485BPOS

                                                  Registration No. 2-69719
                                                  File No. 811-03105

                                        SECURITIES AND EXCHANGE COMMISSION
                                             WASHINGTON, D.C. 20549

                                                     FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933           [X]
Pre-Effective Amendment No. ___                                   [  ]
Post-Effective Amendment No. 51                                   [X]

                                      and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940   [X]
         Amendment No. 44                                         [X]

                                        OPPENHEIMER CAPITAL APPRECIATION FUND
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                   (Exact Name of Registrant as Specified in Charter)

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

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

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

It is proposed that this filing will become effective:

       [   ]    immediately upon filing pursuant to paragraph (b)
       [X]      on October 26, 2006 pursuant to paragraph (b)
       [   ]    60 days after filing pursuant to paragraph (a)(1)
       [   ]    on _______________ pursuant to paragraph (a)(1)
       [   ]    75 days after filing pursuant to paragraph (a)(2)
       [   ]    on _______________ pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

     [ ] This  post-effective  amendment  designates a new effective  date for a
previously filed post-amendment.


Oppenheimer
Capital Appreciation Fund




Prospectus dated October 26, 2006

     Oppenheimer  Capital  Appreciation Fund is a mutual fund that seeks capital
appreciation to make your investment  grow. It emphasizes  investments in common
stocks.  This  Prospectus  contains  important   information  about  the  Fund's
objective,  and its investment policies,  strategies and risks. It also contains
important  information  about  how to buy and sell  shares of the Fund and other
account  features.  Please read this Prospectus  carefully before you invest and
keep it for future reference about your account.


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



                                                      (OppenheimerFunds logo)
CONTENTS




        ABOUT THE FUND

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

       ABOUT YOUR ACCOUNT

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

       Special Investor Services
       AccountLink
       PhoneLink
       OppenheimerFunds Internet Website
       Automatic Withdrawal and Exchange Plans
       Retirement Plans

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



ABOUT THE FUND

The Fund's Investment Objective and Principal Investment Strategies
WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks capital appreciation.

     WHAT DOES THE FUND  MAINLY  INVEST  IN? The Fund  invests  mainly in common
stocks of  "growth  companies."  These  may be newer  companies  or  established
companies of any  capitalization  range that the portfolio  manager believes may
appreciate in value over the long term.

     HOW DOES THE MANAGER  DECIDE  WHAT  SECURITIES  TO BUY OR SELL?  The Fund's
investment  manager,  OppenheimerFunds,  Inc. (the "Manager"),  looks for growth
companies  with stock  prices that it  believes  are  reasonable  in relation to
overall stock market valuations. The Manager focuses on factors that may vary in
particular  cases and over time in seeking broad  diversification  of the Fund's
portfolio among industries and market sectors. Currently, the Manager looks for:

     companies in businesses with above-average growth potential, companies with
growth rates that the  portfolio  managers  believe are  sustainable  over time,
stocks with reasonable valuations relative to their growth potential.


     The  Manager  may sell  companies  from the Fund that it believes no longer
meet the above criteria.

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

Main Risks of Investing in the Fund

     All  investments  have risks to some  degree.  The Fund's  investments  are
subject  to changes in their  value  from a number of factors  described  below.
There is also the risk that poor security  selection by the Fund's  Manager will
cause the Fund to underperform other funds having a similar objective.

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

     Other factors can affect a particular  stock's price, such as poor earnings
reports by the issuer,  loss of major customers,  major  litigation  against the
issuer,  or  changes  in  government  regulations  affecting  the  issuer or its
industry.

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

     Stocks of growth companies,  particularly newer or smaller  companies,  may
offer  opportunities  for greater capital  appreciation but may be more volatile
than other  stocks.  They have greater risks of loss and may be less liquid than
stocks of larger,  more  established  companies.  That means the Fund could have
greater  difficulty  selling a security  of a smaller  company at an  acceptable
price,  especially in periods of market  volatility.  That factor  increases the
potential for losses to the Fund. Also, it may take a substantial period of time
before the Fund realizes a gain on its  investment in a small-cap  company if it
realizes any gain at all.

     HOW RISKY IS THE FUND OVERALL?  The risks described above collectively form
the  overall  risk  profile  of the Fund and can  affect the value of the Fund's
investments,  its  investment  performance  and its price per share.  Particular
investments and investment strategies also have risks. These risks mean that you
can lose money by investing in the Fund.  When you redeem your shares,  they may
be worth more or less than what you paid for them.  There is no  assurance  that
the Fund will achieve its investment objective.

