) and is accepted by the Transfer Agent. The Fund
lets you sell your shares by writing a letter, by wire, or by telephone. You
can also set up Automatic Withdrawal Plans to redeem shares on a regular
basis. If you have questions about any of these procedures, and especially if
you are redeeming shares in a special situation, such as due to the death of
the owner or from a retirement plan account, please call the Transfer Agent
first, at 1.800.225.5677, for assistance.

Certain Requests Require a Signature Guarantee. To protect you and the Fund
      from fraud, the following redemption requests must be in writing and
      must include a signature guarantee (although there may be other
      situations that also require a signature guarantee):
   o  You wish to redeem more than $100,000 and receive a check.
   o  The redemption check is not payable to all shareholders listed on the
      account statement.
   o  The redemption check is not sent to the address of record on your
      account statement.
   o  Shares are being transferred to a Fund account with a different owner
      or name.
   o  Shares are being redeemed by someone (such as an Executor) other than
      the owners.
Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept
      a guarantee of your signature by a number of financial institutions,
      including:
o     a U.S. bank, trust company, credit union or savings association,
o     a foreign bank that has a U.S. correspondent bank,
o     a U.S. registered dealer or broker in securities, municipal securities
      or government securities, or
o     a U.S. national securities exchange, a registered securities
      association or a clearing agency.

      If you are signing on behalf of a corporation, partnership or other
      business or as a fiduciary, you must also include your title in the
      signature.
Retirement Plan Accounts. There are special procedures to sell shares in an
      OppenheimerFunds retirement plan account. Call the Transfer Agent for a
      distribution request form. Special income tax withholding requirements
      apply to distributions from retirement plans. You must submit a
      withholding form with your redemption request to avoid delay in getting
      your money and if you do not want tax withheld. If your employer holds
      your retirement plan account for you in the name of the plan, you must
      ask the plan trustee or administrator to request the sale of the Fund
      shares in your plan account.
Receiving Redemption Proceeds by Wire. While the Fund normally sends your
      money by check, you can arrange to have the proceeds of shares you sell
      sent by Federal Funds wire to a bank account you designate. It must be
      a commercial bank that is a member of the Federal Reserve wire system.
      The minimum redemption you can have sent by wire is $2,500. There is a
      $10 fee for each request. To find out how to set up this feature on
      your account or to arrange a wire, call the Transfer Agent at
      1.800.225.5677.

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

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


HOW DO YOU SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of the NYSE that day, which is
normally 4:00 p.m. Eastern time, but may be earlier on some days. You may not
redeem shares held in an OppenheimerFunds-sponsored qualified retirement plan
account or under a share certificate by telephone.

   o  To redeem shares through a service representative or automatically on
      PhoneLink, call 1.800.225.5677.

      Whichever method you use, you may have a check sent to the address on
the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by
      telephone in any seven-day period. The check must be payable to all
      owners of record of the shares and must be sent to the address on the
      account statement. This service is not available within 30 days of
      changing the address on an account.
Telephone Redemptions Through AccountLink or by Wire. There are no dollar
      limits on telephone redemption proceeds sent to a bank account
      designated when you establish AccountLink. Normally the ACH transfer to
      your bank is initiated on the business day after the redemption. You do
      not receive dividends on the proceeds of the shares you redeemed while
      they are waiting to be transferred.

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


CAN  YOU  SELL  SHARES  THROUGH  YOUR  DEALER?   The   Distributor   has  made
arrangements  to repurchase  Fund shares from dealers and brokers on behalf of
their  customers.  Brokers or dealers  may  charge a  processing  fee for that
service.  If your shares are held in the name of your dealer,  you must redeem
them through your dealer.

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


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

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

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

How to Exchange Shares

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

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

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

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

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

HOW DO YOU SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing,
by telephone or internet, or by establishing an Automatic Exchange Plan.
Written Exchange Requests. Send a request letter, signed by all owners of the
      account, to the Transfer Agent at the address on the back cover.
      Exchanges of shares for which share certificates have been issued
      cannot be processed unless the Transfer Agent receives the certificates
      with the request letter.
Telephone and Internet Exchange Requests. Telephone exchange requests may be
      made either by calling a service representative or by using PhoneLink
      by calling 1.800.225.5677. You may submit internet exchange requests on
      the OppenheimerFunds internet website, at www.oppenheimerfunds.com. You
      must have obtained a user I.D. and password to make transactions on
      that website. Telephone and/or internet exchanges may be made only
      between accounts that are registered with the same name(s) and address.
      Shares for which share certificates have been issued may not be
      exchanged by telephone or the internet.
Automatic Exchange Plan. Shareholders can authorize the Transfer Agent to
      exchange a pre-determined amount of shares automatically on a monthly,
      quarterly, semi-annual or annual basis.

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

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

      Therefore, the Manager and the Fund's Board of Trustees have adopted
      the following policies and procedures to detect and prevent frequent
      and/or excessive exchanges, and/or purchase and redemption activity,
      while balancing the needs of investors who seek liquidity from their
      investment and the ability to exchange shares as investment needs
      change. There is no guarantee that the policies and procedures
      described below will be sufficient to identify and deter excessive
      short-term trading.
o     Timing of Exchanges. Exchanged shares are normally redeemed from one
      fund and the proceeds are reinvested in the fund selected for exchange
      on the same regular business day on which the Transfer Agent or its
      agent (such as a financial intermediary holding the investor's shares
      in an "omnibus" or "street name" account) receives an exchange request
      that conforms to these policies. The request must be received by the
      close of the NYSE that day, which is normally 4:00 p.m. Eastern time,
      but may be earlier on some days, in order to receive that day's net
      asset value on the exchanged shares. Exchange requests received after
      the close of the NYSE will receive the next net asset value calculated
      after the request is received. However, the Transfer Agent may delay
      transmitting the proceeds from an exchange for up to five business days
      if it determines, in its discretion, that an earlier transmittal of the
      redemption proceeds to the receiving fund would be detrimental to
      either the fund from which the exchange is being made or the fund into
      which the exchange is being made. The proceeds will be invested in the
      fund into which the exchange is being made at the next net asset value
      calculated after the proceeds are received. In the event that such a
      delay in the reinvestment of proceeds occurs, the Transfer Agent will
      notify you or your financial representative.

o     Limits on Disruptive Activity. The Transfer Agent may, in its
      discretion, limit or terminate trading activity by any person, group or
      account that it believes would be disruptive, even if the activity has
      not exceeded the policy outlined in this prospectus. The Transfer Agent
      may review and consider the history of frequent trading activity in all
      accounts in the Oppenheimer funds known to be under common ownership or
      control as part of the Transfer Agent's procedures to detect and deter
      excessive trading activity.
o     Exchanges of Client Accounts by Financial Advisers. The Fund and the
      Transfer Agent permit dealers and financial intermediaries to submit
      exchange requests on behalf of their customers (unless that authority
      has been revoked). The Distributor and/or the Transfer Agent have
      agreements with a number of financial intermediaries that permit them
      to submit exchange orders in bulk on behalf of their clients. Those
      intermediaries are required to follow the exchange policies stated in
      this prospectus and to comply with additional, more stringent
      restrictions. Those additional restrictions include limitations on the
      funds available for exchanges, the requirement to give advance notice
      of exchanges to the Transfer Agent, and limits on the amount of client
      assets that may be invested in a particular fund. A fund or the
      Transfer Agent may limit or refuse bulk exchange requests submitted by
      such financial intermediaries if, in the Transfer Agent's judgment,
      exercised in its discretion, the exchanges would be disruptive to any
      of the funds involved in the transaction.

o     Redemptions of Shares. These exchange policy limits do not apply to
      redemptions of shares. Shareholders are permitted to redeem their
      shares on any regular business day, subject to the terms of this
      prospectus. Further details are provided under "How to Sell Shares."
o     Right to Refuse Exchange and Purchase Orders. The Distributor and/or
      the Transfer Agent may refuse any purchase or exchange order in their
      discretion and are not obligated to provide notice before rejecting an
      order. The Fund may amend, suspend or terminate the exchange privilege
      at any time. You will receive 60 days' notice of any material change in
      the exchange privilege unless applicable law allows otherwise.
o     Right to Terminate or Suspend Account Privileges. The Transfer Agent
      may send a written warning to direct shareholders that the Transfer
      Agent believes may be engaging in excessive purchases, redemptions
      and/or exchange activity and reserves the right to suspend or terminate
      the ability to purchase shares and/or exchange privileges for any
      account that the Transfer Agent determines, in carrying out these
      policies and in the exercise of its discretion, has engaged in
      disruptive or excessive trading activity, with or without such warning.
o     Omnibus Accounts. If you hold your shares of the Fund through a
      financial intermediary such as a broker-dealer, a bank, an insurance
      company separate account, an investment adviser, an administrator or
      trustee of a retirement plan or 529 plan, that holds your shares in an
      account under its name (these are sometimes referred to as "omnibus" or
      "street name" accounts), that financial intermediary may impose its own
      restrictions or limitations to discourage short-term or excessive
      trading. You should consult your financial intermediary to find out
      what trading restrictions, including limitations on exchanges, may
      apply.

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

      However, the Transfer Agent will attempt to monitor overall purchase
      and redemption activity in those accounts to seek to identify patterns
      that may suggest excessive trading by the underlying owners. If
      evidence of possible excessive trading activity is observed by the
      Transfer Agent, the financial intermediary that is the registered owner
      will be asked to review account activity, and to confirm to the
      Transfer Agent and the Fund that appropriate action has been taken to
      curtail any excessive trading activity. However, the Transfer Agent's
      ability to monitor and deter excessive short-term trading in omnibus or
      street name accounts ultimately depends on the capability and
      cooperation of the financial intermediaries controlling those accounts.
Additional Policies and Procedures. The Fund's Board has adopted the
      following additional policies and procedures to detect and prevent
      frequent and/or excessive exchanges and purchase and redemption
      activity:
o     30-Day Limit. A direct shareholder may exchange some or all of the
      shares of the Fund held in his or her account to another eligible
      Oppenheimer fund once in a 30 calendar-day period. When shares are
      exchanged into a fund account, that account will be "blocked" from
      further exchanges into another fund for a period of 30 calendar days
      from the date of the exchange. The block will apply to the full account
      balance and not just to the amount exchanged into the account. For
      example, if a shareholder exchanged $1,000 from one fund into another
      fund in which the shareholder already owned shares worth $10,000, then,
      following the exchange, the full account balance ($11,000 in this
      example) would be blocked from further exchanges into another fund for
      a period of 30 calendar days. A "direct shareholder" is one whose
      account is registered on the Fund's books showing the name, address and
      tax ID number of the beneficial owner.

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

o     Dividend Reinvestments/B Share Conversions. Reinvestment of dividends
      or distributions from one fund to purchase shares of another fund and
      the conversion of Class B shares into Class A shares will not be
      considered exchanges for purposes of imposing the 30-day limit.
o     Asset Allocation. Third-party asset allocation and rebalancing programs
      will be subject to the 30-day limit described above. Asset allocation
      firms that want to exchange shares held in accounts on behalf of their
      customers must identify themselves to the Transfer Agent and execute an
      acknowledgement and agreement to abide by these policies with respect
      to their customers' accounts. "On-demand" exchanges outside the
      parameters of portfolio rebalancing programs will be subject to the
      30-day limit. However, investment programs by other Oppenheimer
      "funds-of-funds" that entail rebalancing of investments in underlying
      Oppenheimer funds will not be subject to these limits.
o     Automatic Exchange Plans. Accounts that receive exchange proceeds
      through automatic or systematic exchange plans that are established
      through the Transfer Agent will not be subject to the 30-day block as a
      result of those automatic or systematic exchanges (but may be blocked
      from exchanges, under the 30-day limit, if they receive proceeds from
      other exchanges).

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual "Minimum Balance Fee" is assessed on each Fund account with a
      value of less than $500. The fee is automatically deducted from each
      applicable Fund account annually in September. See the Statement of
      Additional Information to learn how you can avoid this fee and for
      circumstances under which this fee will not be assessed.
The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is
      in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
      be modified, suspended or terminated by the Fund at any time. The Fund
      will provide you notice whenever it is required to do so by applicable
      law. If an account has more than one owner, the Fund and the Transfer
      Agent may rely on the instructions of any one owner. Telephone
      privileges apply to each owner of the account and the dealer
      representative of record for the account unless the Transfer Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the
      Fund will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.

Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements
      for redemptions stated in this prospectus.

Dealers that perform account transactions for their clients by participating
      in NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders
      of the Fund if the dealer performs any transaction erroneously or
      improperly.
The redemption price for shares will vary from day to day because the value
      of the securities in the Fund's portfolio fluctuates. The redemption
      price, which is the net asset value per share, will normally differ for
      each class of shares. The redemption value of your shares may be more
      or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink or by Federal Funds wire (as elected by
      the shareholder) within seven days after the Transfer Agent receives
      redemption instructions in proper form. However, under unusual
      circumstances determined by the Securities and Exchange Commission,
      payment may be delayed or suspended. For accounts registered in the
      name of a broker-dealer, payment will normally be forwarded within
      three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
      described under "How to Sell Shares" for recently purchased shares, but
      only until the purchase payment has cleared. That delay may be as much
      as 10 days from the date the shares were purchased. That delay may be
      avoided if you purchase shares by Federal Funds wire or certified check.
Involuntary redemptions of small accounts may be made by the Fund if the
      account value has fallen below $500 for reasons other than the fact
      that the market value of shares has dropped. In some cases, involuntary
      redemptions may be made to repay the Distributor for losses from the
      cancellation of share purchase orders.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack
      of liquidity in the Fund's portfolio to meet redemptions). This means
      that the redemption proceeds will be paid with liquid securities from
      the Fund's portfolio. If the Fund redeems your shares in kind, you may
      bear transaction costs and will bear market risks until such time as
      such securities are converted into cash.
Federal regulations may require the Fund to obtain your name, your date of
      birth (for a natural person), your residential street address or
      principal place of business and your Social Security Number, Employer
      Identification Number or other government issued identification when
      you open an account. Additional information may be required in certain
      circumstances or to open corporate accounts. The Fund or the Transfer
      Agent may use this information to attempt to verify your identity. The
      Fund may not be able to establish an account if the necessary
      information is not received. The Fund may also place limits on account
      transactions while it is in the process of attempting to verify your
      identity. Additionally, if the Fund is unable to verify your identity
      after your account is established, the Fund may be required to redeem
      your shares and close your account.
"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 pay them annually.
Dividends and distributions paid to Class A and Class Y shares will generally
be higher than dividends for Class B, Class C and Class N shares, which
normally have higher expenses than Class A and Class Y shares. The Fund has
no fixed dividend rate and cannot guarantee that it will pay any dividends or
distributions.

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

WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your
account, specify on your application how you want to receive your dividends
and distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all
      dividends and capital gains distributions in additional shares of the
      Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
      distributions (dividends, short-term capital gains or long-term capital
      gains distributions) in the Fund while receiving the other types of
      distributions by check or having them sent to your bank account through
      AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
      dividends and capital gains distributions or have them sent to your
      bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
      reinvest all distributions in the same class of shares of another
      OppenheimerFunds account you have established.

TAXES. If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the Fund.
Distributions are subject to federal income tax and may be subject to state
or local taxes. Dividends paid from short-term capital gains and net
investment income are taxable as ordinary income. Long-term capital gains are
taxable as long-term capital gains when distributed to shareholders. It does
not matter how long you have held your shares. Whether you reinvest your
distributions in additional shares or take them in cash, the tax treatment is
the same.

      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 to qualify each year as a "regulated investment
company" under the Internal Revenue Code, but reserves the right not to
qualify. It qualified during its last fiscal year. The Fund, as a regulated
investment company, will not be subject to federal income taxes on any of its
income, provided that it satisfies certain income, diversification and
distribution requirements.
Avoid "Buying a Distribution." If you buy shares on or just before the
      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 adviser
about  the  effect  of an  investment  in the  Fund  on  your  particular  tax
situation.


Financial Highlights

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

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

CLASS A     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     32.58     $    32.41     $    30.00     $    26.41    $    31.30
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .36 1          .17 1          .07 1          .14           .24
Net realized and unrealized gain (loss)                  1.67           2.27           2.41           3.71         (4.74)
                                                  ------------------------------------------------------------------------
Total from investment operations                         2.03           2.44           2.48           3.85         (4.50)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.24)          (.04)          (.07)          (.26)         (.39)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.46)         (2.27)          (.07)          (.26)         (.39)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     30.15     $    32.58     $    32.41     $    30.00    $    26.41
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       7.00%          7.79%          8.30%         14.70%       (14.60)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $ 1,146,503     $1,378,475     $1,459,053     $1,429,157    $1,181,014
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $ 1,238,504     $1,465,797     $1,497,594     $1,292,117    $1,300,422
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    1.22%          0.53%          0.23%          0.53%         0.82%
Total expenses                                           1.43% 4        1.33%          1.32%          1.44%         1.52%
Expenses after payments and waivers and
reduction to custodian expenses                          1.43%          1.28%          1.32%          1.44%         1.52%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         1.43%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  31 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

CLASS B     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     31.44     $    31.55     $    29.36     $    25.79    $    30.56
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                              .13 1         (.08) 1        (.17) 1        (.11)          .03
Net realized and unrealized gain (loss)                  1.62           2.20           2.36           3.68         (4.63)
                                                  ------------------------------------------------------------------------
Total from investment operations                         1.75           2.12           2.19           3.57         (4.60)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                       --             --             --             --          (.17)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.22)         (2.23)            --             --          (.17)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     28.97     $    31.44     $    31.55     $    29.36    $    25.79
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       6.22%          6.94%          7.46%         13.84%       (15.16)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $   159,147     $  210,856     $  278,215     $  424,121    $  693,380
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $   178,815     $  247,951     $  342,847     $  527,653    $  981,593
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                             0.47%         (0.27)%        (0.54)%        (0.19)%        0.17%
Total expenses                                           2.18% 4        2.12%          2.11%          2.20%         2.17%
Expenses after payments and waivers
and reduction to custodian expenses                      2.18%          2.07%          2.11%          2.20%         2.17%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         2.18%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  32 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

CLASS C     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     31.38     $    31.48     $    29.29     $    25.77    $    30.55
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                              .13 1         (.07) 1        (.16) 1        (.06)          .05
Net realized and unrealized gain (loss)                  1.62           2.20           2.35           3.63         (4.65)
                                                  ------------------------------------------------------------------------
Total from investment operations                         1.75           2.13           2.19           3.57         (4.60)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                       --             --             --           (.05)         (.18)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.22)         (2.23)            --           (.05)         (.18)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     28.91     $    31.38     $    31.48     $    29.29    $    25.77
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       6.23%          6.99%          7.48%         13.88%       (15.16)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $   141,981     $  174,735     $  190,426     $  205,336    $  203,490
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $   154,404     $  187,520     $  203,073     $  198,226    $  245,055
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                             0.47%         (0.22)%        (0.51)%        (0.19)%        0.18%
Total expenses                                           2.18% 4        2.08%          2.06%          2.17%         2.16%
Expenses after payments and waiver and
reduction to custodian expenses                          2.18%          2.02%          2.06%          2.17%         2.16%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         2.18%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  33 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

CLASS N     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     32.12     $    32.06     $    29.72     $    26.21    $    31.26
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                              .25 1          .05 1         (.05) 1         .09           .49
Net realized and unrealized gain (loss)                  1.66           2.24           2.39           3.65         (5.02)
                                                  ------------------------------------------------------------------------
Total from investment operations                         1.91           2.29           2.34           3.74         (4.53)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.13)            --             -- 2         (.23)         (.52)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.35)         (2.23)            --           (.23)         (.52)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     29.68     $    32.12     $    32.06     $    29.72    $    26.21
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                       6.64%          7.39%          7.89%         14.39%       (14.78)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $    21,431     $   25,539     $   26,382     $   19,538    $   14,843
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $    24,755     $   27,162     $   23,702     $   17,677    $   10,295
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                             0.87%          0.17%         (0.15)%         0.23%         0.55%
Total expenses                                           1.77% 5        1.69%          1.73%          2.14%         1.76%
Expenses after payments and waivers
and reduction to custodian expenses                      1.77%          1.64%          1.69%          1.73%         1.76%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         1.77%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  34 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

CLASS Y     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     32.70     $    32.52     $    30.11     $    26.53    $    31.40
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .41 1          .22 1          .12 1          .20           .56
Net realized and unrealized gain (loss)                  1.69           2.28           2.41           3.72         (4.99)
                                                  ------------------------------------------------------------------------
Total from investment operations                         2.10           2.50           2.53           3.92         (4.43)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.30)          (.09)          (.12)          (.34)         (.44)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.52)         (2.32)          (.12)          (.34)         (.44)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     30.28     $    32.70     $    32.52     $    30.11    $    26.53
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       7.21%          7.98%          8.42%         14.97%       (14.34)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $    17,806     $   28,100     $   30,831     $   30,124    $   24,458
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $    23,687     $   29,815     $   30,649     $   27,078    $   28,726
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    1.39%          0.69%          0.38%          0.74%         1.17%
Total expenses                                           1.24% 4        1.17%          1.16%          1.33%         1.34%
Expenses after payments and waivers and
reduction to custodian expenses                          1.23%          1.12%          1.16%          1.23%         1.23%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         1.24%

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
                              through the OppenheimerFunds website. You may
                              also read or download certain documents on the
                              OppenheimerFunds website at:
                              www.oppenheimerfunds.com
------------------------------------------------------------------------------


Information about the Fund including the Statement of Additional Information
can be reviewed and copied at the 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 SEC File No.: 811-5225               The    Fund's    shares    are
distributed by:
PR0236.001.0207                           [logo]              OppenheimerFunds
Distributor, Inc.

Printed on recycled paper





43

                          APPENDIX TO PROSPECTUS OF
                  OPPENHEIMER QUEST OPPORTUNITY VALUE FUNDSM


      Graphic  material  included  in  the  prospectus  of  Oppenheimer  Quest
Opportunity  Value Fund (the "Fund") under the heading:  "Annual Total Returns
(Class A) (as of 12/31 each year)":

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


--------------------------------------------------------------------------------
               Year Ended                         Annual Total Return
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                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%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                12/31/05                                 1.84%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                12/31/06                                 11.24%

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

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

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


Statement of Additional Information dated February 26, 2007

This Statement of Additional Information is not a Prospectus. This document
contains additional information about the Fund and supplements information in
the Prospectus dated February 26, 2007. It should be read together with the
Prospectus. You can obtain the Prospectus by writing to the Fund's Transfer
Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217,
or by calling the Transfer Agent at the toll-free number shown above, or by
downloading it from the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.


Contents                                                                Page

About the Fund
Additional Information About the Fund's Investment Policies and Risks...    2
    The Fund's Investment Policies......................................    2
    Other Investment Techniques and Strategies..........................   10
    Other Investment Restrictions.......................................   31
    Disclosure of Portfolio Holdings....................................   32
How the Fund is Managed ................................................   36
    Organization and History............................................   36
    Board of Trustees and Audit Committee...............................   38
    Trustees and Officers of the Fund...................................   39
    The Manager.........................................................   48
    Brokerage Policies of the Fund......................................   53
Distribution and Service Plans..........................................   55
Payments to Fund Intermediaries.........................................   60
Performance of the Fund.................................................   64

About Your Account
How To Buy Shares.......................................................   69
How To Sell Shares......................................................   80
How To Exchange Shares..................................................   84
Dividends, Capital Gains and Taxes......................................   89
Additional Information About the Fund...................................   93

Financial Information About the Fund

Report of Independent Registered Public Accounting Firm.................   95
Financial Statements....................................................   96


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






                                      95

ABOUT THE FUND

Additional Information About the Fund's Investment Policies and Risks

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

The Fund's Investment Policies. The composition of the Fund's portfolio and
the techniques and strategies that the Manager, may use in selecting
portfolio securities will vary over time. The Fund is not required to use 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 also invest in those debt securities and other high-quality short-term
debt securities including money market instruments for liquidity or defensive
purposes. Foreign debt securities are subject to the risks of foreign
investing described below. In general, domestic and foreign debt securities
are also subject to two additional types of risks: credit risk and interest
rate risk.

o     Credit Risk. Credit risk relates to the ability of the issuer to meet
interest or principal payment obligations as they become due. In making
investments in debt securities, the Manager may rely to some extent on the
ratings of 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 SAI.

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

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

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

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

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

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

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

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

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

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

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

|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") and 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% 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|   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;
o     unfavorable differences between the U.S. economy and foreign economies;
o     foreign withholding taxes; and
o     foreign exchange contracts.

      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.

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

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

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

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

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

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

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

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

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

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

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

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

        When the Fund makes short sales of securities, it segregates liquid
securities in an amount that equals the current market value of the security
sold short. The segregated assets are marked to market daily.

        The Fund secures its obligation to replace the borrowed security by
depositing collateral with the broker-dealer, usually in cash, U.S.
Government securities or other liquid securities similar to those borrowed.
With respect to the uncovered short positions, a Fund is required to deposit
similar collateral with its custodian, if necessary, to the extent that the
value of both collateral deposits in the aggregate is at all times equal to
at least 100% of the current market value of the security sold short.
Depending on arrangements made with the broker-dealer from which the Fund
borrowed the security, regarding payment over of any payments received by the
Fund on such security, a Fund may not receive any payments (including
interest) on its collateral deposited with such broker-dealer.

        Because making short sales in securities that it does not own exposes
a Fund to the risks associated with those securities, such short sales
involve speculative exposure risk. As a result, if a Fund makes short sales
in securities that increase in value, it will likely underperform similar
mutual funds that do not make short sales in securities they do not own. A
Fund will incur a loss as a result of a short sale if the price of the
security increases between the date of the short sale and the date on which
the Fund replaces the borrowed security. A Fund will realize a gain if the
security declines in price between those dates. There can be no assurance
that a Fund will be able to close out a short sale position at any particular
time or at an acceptable price. Although a Fund's gain is limited to the
price at which it sold the security short, its potential loss is limited only
by the maximum attainable price of the security, less the price at which the
security was sold and may, theoretically, be unlimited. The Fund's total
short positions are limited to 25% of the Fund's net assets.

      A Fund may also make short sales "against the box" without being
subject to such limitations imposed on other short sale transactions. In this
type of short sale, at the time of the sale, the Fund owns or has the
immediate and unconditional right to acquire the identical security at no
additional cost.

|X|   Derivatives. The Fund can invest in a variety of derivative investments
to seek income or for hedging purposes. Some derivative investments the Fund
can use are the hedging instruments described below in this SAI.

      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:
o     sell futures contracts,
o     buy puts on such futures or on securities, or
o     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:
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) 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 (these are referred to as
"commodity futures").

      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.

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 index
options, securities options, currency options, commodities options, and
options on the other types of futures described above.

o     Writing Covered Call Options. The Fund can write (that is, sell)
covered calls. 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.

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

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

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

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

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

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

      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 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.

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 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 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.

o     Interest Rate Swap Transactions. The Fund can enter into interest rate
swap agreements. In an interest rate swap, the Fund and another party
exchange their right to receive or their obligation to pay interest on a
security. For example, they might swap the right to receive floating rate
payments for fixed rate payments. 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."

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

|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 invest in securities of other registered investment
companies or registered unit investment trusts in reliance on sub-paragraph
(F) or (G) of section 12(d)(1) of the Investment Company Act.

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

      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 SAI. This is not a fundamental policy.

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


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


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

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


      A list of the top 20 or more portfolio securities holdings (based on
invested assets), listed by security or by issuer, as of the end of each
month may be disclosed to third parties (subject to the procedures below) no
sooner than 15 days after month-end.


      Except under special limited circumstances discussed below, month-end
lists of the Fund's complete portfolio holdings may be disclosed no sooner
than 30-days after the relevant month-end, subject to the procedures below.
If the Fund's complete portfolio holdings have not been disclosed publicly,
they may be disclosed pursuant to special requests for legitimate business
reasons, provided that:
o     The third-party recipient must first submit a request for release of
            Fund portfolio holdings, explaining the business reason for the
            request;
o     Senior officers (a Senior Vice President or above) in the Manager's
            Portfolio and Legal departments must approve the completed
            request for release of Fund portfolio holdings; and
o     The third-party recipient must sign the Manager's portfolio holdings
            non-disclosure agreement before receiving the data, agreeing to
            keep information that is not publicly available regarding the
            Fund's holdings confidential and agreeing not to trade directly
            or indirectly based on the information.

      The Fund's complete portfolio holdings positions may be released to the
following categories of entities or individuals on an ongoing basis, provided
that such entity or individual either (1) has signed an agreement to keep
such information confidential and not trade on the basis of such information
or (2) is subject to fiduciary obligations, as a member of the Fund's Board,
or as an employee, officer and/or director of the Manager, Distributor, or
Transfer Agent, or their respective legal counsel, not to disclose such
information except in conformity with these policies and procedures and not
to trade for his/her personal account on the basis of such information:
o     Employees of the Fund's Manager, Distributor and Transfer Agent who
            need to have access to such information (as determined by senior
            officers of such entity),
o     The Fund's independent registered public accounting firm,
o     Members of the Fund's Board and the Board's legal counsel,
o     The Fund's custodian bank,
o     A proxy voting service designated by the Fund and its Board,
o     Rating/ranking organizations (such as Lipper and Morningstar),
o     Portfolio pricing services retained by the Manager to provide portfolio
            security prices, and
o     Dealers, to obtain bids (price quotations if securities are not priced
            by the Fund's regular pricing services).

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

       Portfolio holdings information (which may include information on
individual securities positions or multiple securities) may be provided to
the entities listed below (1) by portfolio traders employed by the Manager in
connection with portfolio trading, and (2) by the members of the Manager's
Security Valuation Group and Accounting Departments in connection with
portfolio pricing or other portfolio evaluation purposes:
o     Brokers and dealers in connection with portfolio transactions
            (purchases and sales)
o     Brokers and dealers to obtain bids or bid and asked prices (if
            securities held by the Fund are not priced by the fund's regular
            pricing services)
o     Dealers to obtain price quotations where the fund is not identified as
            the owner.

      Portfolio holdings information (which may include information on the
Fund's entire portfolio or individual securities therein) may be provided by
senior officers of the Manager or attorneys on the legal staff of the
Manager, Distributor, or Transfer Agent, in the following circumstances:
o     Response to legal process in litigation matters, such as responses to
         subpoenas or in class action matters where the Fund may be part of
         the plaintiff class (and seeks recovery for losses on a security) or
         a defendant,
o     Response to regulatory requests for information (the SEC, NASD, state
         securities regulators, and/or foreign securities authorities,
         including without limitation requests for information in inspections
         or for position reporting purposes),
o     To potential sub-advisers of portfolios (pursuant to confidentiality
         agreements),
o     To consultants for retirement plans for plan sponsors/discussions at
         due diligence meetings (pursuant to confidentiality agreements),
o     Investment bankers in connection with merger discussions (pursuant to
         confidentiality agreements).

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

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


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

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


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



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





How the Fund is Managed

Organization  and  History.  The Fund, a series of  Oppenheimer  Quest for Value
Funds  (referred  to as the  "Trust"),  is an open-end,  diversified  management
investment  company with an unlimited number of authorized  shares of beneficial
interest.  The Fund was  organized as a  Massachusetts  business  trust in April
1987.

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

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

o    has its own dividends and distributions,

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

o    will generally have a different net asset value,

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

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

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

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

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

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

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

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


     The Board of Trustees has an Audit Committee  comprised  solely of Trustees
who  are  not  "interested  persons"  under  the  Investment  Company  Act  (the
"Independent Trustees").  The members of the Audit Committee are David K. Downes
(Chairman),  John Cannon, Thomas W. Courtney,  Robert G. Galli, Lacy B. Herrmann
and Brian Wruble.  The Audit  Committee held 6 meetings during the Fund's fiscal
year ended  October  31,  2006.  The Audit  Committee  furnishes  the Board with
recommendations  regarding  the selection of the Fund's  independent  registered
public accounting firm (also referred to as the "independent  Auditors").  Other
main functions of the Audit Committee  outlined in the Audit Committee  Charter,
include,  but are not  limited  to:  (i)  reviewing  the  scope and  results  of
financial  statement audits and the audit fees charged;  (ii) reviewing  reports
from the Fund's  independent  registered  public  accounting  firm regarding the
Fund's internal accounting procedures and controls; (iii) reviewing reports from
the Manager's  Internal Audit  Department;  (iv)  maintaining a separate line of
communication  between  the  Fund's  independent  Auditors  and the  Independent
Trustees;  (v) reviewing the  independence of the Fund's  independent  Auditors;
(vi)  pre-approving  the  provision  of any audit or  non-audit  services by the
Fund's independent Auditors,  including tax services, that are not prohibited by
the  Sarbanes-Oxley  Act, to the Fund, the Manager and certain affiliates of the
Manager.


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

     To date,  the  Audit  Committee  has  been  able to  identify  from its own
resources an ample number of qualified candidates. Nonetheless, shareholders may
submit names of  individuals,  accompanied  by complete  and properly  supported
resumes, for the Audit Committee's  consideration by mailing such information to
the Audit  Committee.  Shareholders  wishing to submit a nominee for election to
the  Board  may  do  so  by  mailing   their   submission   to  the  offices  of
OppenheimerFunds,  Inc., Two World Financial  Center,  225 Liberty Street,  11th
Floor, New York, New York 10281-1008,  to the attention of the Board of Trustees
of  Oppenheimer   Quest  Opportunity  Fund,  c/o  the  Secretary  of  the  Fund.
Submissions should, at a minimum, be accompanied by the following: (1) the name,
address,  and business,  educational,  and/or other pertinent  background of the
person being  recommended;  (2) a statement  concerning whether the person is an
"interested  person" as defined in the  Investment  Company  Act;  (3) any other
information  that the Fund would be  required  to  include in a proxy  statement
concerning the person if he or she was  nominated;  and (4) the name and address
of  the  person  submitting  the  recommendation   and,  if  that  person  is  a
shareholder,  the period for which that  person held Fund  shares.  Shareholders
should note that a person who owns  securities  issued by  Massachusetts  Mutual
Life Insurance Company  ("MassMutual") (the parent company of the Manager) would
be deemed an "interested  person" under the Investment Company Act. In addition,
certain other relationships with MassMutual or its subsidiaries, with registered
broker-dealers,  or with the Funds'  outside legal counsel may cause a person to
be deemed an "interested person."

     Although   candidates   are  expected  to  provide  a  mix  of  attributes,
experience,   perspective  and  skills  necessary  to  effectively  advance  the
interests of  shareholders,  the Audit  Committee has not  established  specific
qualifications  that must be met by a trustee  nominee.  In  evaluating  trustee
nominees,  the Audit Committee  considers,  among other things,  an individual's
background,  skills,  and  experience;  whether the individual is an "interested
person" as defined in the  Investment  Company Act;  and whether the  individual
would be deemed an "audit  committee  financial  expert"  within the  meaning of
applicable  SEC  rules.   The  Audit   Committee  also  considers   whether  the
individual's background,  skills, and experience will complement the background,
skills,  and experience of other  nominees.  The Audit Committee may, upon Board
approval,  retain  an  executive  search  firm or use  the  services  of  legal,
financial,   or  other  external  counsel  to  assist  in  screening   potential
candidates.

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

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

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

     In addition to being a Board member of each of the Board III Funds, Messrs.
Galli and Wruble are also directors, trustees or managers of 38 other portfolios
in the OppenheimerFunds complex.

     Present or former  officers,  directors,  trustees and employees (and their
immediate  family  members) of the Fund,  the Manager  and its  affiliates,  and
retirement  plans  established  by them for their  employees  are  permitted  to
purchase Class A shares of the Fund and the other Oppenheimer funds at net asset
value  without  sales  charge.  The sales charge on Class A shares is waived for
that group because of the reduced sales efforts realized by the Distributor.

     Messrs. Ferreira,  Gillespie,  Murphy, Petersen, Szilagyi, Vandehey, Wixted
and Zack and Mss.  Bloomberg  and Ives,  who are officers of the Fund,  hold the
same  offices  with one or more of the other Board III Funds.  As of February 1,
2006 the  Trustees  and  officers  of the Fund,  as a group,  owned of record or
beneficially  less than 1% of any class of  shares  of the Fund.  The  foregoing
statement  does not  reflect  ownership  of shares held of record by an employee
benefit plan for  employees of the Manager,  other than the shares  beneficially
owned under that plan by the  officers of the Fund listed  above.  In  addition,
none of the  Independent  Trustees (nor any of their  immediate  family members)
owns  securities of either the Manager or the Distributor of the Board III Funds
or of any entity  directly or  indirectly  controlling,  controlled  by or under
common control with the Manager or the Distributor.

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

     Independent Trustees
                                                                                -----------
-------------------------------------------------------------------------------------------
Name, Position(s)   Principal Occupation(s) During the Past 5      Dollar      Aggregate
                                                                             Dollar Range
                                                                  Range of     of Shares
                                                                   Shares    Beneficially
Held with the       Years; Other Trusteeships/Directorships     Beneficially   Owned in
Fund, Length of     Held; Number of Portfolios in the Fund        Owned in    Supervised
Service, Age        Complex Currently Overseen                    the Fund       Funds
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------

                                                                 As of December 31, 2006

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

Thomas W. Courtney, Principal of Courtney Associates, Inc.      None        $10,001-$50,000
Chairman of the     (venture capital firm) (since 1982);
Board of Trustees   General Partner of Trivest Venture Fund
since 2001,         (private venture capital fund); President
Trustee since 1987  of Investment Counseling Federated
Age: 73             Investors, Inc. (1973-1982); Trustee of

                    the following open-end investment
                    companies: Cash Assets Trust (1984),
                    Premier VIT (formerly PIMCO Advisors VIT),
                    Tax Free Trust of Arizona (since 1984) and
                    four funds for the Hawaiian Tax Free
                    Trust. Oversees 10 portfolios in the
                    OppenheimerFunds complex.
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------

Paul Y. Clinton,    Principal of Clinton Management Associates  $10,001 -   Over $100,000
Trustee, since 1987 (financial and venture capital consulting   $50,000
Age: 76             firm) (since 1996); Trustee of Premier VIT

                    (formerly PIMCO Advisors VIT) (open-end
                    investment company); Trustee of Capital
                    Cash Management Trust (money market fund)
                    (1979-December 2004); Trustee of
                    Narragansett Insured Tax-Free Income Fund
                    (tax-exempt bond fund) (1996-December
                    2004); Trustee of Prime Cash Fund
                    (1996-December 2004); and Director of OCC
                    Cash Reserves, Inc. (open-end investment
                    company) (1989-December 2002). Oversees 10
                    portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------

David K. Downes,    President, Chief Executive Officer and      None        None
Trustee since 2005  Board Member of CRAFund Advisors, Inc.
Age: 67             (investment management company) (since

                    January 2004); President of The Community
                    Reinvestment Act Qualified Investment Fund
                    (investment management company) (since
                    January 2004); Independent Chairman of the
                    Board of Trustees of Quaker Investment
                    Trust (registered investment company)
                    (since January 2004); Director of Internet
                    Capital Group (information technology
                    company) (since October 2003); Chief
                    Operating Officer and Chief Financial
                    Officer of Lincoln National Investment
                    Companies, Inc. (subsidiary of Lincoln
                    National Corporation, a publicly traded
                    company) and Delaware Investments U.S.,
                    Inc. (investment management subsidiary of
                    Lincoln National Corporation) (1995-2003);
                    President, Chief Executive Officer and
                    Trustee of Delaware Investment Family of
                    Funds (1995-2003); President and Board
                    Member of Lincoln National Convertible
                    Securities Funds, Inc. and the Lincoln
                    National Income Funds, TDC (1995-2003);
                    Chairman and Chief Executive Officer of
                    Retirement Financial Services, Inc.
                    (registered transfer agent and investment
                    adviser and subsidiary of Delaware
                    Investments U.S., Inc.) (1995-2003);
                    President and Chief Executive Officer of
                    Delaware Service Company, Inc.
                    (1995-2003); Chief Administrative Officer,
                    Chief Financial Officer, Vice Chairman and
                    Director of Equitable Capital Management
                    Corporation (investment subsidiary of
                    Equitable Life Assurance Society)
                    (1985-1992); Corporate Controller of
                    Merrill Lynch & Company (financial
                    services holding company) (1977-1985);
                    held the following positions at the
                    Colonial Penn Group, Inc. (insurance
                    company): Corporate Budget Director
                    (1974-1977), Assistant Treasurer
                    (1972-1974) and Director of Corporate
                    Taxes (1969-1972); held the following
                    positions at Price Waterhouse & Company
                    (financial services firm): Tax Manager
                    (1967-1969), Tax Senior (1965-1967) and
                    Staff Accountant (1963-1965); United
                    States Marine Corps (1957-1959). Oversees
                    10 portfolios in the OppenheimerFunds
                    complex.
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------

Robert G. Galli,    A director or trustee of other Oppenheimer  None        Over $100,000
Trustee since 1998  funds. Oversees 48 portfolios in the
Age: 73             OppenheimerFunds complex.*

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

Lacy B. Herrmann,   Founder and Chairman Emeritus of Aquila     None        $10,001-$50,000
Trustee since 1987  Group of Funds (open-end investment
Age: 77             company) (since December 2004); Chairman
                    of Aquila Management Corporation and
                    Aquila Investment Management LLC (since
                    August 1984); Chief Executive Officer and
                    President of Aquila Management Corporation
                    (August 1984-December 1994); Vice
                    President, Director and Secretary of
                    Aquila Distributors, Inc. (distributor of
                    Aquila Management Corporation); Treasurer
                    of Aquila Distributors, Inc.; President
                    and Chairman of the Board of Trustees of
                    Capital Cash Management Trust ("CCMT");
                    President and Director of STCM Management
                    Company, Inc. (sponsor and adviser to
                    CCMT); Chairman, President and Director of
                    InCap Management Corporation; Sub-Advisor
                    and Administrator of Prime Cash Fund &
                    Short Term Asset Reserves; Director of OCC
                    Cash Reserves, Inc. (open-end investment
                    company) (June 2003); Trustee of Premier
                    VIT (formerly PIMCO Advisors VIT)
                    (investment company) (since 1994); Trustee
                    of OCC Accumulation Trust (open-end
                    investment company); (until December
                    2004); Trustee Emeritus of Brown
                    University (since June 1983). Oversees 10
                    portfolios in the OppenheimerFunds complex.

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

Brian F. Wruble,    General Partner of Odyssey Partners, L.P.   Over        Over $100,000
Trustee since 2001  (hedge fund) (since September 1995);        $100,000
Age: 63             Director of Special Value Opportunities

                    Fund, LLC (registered investment company)
                    (since September 2004); Member, Zurich
                    Financial Investment Advisory Board

                    (insurance) (affiliate of the Manager's

                    parent company) (since October 2004);
                    Board of Governing Trustees of The Jackson
                    Laboratory (non-profit) (since August
                    1990); Trustee of the Institute for
                    Advanced Study (non-profit educational
                    institute) (since May 1992); Special
                    Limited Partner of Odyssey Investment
                    Partners, LLC (private equity investment)
                    (January 1999-September 2004); Trustee of
                    Research Foundation of AIMR (2000-2002)
                    (investment research, non-profit);
                    Governor, Jerome Levy Economics Institute
                    of Bard College (August 1990-September
                    2001) (economics research); Director of
                    Ray & Berendtson, Inc. (May 2000-April
                    2002) (executive search firm); President
                    and Chief Executive Officer of the
                    Delaware Group of Mutual Funds
                    (1992-1995); Chairman, President and Chief
                    Executive Officer of Equitable Capital
                    Management Corporation (1985-1992);
                    Executive Vice President and Chief
                    Investment Officer at The Equitable Life
                    Assurance Society of the U.S. (1979-1992);
                    Vice President and Co-manager at Smith
                    Barney, Harris Upham and Company
                    (1970-1979); Engineer, Sperry Gyroscope
                    Company (1966-1970); former governor of
                    the Association for Investment Management
                    and Research; former chairman of the
                    Institute of Chartered Financial Analysts;
                    Chartered Financial Analyst. Oversees 48
                    portfolios in the OppenheimerFunds
                    complex.*
-------------------------------------------------------------------------------------------

*           In addition to serving as a director or trustee of each of the Board
III Funds, Messrs. Galli and Wruble also serve on the Boards of 38 other
Oppenheimer funds that are not Board III Funds.

      Mr. Murphy is an "Interested Trustee" because he is affiliated with the
Manager by virtue of his positions as an officer an director of the Manager,
and as a shareholder of its parent company. The address of Mr. Murphy is Two
World Financial Center, 225 Liberty Street, 11th Floor, New York, New York
10281-1008. Mr. Murphy serves as a Trustee for an indefinite term, or until
his resignation, retirement, death or removal and as an officer for an
indefinite term, or until his resignation, retirement, death or removal.

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

                                                                 As of December 31, 2006

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

John V. Murphy,    Chairman, Chief Executive Officer and        None        Over $100,000
President and      Director (since June 2001) and President
Principal          (since September 2000) of the Manager;
Executive Officer  President and director or trustee of other
since 2001 and     Oppenheimer funds; President and Director
Trustee since 2005 of Oppenheimer Acquisition Corp. ("OAC")
Age: 57            (the Manager's parent holding company) and
                   of Oppenheimer Partnership Holdings, Inc.
                   (holding company subsidiary of the Manager)
                   (since July 2001); Director of
                   OppenheimerFunds Distributor, Inc.
                   (subsidiary of the Manager) (since November
                   2001); Chairman and Director of Shareholder
                   Services, Inc. and of Shareholder Financial
                   Services, Inc. (transfer agent subsidiaries
                   of the Manager) (since July 2001);
                   President and Director of OppenheimerFunds
                   Legacy Program (charitable trust program
                   established by the Manager) (since July
                   2001); Director of the following investment
                   advisory subsidiaries of the Manager: OFI
                   Institutional Asset Management, Inc.,
                   Centennial Asset Management Corporation,
                   Trinity Investment Management Corporation
                   and Tremont Capital Management, Inc. (since
                   November 2001), HarbourView Asset
                   Management Corporation and OFI Private
                   Investments, Inc. (since July 2001);
                   President (since November 1, 2001) and
                   Director (since July 2001) of Oppenheimer
                   Real Asset Management, Inc.; Executive Vice
                   President of Massachusetts Mutual Life
                   Insurance Company (OAC's parent company)
                   (since February 1997); Director of DLB
                   Acquisition Corporation (holding company
                   parent of Babson Capital Management LLC)
                   (since June 1995); Member of the Investment
                   Company Institute's Board of Governors
                   (since October 3, 2003); Chief Operating
                   Officer of the Manager (September 2000-June
                   2001); President and Trustee of MML Series
                   Investment Fund and MassMutual Select Funds
                   (open-end investment companies) (November
                   1999-November 2001); Director of C.M. Life
                   Insurance Company (September 1999-August
                   2000); President, Chief Executive Officer
                   and Director of MML Bay State Life
                   Insurance Company (September 1999-August
                   2000); Director of Emerald Isle Bancorp and
                   Hibernia Savings Bank (wholly-owned
                   subsidiary of Emerald Isle Bancorp) (June
                   1989-June 1998). Oversees 96 portfolios in
                   the OppenheimerFunds complex.

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

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

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

Emmanuel Ferreira,      Vice President of the Manager since January 2003; Portfolio
Vice President and      Manager at Lashire Investments (July 1999-December 2002). An
Portfolio Manager       officer of 3 portfolios in the OppenheimerFunds complex.
since 2004
Age: 39

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

Mark S. Vandehey,       Senior Vice President and Chief Compliance Officer of the
Vice President and      Manager (since March 2004); Vice President of OppenheimerFunds
Chief Compliance        Distributor, Inc., Centennial Asset Management Corporation and
Officer since 2004      Shareholder Services, Inc. (since June 1983). Former Vice
Age: 56                 President and Director of Internal Audit of the Manager
                        (1997-February 2004). An officer of 96 portfolios in the
                        OppenheimerFunds complex.

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

Brian W. Wixted,        Senior Vice President and Treasurer of the Manager (since March
Treasurer and           1999); Treasurer of the following: HarbourView Asset Management
Principal Financial &   Corporation, Shareholder Financial Services, Inc., Shareholder
Accounting Officer      Services, Inc., Oppenheimer Real Asset Management Corporation,
since 1999              and Oppenheimer Partnership Holdings, Inc. (since March 1999),
Age: 46                 OFI Private Investments, Inc. (since March 2000),
                        OppenheimerFunds International Ltd. (since May 2000),
                        OppenheimerFunds plc (since May 2000), OFI Institutional Asset
                        Management, Inc. (since November 2000), and OppenheimerFunds
                        Legacy Program (charitable trust program established by the
                        Manager) (since June 2003); Treasurer and Chief Financial
                        Officer of OFI Trust Company (trust company subsidiary of the
                        Manager) (since May 2000); Assistant Treasurer of the following:
                        OAC (since March 1999),Centennial Asset Management Corporation
                        (March 1999-October 2003) and OppenheimerFunds Legacy Program
                        (April 2000-June 2003); Principal and Chief Operating Officer of
                        Bankers Trust Company-Mutual Fund Services Division (March
                        1995-March 1999). An officer of 96 portfolios in the
                        OppenheimerFunds complex.

------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Brian Petersen,         Assistant Vice President of the Manager (since August 2002);
Assistant Treasurer     Manager/Financial Product Accounting of the Manager (November

since 2004              1998-July 2002). An officer of 96 portfolios in the
Age: 36                 OppenheimerFunds complex.

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

Brian C. Szilagyi,      Assistant Vice President of the Manager (since July 2004);
Assistant Treasurer     Director of Financial Reporting and Compliance of First Data
since 2005              Corporation (April 2003-July 2004); Manager of Compliance of
Age: 36                 Berger Financial Group LLC (May 2001-March 2003); Director of
                        Mutual Fund Operations at American Data Services, Inc.
                        (September 2000-May 2001). An officer of 96 portfolios in the
                        OppenheimerFunds complex.

