Oppenheimer Cash Reserves


6803 South Tucson Way, Englewood, Colorado 80112
1.800.525.7048

Statement of Additional Information dated November 28, 2001


         This Statement of Additional Information is not a prospectus.  This document contains additional
information about the Fund and supplements information in the Prospectus dated November 28, 2001.  It should be
read together with the Prospectus, which may be obtained by writing to the Fund's Transfer Agent,
OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217, by calling the Transfer Agent at the
toll-free number shown above, or by downloading it from the OppenheimerFunds Internet web site at
www.oppenheimerfunds.com.


Contents                                                                                                    Page

About the Fund

Additional Information about the Fund's Investment Policies and Risks.............................................2
     The Fund's Investment Policies...............................................................................2
     Other Investment Strategies..................................................................................6
     Investment Restrictions......................................................................................7
How the Fund is Managed...........................................................................................9
     Organization and History.....................................................................................9
     Trustees and Officers of the Fund...........................................................................11
     The Manager.................................................................................................17
Distribution and Service Plans...................................................................................19
Performance of the Fund..........................................................................................23


About Your Account

How To Buy Shares................................................................................................26
How To Sell
Shares.................................................................................................31
How To Exchange Shares...........................................................................................37
Dividends and Taxes..............................................................................................40
Additional Information About the Fund............................................................................41


Financial Information About the Fund

Independent Auditors' Report.....................................................................................42
Financial Statements.............................................................................................43

Appendix A: Description of Securities Ratings...................................................................A-1
Appendix B: Industry Classifications............................................................................B-1
Appendix C: Special Sales Charge Arrangements and Waivers.......................................................C-1

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A B O U T  T H E  F U N D
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Additional Information About the Fund's Investment Policies and Risks

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

The Fund's Investment Policies.  The Fund's objective is to seek the maximum current income that is consistent
with stability of principal.  The Fund will not make investments with the objective of seeking capital growth.
However, the value of the securities held by the Fund may be affected by changes in general interest rates.
Because the current value of debt securities varies inversely with changes in prevailing interest rates, if
interest rates increase after a security is purchased, that security would normally decline in value.
Conversely, if interest rates decrease after a security is purchased, its value would rise.  However, those
fluctuations in value will not generally result in realized gains or losses to the Fund since the Fund does not
usually intend to dispose of securities prior to their maturity.  A debt security held to maturity is redeemable
by its issuer at full principal value plus accrued interest.

         The Fund may sell securities prior to their maturity, to attempt to take advantage of short-term market
variations, or because of a revised credit evaluation of the issuer or other considerations. The Fund may also do
so to generate cash to satisfy redemptions of Fund shares. In such cases, the Fund may realize a capital gain or
loss on the security.

         o    Ratings of Securities -- Portfolio Quality, Maturity and Diversification.  Under Rule 2a-7 of the
Investment Company Act, the Fund uses the amortized cost method to value its portfolio securities to determine
the Fund's net asset value per share.  Rule 2a-7 places restrictions on a money market fund's investments.  Under
that Rule, the Fund may purchase only those securities that the Manager, under Board-approved procedures, has
determined have minimal credit risks and are "Eligible Securities."  The rating restrictions described in the
Prospectus and this Statement of Additional Information do not apply to banks in which the Fund's cash is kept.

         An "Eligible Security" is one that has been rated in one of the two highest short-term rating categories
by any two "nationally-recognized statistical rating organizations."  That term is defined in Rule 2a-7 and they
are referred to as "Rating Organizations" in this Statement of Additional Information. If only one Rating
Organization has rated that security, it must have been rated in one of the two highest rating categories by that
Rating Organization.  An unrated security that is judged by the Manager to be of comparable quality to Eligible
Securities rated by Rating Organizations may also be an "Eligible Security."

         Rule 2a-7 permits the Fund to purchase any number of "First Tier Securities."  These are Eligible
Securities that have been rated in the highest rating category for short-term debt obligations by at least two
Rating Organizations.  If only one Rating Organization has rated a particular security, it must have been rated
in the highest rating category by that Rating Organization.  Comparable unrated securities may also be First Tier
Securities.

         Under Rule 2a-7, the Fund may invest only up to 5% of its total assets in "Second Tier Securities."
Those are Eligible Securities that are not "First Tier Securities."  In addition, the Fund may not invest more
than:
o        5% of its total assets in the securities of any one issuer (other than the U.S. government, its agencies
         or instrumentalities) or
o        1% of its total assets or $1 million (whichever is greater) in Second Tier Securities of any one
         issuer.

         Under Rule 2a-7, the Fund must maintain a dollar-weighted average portfolio maturity of not more than 90
days, and the maturity of any single portfolio investment may not exceed 397 days. The Board regularly reviews
reports from the Manager to show the Manager's compliance with the Fund's procedures and with the Rule.


         If a security's rating is downgraded, the Manager or the Board of Trustees may have to reassess the
security's credit risk.  If a security is downgraded, the Manager or the Board of Trustees will promptly reassess
whether the security continues to present minimal credit risk, reassess the status of the security as an
"eligible security," and take such actions as is appropriate. If the Fund disposes of the security within five
days of the Manager learning of the downgrade, the Manager will provide the Board of Trustees with subsequent
notice of such downgrade.  If a security is in default, or ceases to be an Eligible Security, or is determined no
longer to present minimal credit risks, the Board of Trustees must determine whether it would be in the best
interests of the Fund to dispose of the security.

         The Rating Organizations currently designated as nationally-recognized statistical rating organizations
by the Securities and Exchange Commission are Standard & Poor's Ratings Services, Moody's Investors Service, Inc.
and Fitch, Inc.  Appendix A to this Statement of Additional Information contains descriptions of the rating
categories of those Rating Organizations.  Ratings at the time of purchase will determine whether securities may
be acquired under the restrictions described above.


         o    U.S. Government Securities.  U.S. government securities are obligations issued or guaranteed by the
U.S. government or its agencies or instrumentalities.  They include Treasury Bills (which mature within one year
of the date they are issued) and Treasury Notes and Bonds (which are issued with longer maturities).  All
Treasury securities are backed by the full faith and credit of the United States.

         U.S. government agencies and instrumentalities that issue or guarantee securities include, but are not
limited to, the Federal Housing Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, Government National Mortgage Association, General Services Administration,
Bank for Cooperatives, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal Intermediate
Credit Banks, Federal Land Banks, Maritime Administration, the Tennessee Valley Authority and the District of
Columbia Armory Board.

         Securities issued or guaranteed by U.S. government agencies and instrumentalities are not always backed
by the full faith and credit of the United States.  Some, such as securities issued by the Federal National
Mortgage Association ("Fannie Mae"), are backed by the right of the agency or instrumentality to borrow from the
Treasury.  Others, such as securities issued by the Federal Home Loan Mortgage Corporation ("Freddie Mac"), are
supported only by the credit of the instrumentality and not by the Treasury.  If the securities are not backed by
the full faith and credit of the United States, the purchaser must look principally to the agency issuing the
obligation for repayment and may not be able to assert a claim against the United States if the issuing agency or
instrumentality does not meet its commitment.

         Among the U.S. government securities that may be purchased by the Fund are "mortgage-backed securities"
of Fannie Mae, Government National Mortgage Association ("Ginnie Mae") and Freddie Mac.  Timely payment of
principal and interest on Ginnie Mae pass-throughs is guaranteed by the full faith and credit of the United
States.  These mortgage-backed securities include "pass-through" securities and "participation certificates."
Both types of securities are similar, in that they represent pools of mortgages that are assembled by a vendor
who sells interests in the pool.  Payments of principal and interest by individual mortgagors are passed through
to the holders of the interests in the pool.  Another type of mortgage-backed security is the "collateralized
mortgage obligation."  It is similar to a conventional bond and is secured by groups of individual mortgages.

         o    Time Deposits and Other Bank Obligations.  The types of "banks" whose securities the Fund may buy
include commercial banks, savings banks, and savings and loan associations, which may or may not be members of
the Federal Deposit Insurance Corporation.  The Fund may also buy securities of "foreign banks" that are:
o        foreign branches of U.S. banks ( which may be issuers of "Eurodollar" money market instruments),
o        U.S. branches and agencies of foreign banks (which may be issuers of "Yankee dollar" instruments), or
o        foreign branches of foreign banks.


         The Fund may invest in fixed time deposits.  These are non-negotiable deposits in a bank for a specified
period of time at a stated interest rate.  They may or may not be subject to withdrawal penalties.  However, the
Fund's investments in time deposits that are subject to penalties (other than time deposits maturing in less than
7 days) are subject to the 10% investment limitation for investing in illiquid or restricted securities, set
forth in "Illiquid and Restricted Securities" in the Prospectus.  The Fund will buy bank obligations only from a
domestic bank with total assets of at least $2.0 billion or from a foreign bank with total assets of at least
$30.0 billion.  Those asset requirements apply only at the time the obligations are acquired.


         o    Insured Bank Obligations.  The Federal Deposit Insurance Corporation ("FDIC") insures the deposits
of banks and savings and loan associations up to $100,000 per investor.  Within the limits set forth in the
Prospectus, the Fund may purchase bank obligations that are fully insured as to principal by the FDIC.  To remain
fully insured as to principal, these investments must currently be limited to $100,000 per bank.  If the
principal amount and accrued interest together exceed $100,000, then the accrued interest in excess of that
$100,000 will not be insured.

         o    Bank Loan Participation Agreements.  The Fund may invest in bank loan participation agreements,
subject to the investment limitation set forth in the Prospectus as to investments in illiquid securities.
Participation agreements provide an undivided interest in a loan made by the bank issuing the participation
interest in the proportion that the buyer's investment bears to the total principal amount of the loan.  Under
this type of arrangement, the issuing bank may have no obligation to the buyer other than to pay principal and
interest on the loan if and when received by the bank.  Thus, the Fund must look to the creditworthiness of the
borrower, which is obligated to make payments of principal and interest on the loan.  If the borrower fails to
pay scheduled principal or interest payments, the Fund may experience a reduction in income.

         o    Asset-Backed Securities.  These securities, issued by trusts and special purpose corporations, are
backed by pools of assets, primarily automobile and credit-card receivables and home equity loans.  They pass
through the payments on the underlying obligations to the security holders (less servicing fees paid to the
originator or fees for any credit enhancement).  The value of an asset-backed security is affected by changes in
the market's perception of the asset backing the security, the creditworthiness of the servicing agent for the
loan pool, the originator of the loans, or the financial institution providing any credit enhancement.

         Payments of principal and interest passed through to holders of asset-backed securities are typically
supported by some form of credit enhancement, such as a letter of credit, surety bond, limited guarantee by
another entity or having a priority to certain of the borrower's other securities. The degree of credit
enhancement varies, and generally applies to only a fraction of the asset-backed security's par value until
exhausted.  If the credit enhancement of an asset-backed security held by the Fund has been exhausted, and if any
required payments of principal and interest are not made with respect to the underlying loans, the Fund may
experience losses or delays in receiving payment.

         The risks of investing in asset-backed securities are ultimately dependent upon payment of consumer
loans by the individual borrowers.  As a purchaser of an asset-backed security, the Fund would generally have no
recourse to the entity that originated the loans in the event of default by a borrower.  The underlying loans are
subject to prepayments, which shorten the weighted average life of asset-backed securities and may lower their
return, in the same manner as for prepayments of a pool of mortgage loans underlying mortgage-backed securities.
However, asset-backed securities do not have the benefit of the same security interest in the underlying
collateral as do mortgage-backed securities.

         o    Repurchase Agreements.  In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor for delivery on an agreed-upon future date.  The resale price
exceeds the purchase price by an amount that reflects an agreed-upon interest rate effective for the period
during which the repurchase agreement is in effect.  An approved vendor may be a U.S. commercial bank, the U.S.
branch of a foreign bank, or a broker-dealer which has been designated a primary dealer in government
securities.  These entities must meet the credit requirements set forth by the Fund's Board of Trustees from time
to time.

         The majority of these transactions run from day to day, and delivery pursuant to the resale typically
will occur within one to five days of the purchase.  The Fund will not enter into a repurchase agreement that
will cause more than 10% of its net assets to be subject to repurchase agreements maturing in more than seven
days.

         Repurchase agreements are considered "loans" under the Investment Company Act, collateralized by the
underlying security.  The Fund's repurchase agreements require that at all times while the repurchase agreement
is in effect, the collateral's value must equal or exceed the repurchase price to fully collateralize the
repayment obligation.  Additionally, the Manager will



monitor the vendor's creditworthiness to confirm that the vendor is financially sound and will continuously
monitor the collateral's value.  However, if the vendor fails to pay the resale price on the delivery date, the
Fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its
ability to do so.

Other Investment Strategies

         o    Floating Rate/Variable Rate Obligations.  The Fund may invest in instruments with floating or
variable interest rates.  The interest rate on a floating rate obligation is based on a stated prevailing market
rate, such as a bank's prime rate, the 90-day U.S. Treasury Bill rate, the rate of return on commercial paper or
bank certificates of deposit, or some other standard.  The rate on the investment is adjusted automatically each
time the market rate is adjusted.  The interest rate on a variable rate obligation is also based on a stated
prevailing market rate but is adjusted automatically at a specified interval of not less than one year.  Some
variable rate or floating rate obligations in which the Fund may invest have a demand feature entitling the
holder to demand payment of an amount approximately equal to the amortized cost of the instrument or the
principal amount of the instrument plus accrued interest at any time, or at specified intervals not exceeding 397
days. These notes may or may not be backed by bank letters of credit.

         Variable rate demand notes may include master demand notes, which are obligations that permit the Fund
to invest fluctuating amounts in a note.  The amount may change daily without penalty, pursuant to direct
arrangements between the Fund, as the note purchaser, and the issuer of the note.  The interest rates on these
notes fluctuate from time to time.  The issuer of this type of obligation normally has a corresponding right in
its discretion, after a given period, to prepay the outstanding principal amount of the obligation plus accrued
interest.  The issuer must give a specified number of days' notice to the holders of those obligations.
Generally, the changes in the interest rate on those securities reduce the fluctuation in their market value.  As
interest rates decrease or increase, the potential for capital appreciation or depreciation is less than that for
fixed-rate obligations having the same maturity.

         Because these types of obligations are direct lending arrangements between the note purchaser and issuer
of the note, these instruments generally will not be traded.  Generally, there is no established secondary market
for these types of obligations, although they are redeemable from the issuer at face value.  Accordingly, where
these obligations are not secured by letters of credit or other credit support arrangements, the Fund's right to
redeem them is dependent on the ability of the note issuer to pay principal and interest on demand.  These types
of obligations usually are not rated by credit rating agencies.  The Fund may invest in obligations that are not
rated only if the Manager determines at the time of investment that the obligations are of comparable quality to
the other obligations in which the Fund may invest.  The Manager, on behalf of the Fund, will monitor the
creditworthiness of the issuers of the floating and variable rate obligations in the Fund's portfolio on an
ongoing basis.

         o    Loans of Portfolio Securities.  To attempt to increase its income, the Fund may lend its portfolio
securities to brokers, dealers and other financial institutions.  These loans are limited to not more than 25% of
the value of the Fund's total assets and are subject to other conditions described below.  There are some risks
in lending securities.  The Fund could experience a delay in receiving additional collateral to secure a loan, or
a delay in recovering the loaned securities.  The Fund presently does not intend to lend its securities, but if
it does, the value of securities loaned is not expected to exceed 5% of the value of the Fund's total assets.