     In the short term, the stock markets can be volatile,  and the price of the
Fund's  shares  can go up and  down  substantially.  Growth  stocks  may be more
volatile  than  other  equity  investments.  The  Fund  generally  does  not use
income-oriented investments to help cushion the Fund's total return from changes
in stock prices. In the  OppenheimerFunds  spectrum,  the Fund is generally more
aggressive  than funds  that  invest in both  stocks and bonds or in  investment
grade debt  securities,  but may be less  volatile  than  small-cap and emerging
markets stock funds.


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



The Fund's Past Performance

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

     The after-tax  returns are shown for Class A shares only and are calculated
using the historical  highest  individual  federal  marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or local
taxes.  The  after-tax  returns  are  calculated  based on  certain  assumptions
mandated by regulation and your actual  after-tax  returns may differ from those
shown,  depending on your  individual tax situation.  The after-tax  returns set
forth below are not  relevant to  investors  who hold their Fund shares  through
tax-deferred  arrangements  such as  401(k)  plans  or IRAs or to  institutional
investors not subject to tax. The Fund's past investment performance, before and
after taxes,  is not  necessarily  an indication of how the Fund will perform in
the future.


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

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


     For the period from 1/1/06  through  9/30/06,  the  cumulative  return (not
annualized) before taxes for Class A shares of the Fund was 2.87%.

     During  the  period  shown  in the  bar  chart,  the  highest  return  (not
annualized) before taxes for a calendar quarter was 28.86% (4th Qtr `99) and the
lowest return (not  annualized)  before taxes for a calendar quarter was -19.89%
(3rd Qtr '01).



- --------------------------------------------- ---------------------- ---------------------------- --------------------------
                                                                                                          10 Years

Average Annual Total Returns                                                   5 Years              (or life of class, if
for the periods ended December 31, 2005              1 Year          (or life of class, if less)            less)

- --------------------------------------------- ---------------------- ---------------------------- --------------------------
- --------------------------------------------- ---------------------- ---------------------------- --------------------------
Class A Shares (inception 1/22/81)

  Return Before Taxes                                -1.32%                    -2.62%                       9.43%
  Return After Taxes on Distributions                -1.52%                    -2.75%                       7.90%

  Return  After Taxes on Distributions and

  Sale of Fund Shares                                -0.86%                    -2.26%                       7.49%

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

Class B Shares (inception 11/1/95)                   -1.22%                    -2.65%                       9.55%

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

Class C Shares (inception 12/1/93)                    2.90%                    -2.21%                       9.22%

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

Class N Shares (inception 3/1/01)                     3.30%                    -0.94%                        N/A

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

Class Y Shares (inception 11/3/97)                    5.08%                    -1.10%                       6.26%

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

S&P 500 Index (reflects no deduction for              4.91%                   0.54%[1]                    9.07%[1]
fees, expenses or taxes)                                                      1.83%[2]                    5.49%[3]

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

(1)  From 12/31/95.
(2)  From 02/28/01.
(3)  From 10/31/97.




     The Fund's average annual total returns include  applicable  sales charges:
for Class A, the current maximum initial sales charge of 5.75%; for Class B, the
contingent deferred sales charge of 5% (1-year) and 2% (5-years);  and for Class
C and Class N, the 1% contingent  deferred  sales charge for the 1-year  period.
There is no sales charge for Class Y shares.  Because Class B shares  convert to
Class A shares 72 months after  purchase,  Class B  "life-of-class"  performance
does  not  include  any  contingent  deferred  sales  charge  and  uses  Class A
performance for the period after conversion. The returns measure the performance
of a  hypothetical  account and assume  that all  dividends  and  capital  gains
distributions  have been reinvested in additional shares. The performance of the
Fund's  Class A shares is  compared  to S&P 500  Index.  The  index  performance
includes  reinvestment of income but does not reflect  transaction  costs, fees,
expenses or taxes. The Fund's investments vary from those in the index.


Fees and Expenses of the Fund


     The  following  tables are  provided  to help you  understand  the fees and
expenses  you may pay if you buy and hold  shares of the  Fund.  The Fund pays a
variety of expenses  directly  for  management  of its  assets,  administration,
distribution  of its shares and other  services.  Those  expenses are subtracted
from the Fund's assets to calculate  the Fund's net asset values per share.  All
shareholders  therefore pay those expenses  indirectly.  Shareholders  pay other
transaction  expenses  directly,  such as sales  charges.  The numbers below are
based on the Fund's expenses during its fiscal year ended August 31, 2006.