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

Robert G. Zack,         Executive Vice President (since January 2004) and General
Secretary since 2001    Counsel (since March 2002) of the Manager; General Counsel and
Age: 58                 Director of the Distributor (since December 2001); General
                        Counsel of Centennial Asset Management Corporation (since
                        December 2001); Senior Vice President and General Counsel of
                        HarbourView Asset Management Corporation (since December 2001);
                        Secretary and General Counsel of OAC (since November 2001);
                        Assistant Secretary (since September 1997) and Director (since
                        November 2001) of OppenheimerFunds International Ltd. and
                        OppenheimerFunds plc; Vice President and Director of Oppenheimer
                        Partnership Holdings, Inc. (since December 2002); Director of
                        Oppenheimer Real Asset Management, Inc. (since November 2001);
                        Senior Vice President, General Counsel and Director of
                        Shareholder Financial Services, Inc. and Shareholder Services,
                        Inc. (since December 2001); Senior Vice President, General
                        Counsel and Director of OFI Private Investments, Inc. and OFI
                        Trust Company (since November 2001); Vice President of
                        OppenheimerFunds Legacy Program (since June 2003); Senior Vice
                        President and General Counsel of OFI Institutional Asset
                        Management, Inc. (since November 2001); Director of
                        OppenheimerFunds (Asia) Limited (since December 2003); Senior
                        Vice President (May 1985-December 2003), Acting General Counsel
                        (November 2001-February 2002) and Associate General Counsel (May
                        1981-October 2001) of the Manager; Assistant Secretary of the
                        following: Shareholder Services, Inc. (May 1985-November 2001),
                        Shareholder Financial Services, Inc. (November 1989-November
                        2001), and OppenheimerFunds International Ltd. (September
                        1997-November 2001). An officer of 96 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; Vice
since 2001              President (since 1999) and Assistant Secretary (since October
Age: 41                 2003) of the Distributor; Assistant Secretary of Centennial
                        Asset Management Corporation (since October 2003); Vice
                        President and Assistant Secretary of Shareholder Services, Inc.
                        (since 1999); Assistant Secretary of OppenheimerFunds Legacy
                        Program and Shareholder Financial Services, Inc. (since December
                        2001); Assistant Counsel of the Manager (August 1994-October
                        2003). An officer of 96 portfolios in the OppenheimerFunds
                        complex.

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

Lisa I. Bloomberg,      Vice President and Associate Counsel of the Manager (since May
Assistant Secretary     2004); First Vice President (April 2001-April 2004), Associate
since 2004              General Counsel (December 2000-April 2004), Corporate Vice
Age: 38                 President (May 1999-April 2001) and Assistant General Counsel
                        (May 1999-December 2000) of UBS Financial Services Inc.
                        (formerly, PaineWebber Incorporated). An officer of 96
                        portfolios in the OppenheimerFunds complex.

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

Phillip S. Gillespie,   Senior Vice President and Deputy General Counsel of the Manager
Assistant Secretary     (since September 2004); Mr. Gillespie held the following
since 2004              positions at Merrill Lynch Investment Management: First Vice
Age: 42                 President (2001-September 2004); Director (2000-September 2004)
                        and Vice President (1998-2000). An officer of 96 portfolios in
                        the OppenheimerFunds complex.

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


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












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

                                  31, 2006                            December 31, 2006

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

Thomas W. Courtney          $11,755      N/A(1(0))       $100,284        $196,500(4)

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

Paul Y. Clinton(5)           $4,846      N/A(1(0))         N/A             $34,125

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

David K. Downes((6))         $8,788      N/A(1(0))        $4,391          $146,668

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

Robert G. Galli              $9,713      N/A(1(0))       $49,811        $264,812((7))

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

Lacy B. Herrmann             $9,586      N/A(1(0))       $88,150        $167,000((8))

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

Brian F. Wruble              $9,963      N/A(1(0))       $45,544        $241,260((9))

Audit Committee Member
----------------------------------------------------------------------------------------
1.  "Aggregate Compensation From the Fund" includes fees and deferred
    compensation, if any, for a Trustee.
2.  "Estimated Annual Benefits Upon Retirement" is based on a straight life
    payment plan election with the assumption that a Trustee will retire at
    the age of 75 and is eligible (after 7 years of service) to receive
    retirement plan benefits as described below under "Retirement Plan for
    Trustees." Actual benefits upon retirement may vary based on retirement
    age, years of service and benefit payment elections of the Trustee.
3.  "Total Compensation From the Fund and Fund Complex" includes fees,
    deferred compensation (if any) and accrued retirement benefits (if any).
    For purposes of this section only, in accordance with the instructions
    for Form N-1A, "Fund Complex" includes the Oppenheimer funds and one
    open-end investment company, PIMCO Advisors VIT ("PIMCO") (formerly OCC
    Accumulation Trust) for which the Fund's former Sub-Adviser acts as the
    investment adviser. The Manager does not consider PIMCO to be part of the
    OppenheimerFunds "Fund Complex" as that term may be otherwise interpreted.

4.  Includes $35,500 from Premier VIT, with respect to Mr. Courtney's service
    as a trustee of that fund.
5.  Mr. Clinton retired from the Board III funds effective March 31, 2006.
6.  Mr. Downes was appointed as Trustee of the Board III Funds on December

    16, 2005.

7.  Includes $129,312 for serving as a director or trustee of 49 other
    Oppenheimer funds (at December 31, 2005) that are not Board III Funds.
8.  Includes $31,500 from Premier VIT, with respect to Mr. Herrmann's service
    as a trustee of that fund.
9.  Includes $105,760 for serving as a director or trustee of 49 other
    Oppenheimer funds (at December 31, 2005) that are not Board III Funds.
10. As a result of the Fund's current asset levels and accrual methodology,
    no retirement benefits were accrued as expenses during the current year.

|X|         Retirement Plan for Trustees. The Fund has adopted a retirement
plan that provides for payments to retired Independent Trustees. Payments are
up to 80% of the average compensation paid during a Trustee's five years of
service in which the highest compensation was received. A Trustee must serve
as director or trustee for any of the Board III Funds for at least seven
years to be eligible for retirement plan benefits and must serve for at least
15 years to be eligible for the maximum benefit. The amount of retirement
benefits a Trustee will receive depends on the amount of the Trustee's
compensation, including future compensation and the length of his or her
service on the Board.


      Compensation Deferral Plan for Trustees. The Board of Trustees has
adopted a Compensation Deferral Plan for Independent Trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the
Trustee. The amount paid to the Trustee under the plan will be determined
based upon the amount of compensation deferred and the performance of the
selected funds.


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


|X|   Major Shareholders. As of February 9, 2007, the only persons or
entities who owned of record or were known by the Fund to own beneficially 5%
or more of any class of the Fund's outstanding shares were:

      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, 242,074.928 Class C shares (representing
      5.02% 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 353,520.413
      Class Y shares (representing 71.03% 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 144,185.300 Class Y shares (representing
      28.96% 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, which include Proxy Voting Guidelines, under which
the Fund votes proxies relating to securities ("portfolio proxies") held by
the Fund. The Fund's primary consideration in voting portfolio proxies is the
financial interests of the Fund and its shareholders. The Fund has retained
an unaffiliated third-party as its agent to vote portfolio proxies in
accordance with the Fund's Portfolio Proxy Voting Guidelines and to maintain
records of such portfolio proxy voting. The Portfolio Proxy Voting Policies
and Procedures include provisions to address conflicts of interest that may
arise between the Fund and the Manager or the Manager's affiliates or
business relationships. Such a conflict of interest may arise, for example,
where the Manager or an affiliate of the Manager manages or administers the
assets of a pension plan or other investment account of the portfolio company
soliciting the proxy or seeks to serve in that capacity. The Manager and its
affiliates generally seek to avoid such conflicts by maintaining separate
investment decision making processes to prevent the sharing of business
objectives with respect to proposed or actual actions regarding portfolio
proxy voting decisions. Additionally, the Manager employs the following two
procedures: (1) if the proposal that gives rise to the conflict is
specifically addressed in the Proxy Voting Guidelines, the Manager will vote
the portfolio proxy in accordance with the Proxy Voting Guidelines, provided
that they do not provide discretion to the Manager on how to vote on the
matter; and (2) if such proposal is not specifically addressed in the Proxy
Voting Guidelines or the Proxy Voting Guidelines provide discretion to the
Manager on how to vote, the Manager will vote in accordance with the
third-party proxy voting agent's general recommended guidelines on the
proposal provided that the Manager has reasonably determined that there is no
conflict of interest on the part of the proxy voting agent. If neither of the
previous two procedures provides an appropriate voting recommendation, the
Manager may retain an independent fiduciary to advise the Manager on how to
vote the proposal or may abstain from voting. The Proxy Voting Guidelines'
provisions with respect to certain routine and non-routine proxy proposals
are summarized below:

o     The Fund generally votes with the recommendation of the issuer's
         management on routine matters, including ratification of the
         independent registered public accounting firm, unless circumstances
         indicate otherwise.
o     The Fund evaluates nominees for director nominated by management on a
         case-by-case basis, examining the following factors, among others:
         Composition of the board and key board committees, attendance at
         board meetings, corporate governance provisions and takeover
         activity, long-term company performance and the nominee's investment
         in the company.
o     In general, the Fund opposes anti-takeover proposals and supports the
         elimination, or the ability of shareholders to vote on the
         preservation or elimination, of anti-takeover proposals, absent
         unusual circumstances.
o     The Fund supports shareholder proposals to reduce a super-majority vote
         requirement, and opposes management proposals to add a
         super-majority vote requirement.
o     The Fund opposes proposals to classify the board of directors.
o     The Fund supports proposals to eliminate cumulative voting.
o     The Fund opposes re-pricing of stock options without shareholder
         approval.
o     The Fund generally considers executive compensation questions such as
         stock option plans and bonus plans to be ordinary business activity.
         The Fund analyzes stock option plans, paying particular attention to
         their dilutive effect. While the Fund generally supports management
         proposals, the Fund opposes plans it considers to be excessive.

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


|X|   The Investment Advisory Agreement. The Manager provides investment
advisory and management services to the Fund under an investment advisory
agreement between the Manager and 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)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
           2004                                 $17,071,617
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
           2005                                 $15,927,654
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

           2006                                 $13,406,190

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

1. Until January 1, 2005, the Manager, not the Fund, paid the Fund's former
   sub-advisor, OpCap Advisors an annual sub-advisory fee. For fiscal years
   2003 and 2004, this sub-advisory fee was $6,316,831 and $5,758,487,
   respectively. Effective December 31, 2004, the sub-advisory agreement
   between OpCap Advisors and the Manager expired.

      The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the investment
advisory agreement, the Manager is not liable for any loss the Fund sustains
in connection with matters to which the agreement relates.


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

Portfolio Manager. The Fund's portfolio is managed by Emmanuel Ferreira (the
"Portfolio Manager"). He is the person who is responsible for the day-to-day
management of the Fund's investments.


|X|   Other Accounts Managed by the Portfolio Manager. The Fund's portfolio
is managed by Emmanuel Ferreira who is responsible for the day-to-day
management of the Fund's investments. In addition to managing the Fund's
investment portfolio, the Portfolio Manager also manages other investment
portfolios on behalf of the Manager or its affiliates. The following table
provides information, as of October 31, 2006, regarding the other portfolios
managed by the Portfolio Manager. None of those portfolios has an advisory
fee based on performance:


   Portfolio       RegistereTotal      Other        Total    Other   Total
                                                  Assets in
                            Assets in               Other
                            Registered Pooled      Pooled             Assets
                   InvestmenInvestment InvestmentInvestment          in Other
                   CompaniesCompanies  Vehicles   Vehicles   AccountsAccounts
   Manager         Managed   Managed*   Managed   Managed*   Managed Managed*
   ----------------------------------------------------------------------------
   ----------------------------------------------------------------------------

   Emmanuel           3      $2,082.9    None       None      None     None

   Ferreira
   ----------------------------------------------------------------------------
   1. In millions.

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


           As indicated above, the Portfolio Manager also manages other
     funds. Potentially, at times, those responsibilities could conflict with
     the interests of the Fund. That may occur whether the investment
     strategies of the other fund are the same as, or different from, the
     Fund's investment objectives and strategies. For example the Portfolio
     Manager may need to allocate investment opportunities between the Fund
     and another fund having similar objectives or strategies, or he may need
     to execute transactions for another fund that could have a negative
     impact on the value of securities held by the Fund. Not all funds and
     accounts advised by the Manager have the same management fee. If the
     management fee structure of another fund is more advantageous to the
     Manager than the fee structure of the Fund, the Manager could have an
     incentive to favor the other fund. However, the Manager's compliance
     procedures and Code of Ethics recognize the Manager's fiduciary
     obligations to treat all of its clients, including the Fund, fairly and
     equitably, and are designed to preclude the Portfolio Manager from
     favoring one client over another. It is possible, of course, that those
     compliance procedures and the Code of Ethics may not always be adequate
     to do so. At different times, one or more of the Fund's Portfolio
     Manager may manage other funds or accounts with investment objectives
     and strategies that are similar to those of the Fund, or may manage
     funds or accounts with investment objectives and strategies that are
     different from those of the Fund.

|X|   Compensation of the Portfolio Manager. The Fund's Portfolio Manager is
     employed and compensated by the Manager, not the Fund. Under the
     Manager's compensation program for its portfolio managers and portfolio
     analysts, their compensation is based primarily on the investment
     performance results of the funds and accounts they manage, rather than
     on the financial success of the Manager. This is intended to align the
     portfolio managers' and analysts' interests with the success of the
     funds and accounts and their investors. The Manager's compensation
     structure is designed to attract and retain highly qualified investment
     management professionals and to reward individual and team contributions
     toward creating shareholder value. As of October 31, 2006 the Portfolio
     Manager's compensation consisted of three elements: a base salary, an
     annual discretionary bonus and eligibility to participate in long-term
     awards of options and appreciation rights in regard to the common stock
     of the Manager's holding company parent. Senior portfolio managers may
     also be eligible to participate in the Manager's deferred compensation
     plan.

           The base pay component of each portfolio manager is reviewed
     regularly to ensure that it reflects the performance of the individual,
     is commensurate with the requirements of the particular portfolio,
     reflects any specific competence or specialty of the individual manager,
     and is competitive with other comparable positions, to help the Manager
     attract and retain talent. The annual discretionary bonus is determined
     by senior management of the Manager and is based on a number of factors,
     including a fund's pre-tax performance for periods of up to five years,
     measured against an appropriate benchmark selected by management. The
     Lipper benchmark with respect to the Fund is Lipper - Flexible Portfolio
     Funds. Other factors include management quality (such as style
     consistency, risk management, sector coverage, team leadership and
     coaching) and organizational development. The Portfolio Manager's
     compensation is not based on the total value of the Fund's portfolio
     assets, although the Fund's investment performance may increase those
     assets. The compensation structure is also intended to be internally
     equitable and serve to reduce potential conflicts of interest between
     the Fund and other funds and accounts managed by the Portfolio Manager.
     The compensation structure of the other funds and accounts managed by
     the Portfolio Manager is the same as the compensation structure of the
     Fund, described above.

|X|   Ownership of Fund Shares. As of October 31, 2006 the Portfolio Manager
     beneficially owned shares of the Fund, as follows:

            Portfolio Manager                   Range of Shares
                                                  Beneficially
                                               Owned in the Fund

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

            Emmanuel Ferreira                        None

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


Brokerage Policies of the Fund

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

     Under the investment  advisory  agreement,  in choosing  brokers to execute
portfolio  transactions for the Fund, the Manager may select brokers (other than
affiliates)  that provide both brokerage and research  services to the Fund. The
commissions  paid to those brokers may be higher than another  qualified  broker
would  charge,  if  the  Manager  makes  a good  faith  determination  that  the
commission is fair and reasonable in relation to the services provided.

Brokerage Practices Followed by the Manager. The Manager allocates brokerage for
the Fund subject to the  provisions  of the  investment  advisory  agreement and
other applicable rules and procedures described below.

     The   Manager's   portfolio   traders   allocate   brokerage   based   upon
recommendations  from  the  Manager's  portfolio  managers,  together  with  the
portfolio  traders'  judgment as to the  execution  capability  of the broker or
dealer. In certain  instances,  portfolio managers may directly place trades and
allocate  brokerage.  In either case, the Manager's executive officers supervise
the allocation of brokerage.


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


     Other accounts  advised by the Manager have investment  policies similar to
those of the Fund. Those other accounts may purchase or sell the same securities
as the Fund at the same time as the Fund,  which  could  affect  the  supply and
price of the securities. If two or more accounts advised by the Manager purchase
the same security on the same day from the same dealer,  the transactions  under
those combined  orders are averaged as to price and allocated in accordance with
the purchase or sale orders actually placed for each account. When possible, the
Manager tries to combine concurrent orders to purchase or sell the same security
by more than one of the accounts  managed by the Manager or its affiliates.  The
transactions  under those combined orders are averaged as to price and allocated
in accordance with the purchase or sale orders actually placed for each account.

     Rule  12b-1  under  the  Investment  Company  Act  prohibits  any fund from
compensating  a broker or dealer for  promoting or selling the fund's  shares by
(1) directing to that broker or dealer any of the fund's portfolio transactions,
or (2)  directing  any other  remuneration  to that  broker or  dealer,  such as
commissions,  mark-ups,  mark  downs or other  fees  from the  fund's  portfolio
transactions,  that were  effected  by another  broker or dealer  (these  latter
arrangements  are considered to be a type of "step-out"  transaction).  In other
words, a fund and its investment adviser cannot use the fund's brokerage for the
purpose of rewarding broker-dealers for selling the fund's shares.

     However,  the Rule permits funds to effect brokerage  transactions  through
firms that also sell fund shares,  provided that certain  procedures are adopted
to prevent a quid pro quo with respect to portfolio  brokerage  allocations.  As
permitted by the Rule, the Manager has adopted  procedures (and the Fund's Board
of  Trustees  has  approved  those  procedures)  that  permit the Fund to direct
portfolio  securities  transactions  to brokers or dealers  that also promote or
sell  shares  of the  Fund,  subject  to  the  "best  execution"  considerations
discussed  above.  Those  procedures are designed to prevent:  (1) the Manager's
personnel who effect the Fund's portfolio  transactions from taking into account
a broker's or dealer's promotion or sales of the Fund shares when allocating the
Fund's portfolio transactions, and (2) the Fund, the Manager and the Distributor
from entering into agreements or understandings  under which the Manager directs
or is expected to direct the Fund's brokerage directly,  or through a "step-out"
arrangement,  to any  broker or  dealer in  consideration  of that  broker's  or
dealer's  promotion  or sale of the  Fund's  shares or the  shares of any of the
other Oppenheimer funds.

     The investment advisory agreement permits the Manager to allocate brokerage
for research services. The research services provided by a particular broker may
be useful both to the Fund and to one or more of the other  accounts  advised by
the  Manager or its  affiliates.  Investment  research  may be  supplied  to the
Manager by the broker or by a third party at the  instance  of a broker  through
which trades are placed.

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

     Although  the Manager  currently  does not do so, the Board of Trustees may
permit the Manager to use stated  commissions on secondary  fixed-income  agency
trades to obtain research if the broker  represents to the Manager that: (i) the
trade is not from or for the broker's own inventory, (ii) the trade was executed
by the broker on an agency basis at the stated  commission,  and (iii) the trade
is not a riskless principal  transaction.  The Board of Trustees may also permit
the Manager to use commissions on fixed-price  offerings to obtain research,  in
the same manner as is permitted for agency transactions.

     The research  services provided by brokers broaden the scope and supplement
the research activities of the Manager.  That research provides additional views
and  comparisons  for  consideration,  and helps the  Manager  to obtain  market
information  for the valuation of securities  that are either held in the Fund's
portfolio or are being considered for purchase. The Manager provides information
to the Board about the  commissions  paid to brokers  furnishing  such services,
together with the Manager's  representation  that the amount of such commissions
was reasonably related to the value or benefit of such services.


     During the fiscal  years ended  October 31, 2004,  2005 and 2006,  the Fund
paid the total brokerage  commissions  indicated in the chart below.  During the
fiscal year ended October 31, 2006,  the Fund paid  $1,154,025 in commissions to
firms that provide  brokerage and research  services to the Fund with respect to
$1,249,901,840 of aggregate portfolio  transactions.  All such transactions were
on a "best  execution"  basis,  as described  above.  The  provision of research
services was not necessarily a factor in the placement of all such transactions.










                              -------------------------------------------
               Fiscal Year Ended 10/31          Total Brokerage
                                            Commissions Paid by the
                                                     Fund*
            -------------------------------------------------------------
-------------------------------------------------------------------------
            2004                              $4,048,815
-------------------------------------------------------------------------
-------------------------------------------------------------------------
            2005                              $2,198,374
-------------------------------------------------------------------------
-------------------------------------------------------------------------

            2006                              $1,291,123

-------------------------------------------------------------------------
  *  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 Ended  Front-End Sales   Sales Charges
10/31:         Charges on      Retained by
             Class A Shares  Distributor(1)
---------------------------------------------
---------------------------------------------
   2004        $1,336,120       $410,667
---------------------------------------------
---------------------------------------------
   2005        $1,073,914       $372,439
---------------------------------------------
---------------------------------------------

   2006         $746,456        $226,263

---------------------------------------------
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 Ended   Class A Shares  Class B Shares   Class C Shares   Class N Shares
10/31:        Advanced by      Advanced by     Advanced by      Advanced by
             Distributor(1)  Distributor(1)   Distributor(1)   Distributor(1)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
   2004         $184,600       $1,072,528        $141,161         $72,001
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
   2005         $139,487        $794,969         $115,032         $48,127
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

   2006         $82,284         $592,016         $62,144          $12,884

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

--------------------------------------------------------------------------------
Fiscal          Class A          Class B          Class C          Class N
               Contingent      Contingent                         Contingent
             Deferred Sales  Deferred Sales     Contingent      Deferred Sales
Year  Ended     Charges          Charges      Deferred Sales       Charges
10/31:        Retained by      Retained by   Charges Retained    Retained by
              Distributor      Distributor    by Distributor     Distributor
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
   2004         $21,040         $641,979          $11,221           $9,198
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
   2005          $9,299         $533,873          $15,441          $14,175
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

   2006         $20,287         $388,997          $7,769            $4,258

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


Distribution and Service Plans. The Fund has adopted a Service Plans 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 Trustees(1), cast in
person at a meeting called for the purpose of voting on that plan.


      Under the Plans, the Manager and the Distributor may make payments to
affiliates. In their sole discretion, they may also from time to time make
substantial payments from their own resources, which include the profits the
Manager derives from the advisory fees it receives from the Fund, to
compensate brokers, dealers, financial institutions and other intermediaries
for providing distribution assistance and/or administrative services or that
otherwise promote sales of the Fund's shares. These payments, some of which
may be referred to as "revenue sharing," may relate to the Fund's inclusion
on a financial intermediary's preferred list of funds offered to its clients.

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

      The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount
of payments to be made under a plan must be approved by shareholders of the
class affected by the amendment. Because Class B shares of the Fund
automatically convert into Class A shares 72 months after purchase, the Fund
must obtain the approval of both Class A and Class B shareholders for a
proposed material amendment to the Class A plan that would materially
increase payments under the plan. That approval must be by a majority of the
shares of each class, voting separately by class.

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

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

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


|X|   Class A Distribution and 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 (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 plan
recipients periodically at an annual rate not to exceed 0.25% of the average
annual net assets consisting of Class A shares held in the accounts of the
recipients or their customers.


      With respect to purchases of Class A shares subject to a contingent
deferred sales charge by certain retirement plans that purchased such shares
prior to March 1, 2001 ("grandfathered retirement accounts"), the Distributor
currently intends to pay the service fee to recipients in advance for the
first year after the shares are purchased. During the first year the shares
are sold, the Distributor retains the service fee to reimburse itself for the
costs of distributing the shares. After the first year shares are
outstanding, the Distributor makes service fee payments to recipients
periodically on those shares. The advance payment is based on the net asset
value of shares sold. Shares purchased by exchange do not qualify for the
advance service fee payment. If Class A shares purchased by grandfathered
retirement accounts are redeemed during the first year after their purchase,
the recipient of the service fees on those shares will be obligated to repay
the Distributor a pro rata portion of the advance payment of the service fee
made on those shares.


      For the fiscal year ended October 31, 2006 payments under the Class A
plan totaled $3,053,502, of which $26,209 was service fee payments retained
by the Distributor in connection with the grandfathered retirement accounts,
described above, and included $200,696 paid to an affiliate of the
Distributor's parent company. Any unreimbursed expenses the Distributor
incurs with respect to Class A shares in any fiscal year cannot be recovered
in subsequent years. The Distributor may not use payments received under the
Class A plan to pay any of its interest expenses, carrying charges, or other
financial costs, or allocation of overhead.


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

      The asset-based sales charge on Class B, Class C and Class N shares
allow investors to buy shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares. The Fund pays
the asset-based sales charge to the Distributor for its services rendered in
distributing Class B, Class C and Class N shares. The payments are made to
the Distributor in recognition that the Distributor:
o     pays sales concessions to authorized brokers and dealers at the time of
         sale and pays service fees as described above,
o     may finance payment of sales concessions and/or the advance of the
         service fee payment to recipients under the plans, or may provide
         such financing from its own resources or from the resources of an
         affiliate,
o     employs personnel to support distribution of Class B, Class C and Class
         N shares,
o     bears the costs of sales literature, advertising and prospectuses
         (other than those furnished to current shareholders) and state "blue
         sky" registration fees and certain other distribution expenses,
o     may not be able to adequately compensate dealers that sell Class B,
         Class C and Class N shares without receiving payment under the plans
         and therefore may not be able to offer such Classes for sale absent
         the plans,
o     receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that
         charge 12b-1 fees,
o     may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund
         shares,
o     may experience increased difficulty selling the Fund's shares if
         payments under the plan are discontinued because most competitor
         funds have plans that pay dealers for rendering distribution
         services as much or more than the amounts currently being paid by
         the Fund, and
o     may not be able to continue providing, at the same or at a lesser cost,
         the same quality distribution sales efforts and services, or to
         obtain such services from brokers and dealers, if the plan payments
         were to be discontinued.

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

--------------------------------------------------------------------------------
   Distribution and Service Fees Paid to the Distributor for the Fiscal Year

                                Ended 10/31/06

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

Class B Plan     $1,786,369    $1,375,778(1)        None              N/A

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

Class C Plan     $1,542,766     $101,818(2)      $7,558,248          5.32%

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

Class N Plan      $123,526       $42,238(3)       $613,289           2.86%

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

1.    Includes $35,072 paid to an affiliate of the Distributor's parent
   company.
2.    Includes $55,243 paid to an affiliate of the Distributor's parent
   company.
3.    Includes $5,419 paid to an affiliate of the Distributor's parent
   company.


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

Payments to Fund Intermediaries

Financial intermediaries may receive various forms of compensation or
reimbursement from the Fund in the form of 12b-1 plan payments as described
in the preceding section of this SAI. They may also receive payments or
concessions from the Distributor, derived from sales charges paid by the
clients of the financial intermediary, also as described in this SAI.
Additionally, the Manager and/or the Distributor (including their affiliates)
may make payments to financial intermediaries in connection with their
offering and selling shares of the Fund and other Oppenheimer funds,
providing marketing or promotional support, transaction processing and/or
administrative services. Among the financial intermediaries that may receive
these payments are brokers and dealers who sell and/or hold shares of the
Fund, banks (including bank trust departments), registered investment
advisers, insurance companies, retirement plan and qualified tuition program
administrators, third party administrators, and other institutions that have
selling, servicing or similar arrangements with the Manager or Distributor.
The payments to intermediaries vary by the types of product sold, the
features of the Fund share class and the role played by the intermediary.

      Possible types of payments to financial intermediaries include, without
limitation, those discussed below.
o     Payments made by the Fund, or by an investor buying or selling shares
         of the Fund may include:
o     depending on the share class that the investor selects, contingent
              deferred sales charges or initial front-end sales charges, all
              or a portion of which front-end sales charges are payable by
              the Distributor to financial intermediaries (see "About Your
              Account" in the Prospectus);
o     ongoing asset-based payments attributable to the share class selected,
              including fees payable under the Fund's distribution and/or
              service plans adopted under Rule 12b-1 under the Investment
              Company Act, which are paid from the Fund's assets and
              allocated to the class of shares to which the plan relates (see
              "About the Fund -- Distribution and Service Plans" above);
o     shareholder servicing payments for providing omnibus accounting,
              recordkeeping, networking, sub-transfer agency or other
              administrative or shareholder services, including retirement
              plan and 529 plan administrative services fees, which are paid
              from the assets of a Fund as reimbursement to the Manager or
              Distributor for expenses they incur on behalf of the Fund.
o     Payments made by the Manager or Distributor out of their respective
         resources and assets, which may include profits the Manager derives
         from investment advisory fees paid by the Fund. These payments are
         made at the discretion of the Manager and/or the Distributor. These
         payments, often referred to as "revenue sharing" payments, may be in
         addition to the payments by the Fund listed above.
o     These types of payments may reflect compensation for marketing support,
              support provided in offering the Fund or other Oppenheimer
              funds through certain trading platforms and programs,
              transaction processing or other services;
o     The Manager and Distributor each may also pay other compensation to the
              extent the payment is not prohibited by law or by any
              self-regulatory agency, such as the NASD. Payments are made
              based on the guidelines established by the Manager and
              Distributor, subject to applicable law.

      These payments may provide an incentive to financial intermediaries to
actively market or promote the sale of shares of the Fund or other
Oppenheimer funds, or to support the marketing or promotional efforts of the
Distributor in offering shares of the Fund or other Oppenheimer funds. In
addition, some types of payments may provide a financial intermediary with an
incentive to recommend the Fund or a particular share class. Financial
intermediaries may earn profits on these payments, since the amount of the
payment may exceed the cost of providing the service. Certain of these
payments are subject to limitations under applicable law. Financial
intermediaries may categorize and disclose these arrangements to their
clients and to members of the public in a manner different from the
disclosures in the Fund's Prospectus and this SAI. You should ask your
financial intermediary for information about any payments it receives from
the Fund, the Manager or the Distributor and any services it provides, as
well as the fees and commissions it charges.

      Although brokers or dealers that sell Fund shares may also act as a
broker or dealer in connection with the execution of the purchase or sale of
portfolio securities by the Fund or other Oppenheimer funds, a financial
intermediary's sales of shares of the Fund or such other Oppenheimer funds is
not a consideration for the Manager when choosing brokers or dealers to
effect portfolio transactions for the Fund or such other Oppenheimer funds.

      Revenue sharing payments can pay for distribution-related or asset
retention items including, without limitation,
o     transactional support, one-time charges for setting up access for the
         Fund or other Oppenheimer funds on particular trading systems, and
         paying the intermediary's networking fees;
o     program support, such as expenses related to including the Oppenheimer
         funds in retirement plans, college savings plans, fee-based advisory
         or wrap fee programs, fund "supermarkets", bank or trust company
         products or insurance companies' variable annuity or variable life
         insurance products;
o     placement on the dealer's list of offered funds and providing
         representatives of the Distributor with access to a financial
         intermediary's sales meetings, sales representatives and management
         representatives.

      Additionally, the Manager or Distributor may make payments for firm
support, such as business planning assistance, advertising, and educating a
financial intermediary's sales personnel about the Oppenheimer funds and
shareholder financial planning needs.


      For the year ended December 31, 2005, the following financial
intermediaries that are broker-dealers offering shares of the Oppenheimer
funds, and/or their respective affiliates, received revenue sharing or
similar distribution-related payments from the Manager or Distributor for
marketing or program support:


Advantage Capital Corp./Financial     Advest, Inc.
Services Corp.
Aegon USA                             Aetna Retirement Services, Inc.
A.G. Edwards & Sons, Inc.             AIG Life
Allianz Life Insurance Company        Allmerica Financial Life Insurance
                                      and Annuity Co.
Allstate Financial Advisors           American Enterprise Life Insurance
American General Securities, Inc.     American General Annuity
Ameriprise Financial Services, Inc.   American Portfolio Financial
                                      Services, Inc.
Ameritas Life Insurance Corporation   Annuity Investors Life
Associated Securities                 AXA Advisors
Banc One Securities Corp.             BNY Investment Center, Inc.
Cadaret Grant & Co. Inc.              Charles Schwab - Great West Life
Chase Investment Services Corp.       CitiCorp Investment Services, Inc.
Citigroup Global Markets, Inc. (SSB)  CitiStreet
Citizens Bank of Rhode Island         CJM Planning Corp.
Columbus Life Insurance Company       Commonwealth Financial Network
CUNA Brokerage Services, Inc.         CUSO Financial Services, L.P.
Federal Kemper Life Assurance Company Financial Network (ING)
First Global Capital                  GE Financial Assurance - GE Life &
                                      Annuity
Glenbrook Life and Annuity Co.        Hartford
HD Vest                               HSBC Brokerage (USA) Inc.
ING Financial Advisers                ING Financial Partners
Jefferson Pilot Life Insurance        Jefferson Pilot Securities Corp.
Company
John Hancock Life Insurance Co.       Kemper Investors Life Insurance Co.
Legend Equities Corp.                 Legg Mason
Lincoln Benefit Life                  Lincoln Financial
Lincoln Investment Planning, Inc.     Lincoln National Life
Linsco Private Ledger                 MassMutual Financial Group and
                                      affiliates
McDonald Investments, Inc.            Merrill Lynch & Co. and affiliates
MetLife and affiliates                Minnesota Life Insurance Company
Mony Life Insurance Co.               Morgan Stanley Dean Witter, Inc.
Multi-Financial (ING)                 Mutual Service Corporation
National Planning Holdings, Inc.      Nationwide and affiliates
NFP                                   New York Life Securities, Inc.
Park Avenue Securities LLC            PFS Investments, Inc.
Prime Capital Services, Inc.          Primevest Financial Services, Inc.
                                      (ING)
Protective Life Insurance Co.         Prudential Investment Management
                                      Services LLC
Raymond James & Associates            Raymond James Financial Services
RBC Dain Rauscher Inc.                Royal Alliance
Securities America Inc.               Security Benefit Life Insurance Co.
Sentra Securities                     Signator Investments
Sun Life Assurance Company of Canada  SunAmerica Securities, Inc.
SunTrust Securities                   Thrivent
Travelers Life & Annuity Co., Inc.    UBS Financial Services Inc.
Union Central Life Insurance Company  United Planners
Valic Financial Advisors, Inc.        Wachovia Securities LLC
Walnut Street Securities (Met Life    Waterstone Financial Group
Network)
Wells Fargo Investments, LLC


      For the year ended December 31, 2005, the following firms, which in
some cases are broker-dealers, received payments from the Manager or
Distributor for administrative or other services provided (other than revenue
sharing arrangements), as described above:


ABN AMRO Financial Services Inc.      ACS HR Solutions LLC
Administrative Management Group       ADP Broker/Dealer Inc.
Aetna Financial Services              Alliance Benefit Group
American Stock Transfer & Trust Co    Ameriprise Financial Services, Inc.
Baden Retirement Plan Services LLC    Banc One Securities Corp.
BCG Securities                        Benefit Administration Company LLC
Benefit Administration Inc.           Benefit Plans Administrative
                                      Services
Benetech Inc.                         Bisys Retirement Services
Boston Financial Data Services Inc.   Ceridian Retirement Plan Services
Charles Schwab & Co Inc.              Charles Schwab Trust Company
Circle Trust Company                  Citigroup Global Markets Inc.
CitiStreet                            City National Bank
Columbia Funds Distributor Inc.       CPI Qualified Plan Consultants Inc.
Daily Access.Com Inc.                 Digital Retirement Solutions
DST Systems Inc.                      Dyatech LLC
Edgewood/Federated Investments        ERISA Administrative Services Inc.
Expert Plan Inc.                      FASCorp
FBD Consulting Inc.                   Fidelity Institutional Operations
                                      Co.
Fidelity Investments                  First National Bank of Omaha
First Trust Corp.                     First Trust-Datalynx
Franklin Templeton                    Geller Group LTD
GoldK Inc.                            Great West Life & Annuity Ins Co.
Hartford Life Insurance Co            Hewitt Associates LLC
ICMA-RC Services LLC                  Independent Plan Coordinators Inc.
ING                                   Ingham Group
Interactive Retirement Systems        Invesco Retirement Plans
Invesmart                             InWest Pension Management
John Hancock Life Insurance Co.       JPMorgan Chase & Co
JPMorgan Chase Bank                   July Business Services
Kaufman & Goble                       Leggette & Company Inc.
Lincoln National Life                 MassMutual Financial Group and
                                      affiliates
Matrix Settlement & Clearance         Mellon HR Solutions
Services
Mercer HR Services                    Merrill Lynch & Co., Inc.
Metavante 401(k) Services             Metlife Securities Inc.
MFS Investment Management             Mid Atlantic Capital Corp.
Milliman Inc.                         Morgan Stanley Dean Witter Inc.
National City Bank                    National Financial Services Corp.
Nationwide Investment Service Corp.   New York Life Investment Management
Northeast Retirement Services         Northwest Plan Services Inc.
Pension Administration and Consulting PFPC Inc.
Plan Administrators Inc.              PlanMember Services Corporation
Princeton Retirement Group Inc.       Principal Life Insurance Co
Programs for Benefit Plans Inc.       Prudential Retirement Insurance &
                                      Annuity Co
Prudential Retirement Services        PSMI Group
Putnam Investments                    Quads Trust Company
RSM McGladrey Retirement Resources    SAFECO
Standard Insurance Co                 Stanley Hunt DuPree Rhine
Stanton Group Inc.                    State Street Bank & Trust
Strong Capital Management Inc.        Symetra Investment Services Inc.
T Rowe Price Associates               Taylor Perky & Parker LLC
Texas Pension Consultants             The 401(K) Company
The Chicago Trust Company             The Retirement Plan Company LLC
The Vanguard Group                    TruSource
Unified Fund Services Inc.            Union Bank & Trust Co. (Nebraska)
USI Consulting Group (CT)             Valic Retirement Services Co
Wachovia Bank NA                      Web401k.com
Wells Fargo Bank NA                   Wilmington Trust Company
WySTAR Global Retirement Solutions

Performance of the Fund

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

      The Fund's illustrations of its performance data in advertisements must
comply with rules of the SEC. Those rules describe the types of performance
data that may be used and how it is to be calculated. In general, any
advertisement by the Fund of its performance data must include the average
annual total returns for the advertised class of shares of the Fund.

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

      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:

          - 1  = Average Annual Total
ERV l/n        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:

            - 1  = Average Annual Total Return (After Taxes on Distributions
ATVDR 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 10/31/06

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

Class      74.00%   84.62%   0.84%    7.00%    2.89%    4.12%   5.69%    6.32%

A(1)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class      78.56%   78.56%   1.61%    6.22%    3.01%    3.35%   5.97%    5.97%

B(2)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class      73.45%   73.45%   5.31%    6.23%    3.37%    3.37%   5.66%    5.66%

C(3)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class      12.46%   12.46%   5.72%    6.64%    3.79%    3.79%   2.09%    2.09%

N(4)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Class      84.79%   84.79%   7.21%    7.21%    4.33%    4.33%   6.42%    6.42%

Y(5)
---------------------------------------------------------------------------------
1. Inception of Class A:      01/03/89
2. Inception of Class B:      09/01/93
3. Inception of Class C:      09/01/93
4. Inception of Class N:      03/01/01
5. Inception of Class Y:      12/16/96


--------------------------------------------------------------------------------
    Average Annual Total Returns for Class A(1) Shares (After Sales Charge)

                        For the Periods Ended 10/31/06

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

After Taxes on Distributions     -2.05%           1.94%             4.31%

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

After Taxes on                   2.23%            2.18%             4.39%

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 SAI.
The Fund may also compare its performance to that of other investments,
including other mutual funds, or use rankings of its performance by
independent ranking entities. Examples of these performance comparisons are
set forth below.

      |X|   Lipper Rankings. From time to time the Fund may publish the
ranking of the performance of its classes of shares by Lipper, Inc.
("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring
service. Lipper monitors the performance of regulated investment companies,
including the Fund, and ranks their performance for various periods in
categories based on investment styles. The Lipper performance rankings are
based on total returns that include the reinvestment of capital gain
distributions and income dividends but do not take sales charges or taxes
into consideration. Lipper also publishes "peer-group" indices of the
performance of all mutual funds in a category that it monitors and averages
of the performance of the funds in particular categories.

|X|   Morningstar Ratings. From time to time the Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., 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 "NYSE"). The NYSE normally closes
at 4:00 p.m., but may close earlier on certain days. If Federal Funds are
received on a business day after the close of the NYSE, the shares will be
purchased and dividends will begin to accrue on the next regular business
day. The proceeds of ACH transfers are normally received by the Fund three
days after the transfers are initiated. If the proceeds of the ACH transfer
are not received on a timely basis, the Distributor reserves the right to
cancel the purchase order. The Distributor and the Fund are not responsible
for any delays in purchasing shares resulting from delays in ACH
transmissions.

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

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


Oppenheimer AMT-Free Municipals           Oppenheimer Pennsylvania Municipal Fund
Oppenheimer AMT-Free New York Municipals  Oppenheimer Portfolio Series:
Oppenheimer Balanced Fund                 Active Allocation Fund
Oppenheimer California Municipal Fund     Equity Investor Fund
Oppenheimer Capital Appreciation Fund     Conservative Investor Fund
Oppenheimer Capital Income Fund           Moderate Investor Fund
                                              Oppenheimer    Principal   Protected
Oppenheimer Champion Income Fund              Main Street Fund
                                              Oppenheimer    Principal   Protected
Oppenheimer Convertible Securities Fund       Main Street Fund II
Oppenheimer   Commodity   Strategy  Total     Oppenheimer    Principal   Protected
Return Fund                                   Main Street Fund III
Oppenheimer Core Bond Fund                    Oppenheimer Quest Balanced Fund
                                              Oppenheimer   Quest   Capital  Value
Oppenheimer Developing Markets Fund           Fund, Inc.
                                          Oppenheimer  Quest  International  Value
Oppenheimer Discovery Fund                Fund, Inc.
Oppenheimer Dividend Growth Fund          Oppenheimer Quest Opportunity Value Fund
Oppenheimer Emerging Growth Fund          Oppenheimer Quest Value Fund, Inc.
Oppenheimer Emerging Technologies Fund    Oppenheimer Real Estate Fund
                                          Oppenheimer  Rochester Arizona Municipal
Oppenheimer Enterprise Fund               Fund
                                          Oppenheimer      Rochester      Maryland
Oppenheimer Equity Fund, Inc.             Municipal Fund
                                          Oppenheimer   Rochester    Massachusetts
Oppenheimer Global Fund                   Municipal Fund
                                          Oppenheimer      Rochester      Michigan
Oppenheimer Global Opportunities Fund     Municipal Fund
                                          Oppenheimer      Rochester     Minnesota
Oppenheimer Gold & Special Minerals Fund  Municipal Fund
                                          Oppenheimer      Rochester      National
Oppenheimer Growth Fund                   Municipals
                                          Oppenheimer   Rochester  North  Carolina
Oppenheimer International Bond Fund       Municipal Fund
Oppenheimer   International   Diversified
Fund                                      Oppenheimer Rochester Ohio Municipal
                                          Oppenheimer      Rochester      Virginia
Oppenheimer International Growth Fund     Municipal Fund
Oppenheimer  International  Small Company
Fund                                      Oppenheimer Select Value Fund
Oppenheimer International Value Fund      Oppenheimer Senior Floating Rate Fund
Oppenheimer   Limited   Term   California
Municipal Fund                            Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Limited-Term Government Fund  Oppenheimer Strategic Income Fund
Oppenheimer Limited Term Municipal Fund
Oppenheimer Main Street Fund              Oppenheimer U.S. Government Trust
Oppenheimer Main Street Opportunity Fund  Oppenheimer Value Fund
Oppenheimer Main Street Small Cap Fund    Limited-Term New York Municipal Fund
Oppenheimer MidCap Fund                   Rochester Fund Municipals
Oppenheimer New Jersey Municipal Fund


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

And the following money market funds:


Oppenheimer Cash Reserves                 Centennial 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               Institutional Money Market Fund


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


Letters of Intent. Under a Letter of Intent ("Letter"), you can reduce the
sales charge rate that applies to your purchases of Class A shares if you
purchase Class A, Class B or 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 Class C shares will determine the sales charge rate that
applies to your Class A share purchases during that period. Purchases made up
to 90 days before the date that you submit a Letter of Intent will be
included in that determination. Class A shares of Oppenheimer Money Market
Fund, Inc. and Oppenheimer Cash Reserves on which you have not paid a sales
charge and any Class N shares you purchase, or may have purchased, will not
be counted towards satisfying the purchases specified in a Letter.


      A Letter is an investor's statement in writing to the Distributor of
his or her intention to purchase a specified value of Class A, Class B and
Class C shares of the Fund and other Oppenheimer funds during a 13-month
period (the "Letter period"). The Letter states the investor's intention to
make the aggregate amount of purchases of shares which will equal or exceed
the amount specified in the Letter. Purchases made by reinvestment of
dividends or capital gains distributions and purchases made at net asset
value (i.e. without paying a front-end or contingent deferred sales charge)
do not count toward satisfying the amount of the Letter.

      Each purchase of Class A shares under the Letter will be made at the
offering price (including the sales charge) that would apply to a single
lump-sum purchase of shares in the amount intended to be purchased under the
Letter.

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

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

      The Transfer Agent will not hold shares in escrow for purchases of
shares of 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 and Class C shares of other Oppenheimer funds acquired subject
            to a contingent deferred sales charge, and
(c)   Class A, Class B or Class C shares acquired by exchange of either (1)
            Class A shares of one of the other Oppenheimer funds that were
            acquired subject to a Class A initial or contingent deferred
            sales charge or (2) Class B or Class C shares of one of the other
            Oppenheimer funds that were acquired subject to a contingent
            deferred sales charge.

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

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

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

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

Retirement Plans. Certain types of retirement plans are entitled to purchase
shares of the Fund without sales charges or at reduced sales charge rates, as
described in Appendix C to this SAI. Certain special sales charge
arrangements described in that Appendix apply to retirement plans whose
records are maintained on a daily valuation basis by Merrill Lynch Pierce
Fenner & Smith, Inc. ("Merrill Lynch") or an independent record keeper that
has a contract or special arrangement with Merrill Lynch. If on the date the
plan sponsor signed the Merrill Lynch record keeping service agreement the
plan 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 a purchase order of more than $100,000
for Class B shares or a purchase order of $1 million or more to purchase
Class C shares on behalf of a single investor (not including dealer "street
name" or omnibus accounts).

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

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

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

      |X|   Availability of Class N Shares. In addition to the description of
the types of retirement plans which may purchase Class N shares contained in
the prospectus, Class N shares also are offered to the following:
o     to all rollover IRAs (including SEP IRAs and SIMPLE IRAs),
o     to all rollover contributions made to Individual 401(k) plans,
            Profit-Sharing Plans and Money Purchase Pension Plans,
o     to all direct rollovers from OppenheimerFunds-sponsored Pinnacle and
            Ascender retirement plans,
o     to all trustee-to-trustee IRA transfers,
o     to all 90-24 type 403(b) transfers,
o     to Group Retirement Plans (as defined in Appendix C to this SAI) which
            have entered into a special agreement with the Distributor for
            that purpose,
o     to Retirement Plans qualified under Sections 401(a) or 401(k) of the
            Internal Revenue Code, the recordkeeper or the plan sponsor for
            which has entered into a special agreement with the Distributor,
o     to Retirement Plans of a plan sponsor where the aggregate assets of all
            such plans invested in the Oppenheimer funds is $500,000 or more,
o     to Retirement Plans with at least 100 eligible employees or $500,000 or
            more in plan assets,
o     to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
            purchase with the redemption proceeds of Class A shares of one or
            more Oppenheimer funds, and
o     to certain customers of broker-dealers and financial advisors that are
            identified in a special agreement between the broker-dealer or
            financial advisor and the Distributor for that purpose.

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

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

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

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

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

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

      Listed below are certain cases in which the Fund has elected, in its
discretion, not to assess the Fund Account Fees. These exceptions are subject
to change:
o     A fund account whose shares were acquired after September 30th of the
            prior year;
o     A fund account that has a balance below $500 due to the automatic
            conversion of shares from Class B to Class A shares. However,
            once all Class B 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, Record(k)eeper Pro and Pension Alliance Retirement
            Plan programs; and

o     A fund account that falls below the $500 minimum solely due to market
            fluctuations within the 12-month period preceding the date the
            fee is deducted.


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


      The Fund reserves the authority to modify Fund Account Fees in its
discretion.

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

      Dealers other than NYSE members may conduct trading in certain
securities on days on which the NYSE is closed (including weekends and
holidays) or after 4:00 p.m. on a regular business day. Because the Fund's
net asset values will not be calculated on those days, the Fund's net asset
values per share may be significantly affected on such days when shareholders
may not purchase or redeem shares. Additionally, trading on many foreign
stock exchanges and over-the-counter markets normally is completed before the
close of the NYSE.

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

|X|   Securities Valuation. The Fund's Board of Trustees has established
procedures for the valuation of the Fund's securities. In general those
procedures are as follows:
o     Equity securities traded on a U.S. securities exchange are valued as
follows:
(1)   if last sale information is regularly reported, they are valued at the
               last reported sale price on the principal exchange on which
               they are traded, 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 New York foreign exchange market on a
particular business day that are provided to the Manager by a bank, dealer or
pricing service that the Manager has determined to be reliable are used to
value foreign currency, including forward contracts, and to convert to U.S.
dollars securities that are denominated in foreign currency.

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

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

How to Sell Shares

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

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

Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of:
o     Class A shares purchased subject to an initial sales charge or Class A
         shares on which a contingent deferred sales charge was paid, 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 SAI. The request must:
(1)   state the reason for the distribution;
(2)   state the owner's awareness of tax penalties if the distribution is
         premature; and
(3)   conform to the requirements of the plan and the Fund's other redemption
         requirements.

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

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

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

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

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

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

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

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

      |X|   Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent to 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 SAI.