         The Fund must receive collateral for a loan.  Under current applicable regulatory requirements (which
are subject to change), on each business day the loan collateral must be at least equal to the market value of
the loaned securities.  The collateral must consist of cash, bank letters of credit, U.S. government securities
or other cash equivalents in which the Fund is permitted to invest.  To be acceptable as collateral, letters of
credit must obligate a bank to pay amounts demanded by the Fund if the demand meets the terms of the letter.
Such terms and the issuing bank must be satisfactory to the Fund.

         When it lends securities, the Fund receives from the borrower an amount equal to the interest paid or
the dividends declared on the loaned securities during the term of the loan.  It may also receive negotiated loan
fees and the interest on the collateral securities, less any finders', custodian bank, administrative or other
fees the Fund pays in connection with the loan.  The Fund may share the interest it receives on the collateral
securities with the borrower as long as it realizes at least a minimum amount of interest required by the lending
guidelines established by its Board of Trustees.

         The Fund will not lend its portfolio securities to any officer, Trustee, employee or affiliate of the
Fund or its Manager.  The terms of the Fund's loans must meet certain 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.

         o    Illiquid and Restricted Securities.  Under the policies and procedures established by the Fund's
Board of Trustees, the Manager determines the liquidity of certain of the Fund's investments. Investments may be
illiquid because of the absence of an active trading market, making it difficult to value them or dispose of them
promptly at an acceptable price.  A restricted security is one that has a contractual restriction on its resale
or which cannot be sold publicly until it is registered under the Securities Act of 1933.

         Illiquid securities the Fund can buy include issues that may be redeemed only by the issuer upon more
than seven days notice or at maturity, repurchase agreements maturing in more than seven days, fixed time
deposits subject to withdrawal penalties which mature in more than seven days, and other securities that cannot
be sold freely due to legal or contractual restrictions on resale. Contractual restrictions on the resale of
illiquid securities might prevent or delay their sale by the Fund at a time when such sale would be desirable.
Illiquid securities include repurchase agreements maturing in more than 7 days, or certain participation
interests other than those with puts exercisable within 7 days.

         There are restricted securities that are not illiquid that the Fund can buy.  They include certain
master demand notes redeemable on demand, and short-term corporate debt instruments that are not related to
current transactions of the issuer and therefore are not exempt from registration as commercial paper.

Investment Restrictions

              o   What Are "Fundamental Policies?" Fundamental policies are those policies that the Fund has
adopted to govern its investments that can be changed only by the vote of a "majority" of the Fund's outstanding
voting securities.  Under the Investment Company Act, a "majority" vote is defined as the vote of the holders of
the lesser of:


o        67% or more of the shares present or represented by proxy at a shareholder meeting, if the holders of
                  more than 50% of the outstanding shares are present or represented by proxy, or
o        more than 50% of the outstanding shares.
         The Fund's investment objective is a fundamental policy. Other policies described in the Prospectus or
this Statement of Additional Information are "fundamental" only if they are identified as such.  The Fund's Board
of Trustees can change non-fundamental policies without shareholder approval.  However, significant changes to
investment policies will be described in supplements or updates to the Prospectus or this Statement of Additional
Information, as appropriate.  The Fund's most significant investment policies are described in the Prospectus.

         o    Does the Fund Have Additional Fundamental Policies?  The following investment restrictions are
fundamental policies of the Fund:

o        The Fund cannot invest in commodities or commodity contracts;

o        The Fund cannot invest in real estate; however, the Fund may purchase debt securities issued by
companies which invest in real estate or interests therein;

o        The Fund cannot purchase securities on margin or make short sales of securities;

o        The Fund cannot  invest in or hold  securities  of any issuer if those  officers and trustees or directors
of the Fund or its Manager who  beneficially  own  individually  more than1/2of 1% of the securities of such issuer
together own more than 5% of the securities of such issuer;

o        The Fund cannot underwrite securities of other companies except insofar as the Fund may be deemed an
underwriter under the Securities Act of 1933 in connection with the disposition of portfolio securities;

o        The Fund cannot  invest more than 5% of its total assets in  securities  of companies  that have  operated
less than three years, including the operations of predecessors;

o        The Fund cannot issue "senior securities," but this does not prohibit certain investment activities for
which assets of the Fund are designated as segregated, or margin, collateral or escrow arrangements are
established, to cover the related obligations;

o        With respect to 75% of its assets, the Fund cannot purchase securities issued or guaranteed by any one
issuer (except the U.S. Government or its agencies or instrumentalities), if more than 5% of the Fund's total
assets would be invested in securities of that issuer or Fund would then own more than 10% of that issuer's
voting securities;

o        The Fund cannot concentrate investments to the extent of 25% of its assets in any industry; except for
obligations of foreign banks or foreign branches of domestic banks, time deposits, other bank obligations and
U.S. government securities as described in the Prospectus and Statement of Additional Information;

o        The Fund cannot make loans, except that the Fund may purchase debt instruments and repurchase agreements
as described in the Prospectus and Statement of Additional Information, and the Fund may lend its portfolio
securities as described under "Loans of Portfolio Securities" in the Statement of Additional Information; or

o        The Fund cannot borrow money in excess of 10% of the value of its total assets or make any investment
when borrowings exceed 5% of the value of its total assets; it may borrow only as a temporary measure for
extraordinary or emergency purposes; no assets of the Fund may be pledged, mortgaged or assigned to secure a debt.
         Unless the Prospectus or this Statement of Additional Information states that a percentage restriction
applies on an ongoing basis, it applies only at the time the Fund makes an investment. The Fund need not sell
securities to meet the percentage limits if the value of the investment increases in proportion to the size of
the Fund.

|X|      Does the Fund Have Additional Restrictions That Are Not "Fundamental" Policies?

         The Fund has additional operating policies that are not "fundamental," and which can be changed by the
Board of Trustees without shareholder approval.

         The Fund cannot invest in securities of other investment companies, except if it acquires them as part
of a merger, consolidation or acquisition of assets.

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


How the Fund Is Managed

Organization and History.  The Fund is an open-end diversified management company organized as a Massachusetts
business trust in 1988, with an unlimited number of authorized shares of beneficial interest.

         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.


         o    Classes of Shares.  The Board of Trustees has the power, without shareholder approval, to divide
unissued shares of the Fund into two or more classes.  The Board has done so, and the Fund currently has four
classes of shares: Class A, Class B, Class C and Class N shares.  All classes invest in the same investment
portfolio. Only retirement plans may purchase Class N shares. Each class of shares:
o        has its own dividends and distributions,
o        pays certain expenses which may be different for the different classes,

         o    may have 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 of each class are freely transferable.  Each share has one vote at shareholder meetings, with
fractional shares voting proportionally on matters submitted to a vote of shareholders.  There are no preemptive
or conversion rights and shares participate equally in the assets of the Fund upon liquidation.

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

         |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.  The Fund will hold meetings when required to do
so by the Investment Company Act or other applicable law, or when a shareholder meeting is called by the Trustees
or upon proper request of the shareholders.

         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, whichever is less, The Trustees may take such other
action as is permitted under the Investment Company Act.

         o    Shareholder and Trustee Liability.  The Trust's Declaration of Trust contains an express disclaimer
of shareholder or Trustee liability for the Fund's or the Trust's obligations. It also provides for
indemnification and reimbursement of expenses out of the Trust's property for any shareholder held personally
liable for its obligations.  The Declaration of Trust also states that upon request, the Trust shall assume the
defense of any claim made against a shareholder for any act or obligation of the Trust and shall satisfy any
judgment on that claim.  Massachusetts law permits a shareholder of a business trust (such as the Trust) 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's parent Trust is limited to the
relatively remote circumstances in which the Trust 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 the 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. The Trustees shall have no
personal liability to any such person, to the extent permitted by law.





Trustees and Officers of the Fund.  The Fund's Trustees and officers and their principal occupations and business
affiliations during the past five years are listed below.  Trustees denoted with an asterisk (*) below are deemed
to be "interested persons" of the Fund under the Investment Company Act. All of the Trustees are trustees or
directors of the following Denver-based Oppenheimer funds1:.


Oppenheimer Cash Reserves                               Oppenheimer Select Managers
Oppenheimer Champion Income Fund                        Oppenheimer Senior Floating Rate Fund
Oppenheimer Capital Income Fund                         Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund                             Oppenheimer Total Return Fund, Inc.
Oppenheimer International Bond Fund                     Oppenheimer Variable Account Funds
Oppenheimer Integrity Funds                             Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund                Centennial America Fund, L. P.
Oppenheimer Main Street Funds, Inc.                     Centennial California Tax Exempt Trust
Oppenheimer Main Street Opportunity Fund                Centennial Government Trust
Oppenheimer Main Street Small Cap Fund                  Centennial Money Market Trust
Oppenheimer Municipal Fund                              Centennial New York Tax Exempt Trust
Oppenheimer Real Asset Fund                             Centennial Tax Exempt Trust


         Messrs. Swain, Murphy, Wixted,  Zack, Bishop, Farrar, Feld, Ives and Molleur, who are officers of the
Fund, respectively hold the same offices with the other Denver-based Oppenheimer funds as with the Fund.  As of
November 5, 2001, the Trustees and officers of the Fund as a group owned less than 1% of the outstanding 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 below. Mr. Murphy is a trustee of that plan.


James C. Swain*, Chairman, Chief Executive Officer and Trustee, Age: 68.
6803 South Tucson Way, Englewood, Colorado 80112

Vice Chairman of the Manager (since September 1988); formerly President and a director of Centennial Asset
Management Corporation, a wholly-owned subsidiary of the Manager and Chairman of the Board of Shareholder
Services, Inc., a transfer agent subsidiary of the Manager.

John V. Murphy*, President and Trustee, Age: 52
498 7th Avenue, New York, New York 10018
Chairman and Chief Executive Officer and director (since July 2001) and President (since August 2000) of the
Manager; President and a trustee of other Oppenheimer funds; President and a director (since July 2001) of
Oppenheimer Acquisition Corp., the Manager's parent holding company, and of Oppenheimer Partnership Holdings,
Inc. (since July 2001), a holding company subsidiary of the Manager; Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder Financial Services, Inc., transfer agent subsidiaries of the
Manager; President (since November 1, 2001) and a director (since July 2001) of Oppenheimer Real Asset
Management, Inc., an investment adviser subsidiary of the Manager; President and a director (since July 2001) of
OppenheimerFunds Legacy Program, a charitable trust program established by the Manager; a director (since
November 2001) of Trinity Investment Management Corp. and Tremont Advisers, Inc., investment advisory affiliates
of the Manager, and of OAM Institutional, Inc. (since November 2001), an investment advisory subsidiary of the
Manager, and of HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001),
investment adviser subsidiaries of the Manager; formerly President and trustee (from November 1999 to November
2001) of MML Series Investment Fund and MassMutual Institutional Funds, open-end investment companies; Chief
Operating Officer (August 2000 - July 2001) of the Manager; Executive Vice President (from 1995 to 1997) of
MassMutual Financial Group; Executive Vice President and Chief Operating Officer (from 1995 to 1997) of David L.
Babson & Company, an investment advisor; Chief Operating Officer (from 1993 to 1996) of Concert Capital
Management, Inc., an investment advisor.


William L. Armstrong, Trustee, Age: 64.
6803 South Tucson Way, Englewood, Colorado 80112
Chairman of the following private mortgage banking companies: Cherry Creek Mortgage Company (since 1991),
Centennial State Mortgage Company (since 1994), The El Paso Mortgage Company (since 1993), Transland Financial
Services, Inc. (since 1997); Chairman of the following private companies: Great Frontier Insurance (insurance
agency) (since 1995) and Ambassador Media Corporation (since 1984); Director of the following public companies:
Storage Technology Corporation (computer equipment company) (since 1991), Helmerich & Payne, Inc. (oil and gas
drilling/production company) (since 1992), UNUMProvident (insurance company) (since 1991); formerly Director of
International Family Entertainment (television channel) (1992 - 1997) and Natec Resources, Inc. (air pollution
control equipment and services company) (1991-1995), Frontier Real Estate, Inc. (residential real estate
brokerage) (1994-1999), and Frontier Title (title insurance agency) (1995-June 1999); formerly U.S. Senator
(January 1979-January 1991).

Robert G. Avis, Trustee, Age: 70.
6803 South Tucson Way, Englewood, Colorado 80112

Director and President of A.G. Edwards Capital, Inc. (General Partner of private equity funds), formerly, until
March 2000, Chairman, President and Chief Executive Officer of A.G. Edwards Capital, Inc.; formerly, (until March
1999) Vice Chairman and Director of A.G. Edwards, Inc. and Vice Chairman of A.G. Edwards & Sons, Inc. (its
brokerage company subsidiary); until March 1999 Chairman of A.G. Edwards Trust Company and A.G.E. Asset
Management (investment advisor); until March 2000, a Director of A.G. Edwards & Sons and A.G. Edwards Trust
Company.


George C. Bowen, Trustee, Age: 65.
6803 South Tucson Way, Englewood, Colorado 80112

Formerly (until April 1999) Mr. Bowen held the following positions: Senior Vice President (since September 1987)
and Treasurer (since March 1985) of the Manager; Vice President (since June 1983) and Treasurer (since March 1985)
of OppenheimerFunds, Distributor, Inc., a subsidiary of the Manager and the Fund's Distributor; Senior Vice
President (since February 1992), Treasurer (since July 1991) Assistant Secretary and a director (since December
1991) of Centennial Asset Management Corporation; Vice President (since October 1989) and Treasurer (since April
1986) of HarbourView Asset Management Corporation; President, Treasurer and a director of Centennial Capital
Corporation (since June 1989); Vice President and Treasurer (since August 1978) and Secretary (since April 1981)
of Shareholder Services, Inc.; Vice President, Treasurer
and Secretary of Shareholder Financial Services, Inc. (since November 1989); Assistant Treasurer of Oppenheimer
Acquisition Corp. (since March 1998); Treasurer of Oppenheimer Partnership Holdings, Inc. (since November 1989);
Vice President and Treasurer of Oppenheimer Real Asset Management, Inc. (since July 1996); Treasurer of
OppenheimerFunds International Ltd. and Oppenheimer Millennium Funds plc (since October 1997).


Edward L. Cameron, Trustee, Age: 63.
6803 South Tucson Way, Englewood, Colorado 80112
Formerly (from 1974-1999) a partner with PricewaterhouseCoopers LLC (an accounting firm) and Chairman, Price
Waterhouse LLP Global Investment management Industry Services Group (from 1994-1998).

Jon S. Fossel, Trustee, Age: 59.
6803 South Tucson Way, Englewood, Colorado 80112

Formerly (until October 1996) Chairman and a director of the Manager, President and a director of Oppenheimer
Acquisition Corp., Shareholder Services, Inc. and Shareholder Financial Services, Inc..


Sam Freedman, Trustee, Age: 61.
6803 South Tucson Way, Englewood, Colorado 80112
Formerly (until October 1994) Chairman and Chief Executive Officer of OppenheimerFunds Services, Chairman, Chief
Executive Officer and a director of Shareholder Services, Inc., Chairman, Chief Executive Officer and director of
Shareholder Financial Services, Inc., Vice President and director of Oppenheimer Acquisition Corp. and a director of
OppenheimerFunds, Inc.

C. Howard Kast, Trustee, Age: 79.
6803 South Tucson Way, Englewood, Colorado 80112
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).