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Shareholder Fees (charges paid directly from your investment):

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

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

- -------------------------------------- ---------------- ----------------- ---------------- ---------------- -----------------
- -------------------------------------- ---------------- ----------------- ---------------- ---------------- -----------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original
offering price or redemption               None(1)           5%(2)             1%(3)            1%(4)             None
proceeds)
- -------------------------------------- ---------------- ----------------- ---------------- ---------------- -----------------


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


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

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

                                                                         Shares

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

Management Fees                             0.57%            0.57%           0.57%            0.57%           0.57%

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

Distribution and/or Service (12b-1)         0.24%            1.00%           1.00%            0.50%           None
Fees

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

Other Expenses                              0.26%            0.36%           0.27%            0.35%           0.13%

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

Total Annual Operating Expenses             1.07%            1.93%           1.84%            1.42%           0.70%

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


     Expenses may vary in future years.  "Other Expenses" include transfer agent
fees,  custodial fees, and accounting and legal expenses that the Fund pays. The
"Other  Expenses"  in the table are based on, among other  things,  the fees the
Fund would have paid if the  transfer  agent had not waived a portion of its fee
under a  voluntary  undertaking  to the  Fund to  limit  these  fees to 0.35% of
average daily net assets per fiscal year for all classes.  That  undertaking may
be  amended or  withdrawn  at any time.  After the  waiver,  the  actual  "Other
Expenses" and "Total Annual Operating Expenses" were 0.35% and 1.92% for Class B
and as shown above for all other classes.

     1.  A  contingent  deferred  sales  charge  may  apply  to  redemptions  of
investments  of $1  million  or  more  ($500,000  for  certain  retirement  plan
accounts)  of Class A shares.  See "How to Buy Shares" for  details.

     2. Applies to  redemptions  in first year after  purchase.  The  contingent
deferred sales charge gradually declines from

5% to 1% in years one through six and is eliminated after that.

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

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



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


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



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

Class A Shares                                     $678                 $897              $1,134              $1,812

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

Class B Shares                                     $698                 $912              $1,252            $1,840 *

- ---------------------------------- --------------------- -------------------- ------------------- -------------------
- ---------------------------------- --------------------- -------------------- ------------------- -------------------
Class C Shares                                     $289                 $584              $1,005              $2,178
- ---------------------------------- --------------------- -------------------- ------------------- -------------------
- ---------------------------------- --------------------- -------------------- ------------------- -------------------
Class N Shares                                     $246                 $452                $782              $1,714
- ---------------------------------- --------------------- -------------------- ------------------- -------------------
- ---------------------------------- --------------------- -------------------- ------------------- -------------------

Class Y Shares                                      $72                 $225                $391                $874

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


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

Class A Shares                                     $678                 $897              $1,134              $1,812

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

Class B Shares                                     $198                 $612              $1,052            $1,840 *

- ---------------------------------- --------------------- -------------------- ------------------- -------------------
- ---------------------------------- --------------------- -------------------- ------------------- -------------------
Class C Shares                                     $189                 $584              $1,005              $2,178
- ---------------------------------- --------------------- -------------------- ------------------- -------------------
- ---------------------------------- --------------------- -------------------- ------------------- -------------------

Class N Shares                                     $146                 $452                $782              $1,714

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

Class Y Shares                                      $72                 $225                $391                $874

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

     In the first example, expenses include the initial sales charge for Class A
and the  applicable  Class B,  Class C and  Class N  contingent  deferred  sales
charges.  In the second example,  the Class A expenses include the sales charge,
but Class B, Class C and Class N expenses  do not  include  contingent  deferred
sales charges. There is no sales charge on Class Y shares.

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


About the Fund's Investments

     THE FUND'S PRINCIPAL  INVESTMENT  POLICIES AND RISKS. The allocation of the
Fund's portfolio among different  investments will vary over time based upon the
Manager's  evaluation of economic and market trends.  The Fund's portfolio might
not always include all of the different  types of investments  described in this
Prospectus.  The  Statement of  Additional  Information  contains  more detailed
information about the Fund's investment policies and risks.

     The  Manager  tries to reduce  risks by  carefully  researching  securities
before they are  purchased.  The Fund  attempts to reduce its exposure to market
risks by  diversifying  its  investments,  that is, by not holding a substantial
amount of stock of any one company and by not  investing  too great a percentage
of the Fund's assets in any one company. Also, the Fund does not concentrate 25%
or more of its assets in  investments  in any one industry.  That limit does not
apply to securities issued or guaranteed by the U.S.  government or its agencies
and instrumentalities or securities issued by investment companies.