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

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

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

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

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

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

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

How to Exchange Shares

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

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

   The following funds only offer Class A shares:
   Centennial California Tax Exempt Trust    Centennial New York Tax Exempt
                                             Trust
   Centennial Government Trust               Centennial Tax Exempt Trust
   Centennial Money Market Trust

   The following funds do not offer Class N shares:

   Limited Term New York Municipal Fund      Oppenheimer Rochester Arizona
                                             Municipal Fund
   Oppenheimer AMT-Free Municipals           Oppenheimer Rochester Maryland
                                             Municipal Fund
   Oppenheimer AMT-Free New York             Oppenheimer Rochester Massachusetts
   Municipals                                Municipal Fund
   Oppenheimer California Municipal Fund     Oppenheimer Rochester Michigan
                                             Municipal Fund
   Oppenheimer Institutional Money           Oppenheimer Rochester Minnesota
   Market Fund                               Municipal Fund
   Oppenheimer International Value Fund      Oppenheimer Rochester National

                                             Municipals

   Oppenheimer Limited Term California       Oppenheimer Rochester North Carolina
   Municipal Fund                            Municipal Fund
   Oppenheimer Limited Term Municipal        Oppenheimer Rochester Ohio Municipal
   Fund                                      Fund
   Oppenheimer Money Market Fund, Inc.       Oppenheimer Rochester Virginia
                                             Municipal Fund
   Oppenheimer New Jersey Municipal Fund     Oppenheimer Senior Floating Rate Fund
   Oppenheimer Principal Protected Main      Rochester Fund Municipals
   Street Fund II
   Oppenheimer Pennsylvania Municipal
   Fund


   The following funds do not offer Class Y shares:

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


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

o     Oppenheimer Institutional Money Market Fund only offers Class E and
   Class L shares.

o     Class B and Class C shares of Oppenheimer Cash Reserves are generally
      available only by exchange from the same class of shares of other
      Oppenheimer funds or through OppenheimerFunds-sponsored 401(k) plans.
o     Class M shares of Oppenheimer Convertible Securities Fund may be
      exchanged only for Class A shares of other Oppenheimer funds. They may
      not be acquired by exchange of shares of any class of any other
      Oppenheimer funds except Class A shares of Oppenheimer Money Market
      Fund, Inc. or Oppenheimer Cash Reserves acquired by exchange of Class M
      shares.

o     Class A shares of Oppenheimer funds may be exchanged at net asset value
      for shares of certain money market funds offered by the Distributor.
      Shares of any money market fund purchased without a sales charge may be
      exchanged for shares of Oppenheimer funds offered with a sales charge
      upon payment of the sales charge.

o     Shares of the Fund acquired by reinvestment of dividends or
      distributions from any of the other Oppenheimer funds or from any unit
      investment trust for which reinvestment arrangements have been made
      with the Distributor may be exchanged at net asset value for shares of
      the same class of any of the other Oppenheimer funds into which you may
      exchange shares.
o     Shares of Oppenheimer Principal Protected Main Street Fund may be
      exchanged at net asset value for shares of the same class of any of the
      other Oppenheimer funds into which you may exchange shares. However,
      shareholders are not permitted to exchange shares of other Oppenheimer
      funds for shares of Oppenheimer Principal Protected Main Street Fund
      until after the expiration of the warranty period (8/5/2010).
o     Shares of Oppenheimer Principal Protected Main Street Fund II may be
      exchanged at net asset value for shares of the same class of any of the
      other Oppenheimer funds into which you may exchange shares. However,
      shareholders are not permitted to exchange shares of other Oppenheimer
      funds for shares of Oppenheimer Principal Protected Main Street Fund II
      until after the expiration of the warranty period (3/3/2011).
o     Shares of Oppenheimer Principal Protected Main Street Fund III may be
      exchanged at net asset value for shares of the same class of any of the
      other Oppenheimer funds into which you may exchange shares. However,
      shareholders are not permitted to exchange shares of other Oppenheimer
      funds for shares of Oppenheimer Principal Protected Main Street Fund
      III until after the expiration of the warranty period (12/16/2011).

o     Class A, Class B, Class C and Class N shares of each of Oppenheimer
      Developing Markets Fund and Oppenheimer International Small Company
      Fund may be acquired by exchange only with a minimum initial investment
      of $50,000. An existing shareholder of each fund may make additional
      exchanges into that fund with as little as $50.


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

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

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

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

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

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

o     Except with respect to the Class B shares described in the next two
paragraphs, the contingent deferred sales charge is imposed on Class B shares
acquired by exchange if they are redeemed within six years of the initial
purchase of the exchanged Class B shares.

o     With respect to Class B shares of Oppenheimer Limited Term California
Municipal Fund, Oppenheimer Limited-Term Government Fund, Oppenheimer Limited
Term Municipal Fund, Limited Term New York Municipal Fund and Oppenheimer
Senior Floating Rate Fund, the Class B contingent deferred sales charge is
imposed on the acquired shares if they are redeemed within five years of the
initial purchase of the exchanged Class B shares.

o     With respect to Class B shares of Oppenheimer Cash Reserves that were
acquired through the exchange of Class B shares initially purchased in the
Oppenheimer Capital Preservation Fund, the Class B contingent deferred sales
charge is imposed on the acquired shares if they are redeemed within five
years of that initial purchase.

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

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

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

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

      |X|   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.

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


      When you exchange some or all of your shares from one fund to another,
any special account features that are available in the new fund (such as an
Asset Builder Plan or Automatic Withdrawal Plan) will be switched to the new
fund account unless you tell the Transfer Agent not to do so.


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

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

Dividends, Capital Gains and Taxes

Dividends and Distributions. The Fund has no fixed dividend rate and there
can be no assurance as to the payment of any dividends or the realization of
any capital gains. The dividends and distributions paid by a class of shares
will vary from time to time depending on market conditions, the composition
of the Fund's portfolio, and expenses borne by the Fund or borne separately
by a class. Dividends are calculated in the same manner, at the same time,
and on the same day for each class of shares. However, dividends on Class B,
Class C and Class N shares are expected to be lower than dividends on Class A
and Class 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 SAI is based on tax law
in effect on the date of the Prospectus and this SAI. Those laws and
regulations may be changed by legislative, judicial, or administrative
action, sometimes with retroactive effect. State and local tax treatment of
ordinary income dividends and capital gain dividends from regulated
investment companies may differ from the treatment under the Internal Revenue
Code described below. Potential purchasers of shares of the Fund are urged to
consult their tax advisers with specific reference to their own tax
circumstances as well as the consequences of federal, state and local tax
rules affecting an investment in the Fund.

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

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

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

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

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

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

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

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

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

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

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

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

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

      The Fund will be required in certain cases to withhold 28% of ordinary
income dividends, capital gains distributions and the proceeds of the
redemption of shares, paid to any shareholder (1) who has failed to provide a
correct taxpayer identification number or to properly certify that number
when required, (2) who is subject to backup withholding for failure to report
the receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that the shareholder is not subject to backup withholding
or is an "exempt recipient" (such as a corporation). Any tax withheld by the
Fund is remitted by the Fund to the U.S. Treasury and all income and any tax
withheld is identified in reports mailed to shareholders in January of each
year with a copy sent to the IRS.

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

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

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

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

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

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

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

Additional Information About the Fund

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

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

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

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

                  49 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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, 2006, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 2006, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Quest Opportunity Value Fund as of October 31, 2006, the results of
its operations for the year then ended, the changes in its net assets for each
of the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with U.S.
generally accepted accounting principles.


KPMG LLP

Denver, Colorado
December 12, 2006



                  20 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

STATEMENT OF INVESTMENTS  October 31, 2006
--------------------------------------------------------------------------------

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
COMMON STOCKS--72.3%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.2%
--------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.9%
Hilton Hotels Corp.                                    187,700   $    5,428,284
--------------------------------------------------------------------------------
Starwood Hotels &
Resorts Worldwide,
Inc.                                                   153,200        9,152,168
--------------------------------------------------------------------------------
Wyndham Worldwide
Corp. 1                                                447,240       13,193,580
                                                                 ---------------
                                                                     27,774,032

--------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--1.7%
Liberty Media Holding
Corp.-Interactive,
Series A 1                                           1,153,750       25,463,263
--------------------------------------------------------------------------------
MEDIA--6.6%
Liberty Global, Inc.,
Series A 1                                           1,435,422       37,665,473
--------------------------------------------------------------------------------
Liberty Global, Inc.,
Series C 1                                           1,473,428       37,469,274
--------------------------------------------------------------------------------
Liberty Media
Holding Corp.-Capital,
Series A 1                                             255,610       22,764,627
                                                                 ---------------
                                                                     97,899,374

--------------------------------------------------------------------------------
CONSUMER STAPLES--8.5%
--------------------------------------------------------------------------------
BEVERAGES--1.4%
Constellation Brands,
Inc., Cl. A 1                                          322,500        8,865,525
--------------------------------------------------------------------------------
Diageo plc, Sponsored
ADR                                                    163,600       12,183,292
                                                                 ---------------
                                                                     21,048,817

--------------------------------------------------------------------------------
FOOD PRODUCTS--1.9%
ConAgra Foods, Inc.                                    259,400        6,783,310
--------------------------------------------------------------------------------
Nestle SA                                               64,931       22,182,127
                                                                 ---------------
                                                                     28,965,437

--------------------------------------------------------------------------------
TOBACCO--5.2%
Altria Group, Inc.                                     714,000       58,069,620
--------------------------------------------------------------------------------
Loews Corp./Carolina
Group                                                  326,400       18,872,448
                                                                 ---------------
                                                                     76,942,068

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
ENERGY--3.9%
--------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.4%
Halliburton Co.                                        198,000   $    6,405,300
--------------------------------------------------------------------------------
OIL & GAS--3.5%
BP plc, ADR                                            340,400       22,840,840
--------------------------------------------------------------------------------
Exxon Mobil Corp.                                      263,800       18,840,596
--------------------------------------------------------------------------------
Kinder Morgan, Inc.                                     56,500        5,938,150
--------------------------------------------------------------------------------
Petroleo Brasileiro
SA, ADR                                                 51,100        4,535,636
                                                                 ---------------
                                                                     52,155,222

--------------------------------------------------------------------------------
FINANCIALS--14.2%
--------------------------------------------------------------------------------
CAPITAL MARKETS--3.3%
E*TRADE Financial
Corp. 1                                                401,200        9,339,936
--------------------------------------------------------------------------------
UBS AG                                                 658,112       39,305,270
                                                                 ---------------
                                                                     48,645,206

--------------------------------------------------------------------------------
COMMERCIAL BANKS--1.8%
Wachovia Corp.                                         477,400       26,495,700
--------------------------------------------------------------------------------
CONSUMER FINANCE--1.8%
Capital One Financial
Corp.                                                  337,900       26,805,607
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--3.4%
Bank of America Corp.                                  521,400       28,087,818
--------------------------------------------------------------------------------
Groupe Bruxelles
Lambert SA                                             200,000       22,016,311
                                                                 ---------------
                                                                     50,104,129

--------------------------------------------------------------------------------
INSURANCE--3.3%
Everest Re Group Ltd.                                  159,200       15,789,456
--------------------------------------------------------------------------------
Fidelity National
Financial, Inc.                                        563,000       12,554,900
--------------------------------------------------------------------------------
Fidelity National
Title Group, Inc., Cl. A                               126,373        2,781,470
--------------------------------------------------------------------------------
Genworth Financial,
Inc., Cl. A                                            247,000        8,259,680
--------------------------------------------------------------------------------
Platinum Underwriters
Holdings Ltd.                                          337,300       10,071,778
                                                                 ---------------
                                                                     49,457,284

--------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.6%
Freddie Mac                                            127,500        8,796,225


                  21 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
HEALTH CARE--7.3%
--------------------------------------------------------------------------------
BIOTECHNOLOGY--2.9%
Amgen, Inc. 1,2                                        146,300   $   11,105,633
--------------------------------------------------------------------------------
Human Genome
Sciences, Inc. 1                                       483,600        6,456,060
--------------------------------------------------------------------------------
MedImmune, Inc. 1                                      476,000       15,251,040
--------------------------------------------------------------------------------
Vanda
Pharmaceuticals, Inc. 1                                749,440        9,772,698
                                                                 ---------------
                                                                     42,585,431

--------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.5%
Boston Scientific
Corp. 1                                                471,800        7,506,338
--------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.1%
WellPoint, Inc. 1                                      216,000       16,485,120
--------------------------------------------------------------------------------
PHARMACEUTICALS--2.8%
Medicines Co. (The) 1                                  261,600        6,791,136
--------------------------------------------------------------------------------
Pfizer, Inc.                                           541,700       14,436,305
--------------------------------------------------------------------------------
Sanofi-Aventis SA,
ADR                                                    477,500       20,384,475
                                                                 ---------------
                                                                     41,611,916

--------------------------------------------------------------------------------
INDUSTRIALS--5.5%
--------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.3%
Empresa Brasileira de
Aeronautica SA, ADR 3                                  180,500        7,514,215
--------------------------------------------------------------------------------
Orbital Sciences Corp. 1                               945,200       17,164,832
--------------------------------------------------------------------------------
United Technologies
Corp.                                                  372,600       24,487,272
                                                                 ---------------
                                                                     49,166,319

--------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--2.2%
Siemens AG,
Sponsored ADR                                          356,800       32,044,208
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--17.3%
--------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.1%
Cisco Systems, Inc. 1                                  738,800       17,827,244
--------------------------------------------------------------------------------
Juniper Networks, Inc. 1                               577,500        9,944,550
--------------------------------------------------------------------------------
QUALCOMM, Inc.                                         111,500        4,057,485
                                                                 ---------------
                                                                     31,829,279

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.4%
Hutchinson
Technology, Inc. 1                                     334,500   $    7,743,675
--------------------------------------------------------------------------------
International Business
Machines Corp.                                         142,800       13,184,724
                                                                 ---------------
                                                                     20,928,399

--------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.2%
eBay, Inc. 1                                           419,900       13,491,387
--------------------------------------------------------------------------------
Yahoo!, Inc. 1                                         146,400        3,856,176
                                                                 ---------------
                                                                     17,347,563

--------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.9%
Texas Instruments, Inc.                                444,500       13,415,010
--------------------------------------------------------------------------------
SOFTWARE--11.7%
Compuware Corp. 1                                    1,200,300        9,650,412
--------------------------------------------------------------------------------
Microsoft Corp.                                      2,223,200       63,828,072
--------------------------------------------------------------------------------
Novell, Inc. 1                                       2,036,300       12,217,800
--------------------------------------------------------------------------------
Synopsys, Inc. 1                                       982,300       22,111,573
--------------------------------------------------------------------------------
Take-Two Interactive
Software, Inc. 1,3,4                                 4,722,550       66,068,475
                                                                 ---------------
                                                                    173,876,332

--------------------------------------------------------------------------------
MATERIALS--0.6%
--------------------------------------------------------------------------------
METALS & MINING--0.6%
Companhia Vale do
Rio Doce, Sponsored
ADR                                                    423,400        9,196,248
--------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.7%
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.1%
IDT Corp., Cl. B 1                                   1,312,055       17,043,594
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.6%
Sprint Nextel Corp.                                    461,100        8,617,959
--------------------------------------------------------------------------------
UTILITIES--3.1%
--------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.9%
Reliant Energy, Inc. 1                               1,106,800       14,034,224
--------------------------------------------------------------------------------
ENERGY TRADERS--2.2%
AES Corp. (The) 1                                    1,479,000       32,523,210
                                                                 ---------------
Total Common Stocks
(Cost $987,250,002)                                               1,075,168,814


                  22 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
MONEY MARKET FUND--27.7%
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Oppenheimer
Institutional
Money Market
Fund, Cl. E, 5.23% 4,5,9
(Cost $411,573,319)                                411,573,319   $  411,573,319

                                                     PRINCIPAL
                                                        AMOUNT
--------------------------------------------------------------------------------
STRUCTURED NOTES--1.0%
--------------------------------------------------------------------------------
Fhu-Jin Ltd.
Catastrophe Linked
Nts., Cl. B, 9.368%,
8/10/11 6,7                                     $    3,000,000        3,024,900
--------------------------------------------------------------------------------
Successor Cal Quake
Parametric Ltd.
Catastrophe Linked Nts.:
Cl. A-I, 10.64%,
6/6/08 6,7                                           3,000,000        2,968,800
Cl. A-I, 12.64%,
6/6/08 6,7                                           3,000,000        3,019,350
--------------------------------------------------------------------------------
Successor Hurricane
Modeled Ltd.
Catastrophe Linked
Nts., Cl. B-I, 16.04%,
12/6/07 6,7                                          3,000,000        3,088,800
--------------------------------------------------------------------------------
Successor Japan
Quake Ltd.,
Catastrophe Linked
Nts., Series A-I, 9.64%,
6/6/08 6,7                                           3,000,000        3,018,750
                                                                 ---------------
Total Structured Notes
(Cost $15,000,000)                                                   15,120,600

                                                                          VALUE
                                                                     SEE NOTE 1
--------------------------------------------------------------------------------
Total Investments,
at Value (excluding
Investments Purchased
with Cash Collateral
from Securities Loaned)
(Cost $1,413,823,321)                                            $1,501,862,733

                                                     PRINCIPAL
                                                        AMOUNT
--------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL
FROM SECURITIES LOANED 8
--------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--2.7%
Undivided interest of 1.16% in joint repurchase
agreement (Principal Amount/Value $3,450,000,000,
with a maturity value of $3,450,510,792) with
Nomura Securities, 5.33%, dated 10/31/06,
to be repurchased at $40,080,461 on
11/1/06, collateralized by U.S. Agency
Mortgages, 0.00%-7.439%,
3/15/14-6/25/43, with
a value of
$3,519,000,000                                  $   40,074,528       40,074,528
--------------------------------------------------------------------------------
YANKEE FLOATING CERTIFICATE OF DEPOSIT--0.1%
Natexis Banques
Populaires NY, 5.34%,
11/1/06                                              2,000,000        2,000,000
                                                                 ---------------
Total Investments Purchased with
Cash Collateral from Securities
Loaned (Cost $42,074,528)                                            42,074,528

--------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $1,455,897,849)                                    103.8%   1,543,937,261
--------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS                                           (3.8)     (57,069,717)
                                                --------------------------------
NET ASSETS                                               100.0%  $1,486,867,544
                                                ================================


                  23 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Non-income producing security.

2. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:

                             CONTRACTS      EXPIRATION        EXERCISE         PREMIUM            VALUE
                       SUBJECT TO CALL            DATE           PRICE        RECEIVED       SEE NOTE 5
--------------------------------------------------------------------------------------------------------
 Amgen, Inc.                       265         4/23/07             $75        $139,253         $148,400

3. Partial or fully-loaned security. See Note 9 of accompanying Notes.

4. 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, 2006. Transactions during the period in
which the issuer was an affiliate are as follows:

                                                SHARES                                            SHARES
                                           OCTOBER 31,           GROSS           GROSS       OCTOBER 31,
                                                  2005       ADDITIONS      REDUCTIONS              2006
--------------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E, 5.23%*                    --     489,723,396      78,150,077       411,573,319
Take-Two Interactive Software, Inc.          3,996,250         726,300              --         4,722,550

                                                                                 VALUE          DIVIDEND
                                                                            SEE NOTE 1            INCOME
--------------------------------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E, 5.23%*                                        $  411,573,319      $  1,574,622
Take-Two Interactive Software, Inc.                                         66,068,475                --
                                                                        --------------------------------
                                                                        $  477,641,794      $  1,574,622
                                                                        ================================

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

5. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.

6. Illiquid security. The aggregate value of illiquid securities as of October
31, 2006 was $15,120,600, which represents 1.02% of the Fund's net assets. See
Note 8 of accompanying Notes.

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

8. The security/securities have 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 9 of
accompanying Notes.

9. Rate shown is the 7-day yield as of October 31, 2006.


                  24 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

                                                                          SHARES            VALUE
                                                                      SOLD SHORT       SEE NOTE 1
--------------------------------------------------------------------------------------------------
COMMON STOCK SECURITIES SOLD SHORT--(14.2)% 1
--------------------------------------------------------------------------------------------------
Alcon, Inc.                                                              (37,660)   $  (3,994,973)
--------------------------------------------------------------------------------------------------
Arkema 2                                                                  (3,190)        (155,732)
--------------------------------------------------------------------------------------------------
Fidelity NASDAQ Composite Index-Tracking                              (1,403,600)    (130,492,692)
--------------------------------------------------------------------------------------------------
Fidelity National Information Services, Inc.                            (316,500)     (13,156,905)
--------------------------------------------------------------------------------------------------
Imerys SA                                                                (22,760)      (1,966,602)
--------------------------------------------------------------------------------------------------
Lafarge SA                                                               (19,460)      (2,615,331)
--------------------------------------------------------------------------------------------------
Nasdaq-100 Unit Investment Trust                                      (1,043,100)     (44,415,198)
--------------------------------------------------------------------------------------------------
Suez SA                                                                 (124,960)      (5,591,629)
--------------------------------------------------------------------------------------------------
Total SA                                                                (127,600)      (8,683,378)
                                                                                    --------------
TOTAL COMMON STOCK SECURITIES SOLD SHORT (PROCEEDS $197,269,073)                    $(211,072,440)
                                                                                    ==============

1. Collateral on short sales was segregated by the Fund in the amount of
$368,633,358, which represented 174.64% of the market value of securities sold
short. See Note 1 of accompanying Notes.

2. Non-income producing security.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  25 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

-----------------------------------------------------------------------------------------------------------------
ASSETS
-----------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $942,360,042)                                                         $1,066,295,467
Affiliated companies (cost $513,537,807)                                                              477,641,794
                                                                                                   --------------
                                                                                                    1,543,937,261
-----------------------------------------------------------------------------------------------------------------
Cash                                                                                                    1,403,932
-----------------------------------------------------------------------------------------------------------------
Deposits with broker for securities sold short                                                        207,864,259
-----------------------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts                                                               1,593,022
-----------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold                                                                                        5,852,027
Interest and dividends                                                                                  2,968,896
Other                                                                                                      81,522
                                                                                                   --------------
Total assets                                                                                        1,763,700,919

-----------------------------------------------------------------------------------------------------------------
LIABILITIES
-----------------------------------------------------------------------------------------------------------------
Short positions, at value (proceeds of $197,269,073)--see accompanying statement
of investments                                                                                        211,072,440
-----------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $139,253)--see accompanying statement
of investments                                                                                            148,400
-----------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned                                                             42,074,528
-----------------------------------------------------------------------------------------------------------------
Unrealized depreciation on swap contracts                                                              14,880,301
-----------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                                                   4,688,348
Shares of beneficial interest redeemed                                                                  2,950,108
Distribution and service plan fees                                                                        310,348
Transfer and shareholder servicing agent fees                                                             297,962
Trustees' compensation                                                                                    226,508
Shareholder communications                                                                                137,758
Other                                                                                                      46,674
                                                                                                   --------------
Total liabilities                                                                                     276,833,375

-----------------------------------------------------------------------------------------------------------------
NET ASSETS                                                                                         $1,486,867,544
                                                                                                   ==============

-----------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
-----------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest                                                         $      497,422
-----------------------------------------------------------------------------------------------------------------
Additional paid-in capital                                                                          1,355,033,037
-----------------------------------------------------------------------------------------------------------------
Accumulated net investment income                                                                      13,431,756
-----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions                         56,957,754
-----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies                                                                      60,947,575
                                                                                                   --------------
NET ASSETS                                                                                         $1,486,867,544
                                                                                                   ==============


                  26 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

-----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
-----------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $1,146,502,587 and
38,026,444 shares of beneficial interest outstanding)                                              $        30.15
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)    $        31.99
-----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $159,147,320
and 5,493,605 shares of beneficial interest outstanding)                                           $        28.97
-----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $141,980,764 and 4,911,865 shares of
beneficial interest outstanding)                                                                   $        28.91
-----------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $21,431,052
and 722,149 shares of beneficial interest outstanding)                                             $        29.68
-----------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $17,805,821 and 588,088 shares of beneficial interest outstanding)                              $        30.28

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  27 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

--------------------------------------------------------------------------------
INVESTMENT INCOME
--------------------------------------------------------------------------------
Interest                                                         $   21,984,426
--------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding
taxes of $423,808)                                                   14,946,917
Affiliated companies                                                  1,574,622
--------------------------------------------------------------------------------
Portfolio lending fees                                                4,325,080
--------------------------------------------------------------------------------
Other income                                                             52,881
                                                                 ---------------
Total investment income                                              42,883,926

--------------------------------------------------------------------------------
EXPENSES
--------------------------------------------------------------------------------
Management fees                                                      13,406,190
--------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                               3,053,502
Class B                                                               1,786,369
Class C                                                               1,542,766
Class N                                                                 123,526
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                               2,765,281
Class B                                                                 369,638
Class C                                                                 340,613
Class N                                                                  80,299
Class Y                                                                  73,363
--------------------------------------------------------------------------------
Shareholder communications:
Class A                                                                 264,974
Class B                                                                  57,469
Class C                                                                  30,859
Class N                                                                   2,420
--------------------------------------------------------------------------------
Dividends on short sales                                              1,696,616
--------------------------------------------------------------------------------
Custodian fees and expenses                                              20,624
--------------------------------------------------------------------------------
Administration service fees                                               1,500
--------------------------------------------------------------------------------
Other                                                                   104,272
                                                                 ---------------
Total expenses                                                       25,720,281
Less reduction to custodian expenses                                       (940)
Less waivers and reimbursements of expenses                             (32,704)
                                                                 ---------------
Net expenses                                                         25,686,637

--------------------------------------------------------------------------------
NET INVESTMENT INCOME                                                17,197,289


                  28 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
--------------------------------------------------------------------------------
Net realized gain on:
Investments (including premiums on options exercised)            $   55,077,868
Closing and expiration of option contracts written                      158,062
Foreign currency transactions                                           249,788
Short positions                                                      16,142,453
Swap contracts                                                           29,979
                                                                 ---------------
Net realized gain                                                    71,658,150
--------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments                                                          39,226,340
Translation of assets and liabilities denominated in
foreign currencies                                                    2,666,329
Option contracts                                                         (9,147)
Short positions                                                     (13,557,238)
Swap contracts                                                      (13,287,279)
                                                                 ---------------
Net change in unrealized appreciation                                15,039,005

--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS             $  103,894,444
                                                                 ===============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  29 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

YEAR ENDED OCTOBER 31,                                                                     2006              2005
------------------------------------------------------------------------------------------------------------------
OPERATIONS
------------------------------------------------------------------------------------------------------------------
Net investment income                                                           $    17,197,289   $     6,952,511
------------------------------------------------------------------------------------------------------------------
Net realized gain                                                                    71,658,150       261,305,597
------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation                                                15,039,005      (119,390,292)
                                                                                ----------------------------------
Net increase in net assets resulting from operations                                103,894,444       148,867,816

------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A                                                                             (10,046,614)       (1,598,737)
Class B                                                                                      --                --
Class C                                                                                      --                --
Class N                                                                                (100,954)               --
Class Y                                                                                (250,160)          (86,357)
------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A                                                                            (175,983,423)      (99,583,789)
Class B                                                                             (27,064,716)      (18,611,376)
Class C                                                                             (22,974,652)      (13,238,663)
Class N                                                                              (3,378,288)       (1,849,874)
Class Y                                                                              (3,563,267)       (2,105,804)

------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from beneficial interest transactions:
Class A                                                                            (127,453,722)      (92,065,432)
Class B                                                                             (35,046,955)      (67,412,741)
Class C                                                                             (18,827,596)      (15,626,986)
Class N                                                                              (2,203,146)         (967,139)
Class Y                                                                              (7,837,997)       (2,922,726)

------------------------------------------------------------------------------------------------------------------
NET ASSETS
------------------------------------------------------------------------------------------------------------------
Total decrease                                                                     (330,837,046)     (167,201,808)
------------------------------------------------------------------------------------------------------------------
Beginning of period                                                               1,817,704,590     1,984,906,398
                                                                                ----------------------------------
End of period (including accumulated net investment income
of $13,431,756 and $6,574,734, respectively)                                    $ 1,486,867,544   $ 1,817,704,590
                                                                                ==================================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  30 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

CLASS A     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     32.58     $    32.41     $    30.00     $    26.41    $    31.30
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .36 1          .17 1          .07 1          .14           .24
Net realized and unrealized gain (loss)                  1.67           2.27           2.41           3.71         (4.74)
                                                  ------------------------------------------------------------------------
Total from investment operations                         2.03           2.44           2.48           3.85         (4.50)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.24)          (.04)          (.07)          (.26)         (.39)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.46)         (2.27)          (.07)          (.26)         (.39)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     30.15     $    32.58     $    32.41     $    30.00    $    26.41
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       7.00%          7.79%          8.30%         14.70%       (14.60)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $ 1,146,503     $1,378,475     $1,459,053     $1,429,157    $1,181,014
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $ 1,238,504     $1,465,797     $1,497,594     $1,292,117    $1,300,422
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    1.22%          0.53%          0.23%          0.53%         0.82%
Total expenses                                           1.43% 4        1.33%          1.32%          1.44%         1.52%
Expenses after payments and waivers and
reduction to custodian expenses                          1.43%          1.28%          1.32%          1.44%         1.52%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         1.43%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  31 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

CLASS B     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     31.44     $    31.55     $    29.36     $    25.79    $    30.56
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                              .13 1         (.08) 1        (.17) 1        (.11)          .03
Net realized and unrealized gain (loss)                  1.62           2.20           2.36           3.68         (4.63)
                                                  ------------------------------------------------------------------------
Total from investment operations                         1.75           2.12           2.19           3.57         (4.60)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                       --             --             --             --          (.17)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.22)         (2.23)            --             --          (.17)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     28.97     $    31.44     $    31.55     $    29.36    $    25.79
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       6.22%          6.94%          7.46%         13.84%       (15.16)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $   159,147     $  210,856     $  278,215     $  424,121    $  693,380
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $   178,815     $  247,951     $  342,847     $  527,653    $  981,593
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                             0.47%         (0.27)%        (0.54)%        (0.19)%        0.17%
Total expenses                                           2.18% 4        2.12%          2.11%          2.20%         2.17%
Expenses after payments and waivers
and reduction to custodian expenses                      2.18%          2.07%          2.11%          2.20%         2.17%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         2.18%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  32 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

CLASS C     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     31.38     $    31.48     $    29.29     $    25.77    $    30.55
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                              .13 1         (.07) 1        (.16) 1        (.06)          .05
Net realized and unrealized gain (loss)                  1.62           2.20           2.35           3.63         (4.65)
                                                  ------------------------------------------------------------------------
Total from investment operations                         1.75           2.13           2.19           3.57         (4.60)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                       --             --             --           (.05)         (.18)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.22)         (2.23)            --           (.05)         (.18)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     28.91     $    31.38     $    31.48     $    29.29    $    25.77
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       6.23%          6.99%          7.48%         13.88%       (15.16)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $   141,981     $  174,735     $  190,426     $  205,336    $  203,490
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $   154,404     $  187,520     $  203,073     $  198,226    $  245,055
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                             0.47%         (0.22)%        (0.51)%        (0.19)%        0.18%
Total expenses                                           2.18% 4        2.08%          2.06%          2.17%         2.16%
Expenses after payments and waiver and
reduction to custodian expenses                          2.18%          2.02%          2.06%          2.17%         2.16%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         2.18%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  33 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

CLASS N     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     32.12     $    32.06     $    29.72     $    26.21    $    31.26
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                              .25 1          .05 1         (.05) 1         .09           .49
Net realized and unrealized gain (loss)                  1.66           2.24           2.39           3.65         (5.02)
                                                  ------------------------------------------------------------------------
Total from investment operations                         1.91           2.29           2.34           3.74         (4.53)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.13)            --             -- 2         (.23)         (.52)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.35)         (2.23)            --           (.23)         (.52)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     29.68     $    32.12     $    32.06     $    29.72    $    26.21
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                       6.64%          7.39%          7.89%         14.39%       (14.78)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $    21,431     $   25,539     $   26,382     $   19,538    $   14,843
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $    24,755     $   27,162     $   23,702     $   17,677    $   10,295
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                             0.87%          0.17%         (0.15)%         0.23%         0.55%
Total expenses                                           1.77% 5        1.69%          1.73%          2.14%         1.76%
Expenses after payments and waivers
and reduction to custodian expenses                      1.77%          1.64%          1.69%          1.73%         1.76%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         1.77%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  34 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

CLASS Y     YEAR ENDED OCTOBER 31,                       2006           2005           2004           2003          2002
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period              $     32.70     $    32.52     $    30.11     $    26.53    $    31.40
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .41 1          .22 1          .12 1          .20           .56
Net realized and unrealized gain (loss)                  1.69           2.28           2.41           3.72         (4.99)
                                                  ------------------------------------------------------------------------
Total from investment operations                         2.10           2.50           2.53           3.92         (4.43)
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.30)          (.09)          (.12)          (.34)         (.44)
Distributions from net realized gain                    (4.22)         (2.23)            --             --            --
                                                  ------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                         (4.52)         (2.32)          (.12)          (.34)         (.44)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                    $     30.28     $    32.70     $    32.52     $    30.11    $    26.53
                                                  ========================================================================

--------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                       7.21%          7.98%          8.42%         14.97%       (14.34)%
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)          $    17,806     $   28,100     $   30,831     $   30,124    $   24,458
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                 $    23,687     $   29,815     $   30,649     $   27,078    $   28,726
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                    1.39%          0.69%          0.38%          0.74%         1.17%
Total expenses                                           1.24% 4        1.17%          1.16%          1.33%         1.34%
Expenses after payments and waivers and
reduction to custodian expenses                          1.23%          1.12%          1.16%          1.23%         1.23%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    66%           100%            64%            63%           73%

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

      Year Ended October 31, 2006         1.24%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  35 | 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 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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ(R) are valued based on the
closing price provided by NASDAQ prior to the time when the Fund's assets are
valued. In the absence of a sale, the security is valued at the last sale price
on the prior trading day, if it is within the spread of the closing "bid" and
"asked" prices, and if not, at the closing bid price. Securities traded on
foreign exchanges are valued based on the last sale price on the principal
exchange on which the security is traded, as identified by the portfolio
pricing service, prior to the time when the Fund's assets are valued. In the
absence of a sale, the security is valued at the official closing price on the
principal exchange. Corporate, government and municipal debt instruments having
a remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices. Futures
contracts traded on a commodities or futures exchange will be valued at the
final settlement price or official closing price on the principal exchange as
reported by such principal exchange at its trading session ending at, or most
recently prior to, the time when the Fund's assets are valued. Securities
(including restricted securities) for which market quotations are not readily


                  36 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

available are valued at their fair value. Foreign and domestic securities whose
values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Investments in open-end registered
investment companies are valued at that fund's net asset value. Short-term
"money market type" debt securities with remaining maturities of sixty days or
less are valued at amortized cost (which approximates market value).

--------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying Statement of Operations. The Fund records a realized gain or loss
when a structured note is sold or matures.

--------------------------------------------------------------------------------
SECURITIES SOLD SHORT. The Fund sells securities that it does not own, and it
will therefore be obligated to purchase such securities at a future date. Upon
entering into a short position, the Fund records the proceeds as a deposit with
the broker in its Statement of Assets and Liabilities. The value of the open
short position is recorded as a liability, and the Fund records an unrealized
gain or loss to the extent of the difference between the proceeds received and
the value of the open short position. The Fund records a realized gain or loss
when the short position is closed out. By entering into short sales, the Fund
bears the market risk of increases in value of the security sold short in excess
of the proceeds received. Until the security is replaced, the Fund is required
to pay the lender any dividend or interest earned. Dividend expense on short
sales is treated as an expense in the Statement of Operations.

--------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the New
York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each
day the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.

      Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually


                  37 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

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

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.

--------------------------------------------------------------------------------
AFFILIATED FUNDS. The Fund is permitted to invest daily available cash balances
in affiliated money market funds. Each day, the Fund invests the available cash
in Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current
income and stability of principal. The Manager is also the investment advisor of
IMMF. The Fund's investment in IMMF is included in the Statement of Investments.
Included in the net earnings received from IMMF is a 0.10% management fee paid
to the Manager by IMMF. The Manager will waive fees and/or reimburse Fund
expenses in an amount equal to the indirect management fees incurred through the
Fund's investment in IMMF.

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

--------------------------------------------------------------------------------
INVESTMENTS WITH OFF BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities in the annual and semiannual reports.

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


                  38 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.

                                                              NET UNREALIZED
                                                                APPRECIATION
                                                            BASED ON COST OF
                                                              SECURITIES AND
      UNDISTRIBUTED    UNDISTRIBUTED         ACCUMULATED   OTHER INVESTMENTS
      NET INVESTMENT       LONG-TERM                LOSS  FOR FEDERAL INCOME
      INCOME                    GAIN  CARRYFORWARD 1,2,3        TAX PURPOSES
      ----------------------------------------------------------------------
      $   35,079,381   $  38,351,049      $      169,405      $   58,309,818

1. The Fund had $169,405 of straddle losses which were deferred.

2. During the fiscal year ended October 31, 2006, the Fund did not utilize any
capital loss carryforward.

3. During the fiscal year ended October 31, 2005, the Fund did not utilize any
capital loss carryforward.

Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for October 31, 2006. 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 4
         -----------------------------------------------------------------
         $    10,247,991                  $   57,461        $   10,305,452

4. $10,247,991, including $6,585,161 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, 2006
and October 31, 2005 was as follows:

                                          YEAR ENDED            YEAR ENDED
                                    OCTOBER 31, 2006      OCTOBER 31, 2005
         -----------------------------------------------------------------
         Distributions paid from:
         Ordinary income              $   73,736,564        $    1,685,094
         Long-term capital gain          169,625,510           135,389,506
                                      ------------------------------------
         Total                        $  243,362,074        $  137,074,600
                                      ====================================

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, 2006 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments,


                  39 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

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

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            $1,458,535,400
       Federal tax cost of other investments       (197,408,120)
                                                 ---------------
       Total federal tax cost                    $1,261,127,280
                                                 ===============
       Gross unrealized appreciation             $  145,742,863
       Gross unrealized depreciation                (87,433,045)
                                                 ---------------
       Net unrealized appreciation               $   58,309,818
                                                 ===============

--------------------------------------------------------------------------------
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, 2006, the Fund's projected benefit obligations were decreased by $89,482 and
payments of $13,908 were made to retired trustees, resulting in an accumulated
liability of $216,630 as of October 31, 2006.

      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. Such cash overdrafts may result from the
effects of failed


                  40 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

trades in portfolio securities and from cash outflows resulting from
unanticipated shareholder redemption activity. The Fund pays interest to its
custodian on such cash overdrafts, to the extent they are not offset by positive
cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate
plus 0.50%. The "Reduction to custodian expenses" line item, if applicable,
represents earnings on cash balances maintained by the Fund during the period.
Such interest expense and other custodian fees may be paid with these earnings.

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

--------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.

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

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

The Fund has authorized an unlimited number of $0.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:

                             YEAR ENDED OCTOBER 31, 2006      YEAR ENDED OCTOBER 31, 2005
                                 SHARES           AMOUNT           SHARES          AMOUNT
------------------------------------------------------------------------------------------
CLASS A
Sold                          3,156,644   $   92,608,542        4,917,724   $ 159,915,739
Dividends and/or
distributions reinvested      6,108,760      174,466,185        3,053,572      95,576,808
Redeemed                    (13,548,536)    (394,528,449)     (10,683,874)   (347,557,979)
                            --------------------------------------------------------------
Net decrease                 (4,283,132)  $ (127,453,722)      (2,712,578)  $ (92,065,432)
                            ==============================================================

------------------------------------------------------------------------------------------
CLASS B
Sold                            623,703   $   17,563,977          773,625   $  24,343,742
Dividends and/or
distributions reinvested        939,523       25,949,614          576,702      17,549,037
Redeemed                     (2,775,477)     (78,560,546)      (3,462,406)   (109,305,520)
                            --------------------------------------------------------------
Net decrease                 (1,212,251)  $  (35,046,955)      (2,112,079)  $ (67,412,741)
                            ==============================================================


                  41 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

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

                             YEAR ENDED OCTOBER 31, 2006      YEAR ENDED OCTOBER 31, 2005
                                 SHARES           AMOUNT           SHARES          AMOUNT
------------------------------------------------------------------------------------------
CLASS C
Sold                            397,470   $   11,161,293          523,791   $  16,441,896
Dividends and/or
distributions reinvested        760,831       20,976,105          396,787      12,046,450
Redeemed                     (1,813,917)     (50,964,994)      (1,401,470)    (44,115,332)
                            --------------------------------------------------------------
Net decrease                   (655,616)  $  (18,827,596)        (480,892)  $ (15,626,986)
                            ==============================================================

------------------------------------------------------------------------------------------
CLASS N

Sold                            187,209   $    5,389,710          221,277   $   7,121,994
Dividends and/or
distributions reinvested        122,955        3,467,323           59,403       1,839,109
Redeemed                       (383,112)     (11,060,179)        (308,571)     (9,928,242)
                            --------------------------------------------------------------
Net decrease                    (72,948)  $   (2,203,146)         (27,891)  $    (967,139)
                            ==============================================================

------------------------------------------------------------------------------------------
CLASS Y

Sold                            181,884   $    5,332,127          225,432   $   7,354,369
Dividends and/or
distributions reinvested        133,197        3,813,427           69,881       2,192,161
Redeemed                       (586,333)     (16,983,551)        (383,956)    (12,469,256)
                            --------------------------------------------------------------
Net decrease                   (271,252)  $   (7,837,997)         (88,643)  $  (2,922,726)
                            ==============================================================

--------------------------------------------------------------------------------
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, 2006, were as
follows:

                                         PURCHASES           SALES
------------------------------------------------------------------
Investment securities              $ 1,192,352,823   $ 794,643,076

U.S. government and government
agency obligations                              --      57,000,000

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

MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:

                    FEE SCHEDULE
                    ----------------------------------------
                    Up to $1.0 billion                 0.85%
                    Next $500 million                  0.80
                    Next $500 million                  0.75
                    Next $500 million                  0.70
                    Next $500 million                  0.65
                    Next $500 million                  0.60
                    Next $500 million                  0.55
                    Over $4.0 billion                  0.50


                  42 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended October 31, 2006, the Fund paid
$3,697,690 to OFS for services to the Fund.

      Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum 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.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan, the Fund 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 periodically 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% on Class B and
Class C shares and 0.25% 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 determines its
uncompensated expenses under the plan at calendar quarter ends. The
Distributor's aggregate uncompensated expenses under the plan at September 30,
2006 for Class C and Class N shares were $7,558,248 and $613,289, 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


                  43 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

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

CDSC retained by the Distributor on the redemption of shares is shown in the
following table for the period indicated.

                                          CLASS A         CLASS B        CLASS C         CLASS N
                          CLASS A      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, 2006      $   226,263     $    20,287     $   388,997    $     7,769     $     4,258

--------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the year ended October 31, 2006, OFS
waived $1,578 for Class Y shares. This undertaking may be amended or withdrawn
at any time.

      The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the year ended October 31, 2006, the Manager waived $31,126 for
IMMF management fees.

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

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

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

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

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

      The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium


                  44 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

whether or not the option is exercised. The Fund also has the additional risk of
not being able to enter into a closing transaction if a liquid secondary market
does not exist.

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

                                           CALL OPTIONS
                              -------------------------
                               NUMBER OF      AMOUNT OF
                               CONTRACTS       PREMIUMS
-------------------------------------------------------
Options outstanding as of
October 31, 2005                      --    $        --
Options written                    4,852      1,607,401
Options closed or expired         (1,587)      (149,269)
Options exercised                 (3,000)    (1,318,879)
                              -------------------------
Options outstanding as of
October 31, 2006                     265    $   139,253
                              =========================

--------------------------------------------------------------------------------
6. CREDIT DEFAULT SWAP CONTRACTS

Credit default swaps are designed to transfer the credit exposure of fixed
income products between counterparties. 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 a basket of securities. The Fund may take a short position
(purchaser of credit protection) or a long position (seller of credit
protection) in the credit default swap. Risks of credit default swaps include,
but are not limited to, 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 defaulted bonds depending on whether the Fund is long or short the swap,
respectively).

      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. As a purchaser of credit protection under a swap
contract, the Fund pays a periodic interest fee on the notional amount to the
counterparty. This interest fee is accrued daily as a component of unrealized
appreciation (depreciation) and is recorded as realized loss upon payment. Upon
occurrence of a specific credit event with respect to the underlying referenced
debt obligation, the Fund is obligated to deliver that security to the
counterparty in exchange for receipt of the notional amount from the
counterparty. The difference between the value of the security delivered and the
notional amount received is recorded as realized gain and is included on the
Statement of Operations. Credit default swaps are marked to market daily using
different sources, including quotations from counterparties, pricing services,
brokers or market makers. The unrealized appreciation (depreciation) related to
the change in the valuation of the notional amount of the swap is combined with
the amount due to (owed by) the Fund at termination or settlement and disclosed
separately on the Statement of Assets and Liabilities. The net change in this
amount is included on the Statement of Operations.


                  45 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

--------------------------------------------------------------------------------
6. CREDIT DEFAULT SWAP CONTRACTS Continued

Information regarding such credit default swaps as of October 31, 2006 is as
follows:

                                                  NOTIONAL       ANNUAL
                                                    AMOUNT     INTEREST
                   REFERENCE                   RECEIVED BY    RATE PAID                        UNREALIZED
                   DEBT                      THE FUND UPON       BY THE    TERMINATION       APPRECIATION
COUNTERPARTY       OBLIGATION                 CREDIT EVENT         FUND          DATES     (DEPRECIATION)
----------------------------------------------------------------------------------------------------------
Deutsche Bank AG:

                   Custom basket of
                   Asset-Backed Securities   $  60,000,000       3.244%       11/25/39     $      108,691

                   Custom basket of
                   Asset-Backed Securities     125,000,000        3.150        7/25/45         (1,199,996)
                                                                                           ---------------
                                                                                           $   (1,091,305)
                                                                                           ===============

The Fund would take a long position in the credit default swap note (the "funded
swap") to increase the exposure to specific high yield corporate issuers. As a
seller of credit protection under a swap contract, the Fund receives a periodic
interest fee on the notional amount from the counterparty. This interest fee is
accrued daily as a component of unrealized appreciation (depreciation) and is
recorded as realized gain upon receipt. Upon occurrence of a specific credit
event with respect to the underlying referenced debt obligation, the Fund
receives that security from the counterparty in exchange for payment of the
notional amount to the counterparty. The difference between the value of the
security received and the notional amount paid is recorded as realized loss and
is included on the Statement of Operations. Credit default swaps are marked to
market daily using different sources, including quotations from counterparties,
pricing services, brokers or market makers. The unrealized appreciation
(depreciation) related to the change in the valuation of the notional amount of
the swap is combined with the amount due to (owed by) the Fund at termination or
settlement and disclosed separately on the Statement of Assets and Liabilities.
The net change in this amount is included on the Statement of Operations.

Information  regarding  such credit  default  swaps as of October 31, 2006 is as
follows:

                                                 NOTIONAL          ANNUAL
                                                   AMOUNT   INTEREST RATE
                   REFERENCE                      PAID BY        RECEIVED                      UNREALIZED
                   DEBT                     THE FUND UPON          BY THE   TERMINATION      APPRECIATION
COUNTERPARTY       OBLIGATION                CREDIT EVENT            FUND         DATES    (DEPRECIATION)
----------------------------------------------------------------------------------------------------------
Deutsche Bank AG:

                   Custom basket of
                   Asset-Backed Securities   $ 10,000,000           19.50%     11/25/39     $      (1,088)

                   Custom basket of
                   Asset-Backed Securities     20,500,000           19.25       7/25/45         1,484,331
                                                                                            --------------
                                                                                            $   1,483,243
                                                                                            ==============


                  46 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

--------------------------------------------------------------------------------
7. TOTAL RETURN SWAP CONTRACTS

A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Total return swaps are marked to market daily using
different sources, including quotations from counterparties, pricing services,
brokers or market makers. The unrealized appreciation (depreciation) related to
the change in the valuation of the notional amount of the swap is combined with
the amount due to (owed by) the Fund at termination or settlement and disclosed
separately on the Statement of Assets and Liabilities. The net change in this
amount is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).

As of October 31, 2006, the Fund had entered into the following total return
swap agreements:

SWAP                  NOTIONAL                     PAID BY                 RECEIVED    TERMINATION      UNREALIZED
COUNTERPARTY            AMOUNT                    THE FUND              BY THE FUND          DATES    DEPRECIATION
------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:

                                    If positive, the total   If positive, the total
                                        return of a custom         return of Groupe
                                      basket of securities        Bruxelles Lambert
                                             and One-Month          SA (equity) and
                        90,000EUR      EURIBOR plus spread                One-Month        6/22/07   $     563,001
                       310,000EUR    based on the value of            EURIBOR minus        6/21/07       1,961,680
                         5,996EUR        Bruxelles Lambert          spread based on        6/28/07          38,879
                       226,000EUR          SA (equity). If          a custom equity        6/21/07       1,619,612
                        60,000EUR      negative, the total     basket. If negative,        6/27/07         377,784
                        20,000EUR         return on Groupe         the total return        6/28/07         129,973
                       513,000EUR        Bruxelles Lambert            on the custom        6/28/07       5,170,861
                       400,000EUR                      SA.    basket of securities.        6/29/07       3,817,427
                                                                                                     -------------
                                                                                                     $  13,679,217
                                                                                                     =============

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

EUR                Euro

Abbreviation is as follows:

EURIBOR            Euro Interbank Offered Rate


                  47 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

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

--------------------------------------------------------------------------------
8. ILLIQUID SECURITIES

As of October 31, 2006, investments in securities included issues that are
illiquid. A security may also be considered illiquid if it lacks a readily
available market or if its valuation has not changed for a certain period of
time. The Fund will not invest more than 15% of its net assets (determined at
the time of purchase and reviewed periodically) in illiquid securities.
Securities that are illiquid are marked with the applicable footnote on the
Statement of Investments.

--------------------------------------------------------------------------------
9. 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
securities, letters of credit 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 each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. 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. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of October 31, 2006, the Fund
had on loan securities valued at $39,471,338, which are included in the
Statement of Assets and Liabilities as "Investments, at value" and, when
applicable, as "Receivable for Investments sold." Collateral of $42,074,528 was
received for the loans, all of which was received in cash and subsequently
invested in approved investments or held as cash.

--------------------------------------------------------------------------------
10. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
October 31, 2006, the Manager is evaluating the implications of FIN 48. Its
impact in the Fund's financial statements has not yet been determined.


                  48 | OPPENHEIMER QUEST OPPORTUNITY VALUE FUND

      In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE
MEASUREMENTS. This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS No. 157 applies to fair value
measurements already required or permitted by existing standards. SFAS No. 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. As of October
31, 2006, the Manager does not believe the adoption of SFAS No. 157 will
materially impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements on changes in net assets for the
period.

--------------------------------------------------------------------------------
11. LITIGATION

A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds including the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.

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

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

                                  Appendix A

                             RATINGS DEFINITIONS

Below are summaries of the rating definitions used by the
nationally-recognized rating agencies listed below. Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate.
The summaries below are based upon publicly available information provided by
the rating organizations.

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM RATINGS: BONDS AND PREFERRED STOCK ISSUER RATINGS

Aaa: Bonds and preferred stock rated "Aaa" are judged to be the best quality.
They carry the smallest degree of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, the
changes that can be expected are most unlikely to impair the fundamentally
strong position of such issues.

Aa: Bonds and preferred stock rated "Aa" are judged to be of high quality by
all standards. Together with the "Aaa" group, they comprise what are
generally known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as with "Aaa" securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk appear somewhat
larger than that of "Aaa" securities.

A: Bonds and preferred stock rated "A" possess many favorable investment
attributes and are to be considered as upper-medium grade obligations.
Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment some
time in the future.

Baa: Bonds and preferred stock rated "Baa" are considered medium-grade
obligations; that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and have speculative characteristics as well.