Robert M. Kirchner, Trustee, Age: 80.
6803 South Tucson Way, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).

F. William Marshall, Jr., Trustee Age: 59.
6803 South Tucson Way, Englewood, Colorado 80112
Formerly (until 1999) Chairman of SIS & Family Bank, F.S.B. (formerly SIS Bank); President, Chief Executive
Officer and Director of SIS Bankcorp., Inc. and SIS Bank (formerly Springfield Institution for Savings)
(1993-1999); Executive Vice President (until 1999) of Peoples Heritage Financial Group, Inc.; Chairman and Chief
Executive Office of Bank of Ireland First Holdings, Inc. and First New Hampshire Banks (1990-1993); Trustee
(since 1996) of MassMutual Institutional Funds and of MML Series Investment Fund (open-end investment companies).

Carol E. Wolf, Vice President and Portfolio Manager, Age: 49
6803 South Tucson Way, Englewood, Colorado 80112

Senior Vice President (since June 2000) of the Manager; an officer and portfolio manager of other Oppenheimer
funds; formerly Vice President of the Manager (June 1990 - June 2000).





Barry D. Weiss, Vice President and Portfolio Manager, Age: 37
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager (since July 2001); an officer and portfolio manager of other Oppenheimer funds;
formerly Assistant Vice President and Senior Credit Analyst of the Manager (February 2000-June 2001). Prior to
joining the Manager in February 2000, he was Associate Director, Structured Finance, Fitch IBCA Inc. (April 1998
- February 2000); News Director, Fitch Investors Service (September 1996 - April 1998); and Senior Budget
Analyst, City of New York, Office of Management & Budget (February 1990 - September 1996).

Brian W. Wixted, Treasurer, Principal Financial and Accounting Officer, Age: 42.
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer (since March 1999) of
HarbourView Asset Management Corporation, Shareholder Services, Inc., Oppenheimer Real Asset Management
Corporation, Shareholder Financial Services, Inc. and Oppenheimer Partnership Holdings, Inc., and of OFI Private
Investments, Inc. (since March 2000) and of OppenheimerFunds International Ltd. and Oppenheimer Millennium Funds
plc (since May 2000); Treasurer (since May 2000) of Oppenheimer Trust Company; Assistant Treasurer (since March
1999) of Oppenheimer Acquisition Corporation and of Centennial Asset Management Corporation; an officer of other
Oppenheimer funds; formerly Principal and Chief Operating Officer, Bankers Trust Company - Mutual Fund Services
Division (March 1995 - March 1999); Vice President and Chief Financial Officer of CS First Boston Investment
Management Corp. (September 1991 - March 1995).


Robert G. Zack, Vice President and Secretary, Age: 53.
498 7th Avenue, New York, NY 10018
Acting General Counsel (from November 1, 2001) and Senior Vice President (since May 1985) of OppenheimerFunds,
Inc.; Assistant Secretary of Shareholder Services, Inc. (since May 1985), Shareholder Financial Services, Inc.
(since November 1989); OppenheimerFunds International Ltd. and Oppenheimer Millennium Funds plc (since October
1997); an officer of other Oppenheimer funds.


Robert J. Bishop, Assistant Treasurer, Age: 43.
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); an officer of other Oppenheimer funds;
formerly an Assistant Vice President of the Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund
Controller for the Manager.

Scott T. Farrar, Assistant Treasurer, Age: 36.
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant Treasurer of Oppenheimer
Millennium Funds plc (since October 1997); an officer of other Oppenheimer Funds; formerly an Assistant Vice
President of the Manager/Mutual Fund Accounting (April 1994 - May 1996), and a Fund Controller for the Manager.


Denis R. Molleur, Assistant Secretary, Age: 42
498 7th Avenue, New York, New York 10018
Vice President and Senior Counsel of the Manager (since July 1999); an officer of other Oppenheimer funds;
formerly a Vice President and Associate Counsel of the Manager (September 1995 - July 1999).

Katherine P. Feld, Assistant Secretary, Age: 43
498 7th Avenue, New York, New York 10018
Vice President and Senior Counsel of the Manager (since July 1999); an officer of other Oppenheimer funds;
formerly a Vice President and Associate Counsel of the Manager (June 1990 - July 1999).

Kathleen T. Ives, Assistant Secretary,  Age: 36.
6803 South Tucson Way, Englewood, Colorado 80112
Vice President and Assistant Counsel of the Manager (since June 1998); an officer of other Oppenheimer funds;
formerly an Assistant Vice President and Assistant Counsel of the Manager (August 1997 - June 1998); and
Assistant Counsel of the Manager (August 1994 - August 1997).

         Remuneration of Trustees. The officers of the Fund and two of the Trustees of the Fund (Messrs. Murphy
              and Swain) are affiliated with the Manager and receive no salary or fee from the Fund. The
              remaining Trustees of the Fund received the compensation shown below.  The compensation from the
              Fund was paid during its fiscal year ended July 31, 2001.  The compensation from all of the
              Denver-based Oppenheimer funds includes compensation received as a director, trustee or member of a
              committee of the Board during the calendar year 2000.



--------------------------------------------- --------------------------- -----------------------------------
                                                                             Total Compensation from all
                                                Aggregate Compensation               Denver-Based
Trustee/Director's Name and Other Positions           from Fund1                  Oppenheimer Funds2
                                                                                      (39 Funds)
--------------------------------------------- --------------------------- -----------------------------------
--------------------------------------------- --------------------------- -----------------------------------

William L. Armstrong                                     $120                          $49,270
     Review Committee Member

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

Robert G. Avis                                           $138                          $72,000
     Review Committee Member

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

George C. Bowen                                          $120                          $55,948
     Review Committee Member

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

Edward L. Cameron                                        $95                           $26,709
     Audit Committee Chairman

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

Jon S. Fossel                                            $149                          $77,880
     Review Committee Chairman

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

Sam Freedman                                             $156                          $80,100
     Review Committee Member

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

C. Howard Kast                                           $165                          $86,150
     Audit Committee Member

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

Robert M. Kirchner                                       $150                          $76,950

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

Trustee/Director's Name and Other Positions     Aggregate Compensation       Total Compensation from all
                                                                                     Denver-Based
                                                      from Fund1                  Oppenheimer Funds2
                                                                                      (39 Funds)

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

F. William Marshall, Jr.                                 $68                            $3,768
     Audit Committee Member

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

* Effective July 1, 2000, William A. Baker and Ned M. Steel resigned as Trustees of the Fund and subsequently
became Trustees Emeritus of the Fund. For the fiscal year ended July 31, 2001 Messrs. Baker and Steel each
received $108 aggregate compensation from the Fund and for the calendar year ended December 31, 2000, they each
received $63,999 total compensation from all Denver-based Oppenheimer funds. Effective April 5, 2001 Raymond
Kalinowski resigned as Trustee of the Fund. For the fiscal year ended July 31, 2001 Mr. Kalinowski received $99
aggregate compensation from the Fund and for the calendar year ended December 31, 2000, he received $73,500 total
compensation from all Denver-based Oppenheimer funds.

1.       For the Fund's fiscal year ended 07/31/01.
2.       For the 2000 calendar year.

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

         Deferral of Trustees' fees under this plan will not materially affect the Fund's assets, liabilities or
net income per share.  This 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 Securities and Exchange
Commission, the Fund may invest in the funds selected by the Trustee under this plan without shareholder approval
for the limited purpose of determining the value of the Trustees' deferred fee accounts.


         Major Shareholders.  As of November 5, 2001 the only persons who owned of record or were known by the
              Fund to own beneficially 5% or more of any class of the Fund's outstanding shares, were the
              following:

              Salomon Smith Barney, Inc., 333 West 34th Street, New York, New York, which owned 7,073,019.480
              Class C shares (6.88% of the Class C shares then outstanding), for the benefit of its customers.

              RPSS TR Town of Islip Community Development Agency MPPP, 15 Shore Lane, Bay Shore, New York, which
              owned 1,168,984.630 Class N shares (13.02% of the Class N shares then outstanding).

              Reliance Trust Company Cust FBO Rapid 5 Networks, Inc., 3300 Northeast Expressway N.E., Atlanta,
              Georgia, which owned 973,402.960 Class N shares  (10.84% of the Class N shares then outstanding).

              RPSS TR New Braunfels Pediatric Associates PA 401K PSP, 1535 Common Street, New Braunfels, Texas,
              which owned 736,438.020 Class N Shares (8.2% of the Class N shares then outstanding).

              RPSS TR Tri-State Supply, Inc. 401K Plan, Columbia, South Carolina, which owned 727,943.040 Class N
              shares (8.11% of the Class N shares then outstanding).

              RPSS TR Lyndale Enterprises Inc. DBA: Bellamy Drug Co. 401K PSP, 411 Landmark Drive, Wilmington,
              North Carolina, which owned 630,845.150 Class N shares (7.02% of the Class N shares then
              outstanding).

              Richard H. List and Patricia D. List TRS RH List Inc. PSP, 7005 Dunnsville Road, Altamont, New
              York, which owned 504,940.790 Class N shares (5.62% of the Class N shares then outstanding).


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

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

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

         The portfolio managers of the Fund are principally responsible for the day-to-day management of the
Fund's investment portfolio.  Other members of the Manager's fixed-income portfolio department, particularly
security analysts, traders and other portfolio managers, have broad experience with fixed-income securities.
They provide the Fund's portfolio managers with research and support in managing the Fund's investments.

         o    The Investment Advisory Agreement.  The Manager provides investment advisory and management
services to the Fund under an investment advisory agreement between the Manager and the Fund.  The Manager
selects securities for the Fund's portfolio and handles its day-to-day business.  The 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.


         Expenses not expressly assumed by the Manager under the investment advisory agreement are paid by the
Fund.  The investment advisory agreement lists examples of expenses paid by the Fund.  The major categories
relate to interest, taxes, fees to unaffiliated Trustees, legal and audit expenses, custodian bank 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.

   -------------------------------------- --------------------------------------------------------------------------
          Fiscal Year ended 7/31                        Management Fee Paid to OppenheimerFunds, Inc.
   -------------------------------------- --------------------------------------------------------------------------
   -------------------------------------- --------------------------------------------------------------------------
                   1999                                                  $2,211,132
   -------------------------------------- --------------------------------------------------------------------------
   -------------------------------------- --------------------------------------------------------------------------
                   2000                                                  $2,880,791
   -------------------------------------- --------------------------------------------------------------------------
   -------------------------------------- --------------------------------------------------------------------------

                   2001                                                  $3,013,774

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

         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 for any investment,
adoption of any investment policy, or the purchase, sale or retention of any security.

         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 Transactions.  Portfolio decisions are based upon recommendations and judgment of the Manager subject
to the overall authority of the Board of Trustees.  Most purchases made by the Fund are principal transactions at
net prices, so the Fund incurs little or no brokerage costs.  The Fund deals directly with the selling or
purchasing principal or market maker without incurring charges for the services of a broker on its behalf unless
the Manager determines that a better price or execution may be obtained by using the services of a broker.
Purchases of portfolio securities from underwriters include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers include a spread between the bid and asked prices.

         The Fund seeks to obtain prompt execution of orders at the most favorable net price.  If dealers are
used for portfolio transactions, transactions may be directed to dealers for their execution and research
services.  The research services provided by a particular broker may be useful only to one or more of the
advisory accounts of the Manager and its affiliates. Investment research received for the commissions of those
other accounts may be useful both to the Fund and one or more of such other accounts.  Investment research
services may be supplied to the Manager by a third party at the instance of a broker through which trades are
placed.  It may include information and analyses on particular companies and industries as well as market or
economic trends and portfolio strategy, receipt of market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services.  If a research service also assists the Manager in
a non-research capacity (such as bookkeeping or other administrative functions), then only the percentage or
component that provides assistance to the Manager in the investment decision-making process may be paid in
commission dollars.

         The research services provided by brokers broaden the scope and supplement the research activities of
the Manager. That research provides additional views and comparisons for consideration, and helps the Manager
obtain market information for the valuation of securities held in the Fund's portfolio or being considered for
purchase.

         Subject to applicable rules covering the Manager's activities in this area, sales of shares of the Fund
and/or the other investment companies managed by the Manager or distributed by the Distributor may also be
considered as a factor in the direction of transactions to dealers. That must be done in conformity with the
price, execution and other considerations and practices discussed above.  Those other investment companies may
also give similar consideration relating to the sale of the Fund's shares.  No portfolio transactions will be
handled by any securities dealer affiliated with the Manager.

         The Fund's policy of investing in short-term debt securities results in high portfolio turnover and may
increase the Fund's transaction costs.  However, since brokerage commissions, if any, are small, high turnover
does not have an appreciable adverse effect upon the income of the Fund.


Distribution and Service Plans

The Distributor.  Under its General Distributor's Agreement with the Fund, the Distributor acts as the Fund's
principal underwriter in the continuous public offering of the different classes of shares of the Fund. The
Distributor bears the expenses normally attributable to sales, including advertising and the cost of printing and
mailing prospectuses, other than those furnished to existing shareholders.  The Distributor is not obligated to
sell a specific number of shares.  Expenses normally attributable to sales are borne by the Distributor, except
those paid by the Fund under its Distribution and Service Plans described below.


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









---------------- --------------------------------- ---------------------------------- ---------------------------------
Fiscal Year      Concessions on Class B Shares     Concessions on Class C Shares      Concessions on Class N Shares
Ended 7/31:      Advanced by Distributor1          Advanced by Distributor1           Advanced by Distributor1
---------------- --------------------------------- ---------------------------------- ---------------------------------
---------------- --------------------------------- ---------------------------------- ---------------------------------

     1999                    $808,752                           $35,422                             N/A

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

     2000                   $1,182,200                          $64,478                             N/A

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

     2001                   $1,031,706                         $113,935                           $61,374

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

1.       The Distributor  advances  concession  payments to dealers for certain sales of Class B, Class C and Class
     N shares from its own resources at the time of sale.
2.       The inception date of Class N shares was March 1, 2001.



---------------- ------------------------ -------------------------- ------------------------- ------------------------
Fiscal     Year  Class A Contingent       Class B Contingent         Class C Contingent        Class N Contingent
                 Deferred Sales Charges   Deferred Sales Charges     Deferred Sales Charges    Deferred Sales Charges
Ended 7/31       Retained by Distributor  Retained by Distributor    Retained by Distributor   Retained by Distributor
---------------- ------------------------ -------------------------- ------------------------- ------------------------
---------------- ------------------------ -------------------------- ------------------------- ------------------------

     2001               $209,921                   $29,709                     None                     None

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

Distribution and Service Plans.  The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act. Under those
plans the Fund pays the Distributor for all or a portion of its costs incurred in connection with the
distribution and/or servicing of the shares of the particular class

         Each plan has been approved by a vote of the Board of Trustees, including a majority of the Independent
Trustees2, 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 and, in their sole
discretion, from time to time, may use their own resources (at no direct cost to the Fund) to make payments to
brokers, dealers or other financial institutions for distribution and administrative services they perform.  The
Manager may use its profits from the advisory fee it receives from the Fund. In their sole discretion, the
Distributor and the Manager may increase or decrease the amount of payments they make from their own resources to
plan recipients.