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

     Stock  Investments.  The Manager  looks for stocks of  companies  that have
growth potential. Growth companies may be developing new products or services or
may be  expanding  into  new  markets  for  their  products.  They  may be newer
companies or more  established  companies  entering a growth  cycle.  The Fund's
investments are not limited to issuers in a specific  capitalization range, such
as large-cap or small-cap  companies,  and the Fund can invest in issuers in all
capitalization  ranges.  Market capitalization refers to the market value of all
of a  company's  issued and  outstanding  stock.  Currently,  the  Fund's  stock
investments are focused on large-cap issuers,  but that emphasis can change over
time.  Because the stocks of companies that have smaller market  capitalizations
tend to be more volatile,  to the extent that the Fund holds  small-cap  stocks,
its share prices may fluctuate more and the risks of loss are greater.

     Newer growth  companies  tend to retain a large part of their  earnings for
research,  development or investment in capital assets.  Therefore,  they do not
tend to  emphasize  paying  dividends,  and may  not  pay  any  dividends  for a
protracted  period.  They are  selected  for the Fund's  portfolio  because  the
Manager believes the price of the stock will increase over time.

     Foreign Securities. The Fund can buy foreign equity and debt securities. It
would  buy debt  securities  primarily  for  liquidity  or  defensive  purposes,
including debt securities issued by foreign companies or by foreign  governments
and their agencies.  The Fund currently does not expect to have more than 35% of
its total assets invested in foreign securities,  although it has the ability to
invest in them without limit.

     The change in value of a foreign  currency  against  the U.S.  dollar  will
result in a change in the U.S.  dollar value of securities  denominated  in that
foreign  currency.  Foreign  issuers are not subject to the same  accounting and
disclosure requirements that U.S. companies are subject to. The value of foreign
investments may be affected by exchange  control  regulations,  expropriation or
nationalization  of a company's assets,  foreign taxes,  delays in settlement of
transactions, changes in governmental economic or monetary policy in the U.S. or
abroad,  or other  economic or  political  factors.  These risks could cause the
prices of foreign stocks to fall and therefore depress the Fund's share prices.


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

     Investments  By "Funds of Funds." Class Y shares of the Fund are offered as
an investment to certain other  Oppenheimer  funds that act as "funds of funds."
The Fund's Board of Trustees has approved making the Fund's shares  available as
an  investment  for those  funds.  Those  funds of funds may invest  significant
portions  of their  assets  in shares  of the  Fund.  From  time to time,  those
investments may also represent a significant  portion of the Fund's  outstanding
shares or of its outstanding Class Y shares.  Those funds of funds typically use
asset  allocation  strategies under which they may increase or reduce the amount
of their  investment  in the  Fund  frequently,  and may do so on a daily  basis
during  volatile  market  conditions.   If  the  size  of  those  purchases  and
redemptions of the Fund's shares by the funds of funds were significant relative
to the size of the Fund's assets, the Fund could be required to purchase or sell
portfolio securities, increasing its transaction costs and possibly reducing its
performance  for all share  classes.  For a further  discussion  of the possible
effects of frequent  trading in the Fund's  shares,  please refer to the section
titled "Are There Limitations on Frequent Purchases, Redemptions and Exchanges?"
in this prospectus.


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

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

     Other Equity  Securities.  While the Fund mainly buys common stocks, it can
also buy preferred  stocks and  securities  convertible  into common stock.  The
Manager considers some convertible securities to be "equity equivalents" because
of the  conversion  feature and in that case their rating has less impact on the
Manager's investment decision than in the case of other debt securities.

     Illiquid and Restricted  Securities.  Investments  may be illiquid  because
they do not have an active trading market,  making it difficult to value them or
dispose of them promptly at an acceptable price.  Restricted securities may have
terms that limit their  resale to other  investors  or may require  registration
under applicable securities laws before they can be sold publicly. The Fund will
not invest more than 10% of its net assets in illiquid or restricted securities.
The Board can increase that limit to 15%. Certain restricted securities that are
eligible for resale to qualified institutional  purchasers may not be subject to
that limit. The Manager monitors  holdings of illiquid  securities on an ongoing
basis to determine whether to sell any holdings to maintain adequate liquidity.

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

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

     Hedging.  The Fund can buy and sell derivatives such as futures  contracts,
put and call options,  and forward  contracts for "hedging"  purposes.  The Fund
does not currently use hedging extensively.  It has limits on its use of hedging
instruments and is not required to use them in seeking its objective.