Ba: Bonds and preferred stock rated "Ba" are judged to have speculative
elements. Their future cannot be considered well-assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Bonds and preferred stock rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.

Caa: Bonds and preferred stock rated "Caa" are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds and preferred stock rated "Ca" represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C: Bonds and preferred stock rated "C" are the lowest class of rated bonds
and can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a
ranking in the lower end of that generic rating category. Advanced refunded
issues that are secured by certain assets are identified with a # symbol.

PRIME RATING SYSTEM (SHORT-TERM RATINGS - TAXABLE DEBT)
These ratings are opinions of the ability of issuers to honor senior
financial obligations and contracts. Such obligations generally have an
original maturity not exceeding one year, unless explicitly noted.

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions
may be more pronounced. Variability in earnings and profitability may result
in changes in the level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate liquidity is
maintained.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The
McGraw-Hill Companies, Inc.

LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based in varying degrees, on the following
considerations:
o     Likelihood of payment-capacity and willingness of the obligor to meet
      its financial commitment on an obligation in accordance with the terms
      of the obligation;
o     Nature of and provisions of the obligation; and
o     Protection afforded by, and relative position of, the obligation in the
      event of bankruptcy, reorganization, or other arrangement under the
      laws of bankruptcy and other laws affecting creditors' rights.
   The issue ratings definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority
in bankruptcy, as noted above.

AAA: An obligation  rated "AAA" have the highest rating assigned by Standard &
Poor's.  The  obligor's  capacity  to meet  its  financial  commitment  on the
obligation is extremely strong.

AA: An obligation  rated "AA" differ from the highest rated  obligations  only
in small degree.  The obligor's  capacity to meet its financial  commitment on
the obligation is very strong.

A: An  obligation  rated "A" are  somewhat  more  susceptible  to the  adverse
effects of changes in circumstances  and economic  conditions than obligations
in  higher-rated  categories.  However,  the  obligor's  capacity  to meet its
financial commitment on the obligation is still strong.

BBB:  An  obligation  rated  "BBB"  exhibit  adequate  protection  parameters.
However,  adverse  economic  conditions  or  changing  circumstances  are more
likely to lead to a weakened  capacity  of the  obligor to meet its  financial
commitment on the obligation.

BB, B, CCC, CC, and C
An obligation rated `BB', `B', `CCC', `CC', and `C' are regarded as having
significant speculative characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: An obligation  rated "BB" are less  vulnerable  to  nonpayment  than other
speculative  issues.   However,  they  face  major  ongoing  uncertainties  or
exposure to adverse business,  financial,  or economic  conditions which could
lead to the obligor's  inadequate capacity to meet its financial commitment on
the obligation.

B: An obligation  rated "B" are more vulnerable to nonpayment than obligations
rated "BB",  but the obligor  currently has the capacity to meet its financial
commitment  on  the  obligation.  Adverse  business,  financial,  or  economic
conditions  will likely impair the obligor's  capacity or  willingness to meet
its financial commitment on the obligation.

CCC: An obligation  rated "CCC" are currently  vulnerable to  nonpayment,  and
are dependent upon favorable business,  financial, and economic conditions for
the obligor to meet its financial  commitment on the obligation.  In the event
of adverse business,  financial,  or economic  conditions,  the obligor is not
likely  to  have  the  capacity  to  meet  its  financial  commitment  on  the
obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

C:  Subordinated  debt or preferred stock  obligations rated "C" are currently
highly  vulnerable  to  nonpayment.  The "C"  rating  may be  used to  cover a
situation where a bankruptcy  petition has been filed or similar action taken,
but  payments  on this  obligation  are  being  continued.  A "C" also will be
assigned to a preferred  stock issue in arrears on  dividends  or sinking fund
payments, but that is currently paying.

D: An obligation rated "D" are in payment default.  The "D" rating category is
used when payments on an  obligation  are not made on the date due even if the
applicable  grace period has not expired,  unless  Standard & Poor's  believes
that such payments will be made during such grace period.  The "D" rating also
will be used  upon the  filing of a  bankruptcy  petition  or the  taking of a
similar action if payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating
categories.

c: The `c' subscript is used to provide additional information to investors
that the bank may terminate its obligation to purchase tendered bonds if the
long-term credit rating of the issuer is below an investment-grade level
and/or the issuer's bonds are deemed taxable.

p: The letter `p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the debt
being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of or the risk
of default upon failure of such completion. The investor should exercise his
own judgment with respect to such likelihood and risk.

Continuance of the ratings is contingent upon Standard & Poor's receipt of an
executed copy of the escrow agreement or closing documentation confirming
investments and cash flows.

r: The `r' highlights derivative, hybrid, and certain other obligations that
Standard & Poor's believes may experience high volatility or high variability
in expected returns as a result of noncredit risks. Examples of such
obligations are securities with principal or interest return indexed to
equities, commodities, or currencies; certain swaps and options; and
interest-only and principal-only mortgage securities. The absence of an `r'
symbol should not be taken as an indication that an obligation will exhibit
no volatility or variability in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present commercial bank regulations issued by the Comptroller of the
Currency, bonds rated in the top four categories (`AAA', `AA', `A', `BBB',
commonly known as investment-grade ratings) generally are regarded as
eligible for bank investment. Also, the laws of various states governing
legal investments impose certain rating or other standards for obligations
eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries in general

SHORT-TERM ISSUE CREDIT RATINGS
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 days-including
commercial paper.

A-1: A short-term obligation rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

B: A short-term obligation rated "B" is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.

C: A short-term obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

NOTES:
A Standard & Poor's note rating reflects the liquidity factors and market
access risks unique to notes. Notes due in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in
making that assessment:
o     Amortization schedule-the larger the final maturity relative to other
      maturities, the more likely it will
      be treated as a note; and
o     Source of payment-the more dependent the issue is on the market for its
      refinancing, the more likely
      it will be treated as a note.

SP-1: Strong capacity to pay principal and interest. An issue with a very
strong capacity to pay debt service is given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.
International credit ratings assess the capacity to meet foreign currency or
local currency commitments. Both "foreign currency" and "local currency"
ratings are internationally comparable assessments. The local currency rating
measures the probability of payment within the relevant sovereign state's
currency and jurisdiction and therefore, unlike the foreign currency rating,
does not take account of the possibility of foreign exchange controls
limiting transfer into foreign currency.

INTERNATIONAL LONG-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings.

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.


B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are
based on their prospects for achieving partial or full recovery in a
reorganization or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision, the
following serve as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued
interest. "DD" indicates potential recoveries in the range of 50%-90%, and
"D" the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy
a higher portion of their outstanding obligations, while entities rated "D"
have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the major rating categories. Plus and minus signs are
not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency
ratings. A short-term rating has a time horizon of less than 12 months for
most obligations, or up to three years for U.S. public finance securities,
and thus places greater emphasis on the liquidity necessary to meet financial
commitments in a timely manner.

F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments
is adequate. However, near-term adverse changes could result in a reduction
to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.

D: Default. Denotes actual or imminent payment default.









                                  Appendix B

                           Industry Classifications

Aerospace & Defense                  Household Products
Air Freight & Couriers               Industrial Conglomerates
Airlines                             Insurance
Auto Components                      Internet & Catalog Retail
Automobiles                          Internet Software & Services
Beverages                            IT Services
Biotechnology                        Leisure Equipment & Products
Building Products                    Machinery
Chemicals                            Marine
Consumer Finance                     Media
Commercial Banks                     Metals & Mining
Commercial Services & Supplies       Multiline Retail
Communications Equipment             Multi-Utilities
Computers & Peripherals              Office Electronics
Construction & Engineering           Oil & Gas
Construction Materials               Paper & Forest Products
Containers & Packaging               Personal Products
Distributors                         Pharmaceuticals
Diversified Financial Services       Real Estate
Diversified Telecommunication        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











                                  Appendix C

        OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases, the initial sales charge that applies to purchases of Class
A shares(2) of the Oppenheimer funds or the contingent deferred sales charge
that may apply to Class A, Class B or Class C shares may be waived.(3) That
is because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors. Not all waivers apply to all funds.

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

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

Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
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 $5 million or more of its assets (excluding assets
            invested in money market funds) invested in Applicable
            Investments.
         3) The record keeping for a Retirement Plan is handled under a
            service agreement with Merrill Lynch and on the date the plan
            sponsor signs that agreement, the Plan has 500 or more eligible
            employees (as determined by the Merrill Lynch plan conversion
            manager).
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.
|_|   Effective October 1, 2005, taxable accounts established with the
         proceeds of Required Minimum Distributions from Retirement Plans.

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

1.    Class A shares issued or purchased in the following transactions are
   not subject to sales charges (and no concessions are paid by the
   Distributor on such purchases):
|_|   Shares issued in plans of reorganization, such as mergers, asset
         acquisitions and exchange offers, to which the Fund is a party.
|_|   Shares purchased by the reinvestment of dividends or other
         distributions reinvested from the Fund or other Oppenheimer funds or
         unit investment trusts for which reinvestment arrangements have been
         made with the Distributor.
|_|   Shares purchased by certain Retirement Plans that are part of a
         retirement plan or platform offered by banks, broker-dealers,
         financial advisors or insurance companies, or serviced by
         recordkeepers.
|_|   Shares purchased by the reinvestment of loan repayments by a
         participant in a Retirement Plan for which the Manager or an
         affiliate acts as sponsor.
|_|   Shares purchased in amounts of less than $5.

2.    Class A shares issued and purchased in the following transactions are
   not subject to sales charges (a dealer concession at the annual rate of
   0.25% is paid by the Distributor on purchases made within the first 6
   months of plan establishment):
|_|   Retirement Plans that have $5 million or more in plan assets.
|_|   Retirement Plans with a single plan sponsor that have $5 million or
         more in aggregate assets invested in Oppenheimer funds.

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

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

|_|   At the sole discretion of the Distributor, the contingent deferred
         sales charge may be waived for redemptions of shares requested by
         the shareholder of record within 60 days following the termination
         by the Distributor of the selling agreement between the Distributor
         and the shareholder of record's broker-dealer of record for the
         account.

III.  Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer
      Funds

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


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

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases:
|_|   Shares redeemed involuntarily, as described in "Shareholder Account
         Rules and Policies," in the applicable Prospectus.
|_|   Redemptions from accounts other than Retirement Plans following the
         death or disability of the last surviving shareholder. The death or
         disability must have occurred after the account was established, and
         for disability you must provide evidence of a determination of
         disability by the Social Security Administration.
|_|   The contingent deferred sales charges are generally not waived
         following the death or disability of a grantor or trustee for a
         trust account. The contingent deferred sales charges will only be
         waived in the limited case of the death of the trustee of a grantor
         trust or revocable living trust for which the trustee is also the
         sole beneficiary. The death or disability must have occurred after
         the account was established, and for disability you must provide
         evidence of a determination of disability (as defined in the
         Internal Revenue Code).
|_|   Distributions from accounts for which the broker-dealer of record has
         entered into a special agreement with the Distributor allowing this
         waiver.

|_|   At the sole discretion of the Distributor, the contingent deferred
         sales charge may be waived for redemptions of shares requested by
         the shareholder of record within 60 days following the termination
         by the Distributor of the selling agreement between the Distributor
         and the shareholder of record's broker-dealer of record for the
         account.

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

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 SAI 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- & Mid- Cap
   Value Fund
   Oppenheimer Quest Balanced Fund              Oppenheimer Quest
   International Value Fund, Inc.
   Oppenheimer Quest Opportunity Value Fund

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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

--------------------------------------------------------------------------------
                      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 SAI.
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 Core 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 SAI) 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
PX0236.001.0207




(1) In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this SAI 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- & Mid- Cap Value Fund



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

Prospectus dated February 26, 2007

                                                           Oppenheimer Small- & Mid- 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- and mid- 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
         Class Y Shares

         Special Investor Services
         AccountLink
         PhoneLink
         OppenheimerFunds Internet Website
         Retirement Plans

         How to Sell Shares
         By Mail
         By Telephone

         How to Exchange Shares

         Shareholder Account Rules and Policies

         Dividends, Capital Gains and Taxes

         Financial Highlights







11

ABOUT THE FUND

The Fund's Investment Objective and Principal Investment Strategies

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

WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests mainly in stocks of U.S. issuers having a market
capitalization up to $13 billion. That includes both small cap stocks (stocks of issuers that have a market
capitalization under $3 billion) and mid cap stocks (stocks of issuers having a capitalization between $3 billion
and $13 billion). The Fund has no fixed ratio for small cap and mid cap stocks in its portfolio, and while its
focus is on stocks of U.S. companies, it may invest in stocks of small and mid cap foreign issuers as well. Under
normal market conditions the Fund will invest at least 80% of its net assets (plus the amount of any borrowings
for investment purposes) in equity securities of small-cap and mid-cap domestic and foreign issuers. The Fund
emphasizes investment in 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 and mid 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. (the "Manager"), 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 and mid 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 these 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. While small capitalization 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.
Special Risks of Mid-Cap Stocks. While stocks of mid-cap companies may offer greater capital appreciation
         potential than investments in larger capitalization companies, they may also present greater risks.
         Mid-cap stocks tend to be more sensitive to changes in an issuer's earnings expectations. They tend to
         have lower trading volumes than large capitalization securities. As a result, they may experience more
         abrupt and erratic price movements.

         Since mid-cap companies typically reinvest a high proportion of earnings in their own businesses, they
         may lack the dividend yield that can help cushion their total return in a declining market. Many mid-cap
         stocks are traded in over-the-counter markets and therefore may be less liquid than stocks of larger
         exchange-traded issuers. That means the Fund could have greater difficulty selling a security at an
         acceptable price, especially in periods of market volatility. That factor increases the potential for
         losses to the Fund.
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- and
mid- 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, compared to those of
broad-based market indices. The after-tax returns for the other classes of shares will vary.


         The after-tax returns are shown for Class A shares only and are calculated using the historical highest
individual federal marginal income tax rates in effect during the periods shown, and do not reflect the impact of
state or local taxes. The after-tax returns are calculated based on certain assumptions mandated by regulation
and your actual after-tax returns may differ from those shown, depending on your individual tax situation. The
after-tax returns set forth below are not relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or IRAs or to institutional investors not subject to tax. The Fund's past
investment performance, before and after taxes, is not necessarily an indication of how the Fund will perform in
the future.

Annual Total Returns (Class A) (as of 12/31 each year)
[See appendix to prospectus for data in bar chart showing the annual total return]

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


For the period from 1/1/06 through 12/31/06, the cumulative return before taxes for Class A shares was 17.98%.


During the period shown in the bar chart, the highest return (not  annualized)  before taxes for a calendar quarter
was 17.22% (2nd Qtr `99) and the lowest  return (not  annualized)  before taxes for a calendar  quarter was -17.88%
(3rd Qtr `98).

--------------------------------------------- -------------------------- ------------------------- -------------------------
Average Annual Total Returns                           1 Year                    5 Years                   10 Years
                                                                          (or life of class, if     (or life of class, if

for the periods ended December 31, 2006                                           less)                     less)

--------------------------------------------- -------------------------- ------------------------- -------------------------
--------------------------------------------- -------------------------- ------------------------- -------------------------
Class A Shares (inception 1/3/89)

  Return Before Taxes                                  11.20%                     15.81%                    11.61%
  Return After Taxes on Distributions                   9.69%                     14.30%                    10.30%
  Return After Taxes on Distributions and
  Sale of Fund Shares                                   7.82%                     13.11%                    9.58%

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

Class B Shares (inception 9/1/93)                      12.01%                     16.05%                    11.91%

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

Class C Shares (inception 9/1/93)                      16.06%                     16.30%                    11.56%

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

Class N Shares (inception 3/1/01)                      16.54%                     16.79%                    16.30%

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

Class Y Shares (inception 10/24/05)                    18.51%                     20.00%                     N/A

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

Russell 2500(R)Index (reflects no deduction             16.17%                   12.19%(1)                   11.26%
for fees, expenses or taxes)                                                    18.63%(2)                 11.24%(3)

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

Russell 2000(R)Index (reflects no deduction             18.37%                   11.39%(1)                   9.44%
for fees, expenses or taxes)                                                    19.87%(2)                 10.47%(3)

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

(1). From 12/31/01.
2. From 10/31/05.
(3.) From 02/28/01.

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 "10
years" performance does not include any contingent deferred sales charge and uses Class A performance for the
period after conversion. The returns measure the performance of a hypothetical account and assume that all
dividends and capital gains distributions have been reinvested in additional shares. The performance of the
Fund's shares is compared to the Russell 2000(R)Index, an unmanaged index of small-capitalization stocks, and due
to an investment policy change expanding the Fund's investments to include mid cap stocks, the Russell 2500
Index, which is a broad-based measure of small- and mid-cap value stocks. 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 indices.


Fees and Expenses of the Fund


The following tables are provided to help you understand the fees and expenses you may pay if you buy and hold
shares of the Fund. The Fund pays a variety of expenses directly for management of its assets, administration,
distribution of its shares and other services. Those expenses are subtracted from the Fund's assets to calculate
the Fund's net asset values per share. All shareholders therefore pay those expenses indirectly. Shareholders pay
other transaction expenses directly, such as sales charges. The numbers below are based on the Fund's expenses
during its fiscal year ended October 31, 2006.


------------------------------------------------------------------------------------------------------------------------
Shareholder Fees (charges paid directly from your investment):
------------------------------------------------------------------------------------------------------------------------
--------------------------------------------- --------------- ------------- -------------- --------------- -------------
                                              Class A Shares    Class B        Class C     Class N Shares    Class Y
                                                                 Shares        Shares                         Shares
--------------------------------------------- --------------- ------------- -------------- --------------- -------------
--------------------------------------------- --------------- ------------- -------------- --------------- -------------
Maximum Sales Charge (Load) on purchases          5.75%           None          None            None           None
(as % of offering price)
--------------------------------------------- --------------- ------------- -------------- --------------- -------------
--------------------------------------------- --------------- ------------- -------------- --------------- -------------
Maximum Deferred Sales Charge (Load) (as %
of the lower of the original offering price      None(1)         5%(2)          1%(3)          1%(4)           None
or redemption proceeds)
--------------------------------------------- --------------- ------------- -------------- --------------- -------------
--------------------------------------------- --------------- ------------- -------------- --------------- -------------
Redemption Fee (as a percentage of total          2.00%          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 Shares     Class B        Class C     Class N Shares  Class Y Shares
                                                                 Shares        Shares
-------------------------------------------- ---------------- ------------- -------------- --------------- -------------
-------------------------------------------- ---------------- ------------- -------------- --------------- -------------

Management Fees                                   0.64%          0.64%          0.64%          0.64%          0.64%

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

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

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

Other Expenses                                    0.25%          0.33%          0.28%          0.36%          0.04%

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

Total Annual Operating Expenses                   1.14%          1.97%          1.92%          1.50%          0.68%

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

Effective January 1, 2006, the Fund's management fee schedule was revised as described below in "How the Fund is
Managed - The Manager- Advisory Fees." "Management Fees" in the table above assume that the revised management
fee schedule, effective January 1, 2006, was in effect for the Fund's entire fiscal year ended October 31, 2006.
During the fiscal year ended October 31, 2006, the actual management fees were the same as indicated above for
each class of 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 Transfer Agent has voluntarily undertaken to the Fund to limit the
transfer agent 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. For the Fund's fiscal year ended October 31, 2006, the transfer agent fees did
not exceed the expense limitation described 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                             $685                 $918                $1,170              $1,889

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

Class B Shares                             $702                 $924                $1,273             $1,899*

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

Class C Shares                             $297                 $609                $1,047              $2,264

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

Class N Shares                             $254                 $478                 $824               $1,804

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

Class Y Shares                             $70                  $218                 $380                $849

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

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

Class A Shares                             $685                 $918                $1,170              $1,889

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

Class B Shares                             $202                 $624                $1,073             $1,899*

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

Class C Shares                             $197                 $609                $1,047              $2,264

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

Class N Shares                             $154                 $478                 $824               $1,804

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

Class Y Shares                             $70                  $218                 $380                $849

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

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


About the Fund's Investments


THE FUND'S PRINCIPAL INVESTMENT POLICIES AND RISKS. The allocation of the Fund's portfolio among different
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. 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 company. Also, the Fund does not concentrate 25% or more of its assets in investments in any one
industry. That limit does not apply to securities issued or guaranteed by the U.S. government or its agencies and
instrumentalities or securities issued by investment companies.

         However, changes in the overall market prices of securities 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.


SMALL- AND MID- CAP STOCK INVESTMENTS. The Fund emphasizes investments in equity securities, primarily common
stocks. The portfolio managers look for stocks of small- and mid-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- and mid-cap universes 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- and mid-cap stocks. Current examples of sectors offering value investing opportunities among
small- and mid-cap issuers include technology, capital goods and cyclical sectors. However, these opportunities
and industries may change over time.


-------------------------------------------------------------------------------------------------------------------
What is "Market Capitalization?"
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
In general, the market capitalization is the value of a company determined by the total market value of its
issued and outstanding common stock.
-------------------------------------------------------------------------------------------------------------------

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.

Investments by "Funds of Funds." Class Y shares of the Fund are offered as an investment to other Oppenheimer
         funds that act as "funds of funds." The Fund's Board of Trustees has approved making the Fund's shares
         available as an investment to those funds. Those funds of funds may invest significant portions of their
         assets in shares of the Fund, as described in their respective prospectuses. From time to time, those
         investments may also represent a significant portion of the Fund's assets. Those funds of funds
         typically use asset allocation strategies under which they may increase or reduce the amount of their
         investment in the Fund frequently, which may occur on a daily basis under volatile market conditions.
         Depending on a number of factors, such as the flows of cash into and from the Fund as a result of the
         activity of other investors and the Fund's then-current liquidity, those purchases and redemptions of
         the Fund's shares by funds of funds could require the Fund to purchase or sell portfolio securities,
         increasing its transaction costs and possibly reducing its performance, if the size of those purchases
         and redemptions were significant relative to the size of the Fund. For a further discussion of the
         possible effects of frequent trading in the Fund's shares, please refer to the section titled "Are There
         Limitations on Frequent Purchases, Redemptions and Exchanges?" in this prospectus.

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 the Fund invests a significant amount of its assets in foreign securities, it may be
         exposed to "time-zone arbitrage" attempts by investors seeking to take advantage of the differences in
         value of foreign securities that might result from events that occur after the close of the foreign
         securities market on which a foreign security is traded and before the close of the New York Stock
         Exchange (the "NYSE") that day, when the Fund's net asset value is calculated. If such time-zone
         arbitrage were successful, it might dilute the interests of other shareholders. However, the Fund's use
         of "fair value pricing" to adjust the closing market prices of foreign securities under certain
         circumstances, to reflect what the Manager and the Board believe to be their fair value, and the
         imposition of redemption fees, 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.
o        Credit Risk. Debt securities are subject to credit risk. Credit risk relates to the ability of the
         issuer of a security to make interest and principal payments on the security as they become due. If the
         issuer fails to pay interest, the Fund's income might be reduced, and if the issuer fails to repay
         principal, the value of that security and of the Fund's shares might be reduced. A downgrade in an
         issuer's credit rating or other adverse news about an issuer can reduce the value of that issuer's
         securities. 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. Lower-grade debt securities may be subject to greater market
         fluctuations and greater risks of loss of income and principal than investment-grade debt securities.
o        Interest Rate Risk. The values of debt securities, including U.S. government securities, are subject to
         change when prevailing interest rates change. When prevailing interest rates fall, the values of
         already-issued debt securities generally rise. When prevailing interest rates rise, the values of
         already-issued debt securities generally fall, and they may sell at a discount from their face amount.
         The magnitude of these fluctuations will often be greater for 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.
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 applicable securities laws. 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.


         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.
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.

Investments in Oppenheimer Institutional Money Market Fund. The Fund can invest its free cash balances in the
         Class E shares of Oppenheimer Institutional Money Market Fund, to seek current income while preserving
         liquidity. The Oppenheimer Institutional Money Market Fund is a registered open-end management
         investment company, regulated as a money market fund under the Investment Company Act of 1940, as
         amended. It invests in a variety of short-term, high-quality, dollar-denominated money market
         instruments issued by the U.S. government, domestic and foreign corporations and financial institutions,
         and other entities. As a shareholder, the Fund will be subject to its proportional share of the
         Oppenheimer Institutional Money Market Fund's Class E expenses, including its advisory fee. However, the
         Manager will waive a portion of the Fund's advisory fee to the extent of the Fund's share of the
         advisory fee paid by the Oppenheimer Institutional Money Market Fund.
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 might also hold these
         types of securities pending the investment of proceeds from the sale of Fund shares or portfolio
         securities or to meet anticipated redemptions of Fund shares. To the extent the Fund invests defensively
         in these securities, it might not achieve its investment objective of capital 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 discloses its portfolio holdings in its Statements of Investments on
         Form N-Q, which are filed with the Securities and Exchange Commission no later than 60 days after the
         close of its first and third fiscal quarters. These required filings are publicly available at the
         Securities and Exchange Commission. Therefore, portfolio holdings of the Fund are made publicly
         available no later than 60 days after the close of each of the Fund's fiscal quarters.


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

How the Fund is Managed


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

         The Manager has been an investment advisor since 1960. The Manager and its subsidiaries and controlled
affiliates managed more than $235 billion in assets as of December 31, 2006, including other Oppenheimer funds
with more than 6 million shareholder accounts. The Manager is located at Two World Financial Center, 225 Liberty
Street, 11th Floor, New York, New York 10281-1008.

Advisory Fees. Effective January 1, 2006, under the Investment Advisory Agreement, the Fund pays the Manager an
         advisory fee; calculated on the daily net assets of the Fund, 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, 0.60% of the next $1.2 billion and 0.58% of average annual net
         assets in excess of $2 billion. The Fund's management fee for its last fiscal year ended October 31,
         2006 was 0.64% of average annual net assets for each class of shares.


         From January 1, 2005 through December 31, 2005, the annual advisory fee rate was: 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.


         A discussion regarding the basis for the Board of Trustees' approval of the Fund's investment advisory
contract is available in the Fund's Semi-Annual Report to shareholders for the six-months ended April 30, 2006.


Portfolio Managers. The Fund's portfolio is managed by Christopher Leavy and John Damian who are primarily
         responsible for the day-to-day management of the Fund's investments.


         Mr. Leavy has been a portfolio manager of the Fund since March 2001 and a Vice President of the Fund
         since December 2001. He is Director of Equities of the Manager since January 2007 and has been a Senior
         Vice President of the Manager since September 2000. He is a portfolio manager and officer of other
         portfolios in the OppenheimerFunds complex.

         Mr. Damian has been a portfolio manager of the Fund since October 2001 and a Vice President of the Fund
         since December 2001. He has been Head of Value Equity Investments and Senior Vice President of the
         Manager since February 2007. He was Vice President of the Manager since September 2001 and is a
         portfolio manager of other portfolios in the OppenheimerFunds complex.


         The Statement of Additional Information provides additional information about the Portfolio Managers'
         compensation, other accounts they manage and their ownership of Fund shares.


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

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

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


ABOUT YOUR ACCOUNT

How to Buy Shares

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

Buying Shares Through Your Dealer. You can buy shares through any dealer, broker or financial institution that
         has a sales agreement with the Distributor. Your dealer will place your order with the Distributor on
         your behalf. A broker or dealer may charge a processing fee for that service.

Buying Shares Through the Distributor. Complete an OppenheimerFunds new account application and return it with a
         check payable to "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217.
         If you do not list a dealer on the application, Class A shares are your only purchase option. The
         Distributor will act as your agent in buying Class A shares. However, we recommend that you discuss your
         investment with a financial advisor before you make a purchase to be sure that the Fund is appropriate
         for you. Class B, Class C or Class N shares may not be purchased by a new investor directly from the
         Distributor without the investor designating another registered broker-dealer. If a current investor no
         longer has another broker-dealer of record for an existing Class B, Class C or Class N account, the
         Distributor is automatically designated as the broker-dealer of record, but solely for the purpose of
         acting as the investor's agent to purchase the shares.

o        Paying by Federal Funds Wire. Shares purchased through the Distributor may be paid for by Federal Funds
         wire. The minimum wire purchase is $2,500. Before sending a wire, call the Distributor's Wire Department
         at 1.800.225.5677 to notify the Distributor of the wire and to receive further instructions.
o        Buying Shares Through OppenheimerFunds AccountLink. With AccountLink, you can pay for shares by
         electronic funds transfers from your bank account. Shares are purchased for your account by a transfer
         of money from your bank account through the Automated Clearing House (ACH) system. You can provide share
         purchase instructions automatically, under an Asset Builder Plan, described below, or by telephone
         instructions using OppenheimerFunds PhoneLink, also described below. Please refer to "AccountLink,"
         below for more details.

o        Buying Shares Through Asset Builder Plans. You may purchase shares of the Fund automatically from your
         account at a bank or other financial institution under an Asset Builder Plan with AccountLink. Details
         are in the Asset Builder application and the Statement of Additional Information.

WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund shares with a minimum initial
investment of $1,000 and make additional investments at any time with as little as $50. There are reduced
minimums available under the following special investment plans:
o        If you establish one of the many types of retirement plan accounts that OppenheimerFunds offers, more
         fully described below under "Special Investor Services," you can start your account with as little as
         $500.
o        By using an Asset Builder Plan or Automatic Exchange Plan (details are in the Statement of Additional
         Information), or government allotment plan, you can make 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        A minimum initial investment of $250 applies to certain fee based programs that have an agreement with
         the Distributor. The minimum subsequent investment for those programs is $50.

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


AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price which is the net asset value per share
plus any initial sales charge that applies. The offering price that applies to a purchase order is based on the
next calculation of the net asset value per share that is made after the Distributor receives the purchase order
at its offices in Colorado, or after any agent appointed by the Distributor receives the order. Your financial
adviser can provide you with more information regarding the time you must submit your purchase order and whether
the adviser is an authorized agent for the receipt of purchase orders.
Net Asset Value. The Fund calculates the net asset value of each class of shares as of the close of the NYSE, on
         each day the NYSE is open for trading (referred to in this prospectus as a "regular business day"). The
         NYSE normally closes at 4:00 p.m., Eastern time, but may close earlier on some days. All references to
         time in this prospectus 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 market on which the security is
         principally traded, that security may be valued by another method that the Board of Trustees believes
         accurately reflects the fair value. Because some foreign securities trade in markets and on exchanges
         that operate on weekends and U.S. holidays, the values of some of the Fund's foreign investments may
         change on days when investors cannot buy or redeem Fund shares.


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

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


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

The Offering Price. To receive the offering price for a particular day, the Distributor or its designated agent
         must receive your order, in proper form as described in this prospectus, by the time the NYSE closes
         that day. If your order is received on a day when the NYSE is closed or after it has closed, the order
         will receive the next offering price that is determined after your order is received.
Buying Through a Dealer. If you buy shares through an authorized dealer, your dealer must receive the order by
         the close of the NYSE for you to receive that day's offering price.  If your order is received on a day
         when the NYSE is closed or after it is closed, the order will receive the next offering price that is
         determined.

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

WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors five different classes of shares. The
different classes of shares represent investments in the same portfolio of securities, but the classes are
subject to different expenses and will likely have different share prices. When you buy shares, be sure to
specify the class of shares. If you do not choose a class, your investment will be made in Class A shares.
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Class A Shares. If you buy Class A shares, you pay an initial sales charge (on investments up to $1 million for
         regular accounts or lesser amounts for certain retirement plans). The amount of that sales charge will
         vary depending on the amount you invest. The sales charge rates are listed in "How Can You Buy Class A
         Shares?" below.
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales charge at the time of purchase, but you will pay an
         annual asset-based sales charge. If you sell your shares within 6 years of buying them, you will
         normally pay a contingent deferred sales charge. That contingent deferred sales charge varies depending
         on how long you own your shares, as described in "How Can You Buy Class B Shares?" below.
-------------------------------------------------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at the time of purchase, but you will pay an
         annual asset-based sales charge. If you sell your shares within 12 months of buying them, you will
         normally pay a contingent deferred sales charge of 1.0%, as described in "How Can You Buy Class C
         Shares?" below.
Class 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 more than $100,000 of Class B shares or $1 million or more of Class C shares
         from a single investor. Dealers or other financial intermediaries purchasing shares for their customers
         in omnibus accounts are responsible for compliance with those limits.
o        Investing for the Longer Term. If you are investing  less than $100,000 for the  longer-term,  for example
         for  retirement,  and do not expect to need access to your money for seven  years or more,  Class B shares
         may be appropriate.
Are There  Differences in Account  Features That Matter to You? Some account features may not be available to Class
         B, Class C and Class N  shareholders.  Other  features may not be advisable  (because of the effect of the
         contingent  deferred sales charge) for Class B, Class C and Class N  shareholders.  Therefore,  you should
         carefully  review how you plan to use your  investment  account  before  deciding which class of shares to
         buy.

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

How Do Share Classes Affect Payments to Your Broker? A financial 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 held for its customers.


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

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

------------------------------------------------------ -------------------- --------------------- -------------------
Amount of Purchase                                       Front-End Sales      Front-End Sales      Concession As a
                                                           Charge As a          Charge As a
                                                          Percentage of      Percentage of Net      Percentage of
                                                         Offering Price       Amount Invested       Offering Price
------------------------------------------------------ -------------------- --------------------- -------------------
------------------------------------------------------ -------------------- --------------------- -------------------
Less than $25,000                                             5.75%                6.10%                4.75%
------------------------------------------------------ -------------------- --------------------- -------------------
------------------------------------------------------ -------------------- --------------------- -------------------
$25,000 or more but less than $50,000                         5.50%                5.82%                4.75%
------------------------------------------------------ -------------------- --------------------- -------------------
------------------------------------------------------ -------------------- --------------------- -------------------
$50,000 or more but less than $100,000                        4.75%                4.99%                4.00%
------------------------------------------------------ -------------------- --------------------- -------------------
------------------------------------------------------ -------------------- --------------------- -------------------
$100,000 or more but less than $250,000                       3.75%                3.90%                3.00%
------------------------------------------------------ -------------------- --------------------- -------------------
------------------------------------------------------ -------------------- --------------------- -------------------
$250,000 or more but less than $500,000                       2.50%                2.56%                2.00%
------------------------------------------------------ -------------------- --------------------- -------------------
------------------------------------------------------ -------------------- --------------------- -------------------
$500,000 or more but less than $1 million                     2.00%                2.04%                1.60%
------------------------------------------------------ -------------------- --------------------- -------------------
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 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 have not paid a sales
         charge will not be counted for this purpose. In totaling your holdings, you may count shares held in
         your individual accounts (including IRAs and 403(b) plans), your joint accounts with your spouse, or
         accounts you or your spouse hold as trustees or custodians on behalf of your children who are minors. A
         fiduciary can count all shares purchased for a trust, estate or other fiduciary account that has
         multiple accounts (including employee benefit plans for the same employer). If you are buying shares
         directly from the Fund, you must inform the Distributor of your eligibility and holdings at the time of
         your purchase in order to qualify for the Right of Accumulation. If you are buying shares through your
         financial intermediary you must notify your intermediary of your eligibility for the Right of
         Accumulation at the time of your purchase.

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


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


         If you do not complete the Letter of Intent, the front-end sales charge you paid on your purchases will
         be recalculated to reflect the actual value of shares you purchased. A certain portion of your shares
         will be held in escrow by the Fund's Transfer Agent for this purpose. Please refer to "How to Buy Shares
         - Letters of Intent" in the Fund's Statement of Additional Information for more complete information.
Other Special Sales Charge Arrangements and Waivers. The Fund and the Distributor offer other opportunities to
         purchase shares without front-end or contingent deferred sales charges under the programs described
         below. The Fund reserves the right to amend or discontinue these programs at any time without prior
         notice.

o        Dividend Reinvestment. Dividends and/or capital gains distributions received by a shareholder from the
         Fund may be reinvested in shares of the Fund or any of the other Oppenheimer funds into which shares of
         the Fund may be exchanged without a sales charge, at the net asset value per share in effect on the
         payable date. You must notify the Transfer Agent in writing to elect this option and must have an
         existing account in the fund selected for reinvestment.
o        Exchanges of Shares. Shares of the Fund may be exchanged for shares of certain other Oppenheimer funds
         at net asset value per share at the time of exchange, without sales charge, and shares of the Fund can
         be purchased by exchange of shares of certain other Oppenheimer funds on the same basis. Please refer to
         "How to Exchange Shares" in this prospectus and in the Statement of Additional Information for more
         details, including a discussion of circumstances in which sales charges may apply on exchanges.

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

o        Other Special Reductions and Waivers. The Fund and the Distributor offer additional arrangements to
         reduce or eliminate front-end sales charges or to waive contingent deferred sales charges for certain
         types of transactions and for certain categories of investors (primarily retirement plans that purchase
         shares in special programs through the Distributor). These are described in greater detail in Appendix C
         to the Statement of Additional Information, which. The Fund's Statement of Additional Information may be
         ordered by calling 1.800.225.5677 or may be accessed through the OppenheimerFunds website, at
         www.oppenheimerfunds.com (under the heading "I Want To," follow the hyperlink "Access Fund Documents,"
         under the heading "I Want To," and click on the icon in the column "SAI" next to the Fund's name). A
         description of these waivers and special sales charge arrangements is also available for viewing on the
         OppenheimerFunds website (follow the hyperlink "Sales Charge Waivers," under the heading "Fund
         Information," at www.oppenheimerfunds.com)," click on the hyperlink "Sales Charge Waivers"). To receive
         a waiver or special sales charge rate under these programs, the purchaser must notify the Distributor
         (or other financial intermediary through which shares are being purchased) at the time of purchase, or
         must notify the Transfer Agent at the time of redeeming shares for waivers that apply to contingent
         deferred sales charges.

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


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

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

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

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

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

HOW CAN YOU BUY CLASS 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 plan provides for the Fund to pay an asset-based sales charge to the Distributor at an
         annual rate of up to 0.25% of average annual net assets of Class A shares the Fund, however, the Board
         of Trustees has set that rate at zero. 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 periodically for providing personal service
         and maintenance of accounts of their customers that hold Class A shares.


         With respect to Class A shares subject to a Class A contingent deferred sales charge purchased by
         grandfathered retirement accounts, the Distributor pays the 0.25% service fee to dealers in advance for
         the first year after the shares are sold by the dealer. The Distributor retains the first year's service
         fee paid by the Fund. After the shares have been held by grandfathered retirement accounts for a year,
         the Distributor pays the service fee to dealers periodically.
Distribution and Service Plans for Class B, Class C and Class N Shares. The 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 periodically.

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

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

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


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

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

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


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

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

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

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


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


Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account with an account at a U.S. bank or
other financial institution. It must be an Automated Clearing House (ACH) member. AccountLink lets you:
      o  transmit funds electronically to purchase shares by telephone (through a service representative or by
         PhoneLink) or automatically under Asset Builder Plans, or
      o  have the Transfer Agent send redemption proceeds or transmit dividends and distributions directly to
         your bank account. Please call the Transfer Agent for more information.

         You may purchase shares by telephone only after your account has been established. To purchase shares in
amounts up to $250,000 through a telephone representative, call the Distributor at 1.800.225.5677. The purchase
payment will be debited from your bank account.

         AccountLink privileges should be requested on your Application or your dealer's settlement instructions
if you buy your shares through a dealer. After your account is established, you can request AccountLink
privileges by sending signature-guaranteed instructions and proper documentation to the Transfer Agent.
AccountLink privileges will apply to each shareholder listed in the registration on your account as well as to
your dealer representative of record unless and until the Transfer Agent receives written instructions
terminating or changing those privileges. After you establish AccountLink for your account, any change you make
to the bank account information must be made by signature-guaranteed instructions to the Transfer Agent signed by
all shareholders who own the account.

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that enables shareholders to perform a
number of account transactions automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification Number (PIN), by calling the
PhoneLink number, 1.800.225.5677.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by phone, by calling 1.800.225.5677. You
         must have established AccountLink privileges to link your bank account with the Fund to pay for these
         purchases.
Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described below, you can exchange shares
         automatically by phone from your Fund account to another OppenheimerFunds account you have already
         established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling the PhoneLink number and the Fund
         will send the proceeds directly to your AccountLink bank account. Please refer to "How to Sell Shares,"
         below for details.


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


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

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

RETIREMENT PLANS. You may buy shares of the Fund for your retirement plan account. If you participate in a plan
sponsored by your employer, the plan trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans that individuals and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs, SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for employees of eligible tax-exempt organizations, such
         as schools, hospitals and charitable organizations.
401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for businesses and self-employed individuals.

         Please call the Distributor for OppenheimerFunds retirement plan documents, which include applications
and important plan information.

How to Sell Shares


You can sell (redeem) some or all of your shares on any regular business day. Your shares will be sold at the
next net asset value calculated after your order is received by the Distributor or your authorized financial
intermediary, in proper form (which means that it must comply with the procedures described below) and is
accepted by the Transfer Agent. The Fund lets you sell your shares by writing a letter, by wire, or by telephone.
You can also set up Automatic Withdrawal Plans to redeem shares on a regular basis. If you have questions about
any of these procedures, and especially if you are redeeming shares in a special situation, such as due to the
death of the owner or from a retirement plan account, please call the Transfer Agent first, at 1.800.225.5677,
for assistance.

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 also 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 certain financial intermediaries, such as a broker-dealer or a retirement
         plan fiduciary if those institutions have not implemented the system changes necessary to be
         capable of processing the redemption fee. However, account holders whose investments in the
         Fund are held in omnibus accounts through certain other financial intermediates may be subject
         to the redemption fee on terms that are generally in accordance with the redemption fee terms
         in this prospectus but that may differ in certain details. For certain retirement plans treated
         as omnibus accounts by the Fund's Transfer Agent, the redemption fee may be charged on
         participant initiated exchanges or redemptions. Shares held in retirement plans that are not in
         omnibus accounts, such as Oppenheimer-sponsored retirement plans, IRAs, and 403(b)(7) plans are
         also subject to the redemption fee. You should consult with your financial intermediary or
         retirement plan provider for more details on this 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.
Receiving Redemption Proceeds by Wire. While the Fund normally sends your money by check, you can arrange to have
         the proceeds of shares you sell sent by Federal Funds wire to a bank account you designate. It must be a
         commercial bank that is a member of the Federal Reserve wire system. The minimum redemption you can have
         sent by wire is $2,500. There is a $10 fee for each request. To find out how to set up this feature on
         your account or to arrange a wire, call the Transfer Agent at 1.800.225.5677.

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

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


HOW DO YOU SELL SHARES BY TELEPHONE? You and your dealer representative of record may also sell your shares by
telephone. To receive the redemption price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of the NYSE that day, which is normally 4:00 p.m. Eastern time, but
may be earlier on some days. You may not redeem shares held in an OppenheimerFunds-sponsored qualified retirement
plan account or under a share certificate by telephone.

     o   To redeem shares through a service representative or automatically on PhoneLink, call 1.800.225.5677.

         Whichever method you use, you may have a check sent to the address on the account statement, or, if you
have linked your Fund account to your bank account on AccountLink, you may have the proceeds sent to that bank
account.

Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by telephone in any seven-day period. The
         check must be payable to all owners of record of the shares and must be sent to the address on the
         account statement. This service is not available within 30 days of changing the address on an account.
Telephone Redemptions Through AccountLink or by Wire. There are no dollar limits on telephone redemption proceeds
         sent to a bank account designated when you establish AccountLink. Normally the ACH transfer to your bank
         is initiated on the business day after the redemption. You do not receive dividends on the proceeds of
         the shares you redeemed while they are waiting to be transferred.

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


CAN YOU SELL SHARES THROUGH YOUR DEALER? The Distributor has made arrangements to repurchase Fund shares from
dealers and brokers on behalf of their customers. Brokers or dealers may charge a processing fee for that
service. If your shares are held in the name of your dealer, you must redeem them through your dealer.


HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase shares subject to a Class A, 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 carefully.

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

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

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

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

HOW DO YOU SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing, by telephone or internet, or by
establishing an Automatic Exchange Plan.
Written Exchange Requests. Send a request letter, signed by all owners of the account, to the Transfer Agent at
         the address on the back cover. Exchanges of shares for which share certificates have been issued cannot
         be processed unless the Transfer Agent receives the certificates with the request letter.
Telephone and Internet Exchange Requests. Telephone exchange requests may be made either by calling a service
         representative or by using PhoneLink by calling 1.800.225.5677. You may submit internet exchange
         requests on the OppenheimerFunds internet website, at www.oppenheimerfunds.com. You must have obtained a
         user I.D. and password to make transactions on that website. Telephone and/or internet exchanges may be
         made only between accounts that are registered with the same name(s) and address. Shares for which share
         certificates have been issued may not be exchanged by telephone or the internet.
Automatic Exchange Plan. Shareholders can authorize the Transfer Agent to exchange a pre-determined amount of
         shares automatically on a monthly, quarterly, semi-annual or annual basis.

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

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

         Therefore, the Manager and the Fund's Board of Trustees have adopted the following policies and
         procedures to detect and prevent frequent and/or excessive exchanges, and/or purchase and redemption
         activity, while balancing the needs of investors who seek liquidity from their investment and the
         ability to exchange shares as investment needs change. There is no guarantee that the policies and
         procedures described below will be sufficient to identify and deter excessive short-term trading.
o        Timing of Exchanges. Exchanged shares are normally redeemed from one fund and the proceeds are
              reinvested in the fund selected for exchange on the same regular business day on which the Transfer
              Agent or its agent (such as a financial intermediary holding the investor's shares in an "omnibus"
              or "street name" account) receives an exchange request that conforms to these policies. The request
              must be received by the close of the NYSE that day, which is normally 4:00 p.m. Eastern time, but
              may be earlier on some days, in order to receive that day's net asset value on the exchanged
              shares. Exchange requests received after the close of the NYSE will receive the next net asset
              value calculated after the request is received. However, the Transfer Agent may delay transmitting
              the proceeds from an exchange for up to five business days if it determines, in its discretion,
              that an earlier transmittal of the redemption proceeds to the receiving fund would be detrimental
              to either the fund from which the exchange is being made or the fund into which the exchange is
              being made. The proceeds will be invested in the fund into which the exchange is being made at the
              next net asset value calculated after the proceeds are received. In the event that such a delay in
              the reinvestment of proceeds occurs, the Transfer Agent will notify you or your financial
              representative.


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

o        Exchanges of Client Accounts by Financial Advisers. The Fund and the Transfer Agent permit dealers and
         financial intermediaries to submit exchange requests on behalf of their customers (unless 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. The Fund assesses a 2% fee on the proceeds of Fund shares that are redeemed or
              exchanged within 30 days after their purchase in certain circumstances. Further details are
              provided under "How to Sell Shares."


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

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

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

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

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

Additional Policies and Procedures. The Fund's Board has adopted the following additional policies and procedures
to detect and prevent frequent and/or excessive exchanges and purchase and redemption activity:

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


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


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

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

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

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling and exchanging shares is contained
in the Statement of Additional Information.
A $12 annual "Minimum Balance Fee" is assessed on each Fund account with a value of less than $500. The fee is
         automatically deducted from each applicable Fund account annually in September. See the Statement of
         Additional Information to learn how you can avoid this fee and for circumstances under which this fee
         will not be assessed.
The offering of shares may be suspended during any period in which the determination of net asset value is
         suspended, and the offering may be suspended by the Board of Trustees at any time the Board believes it
         is in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may be modified, suspended or terminated
         by the Fund at any time. The Fund will provide you notice whenever it is required to do so by applicable
         law. If an account has more than one owner, the Fund and the Transfer Agent may rely on the instructions
         of any one owner. Telephone privileges apply to each owner of the account and the dealer representative
         of record for the account unless the Transfer Agent receives cancellation instructions from an owner of
         the account.
The Transfer Agent will record any telephone calls to verify data concerning transactions and has adopted other
         procedures to confirm that telephone instructions are genuine, by requiring callers to provide tax
         identification numbers and other account data or by using PINs, and by confirming such transactions in
         writing. The Transfer Agent and the Fund will not be liable for losses or expenses arising out of
         telephone instructions reasonably believed to be genuine.

Redemption or transfer requests will not be honored until the Transfer Agent receives all required documents in
         proper form. From time to time, the Transfer Agent in its discretion may waive certain of the
         requirements for redemptions stated in this prospectus.

Dealers that perform account transactions for their clients by participating in NETWORKING through the National
         Securities Clearing Corporation are responsible for obtaining their clients' permission to perform those
         transactions, and are responsible to their clients who are shareholders of the Fund if the dealer
         performs any transaction erroneously or improperly.
The redemption price for shares will vary from day to day because the value of the securities in the Fund's
         portfolio fluctuates. The redemption price, which is the net asset value per share, will normally differ
         for each class of shares. The redemption value of your shares may be more or less than their original
         cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by check, or through AccountLink or by
         Federal Funds wire (as elected by the shareholder) within seven days after the Transfer Agent receives
         redemption instructions in proper form. However, under unusual circumstances determined by the
         Securities and Exchange Commission, payment may be delayed or suspended. For accounts registered in the
         name of a broker-dealer, payment will normally be forwarded within three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as described under "How to Sell Shares"
         for recently purchased shares, but only until the purchase payment has cleared. That delay may be as
         much as 10 days from the date the shares were purchased. That delay may be avoided if you purchase
         shares by Federal Funds wire or certified check.
Involuntary redemptions of small accounts may be made by the Fund if the account value has fallen below $500 for
         reasons other than the fact that the market value of shares has dropped. In some cases, involuntary
         redemptions may be made to repay the Distributor for losses from the cancellation of share purchase
         orders.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack of liquidity in the Fund's portfolio
         to meet redemptions). This means that the redemption proceeds will be paid with liquid securities from
         the Fund's portfolio. If the Fund redeems your shares in kind, you may bear transaction costs and will
         bear market risks until such time as such securities are converted into cash.
Federal regulations may require the Fund to obtain your name, your date of birth (for a natural person), your
         residential street address or principal place of business and your Social Security Number, Employer
         Identification Number or other government issued identification when you open an account. Additional
         information may be required in certain circumstances or to open corporate accounts. The Fund or the
         Transfer Agent may use this information to attempt to verify your identity. The Fund may not be able to
         establish an account if the necessary information is not received. The Fund may also place limits on
         account transactions while it is in the process of attempting to verify your identity. Additionally, if
         the Fund is unable to verify your identity after your account is established, the Fund may be required
         to redeem your shares and close your account.
"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 pay them annually. Dividends and distributions paid to Class A and Class Y shares will
generally be higher than dividends for Class B, Class C and Class N shares, which normally have higher expenses
than Class A and Class Y shares. The Fund has no fixed dividend rate and cannot guarantee that it will pay any
dividends or distributions.