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

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

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

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


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


         o    Class A Service Plan Fees.  Under the Class A service plan, the Distributor currently uses the fees
it receives from the Fund to pay brokers, dealers and other financial institutions (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 0.20% of average annual net assets of Class A shares.  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. The Distributor makes payments to plan recipients quarterly at an annual rate not to exceed
0.20% of the average annual net assets consisting of Class A shares held in the accounts of the recipients or
their customers.


         For the fiscal year ended July 31, 2001 payments under the Class A Plan totaled $692,696, all of which
was paid by the Distributor to recipients. That included $112,910 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.


         o    Class B, Class C and Class N Service and Distribution Plans.  Under each plan, service fees and
distribution fees are computed on the average of the net asset value of shares in the respective class,
determined as of the close of each regular business day during the period. Each plan provides provide for the
Distributor to be compensated at a flat rate, whether the Distributor's distribution expenses are more or less
than the amounts paid by the Fund under the plan during the period for which the fee is paid.  The types of
services that recipients provide are similar to the services provided under the Class A service plan, described
above.


         Each Plan permits the Distributor to retain both the asset-based sales charges and the service fees or
to pay recipients the service fee on a quarterly basis, without payment in advance.  However, the Distributor
currently intends to pay the service fee to recipients in advance for the first year after Class B, Class C and
Class N shares are purchased.  After the first year Class B, Class C or Class N shares are outstanding, after
their purchase, the Distributor makes service fee payments quarterly on those shares.  The advance payment is
based on the net asset value of shares sold. Shares purchased by exchange do not qualify for the advance service
fee payment. If Class B, Class C or Class N shares are redeemed during the first year after their purchase, the
recipient of the service fees on those shares will be obligated to repay the Distributor a pro rata portion of
the advance payment of the service fee made on those shares.

      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, effective November 1, 2001 the service fee, increases Class N expenses by 0.50% of
the net assets per year of the respective class.


         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
and/or Class N service fee and the asset-based sales charge to the dealer quarterly in lieu of paying the sales
concessions and service fee in advance at the time of purchase.


The asset-based sales charges on Class B, Class C and Class N shares allow investors to buy shares without a
front-end sales charge while allowing the Distributor to compensate dealers that sell those shares. The Fund pays
the asset-based sales charges to the Distributor for its services rendered in distributing each class of 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, and
o        bears the costs of sales literature, advertising and prospectuses (other than those furnished to current

              shareholders) and state "blue sky" registration fees and certain other distribution expenses.
o        may not be able to adequately compensate dealers that sell Class B, Class C and Class N shares without
              receiving payment under the plans and therefore may not be able to offer such Classes for sale
              absent the plans,
o        receives payments under the plans consistent with the service fees and asset-based sales charges paid by
              other non-proprietary funds that 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.

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

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



----------------------------------------------------------------------------------------------------------------------
                        Distribution Fees Paid to the Distributor for the Year Ended 7/31/01
----------------------------------------------------------------------------------------------------------------------
-------------------- -------------------- ---------------------- ---------------------------- ------------------------
Class:               Total Payments       Amount Retained by     Distributor's Aggregate      Distributor's
                                                                                              Unreimbursed Expenses
                                                                 Unreimbursed Expenses        as % of Net Assets of
                     Under Plan           Distributor            Under Plan                   Class
-------------------- -------------------- ---------------------- ---------------------------- ------------------------
-------------------- -------------------- ---------------------- ---------------------------- ------------------------

Class B Plan             $1,562,863            $1,562,863                   None                       None

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

Class C Plan              $514,512              $514,513                    None                       None

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

Class N Plan*               $737                  $646                     $21,335                     0.50%

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

*For the period from inception of Class N shares (3/1/01 to 12/31/01).


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

Performance of the Fund

Explanation of Performance Terminology.  The Fund uses a variety of terms to illustrate its performance. These
terms include "yield," "compounded effective yield" and "average annual total return."  An explanation of how
yields and 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 1.800.525.7048 or by visiting the OppenheimerFunds Internet web site at
http://www.oppenheimerfunds.com.

         The Fund's illustrations of its performance data in advertisements must comply with rules of the
Securities and Exchange Commission.  Those rules describe the types of performance data that may be used and how
it is to be calculated.  If the fund shows total returns in addition to its yields, the returns must be for the
1-, 5- and 10-year periods ending as of the most recent calendar quarter prior to the publication of the
advertisement (or its submission for publication).

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

o        Yields and total returns measure the performance of a hypothetical account in the Fund over various
         periods and do not show the performance of each shareholder's account. Your account's performance will
         vary from the model performance data if your dividends are received in cash, or you buy or sell shares
         during the period, or you bought your shares at a different time than the shares used in the model.
o        An investment in the Fund is not insured by the FDIC or any other government agency.
o        The Fund's yield is not fixed or guaranteed and will fluctuate.
o        Yields and total returns for any given past period represent historical performance information and are
         not, and should not be considered, a prediction of future yields or returns.

         o    Yields.  The Fund's current yield is calculated for a seven-day period of time as follows. First, a
base period return is calculated for the seven-day period by determining the net change in the value of a
hypothetical pre-existing account having one share at the beginning of the seven-day period.  The change includes
dividends declared on the original share and dividends declared on any shares purchased with dividends on that
share, but such dividends are adjusted to exclude any realized or unrealized capital gains or losses affecting
the dividends declared.  Next, the base period return is multiplied by 365/7 to obtain the current yield to the
nearest hundredth of one percent.

         The compounded effective yield for a seven-day period is calculated by
         (1)  adding 1 to the base period return (obtained as described above),
         (2)  raising the sum to a power equal to 365 divided by 7, and
         (3)  subtracting 1 from the result.

         The yield as calculated above may vary for accounts less than approximately $100 in value due to the
effect of rounding off each daily dividend to the nearest full cent.  The calculation of yield under either
procedure described above does not take into consideration any realized or unrealized gains or losses on the
Fund's portfolio securities which may affect dividends.  Therefore, the return on dividends declared during a
period may not be the same on an annualized basis as the yield for that period.

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


         In calculating total returns for Class B shares, payment of the applicable contingent deferred sales
charge is applied, depending on the period for which the return is shown: 5.0% in the first year, 4.0% in the
second year, 3.0% in the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth year and none
thereafter. For Class C shares, the 1% contingent deferred sales charge is deducted for returns for the one-year
period.  For Class N shares, the 1% contingent deferred sales charge is deducted for returns for the one-year and
life-of-class periods as applicable.

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



                                                        1/n
                                              (ERV   )
                                              (----  ) - 1 = Average Annual Total Return
                                              ( 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



                               The Fund's Total Returns for the Periods Ended 7/31/01*

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

Class of Shares          Cumulative Total          Yield                      Compounded Effective Yield                                                          Average Annual Total Returns
                         Returns (10
                         years or              (7 days ended
                         life-of-class)           7/31/01)                      (7 days ended 7/31/01)

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

                                                                         1-Year           5-Year          10-Year
                                                                                            (or             (or
                                                                                      life-of-class)   life-of-class)

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

Class A1            49.88%             2.88%            2.92%             4.84%            4.65%           4.13%

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

Class B             35.69%2            2.33%            2.36%             4.25%            4.06%           3.91%2

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

Class C             33.58%3            2.33%            2.36%             4.26%            4.06%           3.85%3

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

Class N             1.49%4             2.27%            2.29%             N/A4             N/A4             N/A4

-------------- ------------------ ---------------- ----------------- ---------------- ---------------- ---------------
1.       Inception of Class A shares: 1/3/89
2.       Inception of Class B shares:  8/17/93
3.       Inception of Class C shares:  12/1/93
4.       Inception of Class N Shares: 3/1/01

o        Other Performance Comparisons.  Yield information may be useful to investors in reviewing the Fund's
performance.  The Fund may make comparisons between its yield and that of other investments, by citing various
indices such as The Bank Rate Monitor National Index (provided by Bank Rate Monitor(TM)) which measures the average
rate paid on bank money market accounts, NOW accounts and certificates of deposits by the 100 largest banks and
thrifts in the top ten metro areas.  When comparing the Fund's yield with that of other investments, investors
should understand that certain other investment alternatives such as certificates of deposit, U.S. government
securities, money market instruments or bank accounts may provide fixed yields and may be insured or guaranteed.

         From time to time, the Fund may include in its advertisements and sales literature performance
information about the Fund cited in other newspapers and periodicals, such as The New York Times, which may
include performance quotations from other sources.

         From time to time, the Fund's Manager may publish rankings or ratings of the Manager (or the Transfer
Agent) or 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 investor/shareholder services by
third parties may compare the services of the Oppenheimer funds to those of other mutual fund families selected
by the rating


or ranking services. They may be based on the opinions of the rating or ranking service itself, based on its
research or judgment, or based on 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.


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

How to Buy Shares

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


AccountLink. When shares are purchased through AccountLink, each purchase must be at least $25.  Shares will be
purchased on the regular business day the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares.  Dividends will begin to accrue on shares purchased with the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for the purchase through the ACH system before the
close of The New York Stock Exchange. The Exchange normally closes at 4:00 P.M., but may close earlier on certain
days.  If Federal Funds are received on a business day after the close of the Exchange, the shares will be
purchased and dividends will begin to accrue on the next regular business day.  The proceeds of ACH transfers are
normally received by the Fund 3 days after the transfers are initiated.  The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays in ACH transmissions.


Asset Builder Plans.  To establish an Asset Builder Plan to buy shares directly from a bank account, you must
enclose a check (the minimum is $25) for the initial purchase with your application. 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 employee-sponsored qualified retirement accounts. Asset Builder Plans also enable shareholders
of the Fund to use their account in the Fund to make monthly automatic purchases of shares of up to four other
Oppenheimer funds.

         If you make payments from your bank account to purchase shares of the Fund, your bank account will be
debited automatically. Normally the debit will be made two business days prior to the investment dates you
selected on your Application. Neither the Distributor, the Transfer Agent nor the Fund shall be responsible for
any delays in purchasing shares that result from delays in ACH transmissions. The foregoing discussion does not
apply to Asset Builder Plans in Class B shares of the Fund.

         You may purchase Class B shares of the Fund directly by establishing an Asset Builder Plan. The minimum
initial investment for Class B Asset Builder Plans is $5,000 and the maximum initial investment is $500,000. Any
redemption of Class B shares of the Fund or any other Oppenheimer fund within 6 years of investment may be
subject to a contingent deferred sales charge, as further described in the Prospectus.


         If you wish to purchase Class B shares of other Oppenheimer funds by dollar-cost averaging, you may do
so by establishing an Asset Builder Plan in Class B shares of the Fund and simultaneously establishing an
Automatic Exchange Plan in the Fund to exchange the entire amount invested in Class B shares of the Fund and
reinvest that amount in Class B shares of other Oppenheimer funds over a period that may not exceed 24 months.
This privilege is not available with respect to Class C shares, and the investment minimum and maximum noted
above apply. See "Automatic Exchange Plans" below for more information.


         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 your 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.

         o    The Oppenheimer Funds.  The Oppenheimer funds are those mutual funds for which the Distributor acts
as the distributor or the sub-Distributor and include the following:


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


Centennial America Fund, L. P.                                Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust                        Centennial Tax Exempt Trust
Centennial Government Trust                                   Oppenheimer Cash Reserves
Centennial Money Market Trust                                 Oppenheimer Money Market Fund, Inc.


1 - "OSM" stands for Oppenheimer Select Managers


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

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 and 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.

|X|      Alternative Sales Arrangements. As stated in the Prospectus, Class B and Class C shares of the Fund may
only be acquired by exchange of Class B and Class C shares, respectively, of other Oppenheimer funds or directly
through qualified retirement plans, or for Class B shares, pursuant to Asset Builder Plans (above).


         Investors should understand that the purpose and function of the deferred sales charge and asset-based
sales charge with respect to Class B, Class C and Class N shares are the same as those of the initial sales
charge with respect to Class A share of Oppenheimer funds other than



the money market funds. Any salesperson or other person entitled to receive compensation for selling the Fund
shares may receive different compensation with respect to one class of shares than the other.

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


|X|      Class A Shares Subject to a Contingent Deferred Sales Charge. For purchases of Class A shares 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 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.


         Class B Conversion. Under current interpretations of applicable federal income tax law by the Internal
Revenue Service, the conversion of Class B shares to Class A shares after six years is not treated as a taxable
event for the shareholder.  If those laws or the IRS interpretation of those laws should change, the automatic
conversion feature may be suspended. In that event, no further conversions of Class B shares would occur while
that suspension remained in effect.

Although Class B shares could then be exchanged for Class A shares on the basis of relative net asset value of
the two classes, without the imposition of a sales charge or fee, such exchange could constitute a taxable event
for the shareholder, and absent such exchange, Class B shares might continue to be subject to the asset-based
sales charge for longer than six years.


         |X|  Availability of Class N Shares.  In addition to the description of the types of retirement plans
which may purchase Class N shares contained in the prospectus, Class N shares also are offered to the following:
o        to all rollover IRAs,
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 _ to this Statement of Additional Information) which
                  have entered into a special agreement with the Distributor for that purpose,
o        to Retirement Plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code, the
                  recordkeeper or the plan sponsor for which has entered into a special agreement with the
                  Distributor,
o        to Retirement Plans of a plan sponsor where the aggregate assets of all such plans invested in the
                  Oppenheimer funds is $500,000 or more,


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

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

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


         |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 value 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 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).

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

         The Fund's Board of Trustees has adopted the amortized cost method to value the Fund's portfolio
securities.  Under the amortized cost method, a security is valued initially at its cost and its valuation
assumes a constant amortization of any premium or accretion of any discount, regardless of the impact of
fluctuating interest rates on the market value of the security.  This method does not take into consideration any
unrealized capital gains or losses on securities.  While this method provides certainty in valuing securities, in
certain periods the value of a security determined by amortized cost may be higher or lower than the price the
Fund would receive if it sold the security.

         The Fund's Board of Trustees has established procedures reasonably designed to stabilize the Fund's net
asset value at $1.00 per share.  Those procedures include a review of the Fund's portfolio holdings by the Board
of Trustees, at intervals it deems appropriate, to determine whether the Fund's net asset value calculated by
using available market quotations deviates from $1.00 per share based on amortized cost.

         The Board of Trustees will examine the extent of any deviation between the Fund's net asset value based
upon available market quotations and amortized cost. If the Fund's net asset value were to deviate from $1.00 by
more than 0.5%, Rule 2a-7 requires the Board of Trustees to consider what action, if any, should be taken. If
they find that the extent of the deviation may cause a material dilution or other unfair effects on shareholders,
the Board of Trustees will take whatever steps it considers appropriate to eliminate or reduce the dilution,
including, among others, withholding or reducing dividends, paying dividends from capital or capital gains,
selling portfolio instruments prior to maturity to realize capital gains or losses or to shorten the average
maturity of the portfolio, or calculating net asset value per share by using available market quotations.

         During periods of declining interest rates, the daily yield on shares of the Fund may tend to be lower
(and net investment income and dividends higher) than those of a fund holding the identical investments as the
Fund but which used a method of portfolio valuation based on market prices or estimates of market prices. During
periods of rising interest rates, the daily yield of the Fund would tend to be higher and its aggregate value
lower than that of an identical portfolio using market price valuation.