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

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


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

     Temporary  Defensive  and  Interim  Investments.  In  times of  adverse  or
unstable  market,  economic or political  conditions,  the Fund can invest up to
100%  of  its  total  assets  in  temporary   defensive   investments  that  are
inconsistent  with the Fund's principal  investment  strategies.  Generally they
would be cash equivalents (such as commercial paper),  money market instruments,
short-term  debt  securities,   U.S.   government   securities,   or  repurchase
agreements.  The Fund could  also hold these  types of  securities  pending  the
investment of proceeds  from the sale of Fund shares or portfolio  securities or
to meet anticipated  redemptions of Fund shares.  To the extent the Fund invests
defensively in these securities,  it might not achieve its investment  objective
of capital appreciation.

     Portfolio Turnover. A change in the securities held by the Fund is known as
"portfolio  turnover." The Fund can engage in active and frequent trading to try
to achieve  its  objective,  and may have a high  portfolio  turnover  rate (for
example,  over 100%),  although the Manger does not expect  turnover to be high.
Increased  portfolio turnover creates higher brokerage and transaction costs for
the Fund (and may reduce  performance).  If the Fund realizes capital gains when
it sells its  portfolio  investments,  it must  generally pay those gains out to
shareholders,  increasing their taxable distributions.  The Financial Highlights
table at the end of this  Prospectus  shows the Fund's  portfolio  turnover rate
during prior fiscal years.


     Loans of  Portfolio  Securities.  The Fund may make loans of its  portfolio
securities, with a value not to exceed 25% of its net assets, in accordance with
Securities  Lending  Guidelines  adopted by the Board of Trustees.  The Fund has
entered  into a  securities  lending  agreement  with JP  Morgan  Chase for that
purpose.  Under the agreement,  the Fund's portfolio securities may be loaned to
brokers,  dealers and  financial  institutions,  provided that such loans comply
with the  collateralization  and other  requirements  of the securities  lending
agreement,   the  Securities  Lending   Guidelines  and  applicable   government
regulations.  JP Morgan  Chase has agreed to bear the risk that a  borrower  may
default on its obligation to return loaned securities. However, the Fund will be
responsible  for  risks  associated  with  the  investment  of cash  collateral,
including  the risk of a default  by the  issuer  of a  security  in which  cash
collateral  has been  invested.  If that occurs,  the Fund may incur  additional
costs in  seeking  to  obtain  the  collateral  or may lose  the  amount  of the
collateral  investment.  The Fund may also  lose  money if the value of the cash
collateral decreases.

     PORTFOLIO   HOLDINGS.   The  Fund's  portfolio  holdings  are  included  in
semi-annual  and annual reports that are distributed to shareholders of the Fund
within 60 days  after the close of the  period  for which  such  report is being
made.  The Fund also  discloses  its  portfolio  holdings in its  Statements  of
Investments  on Form N-Q,  which  are filed  with the  Securities  and  Exchange
Commission  no later than 60 days after the close of its first and third  fiscal
quarters.  These required  filings are publicly  available at the Securities and
Exchange Commission. Therefore, portfolio holdings of the Fund are made publicly
available  no later than 60 days  after the close of each of the  Fund's  fiscal
quarters.

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


How the Fund Is Managed


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

     The Manager has been an investment  advisor since 1960. The Manager and its
subsidiaries and controlled  affiliates managed more than $220 billion in assets
as of September 30, 2006,  including  other  Oppenheimer  funds with more than 6
million  shareholder  accounts.  The  Manager is located at Two World  Financial
Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008.

     Advisory Fees. Under the Investment Advisory  Agreement,  the Fund pays the
Manager an advisory  fee,  calculated on the daily net assets of the Fund, at an
annual rate that  declines as the Fund's  assets  grow:  0.75% of the first $200
million  of  average  annual  net  assets  of the  Fund,  0.72% of the next $200
million,  0.69% of the next $200 million,  0.66% of the next $200 million, 0.60%
of the next $700 million, 0.58% of the next $1.0 billion, 0.56% of the next $2.0
billion,  0.54% of the next $2.0 billion,  0.52% of the next $2.0 billion, 0.50%
of the next 2.5  billion,  and 0.48% of average  annual  net  assets  over $11.0
billion.  The Fund's  management  fee for its last fiscal year ended  August 31,
2006 was 0.57% of average annual net assets for each class of shares.

     A discussion regarding the basis for the Board of Trustees' approval of the
Fund's  investment  advisory  contract is  available  in the Fund's  Semi-Annual
Report to shareholders for the six month period ended February 28, 2006.


     Portfolio Managers.  The Fund's portfolio is co-managed by William L. Wilby
and Marc L. Baylin, who are primarily  responsible for the day-to-day management
of the Fund's investments.