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

WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your account, specify on your application how
you want to receive your dividends and distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all dividends and capital gains distributions
         in additional shares of the Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some distributions (dividends, short-term capital
         gains or long-term capital gains distributions) in the Fund while receiving the other types of
         distributions by check or having them sent to your bank account through AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all dividends and capital gains
         distributions or have them sent to your bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can reinvest all distributions in the same
         class of shares of another OppenheimerFunds account you have established.

TAXES. If your shares are not held in a tax-deferred retirement account, you should be aware of the following tax
implications of investing in the Fund. Distributions are subject to federal income tax and may be subject to
state or local taxes. Dividends paid from short-term capital gains and net investment income are taxable as
ordinary income. Long-term capital gains are taxable as long-term capital gains when distributed to shareholders.
It does not matter how long you have held your shares. Whether you reinvest your distributions in additional
shares or take them in cash, the tax treatment is the same.

         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 to qualify each year as a "regulated investment company" under the Internal Revenue
Code, but reserves the right not to qualify. It qualified during its last fiscal year. The Fund, as a regulated
investment company, will not be subject to federal income taxes on any of its income, provided that it satisfies
certain income, diversification and distribution requirements.
Avoid "Buying a Distribution." If you buy shares on or just before the 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,                     2006            2005            2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     33.08     $     30.08     $     26.11     $     19.18     $     19.53
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                                .05 1          (.04) 1         (.17) 1         (.04)           (.19)
Net realized and unrealized gain (loss)                    5.69            6.22            5.42            6.97            (.09)
                                                    -----------------------------------------------------------------------------
Total from investment operations                           5.74            6.18            5.25            6.93            (.28)
---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.87)          (3.18)          (1.28)             --            (.07)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     36.95     $     33.08     $     30.08     $     26.11     $     19.18
                                                    =============================================================================

---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        18.04%          21.87%          20.90%          36.13%          (1.45)%
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $ 2,343,715     $ 1,298,204     $   543,999     $   330,215     $   222,029
---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $ 1,884,099     $   893,501     $   436,617     $   245,319     $   231,657
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                               0.13%          (0.11)%         (0.61)%         (0.12)%         (0.69)%
Total expenses                                             1.14% 4         1.23%           1.35%           1.59%           1.68%
Expenses after payments and waivers and
reduction to custodian expenses                            1.14%           1.23%           1.35%           1.56%           1.66%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     136%            121%            163%            163%            151%

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

   Year Ended October 31, 2006           1.14%


CLASS B         YEAR ENDED OCTOBER 31,                     2006            2005            2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     30.29     $     28.01     $     24.59     $     18.20     $     18.65
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.22) 1         (.29) 1         (.37) 1         (.17)           (.18)
Net realized and unrealized gain (loss)                    5.18            5.75            5.07            6.56            (.20)
                                                    -----------------------------------------------------------------------------
Total from investment operations                           4.96            5.46            4.70            6.39            (.38)
---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.87)          (3.18)          (1.28)             --            (.07)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     33.38     $     30.29     $     28.01     $     24.59     $     18.20
                                                    =============================================================================

---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        17.08%          20.82%          19.91%          35.11%          (2.06)%
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   327,908     $   272,643     $   198,971     $   171,896     $   129,885
---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   307,618     $   243,754     $   190,251     $   137,734     $   134,304
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss                                       (0.71)%         (0.98)%         (1.43)%         (0.85)%         (1.34)%
Total expenses                                             1.97% 4         2.09%           2.18%           2.42%           2.34%
Expenses after payments and waivers and
reduction to custodian expenses                            1.97%           2.09%           2.18%           2.29%           2.32%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     136%            121%            163%            163%            151%

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

   Year Ended October 31, 2006           1.97%



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

CLASS C         YEAR ENDED OCTOBER 31,                     2006            2005            2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     30.25     $     27.97     $     24.55     $     18.17     $     18.62
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.20) 1         (.27) 1         (.37) 1         (.13)           (.10)
Net realized and unrealized gain (loss)                    5.18            5.73            5.07            6.51            (.28)
                                                    -----------------------------------------------------------------------------
Total from investment operations                           4.98            5.46            4.70            6.38            (.38)
---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.87)          (3.18)          (1.28)             --            (.07)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     33.36     $     30.25     $     27.97     $     24.55     $     18.17
                                                    =============================================================================

---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        17.17%          20.85%          19.95%          35.11%          (2.06)%
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   542,273     $   292,689     $   122,329     $    71,779     $    46,360
---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   429,214     $   199,650     $    96,555     $    53,649     $    45,455
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss                                       (0.64)%         (0.91)%         (1.42)%         (0.85)%         (1.33)%
Total expenses                                             1.92% 4         2.03%           2.16%           2.40%           2.33%
Expenses after payments and waivers and
reduction to custodian expenses                            1.92%           2.03%           2.16%           2.30%           2.31%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     136%            121%            163%            163%            151%

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

   Year Ended October 31, 2006           1.92%



CLASS N         YEAR ENDED OCTOBER 31,                     2006            2005            2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     32.58     $     29.77     $     25.98     $     19.13     $     19.51
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.08) 1         (.14) 1         (.26) 1         (.11)           (.27)
Net realized and unrealized gain (loss)                    5.61            6.13            5.33            6.96            (.04)
                                                    -----------------------------------------------------------------------------
Total from investment operations                           5.53            5.99            5.07            6.85            (.31)
---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.87)          (3.18)          (1.28)             --            (.07)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     36.24     $     32.58     $     29.77     $     25.98     $     19.13
                                                    =============================================================================

---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        17.65%          21.42%          20.29%          35.81%          (1.61)%
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   229,340     $   102,971     $    36,322     $    11,216     $     4,558
---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   171,305     $    68,779     $    21,951     $     6,722     $     2,882
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss                                       (0.22)%         (0.44)%         (0.93)%         (0.36)%         (0.78)%
Total expenses                                             1.50% 4         1.57%           1.70%           2.01%           1.82%
Expenses after payments and waivers and
reduction to custodian expenses                            1.50%           1.57%           1.66%           1.80%           1.80%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     136%            121%            163%            163%            151%

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

   Year Ended October 31, 2006           1.50%



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

CLASS Y         YEAR ENDED OCTOBER 31,                               2006                2005 1
--------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------
Net asset value, beginning of period                        $       33.08          $      33.38
--------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2                                        .26                    -- 3
Net realized and unrealized gain (loss)                              5.67                  (.30)
                                                            --------------------------------------
Total from investment operations                                     5.93                  (.30)
--------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                                (1.87)                   --
--------------------------------------------------------------------------------------------------
Net asset value, end of period                              $       37.14          $      33.08
                                                            ======================================

--------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4                                  18.64%                (0.90)%
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                    $      35,638          $          1
--------------------------------------------------------------------------------------------------
Average net assets (in thousands)                           $      12,164          $          1
--------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss)                                         0.76%                (0.32)%
Total expenses                                                       0.68% 6,7,8           0.90% 6
--------------------------------------------------------------------------------------------------
Portfolio turnover rate                                               136%                  121%

1. For the period from October 24, 2005 (inception of offering) to October 31,
2005.

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 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.

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

6. Reduction to custodian expenses less than 0.01%.

7. Voluntary waiver of management fees less than 0.01%.

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

   Year Ended October 31, 2006           0.68%

INFORMATION AND SERVICES


For More Information on Oppenheimer Small- & Mid- 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 request these documents by e-mail or through the
                                            OppenheimerFunds website. You may also read or download certain
                                            documents on the OppenheimerFunds website at:
                                            www.oppenheimerfunds.com
------------------------------------------- ---------------------------------------------------------------------

Information about the Fund including the Statement of Additional Information can be reviewed and copied at the
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 SEC File No.: 811-5225                    The Fund's shares are distributed by:
PR0251.001.0207                                      [logo] OppenheimerFunds Distributor, Inc.
Printed on recycled paper







42

                                             APPENDIX TO PROSPECTUS OF
                                     OPPENHEIMER SMALL- & MID- CAP VALUE FUND

         Graphic  material  included in the  Prospectus  of  Oppenheimer  Small- & Mid- Cap Value Fund (the "Fund")
under the heading: "Annual Total Returns (Class A) (as of 12/31 each year)":

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

----------------------------------------------------------- ---------------------------------------------------------
                        Year Ended                                            Annual Total Return
----------------------------------------------------------- ---------------------------------------------------------
----------------------------------------------------------- ---------------------------------------------------------
                         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%
----------------------------------------------------------- ---------------------------------------------------------
----------------------------------------------------------- ---------------------------------------------------------
                         12/31/05                                                    11.73%
----------------------------------------------------------- ---------------------------------------------------------
----------------------------------------------------------- ---------------------------------------------------------

                         12/31/06                                                    17.98%

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

Oppenheimer Small- & Mid- Cap Value Fund
(A series of Oppenheimer Quest for Value Funds)

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


Statement of Additional Information dated February 26, 2007

This Statement of Additional Information ("SAI") is not a Prospectus. This document contains additional
information about the Fund and supplements information in the Prospectus dated February 26, 2007. It should be
read together with the Prospectus. You can obtain the Prospectus by writing to the Fund's Transfer Agent,
OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217, or by calling the Transfer Agent at the
toll-free number shown above, or by downloading it from the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.


Contents                                                                                         Page

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

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

Financial Information About the Fund

Report of Independent Registered Public Accounting Firm...................................................
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






                                                        46

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

The Fund's Investment Policies. The composition of the Fund's portfolio and the techniques and strategies that
the Manager may use in selecting portfolio securities will vary over time. The Fund is not required to use 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- and
mid- 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 up to $13 billion that includes both small cap-stocks (stocks of issuers that have a market
capitalization under $3 billion) and mid cap stocks (stocks of issuers having a capitalization between $3 billion
and $13 billion). The Fund has no fixed ratio for small-cap and mid-cap stocks in its portfolio, and while its
focus is on stocks of U.S. companies, it may invest in stocks of small and mid-cap foreign issuers as well. The
Fund can purchase securities of issuers having a larger market capitalization. The Fund is not required to sell
securities of an issuer it holds if the issuer's capitalization exceeds $13 billion.

         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).

         At times, in the Manager's view, the market may favor or disfavor securities of issuers of a particular
capitalization range. Therefore, the Fund may change the proportion of its equity investments in securities of
different capitalization ranges, based upon the Manager's judgment of where the best market opportunities are to
seek the Fund's objective.

         Securities of newer small- and mid-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- and mid- capitalization issuers may be subject to
greater price volatility in general than securities of large cap companies. Therefore, to the degree that the
Fund has investments in smaller and mid size 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;
o        unfavorable differences between the U.S. economy and foreign economies;
o        foreign withholding taxes; and
o        foreign exchange contracts.

         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.


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

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

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

|X|      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. These are more speculative securities and can increase the Fund's overall portfolio risks.

|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. The
market for them may be very limited, and they may be difficult for the Fund to dispose of promptly at an
acceptable price. 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 applicable securities law, the Fund may have to cause those securities to be registered. The
expenses of registering restricted securities may be negotiated by the Fund with the issuer at the time the Fund
buys the securities. When the Fund must arrange registration because the Fund wishes to sell the security, a
considerable period may elapse between the time the decision is made to sell the security and the time the
security is registered so that the Fund could sell it. The Fund would bear the risks of any downward price
fluctuation during that period.

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

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

|X|      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 policies approved
by the Fund's Board. It may do so to try to provide income or to raise cash for liquidity purposes. These loans
are limited to not more than 25% of the value of the Fund's net assets.

         The Fund has entered into a Securities Lending Agreement (the "Securities Lending Agreement") with
JPMorgan Chase Bank, N.A. ("JPMorgan Chase"). Under the Securities Lending Agreement and applicable regulatory
requirements (which are subject to change), the collateral for such loans must, on each business day, be at least
equal to the value of the loaned securities and must consist of cash, bank letters of credit or securities of the
U.S. Government (or its agencies or instrumentalities), or other cash equivalents in which the Fund is permitted
to invest. To be acceptable as collateral, a bank letter of credit must obligate the bank to pay to JPMorgan
Chase, as agent, amounts demanded by the Fund if the demand meets the terms of the letter. Both the issuing bank
and the terms of the letter of credit must be satisfactory to JPMorgan Chase and the Fund. The terms of the loans
must also meet applicable tests under the Internal Revenue Code and permit the Fund to reacquire loaned
securities on five business days' notice or in time to vote on any material matters. The Securities Lending
Agreement may be terminated by either JPMorgan Chase or the Fund on 30 days' written notice.

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

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


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

|X|      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"), (3) an 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 Puts and Calls. 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.

|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") has
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 adviser (as they
may be amended from time to time), and as otherwise set forth in the Fund's Prospectus or this SAI.

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


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

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

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

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

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

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

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

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

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

|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.

o        With respect to the Fund's non-fundamental policy to invest, under normal circumstances, at least 80% of
its net assets (plus the amount of any borrowings used for investment purposes) in equity securities of small-
and mid-cap domestic and foreign issuers, the Fund will provide shareholders at least 60 days' prior notice of
any change in such policy as required by the Investment Company Act.

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

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

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


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

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

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

         Except under special limited circumstances discussed below, month-end lists of the Fund's complete
portfolio holdings may be disclosed no sooner than 30-days after the relevant month-end, subject to the
procedures below. If the Fund's complete portfolio holdings have not been disclosed publicly, they may be
disclosed pursuant to special requests for legitimate business reasons, provided that:
o        The third-party recipient must first submit a request for release of Fund portfolio holdings, explaining
                  the business reason for the request;
o        Senior officers (a Senior Vice President or above) in the Manager's Portfolio and Legal departments must
                  approve the completed request for release of Fund portfolio holdings; and
o        The third-party recipient must sign the Manager's portfolio holdings non-disclosure agreement before
                  receiving the data, agreeing to keep information that is not publicly available regarding the
                  Fund's holdings confidential and agreeing not to trade directly or indirectly based on the
                  information.

         The Fund's complete portfolio holdings positions may be released to the following categories of entities
or individuals on an ongoing basis, provided that such entity or individual either (1) has signed an agreement to
keep such information confidential and not trade on the basis of such information or (2) is subject to fiduciary
obligations, as a member of the Fund's Board, or as an employee, officer and/or director of the Manager,
Distributor, or Transfer Agent, or their respective legal counsel, not to disclose such information except in
conformity with these policies and procedures and not to trade for his/her personal account on the basis of such
information:
o        Employees of the Fund's Manager, Distributor and Transfer Agent who need to have access to such
                  information (as determined by senior officers of such entity),
o        The Fund's independent registered public accounting firm,
o        Members of the Fund's Board and the Board's legal counsel,
o        The Fund's custodian bank,
o        A proxy voting service designated by the Fund and its Board,
o        Rating/ranking organizations (such as Lipper and Morningstar),
o        Portfolio pricing services retained by the Manager to provide portfolio security prices, and
o        Dealers, to obtain bids (price quotations if securities are not priced by the Fund's regular pricing
                  services).

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

           Portfolio holdings information (which may include information on individual securities positions or
multiple securities) may be provided to the entities listed below (1) by portfolio traders employed by the
Manager in connection with portfolio trading, and (2) by the members of the Manager's Security Valuation Group
and Accounting Departments in connection with portfolio pricing or other portfolio evaluation purposes:
o        Brokers and dealers in connection with portfolio transactions (purchases and sales)
o        Brokers and dealers to obtain bids or bid and asked prices (if securities held by the Fund are not
                  priced by the fund's regular pricing services)
o        Dealers to obtain price quotations where the fund is not identified as the owner.

         Portfolio holdings information (which may include information on the Fund's entire portfolio or
individual securities therein) may be provided by senior officers of the Manager or attorneys on the legal staff
of the Manager, Distributor, or Transfer Agent, in the following circumstances:
o        Response to legal process in litigation matters, such as responses to subpoenas or in class action
              matters where the Fund may be part of the plaintiff class (and seeks recovery for losses on a
              security) or a defendant,
o        Response to regulatory requests for information (the SEC, NASD, state securities regulators, and/or
              foreign securities authorities, including without limitation requests for information in
              inspections or for position reporting purposes),
o        To potential sub-advisers of portfolios (pursuant to confidentiality agreements),

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

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

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

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


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


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

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

How the Fund is Managed

Organization and History. The Fund, a series of Oppenheimer Quest for Value Funds (referred to as the "Trust"),
is an open-end, diversified management investment company with an unlimited number of authorized shares of
beneficial interest. The Fund was organized as a Massachusetts business trust in April 1987. Prior to June 2005,
the Fund's name was "Oppenheimer Small Cap Value Fund." Prior to March 2001, the Fund's name was "Oppenheimer
Quest Small Cap Fund." Prior to May 2000, the Fund's name was "Oppenheimer Quest Small Cap Value Fund."

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

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

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

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

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

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

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

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


         The Board of Trustees has an Audit Committee comprised solely of Trustees who are not "interested
persons" under the Investment Company Act (the "Independent Trustees"). The members of the Audit Committee are
David K. Downes (Chairman), Thomas W. Courtney, Robert G. Galli, Lacy B. Herrmann and Brian Wruble. The Audit
Committee held 7 meetings during the Fund's fiscal year ended October 31, 2006. The Audit Committee furnishes the
Board with recommendations regarding the selection of the Fund's independent registered public accounting firm
(also referred to as the "independent Auditors"). Other main functions of the Audit Committee outlined in the
Audit Committee Charter, include, but are not limited to: (i) reviewing the scope and results of financial
statement audits and the audit fees charged; (ii) reviewing reports from the Fund's independent registered public
accounting firm regarding the Fund's internal accounting procedures and controls; (iii) reviewing reports from
the Manager's Internal Audit Department; (iv) maintaining a separate line of communication between the Fund's
independent Auditors and the Independent Trustees; (v) reviewing the independence of the Fund's independent
Auditors; and (vi) pre-approving the provision of any audit or non-audit services by the Fund's independent
Auditors, including tax services, that are not prohibited by the Sarbanes-Oxley Act, to the Fund, the Manager and
certain affiliates of the Manager.

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

         To date, the Audit Committee has been able to identify from its own resources an ample number of
qualified candidates. Nonetheless, shareholders may submit names of individuals, accompanied by complete and
properly supported resumes, for the Audit Committee's consideration by mailing such information to the Audit
Committee. Shareholders wishing to submit a nominee for election to the Board may do so by mailing their
submission to the offices of OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street, 11th Floor,
New York, NY 10281-1008, to the attention of the Board of Trustees of Oppenheimer Small- & Mid- Cap Value Fund,
c/o the Secretary of the Fund. Submissions should, at a minimum, be accompanied by the following: (1) the name,
address, and business, educational, and/or other pertinent background of the person being recommended; (2) a
statement concerning whether the person is an "interested person" as defined in the Investment Company Act; (3)
any other information that the Fund would be required to include in a proxy statement concerning the person if he
or she was nominated; and (4) the name and address of the person submitting the recommendation and, if that
person is a shareholder, the period for which that person held Fund shares. Shareholders should note that a
person who owns securities issued by Massachusetts Mutual Life Insurance Company ("MassMutual") (the parent
company of the Manager) would be deemed an "interested person" under the Investment Company Act. In addition,
certain other relationships with MassMutual or its subsidiaries, with registered broker-dealers, or with the
Funds' outside legal counsel may cause a person to be deemed an "interested person."


         Although candidates are expected to provide a mix of attributes, experience, perspective and skills
necessary to effectively advance the interests of shareholders, the Audit Committee has not established specific
qualifications that must be met by a trustee nominee. In evaluating trustee nominees, the Audit Committee
considers, among other things, an individual's background, skills, and experience; whether the individual is an
"interested person" as defined in the Investment Company Act; and whether the individual would be deemed an "audit
committee financial expert" within the meaning of applicable SEC rules. The Audit Committee also considers
whether the individual's background, skills, and experience will complement the background, skills, and
experience of other nominees. The Audit Committee may, upon Board approval, retain an executive search firm or
use the services of legal, financial, or other external counsel to assist in screening potential candidates.

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

Trustees and Officers of the Fund. Except for Mr. Murphy, each of the Trustees is an "Independent Trustee" under
the Investment Company Act. All of the Trustees are also directors or trustees of the following Oppenheimer funds
(referred to as "Board III Funds"):
              Bond Fund Series
              Oppenheimer MidCap Fund
              Oppenheimer Quest Capital Value Fund, Inc.
              Oppenheimer Quest For Value Funds
              Oppenheimer Quest International Value Fund, Inc.
              Oppenheimer Quest Value Fund, Inc.
              Rochester Fund Municipals
              Rochester Portfolio Series


         In addition to being a Board member of each of the Board III Funds, Messrs. Galli and Wruble are also
directors, or managers of 49 other portfolios in the OppenheimerFunds complex.


         Present or former officers, directors, trustees and employees (and their immediate family members) of
the Fund, the Manager and its affiliates, and retirement plans established by them for their employees are
permitted to purchase Class A shares of the Fund and the other Oppenheimer funds at net asset value without sales
charge. The sales charge on Class A shares is waived for that group because of the reduced sales efforts realized
by the Distributor.


         Messrs.  Gillespie, Murphy, Petersen, Szilagyi, Vandehey, Wixted and Zack and Mss. Bloomberg and Ives,
who are officers of the Fund, hold the same offices with one or more of the other Board III Funds. As of February
9, 2007 the Trustees and officers of the Fund, as a group, owned of record or beneficially less than 1% of any
class of shares of the Fund. The foregoing statement does not reflect ownership of shares held of record by an
employee benefit plan for employees of the Manager, other than the shares beneficially owned under that plan by
the officers of the Fund listed above. In addition, none of the Independent Trustees (nor any of their immediate
family members) owns securities of either the Manager or the Distributor of the Board III Funds or of any entity
directly or indirectly controlling, controlled by or under common control with the Manager or the Distributor.


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

--------------------------------------------------------------------------------------------------------------------------------------
                                                        Independent Trustees
--------------------------------------------------------------------------------------------------------------------------------------
---------------------------- ------------------------------------------------------------------ -------------------- -----------------
Name, Position(s) Held       Principal Occupation(s) During the Past 5 Years; Other                Dollar Range of    Aggregate Dollar
                                                                                                                      Range of Shares
                                                                                                                        Beneficially
with the Fund, Length of     Trusteeships/Directorships Held; Number of Portfolios in the        Shares Beneficially      Owned in
Service, Age                 Fund Complex Currently Overseen                                      Owned in the Fund   Supervised Funds
---------------------------- ------------------------------------------------------------------ -------------------- -----------------
---------------------------- ------------------------------------------------------------------ --------------------------------------

                                                                                                       As of December 31, 2006

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

Thomas W. Courtney,          Principal of Courtney Associates, Inc. (venture capital firm)      $0                   $50,000-$100,000
Chairman of the Board of     (since 1982); General Partner of Trivest Venture Fund (private
Trustees since 2001,         venture capital fund); President of Investment Counseling
Trustee since 1987           Federated Investors, Inc. (1973-1982); Trustee of the following
Age: 73                      open-end investment companies: Cash Assets Trust (1984), Premier
                             VIT (formerly PIMCO Advisors VIT), Tax Free Trust of Arizona
                             (since 1984) and four funds for the Hawaiian Tax Free Trust.
                             Oversees 10 portfolios in the OppenheimerFunds complex.

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

David K. Downes,             President, Chief Executive Officer and Board Member of CRAFund     None                 None
Trustee since 2005           Advisors, Inc. (investment management company) (since January
 Age: 67                     2004); President of The Community Reinvestment Act Qualified
                             Investment Fund (investment management company) (since January
                             2004); Independent Chairman of the Board of Trustees of Quaker
                             Investment Trust (registered investment company) (since January
                             2004); Director of Internet Capital Group (information
                             technology company) (since October 2003); Chief Operating
                             Officer and Chief Financial Officer of Lincoln National
                             Investment Companies, Inc. (subsidiary of Lincoln National
                             Corporation, a publicly traded company) and Delaware Investments
                             U.S., Inc. (investment management subsidiary of Lincoln National
                             Corporation) (1995-2003); President, Chief Executive Officer and
                             Trustee of Delaware Investment Family of Funds (1995-2003);
                             President and Board Member of Lincoln National Convertible
                             Securities Funds, Inc. and the Lincoln National Income Funds,
                             TDC (1995-2003); Chairman and Chief Executive Officer of
                             Retirement Financial Services, Inc. (registered transfer agent
                             and investment adviser and subsidiary of Delaware Investments
                             U.S., Inc.) (1995-2003); President and Chief Executive Officer
                             of Delaware Service Company, Inc. (1995-2003); Chief
                             Administrative Officer, Chief Financial Officer, Vice Chairman
                             and Director of Equitable Capital Management Corporation
                             (investment subsidiary of Equitable Life Assurance Society)
                             (1985-1992); Corporate Controller of Merrill Lynch & Company
                             (financial services holding company) (1977-1985); held the
                             following positions at the Colonial Penn Group, Inc. (insurance
                             company): Corporate Budget Director (1974-1977), Assistant
                             Treasurer (1972-1974) and Director of Corporate Taxes
                             (1969-1972); held the following positions at Price Waterhouse &
                             Company (financial services firm): Tax Manager (1967-1969), Tax
                             Senior (1965-1967) and Staff Accountant (1963-1965); United
                             States Marine Corps (1957-1959). Oversees 10 portfolios in the
                             OppenheimerFunds complex.

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

Robert G. Galli,             A director or trustee of other Oppenheimer funds. Oversees 59             None          Over $100,000
Trustee since 1998           portfolios in the OppenheimerFunds complex.*
Age: 73


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

Lacy B. Herrmann,            Founder and Chairman Emeritus of Aquila Group of Funds (open-end   $0                   $10,001-$50,000
Trustee since 1987           investment company) (since December 2004); Chairman of Aquila
Age: 77                      Management Corporation and Aquila Investment Management LLC
                             (since August 1984); Chief Executive Officer and President of
                             Aquila Management Corporation (August 1984-December 1994); Vice
                             President, Director and Secretary of Aquila Distributors, Inc.
                             (distributor of Aquila Management Corporation); Treasurer of
                             Aquila Distributors, Inc.; President and Chairman of the Board
                             of Trustees of Capital Cash Management Trust ("CCMT"); President
                             and Director of STCM Management Company, Inc. (sponsor and
                             adviser to CCMT); Chairman, President and Director of InCap
                             Management Corporation; Sub-Advisor and Administrator of Prime
                             Cash Fund & Short Term Asset Reserves; Director of OCC Cash
                             Reserves, Inc. (open-end investment company) (June 2003-December
                             2004); Trustee of Premier VIT (formerly PIMCO Advisors VIT)
                             (investment company) (since 1994); Trustee of OCC Accumulation
                             Trust (open-end investment company) (until December 2004);
                             Trustee Emeritus of Brown University (since June 1983).
                             Oversees10 portfolios in the OppenheimerFunds complex.

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

Brian F. Wruble,             General Partner of Odyssey Partners, L.P. (hedge fund) (since        $50,001-$100,000   Over $100,000
Trustee since 2001           September 1995); Director of Special Value Opportunities Fund,
Age: 63                      LLC (registered investment company) (since September 2004);
                             Member, Zurich Financial Investment Advisory Board (insurance)
                             (affiliate of the Manager's parent company) (since October
                             2004); Board of Governing Trustees of The Jackson Laboratory
                             (non-profit) (since August 1990); Trustee of the Institute for
                             Advanced Study (non-profit educational institute) (since May
                             1992); Special Limited Partner of Odyssey Investment Partners,
                             LLC (private equity investment) (January 1999-September 2004);
                             Trustee of Research Foundation of AIMR (2000-2002) (investment
                             research, non-profit); Governor, Jerome Levy Economics Institute
                             of Bard College (August 1990-September 2001) (economics
                             research); Director of Ray & Berendtson, Inc. (May 2000-April
                             2002) (executive search firm); President and Chief Executive
                             Officer of the Delaware Group of Mutual Funds (1992-1995);
                             Chairman, President and Chief Executive Officer of Equitable
                             Capital Management Corporation (1985-1992); Executive Vice
                             President and Chief Investment Officer at The Equitable Life
                             Assurance Society of the U.S. (1979-1992); Vice President and
                             Co-manager at Smith Barney, Harris Upham and Company
                             (1970-1979); Engineer, Sperry Gyroscope Company (1966-1970);
                             former governor of the Association for Investment Management and
                             Research; former chairman of the Institute of Chartered
                             Financial Analysts; Chartered Financial Analyst. Oversees 59
                             portfolios in the OppenheimerFunds complex.*

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

     * In  addition  to serving as  director  or trustee of all of the Board III
Funds,  Messrs.  Galli  and  Wruble  also  serve  as Board  members  of 49 other
Oppenheimer funds that are not Board III Funds.

     Mr. Murphy is an  "Interested  Trustee"  because he is affiliated  with the
Manager by virtue of his  positions  as an officer and  director of the Manager,
and as a  shareholder  of its parent  company.  The address of Mr. Murphy is Two
World  Financial  Center,  225 Liberty  Street,  11th Floor,  New York, New York
10281-1008.  Mr. Murphy serves as a Trustee for an indefinite term, or until his
resignation,  retirement,  death or removal and as an officer for an  indefinite
term, or until his resignation, retirement, death or removal.


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

                                                                                                     As of December 31, 2006

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

John V. Murphy,             Chairman, Chief Executive Officer and Director (since June        Over $100,000     Over $100,000
Trustee since 2005 and      2001) and President (since September 2000) of the Manager;
President and Principal     President and director or trustee of other Oppenheimer funds;
Executive Officer since     President and Director of Oppenheimer Acquisition Corp. ("OAC")
2001                        (the Manager's parent holding company) and of Oppenheimer
Age: 57                     Partnership Holdings, Inc. (holding company subsidiary of the
                            Manager) (since July 2001); Director of OppenheimerFunds
                            Distributor, Inc. (subsidiary of the Manager) (since November
                            2001); Chairman and Director of Shareholder Services, Inc. and
                            of Shareholder Financial Services, Inc. (transfer agent
                            subsidiaries of the Manager) (since July 2001); President and
                            Director of OppenheimerFunds Legacy Program (charitable trust
                            program established by the Manager) (since July 2001); Director
                            of the following investment advisory subsidiaries of the
                            Manager: OFI Institutional Asset Management, Inc., Centennial
                            Asset Management Corporation, Trinity Investment Management
                            Corporation and Tremont Capital Management, Inc. (since
                            November 2001), HarbourView Asset Management Corporation and
                            OFI Private Investments, Inc. (since July 2001); President
                            (since November 1, 2001) and Director (since July 2001) of
                            Oppenheimer Real Asset Management, Inc.; Executive Vice
                            President of Massachusetts Mutual Life Insurance Company (OAC's
                            parent company) (since February 1997); Director of DLB
                            Acquisition Corporation (holding company parent of Babson
                            Capital Management LLC) (since June 1995); Member of the
                            Investment Company Institute's Board of Governors (since
                            October 3, 2003); Chief Operating Officer of the Manager
                            (September 2000-June 2001); President and Trustee of MML Series
                            Investment Fund and MassMutual Select Funds (open-end
                            investment companies) (November 1999-November 2001); Director
                            of C.M. Life Insurance Company (September 1999-August 2000);
                            President, Chief Executive Officer and Director of MML Bay
                            State Life Insurance Company (September 1999-August 2000);
                            Director of Emerald Isle Bancorp and Hibernia Savings Bank
                            (wholly-owned subsidiary of Emerald Isle Bancorp) (June
                            1989-June 1998). Oversees 96 portfolios in the OppenheimerFunds
                            complex.

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


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


-----------------------------------------------------------------------------------------------------------------------------------
                                                    Other Officers of the Fund
-----------------------------------------------------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------------
Name, Position(s) Held with Fund,   Principal Occupation(s) During Past 5 Years
Length of Service, Age
----------------------------------- -----------------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------------
John Damian,                        Vice President of the Manager since September 2001; Senior Analyst/Director for Citigroup
Vice President and Portfolio        Asset Management (November 1999-September 2001); Senior Research Analyst for Pzena Investment

Manager since 2001                  Management (October 1997-November 1999). An officer of 2 portfolios in the OppenheimerFunds
Age: 38                             complex.

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

Christopher Leavy,                  Director of Equities (since January 2007) and Senior Vice President of the Manager since
Vice President and Portfolio        September 2000; portfolio manager of Morgan Stanley Dean Witter Investment Management
Manager since 2001                  (1997-September 2000). An officer of 7 portfolios in the OppenheimerFunds complex.
Age: 35

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

Mark S. Vandehey,                   Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Vice
Vice President and Chief            President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and
Compliance Officer since 2004       Shareholder Services, Inc. (since June 1983). Former Vice President and Director of Internal
Age: 56                             Audit of the Manager (1997-February 2004). An officer of 96portfolios in the OppenheimerFunds

                                    complex.
----------------------------------- -----------------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------------

Brian W. Wixted,                    Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the
Treasurer and Principal Financial   following: HarbourView Asset Management Corporation, Shareholder Financial Services, Inc.,
& Accounting Officer since 1999     Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer
Age: 47                             Partnership Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March
                                    2000), OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds plc (since May
                                    2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds
                                    Legacy Program (charitable trust program established by the Manager) (since June 2003);
                                    Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the
                                    Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March
                                    1999),Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds
                                    Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust
                                    Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 96 portfolios in
                                    the OppenheimerFunds complex.

----------------------------------- -----------------------------------------------------------------------------------------------
----------------------------------- -----------------------------------------------------------------------------------------------
Brian Petersen,                     Assistant Vice President of the Manager (since August 2002); Manager/Financial Product

Assistant Treasurer since 2004      Accounting of the Manager (November 1998-July 2002). An officer of 96 portfolios in the
Age: 36                             OppenheimerFunds complex.

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

Brian C. Szilagyi,                  Assistant Vice President of the Manager (since July 2004); Director of Financial Reporting
Assistant Treasurer since 2005      and Compliance of First Data Corporation (April 2003-July 2004); Manager of Compliance of
Age: 36                             Berger Financial Group LLC (May 2001-March 2003); Director of Mutual Fund Operations at
                                    American Data Services, Inc. (September 2000-May 2001). An officer of 96 portfolios in the
                                    OppenheimerFunds complex.

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

Robert G. Zack,                     Executive Vice President (since January 2004) and General Counsel (since March 2002) of the
Secretary since 2001                Manager; General Counsel and Director of the Distributor (since December 2001); General
Age: 58                             Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice
                                    President and General Counsel of HarbourView Asset Management Corporation (since December
                                    2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since
                                    September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and
                                    OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc.
                                    (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November
                                    2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services,
                                    Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General
                                    Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November
                                    2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice
                                    President and General Counsel of OFI Institutional Asset Management, Inc. (since November
                                    2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice
                                    President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and
                                    Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the
                                    following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial
                                    Services, Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd.
                                    (September 1997-November 2001). An officer of 96 portfolios in the OppenheimerFunds complex.

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

Kathleen T. Ives,                   Vice President (since June 1998) and Senior Counsel and Assistant Secretary (since October
Assistant Secretary since 2001      2003) of the Manager; Vice President (since 1999) and Assistant Secretary (since October
Age: 41                             2003) of the Distributor; Assistant Secretary of Centennial Asset Management Corporation
                                    (since October 2003); Vice President and Assistant Secretary of Shareholder Services, Inc.
                                    (since 1999); Assistant Secretary of OppenheimerFunds Legacy Program and Shareholder
                                    Financial Services, Inc. (since December 2001); Assistant Counsel of the Manager (August
                                    1994-October 2003). An officer of 96 portfolios in the OppenheimerFunds complex.

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

Lisa I. Bloomberg,                  Vice President and Associate Counsel of the Manager (since May 2004); First Vice President
Assistant Secretary since 2004      (April 2001-April 2004), Associate General Counsel (December 2000-April 2004), Corporate Vice
Age: 38                             President (May 1999-April 2001) and Assistant General Counsel (May 1999-December 2000) of UBS
                                    Financial Services Inc. (formerly, PaineWebber Incorporated). An officer of 96 portfolios in
                                    the OppenheimerFunds complex.

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

Phillip S. Gillespie,               Senior Vice President and Deputy General Counsel of the Manager (since September 2004); Mr.
Assistant Secretary since 2004      Gillespie held the following positions at Merrill Lynch Investment Management: First Vice
Age: 42                             President (2001-September 2004); Director (2000-September 2004) and Vice President
                                    (1998-2000). An officer of 96 portfolios in the OppenheimerFunds complex.

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


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












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

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

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

Thomas W. Courtney                         $11,940             $57,504               $100,284                $196,000(4)

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

Paul Y. Clinton(5)                         $3,486              $29,518               $85,662                 $44,438 (6)

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

David K. Downes((7))                       $9,757              $10,818                $4,391                  $146,668
Audit Committee Chairman

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

Robert G. Galli                            $9,863              $48,999             $107,096 (8)             $264,812 (9)

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

Lacy B. Herrmann                           $9,876              $13,003               $88,150                $167,000 (10)

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

Brian F. Wruble                            $10,119             $27,232             $49,899(11)              $241,260 (12)

Audit Committee Member
------------------------------------ -------------------- ------------------- ----------------------- --------------------------
1.    "Aggregate Compensation From the Fund" includes fees and deferred compensation, if any, for a Trustee.
2.    "Estimated Annual Benefits Upon Retirement" is based on a straight life payment plan election with the
      assumption that a Trustee will retire at the age of 75 and is eligible (after 7 years of service) to
      receive retirement plan benefits as described below under "Retirement Plan for Trustees." Actual benefits
      upon retirement may vary based on retirement age, years of service and benefit payment elections of the
      Trustee.
3.    "Total Compensation From the Fund and Fund Complex" includes fees, deferred compensation (if any) and
      accrued retirement benefits (if any). For purposes of this section only, in accordance with the
      instructions for Form N-1A, "Fund Complex" includes the Oppenheimer funds and one open-end investment
      company, PIMCO Advisors VIT ("PIMCO") (formerly OCC Accumulation Trust) for which the Fund's former
      Sub-Adviser acts as the investment adviser. The Manager does not consider PIMCO to be part of the
      OppenheimerFunds "Fund Complex" as that term may be otherwise interpreted.

4.    Includes $35,500 in compensation from Premier VIT, with respect to Mr. Courtney's service as a trustee of
      that fund.
5.    Mr. Clinton retired from the Board III funds effective March 31, 2006.
6.    Includes $10,313 in compensation from Premier VIT, with respect to Mr. Clinton's service as a trustee of
      that fund.
7.    Mr. Downes was appointed as Trustee of the Board III Funds on December 16, 2005.
8.    Includes $57,285 estimated benefits to be paid to Mr. Galli for serving as a director or trustee of 49
      other Oppenheimer funds that are not Board III Funds.
9.    Includes $129,312 for serving as a director or trustee of 49 other Oppenheimer funds (at December 31, 2006)
      that are not Board III Funds.
10.   Includes $31,500 in compensation from Premier VIT, with respect to Mr. Herrmann's service as a trustee of
      that fund.
11.   Includes $4,355 estimated benefits to be paid to Mr. Wruble for serving as a director or trustee of 49
      other Oppenheimer funds that are not Board III Funds.
12.   Includes $105,760 for serving as a director or trustee of 49 other Oppenheimer funds (at December 31, 2006)
      that are not Board III Funds.



|X|      Retirement Plan for Trustees. The Fund has adopted a retirement plan that provides for payments to
retired Independent Trustees. Payments are up to 80% of the average compensation paid during a Trustee's five
years of service in which the highest compensation was received. A Trustee must serve as director or trustee for
any of the Board III Funds for at least seven years to be eligible for retirement plan benefits and must serve
for at least 15 years to be eligible for the maximum benefit. The amount of retirement benefits a Trustee will
receive depends on the amount of the Trustee's compensation, including future compensation and the length of his
or her service on the Board.


         Compensation Deferral Plan for Trustees. The Board of Trustees has adopted a Compensation Deferral Plan
for Independent Trustees that enables them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund. Under the plan, the compensation deferred by a Trustee is periodically
adjusted as though an equivalent amount had been invested in shares of one or more Oppenheimer funds selected by
the Trustee. The amount paid to the Trustee under the plan will be determined based upon the amount of
compensation deferred and the performance of the selected funds.


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


|X|      Major Shareholders. As of February 9, 2007, the only persons or entities who owned of record or were
known by the Fund to own beneficially 5% or more of any class of the Fund's outstanding shares were:

         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 11,673,105.783 Class A shares
         (representing 16.19% of the Class A shares then outstanding).

         Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of Customers, Attn: Fund Admn/#971J1, 4800 Deer
         Lake Drive E. Fl 3, Jacksonville, FL 32246-6484, which owned 6,635,732.701 Class A shares (representing
         9.20% of the Class A shares then outstanding).

         Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of Customers, Attn: Fund Admn/#97CL0, 4800 Deer
         Lake Drive E. Fl 3, Jacksonville, FL 32246-6484, which owned 787,136.402 Class B shares (representing
         7.59% of the Class B shares then outstanding).

         Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of Customers, Attn: Fund Admn/#97HX8, 4800 Deer
         Lake Drive E. Fl 3, Jacksonville, FL 32246-6484, which owned 5,161,737.927 Class C shares (representing
         27.70% of the Class C shares then outstanding).

         Citigroup Global Mkts Inc., Attn: Cindy Tepesta-7th Floor, 333 West 34th Street, New York, NY
         10001-2483, which owned 1,244,663.727 Class C shares (representing 6.67% of the Class C shares then
         outstanding).

         Merrill Lynch Pierce Fenner & Smith for the Sole Benefit of Customers, Attn: Fund Admn, 4800 Deer Lake
         Drive E. Fl 3, Jacksonville, FL 32246-6484, which owned 1,260,392.085 Class N shares (representing
         16.96% of the Class N shares then outstanding).

         Hartford Life Insurance Co. Separate Investment Acct 457, Attn: Dave Ten Broeck, P.O. Box 2999,
         Hartford, CT 06104-2999, which owned 1,048,272.789 Class N shares (representing 14.11% of the Class N
         shares then outstanding).

         Oppenheimer Portfolio Series, Active Allocation Tact Comp, Attn: FPA Trade Settle (2-FA), 6803 S. Tucson
         Way, Centennial, CO 80112-3924, which owned 778,102.702 Class Y shares (representing 65.31% of the Class
         N shares then outstanding).

         Taynik & Co., c/o Investors Bank & Trust, FPG90, P.O. Box 9130, Boston, MA 02117-9130, which owned
         214,383.066 Class Y shares (representing 17.99% of the Class Y shares then outstanding).

         Ameriprise Trust Company, FBO Ameriprise TR RET SVC Plan, 996 Ameriprise Financial Ctr, Minneapolis, MN
         55474-0009, which owned 122,444.656 Class Y shares (representing 65.31% of the Class N shares then
         outstanding).


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

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

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


|X|      Portfolio Proxy Voting. The Fund has adopted Portfolio Proxy Voting Policies and Procedures, which
include Proxy Voting Guidelines, under which the Fund votes proxies relating to securities ("portfolio proxies")
held by the Fund. The Fund's primary consideration in voting portfolio proxies is the financial interests of the
Fund and its shareholders. The Fund has retained an unaffiliated third-party as its agent to vote portfolio
proxies in accordance with the Fund's Proxy Voting Guidelines and to maintain records of such portfolio proxy
voting. The Portfolio Proxy Voting Policies and Procedures include provisions to address conflicts of interest
that may arise between the Fund and the Manager or the Manager's affiliates or business relationships. Such a
conflict of interest may arise, for example, where the Manager or an affiliate of the Manager manages or
administers the assets of a pension plan or other investment account of the portfolio company soliciting the
proxy or seeks to serve in that capacity. The Manager and its affiliates generally seek to avoid such conflicts
by maintaining separate investment decision making processes to prevent the sharing of business objectives with
respect to proposed or actual actions regarding portfolio proxy voting decisions. Additionally, the Manager
employs the following two procedures: (1) if the proposal that gives rise to the conflict is specifically
addressed in the Proxy Voting Guidelines, the Manager will vote the portfolio proxy in accordance with the Proxy
Voting Guidelines, provided that they do not provide discretion to the Manager on how to vote on the matter; and
(2) if such proposal is not specifically addressed in the Proxy Voting Guidelines or the Proxy Voting Guidelines
provide discretion to the Manager on how to vote, the Manager will vote in accordance with the third-party proxy
voting agent's general recommended guidelines on the proposal provided that the Manager has reasonably determined
that there is no conflict of interest on the part of the proxy voting agent. If neither of the previous two
procedures provides an appropriate voting recommendation, the Manager may retain an independent fiduciary to
advise the Manager on how to vote the proposal or may abstain from voting. The Proxy Voting Guidelines'
provisions with respect to certain routine and non-routine proxy proposals are summarized below:
o        The Fund generally votes with the recommendation of the issuer's management on routine matters,

              including ratification of the independent registered public accounting firm, unless circumstances
              indicate otherwise.
o        The Fund evaluates nominees for director nominated by management on a case-by-case basis, examining the
              following factors, among others: Composition of the board and key board committees, attendance at
              board meetings, corporate governance provisions and takeover activity, long-term company
              performance and the nominee's investment in the company.
o        In general, the Fund opposes anti-takeover proposals and supports the elimination, or the ability of
              shareholders to vote on the preservation or elimination, of anti-takeover proposals, absent unusual
              circumstances.
o        The Fund supports shareholder proposals to reduce a super-majority vote requirement, and opposes
              management proposals to add a super-majority vote requirement.
o        The Fund opposes proposals to classify the board of directors.
o        The Fund supports proposals to eliminate cumulative voting.
o        The Fund opposes re-pricing of stock options without shareholder approval.
o        The Fund generally considers executive compensation questions such as stock option plans and bonus plans
              to be ordinary business activity. The Fund analyzes stock option plans, paying particular attention
              to their dilutive effect. While the Fund generally supports management proposals, the Fund opposes
              plans it considers to be excessive.

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


|X|      The Investment Advisory Agreement. The Manager provides investment advisory and management services to
the Fund under an investment advisory agreement between the Manager and the Fund's Parent Trust. The Manager
selects securities for the Fund's portfolio and handles 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 Department provide the
portfolio managers with counsel and support in managing the Fund's portfolio.


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


         The Fund pays expenses not expressly assumed by the Manager under the advisory agreement. 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.
--------------------------------------- -----------------------------------------------------------------------------
--------------------------------------- -----------------------------------------------------------------------------
                 2004                                                    $5,805,595
--------------------------------------- -----------------------------------------------------------------------------
--------------------------------------- -----------------------------------------------------------------------------
                 2005                                                    $9,813,223
--------------------------------------- -----------------------------------------------------------------------------
--------------------------------------- -----------------------------------------------------------------------------

                 2006                                                   $18,046,466

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


         The investment advisory agreement states that in the absence of willful misfeasance, bad faith, gross
negligence in the performance of its duties or reckless disregard of its obligations and duties under the
investment advisory agreement, the Manager is not liable for any loss the Fund sustains in connection with
matters to which the agreement relates.

         The agreement permits the Manager to act as investment adviser for any other person, firm or corporation
and to use the 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.


 Portfolio Managers. The Fund's portfolio is managed by Christopher Leavy and John Damian (each is referred to as
a "Portfolio Manager" and collectively they are referred to as the "Portfolio Managers"). They are the persons
who are responsible for the day-to-day management of the Fund's investments.


|X|      Other Accounts Managed by the Portfolio Managers. The Fund's portfolio is managed by Christopher Leavy
and John Damian who are responsible for the day-to-day management of the Fund's investments. In addition to
managing the Fund's investment portfolio, Messrs. Leavy and Damian also manage other investment portfolios on
behalf of the Manager or its affiliates. The following table provides information, as of October 31, 2006,
regarding the other portfolios managed by the Portfolio Managers. None of those portfolios has an advisory fee
based on performance:


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

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

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

     Christopher Leavy           13         $9,224.2          4             $998.1         None          None

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

     John Damian                 1           $173.8          None            None          None          None

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

         As indicated above, each of the Portfolio Managers also manages other funds. Potentially, at times,
those responsibilities could conflict with the interests of the Fund. That may occur whether the investment
strategies of the other fund are the same as, or different from, the Fund's investment objectives and strategies.
For example the Portfolio Manager may need to allocate investment opportunities between the Fund and another fund
having similar objectives or strategies, or he may need to execute transactions for another fund that could have
a negative impact on the value of securities held by the Fund. Not all funds and accounts advised by the Manager
have the same management fee. If the management fee structure of another fund is more advantageous to the Manager
than the fee structure of the Fund, the Manager could have an incentive to favor the other fund. However, the
Manager's compliance procedures and Code of Ethics recognize the Manager's fiduciary obligations to treat all of
its clients, including the Fund, fairly and equitably, and are designed to preclude the Portfolio Managers from
favoring one client over another. It is possible, of course, that those compliance procedures and the Code of
Ethics may not always be adequate to do so. At different times, one or more of the Fund's Portfolio Managers may
manage other funds or accounts with investment objectives and strategies that are similar to those of the Fund,
or may manage funds or accounts with investment objectives and strategies that are different from those of the
Fund.


|X|      Compensation of the Portfolio Managers. The Fund's Portfolio Managers are employed and compensated by
the Manager, not the Fund. Under the Manager's compensation program for its portfolio managers and portfolio
analysts, their compensation is based primarily on the investment performance results of the funds and accounts
they manage, rather than on the financial success of the Manager. This is intended to align the portfolio
managers' and analysts' interests with the success of the funds and accounts and their investors. The Manager's
compensation structure is designed to attract and retain highly qualified investment management professionals and
to reward individual and team contributions toward creating shareholder value. As of October 31, 2006, each
Portfolio Managers' compensation consisted of three elements: a base salary, an annual discretionary bonus and
eligibility to participate in long-term awards of options and appreciation rights in regard to the common stock
of the Manager's holding company parent. Senior portfolio managers may also be eligible to participate in the
Manager's deferred compensation plan.