How to Sell Shares

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


Checkwriting.  When a check is presented to the bank for clearance, the bank will ask the Fund to redeem a
sufficient number of full and fractional shares in the shareholder's account to cover the amount of the check.
This enables the shareholder to continue receiving dividends on those shares until the check is presented to the
Fund.  Checks may not be presented for payment at the offices of the bank or the Fund's custodian bank.  This
limitation does not affect the use of checks for the payment of bills or to obtain cash at other banks.  The Fund
reserves the right to amend, suspend or discontinue offering checkwriting privileges at any time.  The Fund will
provide you notice whenever it is required to do so by applicable law.


         In choosing to take advantage of the checkwriting privilege, by signing the account application or by
completing a checkwriting card, each individual who signs:
(1)      for individual accounts, represents that they are the registered owner(s) of the shares of the Fund in
         that account;
(2)      for accounts for corporations, partnerships, trusts and other entities, represents that they are an
         officer, general partner, trustee or other fiduciary or agent, as applicable, duly authorized to act on
         behalf of the registered owner(s);
(3)      authorizes the Fund, its Transfer Agent and any bank through which the Fund's drafts (checks) are
         payable to pay all checks drawn on the Fund account of such person(s) and to redeem a sufficient amount
         of shares from that account to cover payment of each check;
     (4) specifically acknowledges that if they choose to permit checks to be honored if there is a single
         signature on checks drawn against joint accounts, or accounts for corporations, partnerships, trusts or
         other entities, the signature of any one signatory on a check will be sufficient to authorize payment of
         that check and redemption from the account, even if that account is registered in the names of more than
         one person or more than one authorized signature appears on the checkwriting card or the application, as
         applicable;
(5)      understands that the checkwriting privilege may be terminated or amended at any time by the Fund and/or
         the Fund's bank; and
(6)      acknowledges and agrees that neither the Fund nor its bank shall incur any liability for that amendment
         or termination of checkwriting privileges or for redeeming shares to pay checks reasonably believed by
         them to be genuine, or for returning or not paying checks that have not been accepted for any reason.

Reinvestment Privilege.  Within six months of a redemption, a shareholder may reinvest all or part of the
redemption proceeds of Class A shares that were purchased by exchange of Class A shares of another Oppenheimer
fund on which an initial sales charge was paid or Class A or Class B shares on which a contingent deferred sales
charge was paid.

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

         Any capital gain that was realized when the shares were redeemed is taxable, and reinvestment will not
alter any capital gains tax payable on that gain.  If there has been a capital loss on the redemption, some or
all of the loss may not be tax deductible, depending on the timing and amount of the reinvestment.  Under the
Internal Revenue Code, if the redemption proceeds of Fund shares on which a sales charge was paid are reinvested
of 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 unusual 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 $200 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.


Sending Redemption Proceeds by Federal Funds Wire.  The Federal Funds wire of redemptions 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.

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

         Participants (other than self-employed persons) 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 the 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 New York Stock
Exchange on a regular business day, it will be processed at that day's net asset value if the order was received
by the dealer or broker from its customers prior to the time the Exchange closes.  Normally the Exchange closes
at 4:00 P.M.  Additionally, the order must have been transmitted to and received by the Distributor prior to its
close of business that day (normally 5:00 P.M.).




         Ordinarily, for accounts redeemed by a broker-dealer under this procedure, payment will be made within
three business days after the shares have been redeemed upon the Distributor's receipt of the required redemption
documents in proper form. The signature(s) of the registered owner(s) on the redemption document 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 may arrange to have
Automatic Withdrawal Plan payments transferred to the bank account designated on the account application or
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 and reserves
the right to amend, suspend or discontinue offering such plans at any time without prior notice. Class B, Class C
and Class N shareholders should not establish withdrawal plans, because of the potential imposition of the
contingent deferred sales charge on such withdrawals (except where the Class B or Class C contingent deferred
sales charge is waived as described in Appendix C to this Statement of Additional Information).

         By requesting an Automatic Withdrawal or Exchange Plan, the shareholder agrees to the terms and
conditions applicable 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.


                  Class B, Class C and Class N shareholders should not establish automatic withdrawal plans,
because of the potential imposition of the contingent deferred sales charge on such withdrawals (except where the
Class B, Class C [or Class N] contingent deferred sales charge is waived as described in Appendix C to this
Statement of Additional Information)


         o    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 $25. Instructions should be provided on the account
application or signature-guaranteed instructions. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to Exchange Shares" in the Prospectus and below in this
Statement of Additional Information.

         o    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 withdrawal 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
(the "Planholder") who executed the Plan authorization and application submitted to the Transfer Agent.  Neither
the Transfer Agent nor the Fund 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 of 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 in 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 (in
proper form in accordance with the requirements of the then-current Prospectus of the Fund) to redeem all, or any
part of, the shares held under the Plan.  In that case, the Transfer Agent will redeem the number of shares
requested at the net asset value per share in effect in accordance with the Fund's usual redemption procedures
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 from the account will
be held in uncertificated form in the name of the Planholder.  The account will continue as a
dividend-reinvestment, uncertificated account unless and until proper instructions are received from the
Planholder, his or her executor or guardian, or another authorized person.





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

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


How to Exchange Shares

As stated in the Prospectus, shares of a particular class of Oppenheimer funds having more than one class of
shares may be exchanged only for shares of the same class of other Oppenheimer funds.  Shares of Oppenheimer
funds that have a single class without a class designation are deemed "Class A" shares for this purpose. You can
obtain a current list showing which funds offer which classes by calling the Distributor at 1.800.525.7048.
o        All of the Oppenheimer funds currently offer Class A, B and C shares except Oppenheimer Money Market
     Fund, Inc., Centennial Money Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust,
     Centennial New York Tax Exempt Trust, Centennial California Tax Exempt Trust, and Centennial America Fund,
     L.P., which only offer Class A shares.
o        Class B, Class C and Class N shares of Oppenheimer Cash Reserves are generally available only by
     exchange from the same class of shares of other Oppenheimer funds or through OppenheimerFunds-sponsored
     401(k) plans.
o        Only certain Oppenheimer funds currently offer Class Y shares. Class Y shares of Oppenheimer Real Asset
     Fund may not be exchanged for shares of any other fund.
o        Only certain Oppenheimer funds currently offer Class N shares, which are only offered to retirement
     plans as described in the Prospectus. Class N shares can be exchanged only for Class N shares of other
     Oppenheimer funds.
o        Class M shares of Oppenheimer Convertible Securities Fund may be exchanged only for Class A shares of
     other Oppenheimer funds. They may not be acquired by exchange of shares of any class of any other
     Oppenheimer funds except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash Reserves
     acquired by exchange of Class M shares.
o        Class X shares of Limited Term New York Municipal Fund can be exchanged only for Class B shares of other
     Oppenheimer funds and no exchanges may be made to Class X shares.
o        Shares of Oppenheimer Capital Preservation Fund may not be exchanged for shares of Oppenheimer Money
     Market Fund, Inc., Oppenheimer Cash Reserves or Oppenheimer Limited-Term Government Fund.  Only participants
     in certain retirement plans may purchase shares of Oppenheimer Capital Preservation Fund, and only those
     participants may exchange shares of other Oppenheimer funds for shares of Oppenheimer Capital Preservation
     Fund.

o        Class A shares of Oppenheimer Senior Floating Rate Fund are not available by exchange of shares of
     Oppenheimer Money Market Fund or Class A shares of Oppenheimer Cash Reserves. 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.
Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund and Oppenheimer Select Managers QM Active
     Balanced Fund are only available to retirement plans and are available only by exchange from the same class
     of shares of other Oppenheimer funds held by retirement plans.

         Class A shares of  Oppenheimer  funds may be  exchanged  at net asset value for shares of any money market
fund  offered  by the  Distributor.  Shares of any money  market  fund  purchased  without  a sales  charge  may be
exchanged for shares of  Oppenheimer  funds offered with a sales charge upon payment of the sales charge.  They may
also be used to purchase shares of Oppenheimer funds subject to an early withdrawal  charge or contingent  deferred
sales charge.

         Shares of Oppenheimer Money Market Fund, Inc. purchased with the redemption proceeds of shares of other
mutual funds (other than funds managed by the Manager or its subsidiaries) redeemed within the 30 days prior to
that purchase may subsequently be exchanged for shares of other Oppenheimer funds without being subject to an
initial sales charge or contingent deferred sales charge. To qualify for that privilege, the investor or the
investor's dealer must notify the Distributor of eligibility for this privilege at the time the shares of
Oppenheimer Money Market Fund, Inc. are purchased.  If requested, they must supply proof of entitlement to this
privilege.

         Shares of the Fund acquired by reinvestment of dividends or distributions from any of the other
Oppenheimer funds or from any unit investment trust for which reinvestment arrangements have been made with the
Distributor may be exchanged at net asset value for shares of any of the Oppenheimer funds.

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


         |X| How Exchanges Affect Contingent Deferred Sales Charges. No contingent deferred sales charge is
imposed on exchanges of shares of any class purchased subject to a contingent deferred sales charge.  However,
when Class A shares of this Fund acquired by exchange of (i) Class A shares of other Oppenheimer funds (other
than Rochester Fund Municipals or Oppenheimer Rochester National Municipals) purchased subject to a Class A
contingent deferred sales charge are redeemed within 18 months of the end of the calendar month of the initial
purchase of the exchanged Class A shares, or (ii) Class A shares of either Rochester Fund Municipals or
Oppenheimer Rochester National Municipals purchased subject to a Class A contingent deferred sales charge are
redeemed within 24 months of the end 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. The Class B contingent
deferred sales charge is imposed on Class B shares acquired by exchange if they are redeemed within 6 years of
the initial purchase of the exchanged Class B 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. 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.


         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 and Class N contingent deferred
sales charge will be followed in determining the order in which the shares are exchanged. Before exchanging
shares, shareholders should take into account how the exchange may affect any contingent deferred sales charge
that might be imposed in the subsequent redemption of remaining shares.

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

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

         |X|  Telephone Exchange Requests.  When exchanging shares by telephone, a shareholder must have an
existing account in the fund to which the exchange is to be made.  Otherwise, the investor 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).  When you exchange some
or all of your shares from one fund to another, any special account features such as an Asset Builder Plan or an
Automatic Withdrawal Plan, will be switched to the new account unless you tell the Transfer Agent not to do so.
However, special redemption and exchange features cannot be switched to an account in Oppenheimer Senior Floating
Rate Fund.

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

         The different Oppenheimer funds available for exchange have different investment objectives, policies
and risks.  A shareholder should assure that the fund selected is appropriate for his or her investment and
should be aware of the tax consequences of an exchange.  For federal income tax purposes, an exchange transaction
is treated as a redemption of shares of one fund and a purchase of shares of another.  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 and Taxes

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. That is because of the effect of the asset-based sales charge on Class B, Class C and
Class N 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 and Distributions.  The federal tax treatment of the Fund's dividends and
capital gains distributions is explained in the Prospectus under the caption "Dividends and Taxes."  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.  It if 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.
However, the Fund's Board of Trustees and the Manager might determine in a particular year that it would be in
the best interest of shareholders for the Fund not to make 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. The Fund's dividends will not be eligible for the dividends-received deduction for
corporations.

         If the Fund qualifies as a "regulated investment company" under the Internal Revenue Code, it will not
be liable for federal income taxes on amounts paid by it as dividends and distributions. That qualification
enables the Fund to "pass through" its income and realized capital gains to shareholders without having to pay
tax on them.  The Fund qualified as a regulated investment company in its last fiscal year and intends to qualify
in future years, but reserves the right not to qualify.  The Internal Revenue Code contains a number of complex
tests to determine whether the Fund qualifies.  The Fund might not meet those tests in a particular year.  If it
does not qualify, the Fund will be treated for tax purposes as an ordinary corporation and will receive no tax
deduction for payments of dividends and distributions made to shareholders.

Dividend Reinvestment in Another Fund.  Shareholders of the Fund may elect to reinvest all dividends and/or
capital gains distributions in the same class of any of the other Oppenheimer funds listed above.  Reinvestment
for Class B, Class C and Class N will be made at net asset value without sales charge.  Reinvestment for Class A
shares will be subject to the initial sales charge of the fund selected.  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.  The investment will be made at net asset value in effect at the close
of business on the payable date of the dividend or distribution. 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 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 bank of the Fund's assets.  The custodian bank's responsibilities
include safeguarding and controlling the Fund's portfolio securities and handling the delivery of such securities
to and from the Fund.  It will be the practice of the Fund to deal with the custodian bank in a manner
uninfluenced by any banking relationship the custodian bank may have with the Manager and its affiliates.  The
Fund's cash balances with the custodian bank in excess of $100,000 are not protected by federal deposit
insurance.  Those uninsured balances at times may be substantial.

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

INDEPENDENT AUDITORS' REPORT

================================================================================
 The Board of Trustees and Shareholders of Oppenheimer Cash Reserves:

 We have audited the accompanying statement of assets and liabilities of
 Oppenheimer Cash Reserves, including the statement of investments, as of July
 31, 2001, and the related statement of operations for the year then ended, the
 statements of changes in net assets for each of the two years in the period
 then ended, and the financial highlights for the periods indicated. 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 auditing standards generally
 accepted in the United States of America. Those standards require that we plan
 and perform the audit to obtain reasonable assurance about whether the
 financial statements and financial highlights are free of material
 misstatement. An audit includes examining, on a test basis, evidence supporting
 the amounts and disclosures in the financial statements. Our procedures
 included confirmation of securities owned as of July 31, 2001, by
 correspondence with the custodian and brokers; where replies were not received
 from brokers, we performed other auditing procedures. 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 Cash Reserves as of July 31, 2001, the results of its operations
 for the year then ended, the changes in its net assets for each of the two
 years in the period then ended, and the financial highlights for the periods
 indicated, in conformity with accounting principles generally accepted in the
 United States of America.