     William  L.  Wilby,  CFA,  is a Vice  President  of the Fund and has been a
portfolio manager of the Fund since October 2005, a Senior Vice President of the
Manager since July 1994 and a Senior Investment Officer and Director of Equities
of the Manager since July 2004. Mr. Wilby was Director of  International  Global
Equities of the Manager  from  December  1992  through July 2004 and Senior Vice
President of  HarbourView  Asset  Management  Corporation  from May 1999 through
November  2001.  Before  joining  OppenheimerFunds  in 1991,  Mr.  Wilby  was an
International Investment Strategist at Brown Brothers Harriman & Co., a Managing
Director and Portfolio Manager at AIG Global Investors, an International Pension
Manager  at  Northern  Trust  Bank in  Chicago  and an  International  Financial
Economist at Northern Trust Bank and at the Federal Reserve Bank in Chicago.

     Marc L.  Baylin,  CFA, is a Vice  President of the Fund and the Manager and
has been a member of the Growth Equity  Investment Team since September 2005. He
was Managing Director and Lead Portfolio Manager at JP Morgan Fleming Investment
Management  from June 2002 to August  2005 and was a Vice  President  of T. Rowe
Price, where he was an analyst from June 1993 and a portfolio manager from March
1999 to June 2002.

     The Statement of Additional  Information  provides  additional  information
about the Portfolio Managers' compensation, other accounts they manage and their
ownership of Fund shares.


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

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

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


ABOUT YOUR ACCOUNT

How to Buy Shares


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

     Buying Shares  Through Your Dealer.  You can buy shares through any dealer,
broker or financial institution that has a sales agreement with the Distributor.
Your dealer will place your order with the Distributor on your behalf.  A broker
or dealer may charge a processing fee for that service.

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

     o Paying by Federal Funds Wire.  Shares  purchased  through the Distributor
may be paid for by Federal  Funds  wire.  The minimum  wire  purchase is $2,500.
Before sending a wire, call the Distributor's  Wire Department at 1.800.225.5677
to notify the Distributor of the wire and to receive further instructions.

     o Buying Shares Through OppenheimerFunds AccountLink. With AccountLink, you
can pay for shares by electronic funds transfers from your bank account.  Shares
are  purchased  for your  account by a transfer of money from your bank  account
through the  Automated  Clearing  House  (ACH)  system.  You can  provide  share
purchase  instructions  automatically,  under an Asset Builder  Plan,  described
below,  or by telephone  instructions  using  OppenheimerFunds  PhoneLink,  also
described below. Please refer to "AccountLink," below for more details.

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


     WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares  with  a  minimum  initial  investment  of  $1,000  and  make  additional
investments  at any time  with as  little as $50.  There  are  reduced  minimums
available under the following special investment plans:

     o If you establish  one of the many types of retirement  plan accounts that
OppenheimerFunds  offers,  more fully  described  below under "Special  Investor
Services," you can start your account with as little as $500.

     o By using an Asset Builder Plan or Automatic Exchange Plan (details are in
the Statement of Additional Information),  or government allotment plan, you can
make an  initial  investment  for as  little  as $500.  The  minimum  subsequent
investment is $50,  except that for any account  established  under one of these
plans prior to November 1, 2002, the minimum  additional  investment will remain
$25.

     o A  minimum  initial  investment  of $250  applies  to  certain  fee based
programs that have an agreement  with the  Distributor.  The minimum  subsequent
investment for those programs is $50.

     o  The  minimum  investment  requirement  does  not  apply  to  reinvesting
dividends  from the Fund or other  Oppenheimer  funds (a list of them appears in
the Statement of Additional Information,  or you can ask your dealer or call the
Transfer Agent), or reinvesting  distributions  from unit investment trusts that
have made arrangements with the Distributor.


     AT WHAT PRICE ARE SHARES  SOLD?  Shares  are sold at their  offering  price
which is the net asset  value per  share  plus any  initial  sales  charge  that
applies.  The offering  price that  applies to a purchase  order is based on the
next  calculation  of the net  asset  value  per  share  that is made  after the
Distributor receives the purchase order at its offices in Colorado, or after any
agent appointed by the Distributor  receives the order.  Your financial  adviser
can provide you with more  information  regarding  the time you must submit your
purchase order and whether the adviser is an authorized agent for the receipt of
purchase orders.


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

     The net asset value per share for a class of shares on a "regular  business
day" is determined  by dividing the value of the Fund's net assets  attributable
to that class by the number of shares of that class  outstanding on that day. To
determine net asset values, the Fund assets are valued primarily on the basis of
current market quotations.  If market quotations are not readily available or do
not accurately reflect fair value for a security (in the Manager's  judgment) or
if a security's value has been materially affected by events occurring after the
close of the market on which the security is principally  traded,  that security
may be valued by another method that the Board of Trustees  believes  accurately
reflects the fair value. Because some foreign securities trade in markets and on
exchanges that operate on weekends and U.S. holidays,  the values of some of the
Fund's  foreign  investments  may  change on days when  investors  cannot buy or
redeem Fund shares.