         The base pay component of each portfolio manager is reviewed regularly to ensure that it reflects the
performance of the individual, is commensurate with the requirements of the particular portfolio, reflects any
specific competence or specialty of the individual manager, and is competitive with other comparable positions,
to help the Manager attract and retain talent. The annual discretionary bonus is determined by senior management
of the Manager and is based on a number of factors, including a fund's pre-tax performance for periods of up to
five years, measured against an appropriate benchmark selected by management. The Lipper benchmark with respect
to the Fund is Lipper - Mid-Cap Value Funds. Other factors include management quality (such as style consistency,
risk management, sector coverage, team leadership and coaching) and organizational development. The Portfolio
Managers' compensation is not based on the total value of the Fund's portfolio assets, although the Fund's
investment performance may increase those assets. The compensation structure is also intended to be internally
equitable and serve to reduce potential conflicts of interest between the Fund and other funds and accounts
managed by the Portfolio Managers. The compensation structure of the other funds and accounts managed by the
Portfolio Manager is the same as the compensation structure of the Fund, described above.

|X|      Ownership of Fund Shares. As of October 31, 2006, the Portfolio Managers beneficially owned shares of
the Fund, as follows:


                  Portfolio Manager                                 Range of Shares Beneficially
                                                                         Owned in the Fund
                  ------------------------------------------------------------------------------------
                  ------------------------------------------------------------------------------------
                  Christopher Leavy                                           None
                  ------------------------------------------------------------------------------------
                  ------------------------------------------------------------------------------------

                  John Damian                                           $50,001-$100,000

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

Brokerage Policies of the Fund

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

         Under the investment advisory agreement, in choosing brokers to execute portfolio transactions for the
Fund, the Manager may select brokers (other than affiliates) that provide both brokerage and research services to
the Fund. The commissions paid to those brokers may be higher than another qualified broker would charge, if the
Manager makes a good faith determination that the commission is fair and reasonable in relation to the services
provided.

Brokerage Practices Followed by the Manager. The Manager allocates brokerage for the Fund subject to the
provisions of the investment advisory agreement and other applicable rules and procedures described below.

         The Manager's portfolio traders allocate brokerage based upon recommendations from the Manager's
portfolio managers, together with the portfolio traders' judgment as to the execution capability of the broker or
dealer. In certain instances, portfolio managers may directly place trades and allocate brokerage. In either
case, the Manager's executive officers supervise the allocation of brokerage.

         Other accounts advised by the Manager have investment policies similar to those of the Fund. Those other
accounts may purchase or sell the same securities as the Fund at the same time as the Fund, which could affect
the supply and price of the securities. If two or more accounts advised by the Manager purchase the same security
on the same day from the same dealer, the transactions under those combined orders are averaged as to price and
allocated in accordance with the purchase or sale orders actually placed for each account. When possible, the
Manager tries to combine concurrent orders to purchase or sell the same security by more than one of the accounts
managed by the Manager or its affiliates. The transactions under those combined orders are averaged as to price
and allocated in accordance with the purchase or sale orders actually placed for each account.

         Rule 12b-1 under the Investment Company Act prohibits any fund from compensating a broker or dealer for
promoting or selling the fund's shares by (1) directing to that broker or dealer any of the fund's portfolio
transactions, or (2) directing any other remuneration to that broker or dealer, such as commissions, mark-ups,
mark downs or other fees from the fund's portfolio transactions, that were effected by another broker or dealer
(these latter arrangements are considered to be a type of "step-out" transaction). In other words, a fund and its
investment adviser cannot use the fund's brokerage for the purpose of rewarding broker-dealers for selling the
fund's shares.

         However, the Rule permits funds to effect brokerage transactions through firms that also sell fund
shares, provided that certain procedures are adopted to prevent a quid pro quo with respect to portfolio
brokerage allocations. As permitted by the Rule, the Manager has adopted procedures (and the Fund's Board of
Trustees has approved those procedures) that permit the Fund to direct portfolio securities transactions to
brokers or dealers that also promote or sell shares of the Fund, subject to the "best execution" considerations
discussed above. Those procedures are designed to prevent: (1) the Manager's personnel who effect the Fund's
portfolio transactions from taking into account a broker's or dealer's promotion or sales of the Fund shares when
allocating the Fund's portfolio transactions, and (2) the Fund, the Manager and the Distributor from entering
into agreements or understandings under which the Manager directs or is expected to direct the Fund's brokerage
directly, or through a "step-out" arrangement, to any broker or dealer in consideration of that broker's or
dealer's promotion or sale of the Fund's shares or the shares of any of the other Oppenheimer funds.

         The investment advisory agreement permits the Manager to allocate brokerage for research services. The
research services provided by a particular broker may be useful both to the Fund and to one or more of the other
accounts advised by the Manager or its affiliates. Investment research may be supplied to the Manager by the
broker or by a third party at the instance of a broker through which trades are placed.

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

         Although the Manager currently does not do so, the Board of Trustees may permit the Manager to use
stated commissions on secondary fixed-income agency trades to obtain research if the broker represents to the
Manager that: (i) the trade is not from or for the broker's own inventory, (ii) the trade was executed by the
broker on an agency basis at the stated commission, and (iii) the trade is not a riskless principal transaction.
The Board of Trustees may also permit the Manager to use commissions on fixed-price offerings to obtain research,
in the same manner as is permitted for agency transactions.

         The research services provided by brokers broaden the scope and supplement the research activities of
the Manager. That research provides additional views and comparisons for consideration, and helps the Manager to
obtain market information for the valuation of securities that are either held in the Fund's portfolio or are
being considered for purchase. The Manager provides information to the Board about the commissions paid to
brokers furnishing such services, together with the Manager's representation that the amount of such commissions
was reasonably related to the value or benefit of such services.


         During the fiscal years ended October 31, 2004, 2005 and 2006, the Fund paid the total brokerage
commissions indicated in the chart below. During the fiscal year ended October 31, 2006, the Fund paid $9,704,892
in commissions to firms that provide brokerage and research services to the Fund with respect to $7,148,571,838
of aggregate portfolio transactions. All such transactions were on a "best execution" basis, as described above.
The provision of research services was not necessarily a factor in the placement of all such transactions.










------------------------------------------- ---------------------------------------------------------------
         Fiscal Year Ended 10/31                    Total Brokerage Commissions Paid by the Fund*
------------------------------------------- ---------------------------------------------------------------
------------------------------------------- ---------------------------------------------------------------
                   2004                                               $4,288,825
------------------------------------------- ---------------------------------------------------------------
------------------------------------------- ---------------------------------------------------------------
                   2005                                               $6,328,042
------------------------------------------- ---------------------------------------------------------------
------------------------------------------- ---------------------------------------------------------------

                   2006                                              $10,449,364

------------------------------------------- ---------------------------------------------------------------
   *   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 Year         Aggregate Front-End      Class A Front-End
                                               Sales Charges
Ended 10/31:          Sales Charges on          Retained by
                       Class A Shares          Distributor(1)
------------------ ----------------------- -----------------------
------------------ ----------------------- -----------------------
      2004               $2,237,599               $609,190
------------------ ----------------------- -----------------------
------------------ ----------------------- -----------------------
      2005               $5,315,686              $1,291,832
------------------ ----------------------- -----------------------
------------------ ----------------------- -----------------------

      2006               $7,693,240              $1,715,792

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

------------------ ----------------------- ---------------------- ------------------------ ------------------------
Fiscal Year         Concessions on Class   Concessions on Class   Concessions on Class C   Concessions on Class N
Ended 10/31:        A Shares Advanced by   B Shares Advanced by     Shares Advanced by       Shares Advanced by
                       Distributor(1)         Distributor(1)          Distributor(1)           Distributor(1)
------------------ ----------------------- ---------------------- ------------------------ ------------------------
------------------ ----------------------- ---------------------- ------------------------ ------------------------
      2004                $195,869              $1,229,769               $349,158                 $120,457
------------------ ----------------------- ---------------------- ------------------------ ------------------------
------------------ ----------------------- ---------------------- ------------------------ ------------------------
      2005                $300,758              $2,080,942              $1,446,482                $194,065
------------------ ----------------------- ---------------------- ------------------------ ------------------------
------------------ ----------------------- ---------------------- ------------------------ ------------------------

      2006                $477,544              $2,312,670              $2,157,358                $108,178

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

------------------ ----------------------- ----------------------- ------------------------- -----------------------
Fiscal       Year    Class A Contingent      Class B Contingent       Class C Contingent       Class N Contingent
                       Deferred Sales          Deferred Sales                                    Deferred Sales
Ended 10/31:        Charges Retained by     Charges Retained by     Deferred Sales Charges    Charges Retained by
                        Distributor             Distributor        Retained by Distributor        Distributor
------------------ ----------------------- ----------------------- ------------------------- -----------------------
------------------ ----------------------- ----------------------- ------------------------- -----------------------
      2004                 $2,832                 $304,373                 $16,341                  $10,762
------------------ ----------------------- ----------------------- ------------------------- -----------------------
------------------ ----------------------- ----------------------- ------------------------- -----------------------
      2005                $49,584                 $410,979                 $42,823                  $57,195
------------------ ----------------------- ----------------------- ------------------------- -----------------------
------------------ ----------------------- ----------------------- ------------------------- -----------------------

      2006                $12,461                 $448,189                 $98,446                  $73,919

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


Distribution and Service Plans. The Fund has adopted a 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 Trustees(1), cast in person at a meeting called for the purpose of voting on that
plan.


         Under the Plans, the Manager and the Distributor may make payments to affiliates. In their sole
discretion, they may also from time to time make substantial payments from their own resources, which include the
profits the Manager derives from the advisory fees it receives from the Fund, to compensate brokers, dealers,
financial institutions and other intermediaries for providing distribution assistance and/or administrative
services or that otherwise promote sales of the Fund's shares. These payments, some of which may be referred to
as "revenue sharing," may relate to the Fund's inclusion on a financial intermediary's preferred list of funds
offered to its clients.

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

         The Board of Trustees and the Independent Trustees must approve all material amendments to a plan. An
amendment to increase materially the amount of payments to be made under a plan must be approved by shareholders
of the class affected by the amendment. Because Class B shares of the Fund automatically convert into Class A
shares 72 months after purchase, the Fund must obtain the approval of both Class A and Class B shareholders for a
proposed material amendment to the Class A plan that would materially increase payments under the plan. That
approval must be by a majority of the shares of each class, voting separately by class.

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

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

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


|X|      Class A Distribution and Service Plan Fees. Under the Class A distribution and 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 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. While the plan permits the Board to authorize payments to the Distributor to reimburse
itself for services under the plan, the Board has not yet done so, except in the case of the special arrangement
described below, regarding grandfathered retirement accounts. The Distributor makes payments to plan recipients
periodically at an annual rate not to exceed 0.25% of the average annual net assets consisting of Class A shares
held in the accounts of the recipients or their customers.

         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 up to 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. When the asset-based sales charge was assessed, 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 periodically on those shares. The advance payment is based on the net
asset value of shares sold. Shares purchased by exchange do not qualify for the advance service fee payment. If
Class A shares purchased by grandfathered retirement accounts are redeemed during the first year after their
purchase, the recipient of the service fees on those shares will be obligated to repay the Distributor a pro rata
portion of the advance payment of the service fee made on those shares.


         For the fiscal year ended October 31, 2006, payments under the Class A distribution and service plan
totaled $4,647,893, of which $20,074 was service fee payments retained by the Distributor in connection with the
grandfathered retirement accounts, described above, and included $192,452 paid to an affiliate of the
Distributor's parent company. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years. The Distributor may not use payments received under the
Class A plan to pay any of its interest expenses, carrying charges, or other financial costs, or allocation of
overhead.


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

         The asset-based sales charge on Class B, Class C and Class N shares allow investors to buy shares
without a front-end sales charge while allowing the Distributor to compensate dealers that sell those shares. The
Fund pays the asset-based sales charge to the Distributor for its services rendered in distributing Class B,
Class C and Class N shares. The payments are made to the Distributor in recognition that the Distributor:
o        pays sales concessions to authorized brokers and dealers at the time of sale and pays service fees as
              described above,
o        may finance payment of sales concessions and/or the advance of the service fee payment to recipients
              under the plans, or may provide such financing from its own resources or from the resources of an
              affiliate,
o        employs personnel to support distribution of Class B, Class C and Class N shares,
o        bears the costs of sales literature, advertising and prospectuses (other than those furnished to current
              shareholders) and state "blue sky" registration fees and certain other distribution expenses,
o        may not be able to adequately compensate dealers that sell Class B, Class C and Class N shares without
              receiving payment under the plans and therefore may not be able to offer such Classes for sale
              absent the plans,
o        receives payments under the plans consistent with the service fees and asset-based sales charges paid by
              other non-proprietary funds that charge 12b-1 fees,
o        may use the payments under the plan to include the Fund in various third-party distribution programs
              that may increase sales of Fund shares,
o        may experience increased difficulty selling the Fund's shares if payments under the plan are
              discontinued because most competitor funds have plans that pay dealers for rendering distribution
              services as much or more than the amounts currently being paid by the Fund, and
o        may not be able to continue providing, at the same or at a lesser cost, the same quality distribution
              sales efforts and services, or to obtain such services from brokers and dealers, if the plan
              payments were to be discontinued.

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

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

              Distribution and Service Fees Paid to the Distributor for the Fiscal Year Ended 10/31/06

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

Class B Plan               $3,071,329            $2,371,669(1)             $2,890,752                 0.88%

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

Class C Plan               $4,282,245            $1,922,847(2)             $5,583,417                 1.03%

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

Class N Plan                $854,481              $237,507(3)              $1,291,971                 0.56%

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

1.       Includes $34,262 paid to an affiliate of the Distributor's parent company.
2.       Includes $53,974 paid to an affiliate of the Distributor's parent company.
3.       Includes $14,840 paid to an affiliate of the Distributor's parent company.


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

Payments to Fund Intermediaries

Financial intermediaries may receive various forms of compensation or reimbursement from the Fund in the form of
12b-1 plan payments as described in the preceding section of this SAI. They may also receive payments or
concessions from the Distributor, derived from sales charges paid by the clients of the financial intermediary,
also as described in this SAI. Additionally, the Manager and/or the Distributor (including their affiliates) may
make payments to financial intermediaries in connection with their offering and selling shares of the Fund and
other Oppenheimer funds, providing marketing or promotional support, transaction processing and/or administrative
services. Among the financial intermediaries that may receive these payments are brokers and dealers who sell
and/or hold shares of the Fund, banks (including bank trust departments), registered investment advisers,
insurance companies, retirement plan and qualified tuition program administrators, third party administrators,
and other institutions that have selling, servicing or similar arrangements with the Manager or Distributor. The
payments to intermediaries vary by the types of product sold, the features of the Fund share class and the role
played by the intermediary.

         Possible types of payments to financial intermediaries include, without limitation, those discussed
below.
o        Payments made by the Fund, or by an investor buying or selling shares of the Fund may include:
o        depending on the share class that the investor selects, contingent deferred sales charges or initial
                    front-end sales charges, all or a portion of which front-end sales charges are payable by the
                    Distributor to financial intermediaries (see "About Your Account" in the Prospectus);
o        ongoing asset-based payments attributable to the share class selected, including fees payable under the
                    Fund's distribution and/or service plans adopted under Rule 12b-1 under the Investment
                    Company Act, which are paid from the Fund's assets and allocated to the class of shares to
                    which the plan relates (see "About the Fund -- Distribution and Service Plans" above);
o        shareholder servicing payments for providing omnibus accounting, recordkeeping, networking, sub-transfer
                    agency or other administrative or shareholder services, including retirement plan and 529
                    plan administrative services fees, which are paid from the assets of a Fund as reimbursement
                    to the Manager or Distributor for expenses they incur on behalf of the Fund.
o        Payments made by the Manager or Distributor out of their respective resources and assets, which may
             include profits the Manager derives from investment advisory fees paid by the Fund. These payments
             are made at the discretion of the Manager and/or the Distributor. These payments, often referred to
             as "revenue sharing" payments, may be in addition to the payments by the Fund listed above.
o        These types of payments may reflect compensation for marketing support, support provided in offering the
                    Fund or other Oppenheimer funds through certain trading platforms and programs, transaction
                    processing or other services;
o        The Manager and Distributor each may also pay other compensation to the extent the payment is not
                    prohibited by law or by any self-regulatory agency, such as the NASD. Payments are made based
                    on the guidelines established by the Manager and Distributor, subject to applicable law.

         These payments may provide an incentive to financial intermediaries to actively market or promote the
sale of shares of the Fund or other Oppenheimer funds, or to support the marketing or promotional efforts of the
Distributor in offering shares of the Fund or other Oppenheimer funds. In addition, some types of payments may
provide a financial intermediary with an incentive to recommend the Fund or a particular share class. Financial
intermediaries may earn profits on these payments, since the amount of the payment may exceed the cost of
providing the service. Certain of these payments are subject to limitations under applicable law. Financial
intermediaries may categorize and disclose these arrangements to their clients and to members of the public in a
manner different from the disclosures in the Fund's Prospectus and this SAI. You should ask your financial
intermediary for information about any payments it receives from the Fund, the Manager or the Distributor and any
services it provides, as well as the fees and commissions it charges.

         Although brokers or dealers that sell Fund shares may also act as a broker or dealer in connection with
the execution of the purchase or sale of portfolio securities by the Fund or other Oppenheimer funds, a financial
intermediary's sales of shares of the Fund or such other Oppenheimer funds is not a consideration for the Manager
when choosing brokers or dealers to effect portfolio transactions for the Fund or such other Oppenheimer funds.

         Revenue sharing payments can pay for distribution-related or asset retention items including, without
limitation,
o        transactional support, one-time charges for setting up access for the Fund or other Oppenheimer funds on
             particular trading systems, and paying the intermediary's networking fees;
o        program support, such as expenses related to including the Oppenheimer funds in retirement plans,
             college savings plans, fee-based advisory or wrap fee programs, fund "supermarkets", bank or trust
             company products or insurance companies' variable annuity or variable life insurance products;
o        placement on the dealer's list of offered funds and providing representatives of the Distributor with
             access to a financial intermediary's sales meetings, sales representatives and management
             representatives.

         Additionally, the Manager or Distributor may make payments for firm support, such as business planning
assistance, advertising, and educating a financial intermediary's sales personnel about the Oppenheimer funds and
shareholder financial planning needs.


         For the year ended December 31, 2006, the following financial intermediaries that are broker-dealers
offering shares of the Oppenheimer funds, and/or their respective affiliates, received revenue sharing or similar
distribution-related payments from the Manager or Distributor for marketing or program support:


Advantage Capital Corp./Financial Services Corp.        Advest, Inc.
Aegon USA                                               Aetna Retirement Services, Inc.
A.G. Edwards & Sons, Inc.                               AIG Life
Allianz Life Insurance Company                          Allmerica Financial Life Insurance and Annuity Co.
Allstate Financial Advisors                             American Enterprise Life Insurance
American General Securities, Inc.                       American General Annuity
Ameriprise Financial Services, Inc.                     American Portfolio Financial Services, Inc.
Ameritas Life Insurance Corporation                     Annuity Investors Life
Associated Securities                                   AXA Advisors
Banc One Securities Corp.                               BNY Investment Center, Inc.
Cadaret Grant & Co. Inc.                                Charles Schwab - Great West Life
Chase Investment Services Corp.                         CitiCorp Investment Services, Inc.
Citigroup Global Markets, Inc. (SSB)                    CitiStreet
Citizens Bank of Rhode Island                           CJM Planning Corp.
Columbus Life Insurance Company                         Commonwealth Financial Network
CUNA Brokerage Services, Inc.                           CUSO Financial Services, L.P.
Federal Kemper Life Assurance Company                   Financial Network (ING)
First Global Capital                                    GE Financial Assurance - GE Life & Annuity
Glenbrook Life and Annuity Co.                          Hartford
HD Vest                                                 HSBC Brokerage (USA) Inc.
ING Financial Advisers                                  ING Financial Partners
Jefferson Pilot Life Insurance Company                  Jefferson Pilot Securities Corp.
John Hancock Life Insurance Co.                         Kemper Investors Life Insurance Co.
Legend Equities Corp.                                   Legg Mason
Lincoln Benefit Life                                    Lincoln Financial
Lincoln Investment Planning, Inc.                       Lincoln National Life
Linsco Private Ledger                                   MassMutual Financial Group and affiliates
McDonald Investments, Inc.                              Merrill Lynch & Co. and affiliates
MetLife and affiliates                                  Minnesota Life Insurance Company
Mony Life Insurance Co.                                 Morgan Stanley Dean Witter, Inc.
Multi-Financial (ING)                                   Mutual Service Corporation
National Planning Holdings, Inc.                        Nationwide and affiliates
NFP                                                     New York Life Securities, Inc.
Park Avenue Securities LLC                              PFS Investments, Inc.
Prime Capital Services, Inc.                            Primevest Financial Services, Inc. (ING)
Protective Life Insurance Co.                           Prudential Investment Management Services LLC
Raymond James & Associates                              Raymond James Financial Services
RBC Dain Rauscher Inc.                                  Royal Alliance
Securities America Inc.                                 Security Benefit Life Insurance Co.
Sentra Securities                                       Signator Investments
Sun Life Assurance Company of Canada                    SunAmerica Securities, Inc.
SunTrust Securities                                     Thrivent
Travelers Life & Annuity Co., Inc.                      UBS Financial Services Inc.
Union Central Life Insurance Company                    United Planners
Valic Financial Advisors, Inc.                          Wachovia Securities LLC
Walnut Street Securities (Met Life Network)             Waterstone Financial Group
Wells Fargo Investments, LLC


         For the year ended December 31, 2006, the following firms, which in some cases are broker-dealers,
received payments from the Manager or Distributor for administrative or other services provided (other than
revenue sharing arrangements), as described above:


ABN AMRO Financial Services Inc.                        ACS HR Solutions LLC
Administrative Management Group                         ADP Broker/Dealer Inc.
Aetna Financial Services                                Alliance Benefit Group
American Stock Transfer & Trust Co                      Ameriprise Financial Services, Inc.
Baden Retirement Plan Services LLC                      Banc One Securities Corp.
BCG Securities                                          Benefit Administration Company LLC
Benefit Administration Inc.                             Benefit Plans Administrative Services
Benetech Inc.                                           Bisys Retirement Services
Boston Financial Data Services Inc.                     Ceridian Retirement Plan Services
Charles Schwab & Co Inc.                                Charles Schwab Trust Company
Circle Trust Company                                    Citigroup Global Markets Inc.
CitiStreet                                              City National Bank
Columbia Funds Distributor Inc.                         CPI Qualified Plan Consultants Inc.
Daily Access.Com Inc.                                   Digital Retirement Solutions
DST Systems Inc.                                        Dyatech LLC
Edgewood/Federated Investments                          ERISA Administrative Services Inc.
Expert Plan Inc.                                        FASCorp
FBD Consulting Inc.                                     Fidelity Institutional Operations Co.
Fidelity Investments                                    First National Bank of Omaha
First Trust Corp.                                       First Trust-Datalynx
Franklin Templeton                                      Geller Group LTD
GoldK Inc.                                              Great West Life & Annuity Ins Co.
Hartford Life Insurance Co                              Hewitt Associates LLC
ICMA-RC Services LLC                                    Independent Plan Coordinators Inc.
ING                                                     Ingham Group
Interactive Retirement Systems                          Invesco Retirement Plans
Invesmart                                               InWest Pension Management
John Hancock Life Insurance Co.                         JPMorgan Chase & Co
JPMorgan Chase Bank                                     July Business Services
Kaufman & Goble                                         Leggette & Company Inc.
Lincoln National Life                                   MassMutual Financial Group and affiliates
Matrix Settlement & Clearance Services                  Mellon HR Solutions
Mercer HR Services                                      Merrill Lynch & Co., Inc.
Metavante 401(k) Services                               Metlife Securities Inc.
MFS Investment Management                               Mid Atlantic Capital Corp.
Milliman Inc.                                           Morgan Stanley Dean Witter Inc.
National City Bank                                      National Financial Services Corp.
Nationwide Investment Service Corp.                     New York Life Investment Management
Northeast Retirement Services                           Northwest Plan Services Inc.
Pension Administration and Consulting                   PFPC Inc.
Plan Administrators Inc.                                PlanMember Services Corporation
Princeton Retirement Group Inc.                         Principal Life Insurance Co
Programs for Benefit Plans Inc.                         Prudential Retirement Insurance & Annuity Co
Prudential Retirement Services                          PSMI Group
Putnam Investments                                      Quads Trust Company
RSM McGladrey Retirement Resources                      SAFECO
Standard Insurance Co                                   Stanley Hunt DuPree Rhine
Stanton Group Inc.                                      State Street Bank & Trust
Strong Capital Management Inc.                          Symetra Investment Services Inc.
T Rowe Price Associates                                 Taylor Perky & Parker LLC
Texas Pension Consultants                               The 401(K) Company
The Chicago Trust Company                               The Retirement Plan Company LLC
The Vanguard Group                                      TruSource
Unified Fund Services Inc.                              Union Bank & Trust Co. (Nebraska)
USI Consulting Group (CT)                               Valic Retirement Services Co
Wachovia Bank NA                                        Web401k.com
Wells Fargo Bank NA                                     Wilmington Trust Company
WySTAR Global Retirement Solutions

Performance of the Fund

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

         The Fund's illustrations of its performance data in advertisements must comply with rules of the SEC.
Those rules describe the types of performance data that may be used and how it is to be calculated. In general,
any advertisement by the Fund of its performance data must include the average annual total returns for the
advertised class of shares of the Fund.

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

         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:

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

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

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

o        Cumulative Total Return. The "cumulative total return" calculation measures the change in value of a
hypothetical investment of $1,000 over an entire period of years. Its calculation uses some of the same factors
as average annual total return, but it does not average the rate of return on an annual basis. Cumulative total
return is determined as follows:

    ERV - P        = Total Return
----------------
       P
o        Total Returns at Net Asset Value. From time to time the Fund may also quote a cumulative or an average
annual total return "at net asset value" (without deducting sales charges) for Class A, 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 10/31/06

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

Class A(1)       205.09%      223.70%      11.26%       18.04%       17.07%       18.47%       11.80%       12.46%

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

Class B(2)       213.50%      213.50%      12.08%       17.08%       17.34%       17.55%       12.10%       12.10%

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

Class C(3)       203.76%      203.76%      16.17%       17.17%       17.58%       17.58%       11.75%       11.75%

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

Class N(4)       128.79%      128.79%      16.65%       17.65%       18.09%       18.09%       15.73%       15.73%

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

Class Y(5)       17.58%       17.58%       18.64%       18.64%       17.22%       17.22%         N/A          N/A

-------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1.   Inception of Class A: 01/03/89
2.   Inception of Class B: 09/01/93
3.   Inception of Class C: 09/01/93
4.   Inception of Class N: 03/01/01
5.   Inception of Class Y: 10/24/05

--------------------------------------------------------------------------------------------------------------------
                      Average Annual Total Returns for Class A(1) Shares (After Sales Charge)

                                          For the Periods Ended 10/31/06

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

After Taxes on Distributions                      9.63%                   15.84%                    10.20%

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

After Taxes on Distributions and                  7.62%                   14.38%                    9.47%

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 SAI. The Fund may also compare its
performance to that of other investments, including other mutual funds, or use rankings of its performance by
independent ranking entities. Examples of these performance comparisons are set forth below.

         |X|  Lipper Rankings. From time to time the Fund may publish the ranking of the performance of its
classes of shares by Lipper, Inc. ("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring
service. Lipper monitors the performance of regulated investment companies, including the Fund, and ranks their
performance for various periods in categories based on investment styles. The Lipper performance rankings are
based on total returns that include the reinvestment of capital gain distributions and income dividends but do
not take sales charges or taxes into consideration. Lipper also publishes "peer-group" indices of the performance
of all mutual funds in a category that it monitors and averages of the performance of the funds in particular
categories.

|X|      Morningstar Ratings. From time to time the Fund may publish the star rating of the performance of its
classes of shares by Morningstar, Inc., an independent mutual fund monitoring service. Morningstar rates mutual
funds in their specialized market sector. The Fund is 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.

When you purchase shares of the Fund, your ownership interest in the shares of the Fund will be recorded as a
book entry on the records of the Fund. The Fund will not issue or re-register physical share certificates.

AccountLink. When shares are purchased through AccountLink, each purchase must be at least $50 and shareholders
must invest at least $500 before an Asset Builder Plan (described below) can be established on a new account.
Accounts established prior to November 1, 2002 will remain at $25 for additional purchases. Shares will be
purchased on the regular business day the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares. Dividends will begin to accrue on shares purchased with the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for the purchase through the ACH system before the
close of the New York Stock Exchange (the "NYSE"). The NYSE normally closes at 4:00 p.m., but may close earlier
on certain days. If Federal Funds are received on a business day after the close of the NYSE, the shares will be
purchased and dividends will begin to accrue on the next regular business day. The proceeds of ACH transfers are
normally received by the Fund three days after the transfers are initiated. If the proceeds of the ACH transfer
are not received on a timely basis, the Distributor reserves the right to cancel the purchase order. The
Distributor and the Fund are not responsible for any delays in purchasing shares resulting from delays in ACH
transmissions.

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

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


Oppenheimer AMT-Free Municipals                               Oppenheimer New Jersey Municipal Fund
Oppenheimer AMT-Free New York Municipals                      Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Balanced Fund                                     Oppenheimer Portfolio Series:
Oppenheimer Baring China Fund                                   Active Allocation Fund
Oppenheimer Baring Japan Fund                                   Conservative Investor Fund
Oppenheimer Core Bond Fund                                      Equity Investor Fund
Oppenheimer California Municipal Fund                           Moderate Investor Fund
Oppenheimer Capital Appreciation Fund                         Oppenheimer Principal Protected Main Street Fund
Oppenheimer Capital Income Fund                               Oppenheimer Principal Protected Main Street Fund II
Oppenheimer Champion Income Fund                              Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Commodity Strategy Total Return Fund              Oppenheimer Quest Balanced Fund
Oppenheimer Convertible Securities Fund                       Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Discovery Fund                                    Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Dividend Growth Fund                              Oppenheimer Quest Opportunity Value Fund
Oppenheimer Emerging Growth Fund                              Oppenheimer Quest Value Fund, Inc.
Oppenheimer Emerging Technologies Fund                        Oppenheimer Real Estate Fund
Oppenheimer Enterprise Fund                                   Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Equity Fund, Inc.                                 Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Global Fund                                       Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Global Opportunities Fund                         Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Growth Fund                                       Oppenheimer Rochester National Municipals
Oppenheimer International Bond Fund                           Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer International Diversified Fund                    Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer International Growth Fund                         Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer International Small Company Fund                  Oppenheimer Select Value Fund
Oppenheimer International Value Fund                          Oppenheimer Senior Floating Rate Fund
Oppenheimer Limited Term California Municipal Fund            Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Limited-Term Government Fund                      Oppenheimer Strategic Income Fund
Oppenheimer Limited Term Municipal Fund                       Oppenheimer U.S. Government Trust
Oppenheimer Main Street Fund                                  Oppenheimer Value Fund
Oppenheimer Main Street Opportunity Fund                      Limited-Term New York Municipal Fund
Oppenheimer Main Street Small Cap Fund                        Rochester Fund Municipals
Oppenheimer MidCap Fund
                                                              Life Cycle Funds
                                                              Oppenheimer Transition 2010 Fund
                                                              Oppenheimer Transition 2015 Fund
                                                              Oppenheimer Transition 2020 Fund
                                                              Oppenheimer Transition 2030 Fund
And the following money market funds:
Oppenheimer Cash Reserves                                     Centennial Government Trust
Oppenheimer Money Market Fund, Inc.                           Centennial Money Market Trust
Oppenheimer Institutional Money Market Fund                   Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust                        Centennial Tax Exempt Trust


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


Letters of Intent. Under a Letter of Intent ("Letter"), you can reduce the sales charge rate that applies to your
purchases of Class A shares if you purchase Class A, Class B or 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 Class C shares will
determine the sales charge rate that applies to your Class A share purchases during that period. Purchases made
up to 90 days before the date that you submit a Letter of Intent will be included in that determination. Class A
shares of Oppenheimer Money Market Fund, Inc. and Oppenheimer Cash Reserves on which you have not paid a sales
charge and any Class N shares you purchase, or may have purchased, will not be counted towards satisfying the
purchases specified in a Letter.


         A Letter is an investor's statement in writing to the Distributor of his or her intention to purchase a
specified value of Class A, Class B and Class C shares of the Fund and other Oppenheimer funds during a 13-month
period (the "Letter period"). The Letter states the investor's intention to make the aggregate amount of
purchases of shares which will equal or exceed the amount specified in the Letter. Purchases made by reinvestment
of dividends or capital gains distributions and purchases made at net asset value (i.e. without paying a
front-end or contingent deferred sales charge) do not count toward satisfying the amount of the Letter.

         Each purchase of Class A shares under the Letter will be made at the offering price (including the sales
charge) that would apply to a single lump-sum purchase of shares in the amount intended to be purchased under the
Letter.

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

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

         The Transfer Agent will not hold shares in escrow for purchases of shares of 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 and Class C shares of other Oppenheimer funds acquired subject to a contingent deferred sales
                  charge, and
(c)      Class A, Class B or Class C shares acquired by exchange of either (1) Class A shares of one of the other
                  Oppenheimer funds that were acquired subject to a Class A initial or contingent deferred sales
                  charge or (2) Class B or Class C shares of one of the other Oppenheimer funds that were
                  acquired subject to a contingent deferred sales charge.

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

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

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

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


Retirement Plans. Certain types of retirement plans are entitled to purchase shares of the Fund without sales
charges or at reduced sales charge rates, as described in Appendix C to this SAI.  Certain special sales charge
arrangements described in that Appendix apply to retirement plans whose records are maintained on a daily
valuation basis by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an independent record keeper
that has a contract or special arrangement with Merrill Lynch.  If on the date the plan sponsor signed the
Merrill Lynch record keeping service agreement the plan 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 or
an affiliate 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 a purchase order of more than $100,000 for Class B shares or a purchase
order of $1 million or more to purchase Class C shares on behalf of a single investor (not including dealer
"street name" or omnibus accounts).


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


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 SAI) which have entered into a special
                  agreement with the Distributor for that purpose,
o        to Retirement Plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code, the
                  recordkeeper or the plan sponsor for which has entered into a special agreement with the
                  Distributor,
o        to Retirement Plans of a plan sponsor where the aggregate assets of all such plans invested in the
                  Oppenheimer funds is $500,000 or more,
o        to Retirement Plans with at least 100 eligible employees or $500,000 or more in plan assets,
o        to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the purchase with the redemption
                  proceeds of Class A shares of one or more Oppenheimer funds, and

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


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

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

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

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

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

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

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

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

         Listed below are certain cases in which the Fund has elected, in its discretion, not to assess the Fund
Account Fees. These exceptions are subject to change:
o        A fund account whose shares were acquired after September 30th of the prior year;
o        A fund account that has a balance below $500 due to the automatic conversion of shares from Class B to
                  Class A shares. However, once all Class B 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 and click the hyperlink "Sign Up for Electronic Document Delivery" under the
heading "I Want To," or call 1.888.470.0862 for instructions.


         The Fund reserves the authority to modify Fund Account Fees in its discretion.

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

         Dealers other than NYSE members may conduct trading in certain securities on days on which the NYSE is
closed (including weekends and holidays) or after 4:00 p.m. on a regular business day. Because the Fund's net
asset values will not be calculated on those days, the Fund's net asset values per share may be significantly
affected on such days when shareholders may not purchase or redeem shares. Additionally, trading on many foreign
stock exchanges and over-the-counter markets normally is completed before the close of the NYSE.

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

|X|      Securities Valuation. The Fund's Board of Trustees has established procedures for the valuation of the
Fund's securities. In general those procedures are as follows:
o        Equity securities traded on a U.S. securities exchange are valued as follows:
(1)      if last sale information is regularly reported, they are valued at the last reported sale price on the
                      principal exchange on which they are traded, 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 New York foreign exchange market on a particular business day that are
provided to the Manager by a bank, dealer or pricing service that the Manager has determined to be reliable are
used to value foreign currency, including forward contracts, and to convert to U.S. dollars securities that are
denominated in foreign currency.

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

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

How to Sell Shares

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

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

Reinvestment Privilege. Within six months of a redemption, a shareholder may reinvest all or part of the
redemption proceeds of:
o        Class A shares purchased subject to an initial sales charge or Class A shares on which a contingent
              deferred sales charge was paid, 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 SAI. The request must:
(1)      state the reason for the distribution;
(2)      state the owner's awareness of tax penalties if the distribution is premature; and
(3)      conform to the requirements of the plan and the Fund's other redemption requirements.

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

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

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

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

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

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

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

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

         |X|  Automatic Exchange Plans. Shareholders can authorize the Transfer Agent to 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 SAI.

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

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

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

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

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

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

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

How to Exchange Shares

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

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

     The following funds only offer Class A shares:
     Centennial California Tax Exempt Trust                       Centennial New York Tax Exempt Trust
     Centennial Government Trust                                  Centennial Tax Exempt Trust
     Centennial Money Market Trust

     The following funds do not offer Class N shares:

     Limited Term New York Municipal Fund                         Oppenheimer Rochester Arizona Municipal Fund
     Oppenheimer AMT-Free Municipals                              Oppenheimer Rochester Maryland Municipal Fund
     Oppenheimer AMT-Free New York Municipals                     Oppenheimer Rochester Massachusetts Municipal Fund
     Oppenheimer California Municipal Fund                        Oppenheimer Rochester Michigan Municipal Fund
     Oppenheimer Institutional Money Market Fund                  Oppenheimer Rochester Minnesota Municipal Fund
     Oppenheimer International Value Fund                         Oppenheimer Rochester National Municipals
     Oppenheimer Limited Term California Municipal Fund           Oppenheimer Rochester North Carolina Municipal Fund
     Oppenheimer Limited Term Municipal Fund                      Oppenheimer Rochester Ohio Municipal Fund
     Oppenheimer Money Market Fund, Inc.                          Oppenheimer Rochester Virginia Municipal Fund
     Oppenheimer New Jersey Municipal Fund                        Oppenheimer Senior Floating Rate Fund
     Oppenheimer Principal Protected Main Street Fund II          Rochester Fund Municipals
     Oppenheimer Pennsylvania Municipal Fund


     The following funds do not offer Class Y shares:

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

o        Oppenheimer Money Market Fund, Inc. only offers Class A and Class Y shares.
o        Oppenheimer Institutional Money Market Fund only offers Class E and Class L shares.
o        Class B and Class C shares of Oppenheimer Cash Reserves are generally available only by exchange from

         the same class of shares of other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k) plans.
o        Class M shares of Oppenheimer Convertible Securities Fund may be exchanged only for Class A shares of
         other Oppenheimer funds. They may not be acquired by exchange of shares of any class of any other
         Oppenheimer funds except Class A shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash
         Reserves acquired by exchange of Class M shares.

o        Class A shares of Oppenheimer funds may be exchanged at net asset value for shares of certain money
         market funds offered by the Distributor. Shares of any money market fund purchased without a sales
         charge may be exchanged for shares of Oppenheimer funds offered with a sales charge upon payment of the
         sales charge.

o        Shares of the Fund acquired by reinvestment of dividends or distributions from any of the other
         Oppenheimer funds or from any unit investment trust for which reinvestment arrangements have been made
         with the Distributor may be exchanged at net asset value for shares of the same class of any of the
         other Oppenheimer funds into which you may exchange shares.
o        Shares of Oppenheimer Principal Protected Main Street Fund may be exchanged at net asset value for
         shares of the same class of any of the other Oppenheimer funds into which you may exchange shares.
         However, shareholders are not permitted to exchange shares of other Oppenheimer funds for shares of
         Oppenheimer Principal Protected Main Street Fund until after the expiration of the warranty period
         (8/5/2010).
o        Shares of Oppenheimer Principal Protected Main Street Fund II may be exchanged at net asset value for
         shares of the same class of any of the other Oppenheimer funds into which you may exchange shares.
         However, shareholders are not permitted to exchange shares of other Oppenheimer funds for shares of
         Oppenheimer Principal Protected Main Street Fund II until after the expiration of the warranty period
         (3/3/2011).
o        Shares of Oppenheimer Principal Protected Main Street Fund III may be exchanged at net asset value for
         shares of the same class of any of the other Oppenheimer funds into which you may exchange shares.
         However, shareholders are not permitted to exchange shares of other Oppenheimer funds for shares of
         Oppenheimer Principal Protected Main Street Fund III until after the expiration of the warranty period
         (12/16/2011).

o        Class A, Class B, Class C and Class N shares of each of Oppenheimer Developing Markets Fund and
         Oppenheimer International Small Company Fund may be acquired by exchange only with a minimum initial
         investment of $50,000.  An existing shareholder of each fund may make additional exchanges into that
         fund with as little as $50.


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

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

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

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

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

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

o        Except with respect to the Class B shares described in the next two paragraphs, the contingent deferred
sales charge is imposed on Class B shares acquired by exchange if they are redeemed within six years of the
initial purchase of the exchanged Class B shares.

o        With respect to Class B shares of Oppenheimer Limited Term California Municipal Fund, Oppenheimer
Limited-Term Government Fund, Oppenheimer Limited Term Municipal Fund, Limited Term New York Municipal Fund and
Oppenheimer Senior Floating Rate Fund, the Class B contingent deferred sales charge is imposed on the acquired
shares if they are redeemed within five years of the initial purchase of the exchanged Class B shares.

o        With respect to Class B shares of Oppenheimer Cash Reserves that were acquired through the exchange of
Class B shares initially purchased in the Oppenheimer Capital Preservation Fund, the Class B contingent deferred
sales charge is imposed on the acquired shares if they are redeemed within five years of that initial purchase.

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

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

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

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

         |X|  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 features that
are available in the new fund (such as an Asset Builder Plan or Automatic Withdrawal Plan) will be switched to
the new fund account unless you tell the Transfer Agent not to do so.


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

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

Dividends, Capital Gains and Taxes

Dividends and Distributions. The Fund has no fixed dividend rate and there can be no assurance as to the payment
of any dividends or the realization of any capital gains. The dividends and distributions paid by a class of
shares will vary from time to time depending on market conditions, the composition of the Fund's portfolio, and
expenses borne by the Fund or borne separately by a class. Dividends are calculated in the same manner, at the
same time, and on the same day for each class of shares. However, dividends on Class B, Class C and Class N
shares are expected to be lower than dividends on Class A and Class 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 SAI is based on tax law in effect on the date of the
Prospectus and this SAI. Those laws and regulations may be changed by legislative, judicial, or administrative
action, sometimes with retroactive effect. State and local tax treatment of ordinary income dividends and capital
gain dividends from regulated investment companies may differ from the treatment under the Internal Revenue Code
described below. Potential purchasers of shares of the Fund are urged to consult their tax advisers with specific
reference to their own tax circumstances as well as the consequences of federal, state and local tax rules
affecting an investment in the Fund.

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

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

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

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

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

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

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

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

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

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

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

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

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

         The Fund will be required in certain cases to withhold 28% of ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any shareholder (1) who has failed to provide
a correct taxpayer identification number or to properly certify that number when required, (2) who is subject to
backup withholding for failure to report the receipt of interest or dividend income properly, or (3) who has
failed to certify to the Fund that the shareholder is not subject to backup withholding or is an "exempt
recipient" (such as a corporation). Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and
all income and any tax withheld is identified in reports mailed to shareholders in January of each year with a
copy sent to the IRS.

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

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

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

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

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


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


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

Additional Information About the Fund

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

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

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

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

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

--------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER QUEST FOR VALUE FUNDS:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Small- & Mid- Cap Value Fund (one of the portfolios constituting the
Oppenheimer Quest For Value Funds), including the statement of investments, as
of October 31, 2006, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 2006, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Small- & Mid- Cap Value Fund as of October 31, 2006, the results of
its operations for the year then ended, the changes in its net assets for each
of the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with U.S.
generally accepted accounting principles.


KPMG LLP

Denver, Colorado
December 12, 2006













STATEMENT OF INVESTMENTS  October 31, 2006
--------------------------------------------------------------------------------

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
COMMON STOCKS--94.7%
--------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--13.6%
--------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--4.9%
Boyd Gaming Corp.                                      750,000   $   29,602,500
--------------------------------------------------------------------------------
Hilton Hotels Corp.                                  1,200,000       34,704,000
--------------------------------------------------------------------------------
Penn National
Gaming, Inc. 1                                       1,200,000       43,884,000
--------------------------------------------------------------------------------
Scientific Games
Corp., Cl. A 1                                       1,000,000       28,030,000
--------------------------------------------------------------------------------
Starwood Hotels &
Resorts Worldwide,
Inc.                                                   575,000       34,350,500
                                                                 ---------------
                                                                    170,571,000

--------------------------------------------------------------------------------
HOUSEHOLD DURABLES--2.1%
Harman International
Industries, Inc.                                       325,000       33,263,750
--------------------------------------------------------------------------------
Jarden Corp. 1                                       1,100,000       39,578,000
                                                                 ---------------
                                                                     72,841,750

--------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.9%
ValueVision Media,
Inc., Cl. A 1,2                                      2,500,000       32,275,000
--------------------------------------------------------------------------------
MEDIA--4.2%
Cablevision Systems
Corp. New York
Group, Cl. A 1                                       1,200,000       33,348,000
--------------------------------------------------------------------------------
Clear Channel
Outdoor Holdings,
Inc., Cl. A 1                                        1,600,000       39,280,000
--------------------------------------------------------------------------------
GateHouse
Media, Inc.                                            171,500        3,678,675
--------------------------------------------------------------------------------
Liberty Global, Inc.,
Series A 1                                           1,275,000       33,456,000
--------------------------------------------------------------------------------
Liberty Global, Inc.,
Series C 1                                           1,375,000       34,966,250
                                                                 ---------------
                                                                    144,728,925

--------------------------------------------------------------------------------
SPECIALTY RETAIL--0.5%
Urban Outfitters,
Inc. 1,3                                             1,000,000       17,500,000
--------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.0%
Quicksilver, Inc. 1                                  2,500,000       34,875,000

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
CONSUMER STAPLES--3.9%
--------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.3%
CVS Corp.                                            1,400,000   $   43,932,000
--------------------------------------------------------------------------------
FOOD PRODUCTS--2.6%
Bunge Ltd.                                             600,000       38,466,000
--------------------------------------------------------------------------------
ConAgra Foods, Inc.                                  2,050,000       53,607,500
                                                                 ---------------
                                                                     92,073,500

--------------------------------------------------------------------------------
ENERGY--5.3%
--------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.9%
Cameron International
Corp. 1                                                350,000       17,535,000
--------------------------------------------------------------------------------
FMC Technologies,
Inc. 1                                                 150,000        9,067,500
--------------------------------------------------------------------------------
National Oilwell
Varco, Inc. 1                                          650,000       39,260,000
--------------------------------------------------------------------------------
Weatherford
International Ltd. 1                                   850,000       34,918,000
                                                                 ---------------
                                                                    100,780,500

--------------------------------------------------------------------------------
OIL & GAS--2.4%
Kinder Morgan
Management LLC 1                                             1               31
--------------------------------------------------------------------------------
Murphy Oil Corp.                                       350,000       16,506,000
--------------------------------------------------------------------------------
Peabody Energy
Corp.                                                  825,000       34,625,250
--------------------------------------------------------------------------------
Range Resources
Corp.                                                1,150,000       31,222,500
                                                                 ---------------
                                                                     82,353,781

--------------------------------------------------------------------------------
FINANCIALS--21.6%
--------------------------------------------------------------------------------
CAPITAL MARKETS--3.6%
Affiliated Managers
Group, Inc. 1                                          575,000       57,580,500
--------------------------------------------------------------------------------
E*TRADE Financial
Corp. 1                                              2,450,000       57,036,000
--------------------------------------------------------------------------------
Granahan McCourt
Acquisition Corp. 1,2                                1,350,000       10,665,000
                                                                 ---------------
                                                                    125,281,500

--------------------------------------------------------------------------------
COMMERCIAL BANKS--2.7%
Cullen/Frost
Bankers, Inc.                                          300,000       16,248,000


                  22 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
COMMERCIAL BANKS Continued
Marshall & Ilsley
Corp.                                                  725,000   $   34,756,500
--------------------------------------------------------------------------------
Zions Bancorp                                          550,000       44,220,000
                                                                 ---------------
                                                                     95,224,500

--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.5%
CIT Group, Inc.                                        675,000       35,133,750
--------------------------------------------------------------------------------
iShares Russell Midcap
Value Index Fund                                       375,000       53,081,250
                                                                 ---------------
                                                                     88,215,000

--------------------------------------------------------------------------------
INSURANCE--7.3%
ACE Ltd.                                               300,000       17,175,000
--------------------------------------------------------------------------------
Everest Re Group
Ltd.                                                   700,000       69,426,000
--------------------------------------------------------------------------------
Fidelity National
Financial, Inc.                                      1,000,000       22,300,000
--------------------------------------------------------------------------------
Fidelity National Title
Group, Inc., Cl. A 2                                 2,250,000       49,522,500
--------------------------------------------------------------------------------
First Mercury Financial
Corp. 1                                                 46,700          966,690
--------------------------------------------------------------------------------
National Financial
Partners Corp.                                       1,450,000       57,130,000
--------------------------------------------------------------------------------
Platinum Underwriters
Holdings Ltd.                                        1,200,000       35,832,000
                                                                 ---------------
                                                                    252,352,190

--------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--2.7%
American Financial
Realty Trust                                         1,770,300       20,659,401
--------------------------------------------------------------------------------
BioMed Realty
Trust, Inc.                                          1,000,000       32,230,000
--------------------------------------------------------------------------------
Douglas Emmett,
Inc. 1                                                 450,000       10,732,500
--------------------------------------------------------------------------------
Strategic Hotels &
Resorts, Inc.                                        1,400,000       29,778,000
                                                                 ---------------
                                                                     93,399,901

--------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.7%
Grubb & Ellis Co. 1,2                                2,000,000       24,380,000

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--2.1%
Countrywide
Financial Corp.                                        500,000   $   19,060,000
--------------------------------------------------------------------------------
NewAlliance
Bancshares, Inc.                                     3,500,000       54,180,000
                                                                 ---------------
                                                                     73,240,000

--------------------------------------------------------------------------------
HEALTH CARE--9.5%
--------------------------------------------------------------------------------
BIOTECHNOLOGY--1.1%
MedImmune, Inc. 1                                    1,200,000       38,448,000
--------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--5.0%
Coventry Health
Care, Inc. 1                                           700,000       32,865,000
--------------------------------------------------------------------------------
DaVita, Inc. 1                                         625,000       34,768,750
--------------------------------------------------------------------------------
Omnicare, Inc.                                       1,800,000       68,184,000
--------------------------------------------------------------------------------
Triad Hospitals, Inc. 1                              1,000,000       37,030,000
                                                                 ---------------
                                                                    172,847,750

--------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--3.0%
Fisher Scientific
International, Inc. 1                                  550,000       47,091,000
--------------------------------------------------------------------------------
Invitrogen Corp. 1                                   1,000,000       58,010,000
                                                                 ---------------
                                                                    105,101,000

--------------------------------------------------------------------------------
PHARMACEUTICALS--0.4%
Sepracor, Inc. 1                                       300,000       15,528,000
--------------------------------------------------------------------------------
INDUSTRIALS--11.7%
--------------------------------------------------------------------------------
AEROSPACE & DEFENSE--2.5%
Empresa Brasileira
de Aeronautica
SA, ADR                                              1,000,000       41,630,000
--------------------------------------------------------------------------------
Goodrich Corp.                                       1,050,000       46,294,500
--------------------------------------------------------------------------------
Stanley, Inc. 1                                          3,100           54,002
                                                                 ---------------
                                                                     87,978,502

--------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.8%
Acco Brands Corp. 1                                    500,000       12,150,000
--------------------------------------------------------------------------------
TeleTech
Holdings, Inc. 1                                       816,762       15,853,350
                                                                 ---------------
                                                                     28,003,350


                  23 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--1.4%
Foster Wheeler Ltd. 1                                1,100,000   $   49,445,000
--------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--2.4%
AMETEK, Inc.                                         1,000,000       46,680,000
--------------------------------------------------------------------------------
Cooper Industries
Ltd., Cl. A                                            400,000       35,780,000
                                                                 ---------------
                                                                     82,460,000

--------------------------------------------------------------------------------
MACHINERY--2.9%
Actuant Corp., Cl. A                                   800,000       41,072,000
--------------------------------------------------------------------------------
Oshkosh Truck Corp.                                  1,350,000       61,033,500
                                                                 ---------------
                                                                    102,105,500

--------------------------------------------------------------------------------
MARINE--0.8%
Alexander &
Baldwin, Inc.                                          600,000       27,618,000
--------------------------------------------------------------------------------
ROAD & RAIL--0.9%
Hunt (J.B.) Transport
Services, Inc.                                       1,350,000       29,214,000
--------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--12.5%
--------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.8%
Finisar Corp. 1                                        989,883        3,444,793
--------------------------------------------------------------------------------
Juniper Networks,
Inc. 1                                               1,500,000       25,830,000
--------------------------------------------------------------------------------
Optium Corp. 1                                          20,400          413,100
                                                                 ---------------
                                                                     29,687,893

--------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.8%
Seagate Technology                                   1,250,000       28,225,000
--------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--3.0%
Agilent Technologies,
Inc. 1                                               2,200,000       78,320,000
--------------------------------------------------------------------------------
Amphenol Corp.,
Cl. A                                                  400,000       27,160,000
                                                                 ---------------
                                                                    105,480,000

--------------------------------------------------------------------------------
IT SERVICES--0.5%
BISYS Group,
Inc. (The) 1                                         1,500,000       16,560,000

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--2.9%
Analog Devices, Inc.                                   600,000   $   19,092,000
--------------------------------------------------------------------------------
ASML Holding NV 1                                    1,500,000       34,260,000
--------------------------------------------------------------------------------
Conexant Systems,
Inc. 1                                               6,000,000       11,580,000
--------------------------------------------------------------------------------
Fairchild Semiconductor
International, Inc.,
Cl. A 1                                                500,000        8,055,000
--------------------------------------------------------------------------------
Marvell Technology
Group Ltd. 1                                         1,500,000       27,420,000
                                                                 ---------------
                                                                    100,407,000

--------------------------------------------------------------------------------
SOFTWARE--4.5%
Activision, Inc. 1                                   2,500,000       38,550,000
--------------------------------------------------------------------------------
Novell, Inc. 1                                       6,000,000       36,000,000
--------------------------------------------------------------------------------
Nuance
Communications,
Inc. 1                                               3,700,000       42,698,000
--------------------------------------------------------------------------------
Synopsys, Inc. 1                                     1,750,000       39,392,500
                                                                 ---------------
                                                                    156,640,500

--------------------------------------------------------------------------------
MATERIALS--7.7%
--------------------------------------------------------------------------------
CHEMICALS--2.8%
Ashland, Inc.                                          600,000       35,460,000
--------------------------------------------------------------------------------
Chemtura Corp.                                       4,000,000       34,320,000
--------------------------------------------------------------------------------
Mosaic Co. (The) 1                                   1,500,000       28,080,000
                                                                 ---------------
                                                                     97,860,000

--------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--2.5%
Martin Marietta
Materials, Inc.                                        425,000       37,400,000
--------------------------------------------------------------------------------
Texas Industries, Inc.                                 800,000       49,680,000
                                                                 ---------------
                                                                     87,080,000

--------------------------------------------------------------------------------
METALS & MINING--2.4%
Phelps Dodge Corp.                                     300,000       30,114,000
--------------------------------------------------------------------------------
Steel Dynamics, Inc.                                   300,000       18,033,000


                  24 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
METALS & MINING Continued
United States Steel
Corp.                                                  500,000   $   33,800,000
                                                                 ---------------
                                                                     81,947,000

--------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.1%
--------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.1%
Crown Castle
International Corp. 1                                1,125,000       37,856,250
--------------------------------------------------------------------------------
UTILITIES--7.8%
--------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.0%
Edison International,
Inc.                                                   800,000       35,552,000
--------------------------------------------------------------------------------
ENERGY TRADERS--3.7%
AES Corp. (The) 1                                    2,200,000       48,378,000
--------------------------------------------------------------------------------
Mirant Corp. 1                                       1,200,000       35,484,000
--------------------------------------------------------------------------------
NRG Energy, Inc. 1                                     900,000       43,335,000
                                                                 ---------------
                                                                    127,197,000

                                                                          VALUE
                                                        SHARES       SEE NOTE 1
--------------------------------------------------------------------------------
GAS UTILITIES--1.0%
Southern Union Co.                                   1,200,000   $   33,216,000
--------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--2.1%
CMS Energy Corp. 1                                   5,000,000       74,450,000
                                                                 ---------------
Total Common Stocks
(Cost $2,894,986,499)                                             3,294,932,292

--------------------------------------------------------------------------------
MONEY MARKET FUND--4.8%
--------------------------------------------------------------------------------
Oppenheimer
Institutional Money
Market Fund, Cl. E, 5.23% 2,4
(Cost $165,612,944)                                165,612,944      165,612,944

                                               EXPIRATION
                                                     DATE    STRIKE   CONTRACTS
--------------------------------------------------------------------------------------------------
OPTIONS PURCHASED--0.0%
--------------------------------------------------------------------------------------------------
Urban Outfitters Put 1 (Cost $447,497)           12/18/06   $ 17.50       5,000           550,000
--------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $3,061,046,940)                                                      99.5%    3,461,095,236
--------------------------------------------------------------------------------------------------
OTHER ASSETS NET
OF LIABILITIES                                                              0.5        17,779,243
                                                                      ----------------------------
NET ASSETS                                                                100.0%  $ 3,478,874,479
                                                                      ============================


                  25 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

STATEMENTS OF INVESTMENTS  Continued
--------------------------------------------------------------------------------

FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Non-income producing security.