/s/ Deloitte & Touche LLP


 Denver, Colorado
 August 21, 2001




STATEMENT OF INVESTMENTS  July 31, 2001


                                                          Principal          Value
                                                             Amount     See Note 1
==================================================================================

 Certificates of Deposit--8.7%
----------------------------------------------------------------------------------
 Domestic Certificates of Deposit--1.8%
 Northern Trust Co.:
 5.14%, 8/20/01                                         $13,000,000    $13,000,034
----------------------------------------------------------------------------------
 Yankee Certificates of Deposit--6.9%
 Bank of Scotland:
 3.64%, 9/21/01                                          10,000,000     10,000,000
----------------------------------------------------------------------------------
 BNP Paribas, Chicago:
 3.60%, 9/26/01                                          10,000,000     10,000,000
 3.64%, 9/20/01                                           6,000,000      6,000,000
----------------------------------------------------------------------------------
 Credit Suisse First Boston, Inc.
 (gtd. by Credit Suisse Group):
 3.60%, 10/16/01                                         14,000,000     14,000,000
----------------------------------------------------------------------------------
 Dresdner Bank AG:
 5.24%, 9/17/01                                           5,000,000      5,001,077
----------------------------------------------------------------------------------
 Toronto Dominion Bank:
 3.77%, 9/13/01                                           5,000,000      5,000,000
                                                                       -----------
                                                                        50,001,077
                                                                       -----------
 Total Certificates of Deposit (Cost $63,001,111)                       63,001,111

==================================================================================
 Direct Bank Obligations--6.9%

 National Bank of Commerce, Tennessee:
 3.83%, 8/20/01(1)                                       10,000,000      9,998,000
----------------------------------------------------------------------------------
 Nationwide Building Society:
 3.57%, 10/25/01                                         10,000,000      9,915,708
 3.63%, 10/10/01                                         10,500,000     10,425,683
----------------------------------------------------------------------------------
 Nordea North America, Inc. (gtd. by Merita Bank plc):
 3.55%, 10/31/01                                         15,000,000     14,865,396
----------------------------------------------------------------------------------
 Toronto Dominion Bank:
 3.88%, 8/27/01                                           5,000,000      4,985,989
                                                                       -----------
 Total Direct Bank Obligations (Cost $50,190,776)                       50,190,776

==================================================================================
 Letters of Credit--3.4%

 Chase Manhattan Bank, guaranteeing
 commercial paper of NATC California LLC:
 3.57%, 10/26/01                                         10,000,000      9,914,717
----------------------------------------------------------------------------------
 Deutsche Bank AG, guaranteeing commercial paper
 of Deutsche Bank Financial, Inc.:
 4.48%, 10/22/01                                         15,000,000     14,846,933
                                                                       -----------
 Total Letters of Credit (Cost $24,761,650)                             24,761,650

==================================================================================
 Short-Term Notes--65.6%
----------------------------------------------------------------------------------
 Aerospace/Defense--2.7%
 BAE Systems Holdings, Inc.:
 3.60%, 8/29/01(2)                                        8,000,000      7,977,600
 3.66%, 9/12/01(2)                                       12,000,000     11,949,600
                                                                       -----------
                                                                        19,927,200



                                                          Principal          Value
                                                             Amount     See Note 1
----------------------------------------------------------------------------------
 Asset-Backed--14.5%
 Aspen Funding Corp.:
 3.93%, 8/15/01(2)                                      $ 5,000,000   $  4,992,358
----------------------------------------------------------------------------------
 Breeds Hill Capital Co. LLC, Series A:
 3.95%, 8/1/01(2)                                         3,530,000      3,530,000
----------------------------------------------------------------------------------
 Charta Corp.:
 3.67%, 10/15/01(2)                                       6,000,000      5,954,125
 3.87%, 8/29/01(2)                                        5,000,000      4,984,950
----------------------------------------------------------------------------------
 Check Point Charlie, Inc.:
 3.65%, 9/10/01(2)                                        4,000,000      3,983,778
 3.78%, 9/6/01(2)                                         5,000,000      4,981,100
 3.86%, 9/4/01(2)                                         5,000,000      4,981,867
----------------------------------------------------------------------------------
 CIESCO LP:
 3.74%, 8/24/01(2)                                        5,000,000      4,988,053
 4.13%, 8/8/01                                            5,000,000      4,995,985
----------------------------------------------------------------------------------
 CXC, Inc.:
 3.75%, 8/21/01(2)                                        5,000,000      4,989,583
----------------------------------------------------------------------------------
 Galaxy Funding, Inc.:
 3.59%, 11/16/01(2)                                       4,950,000      4,897,182
 5.05%, 8/17/01(2)                                        9,000,000      8,979,800
----------------------------------------------------------------------------------
 GOVCO, Inc.:
 3.93%, 8/7/01                                           15,000,000     14,990,175
----------------------------------------------------------------------------------
 Lexington Parker Capital Co. LLC:
 4.59%, 10/18/01(2)                                       8,000,000      7,920,440
----------------------------------------------------------------------------------
 Scaldis Capital LLC:
 3.61%, 10/25/01(2)                                       5,000,000      4,957,382
 4.54%, 10/5/01(2)                                        5,000,000      4,959,014
----------------------------------------------------------------------------------
 Victory Receivables Corp.:
 3.98%, 8/14/01(2)                                       10,000,000      9,985,628
                                                                      ------------
                                                                       105,071,420

----------------------------------------------------------------------------------
 Banks--0.8%
 Wells Fargo & Co.:
 4.91%, 9/14/01                                           6,000,000      5,963,993
----------------------------------------------------------------------------------
 Beverages--2.7%
 Coca Cola Enterprises, Inc.:
 3.70%, 10/17/01(2)                                      10,000,000      9,920,861
 3.72%, 11/16/01(2)                                      10,000,000      9,889,433
                                                                      ------------
                                                                        19,810,294

----------------------------------------------------------------------------------
 Broker/Dealers--6.5%
 Banc of America Securities LLC:
 4.075%, 8/1/01(1)                                       15,000,000     15,000,000
----------------------------------------------------------------------------------
 Goldman Sachs Group LP, Promissory Note:
 3.76%, 12/13/01(3)                                       7,000,000      7,000,000
 3.86%, 12/3/01(3)                                       10,000,000     10,000,000
----------------------------------------------------------------------------------
 Morgan Stanley Dean Witter & Co. (Masternote Facility):
 3.875%, 8/1/01(1)                                       15,000,000     15,000,000
                                                                      ------------
                                                                        47,000,000



STATEMENT OF INVESTMENTS  Continued

                                                          Principal          Value
                                                             Amount     See Note 1
----------------------------------------------------------------------------------
 Commercial Finance--7.7%
 CIT Group, Inc.:
 3.57%, 10/26/01                                        $10,000,000    $ 9,914,717
 4.416%, 8/2/01(1)                                       10,000,000     10,000,000
----------------------------------------------------------------------------------
 Countrywide Home Loans, Series J:
 4.02%, 8/7/01(1)                                        15,000,000     14,996,208
----------------------------------------------------------------------------------
 Homeside Lending, Inc.:
 3.72%, 9/12/01                                          10,000,000      9,956,600
 3.77%, 9/6/01                                            5,000,000      4,981,200
 3.98%, 8/6/01                                            5,620,000      5,616,917
                                                                       -----------
                                                                        55,465,642

----------------------------------------------------------------------------------
 Consumer Finance--0.9%
 American Express Credit Corp.:
 5%, 8/9/01                                               5,000,000      4,994,444
----------------------------------------------------------------------------------
 American General Finance Corp.:
 3.55%, 11/26/01                                          1,500,000      1,482,694
                                                                       -----------
                                                                         6,477,138

----------------------------------------------------------------------------------
 Diversified Financial--5.9%
 General Electric Capital Corp.:
 4.95%, 9/10/01                                          12,000,000     11,934,000
----------------------------------------------------------------------------------
 Household Finance Corp.:
 3.57%, 9/20/01                                           5,000,000      4,975,278
 3.63%, 10/16/01                                          6,000,000      5,954,020
 3.99%, 9/7/01(1)                                        10,000,000     10,000,000
----------------------------------------------------------------------------------
 Verizon Network Funding:
 3.66%, 9/26/01                                          10,000,000      9,943,067
                                                                       -----------
                                                                        42,806,365

----------------------------------------------------------------------------------
 Healthcare/Drugs--2.1%
 American Home Products:
 3.80%, 9/24/01(2)                                       15,000,000     14,915,625




                                                          Principal          Value
                                                             Amount     See Note 1
----------------------------------------------------------------------------------
 Insurance--9.9%
 AIG Life Insurance Co.:
 3.835%, 8/1/01(1,3)                                    $ 7,000,000   $  7,000,000
----------------------------------------------------------------------------------
 American General Corp.:
 3.61%, 9/17/01                                          10,000,000      9,952,869
 3.62%, 11/7/01                                          10,000,000      9,901,456
----------------------------------------------------------------------------------
 ING America Insurance Holdings, Inc.:
 3.73%, 9/17/01                                           5,000,000      4,975,651
 3.89%, 8/20/01                                          10,000,000      9,979,206
----------------------------------------------------------------------------------
 Marsh U.S.A., Inc.:
 3.73%, 12/4/01(2)                                        5,000,000      4,935,243
----------------------------------------------------------------------------------
 Metropolitan Life Insurance Co.:
 3.885%, 8/1/01(1)                                       10,000,000     10,000,000
----------------------------------------------------------------------------------
 Pacific Life Insurance Co.:
 3.855%, 8/1/01(1,3)                                      5,000,000      5,000,000
----------------------------------------------------------------------------------
 Prudential Life Insurance Co.:
 3.836%, 10/1/01(1)                                      10,000,000     10,000,000
                                                                      ------------
                                                                        71,744,425

----------------------------------------------------------------------------------
 Photography--1.2%
 Eastman Kodak Co.:
 3.99%, 8/20/01                                           9,000,000      8,981,142
----------------------------------------------------------------------------------
 Special Purpose Financial--7.8%
 KZH-KMS Corp.:
 3.68%, 10/11/01(2)                                       6,500,000      6,452,824
----------------------------------------------------------------------------------
 Lone Star Funding LLC:
 3.65%, 9/21/014                                          5,000,000      4,974,146
 3.71%, 10/9/01(2)                                       15,000,000     14,893,337
----------------------------------------------------------------------------------
 MONET Trust, Series 2000-1:
 3.77%, 9/27/01(1,3)                                      9,000,000      9,000,000
----------------------------------------------------------------------------------
 Sigma Finance, Inc.:
 3.69%, 10/3/01(2)                                        5,000,000      4,967,713
 5.06%, 8/14/01(2)                                        4,000,000      3,992,691
----------------------------------------------------------------------------------
 Zurich Trust Certificates, Series ZTC-2T:
 3.90%, 10/24/01(1,3)                                    12,000,000     12,000,000
                                                                      ------------
                                                                        56,280,711

----------------------------------------------------------------------------------
 Telecommunications: Technology--2.9%
 Cingular Wireless LLC:
 3.76%, 9/13/01(2)                                       15,000,000     14,932,633
 3.80%, 9/10/01(2)                                        6,000,000      5,975,467
                                                                      ------------
                                                                        20,908,100
                                                                      ------------
 Total Short-Term Notes (Cost $475,352,055)                            475,352,055



STATEMENT OF INVESTMENTS  Continued

                                                          Principal          Value
                                                             Amount     See Note 1
==================================================================================
 U.S. Government Agencies--14.1%

 Federal Home Loan Bank:
 4.79%, 8/3/01                                          $ 7,884,000   $  7,881,902
 5.875%, 9/17/01                                         10,000,000     10,013,843
 6.75%, 2/15/02                                          13,750,000     13,943,828
----------------------------------------------------------------------------------
 Federal Home Loan Mortgage Corp.:
 3.52%, 11/1/01                                          15,000,000     14,865,067
 3.62%, 10/11/01                                         10,000,000      9,928,606
 3.63%, 10/4/01                                          10,000,000      9,935,644
 4.75%, 12/14/01                                         15,000,000     15,041,528
----------------------------------------------------------------------------------
 Federal National Mortgage Assn.:
 4.625%, 10/15/01                                         5,000,000      5,006,268
 6.02%, 12/20/01                                         15,000,000     15,114,282
                                                                      ------------
 Total U.S. Government Agencies (Cost $101,730,968)                    101,730,968
----------------------------------------------------------------------------------
 Total Investments, at Value (Cost $715,036,560)               98.7%   715,036,560
----------------------------------------------------------------------------------
 Other Assets Net of Liabilities                                1.3      9,413,038
                                                        --------------------------
 Net Assets                                                   100.0%  $724,449,598
                                                        ==========================



Footnotes to Statement of Investments

Short-term notes, direct bank obligations and letters of credit are generally
traded on a discount basis; the interest rate is the discount rate received by
the Fund at the time of purchase. Other securities normally bear interest at the
rates shown.

1. Represents the current interest rate for a variable rate security.
2. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $195,888,287, or 27.04% of the
Fund's net assets and have been determined to be liquid pursuant to guidelines
adopted by the Board of Trustees.
3. Identifies issues considered to be illiquid--See Note 4 of Notes to Financial
Statements.
4. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $4,974,146, or 0.69% of the Fund's net
assets as of July 31, 2001.

See accompanying Notes to Financial Statements.





STATEMENT OF ASSETS AND LIABLITIES  July 31, 2001

==================================================================================
 Assets

 Investments, at value (cost $715,036,560)
 --see accompanying statement                                         $715,036,560
----------------------------------------------------------------------------------
 Receivables and other assets:
 Shares of beneficial interest sold                                     27,841,142
 Interest                                                                2,040,194
 Other                                                                     228,995
                                                                      ------------
 Total assets                                                          745,146,891

==================================================================================
 Liabilities

 Bank overdraft                                                            201,673
----------------------------------------------------------------------------------
 Payables and other liabilities:
 Shares of beneficial interest redeemed                                 19,292,616
 Dividends                                                                 461,205
 Distribution and service plan fees                                        264,481
 Transfer and shareholder servicing agent fees                              66,744
 Shareholder reports                                                        64,630
 Trustees' compensation                                                         26
 Other                                                                     345,918
                                                                      ------------
 Total liabilities                                                      20,697,293

==================================================================================
 Net Assets                                                           $724,449,598
                                                                      ============

==================================================================================
 Composition of Net Assets

 Paid-in capital                                                      $724,463,362
----------------------------------------------------------------------------------
 Accumulated net realized gain (loss) on investment transactions           (13,764)
                                                                      ------------
 Net Assets                                                           $724,449,598
                                                                      ============

==================================================================================
 Net Asset Value Per Share

 Class A Shares:
 Net asset value, redemption price and offering price per share
 (based on net assets of $395,898,404 and 395,962,100 shares of
 beneficial interest outstanding)                                            $1.00
----------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on
 net assets of $239,200,523 and 239,203,178 shares of beneficial
 interest outstanding)                                                       $1.00
----------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on
 net assets of $85,075,963 and 85,078,045 shares of beneficial
 interest outstanding)                                                       $1.00
----------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on
 net assets of $4,274,708 and 4,274,709 shares of beneficial
 interest outstanding)                                                       $1.00


See accompanying Notes to Financial Statements.



STATEMENT OF OPERATIONS  For the Year Ended July 31, 2001
==================================================================================
 Investment Income

 Interest                                                              $36,435,490

==================================================================================
 Expenses

 Management fees                                                         3,013,774
----------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                   692,696
 Class B                                                                 1,562,863
 Class C                                                                   514,512
 Class N                                                                       737
----------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees                           2,144,604
----------------------------------------------------------------------------------
 Shareholder reports                                                       524,758
----------------------------------------------------------------------------------
 Custodian fees and expenses                                                29,086
----------------------------------------------------------------------------------
 Trustees' compensation                                                      4,815
----------------------------------------------------------------------------------
 Other                                                                     250,687
                                                                       -----------
 Total expenses                                                          8,738,532
 Less reduction to custodian expenses                                      (11,791)
                                                                       -----------
 Net expenses                                                            8,726,741

==================================================================================
 Net Investment Income                                                  27,708,749

==================================================================================
 Net Realized Gain (Loss) on Investments                                   (18,474)

==================================================================================
 Net Increase in Net Assets Resulting from Operations                  $27,690,275
                                                                       ===========


See accompanying Notes to Financial Statements.



STATEMENTS OF CHANGES IN NET ASSETS

 Year Ended July 31,                                           2001           2000
==================================================================================

 Operations

 Net investment income (loss)                          $ 27,708,749   $ 28,207,683
----------------------------------------------------------------------------------
 Net realized gain (loss)                                   (18,474)         4,319
                                                       ---------------------------
 Net increase (decrease) in net assets
 resulting from operations                               27,690,275     28,212,002

==================================================================================
 Dividends and/or Distributions to Shareholders:

 Class A                                                (16,436,745)   (15,670,808)
 Class B                                                 (8,471,083)    (9,902,934)
 Class C                                                 (2,791,572)    (2,633,941)
 Class N                                                     (9,349)            --

==================================================================================
 Beneficial Interest Transactions

 Net increase (decrease) in net assets resulting
 from beneficial interest transactions:
 Class A                                                 78,707,756     52,564,154
 Class B                                                 66,862,410    (31,737,646)
 Class C                                                 35,697,673       (226,153)
 Class N                                                  4,274,709             --

==================================================================================
 Net Assets

 Total increase                                         185,524,074     20,604,674
----------------------------------------------------------------------------------
 Beginning of period                                    538,925,524    518,320,850
                                                       ---------------------------
 End of period                                         $724,449,598   $538,925,524
                                                       ===========================


See accompanying Notes to Financial Statements.