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

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

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

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

     Buying Through a Dealer.  If you buy shares  through an authorized  dealer,
your dealer  must  receive the order by the close of the NYSE for you to receive
that day's offering  price.  If your order is received on a day when the NYSE is
closed or after it is closed,  the order will  receive the next  offering  price
that is determined.


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


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



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



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

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

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

     Class Y Shares.  Class Y shares are offered  only to certain  institutional
investors that have a special agreement with the Distributor.


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


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

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

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

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

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

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

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

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


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


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

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


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

Less  than  $25,000                     5.75%                   6.10%              4.75%

$25,000  or more  but less
than $50,000                            5.50%                   5.82%              4.75%

$50,000  or more  but less
than $100,000                           4.75%                   4.99%              4.00%

$100,000  or more but less
than $250,000                           3.75%                   3.90%              3.00%

$250,000  or more but less
than $500,000                           2.50%                   2.56%              2.00%

$500,000  or more but less
than $1 million                         2.00%                   2.04%               1.60%

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


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

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

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

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


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

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


     Other  Special  Sales Charge  Arrangements  and  Waivers.  The Fund and the
Distributor  offer other  opportunities to purchase shares without  front-end or
contingent  deferred sales charges under the programs  described below. The Fund
reserves the right to amend or  discontinue  these  programs at any time without
prior notice.

     o Dividend  Reinvestment.  Dividends  and/or  capital  gains  distributions
received by a shareholder from the

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

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

     o  Reinvestment  Privilege.  Within six months of a  redemption  of certain
Class A and Class B shares,  the proceeds may be reinvested in Class A shares of
the Fund,  or any of the other  Oppenheimer  funds into which shares of the Fund
may be exchanged,  without a sales charge. This privilege applies to redemptions
of Class A shares  that were  subject to an initial  sales  charge or Class A or
Class B shares that were  subject to a  contingent  deferred  sales  charge when
redeemed.  The  investor  must ask the  Transfer  Agent or his or her  financial
intermediary  for that privilege at the time of  reinvestment  and must identify
the account from which the redemption was made.

     o Other Special Reductions and Waivers.  The Fund and the Distributor offer
additional  arrangements  to reduce or eliminate  front-end  sales charges or to
waive  contingent  deferred sales charges for certain types of transactions  and
for certain  classes of  investors  (primarily  retirement  plans that  purchase
shares in special  programs  through the  Distributor).  These are  described in
greater detail in Appendix B to the Statement of Additional  Information,  which
may be  ordered  by  calling  1.800.225.5677  or  through  the  OppenheimerFunds
website, at  www.oppenheimerfunds.com  (follow the hyperlinks:  "Access Accounts
and  Services" - "Forms & Literature"  - "Order  Literature"  -  "Statements  of
Additional  Information").  A  description  of these  waivers and special  sales
charge  arrangements  is also  available  for  viewing  on the  OppenheimerFunds
website (follow the hyperlinks:  "Research  Funds" - "Fund  Documents" - "View a
description  . . .").  To receive a waiver or special  sales  charge  rate under
these  programs,  the purchaser must notify the  Distributor (or other financial
intermediary  through which shares are being purchased) at the time of purchase,
or notify the Transfer  Agent at the time of redeeming  shares for those waivers
that apply to contingent deferred sales charges.

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


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


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


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


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

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

     o the original net asset value of the redeemed shares.

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

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

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

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

Years Since Beginning of Month in Which Purchase Order      Contingent Deferred Sales Charge on Redemptions in
was Accepted                                                That Year

                                                            (As % of Amount Subject to Charge)
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
0 - 1                                                       5.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
1 - 2                                                       4.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
2 - 3                                                       3.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
3 - 4                                                       3.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
4 - 5                                                       2.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
5 - 6                                                       1.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
More than 6                                                 None
- ----------------------------------------------------------- --------------------------------------------------------

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

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


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


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


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

     o The  group  retirement  plan  is  terminated  or  Class N  shares  of all
Oppenheimer funds are terminated as an

     investment  option of the plan and Class N shares  are  redeemed  within 18
months  after the plan's  first  purchase  of Class N shares of any  Oppenheimer
fund, or

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

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


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


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


DISTRIBUTION AND SERVICE (12b-1) PLANS.