2. 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, 2006. Transactions during the period in
which the issuer was an affiliate are as follows:

                                                        SHARES           GROSS           GROSS              SHARES
                                              OCTOBER 31, 2005       ADDITIONS      REDUCTIONS    OCTOBER 31, 2006
-------------------------------------------------------------------------------------------------------------------
Double Hull Tankers, Inc.                            2,000,000              --       2,000,000                  --
Fidelity National Title Group, Inc., Cl. A                  --       2,250,000              --           2,250,000
Granahan McCourt Acquisition Corp.                          --       1,350,000              --           1,350,000
Grubb & Ellis Co.                                           --       2,200,000         200,000           2,000,000
Horizon Lines, Inc., Cl. A                           2,500,000              --       2,500,000                  --
NorthStar Realty Finance Corp.                       2,000,000         500,000       2,500,000                  --
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.23%*                                  --     251,602,898      85,989,954         165,612,944
ValueVision Media, Inc., Cl. A                       2,000,000         600,000         100,000           2,500,000

                                                                         VALUE        DIVIDEND            REALIZED
                                                                    SEE NOTE 1          INCOME         GAIN (LOSS)
-------------------------------------------------------------------------------------------------------------------
Double Hull Tankers, Inc.                                        $          --     $ 1,131,158        $  1,697,435
Fidelity National Title Group, Inc., Cl. A                          49,522,500         348,020                  --
Granahan McCourt Acquisition Corp.                                  10,665,000              --                  --
Grubb & Ellis Co.                                                   24,380,000              --              35,617
Horizon Lines, Inc., Cl. A                                                  --         473,297           6,688,750
NorthStar Realty Finance Corp.                                              --       1,275,000           6,312,394
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.23%*                                         165,612,944         297,146                  --
ValueVision Media, Inc., Cl. A                                      32,275,000              --             (44,164)
                                                                 --------------------------------------------------
                                                                 $ 282,455,444     $ 3,524,621        $ 14,690,032
                                                                 ==================================================

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

3. A sufficient amount of securities has been designated to cover outstanding
written put options, as follows:

                               CONTRACTS   EXPIRATION   EXERCISE     PREMIUM        VALUE
                          SUBJECT TO PUT         DATE      PRICE    RECEIVED   SEE NOTE 5
------------------------------------------------------------------------------------------
Urban Outfitters, Inc.            10,000     12/18/06     $   15    $179,994     $250,000

4. Rate shown is the 7-day yield as of October 31, 2006.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  26 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
Investments, at value--see accompanying statement
of investments:
Unaffiliated companies (cost $2,796,110,195)                    $ 3,178,639,792
Affiliated companies (cost $264,936,745)                            282,455,444
                                                                ----------------
                                                                  3,461,095,236
--------------------------------------------------------------------------------
Cash                                                                    634,639
--------------------------------------------------------------------------------
Receivables and other assets:
Investments sold                                                     63,720,328
Shares of beneficial interest sold                                   11,494,582
Interest and dividends                                                  758,271
Other                                                                    94,871
                                                                ----------------
Total assets                                                      3,537,797,927

--------------------------------------------------------------------------------
LIABILITIES
--------------------------------------------------------------------------------
Options written, at value (premiums received $179,994)--
see accompanying statement of investments                               250,000
--------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                50,411,737
Shares of beneficial interest redeemed                                6,358,017
Distribution and service plan fees                                      707,063
Transfer and shareholder servicing agent fees                           693,686
Trustees' compensation                                                  270,106
Shareholder communications                                              176,886
Other                                                                    55,953
                                                                ----------------
Total liabilities                                                    58,923,448

--------------------------------------------------------------------------------
NET ASSETS                                                      $ 3,478,874,479
                                                                ================

--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
--------------------------------------------------------------------------------
Par value of shares of beneficial interest                      $       967,923
--------------------------------------------------------------------------------
Additional paid-in capital                                        2,891,643,101
--------------------------------------------------------------------------------
Accumulated net investment loss                                        (277,699)
--------------------------------------------------------------------------------
Accumulated net realized gain on investments                        186,562,864
--------------------------------------------------------------------------------
Net unrealized appreciation on investments                          399,978,290
                                                                ----------------
NET ASSETS                                                      $ 3,478,874,479
                                                                ================


                  27 | OPPENHEIMER SMALL- & MID- 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
$2,343,715,020 and 63,424,325 shares of beneficial interest outstanding)                   $ 36.95
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price)                                                                   $ 39.20
---------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $327,907,647
and 9,823,453 shares of beneficial interest outstanding)                                   $ 33.38
---------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $542,273,331
and 16,256,261 shares of beneficial interest outstanding)                                  $ 33.36
---------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $229,340,064
and 6,328,579 shares of beneficial interest outstanding)                                   $ 36.24
---------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $35,638,417 and 959,683 shares of beneficial interest outstanding)           $ 37.14

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  28 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

--------------------------------------------------------------------------------
INVESTMENT INCOME
--------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding
taxes of $107,861)                                              $    28,632,343
Affiliated companies                                                  3,524,621
--------------------------------------------------------------------------------
Interest                                                              3,514,842
--------------------------------------------------------------------------------
Other income                                                             41,003
                                                                ----------------
Total investment income                                              35,712,809

--------------------------------------------------------------------------------
EXPENSES
--------------------------------------------------------------------------------
Management fees                                                      18,046,466
--------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                               4,647,893
Class B                                                               3,071,329
Class C                                                               4,282,245
Class N                                                                 854,481
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                               3,963,522
Class B                                                                 855,929
Class C                                                                 993,333
Class N                                                                 571,007
Class Y                                                                   2,683
--------------------------------------------------------------------------------
Shareholder communications:
Class A                                                                 373,167
Class B                                                                  98,279
Class C                                                                 104,320
Class N                                                                  14,180
Class Y                                                                     128
--------------------------------------------------------------------------------
Trustees' compensation                                                  229,785
--------------------------------------------------------------------------------
Custodian fees and expenses                                              18,337
--------------------------------------------------------------------------------
Administration service fees                                               1,500
--------------------------------------------------------------------------------
Other                                                                   312,194
                                                                ----------------
Total expenses                                                       38,440,778
Less reduction to custodian expenses                                     (4,823)
Less waivers and reimbursements of expenses                             (14,643)
                                                                ----------------
Net expenses                                                         38,421,312

--------------------------------------------------------------------------------
NET INVESTMENT LOSS                                                  (2,708,503)


                  29 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
--------------------------------------------------------------------------------
Net realized gain on:
Investments:
  Unaffiliated companies                                        $   207,930,588
  Affiliated companies                                               14,690,032
                                                                ----------------
Net realized gain                                                   222,620,620
--------------------------------------------------------------------------------
Net change in unrealized appreciation
(depreciation) on:
Investments                                                         209,781,413
Option contracts                                                        (70,006)
                                                                ----------------
Net change in unrealized appreciation                               209,711,407

--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS            $   429,623,524
                                                                ================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  30 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

YEAR ENDED OCTOBER 31,                                                                     2006              2005
------------------------------------------------------------------------------------------------------------------
OPERATIONS
------------------------------------------------------------------------------------------------------------------
Net investment loss                                                             $    (2,708,503)  $    (5,529,882)
------------------------------------------------------------------------------------------------------------------
Net realized gain                                                                   222,620,620       134,128,520
------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation                                               209,711,407        86,417,734
                                                                                ----------------------------------
Net increase in net assets resulting from operations                                429,623,524       215,016,372

------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A                                                                             (77,804,945)      (61,107,717)
Class B                                                                             (16,849,275)      (22,765,841)
Class C                                                                             (19,268,301)      (14,629,531)
Class N                                                                              (6,894,529)       (4,196,588)
Class Y                                                                                (927,666)               --

------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A                                                                             833,598,110       681,217,184
Class B                                                                              24,936,974        54,529,663
Class C                                                                             205,626,330       156,100,810
Class N                                                                             107,130,883        60,721,673
Class Y                                                                              33,195,013             1,000

------------------------------------------------------------------------------------------------------------------
NET ASSETS
------------------------------------------------------------------------------------------------------------------
Total increase                                                                    1,512,366,118     1,064,887,025
------------------------------------------------------------------------------------------------------------------
Beginning of period                                                               1,966,508,361       901,621,336
                                                                                ----------------------------------
End of period (including accumulated net investment loss
of $277,699 and $92,400, respectively)                                          $ 3,478,874,479   $ 1,966,508,361
                                                                                ==================================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  31 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

CLASS A         YEAR ENDED OCTOBER 31,                     2006            2005            2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     33.08     $     30.08     $     26.11     $     19.18     $     19.53
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                                .05 1          (.04) 1         (.17) 1         (.04)           (.19)
Net realized and unrealized gain (loss)                    5.69            6.22            5.42            6.97            (.09)
                                                    -----------------------------------------------------------------------------
Total from investment operations                           5.74            6.18            5.25            6.93            (.28)
---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.87)          (3.18)          (1.28)             --            (.07)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     36.95     $     33.08     $     30.08     $     26.11     $     19.18
                                                    =============================================================================

---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        18.04%          21.87%          20.90%          36.13%          (1.45)%
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $ 2,343,715     $ 1,298,204     $   543,999     $   330,215     $   222,029
---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $ 1,884,099     $   893,501     $   436,617     $   245,319     $   231,657
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                               0.13%          (0.11)%         (0.61)%         (0.12)%         (0.69)%
Total expenses                                             1.14% 4         1.23%           1.35%           1.59%           1.68%
Expenses after payments and waivers and
reduction to custodian expenses                            1.14%           1.23%           1.35%           1.56%           1.66%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     136%            121%            163%            163%            151%

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

   Year Ended October 31, 2006           1.14%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  32 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

CLASS B         YEAR ENDED OCTOBER 31,                     2006            2005            2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     30.29     $     28.01     $     24.59     $     18.20     $     18.65
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.22) 1         (.29) 1         (.37) 1         (.17)           (.18)
Net realized and unrealized gain (loss)                    5.18            5.75            5.07            6.56            (.20)
                                                    -----------------------------------------------------------------------------
Total from investment operations                           4.96            5.46            4.70            6.39            (.38)
---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.87)          (3.18)          (1.28)             --            (.07)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     33.38     $     30.29     $     28.01     $     24.59     $     18.20
                                                    =============================================================================

---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        17.08%          20.82%          19.91%          35.11%          (2.06)%
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   327,908     $   272,643     $   198,971     $   171,896     $   129,885
---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   307,618     $   243,754     $   190,251     $   137,734     $   134,304
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss                                       (0.71)%         (0.98)%         (1.43)%         (0.85)%         (1.34)%
Total expenses                                             1.97% 4         2.09%           2.18%           2.42%           2.34%
Expenses after payments and waivers and
reduction to custodian expenses                            1.97%           2.09%           2.18%           2.29%           2.32%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     136%            121%            163%            163%            151%

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

   Year Ended October 31, 2006           1.97%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  33 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

CLASS C         YEAR ENDED OCTOBER 31,                     2006            2005            2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     30.25     $     27.97     $     24.55     $     18.17     $     18.62
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.20) 1         (.27) 1         (.37) 1         (.13)           (.10)
Net realized and unrealized gain (loss)                    5.18            5.73            5.07            6.51            (.28)
                                                    -----------------------------------------------------------------------------
Total from investment operations                           4.98            5.46            4.70            6.38            (.38)
---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.87)          (3.18)          (1.28)             --            (.07)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     33.36     $     30.25     $     27.97     $     24.55     $     18.17
                                                    =============================================================================

---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        17.17%          20.85%          19.95%          35.11%          (2.06)%
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   542,273     $   292,689     $   122,329     $    71,779     $    46,360
---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   429,214     $   199,650     $    96,555     $    53,649     $    45,455
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss                                       (0.64)%         (0.91)%         (1.42)%         (0.85)%         (1.33)%
Total expenses                                             1.92% 4         2.03%           2.16%           2.40%           2.33%
Expenses after payments and waivers and
reduction to custodian expenses                            1.92%           2.03%           2.16%           2.30%           2.31%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     136%            121%            163%            163%            151%

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

   Year Ended October 31, 2006           1.92%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  34 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

CLASS N         YEAR ENDED OCTOBER 31,                     2006            2005            2004            2003            2002
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                $     32.58     $     29.77     $     25.98     $     19.13     $     19.51
---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                        (.08) 1         (.14) 1         (.26) 1         (.11)           (.27)
Net realized and unrealized gain (loss)                    5.61            6.13            5.33            6.96            (.04)
                                                    -----------------------------------------------------------------------------
Total from investment operations                           5.53            5.99            5.07            6.85            (.31)
---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                      (1.87)          (3.18)          (1.28)             --            (.07)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                      $     36.24     $     32.58     $     29.77     $     25.98     $     19.13
                                                    =============================================================================

---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                        17.65%          21.42%          20.29%          35.81%          (1.61)%
---------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)            $   229,340     $   102,971     $    36,322     $    11,216     $     4,558
---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                   $   171,305     $    68,779     $    21,951     $     6,722     $     2,882
---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss                                       (0.22)%         (0.44)%         (0.93)%         (0.36)%         (0.78)%
Total expenses                                             1.50% 4         1.57%           1.70%           2.01%           1.82%
Expenses after payments and waivers and
reduction to custodian expenses                            1.50%           1.57%           1.66%           1.80%           1.80%
---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                     136%            121%            163%            163%            151%

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

   Year Ended October 31, 2006           1.50%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  35 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

CLASS Y         YEAR ENDED OCTOBER 31,                               2006                2005 1
--------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
--------------------------------------------------------------------------------------------------
Net asset value, beginning of period                        $       33.08          $      33.38
--------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2                                        .26                    -- 3
Net realized and unrealized gain (loss)                              5.67                  (.30)
                                                            --------------------------------------
Total from investment operations                                     5.93                  (.30)
--------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain                                (1.87)                   --
--------------------------------------------------------------------------------------------------
Net asset value, end of period                              $       37.14          $      33.08
                                                            ======================================

--------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 4                                  18.64%                (0.90)%
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                    $      35,638          $          1
--------------------------------------------------------------------------------------------------
Average net assets (in thousands)                           $      12,164          $          1
--------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss)                                         0.76%                (0.32)%
Total expenses                                                       0.68% 6,7,8           0.90% 6
--------------------------------------------------------------------------------------------------
Portfolio turnover rate                                               136%                  121%

1. For the period from October 24, 2005 (inception of offering) to October 31,
2005.

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 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.

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

6. Reduction to custodian expenses less than 0.01%.

7. Voluntary waiver of management fees less than 0.01%.

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

   Year Ended October 31, 2006           0.68%

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                  36 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

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

Oppenheimer Small- & Mid- 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, 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 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 may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ(R) are valued based on the
closing price provided by NASDAQ prior to the time when the Fund's assets are
valued. In the absence of a sale, the security is valued at the last sale price
on the prior trading day, if it is within the spread of the closing "bid" and
"asked" prices, and if not, at the closing bid price. Securities traded on
foreign exchanges are valued based on the last sale price on the principal
exchange on which the security is traded, as identified by the portfolio pricing
service, prior to the time when the Fund's assets are valued. In the absence of
a sale, the security is valued at the official closing price on the principal
exchange. Corporate, government and municipal debt instruments


                  37 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

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

having a remaining maturity in excess of sixty days and all mortgage-backed
securities will be valued at the mean between the "bid" and "asked" prices.
Futures contracts traded on a commodities or futures exchange will be valued at
the final settlement price or official closing price on the principal exchange
as reported by such principal exchange at its trading session ending at, or most
recently prior to, the time when the Fund's assets are valued. Securities
(including restricted securities) for which market quotations are not readily
available are valued at their fair value. Foreign and domestic securities whose
values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Investments in open-end registered
investment companies are valued at that fund's net asset value. Short-term
"money market type" debt securities with remaining maturities of sixty days or
less are valued at amortized cost (which approximates market value).

--------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the New
York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each
day the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.

      Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.

      The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.

--------------------------------------------------------------------------------
AFFILIATED FUNDS. The Fund is permitted to invest daily available cash balances
in affiliated money market funds. Each day, the Fund invests the available cash
in Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current
income and stability of principal. The Manager is also the investment advisor of
IMMF. The Fund's investment in IMMF is included in the Statement of Investments.
Included in the net earnings received from IMMF is a 0.10% management fee paid
to the Manager by IMMF. The Manager will waive fees and/or reimburse Fund
expenses in an amount equal to the indirect management fees incured through the
Fund's investment in IMMF.


                  38 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

--------------------------------------------------------------------------------
INVESTMENTS WITH OFF-BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities in the annual and semiannual reports.

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

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

The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.

                                                              NET UNREALIZED
                                                                APPRECIATION
                                                            BASED ON COST OF
                                                              SECURITIES AND
    UNDISTRIBUTED    UNDISTRIBUTED         ACCUMULATED     OTHER INVESTMENTS
    NET INVESTMENT       LONG-TERM                LOSS    FOR FEDERAL INCOME
    INCOME                    GAIN    CARRYFORWARD 1,2          TAX PURPOSES
    ------------------------------------------------------------------------
    $110,104,749       $92,871,997                $ --          $383,564,408

1. During the fiscal year ended October 31, 2006, the Fund did not utilized any
capital loss carryforward.

2. During the fiscal year ended October 31, 2005, the Fund did not utilized any
capital loss carryforward.

Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for October 31, 2006. Net assets of the
Fund were unaffected by the reclassifications.


                  39 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

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

                                  REDUCTION TO                  REDUCTION TO
                                   ACCUMULATED               ACCUMULATED NET
    INCREASE TO                 NET INVESTMENT                 REALIZED GAIN
    PAID-IN CAPITAL                       LOSS              ON INVESTMENTS 3
    ------------------------------------------------------------------------
    $24,855,041                     $2,523,204                   $27,378,245

3. $24,855,041, including $12,564,006 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, 2006
and October 31, 2005 was as follows:

                                          YEAR ENDED              YEAR ENDED
                                    OCTOBER 31, 2006        OCTOBER 31, 2005
    ------------------------------------------------------------------------
    Distributions paid from:
    Ordinary income                     $ 73,885,502            $ 66,423,473
    Long-term capital gain                47,859,214              36,276,204
                                        ------------------------------------
    Total                               $121,744,716            $102,699,677
                                        ====================================

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, 2006 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.

    Federal tax cost of securities          $  3,077,460,822
    Federal tax cost of other investments           (179,994)
                                            ----------------
    Total federal tax cost                  $  3,077,280,828
                                            ================
    Gross unrealized appreciation           $    438,189,609
    Gross unrealized depreciation                (54,625,201)
                                            ----------------
    Net unrealized appreciation             $    383,564,408
                                            ================

--------------------------------------------------------------------------------
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, 2006, the Fund's projected benefit obligations were increased by $189,030
and payments of $4,934 were made to retired trustees, resulting in an
accumulated liability of $270,106 as of October 31, 2006.

      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


                  40 | OPPENHEIMER SMALL- & MID- CAP VALUE 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. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.

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

--------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.

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


                  41 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

--------------------------------------------------------------------------------
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, 2006       YEAR ENDED OCTOBER 31, 2005 1
                                     SHARES              AMOUNT           SHARES             AMOUNT
------------------------------------------------------------------------------------------------------
CLASS A
Sold                             37,106,616    $  1,282,205,333       26,126,619    $   843,808,397
Dividends and/or
distributions reinvested          2,094,799          68,918,902        1,967,502         57,903,518
Redeemed                        (15,026,011)       (517,526,125) 2    (6,928,846)      (220,494,731) 3
                                ----------------------------------------------------------------------
Net increase                     24,175,404        $833,598,110       21,165,275       $681,217,184
                                ======================================================================

------------------------------------------------------------------------------------------------------
CLASS B
Sold                              3,195,736    $    100,252,356        3,465,166    $   102,291,118
Dividends and/or
distributions reinvested            505,807          15,143,846          780,877         21,200,799
Redeemed                         (2,880,075)        (90,459,228) 2    (2,347,347)       (68,962,254) 3
                                ----------------------------------------------------------------------
Net increase                        821,468    $     24,936,974        1,898,696    $    54,529,663
                                ======================================================================

------------------------------------------------------------------------------------------------------
CLASS C
Sold                              8,543,881    $    267,752,421        6,056,884    $   179,229,772
Dividends and/or
distributions reinvested            473,830          14,172,254          473,750         12,843,349
Redeemed                         (2,436,172)        (76,298,345) 2    (1,229,743)       (35,972,311) 3
                                ----------------------------------------------------------------------
Net increase                      6,581,539        $205,626,330        5,300,891       $156,100,810
                                ======================================================================

------------------------------------------------------------------------------------------------------
CLASS N
Sold                              4,522,723    $    153,395,550        2,445,507    $    77,193,747
Dividends and/or
distributions reinvested            184,925           5,986,033          130,920          3,807,139
Redeemed                         (1,539,472)        (52,250,700) 2      (636,113)       (20,279,213) 3
                                ----------------------------------------------------------------------
Net increase                      3,168,176        $107,130,883        1,940,314    $    60,721,673
                                ======================================================================

------------------------------------------------------------------------------------------------------
CLASS Y
Sold                              1,347,807    $     46,153,192           29.958    $         1,000
Dividends and/or
distributions reinvested             28,178             927,610               --                 --
Redeemed                           (416,332)        (13,885,789) 2            --                 --
                                ----------------------------------------------------------------------
Net increase                        959,653    $     33,195,013           29.958    $         1,000
                                ======================================================================

1. For the year ended October 31, 2005, for Class A, Class B, Class C and Class
N shares and for the period from October 24, 2005 (inception of offering) to
October 31, 2005, for Class Y shares.

2. Net of redemption fees of $25,973, $4,241, $5,917, $2,361 and $168 for Class
A, Class B, Class C, Class N and Class Y, respectively.

3. Net of redemption fees of $36,403, $9,931, $8,134 and $2,802 for Class A,
Class B, Class C and Class N, respectively.


                  42 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

--------------------------------------------------------------------------------
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, 2006, were as
follows:

                                PURCHASES              SALES
------------------------------------------------------------
Investment securities      $4,792,527,785     $3,720,646,857

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

MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:

FEE SCHEDULE EFFECTIVE JANUARY 1, 2006       FEE SCHEDULE NOVEMBER 1, 2005 TO DECEMBER 31, 2005
-----------------------------------------------------------------------------------------------
Up to $400 million         0.80%             Up to $400 million                   0.80%
Next $400 million          0.75              Next $400 million                    0.75
Next $1.2 billion          0.60              Over $800 million                    0.60
Over$2.0 billion           0.58

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

--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended October 31, 2006, the Fund paid
$6,067,599 to OFS for services to the Fund.

      Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum 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.

--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a
Distribution and Service Plan for Class A shares. Under the plan, the Fund 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 periodically 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.


                  43 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

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

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% on Class B and
Class C shares and 0.25% 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 determines its
uncompensated expenses under the plan at calendar quarter ends. The
Distributor's aggregate uncompensated expenses under the plan at September 30,
2006 for Class B, Class C and Class N shares were $2,890,752, $5,583,417 and
$1,291,971, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.

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

                                         CLASS A        CLASS B        CLASS C        CLASS N
                          CLASS A     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, 2006       $1,715,792        $12,461       $448,189        $98,446        $73,919

--------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the year ended October 31, 2006, OFS
waived $8,442 for Class N shares. This undertaking may be amended or withdrawn
at any time.

      The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the year ended October 31, 2006, the Manager waived $6,201 for IMMF
management fees.

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

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


                  44 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

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

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

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

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

                                             PUT OPTIONS
                                 -----------------------
                                 NUMBER OF     AMOUNT OF
                                 CONTRACTS      PREMIUMS
--------------------------------------------------------
Options outstanding as of
October 31, 2005                        --   $        --
Options written                     10,000       179,994
                                 -----------------------
Options outstanding as of
October 31, 2006                    10,000   $   179,994
                                 =======================

--------------------------------------------------------------------------------
6. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax


                  45 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

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

--------------------------------------------------------------------------------
6. RECENT ACCOUNTING PRONOUNCEMENTS Continued

position that, in Management's judgment, will not be fully realized. FIN 48 is
effective for fiscal years beginning after December 15, 2006. As of October 31,
2006, the Manager is evaluating the implications of FIN 48. Its impact in the
Fund's financial statements has not yet been determined.

      In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE
MEASUREMENTS. This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS No. 157 applies to fair value
measurements already required or permitted by existing standards. SFAS No. 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. As of October
31, 2006, the Manager does not believe the adoption of SFAS No. 157 will
materially impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements on changes in net assets for the
period.

--------------------------------------------------------------------------------
7. LITIGATION

A consolidated amended complaint was filed as a putative class action against
the Manager and the Transfer Agent and other defendants (including 51 of the
Oppenheimer funds including the Fund) in the U.S. District Court for the
Southern District of New York on January 10, 2005 and was amended on March 4,
2005. The complaint alleged, among other things, that the Manager charged
excessive fees for distribution and other costs, and that by permitting and/or
participating in those actions, the Directors/Trustees and the Officers of the
funds breached their fiduciary duties to fund shareholders under the Investment
Company Act of 1940 and at common law. The plaintiffs sought unspecified
damages, an accounting of all fees paid, and an award of attorneys' fees and
litigation expenses.

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

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


                  46 | OPPENHEIMER SMALL- & MID- CAP VALUE FUND

                                                   A-7
                                                    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 Services                Road & Rail
Electric Utilities                                    Semiconductors and Semiconductor Equipment
Electrical Equipment                                  Software
Electronic Equipment & Instruments                    Specialty Retail
Energy Equipment & Services                           Textiles, Apparel & Luxury Goods
Food & Staples Retailing                              Thrifts & Mortgage Finance
Food Products                                         Tobacco
Gas Utilities                                         Trading Companies & Distributors
Health Care Equipment & Supplies                      Transportation Infrastructure
Health Care Providers & Services                      Water Utilities
Hotels Restaurants & Leisure                          Wireless Telecommunication Services
Household Durables











                                                    Appendix C

                          OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases,  the initial sales charge that applies to purchases of Class A
shares(2) of the Oppenheimer funds or the contingent  deferred sales charge that
may  apply to Class A,  Class B or  Class C  shares  may be  waived.(3)  That is
because  of  the  economies  of  sales  efforts  realized  by   OppenheimerFunds
Distributor,  Inc.,  (referred to in this document as the "Distributor"),  or by
dealers  or other  financial  institutions  that offer  those  shares to certain
classes of investors. Not all waivers apply to all funds.

For the purposes of some of the waivers  described  below and in the  Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds, the
term "Retirement Plan" refers to the following types of plans:

               1)   plans created or qualified  under Sections  401(a) or 401(k)
                    of the Internal Revenue Code,
               2)   non-qualified deferred compensation plans,
               3)   employee benefit plans(4)
               4)   Group Retirement Plans(5)
               5)   403(b)(7) custodial plan accounts
               6)   Individual    Retirement   Accounts   ("IRAs"),    including
                    traditional  IRAs,  Roth IRAs,  SEP-IRAs,  SARSEPs or SIMPLE
                    plans

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

Waivers  that apply at the time shares are  redeemed  must be  requested  by the
shareholder and/or dealer in the redemption request. 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 $5 million or more of its
                    assets  (excluding  assets  invested in money market  funds)
                    invested in Applicable Investments.
               3)   The record keeping for a Retirement  Plan is handled under a
                    service  agreement  with  Merrill  Lynch and on the date the
                    plan sponsor signs that agreement,  the Plan has 500 or more
                    eligible  employees (as determined by the Merrill Lynch plan
                    conversion manager). 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.
|_|  Effective October 1, 2005,  taxable accounts  established with the proceeds
     of Required Minimum Distributions from Retirement Plans. |_| |_| B. Waivers
     of the Class A Initial and  Contingent  Deferred  Sales  Charges in Certain
     Transactions.

1.   Class A shares  issued or purchased in the following  transactions  are not
     subject to sales charges (and no concessions are paid by the Distributor on
     such purchases):
|_|  Shares  issued  in  plans  of  reorganization,   such  as  mergers,   asset
     acquisitions and exchange offers, to which the Fund is a party.
|_|  Shares  purchased by the  reinvestment of dividends or other  distributions
     reinvested  from  the Fund or other  Oppenheimer  funds or unit  investment
     trusts  for  which  reinvestment  arrangements  have  been  made  with  the
     Distributor.
|_|  Shares purchased by certain  Retirement Plans that are part of a retirement
     plan or platform offered by banks,  broker-dealers,  financial  advisors or
     insurance companies, or serviced by recordkeepers.
|_|  Shares purchased by the reinvestment of loan repayments by a participant in
     a Retirement Plan for which the Manager or an affiliate acts as sponsor.
|_|  Shares purchased in amounts of less than $5.

2.   Class A shares issued and purchased in the following  transactions  are not
     subject to sales  charges (a dealer  concession at the annual rate of 0.25%
     is paid by the  Distributor  on purchases made within the first 6 months of
     plan establishment):
|_|  Retirement Plans that have $5 million or more in plan assets.
|_|  Retirement Plans with a single plan sponsor that have $5 million or more in
     aggregate assets invested in Oppenheimer funds.

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

The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
|_|  To make Automatic  Withdrawal Plan payments that are limited annually to no
     more than 12% of the account value adjusted annually.
|_|  Involuntary  redemptions  of  shares  by  operation  of law or  involuntary
     redemptions of small accounts  (please refer to "Shareholder  Account Rules
     and Policies," in the applicable fund Prospectus).

|_|  For distributions  from Retirement Plans,  deferred  compensation  plans or
     other employee benefit plans for any of the following purposes:
               1)   Following  the  death  or  disability  (as  defined  in  the
                    Internal  Revenue Code) of the  participant or  beneficiary.
                    The death or disability  must occur after the  participant's
                    account was established.
               2)   To return excess contributions.
               3)   To return contributions made due to a mistake of fact.
               4)   Hardship withdrawals, as defined in the plan.(7)
               5)   Under a Qualified  Domestic  Relations  Order, as defined in
                    the  Internal  Revenue  Code,  or, in the case of an IRA,  a
                    divorce or separation  agreement  described in Section 71(b)
                    of the Internal Revenue Code.
               6)   To  meet  the  minimum  distribution   requirements  of  the
                    Internal Revenue Code.
               7)   To make "substantially equal periodic payments" as described
                    in Section 72(t) of the Internal Revenue Code.
               8)   For loans to participants or beneficiaries.
               9)   Separation from service.(8)
               10)  Participant-directed  redemptions  to  purchase  shares of a
                    mutual fund  (other than a fund  managed by the Manager or a
                    subsidiary  of the  Manager)  if the plan  has made  special
                    arrangements with the Distributor.
               11)  Plan  termination  or  "in-service  distributions,"  if  the
                    redemption   proceeds   are  rolled  over   directly  to  an
                    OppenheimerFunds-sponsored IRA.

|_|  For distributions  from 401(k) plans sponsored by broker-dealers  that have
     entered into a special agreement with the Distributor allowing this waiver.
|_|  For  distributions  from retirement  plans that have $10 million or more in
     plan  assets  and that  have  entered  into a  special  agreement  with the
     Distributor.
|_|  For distributions from retirement plans which are part of a retirement plan
     product or platform  offered by certain  banks,  broker-dealers,  financial
     advisors,  insurance  companies or record keepers which have entered into a
     special agreement with the Distributor.
|_|  At the sole discretion of the  Distributor,  the contingent  deferred sales
     charge may be waived for redemptions of shares requested by the shareholder
     of record within 60 days following the  termination  by the  Distributor of
     the  selling  agreement  between the  Distributor  and the  shareholder  of
     record's broker-dealer of record for the account.

III.     Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds
-------------------------------------------------------------------------------------------------------------------

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

|_|      A.   Waivers for Redemptions in Certain Cases.

The Class B,  Class C and Class N  contingent  deferred  sales  charges  will be
waived for redemptions of shares in the following cases:

|_|  Shares redeemed  involuntarily,  as described in "Shareholder Account Rules
     and Policies," in the applicable Prospectus.

|_|  Redemptions  from accounts other than Retirement  Plans following the death
     or disability of the last  surviving  shareholder.  The death or disability
     must have occurred  after the account was  established,  and for disability
     you must provide  evidence of a  determination  of disability by the Social
     Security Administration.

|_|  The contingent  deferred  sales charges are generally not waived  following
     the death or  disability of a grantor or trustee for a trust  account.  The
     contingent  deferred  sales charges will only be waived in the limited case
     of the death of the trustee of a grantor  trust or  revocable  living trust
     for which the trustee is also the sole beneficiary. The death or disability
     must have occurred  after the account was  established,  and for disability
     you must provide  evidence of a determination  of disability (as defined in
     the Internal Revenue Code).

|_|  Distributions  from  accounts  for which the  broker-dealer  of record  has
     entered into a special agreement with the Distributor allowing this waiver.

|_|  Redemptions  of Class B shares held by  Retirement  Plans whose records are
     maintained on a daily  valuation  basis by Merrill Lynch or an  independent
     record keeper under a contract with Merrill Lynch.

|_|  Redemptions of Class C shares of  Oppenheimer  U.S.  Government  Trust from
     accounts of clients of  financial  institutions  that have  entered  into a
     special arrangement with the Distributor for this purpose.

|_|  Redemptions  of Class C shares  of an  Oppenheimer  fund in  amounts  of $1
     million or more  requested  in writing by a  Retirement  Plan  sponsor  and
     submitted more than 12 months after the Retirement Plan's first purchase of
     Class C shares, if the redemption proceeds are invested to purchase Class N
     shares of one or more Oppenheimer funds.

|_|  Distributions(9)  from Retirement Plans or other employee benefit plans for
     any of the following purposes:
               1)   Following  the  death  or  disability  (as  defined  in  the
                    Internal  Revenue Code) of the  participant or  beneficiary.
                    The death or disability  must occur after the  participant's
                    account was established in an Oppenheimer fund.
               2)   To  return  excess  contributions  made  to a  participant's
                    account.
               3)   To return contributions made due to a mistake of fact.
               4)   To make hardship withdrawals, as defined in the plan.(10)
               5)   To make  distributions  required under a Qualified  Domestic
                    Relations  Order  or, in the case of an IRA,  a  divorce  or
                    separation  agreement  described  in  Section  71(b)  of the
                    Internal Revenue Code.
               6)   To  meet  the  minimum  distribution   requirements  of  the
                    Internal Revenue Code.
               7)   To make "substantially equal periodic payments" as described
                    in Section 72(t) of the Internal Revenue Code.
               8)   For loans to participants or beneficiaries.(11)
               9)   On account of the participant's separation from service.(12)
               10)  Participant-directed  redemptions  to  purchase  shares of a
                    mutual fund  (other than a fund  managed by the Manager or a
                    subsidiary of the Manager)  offered as an investment  option
                    in  a   Retirement   Plan  if  the  plan  has  made  special
                    arrangements with the Distributor.
               11)  Distributions  made  on  account  of a plan  termination  or
                    "in-service"  distributions,  if the redemption proceeds are
                    rolled over directly to an OppenheimerFunds-sponsored IRA.
               12)  For  distributions  from a  participant's  account  under an
                    Automatic  Withdrawal Plan after the participant reaches age
                    59 1/2, as long as the aggregate value of the  distributions
                    does  not  exceed  10%  of  the  account's  value,  adjusted
                    annually.
               13)  Redemptions of Class B shares under an Automatic  Withdrawal
                    Plan for an account  other than a  Retirement  Plan,  if the
                    aggregate  value of the redeemed  shares does not exceed 10%
                    of the account's value, adjusted annually.
               14)  For   distributions   from   401(k)   plans   sponsored   by
                    broker-dealers  that have entered into a special arrangement
                    with the Distributor allowing this waiver.

|_|  Redemptions  of  Class B  shares  or  Class C  shares  under  an  Automatic
     Withdrawal  Plan  from  an  account  other  than a  Retirement  Plan if the
     aggregate value of the redeemed shares does not exceed 10% of the account's
     value annually.

|_|  At the sole discretion of the  Distributor,  the contingent  deferred sales
     charge may be waived for redemptions of shares requested by the shareholder
     of record within 60 days following the  termination  by the  Distributor of
     the  selling  agreement  between the  Distributor  and the  shareholder  of
     record's broker-dealer of record for the account.

|_|      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- & Mid- Cap Value Fund
     Oppenheimer Quest Balanced Fund             Oppenheimer Quest International Value Fund, Inc.
     Oppenheimer Quest Opportunity Value Fund

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

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

     All of the funds  listed  above are  referred  to in this  Appendix  as the
"Former Quest for Value Funds." The waivers of initial and  contingent  deferred
sales charges  described in this Appendix apply to shares of an Oppenheimer fund
that are either:

|_|  acquired  by such  shareholder  pursuant  to an  exchange  of  shares of an
     Oppenheimer fund that was one of the Former Quest for Value Funds, or
|_|  purchased by such shareholder by exchange of shares of another  Oppenheimer
     fund that were  acquired  pursuant to the merger of any of the Former Quest
     for Value Funds into that other  Oppenheimer fund on November 24, 1995. |_|
     |_| A. Reductions or Waivers of Class A Sales Charges.

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

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

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


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

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

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

o    Shareholders  who were  shareholders of the AMA Family of Funds on February
     28, 1991 and who acquired shares of any of the Former Quest for Value Funds
     by merger of a portfolio of the AMA Family of Funds.

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

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

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


|X| Waivers for  Redemptions of Shares  Purchased Prior to March 6, 1995. In the
following  cases,  the  contingent  deferred  sales  charge  will be waived  for
redemptions  of Class A, Class B or Class C shares of an  Oppenheimer  fund. The
shares must have been  acquired  by the merger of a Former  Quest for Value Fund
into the fund or by exchange  from an  Oppenheimer  fund that was a Former Quest
for Value Fund or into  which  such fund  merged.  Those  shares  must have been
purchased prior to March 6, 1995 in connection with:

o    withdrawals under an automatic  withdrawal plan holding only either Class B
     or Class C shares  if the  annual  withdrawal  does not  exceed  10% of the
     initial value of the account value, adjusted annually, and

o    liquidation of a shareholder's  account if the aggregate net asset value of
     shares held in the account is less than the required  minimum value of such
     accounts.

|X| Waivers for  Redemptions  of Shares  Purchased on or After March 6, 1995 but
Prior to November 24, 1995.  In the following  cases,  the  contingent  deferred
sales  charge  will be waived  for  redemptions  of Class A,  Class B or Class C
shares of an Oppenheimer  fund. The shares must have been acquired by the merger
of a  Former  Quest  for  Value  Fund  into  the  fund  or by  exchange  from an
Oppenheimer  fund  that was a Former  Quest For Value  Fund or into  which  such
Former Quest for Value Fund merged.  Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995:

o    redemptions  following the death or disability  of the  shareholder(s)  (as
     evidenced  by a  determination  of  total  disability  by the  U.S.  Social
     Security Administration);

o    withdrawals  under an  automatic  withdrawal  plan (but only for Class B or
     Class C shares)  where the  annual  withdrawals  do not  exceed  10% of the
     initial value of the account value; adjusted annually, and

o    liquidation of a shareholder's  account if the aggregate net asset value of
     shares held in the account is less than the required minimum account value.

     A shareholder's  account will be credited with the amount of any contingent
deferred  sales charge paid on the redemption of any Class A, Class B or Class C
shares of the  Oppenheimer  fund  described  in this section if the proceeds are
invested  in the same Class of shares in that fund or another  Oppenheimer  fund
within 90 days after redemption.

V.   Special Sales Charge  Arrangements for Shareholders of Certain  Oppenheimer
     Funds Who Were Shareholders of Connecticut Mutual Investment Accounts, Inc.
     --------------------------------------------------------------------------------------------------------------

The initial and  contingent  deferred  sale charge rates and waivers for Class A
and Class B shares described in the respective  Prospectus (or this Appendix) of
the  following  Oppenheimer  funds  (each is  referred  to as a  "Fund"  in this
section):

     Oppenheimer U. S. Government Trust,
     Oppenheimer Core Bond Fund,
     Oppenheimer Value Fund and

are  modified  as  described  below  for  those  Fund   shareholders   who  were
shareholders  of the  following  funds  (referred to as the "Former  Connecticut
Mutual  Funds")  on  March 1,  1996,  when  OppenheimerFunds,  Inc.  became  the
investment adviser to the Former Connecticut Mutual Funds:

     Connecticut Mutual Liquid Account                            Connecticut Mutual Total Return Account
     Connecticut Mutual Government Securities Account             CMIA LifeSpan Capital Appreciation Account
     Connecticut Mutual Income Account                            CMIA LifeSpan Balanced Account
     Connecticut Mutual Growth Account                            CMIA Diversified Income Account
|_|
|_|      A.   Prior Class A CDSC and Class A Sales Charge Waivers.

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

         Those shareholders who are eligible for the prior Class A CDSC are:
               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- & Mid- 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
PX0251.001.0207




(1) In  accordance  with Rule  12b-1 of the  Investment  Company  Act,  the term
"Independent  Trustees"  in  this  SAI  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
with Registrant's Post-Effective Amendment, (4/14/88), and incorporated
herein by reference.

(iii) Amendment No. 2 to Declaration of Trust dated 4/18/88: Previously filed
with Registrant's Post-Effective Amendment, (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 2/24/04: Previously filed with
Registrant's Post-Effective Amendment No. 54, (2/24/05), and incorporated
herein by reference.


(xi)  Amendment to Declaration of Trust dated 4/28/05: Previously filed with
Registrant's Post-Effective Amendment No. 56, (9/23/05), and incorporated
herein by reference.

(xii) Amendment to Declaration of Trust dated 8/19/05: Previously filed with
Registrant's Post-Effective Amendment No. 56, (9/23/05), and incorporated
herein by reference.

(b)   Amended and Restated By-Laws dated 10/3/05: Previously filed with
Registrant's Post-Effective Amendment No. 57, (2/28/06), and incorporated
herein by reference.

(c)   (i)  Specimen Class A Share Certificate for Oppenheimer Quest Balanced
Fund: Previously filed with Registrant's Post-Effective Amendment No. 41,
(11/21/97), and incorporated herein by reference.

(ii)  Specimen Class B Share Certificate for Oppenheimer Quest Balanced Fund:
Previously filed with Registrant's Post-Effective Amendment No. 41,
(11/21/97), and incorporated herein by reference.

(iii) Specimen Class C Share Certificate for Oppenheimer Quest Balanced Fund:
Previously filed with Registrant's Post-Effective Amendment No. 41,
(11/21/97), and incorporated herein by reference.

(iv)  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.

(v)   Specimen Class Y Share Certificate for Oppenheimer Quest Balanced Fund:
Previously filed with Post-Effective Amendment No. 46, (2/28/00), and
incorporated herein by reference.

(vi)  Specimen Class A Share Certificate for Oppenheimer Quest Opportunity
Value Fund ("Opportunity Value Fund"): Previously filed with Registrant's
Post-Effective Amendment No. 37, (10/16/96), and incorporated herein by
reference.

(vii) Specimen Class B Share Certificate for Oppenheimer Quest Opportunity
Value Fund: Previously filed with Registrant's Post-Effective Amendment No.
37, (10/16/96), and incorporated herein by reference.

(viii)      Specimen Class C Share Certificate for Oppenheimer Quest
Opportunity Value Fund: Previously filed with Registrant's Post-Effective
Amendment No. 37, (10/16/96), and incorporated herein by reference.

(ix)  Specimen Class N Share Certificate for Oppenheimer Quest Opportunity
Value Fund: Previously filed with Registrant's Post-Effective Amendment No.
48, (12/06/00), and incorporated herein by reference.

(x)   Specimen Class Y Share Certificate for Oppenheimer Quest Opportunity
Value Fund: Previously filed with Registrant's Post-Effective Amendment No.
37, (10/16/96), and incorporated herein by reference.

(xi)  Specimen Class A Share Certificate for Oppenheimer Small Cap Value
Fund: Previously filed with Registrant's Post-Effective Amendment No. 37,
(10/16/96), and incorporated herein by reference.

(xii) Specimen Class B Share Certificate for Oppenheimer Small Cap Value
Fund: Previously filed with Registrant's Post-Effective Amendment No. 37,
(10/16/96), and incorporated herein by reference.

(xiii)      Specimen Class C Share Certificate for Oppenheimer Small Cap
Value Fund: Previously filed with Registrant's Post-Effective Amendment No.
37, (10/16/96), and incorporated herein by reference.