FINANCIAL HIGHLIGHTS

 Class A        Year Ended July 31,                  2001            2000            1999            1998            1997
=========================================================================================================================

 Per Share Operating Data

 Net asset value, beginning of period               $1.00           $1.00           $1.00           $1.00           $1.00
-------------------------------------------------------------------------------------------------------------------------
 Income from investment operations--net
 investment income and net realized gain              .05             .05             .04             .04             .04
 Dividends and/or distributions
 to shareholders                                     (.05)           (.05)           (.04)           (.04)           (.04)
-------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                     $1.00           $1.00           $1.00           $1.00           $1.00
                                                    =====================================================================

=========================================================================================================================
 Total Return(1)                                     4.84%           5.10%           4.30%           4.61%           4.41%

=========================================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)        $395,898        $317,198        $264,632        $210,477        $172,970
-------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)               $351,490        $312,440        $245,622        $186,795        $179,948
-------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                               4.67%           5.00%           4.22%           4.48%           4.33%
 Expenses                                            1.15%           1.06%           1.10%           1.28%(3)        1.29%(3)



1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods of less than one full year. Total returns reflect changes
in net investment income only.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.


14 | OPPENHEIMER CASH RESERVES
 Class B        Year Ended July 31,                  2001            2000            1999            1998            1997
=========================================================================================================================

 Per Share Operating Data

 Net asset value, beginning of period               $1.00           $1.00           $1.00           $1.00           $1.00
-------------------------------------------------------------------------------------------------------------------------
 Income from investment operations--net
 investment income and net realized gain              .04             .04             .04             .04             .04
 Dividends and/or distributions
 to shareholders                                     (.04)           (.04)           (.04)           (.04)           (.04)
-------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                     $1.00           $1.00           $1.00           $1.00           $1.00
                                                    =====================================================================

=========================================================================================================================
 Total Return(1)                                     4.25%           4.52%           3.72%           3.98%           3.82%

=========================================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)        $239,201        $172,345        $204,081         $80,005         $54,009
-------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)               $208,775        $225,824        $170,068         $73,003         $67,333
-------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                               4.07%           4.40%           3.67%           3.93%           3.78%
 Expenses                                            1.70%           1.61%           1.65%           1.83%(3)        1.84%(3)



1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods of less than one full year. Total returns reflect changes
in net investment income only.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.


15 | OPPENHEIMER CASH RESERVES


FINANCIAL HIGHLIGHTS  Continued

 Class C        Year Ended July 31,                  2001            2000            1999            1998            1997
=========================================================================================================================

 Per Share Operating Data

 Net asset value, beginning of period               $1.00           $1.00           $1.00           $1.00           $1.00
-------------------------------------------------------------------------------------------------------------------------
 Income from investment operations--net
 investment income and net realized gain              .04             .04             .04             .04             .04
 Dividends and/or distributions
 to shareholders                                     (.04)           (.04)           (.04)           (.04)           (.04)
-------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                     $1.00           $1.00           $1.00           $1.00           $1.00
                                                    =====================================================================

=========================================================================================================================
 Total Return(1)                                     4.26%           4.52%           3.73%           3.99%           3.84%

=========================================================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)         $85,076         $49,382         $49,607         $18,101         $ 9,125
-------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                $68,741         $59,556         $37,244         $15,297         $10,930
-------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                               4.07%           4.44%           3.67%           3.94%           3.78%
 Expenses                                            1.70%           1.61%           1.65%           1.83%(3)        1.85%(3)



1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Total returns are not
annualized for periods of less than one full year. Total returns reflect changes
in net investment income only.
2. Annualized for periods of less than one full year.
3. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.


16 | OPPENHEIMER CASH RESERVES


                                                                        Period Ended
 Class N                                                            July 31, 2001(1)
====================================================================================

 Per Share Operating Data

 Net asset value, beginning of period                                          $1.00
------------------------------------------------------------------------------------
 Income from investment operations--net
 investment income and net realized gain                                         .01
 Dividends and/or distributions to shareholders                                 (.01)
------------------------------------------------------------------------------------
 Net asset value, end of period                                                $1.00
                                                                               =====

====================================================================================
 Total Return(2)                                                                1.49%

====================================================================================
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)                                     $4,275
------------------------------------------------------------------------------------
 Average net assets (in thousands)                                            $  737
------------------------------------------------------------------------------------
 Ratios to average net assets:(3)
 Net investment income                                                          3.03%
 Expenses                                                                       1.19%



1. For the period from March 1, 2001 (inception of offering) to July 31, 2001.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Total returns are not annualized for periods of less than one
full year. Total returns reflect changes in net investment income only.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.


17 | OPPENHEIMER CASH RESERVES


NOTES TO FINANCIAL STATEMENTS

================================================================================
 1. Significant Accounting Policies
 Oppenheimer Cash Reserves (the Fund) is registered under the Investment Company
 Act of 1940, as amended, as an open-end management investment company. The
 Fund's investment objective is to seek the maximum current income that is
 consistent with stability of principal. The Fund's investment advisor is
 OppenheimerFunds, Inc. (the Manager).
    The Fund offers Class A, Class B, Class C and Class N shares. Class A shares
 are sold at their offering price, which is normally net asset value plus a
 front-end sales charge. Class B, Class C and Class N shares are sold without a
 front-end sales charge but may be subject to a contingent deferred sales charge
 (CDSC). Class N shares are sold only through retirement plans. Retirement plans
 that offer Class N shares may impose charges on those accounts. All classes of
 shares have identical rights to earnings, assets and voting privileges, except
 that each class has its own expenses directly attributable to that class and
 exclusive voting rights with respect to matters affecting that class. Classes
 A, B, C and N have separate distribution and/or service plans. Class B shares
 will automatically convert to Class A shares six years after the date of
 purchase. The following is a summary of significant accounting policies
 consistently followed by the Fund.
--------------------------------------------------------------------------------
 Securities Valuation. Portfolio securities are valued on the basis of amortized
 cost, which approximates market value.
--------------------------------------------------------------------------------
 Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
 those attributable to a specific class), gains and losses are allocated daily
 to each class of shares based upon the relative proportion of net assets
 represented by such class. Operating expenses directly attributable to a
 specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
 Federal Taxes. The Fund intends to continue to comply with provisions of the
 Internal Revenue Code applicable to regulated investment companies and to
 distribute all of its taxable income to shareholders. Therefore, no federal
 income or excise tax provision is required.
--------------------------------------------------------------------------------
 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.
--------------------------------------------------------------------------------
 Security Transactions. Security transactions are accounted for as of trade
 date. Gains and losses on securities sold are determined on the basis of
 identified cost.
--------------------------------------------------------------------------------
 Other. The preparation of financial statements in conformity with accounting
 principles generally accepted in the United States of America requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial statements and the reported amounts of income and
 expenses during the reporting period. Actual results could differ from those
 estimates.


================================================================================
 2. Shares of Beneficial Interest
 The Fund has authorized an unlimited number of no par value shares of
 beneficial interest. Transactions in shares of beneficial interest were as
 follows:

                                 Year Ended July 31, 2001(1)             Year Ended July 31, 2000
                                   Shares             Amount            Shares             Amount
-------------------------------------------------------------------------------------------------

 Class A
 Sold                       1,204,183,854    $ 1,204,183,854     1,263,236,304    $ 1,263,236,304
 Dividends and/or
 distributions reinvested      15,219,869         15,219,869        14,256,928         14,256,928
 Redeemed                  (1,140,695,967)    (1,140,695,967)   (1,224,929,078)    (1,224,929,078)
                           ----------------------------------------------------------------------
 Net increase (decrease)       78,707,756    $    78,707,756        52,564,154    $    52,564,154
                           ======================================================================

-------------------------------------------------------------------------------------------------
 Class B
 Sold                         593,249,893    $   593,249,893       677,633,692    $   677,633,692
 Dividends and/or
 distributions reinvested       7,307,928          7,307,928         8,397,959          8,397,959
 Redeemed                    (533,695,411)      (533,695,411)     (717,769,297)      (717,769,297)
                           ----------------------------------------------------------------------
 Net increase (decrease)       66,862,410    $    66,862,410       (31,737,646)   $   (31,737,646)
                           ======================================================================

-------------------------------------------------------------------------------------------------
 Class C
 Sold                         704,729,916    $   704,729,916       665,255,346    $   665,255,346
 Dividends and/or
 distributions reinvested       2,258,358          2,258,358         2,260,243          2,260,243
 Redeemed                    (671,290,601)      (671,290,601)     (667,741,742)      (667,741,742)
                           ----------------------------------------------------------------------
 Net increase (decrease)       35,697,673    $    35,697,673          (226,153)   $      (226,153)
                           ======================================================================

-------------------------------------------------------------------------------------------------
 Class N
 Sold                           6,629,109    $     6,629,109                --    $            --
 Dividends and/or
 distributions reinvested           6,894              6,894                --                 --
 Redeemed                      (2,361,294)        (2,361,294)               --                 --
                           ----------------------------------------------------------------------
 Net increase (decrease)        4,274,709    $     4,274,709                --    $            --
                           ======================================================================


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

================================================================================
 3. 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 of
 0.50% of the first $250 million of average annual net assets, 0.475% of the
 next $250 million, 0.45% of the next $250 million, 0.425% of net assets of the
 next $250 million, and 0.40% of net assets in excess of $1 billion. The Fund's
 management fee for the year ended July 31, 2001, was an annualized rate of
 0.48%.



NOTES TO FINANCIAL STATEMENTS  Continued

================================================================================
 3. Fees and Other Transactions with Affiliates  Continued
 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 an agreed upon per account fee.
--------------------------------------------------------------------------------
 Distribution and Service Plan Fees. Under its General Distributor's Agreement
 with the Manager, the Distributor acts as the Fund's principal underwriter in
 the continuous public offering of the different classes of shares of the Fund.

 The compensation paid to (or retained by) the Distributor from the sale of
 shares or on the redemption of shares is shown in the table below for the
 period indicated.

                 Commissions        Commissions         Commissions        Commissions
                  on Class A         on Class B          on Class C         on Class N
                      Shares             Shares              Shares             Shares
                 Advanced by        Advanced by         Advanced by        Advanced by
 Year Ended   Distributor(1)     Distributor(1)      Distributor(1)     Distributor(1)
--------------------------------------------------------------------------------------

 July 31, 2001        $7,156         $1,031,706            $113,935            $61,374


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

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

 July 31, 2001       $209,921            $29,709                 $--                $--


    The Fund has adopted a Service Plan for Class A shares and Distribution and
 Service Plans for Class B, Class C and Class N shares under Rule 12b-1 of the
 Investment Company Act. Under those plans the Fund pays the Distributor for all
 or a portion of its costs incurred in connection with the distribution and/or
 servicing of the shares of the particular class.
--------------------------------------------------------------------------------
 Class A Service Plan Fees. Under the Class A service plan, the Distributor
 currently uses the fees it receives from the Fund to pay brokers, dealers and
 other financial institutions. The Class A service plan permits reimbursements
 to the Distributor at a rate of up to 0.20% of average annual net assets of
 Class A shares purchased. The Distributor makes payments to plan recipients
 quarterly at an annual rate not to exceed 0.20% of the average annual net
 assets consisting of Class A shares of the Fund. For the year ended July 31,
 2001, payments under the Class A plan totaled $692,696, all of which were paid
 by the Distributor to recipients, and included $112,910 paid to an affiliate of
 the Manager. Any unreimbursed expenses the Distributor incurs with respect to
 Class A shares in any fiscal year cannot be recovered in subsequent years.



--------------------------------------------------------------------------------
 Class B, Class C and Class N Distribution and Service Plan Fees. Under each
 plan, service fees and distribution fees are computed on the average of the net
 asset value of shares in the respective class, determined as of the close of
 each regular business day during the period. The Class B, Class C and Class N
 plans provide 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 Distributor retains the asset-based sales charge on Class B shares. The
 Distributor retains the asset-based sales charge on Class C shares during the
 first year the shares are outstanding. The Distributor retains the asset-based
 sales charge on Class N shares. The asset-based sales charges on Class B, Class
 C and Class N shares allow investors to buy shares without a front-end sales
 charge while allowing the Distributor to compensate dealers that sell those
 shares.
    The 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 asset-based sales charges from
 the Fund under the plans. If any 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. The plans allow for the carryforward of distribution expenses, to
 be recovered from asset-based sales charges in subsequent fiscal periods.

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

 Class B Plan       $1,562,863      $1,562,863        $    --                --%
 Class C Plan          514,512         514,512             --                --
 Class N Plan              737             646         21,335              0.50


================================================================================
 4. Illiquid Securities
 As of July 31, 2001, investments in securities included issues that are
 illiquid. A security may be considered illiquid if it lacks a readily available
 market or if its valuation has not changed for a certain period of time. The
 Fund intends to invest no more than 10% of its net assets (determined at the
 time of purchase and reviewed periodically) in illiquid securities. The
 aggregate value of illiquid securities subject to this limitation as of July
 31, 2001, was $50,000,000, which represents 6.90% of the Fund's net assets.




22 | OPPENHEIMER CASH RESERVES






                                                    Appendix A

                                         Description of Securities Ratings

Below is a description of the two highest rating categories for Short Term Debt and Long Term Debt by the
"Nationally-Recognized Statistical Rating Organizations" which the Manager evaluates in purchasing securities on
behalf of the Fund.  The ratings descriptions are based on information supplied by the ratings organizations to
subscribers.

SHORT TERM DEBT RATINGS.

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

The following rating designations for commercial paper (defined by Moody's as promissory obligations not having
original maturity in excess of nine months), are judged by Moody's to be investment grade, and indicate the
relative repayment capacity of rated issuers:

Prime-1: Superior capacity for repayment.  Capacity will normally be evidenced by the following characteristics:
(a) leading market positions in well-established industries; (b) high rates of return on funds employed; (c)
conservative capitalization structure with moderate reliance on debt and ample asset protection; (d) broad
margins in earning coverage of fixed financial charges and high internal cash generation; and (e)
well-established access to a range of financial markets and assured sources of alternate liquidity.

Prime-2: Strong capacity for repayment.  This will normally be evidenced by many of the characteristics cited
above but to a lesser degree.  Earnings trends and coverage ratios, while sound, will be more subject to
variation.  Capitalization characteristics, while still appropriate, may be more affected by external
conditions.  Ample alternate liquidity is maintained.

         Moody's ratings for state and municipal short-term obligations are designated "Moody's Investment Grade"
("MIG"). Short-term notes which have demand features may also be designated as "VMIG".  These rating categories
are as follows:

MIG 1/VMIG 1: Denotes superior credit quality. Excellent protection is afforded by established cash flows, highly
reliable liquidity support or demonstrated broad-based access to the market for refinancing.

MIG 2/VMIG 2: Denotes strong credit quality. Margins of protection are ample although not as large as in the
preceding group.

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

The following ratings by Standard and Poor's for commercial paper (defined by Standard and Poor's as debt having
an original maturity of no more than 365 days) assess the likelihood of payment:
A-1: Obligation is rated in the highest category. The obligor's capacity to meet its financial commitment on the
obligation is strong. Within this category, a plus (+) sign designation indicates the obligor's capacity to meet
its financial obligation is extremely strong.

A-2: Obligation is somewhat more susceptible to the adverse effects of changes in circumstances and economic
conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.

Standard and Poor's ratings for Municipal Notes due in 3 years or less:
------------------------------------------------------------------------

SP-1: Strong capacity to pay principal and interest. An issue determined to possess 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.

Standard and Poor's assigns "dual ratings" to all municipal debt issues that have a demand or double feature as
part of their provisions.  The first rating addresses the likelihood of repayment of principal and interest as
due, and the second rating addresses only the demand feature.  With short-term demand debt, Standard and Poor's
note rating symbols are used with the commercial paper symbols (for example, "SP-1+/A-1+").


Fitch, Inc. ("Fitch")

Fitch assigns the following short-term ratings to debt obligations that are payable on demand or have original
maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term
notes, and municipal and investment notes:

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.

LONG TERM DEBT RATINGS.

These ratings are relevant for securities purchased by the Fund with a remaining maturity of 397 days or less, or
for rating issuers of short-term obligations.


Moody's

Bonds (including municipal bonds) are rated as follows:

Aaa: Judged to be the best quality. They carry the smallest degree of investment risk and are generally referred
to as "gilt edged."  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: 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.

         Moody's applies numerical modifiers "1", "2" and "3" in its "Aa" rating classification. 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.


Standard and Poor's

Bonds (including municipal bonds maturing beyond 3 years) are rated as follows:

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

AA: Bonds rated "AA" differ from the highest rated obligations only in small degree. A strong capacity to meet
its financial commitment on the obligation is very strong.


Fitch

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.

         Because bonds rated in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is generally rated "F-1+".








                                                        B-1
                                                    Appendix B

-------------------------------------------------------------------------------------------------------------------
                                              Industry Classifications
-------------------------------------------------------------------------------------------------------------------

Aerospace/Defense                                           Food and Drug Retailers
Air Transportation                                          Gas Utilities
Asset-Backed                                                Health Care/Drugs
Auto Parts and Equipment                                    Health Care/Supplies & Services
Automotive                                                  Homebuilders/Real Estate
Bank Holding Companies                                      Hotel/Gaming
Banks                                                       Industrial Services
Beverages                                                   Information Technology
Broadcasting                                                Insurance
Broker-Dealers                                              Leasing & Factoring
Building Materials                                          Leisure
Cable Television                                            Manufacturing
Chemicals                                                   Metals/Mining
Commercial Finance                                          Nondurable Household Goods
Communication Equipment                                     Office Equipment
Computer Hardware                                           Oil - Domestic
Computer Software                                           Oil - International
Conglomerates                                               Paper
Consumer Finance                                            Photography
Consumer Services                                           Publishing
Containers                                                  Railroads & Truckers
Convenience Stores                                          Restaurants
Department Stores                                           Savings & Loans
Diversified Financial                                       Shipping
Diversified Media                                           Special Purpose Financial
Drug Wholesalers                                            Specialty Printing
Durable Household Goods                                     Specialty Retailing
Education                                                   Steel
Electric Utilities                                          Telecommunications - Long Distance
Electrical Equipment                                        Telephone - Utility
Electronics                                                 Textile, Apparel & Home Furnishings
Energy Services                                             Tobacco
Entertainment/Film                                          Trucks and Parts
Environmental                                               Wireless Services
Food







                                                       C-11
                                                    Appendix C

                          OppenheimerFunds Special Sales Charge Arrangements and Waivers

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

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

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

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

Waivers that apply at the time shares are redeemed must be requested by the shareholder and/or dealer in the
redemption request.


I.                      Applicability of Class A Contingent Deferred Sales Charges in Certain Cases

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

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

II.                                Waivers of Class A Sales Charges of Oppenheimer Funds

A.  Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers.

Class A shares purchased by the following investors are not subject to any Class A sales charges (and no
concessions are paid by the Distributor on such purchases):
-        The Manager or its affiliates.
-




     Present or former officers, directors, trustees and employees (and their "immediate families") of the Fund,
         the Manager and its affiliates, and retirement plans established by them for their employees. The term
         "immediate family" refers to one's spouse, children, grandchildren, grandparents, parents,
         parents-in-law, brothers and sisters, sons- and daughters-in-law, a sibling's spouse, a spouse's
         siblings, aunts, uncles, nieces and nephews; relatives by virtue of a remarriage (step-children,
         step-parents, etc.) are included.
-        Registered management investment companies, or separate accounts of insurance companies having an
         agreement with the Manager or the Distributor for that purpose.
-        Dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their
         own accounts or for retirement plans for their employees.
-        Employees and registered representatives (and their spouses) of dealers or brokers described above or
         financial institutions that have entered into sales arrangements with such dealers or brokers (and which
         are identified as such to the Distributor) or with the Distributor. The purchaser must certify to the
         Distributor at the time of purchase that the purchase is for the purchaser's own account (or for the
         benefit of such employee's spouse or minor children).
-        Dealers, brokers, banks or registered investment advisors that have entered into an agreement with the
         Distributor providing specifically for the use of shares of the Fund in particular investment products
         made available to their clients. Those clients may be charged a transaction fee by their dealer, broker,
         bank or advisor for the purchase or sale of Fund shares.
-        Investment advisors and financial planners who have entered into an agreement for this purpose with the
         Distributor and who charge an advisory, consulting or other fee for their services and buy shares for
         their own accounts or the accounts of their clients.
-        "Rabbi trusts" that buy shares for their own accounts, if the purchases are made through a broker or
         agent or other financial intermediary that has made special arrangements with the Distributor for those
         purchases.
-        Clients of investment advisors or financial planners (that have entered into an agreement for this
         purpose with the Distributor) who buy shares for their own accounts may also purchase shares without
         sales charge but only if their accounts are linked to a master account of their investment advisor or
         financial planner on the books and records of the broker, agent or financial intermediary with which the
         Distributor has made such special arrangements . Each of these investors may be charged a fee by the
         broker, agent or financial intermediary for purchasing shares.
-        Directors, trustees, officers or full-time employees of OpCap Advisors or its affiliates, their
         relatives or any trust, pension, profit sharing or other benefit plan which beneficially owns shares for
         those persons.
-        Accounts for which Oppenheimer Capital (or its successor) is the investment advisor (the Distributor
         must be advised of this arrangement) and persons who are directors or trustees of the company or trust
         which is the beneficial owner of such accounts.
-        A unit investment trust that has entered into an appropriate agreement with the Distributor.
-        Dealers, brokers, banks, or registered investment advisers that have entered into an agreement with the
         Distributor to sell shares to defined contribution employee retirement plans for which the dealer,
         broker or investment adviser provides administration services.
-        Retirement Plans and deferred compensation plans and trusts used to fund those plans (including, for
         example, plans qualified or created under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue
         Code), in each case if those purchases are made through a broker, agent or other financial intermediary
         that has made special arrangements with the Distributor for those purchases.
-        A TRAC-2000 401(k) plan (sponsored by the former Quest for Value Advisors) whose Class B or Class C
         shares of a Former Quest for Value Fund were exchanged for Class A shares of that Fund due to the
         termination of the Class B and Class C TRAC-2000 program on November 24, 1995.
-        A qualified Retirement Plan that had agreed with the former Quest for Value Advisors to purchase shares
         of any of the Former Quest for Value Funds at net asset value, with such shares to be held through
         DCXchange, a sub-transfer agency mutual fund clearinghouse, if that arrangement was consummated and
         share purchases commenced by December 31, 1996.
B.  Waivers of Initial and Contingent Deferred Sales Charges in Certain Transactions.

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

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

The Class A contingent deferred sales charge is also waived if shares that would otherwise be subject to the
contingent deferred sales charge are redeemed in the following cases:
     -   To make Automatic  Withdrawal  Plan payments that are limited  annually to no more than 12% of the account
         value adjusted annually.
-        Involuntary redemptions of shares by operation of law or involuntary redemptions of small accounts
         (please refer to "Shareholder Account Rules and Policies," in the applicable fund Prospectus).
-        For distributions from Retirement Plans, deferred compensation plans or other employee benefit plans for
         any of the following purposes:
(1)      Following the death or disability (as defined in the Internal Revenue Code) of the participant or
                beneficiary. The death or disability must occur after the participant's account was established.
(2)      To return excess contributions.
(3)      To return contributions made due to a mistake of fact.
(4)      Hardship withdrawals, as defined in the plan.6
(5)      Under a Qualified Domestic Relations Order, as defined in the Internal Revenue Code, or, in the case of
                an IRA, a divorce or separation agreement described in Section 71(b) of the Internal Revenue
                Code.
(6)      To meet the minimum distribution requirements of the Internal Revenue Code.
(7)      To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue
                Code.
(8)      For loans to participants or beneficiaries.
(9)      Separation from service.7
(10)     Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the
                Manager or a subsidiary of the Manager) if the plan has made special arrangements with the
                Distributor.
(11)




         Plan termination or "in-service distributions," if the redemption proceeds are rolled over directly to
                an OppenheimerFunds-sponsored IRA.
         -    For  distributions  from 401(k) plans  sponsored by  broker-dealers  that have entered into a special
              agreement with the Distributor allowing this waiver.

                  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, including a trustee of a grantor trust or revocable living trust for which the
         trustee is also the sole beneficiary. The death or disability must have occurred after the account was
         established, and for disability you must provide evidence of a determination of disability by the Social
         Security Administration.
-        Distributions from accounts for which the broker-dealer of record has entered into a special agreement
         with the Distributor allowing this waiver.
-        Redemptions of Class B shares held by Retirement Plans whose records are maintained on a daily valuation
         basis by Merrill Lynch or an independent record keeper under a contract with Merrill Lynch.
-        Redemptions of Class C shares of Oppenheimer U.S. Government Trust from accounts of clients of financial
         institutions that have entered into a special arrangement with the Distributor for this purpose.
-        Redemptions requested in writing by a Retirement Plan sponsor of Class C shares of an Oppenheimer fund
         in amounts of $500,000 or more and made more than 12 months after the Retirement Plan's first purchase
         of Class C shares, if the redemption proceeds are invested in Class N shares of one or more Oppenheimer
         funds.
-        Distributions8 from Retirement Plans or other employee benefit plans for any of the following purposes:
(1)      Following the death or disability (as defined in the Internal Revenue Code) of the participant or
                beneficiary. The death or disability must occur after the participant's account was established
                in an Oppenheimer fund.
(2)      To return excess contributions made to a participant's account.
(3)      To return contributions made due to a mistake of fact.
(4)      To make hardship withdrawals, as defined in the plan.9
(5)      To make distributions required under a Qualified Domestic Relations Order or, in the case of an IRA, a
                divorce or separation agreement described in Section 71(b) of the Internal Revenue Code.
(6)      To meet the minimum distribution requirements of the Internal Revenue Code.
(7)      To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue
                Code.
(8)      For loans to participants or beneficiaries.10
(9)




         On account of the participant's separation from service.11
(10)     Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the
                Manager or a subsidiary of the Manager) offered as an investment option in a Retirement Plan if the
                plan has made special arrangements with the Distributor.
(11)     Distributions made on account of a plan termination or "in-service" distributions, if the redemption
                proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA.
(12)     For distributions from a participant's account under an Automatic Withdrawal Plan after the participant
                reaches age 59 1/2, as long as the aggregate value of the distributions does not exceed 10% of the
                account's value, adjusted annually.
         (13)   Redemptions of Class B shares under an Automatic Withdrawal Plan for an account other than a
                Retirement Plan, if the aggregate value of the redeemed shares does not exceed 10% of the
                account's value, adjusted annually.
         (14)   For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special
                arrangement with the Distributor allowing this waiver.
         -    Redemptions  of Class B shares or Class C shares under an Automatic  Withdrawal  Plan from an account
              other than a Retirement  Plan if the  aggregate  value of the redeemed  shares does not exceed 10% of
              the account's value annually.

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

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

IV.       Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of
                                                Former Quest for Value Funds

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

    Oppenheimer Quest Value Fund, Inc.                     Oppenheimer Small Cap Value Fund
    Oppenheimer Quest Balanced Value Fund                  Oppenheimer Quest Global Value Fund, Inc.
    Oppenheimer Quest Opportunity Value Fund

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

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

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

A.  Reductions or Waivers of Class A Sales Charges.

         - -  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    Concession as % of
or Members                     % of Offering Price          % of Net Amount Invested     Offering Price
------------------------------ ---------------------------- ---------------------------- ----------------------------
------------------------------ ---------------------------- ---------------------------- ----------------------------
9 or Fewer                                2.50%                        2.56%                        2.00%
------------------------------ ---------------------------- ---------------------------- ----------------------------
------------------------------ ---------------------------- ---------------------------- ----------------------------
At  least  10  but  not  more             2.00%                        2.04%                        1.60%
than 49
------------------------------ ---------------------------- ---------------------------- ----------------------------

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

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

         - -  Waiver of Class A Sales Charges for Certain Shareholders.  Class A shares purchased by the
following investors are not subject to any Class A initial or contingent deferred sales charges:
              -   Shareholders who were shareholders of the AMA Family of Funds on February 28, 1991 and who
                  acquired shares of any of the Former Quest for Value Funds by merger of a portfolio of the AMA
                  Family of Funds.
              -   Shareholders who acquired shares of any Former Quest for Value Fund by merger of any of the
                  portfolios of the Unified Funds.
         - -  Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions.  The Class A contingent
deferred sales charge will not apply to redemptions of Class A shares purchased by the following investors who
were shareholders of any Former Quest for Value Fund:

         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.

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

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

         A shareholder's account will be credited with the amount of any contingent deferred sales charge paid on
the redemption of any Class A, Class B or Class C shares of the Oppenheimer fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another Oppenheimer fund within 90 days after
redemption.

    V. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of
                                   Connecticut Mutual Investment Accounts, Inc.

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

Connecticut Mutual Liquid Account                             Connecticut Mutual Total Return Account
Connecticut Mutual Government Securities Account              CMIA LifeSpan Capital Appreciation Account
Connecticut Mutual Income Account                             CMIA LifeSpan Balanced Account
Connecticut Mutual Growth Account                             CMIA Diversified Income Account


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

         -    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.

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






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

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

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

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

VI.                 Special Reduced Sales Charge for Former Shareholders of Advance America Funds, Inc.

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

          VII. Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer Convertible Securities
                                                       Fund

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




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Oppenheimer Cash Reserves
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Internet Web Site:
         www.oppenheimerfunds.com
         ------------------------


Investment Adviser
         OppenheimerFunds, Inc.
         6803 South Tucson Way
         Englewood, CO 80112


Distributor

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


Transfer Agent
         OppenheimerFunds Services
         P.O. Box 5270
         Denver, Colorado 80217
         1.800.525.7048

Custodian Bank
         Citibank, N.A.
         399 Park Avenue
         New York, New York 10043

Independent Auditors
         Deloitte & Touche LLP
         555 Seventeenth Street, Suite 3600
         Denver, Colorado 80202-3942

Legal Counsel
         Myer, Swanson, Adams & Wolf, P.C.
         1600 Broadway
         Denver, Colorado 80202

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