(xiv) Specimen Class N Share Certificate for Oppenheimer Small Cap Value
Fund: Previously filed with Registrant's Post-Effective Amendment No. 48,
(12/06/00), and incorporated herein by reference.


(d)   (i)  Amended and Restated Investment Advisory Agreement for Oppenheimer
Quest Balanced Fund dated 4/03/06: Previously filed with Registrant's
Post-Effective Amendment No. 58, (12/22/06), and incorporated herein by
reference.


      (ii) Amended and Restated Investment Advisory Agreement for Oppenheimer
Quest Opportunity Value Fund dated 1/01/05: Previously filed with
Registrant's Post-Effective Amendment No. 54, (2/24/05), and incorporated
herein by reference.

      (iii) Amended and Restated Investment Advisory Agreement for
Oppenheimer Small- & Mid- Cap Value Fund dated 1/01/06: Previously filed with
Registrant's Post-Effective Amendment No. 57, (2/28/06), and incorporated
herein by reference.

(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. 34 to the Registration
Statement of Oppenheimer Main Street Funds, Inc. (Reg. No. 33-17850),
(10/23/06), and incorporated herein by reference.

(iii) Form of Broker Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 34 to the Registration
Statement of Oppenheimer Main Street Funds, Inc. (Reg. No. 33-17850),
(10/23/06), and incorporated herein by reference.

(iv)  Form of Agency Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 34 to the Registration
Statement of Oppenheimer Main Street Funds, Inc. (Reg. No. 33-17850),
(10/23/06), and incorporated herein by reference.

(v)   Form of Trust Company Fund/SERV Purchase Agreement of OppenheimerFunds
Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to
the Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.
33-17850), (10/23/06), and incorporated herein by reference.

(vi)  Form of Trust Company Agency Agreement of OppenheimerFunds Distributor,
Inc.: Previously filed with Post-Effective Amendment No. 34 to the
Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.
33-17850), (10/23/06), and incorporated herein by reference.

(f)   (i)  Form of Deferred Compensation Plan for Disinterested
Trustees/Directors: Previously filed Registrant's Post Effective Amendment
No. 43, 12/21/98, and incorporated herein by reference.

      (ii)  Amended and Restated Retirement Plan for Non-Interested Trustees
or Directors dated 12/12/00: Previously filed with Registrant's
Post-Effective Amendment No. 49, 2/09/01, and incorporated herein by
reference.


(g)   (i)  Global Custodial Services Agreement dated July 15, 2003, as
amended September 13, 2006, between Registrant and Citibank, N.A.: Previously
filed with Post-Effective Amendment No. 27 to the Registration Statement of
Oppenheimer California Municipal Fund (Reg. No. 33-23566), (9/26/06), and
incorporated herein by reference.


(ii)  Amended and Restated Foreign Custody Manager Agreement dated May 31,
2001, as amended July 15, 2003: 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 Consents: 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 Distribution and Service Plan and Agreement
for Class A shares of Oppenheimer Quest Balanced Fund dated October 3, 2005:
Previously filed with Registrant's Post Effective Amendment No. 58
(12/22/06), and incorporated herein by reference.


(ii)  Amended and Restated Distribution and Service Plan and Agreement for
Class B shares of Oppenheimer Quest Balanced Fund dated October 3, 2005:
Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(iii) Amended and Restated Distribution and Service Plan and Agreement for
Class C shares of Oppenheimer Quest Balanced Fund dated October 3, 2005:
Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(iv)  Amended and Restated Distribution and Service Plan and Agreement for
Class N shares of Oppenheimer Quest Balanced Fund dated October 3, 2005:
Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(v)   Amended and Restated Distribution and Service Plan and Agreement for
Class A shares of Oppenheimer Quest Opportunity Value Fund dated October 3,
2005: Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.


(vi)  Amended and Restated Distribution and Service Plan and Agreement for
Class B shares of Oppenheimer Quest Opportunity Value Fund dated October 3,
2005: Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.


(vii) Amended and Restated Distribution and Service Plan and Agreement for
Class C shares of Oppenheimer Quest Opportunity Value Fund dated October 3,
2005: Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(viii)      Amended and Restated Distribution and Service Plan and Agreement
for Class N shares of Oppenheimer Quest Opportunity Value Fund dated October
3, 2005: Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(ix)  Amended and Restated Distribution and Service Plan and Agreement for
Class A shares of Oppenheimer Small- & Mid- Cap Value Fund dated October 3,
2005: Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(x)   Amended and Restated Distribution and Service Plan and Agreement for
Class B shares of Oppenheimer Small- & Mid- Cap Value Fund dated October 3,
2005: Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(xi)  Amended and Restated Distribution and Service Plan and Agreement for
Class C shares of Oppenheimer Small- & Mid- Cap Value Fund dated October 3,
2005: Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(xii) Amended and Restated Distribution and Service Plan and Agreement for
Class N shares of Oppenheimer Small- & Mid- Cap Value Fund dated October 3,
2005: Previously filed with Registrant's Post-Effective Amendment No. 57,
(2/28/06), and incorporated herein by reference.

(n)   Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated through
10/24/06: Previously filed with Post-Effective Amendment No. 62 to the
Registration Statement of Oppenheimer Capital Income Fund (Reg. No. 2-33043),
(11/21/06), and incorporated herein by reference.

(o)   (i)   Powers of Attorney for all Trustees/Directors and Principal
Officers dated April 4, 2005: Previously filed with Post-Effective Amendment
No. 29 to the Registration Statement of Oppenheimer Convertible Securities
Fund (Reg. No. 33-3076), (4/28/05), and incorporated herein by reference.

      (ii)  Power of Attorney for David K. Downes dated January 17, 2006:
Previously filed with Post-Effective Amendment No. 54 to the Registration
Statement of Oppenheimer Quest Value Fund, Inc. (Reg. No. 2-65223), 2/27/06,
and incorporated herein by reference.

(p)   (i)  Amended and Restated Code of Ethics of the Oppenheimer Funds dated
March 31, 2006 under Rule 17j-1 of the Investment Company Act of 1940:
Previously filed with the Post-Effective Amendment No. 13 to the Registration
Statement of Oppenheimer MidCap Fund (Reg. No. 333-31533), (4/7/06), and
incorporated herein by reference.

      (ii) Code of Ethics dated October, 2006 for Allianz Global Investors of
America L.P., the parent company of Oppenheimer Capital LLP (the
"Sub-Advisor"): Filed herewith.

Item 24. - Persons Controlled by or Under Common Control with the Fund

None.

Item 25. - Indemnification

Reference is made to the provisions of Article Seven of Registrant's Amended
and Restated Declaration of Trust filed as Exhibit 23(a) to this Registration
Statement, and incorporated herein by reference.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.

Item 26. - Business and Other Connections of the Investment Adviser

(a)   OppenheimerFunds, Inc. is the investment adviser of the Registrant; it
and certain subsidiaries and affiliates act in the same capacity to other
investment companies, including without limitation those described in Parts A
and B hereof and listed in Item 26(b) below.

      (i) The directors and executive officers of OpCap 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
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Timothy L. Abbuhl,          Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Agan,                Senior  Vice  President  of  Shareholder   Financial
Senior Vice President       Services,  Inc.  and  Shareholders  Services,  Inc.;
                            Vice  President  of  OppenheimerFunds   Distributor,
                            Inc.,  Centennial Asset  Management  Corporation and
                            OFI Private Investments Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Carl Algermissen,           Formerly   Associate   Counsel  &  Legal  Compliance
Vice President & Associate  Officer at Great  West-Life & Annuity  Insurance Co.
Counsel                     (February 2004-October 2004).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Amato,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Erik Anderson,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Beck Apostolopoulos, None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante,          Secretary  (since  December  2001)  of:   Centennial
Vice President & Secretary  Asset   Management   Corporation,   OppenheimerFunds
                            Distributor,   Inc.,  HarbourView  Asset  Management
                            Corporation  (since  June  2003),  Oppenheimer  Real
                            Asset  Management,   Inc.,   Shareholder   Financial
                            Services,  Inc., Shareholder Services, Inc., Trinity
                            Investment  Management  Corporation  (since  January
                            2005),  OppenheimerFunds Legacy Program, OFI Private
                            Investments   Inc.   (since   June   2003)  and  OFI
                            Institutional  Asset  Management,  Inc.  (since June
                            2003).  Assistant  Secretary  of OFI  Trust  Company
                            (since December 2001).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Hany S. Ayad,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Baker,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James F. Bailey,            Senior Vice President of Shareholder Services,  Inc.
Senior Vice President       (since March 2006).  Formerly  Vice  President at T.
                            Row Price Group (September 2000 - January 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Baldwin,            President  and  Director  of  Shareholder  Financial
Executive Vice President    Services,   Inc.  and  Shareholder  Services,   Inc.
                            Formerly  Managing  Director at Deutsche Bank (March
                            2001 - March 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Michael Banta,         None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joanne Bardell,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Adam Bass,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Baum,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeff Baumgartner,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marc Baylin,                Formerly  Portfolio  Manager  at J.P.  Morgan  (June
Vice President              2002-August 2005.)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Todd Becerra,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lalit K. Behal              Assistant  Secretary of HarbourView Asset Management
Assistant Vice President    Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Beichert,          Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gerald B. Bellamy,          Assistant  Vice  President  (Sales  Manager  of  the
Assistant Vice President    International  Division) of OFI Institutional  Asset
                            Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Erik S. Berg,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Bertucci,            None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rajeev Bhaman,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Billings,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Binning,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Bishop,           Treasurer  (since October 2003) of  OppenheimerFunds
Vice President              Distributor,  Inc. and Centennial  Asset  Management
                            Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Beth Bleimehl,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John R. Blomfield,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa I. Bloomberg,          None
Vice President & Associate
Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Veronika Boesch,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Chad Boll,                  None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Antulio N. Bomfim,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michelle Borre Massick,     None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Lori E. Bostrom,            None
Vice President & Senior
Counsel

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Bourgeois,             Assistant Vice  President of  Shareholder  Services,
Assistant Vice President    Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Boydell,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Garrett C. Broadrup         Formerly  an  Associate  at  Davis  Polk  &  Wardell
Assistant Vice President &  (October 2002 - October 2006)
Assistant Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Bromberg,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joan Brunelle,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kristine Bryan-Levin,       Formerly  Senior Vice  President  at Brown  Brothers
Vice President              Harriman (November 2002 - May 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stephanie Bullington,       Formerly Fund Accounting  Manager at Madison Capital
Assistant Vice President    Management  Company  (July  2005 - October  2005 and
                            Fund   Accounting   Officer  at   Butterfield   Fund
                            Services   (Bermuda)   Limited   (a   wholly   owned
                            subsidiary  of the  Bank of NT  Butterfield  & Sons)
                            (September 2003 - June 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul Burke,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Burns,                 None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Geoffrey Caan,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Dale William Campbell,      Formerly   Manager   at    OppenheimerFunds,    Inc.
Assistant Vice President    (1993-January 2007).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick Campbell,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine Carroll,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Debra Casey,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maria Castro,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Chaffee,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles Chibnik,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick Sheng Chu,          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brett Clark,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
H.C. Digby Clements,        None
Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Peter V. Cocuzza,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Gerald James Concepcion,    None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Corbett,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Cornwell,             Senior  Vice  President  of  Shareholder   Financial
Senior Vice President       Services, Inc. and Shareholder Services,  Inc.; Vice
                            President  of  OppenheimerFunds  Distributor,  Inc.,
                            Centennial   Asset   Management    Corporation   and
                            OppenheimerFunds Legacy Program.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cheryl Corrigan,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Belinda J. Cosper,          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott Cottier,              None
Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Laura Coulston,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George Curry,               Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie C. Cusker,            None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Dachille,             Formerly Fixed Income Director at National  Railroad
Vice President              Retirement Investment Trust (May 2003 - May 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Damian,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Demarco,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig P. Dinsell,           None
Executive Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Randall C. Dishmon,         None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gavin Dobson,               Formerly  President  at Britannic  Asset  Management
Vice President              International (September 2001 - May 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rebecca K. Dolan,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven D. Dombrower,        Senior Vice  President  of OFI  Private  Investments
Vice President              Inc.;    Vice    President    of    OppenheimerFunds
                            Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Doyle,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bruce C. Dunbar,            None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Dvorak,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Edmiston,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
A. Taylor Edwards,          Formerly  Associate at Dechert LLP (September 2000 -
Vice President & Assistant  December 2005).
Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Venkat Eleswarapu,          Formerly  Associate  Professor  of  Finance at Texas
Vice President              Tech  University  (July  2005 -  December  2005) and
                            Assistant   Professor   of   Finance   at   Southern
                            Methodist University (January 1999 - May 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel R. Engstrom,         None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Robert Erven          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George R. Evans,            None
Senior Vice President &
Director of International
Equities
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward N. Everett,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathy Faber,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Falicia,              None  Assistant  Secretary  (as  of  July  2004)  of
Assistant Vice President    HarbourView Asset Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Matthew Farkas,             Formerly  Associate at Epstein Becker & Green,  P.C.
Assistant Vice President    (September 2000 - March 2006).
and Assistant Counsel

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kristie Feinberg,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Emmanuel Ferreira,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald H. Fielding,         Vice  President  of  OppenheimerFunds   Distributor,
Senior Vice President;      Inc.;  Director  of ICI  Mutual  Insurance  Company;
Chairman of the Rochester   Governor  of St.  John's  College;  Chairman  of the
Division                    Board  of  Directors  of  International   Museum  of
                            Photography at George Eastman House.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bradley G. Finkle,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John E. Forrest,            Senior   Vice    President    of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Foxhoven,             Assistant Vice President of OppenheimerFunds  Legacy
Vice President              Program.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Colleen M. Franca,          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barbara Fraser,             Formerly  Attorney in Private Practice (April 2000 -
Vice President & Associate  November 2005).
Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Frengillo,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dominic Freud,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dan Gagliardo,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Hazem Gamal,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Seth Gelman,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Timothy Gerlach,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Subrata Ghose,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles W. Gilbert,         None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kurt Gibson,                Formerly  Manager at Barclays  Capital (January 2002
Assistant Vice President    - April 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Phillip S. Gillespie,       None
Senior Vice President &
Assistant Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alan C. Gilston,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jacqueline Girvin-Harkins,  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill E. Glazerman,          None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Benjamin J. Gord,           Vice  President  of  HarbourView   Asset  Management
Vice President              Corporation   and   of   OFI   Institutional   Asset
                            Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Leyla Greengard,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert B. Grill,            None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Carol Guttzeit,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Haley,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marilyn Hall,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kelly Haney,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steve Hauenstein,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert W. Hawkins,          Formerly an  Associate  at Shearman and Sterling LLP
Vice President & Assistant  (July 2004 - August 2005).
Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas B. Hayes,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer Heathwood,         None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Heidi Heikenfeld,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Annika Helgerson,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Henderson,           Formerly  Director of Corporate  Purchasing and Risk
Assistant Vice President    Management  at  StarTek  Inc.  (January  2003  - May
                            2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Hermann,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dennis Hess,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph Higgins,             Vice   President   of   OFI   Institutional    Asset
Vice President              Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dorothy F. Hirshman,        None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Hoelscher,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Hourihan,             Assistant   Secretary  of  OFI  Institutional  Asset
Vice President & Associate  Management,  Inc. (since April 2006).  Formerly Vice
Counsel                     President  and  Senior   Counsel  at   Massachusetts
                            Financial Service Company (June 2004 - March 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Hrybenko,            Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott T. Huebl,             Assistant Vice President of OppenheimerFunds  Legacy
Vice President              Program.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Margaret Hui,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dana Hunter,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Huttlin,               Senior    Vice    President    (Director    of   the
Vice President              International  Division) (since January 2004) of OFI
                            Institutional   Asset  Management,   Inc.;  Director

                            (since June 2003) of OppenheimerFunds  International
                            Distributor Limited.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James G. Hyland,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kelly Bridget Ireland,      None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen T. Ives,           Vice   President   and   Assistant    Secretary   of
Vice President, Senior      OppenheimerFunds  Distributor,  Inc. and Shareholder
Counsel & Assistant         Services,  Inc.;  Assistant  Secretary of Centennial
Secretary                   Asset   Management   Corporation,   OppenheimerFunds
                            Legacy Program and Shareholder  Financial  Services,
                            Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Jaume,              Senior   Vice   President   of   HarbourView   Asset
Vice President              Management  Corporation and OFI Institutional  Asset
                            Management, Inc.; Director of OFI Trust Company.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Frank V. Jennings,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Jennings,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Michael Johnson,       None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Kadehjian,             Formerly  Vice  President,  Compensation  Manager at
Assistant Vice President    The Bank of New York (November 1996-November 2004).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles Kandilis,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Amee Kantesaria,            Formerly  Counsel  at   Massachusetts   Mutual  Life
Assistant Vice President    Insurance Company
                            (May 2005-December 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rezo Kanovich,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas W. Keffer,           None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Keogh,              Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Kiernan,               Formerly  Vice   President  and  Senior   Compliance
Assistant Vice President &  Officer,   Guardian  Trust   Company,   FSB  at  The
Marketing Compliance        Guardian Life  Insurance  Company of America  (since
Manager                     February 1998 - November 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Audrey Kiszla               Formerly Vice  President at First  Horizon  Merchant
Vice President              Services  (December  2005- May  2006);  Director  at
                            Janus (January 1998 - August 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Klassen                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin S. Korn,             None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Kramer,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul Kunz,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gloria LaFond,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Lamentino,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Lange,               Vice  President  of  OppenheimerFunds   Distributor,
Vice President              Inc. and OFI Private Investments Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey P. Lagarce,         President  of OFI  Institutional  Asset  Management,
Senior Vice President       Inc. as of January  2005.  Formerly  Executive  Vice
                            President-Head  of  Fidelity   Tax-Exempt   Services
                            Business    at    Fidelity    Investments    (August
                            1996-January 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Latino,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kristina Lawrence,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gayle Leavitt,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher M. Leavy,       None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin Lee,                  Formerly  Vice  President  at  Delaware  Investments
Vice President              (October 2000 - February 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Randy Legg,                 None
Vice President & Associate
Counsel

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Laura Leitzinger,           Senior Vice President of Shareholder Services,  Inc.
Senior Vice President       and Shareholder Financial Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Justin Leverenz,            None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael S. Levine,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Levitt,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gang Li,                    None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Shanquan Li,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie A. Libby,             Senior Vice  President  of OFI  Private  Investments
Senior Vice President       Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Lifshey,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mitchell J. Lindauer,       None
Vice President & Assistant
General Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bill Linden,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malissa B. Lischin,         Assistant   Vice   President   of   OppenheimerFunds
Vice President              Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David P. Lolli,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel G. Loughran          None
Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patricia Lovett,            Vice  President of Shareholder  Financial  Services,
Vice President              Inc.  and  Senior  Vice   President  of  Shareholder
                            Services, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Misha Lozovik,              None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven Lucaccini,           Formerly  Director  and High  Yield  Analyst  at UBS
Assistant Vice President    Global  Asset  Management  (November  2001  -  April
                            2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dongyan Ma,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steve Macchia,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark H. Madden,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jerry Mandzij,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Angelo G. Manioudakis       Senior   Vice   President   of   HarbourView   Asset
Senior Vice President       Management  Corporation  and  of  OFI  Institutional
                            Asset Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Carolyn Maxson,             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William T. Mazzafro,        Formerly  self-employed  as a consultant  securities
Assistant Vice President    (January 2004 - December 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Trudi McKenna,              Formerly   Leadership   Development   Supervisor  at
Assistant Vice President    JetBlue Airways (July 2003 - October 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jay Mewhirter,              Formerly  Director  of  Application  Development  at
Vice President              AMVESCAP (September 1999 - March 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elizabeth McCormack,        Vice   President   and   Assistant    Secretary   of
Vice President              HarbourView Asset Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph McDonnell,           Formerly  Senior  Vice  President  at  Lehman  Bros.
Vice President              (April 1995 - March 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph McGovern,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles L. McKenzie,        Chairman  of the Board,  Director,  Chief  Executive
Senior Vice President       Officer  and   President   of  OFI  Trust   Company;
                            Chairman,  Chief Executive Officer, Chief Investment
                            Officer  and  Director  of OFI  Institutional  Asset
                            Management,    Inc.;   Chief   Executive    Officer,
                            President,  Senior Managing Director and Director of
                            HarbourView Asset Management Corporation;  Chairman,
                            President;    Director    of   Trinity    Investment
                            Management   Corporation   and  Vice   President  of
                            Oppenheimer Real Asset Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William McNamara            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Medev,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucienne Mercogliano,       None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew J. Mika,             None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Jan Miller,                 None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Heather Minks               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rejeev Mohammed,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nikolaos D. Monoyios,       None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Sarah Morrison,             Formerly  Manager  at  Cendant  Corporation  (August
Assistant Vice President    2000 - 2005) and Manager at  Oppenheimerfunds,  Inc.
                            (April 2005 - January 2007).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Mulachy,               None
Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John V. Murphy,             President  and  Management  Director of  Oppenheimer
Chairman, President, Chief  Acquisition   Corp.;   President   and  Director  of
Executive Officer &         Oppenheimer Real Asset  Management,  Inc.;  Chairman
Director                    and  Director  of  Shareholder  Services,  Inc.  and
                            Shareholder  Financial  Services,  Inc.; Director of
                            Centennial     Asset     Management     Corporation,
                            OppenheimerFunds     Distributor,      Inc.,     OFI
                            Institutional   Asset  Management,   Inc.,   Trinity
                            Investment  Management  Corporation,  Tremont  Group
                            Holdings,   Inc.,   HarbourView   Asset   Management
                            Corporation  and  OFI  Private   Investments   Inc.;
                            Executive  Vice  President of  Massachusetts  Mutual
                            Life Insurance Company;  Director of DLB Acquisition
                            Corporation;  a  member  of the  Investment  Company
                            Institute's Board of Governors.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Meaghan Murphy,             None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Suzanne Murphy,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas J. Murray,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Nadler,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul Newman,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Nichols,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

James B. O'Connell,         None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Matthew O'Donnell,          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tony Oh,                    Formerly  Director  of  SEC  Reporting  at  Teletech
Assistant Vice President    Holdings (July 2004 - April 2005.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John O'Hare,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

John J. Okray,              None
Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lerae A. Palumbo,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Anthony Parish,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Patton,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David P. Pellegrino,        None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Allison C. Pells,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert H. Pemble,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lori L. Penna,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian Petersen,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marmeline Petion-Midy,      None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Pfeffer,              Senior   Vice   President   of   HarbourView   Asset
Senior Vice President &     Management Corporation since February 2004.
Chief Financial Officer
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Sanjeev Phansalkar,         Formerly   Consultant  at  The  Solomon-Page   Group
Assistant Vice President    (October 2004 - September 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James F. Phillips,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott Phillips,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gary Pilc,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Piper,                 Assistant Vice  President of  Shareholder  Services,
Assistant Vice President    Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeaneen Pisarra,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nicolas Pisciotti,          Formerly  Assistant  Vice  President  at ING  (April
Assistant Vice President    2002 - May 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Poiesz,               None
Senior Vice President,
Head of Growth Equity
Investments
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Sergei Polevikov,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Semyon Polyak,              Formerly Vice President and Co-Portfolio  Manager at
Vice President              Pioneer Investments (June 1998 - August 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey Portnoy,            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Preuss,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ellen Puckett,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jane C. Putnam,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Paul Quarles,               None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael E. Quinn,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie S. Radtke,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Norma J. Rapini,            None
Assistant Vice President :
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Corry E. Read,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marc Reinganum,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Reiter,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Rhodes,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Richter,               Vice  President  of  HarbourView   Asset  Management
Vice President              Corporation.  Formerly  Investment Officer at Alaska
                            Permanent  Fund  Corporation  (April 2005 - February
                            2006);  Vice  President at Loomis Sayles & Co. (July
                            1997 - April 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Claire Ring,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Grace Roberts,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David Robertson,            Senior   Vice    President    of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Robis,               Formerly a Proprietary  Trader at J.P.  Morgan Chase
Assistant Vice President    & Co. (May 2004-May 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Antoinette Rodriguez,       None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stacey Roode,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey S. Rosen,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stacy Roth,                 None
Vice President
---------------------------------------------------------------------------------
                      -----------------------------------------------------------

                      Adrienne Ruffle,               None

                      Vice President & Assistant
                      Counsel
                      -----------------------------------------------------------
---------------------------------------------------------------------------------
                      Kim Russomanno,                None
                      Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gerald Rutledge,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie Anne Ryan,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Timothy Ryan,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rohit Sah,                  None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Valerie Sanders,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rudi W. Schadt,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ellen P. Schoenfeld,        None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick Schneider           Formerly  Human  Resources  Manager at ADT  Security
Assistant Vice President    Services (December 2001 - July 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mary Beth Schellhorn,       Formerly   Human   Resources   Generalist  at  Misys
Assistant Vice President    Banking Systems (November 2000 - June 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Scott A. Schwegel,          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Allan P. Sedmak             None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer L. Sexton,         Senior Vice  President  of OFI  Private  Investments
Vice President              Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Asutosh Shah,               Formerly Vice President at Merrill Lynch  Investment
Vice President              Managers (February 2002 - February 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kamal Shah,                 Formerly  Senior  Vice  President  Chief  Technology
Vice President              Officer at Tremont Capital  Management (March 1998 -
                            July 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nava Sharma,                None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Siomades,            Formerly  Vice  President,  Portfolio  Management at
Vice President              Curian Capital LLC (December 2002 - September 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David C. Sitgreaves,        None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Enrique H. Smith,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Louis Sortino,              None
Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Keith J. Spencer,           None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Marco Antonio Spinar,       None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brett Stein                 Formerly  Vice  President  of  Client   Services  at
Vice President              XAware, Inc. (October 2002 - August 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard A. Stein,           None
Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Arthur P. Steinmetz,        Senior   Vice   President   of   HarbourView   Asset
Senior Vice President       Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer Stevens,           None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Benjamin Stewart            None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John P. Stoma,              Senior   Vice    President    of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Amy Sullivan,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Deborah A. Sullivan,        Secretary of OFI Trust Company.
Vice President & Assistant
Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Sussman,            Vice President of OppenheimerFunds Distributor, Inc.
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Swaney,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Brian C. Szilagyi,          None
Assistant Vice President

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Matthew Tartaglia,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin Telles,              Senior   Vice    President    of    OppenheimerFunds
Senior Vice President       Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Toner,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Melinda Trujillo,           Formerly  Senior  Manager  at CoBank,  ACB  (January
Assistant Vice President    2004 - April 2006).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Leonid Tsvayg,              None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Keith Tucker,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cameron Ullyat,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Angela Uttaro,              None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark S. Vandehey,           Vice  President  and  Chief  Compliance  Officer  of
Senior Vice President &     OppenheimerFunds   Distributor,   Inc.,   Centennial
Chief Compliance Officer    Asset   Management   Corporation   and   Shareholder
                            Services,   Inc.;   Chief   Compliance   Officer  of
                            HarbourView  Asset  Management   Corporation,   Real
                            Asset  Management,   Inc.,   Shareholder   Financial
                            Services,   Inc.,  Trinity   Investment   Management
                            Corporation,  OppenheimerFunds  Legacy Program,  OFI
                            Private  Investments  Inc. and OFI Trust Company and
                            OFI Institutional Asset Management, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maureen Van Norstrand,      None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Nancy Vann,                 None
Vice President & Assistant
Counsel

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rene Vecka,                 None
Assistant Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Vermette,           Assistant   Vice   President   of   OppenheimerFunds
Assistant Vice President    Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elaine Villas-Obusan,       None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Phillip F. Vottiero,        None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Walsh,                 None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jerry A. Webman,            Senior   Vice   President   of   HarbourView   Asset
Senior Vice President       Management Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher D. Weiler,      None
Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Adam Weiner,                None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barry D. Weiss,             Vice  President  of  HarbourView   Asset  Management
Vice President              Corporation  and  of  Centennial   Asset  Management
                            Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Melissa Lynn Weiss,         None
Vice President & Associate
Counsel
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

Rebecca Wekesser,           Formerly  Manager at Oppenheimer  Funds (July 1998 -
Assistant Vice President    January 2007).

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christine Wells,            None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph J. Welsh,            Vice  President  of  HarbourView   Asset  Management
Vice President              Corporation.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Diederick Werdmolder,       Director of OppenheimerFunds  International Ltd. and
Senior Vice President       OppenheimerFunds     plc    and     OppenheimerFunds

                            International   Distributor  Limited;   Senior  Vice
                            President  (Managing  Director of the  International
                            Division)  of OFI  Institutional  Asset  Management,
                            Inc.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine M. White,         Assistant   Vice   President   of   OppenheimerFunds
Assistant Vice President    Distributor,  Inc.;  member of the American  Society
                            of Pension Actuaries (ASPA) since 1995.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William L. Wilby,           None
Senior Vice President &
Senior Investment Officer,
Director of Equities
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Troy Willis,                None
Vice President:
Rochester Division
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donna M. Winn,              President,  Chief  Executive  Officer & Director  of
Senior Vice President       OFI Private  Investments Inc.;  Director & President
                            of  OppenheimerFunds  Legacy  Program;  Senior  Vice
                            President of OppenheimerFunds Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
 Philip Witkower,           Senior   Vice    President    of    OppenheimerFunds
 Senior Vice President      Distributor, Inc.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian W. Wixted,            Treasurer   of    HarbourView    Asset    Management
Senior Vice President &     Corporation;  OppenheimerFunds  International  Ltd.,
Treasurer                   Oppenheimer    Real    Asset    Management,    Inc.,
                            Shareholder  Services,  Inc.,  Shareholder Financial
                            Services,  Inc., OFI Private  Investments  Inc., OFI
                            Institutional      Asset      Management,      Inc.,
                            OppenheimerFunds  plc  and  OppenheimerFunds  Legacy
                            Program;  Treasurer and Chief  Financial  Officer of
                            OFI   Trust   Company;    Assistant   Treasurer   of
                            Oppenheimer Acquisition Corp.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Carol E. Wolf,              Senior   Vice   President   of   HarbourView   Asset
Senior Vice President       Management   Corporation  and  of  Centennial  Asset
                            Management  Corporation;  serves on the Board of the
                            Colorado Ballet.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Meredith Wolf               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Oliver Wolff,               None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kurt Wolfgruber,            Director   of   Tremont   Group   Holdings,    Inc.,
Executive Vice President,   HarbourView  Asset  Management  Corporation  and OFI
Chief Investment Officer &  Institutional  Asset  Management,  Inc.  (since June
Director                    2003).    Management    Director   of    Oppenheimer
                            Acquisition Corp. (since December 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Caleb C. Wong,              None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward C. Yoensky,          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Geoff Youell,               Formerly   Principal   Consultant   at  XAware   Inc
Assistant Vice President    (January 2004 - June 2005).
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucy Zachman,               None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Zack              General  Counsel  of  Centennial   Asset  Management
Executive Vice President &  Corporation;   General   Counsel  and   Director  of
General Counsel             OppenheimerFunds  Distributor,   Inc.;  Senior  Vice

                            President and General  Counsel of HarbourView  Asset
                            Management  Corporation and OFI Institutional  Asset
                            Management,  Inc.;  Senior Vice  President,  General
                            Counsel  and  Director  of   Shareholder   Financial
                            Services,  Inc.,  Shareholder  Services,  Inc.,  OFI
                            Private  Investments  Inc.  and OFI  Trust  Company;
                            Director     and     Assistant      Secretary     of
                            OppenheimerFunds      International      Ltd     and
                            OppenheimerFunds plc; Vice President,  Secretary and
                            General  Counsel of Oppenheimer  Acquisition  Corp.;
                            Director of Oppenheimer Real Asset Management,  Inc.
                            and   OppenheimerFunds   International   Distributor
                            Limited;  Vice President of OppenheimerFunds  Legacy
                            Program.

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Neal A. Zamore,             None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Anna Zatulovskaya,          None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark D. Zavanelli,          None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alex Zhou,                  None
Assistant Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald Zibelli,             Formerly  Managing  Director  and Small  Cap  Growth
Vice President              Team Leader at Merrill Lynch.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Arthur J. Zimmer,           Senior   Vice   President   of   HarbourView   Asset
Senior Vice President       Management Corporation.
---------------------------------------------------------------------------------


---------------------------------------------------------------------------------
Name and Current Position with  Other Business and Connections During the Past
Oppenheimer Capital LLC         Two Years
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malcolm Bishopp,                Managing Director, PIMCO Advisors Retail
Managing Director               Holdings LLC.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark F. Degenhart,              None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Colin J. Glinsman,              Chief Investment Officer of Oppenheimer Capital
Managing Director               LLC.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Louis P. Goldstein,             None
Managing Director
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Matthew J. Greenwald,           None
Senior Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Benjamin D. Gutstein,           None
Vice President
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bruce Koepfgen,                 Chief Executive Officer of Oppenheimer Capital
Managing Director               LLC.
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Francis A. LeCates, Jr.,        None
Managing Director
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John G. Lindenthal,             None
Managing Director
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John C. Maney,                  None
Chief Financial Officer
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elisa A. Mazen,                 None
Managing Director
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William P. McDaniel,            None
Managing Director
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vinh T. Nguyen,                 None
Vice President & Controller
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Anne-Marie L. Pitale,           None
Vice President & Director of
Compliance
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Francis C. Poli,                None
Executive Vice President,
Chief Legal Officer & Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian S. Shlissel,              Senior Vice President of PIMCO Advisors Fund
Senior Vice President &         Management LLC.
Treasurer
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stewart A. Smith,               None
Vice President & Assistant
Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stephen J. Treadway,            Chief Executive Officer of PIMCO Advisors Fund
Managing Director               Management LLC.
---------------------------------------------------------------------------------

The Oppenheimer Funds include the following:

Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust

Limited Term New York Municipal Fund (a series of Rochester Portfolio Series)
OFI Tremont Core Strategies Hedge Fund
OFI Tremont Market Neutral Hedge Fund
Oppenheimer AMT-Free Municipals
Oppenheimer AMT-Free New York Municipals
Oppenheimer Balanced Fund
Oppenheimer Baring China Fund
Oppenheimer Baring Japan Fund
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Commodity Strategy Total Return Fund
Oppenheimer Convertible Securities Fund (a series of Bond Fund Series)
Oppenheimer Core Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Dividend Growth Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Fund, Inc.

Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Bond Fund
Oppenheimer Institutional Money Market Fund
Oppenheimer International Diversified Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer International Value Fund (a series of Oppenheimer International
Value Trust)
Oppenheimer Limited Term California Municipal Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal
Fund)
Oppenheimer Main Street Fund (a series of Oppenheimer Main Street Funds, Inc.)
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals

Oppenheimer Portfolio Series (4 series)
     Active Allocation Fund
     Equity Investor Fund
     Conservative Investor Fund
     Moderate Investor Fund

Oppenheimer Principal Protected Main Street Fund (a series of Oppenheimer
Principal
     Protected Trust)
Oppenheimer Principal Protected Main Street Fund II (a series of Oppenheimer
Principal
     Protected Trust II)
Oppenheimer Principal Protected Main Street Fund III (a series of Oppenheimer
Principal
     Protected Trust III)
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small- & Mid- Cap Value Fund

Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Select Value Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (1 series):
Oppenheimer Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Transition 2010 fund
Oppenheimer Transition 2015 Fund
Oppenheimer Transition 2020 Fund
Oppenheimer Transition 2030 Fund
Oppenheimer Tremont Market Neutral Fund, LLC
Oppenheimer Tremont Opportunity Fund, LLC
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (11 series):

     Oppenheimer Balanced Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Core Bond Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer MidCap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Strategic Bond Fund/VA
     Oppenheimer Value Fund/VA
Panorama Series Fund, Inc. (4 series):
     Government Securities Portfolio
     Growth Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio
Rochester Fund Municipals

The address of the Oppenheimer funds listed above, Shareholder Financial
Services, Inc., Shareholder Services, Inc., OppenheimerFunds Services,
Centennial Asset Management Corporation, Oppenheimer Real Asset Management,
Inc. and OppenheimerFunds Legacy Program is 6803 South Tucson Way,
Centennial, Colorado 80112-3924.

The address of OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc.,
HarbourView Asset Management Corporation, Oppenheimer Acquisition Corp., OFI
Private Investments Inc., OFI Institutional Asset Management, Inc. and
Oppenheimer Trust Company is Two World Financial Center, 225 Liberty Street,
11th Floor, New York, New York 10281-1008.

The address of Tremont Group Holdings, Inc. is 555 Theodore Fremd Avenue,
Suite 206-C, Rye, New York 10580.

The address of OppenheimerFunds International Ltd. is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment Management Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.


The address of OppenheimerFunds International Distributor Limited is Central
Tower, 28 Queen's Road, Suite 1601, Central, Hong Kong.


The address of Oppenheimer Capital LLC is 1345 Avenue of the Americas, 49th
Floor, New York, New York 10105-4800.

Item 27. Principal Underwriter

(a)   OppenheimerFunds Distributor, Inc. is the Distributor of the
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which OppenheimerFunds, Inc. is
the investment adviser, as described in Part A and Part B of this
Registration Statement and listed in Item 26(b) above (except Panorama Series
Fund, Inc.) and for MassMutual Institutional Funds.

(b)   The directors and officers of the Registrant's principal underwriter
are:

---------------------------------------------------------------------------------
Name & Principal                Position & Office         Position and Office
Business Address                with Underwriter          with Registrant
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Timothy Abbhul(1)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Agan(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Anthony Allocco(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Janette Aprilante(2)            Secretary                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Barker                    Vice President            None
1723 W. Nelson Street
Chicago, IL 60657
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Beichert(1)            Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rocco Benedetto(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rick Bettridge                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Bishop(1)             Treasurer                 None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Blinzler(1)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David A. Borrelli               Vice President            None
105 Black Calla Ct.
San Ramon, CA 94583
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey R. Botwinick            Vice President            None
4431 Twin Pines Drive
Manlius, NY 13104
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Sarah Bourgraf(1)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michelle Brennan(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin E. Brosmith               Senior Vice President     None
5 Deer Path
South Natlick, MA 01760
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jeffrey W. Bryan                Vice President            None
1048 Malaga Avenue
Coral Gables, FL 33134
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick Campbell(1)             Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Andrew Chonofsky                Vice President            None
109 Wade Avenue, Apt. 365
Raleigh, NC 27605
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Angelanto Ciaglia(2)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Melissa Clayton(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Colby(2)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Rodney Constable(1)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Susan Cornwell(1)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Neev Crane                      Vice President            None
1530 Beacon Street, Apt. #1403
Brookline, MA 02446
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Fredrick Davis                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Davis(2)                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Stephen J. Demetrovits(2)       Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven Dombrower                Vice President            None
13 Greenbrush Court
Greenlawn, NY 11740
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George P. Dougherty             Vice President            None
328 Regency Drive
North Wales, PA 19454
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ryan C. Drier                   Vice President            None
2240 Breton Road SE
Grand Rapids, MI 49525
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cliff H. Dunteman               Vice President            None
N 53 W 27761 Bantry Road
Sussex, WI 53089-45533
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Hillary Eigen(2)                Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent M. Elwell                  Vice President            None
35 Crown Terrace
Yardley, PA 19067
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gregg A. Everett                Vice President            None
4328 Auston Way
Palm Harbor, FL 34685-4017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George R. Fahey                 Senior Vice President     None
9511 Silent Hills Lane
Lone Tree, CO 80124
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric C. Fallon                  Vice President            None
10 Worth Circle
Newton, MA 02458
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Deanna Farrugia(1)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Fereday                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Joseph Fernandez                Vice President            None
1717 Richbourg Park Drive
Brentwood, TN 37027
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark J. Ferro                   Senior Vice President     None
104 Beach 221st Street
Breezy Point, NY 11697
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ronald H. Fielding(3)           Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bradley Finkle(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric P. Fishel                  Vice President            None
725 Boston Post Rd., #12
Sudbury, MA 01776
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick W. Flynn                Senior Vice President     None
14083 East Fair Avenue
Englewood, CO 80111
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John E. Forrest(2)              Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John ("J") Fortuna(2)           Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jayme D. Fowler                 Vice President            None
3818 Cedar Springs Road,
#101-349
Dallas, TX 75219
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Fuermann                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lucio Giliberti                 Vice President            None
6 Cyndi Court
Flemington, NJ 08822
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Gottesman               Vice President            None
255 Westchester Way
Birmingham, MI 48009
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Raquel Granahan(4)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ralph Grant                     Senior Vice President     None
10 Boathouse Close
Mt. Pleasant, SC 29464
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kahle Greenfield(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Grossjung                  Vice President            None
4002 N. 194th Street
Elkhorn, NE 68022
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael D. Guman                Vice President            None
3913 Pleasant Avenue
Allentown, PA 18103
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James E. Gunther                Vice President            None
603 Withers Circle
Wilmington, DE 19810
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin J. Healy(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elyse R. Jurman Herman          Vice President            None
5486 NW 42 Avenue
Boca Raton, FL 33496
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy G. Hetson(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William E. Hortz(2)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Hrybenko(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Amy Huber(1)                    Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian F. Husch                  Vice President            None
37 Hollow Road
Stonybrook, NY 11790
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Keith Hylind                    Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen T. Ives(1)             Vice President &          Assistant Secretary
                                Assistant Secretary
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Shonda Rae Jaquez(2)            Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nivan Jaleeli                   Vice President            None
13622 E. Geronimo Rd.
Scottsdale, AZ 85259
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric K. Johnson                 Vice President            None
8588 Colonial Drive
Lone Tree, CO 80124
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina J. Keller(2)          Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Keogh(2)                Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Lisa Klassen(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Klein                   Senior Vice President     None
4820 Fremont Avenue South
Minneapolis, MN 55419
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard Knott(1)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brent A. Krantz                 Senior Vice President     None
61500 Tam McArthur Loop
Bend, OR 97702
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Kristenson(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David T. Kuzia                  Vice President            None
10258 S. Dowling Way
Highlands Ranch, CO 80126
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Tracey Lange(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul R. LeMire                  Assistant Vice President  None
7 Cormorant Drive
Middletown, NJ 07748
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric J. Liberman                Vice President            None
27 Tappan Ave., Unit West
Sleepy Hollow, NY 10591
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Malissa Lischin(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Loncar                   Vice President            None
1401  North Taft  Street,  Apt.
726
Arlington, VA 22201
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Craig Lyman                     Vice President            None
7425 Eggshell Drive
N. Las Vegas, NV 89084
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Peter Maddox(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Malik                   Vice President            None
546 Idylberry Road
San Rafael, CA 94903
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven C. Manns                 Vice President            None
1627 N. Hermitage Avenue
Chicago, IL 60622
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Todd A. Marion                  Vice President            None
24 Midland Avenue
Cold Spring Harbor, NY 11724
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
LuAnn Mascia(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Theresa-Marie Maynier           Vice President            None
2421 Charlotte Drive
Charlotte, NC 28203
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John C. McDonough               Vice President            None
533 Valley Road
New Canaan, CT 06840
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kent C. McGowan                 Vice President            None
9510 190th Place SW
Edmonds, WA 98020
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian F. Medina                 Vice President            None
3009 Irving Street
Denver, CO 80211
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Daniel Melehan                  Vice President            None
906 Bridgeport Court
San Marcos, CA 92069
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark Mezzanotte                 Vice President            None
16 Cullen Way
Exeter, NH 03833
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Matthew L. Michaelson           Vice President            None
1250 W. Grace, #3R
Chicago, IL 60613
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Noah Miller(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Clint Modler(1)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert Moser                    Vice President            None
9650 East Aspen Hill Circle
Lone Tree, CO 80124
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David W. Mountford              Vice President            None
7820 Banyan Terrace
Tamarac, FL 33321
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gzim Muja                       Vice President            None
269 S. Beverly Dr. #807
Beverly Hills, CA 90212
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John V. Murphy(2)               Director                  President & Trustee
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wendy Jean Murray               Vice President            None
32 Carolin Road
Upper Montclair, NJ 07043
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John S. Napier                  Vice President            None
17 Hillcrest Ave.
Darien, CT 06820
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christina Nasta(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kathleen Nelkin(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kevin P. Neznek(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bradford G. Norford             Vice President            None
5095 Lahinch Ct.
Westerville, OH 43082
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alan Panzer                     Vice President            None
6755 Ridge Mill Lane
Atlanta, GA 30328
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Park(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Perkes                 Vice President            None
6 Lawton Ct.
Frisco, TX 75034
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles K. Pettit(2)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Elaine M. Puleo-Carter(2)       Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Minnie Ra                       Vice President            None
100 Dolores Street, #203
Carmel, CA 93923
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Dusting Raring                  Vice President            None
27 Blakemore Drive
Ladera Ranch, CA 92797
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael A. Raso                 Vice President            None
3 Vine Place
Larchmont, NY 10538
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Richard E. Rath                 Vice President            None
46 Mt. Vernon Ave.
Alexandria, VA 22301
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William J. Raynor(5)            Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ruxandra Risko(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David R. Robertson(2)           Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Nicole Robbins(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ian M. Roche                    Vice President            None
7070 Bramshill Circle
Bainbridge, OH 44023
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth A. Rosenson             Vice President            None
24753 Vantage Pt. Terrace
Malibu, CA 90265
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Matthew Rutig                   Vice President            None
199 North Street
Ridgefield, CT 06877
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William R. Rylander             Vice President            None
85 Evergreen Road
Vernon, CT 06066
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Sabow                    Vice President            None
6617 Southcrest Drive
Edina, MN 55435
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Saunders                   Vice President            None
2251 Chantilly Ave.
Winter Park, FL 32789
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Schmitt(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Thomas Schmitt                  Vice President            None
40 Rockcrest Rd
Manhasset, NY 11030
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Schories                Vice President            None
3 Hill Street
Hazlet, NJ 07730
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Charles F. Scully               Vice President            None
125 Cypress View Way
Apex, NC 27502
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennifer Sexton(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Eric Sharp                      Vice President            None
862 McNeill Circle
Woodland, CA 95695
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Sheluck(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Debbie A. Simon                 Vice President            None
55 E. Erie St., #4404
Chicago, IL 60611
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Douglas Bruce Smith             Vice President            None
3635 NW Sierra Drive,
Camas, WA 98607
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Christopher M. Spencer          Vice President            None
2353 W 118th Terrace
Leawood, KS 66211
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John A. Spensley                Vice President            None
375 Mallard Court
Carmel, IN 46032
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Alfred St. John(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Bryan Stein                     Vice President            None
8 Longwood Rd.
Voorhees, NJ 08043
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Stoma(2)                   Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Wayne Strauss(3)                Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Brian C. Summe                  Vice President            None
2479 Legends Way
Crestview Hills, KY 41017
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael Sussman(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George T. Sweeney               Senior Vice President     None
5 Smokehouse Lane
Hummelstown, PA 17036
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William K. Tai                  Vice President            None
12701 Prairie Drive
Urbandale, IA 50323
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James Taylor(2)                 Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Martin Telles(2)                Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Paul Temple(2)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
David G. Thomas                 Vice President            None
16628 Elk Run Court
Leesburg, VA 20176
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Barrie L. Tiedemann             Vice President            None
1774 Sheridan Drive
Ann Arbor, MI 48104
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mark S. Vandehey(1)             Vice President and Chief  Vice President and
                                Compliance Officer        Chief Compliance
                                                          Officer
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Vincent Vermete(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cynthia Walloga(2)              Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Kenneth Lediard Ward            Vice President            None
1400 Cottonwood Valley Circle
N.
Irving, TX 75038
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Teresa Ward(1)                  Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Michael J. Weigner              Vice President            None
4905 W. San Nicholas Street
Tampa, FL 33629
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donn Weise                      Vice President            None
3249 Earlmar Drive
Los Angeles, CA 90064
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Chris G. Werner                 Vice President            None
98 Crown Point Place
Castle Rock, CO 80108
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Catherine White(2)              Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ryan Wilde(1)                   Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Julie Wimer(2)                  Assistant Vice President  None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Donna Winn(2)                   Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Peter Winters                   Vice President            None
911 N. Organce Ave, Pat. 514
Orlando, FL 32801
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Patrick Wisneski(1)             Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Philip Witkower(2)              Senior Vice President     None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Meredith Wolff(2)               Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Cary Patrick Wozniak            Vice President            None
18808 Bravata Court
San Diego, CA 92128
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John Charles Young              Vice President            None
3914 Southwestern
Houston, TX 77005
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jill Zachman(2)                 Vice President            None
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Zack(2)               General Counsel &         Secretary
                                Director
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Walter Zinych                   Vice President            None
630 North Franklin St., Apt.
718
Chicago, IL 60610
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Steven Zito(1)                  Vice President            None
---------------------------------------------------------------------------------

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)Two World Financial  Center,  225 Liberty Street,  11th Floor, New York, NY
10281-1008
(3)350 Linden Oaks, Rochester, NY 14623
(4)555 Theodore Fremd Avenue, Rye, NY 10580
(5)Independence Wharf, 470 Atlantic Avenue, 11th Floor, Boston, MA 02210

(c)   Not applicable.

Item 28. Location of Accounts and Records

The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940
and rules promulgated thereunder are in the possession of OppenheimerFunds,
Inc. at its offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.

Item 29. Management Services

Not applicable

Item 30. Undertakings

Not applicable.







                                  SIGNATURES


Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on
the 23rd day of February, 2007.


                        OPPENHEIMER QUEST FOR VALUE FUNDS


                     By:      /s/ John V. Murphy*
                        John V. Murphy, President,
                        Principal Executive Officer and Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures                    Title                         Date


/s/ Thomas W. Courtney*                                     Chairman of the

February 23, 2007

Thomas W. Courtney            Board of Trustees



/s/ John V. Murphy*           President, Principal          February 23, 2007
John V. Murphy                Executive Officer and Trustee


/s/ Brian W. Wixted*          Treasurer, Principal          February 23, 2007
Brian W. Wixted               Financial & Accounting Officer


/s/ David K. Downes*          Trustee                       February 23, 2007

David K. Downes



/s/ Paul Y. Clinton*          Trustee                       February 23, 2007

Paul Y. Clinton



/s/ Robert G. Galli*          Trustee                       February 23, 2007

Robert G. Galli


/s/ Lacy B. Herrmann*                                       Trustee

February 23, 2007
Lacy B. Herrmann


/s/ Brian F. Wruble*          Trustee                       February 23, 2007

Brian F. Wruble


*By:  /s/ Mitchell J. Lindauer
      Mitchell J. Lindauer, Attorney-in-Fact






                      OPPENHEIMER QUEST FOR VALUE FUNDS


                       Post-Effective Amendment No. 59


                     Registration Statement No. 33-15489


                                EXHIBIT INDEX

Exhibit No.       Description


23(j)             Independent Registered Public Accounting Firm's Consents.