     Service  Plan for Class A Shares.  The Fund has adopted a Service  Plan for
Class A  shares.  It  reimburses  the  Distributor  for a  portion  of its costs
incurred  for  services   provided  to  accounts   that  hold  Class  A  shares.
Reimbursement  is made quarterly at an annual rate of up to 0.25% of the average
annual net assets of Class A shares of the Fund. The Distributor  currently uses
all  of  those  fees  to  pay  dealers,   brokers,  banks  and  other  financial
institutions  periodically  for providing  personal  service and  maintenance of
accounts of their  customers  that hold Class A shares.  With respect to Class A
shares  subject to a Class A  contingent  deferred  sales  charge  purchased  by
grandfathered retirement accounts, the Distributor pays the 0.25% service fee to
dealers in advance  for the first year after the shares are sold by the  dealer.
The Distributor retains the first year's service fee paid by the Fund. After the
shares  have been held by  grandfathered  retirement  accounts  for a year,  the
Distributor pays the service fee to dealers periodically.



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


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


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

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

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

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


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


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


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

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

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

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


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


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


Special Investor Services

     ACCOUNTLINK.  You can use our AccountLink feature to link your Fund account
with an account at a U.S.  bank or other  financial  institution.  It must be an
Automated Clearing House (ACH) member. AccountLink lets you:

     o transmit funds  electronically to purchase shares by telephone (through a
service  representative  or by PhoneLink) or  automatically  under Asset Builder
Plans, or

     o have the Transfer Agent send  redemption  proceeds or transmit  dividends
and distributions directly to your bank account.  Please call the Transfer Agent
for more information.

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


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


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

     Purchasing  Shares.  You may  purchase  shares in amounts up to $100,000 by
phone,  by  calling  1.800.225.5677.   You  must  have  established  AccountLink
privileges  to link your bank account with the Fund to pay for these  purchases.

     Exchanging Shares. With the OppenheimerFunds Exchange Privilege,  described
below, you can exchange shares  automatically by phone from your Fund account to
another  OppenheimerFunds  account you have already  established  by calling the
special PhoneLink number.

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


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

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

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


     RETIREMENT  PLANS.  You may buy shares of the Fund for your retirement plan
account.  If you  participate  in a plan  sponsored by your  employer,  the plan
trustee  or  administrator  must buy the  shares  for  your  plan  account.  The
Distributor also offers a number of different  retirement plans that individuals
and employers can use:

     Individual  Retirement  Accounts  (IRAs).  These include regular IRAs, Roth
IRAs,  SIMPLE IRAs and rollover IRAs.

     SEP-IRAs.  These  are  Simplified  Employee  Pension  Plan  IRAs for  small
business owners or self-employed  individuals.

     403(b)(7)  Custodial Plans.  These are tax-deferred  plans for employees of
eligible  tax-exempt  organizations,  such as schools,  hospitals and charitable
organizations.  401(k) Plans. These are special retirement plans for businesses.

     Pension and  Profit-Sharing  Plans. These plans are designed for businesses
and self-employed individuals.

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

How to Sell Shares


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


     Certain Requests Require a Signature Guarantee. To protect you and the Fund
from  fraud,  the  following  redemption  requests  must be in writing  and must
include a signature  guarantee (although there may be other situations that also
require a  signature  guarantee):  o You wish to redeem more than  $100,000  and
receive a check

     o The  redemption  check is not payable to all  shareholders  listed on the
account statement

     o The redemption check is not sent to the address of record on your account
statement

     o Shares are being  transferred to a Fund account with a different owner or
name

     o Shares are being redeemed by someone (such as an Executor) other than the
owners.


     Where Can You Have Your  Signature  Guaranteed?  The  Transfer  Agent  will
accept a guarantee  of your  signature  by a number of  financial  institutions,
including:

     o a U.S. bank,  trust  company,  credit union or savings  association,

     o a foreign bank that has a U.S.  correspondent  bank,

     o a U.S. registered dealer or broker in securities, municipal securities or
government  securities,  or

     o a U.S. national securities exchange, a registered securities  association
or a clearing agency. If you are signing on behalf of a corporation, partnership
or other  business or as a  fiduciary,  you must also  include your title in the
signature.

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

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


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

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

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


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

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

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

Are There Limits on Amounts Redeemed by Telephone?

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

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

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


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


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

     A contingent  deferred  sales charge will be based on the lesser of the net
asset value of the redeemed shares at the time of redemption or the original net
asset value. A contingent deferred sales charge is not imposed on:

     o the amount of your account value  represented by an increase in net asset
value over the initial purchase price,

     o shares  purchased  by the  reinvestment  of  dividends  or capital  gains
distributions, or

     o shares redeemed in the special  circumstances  described in Appendix B to
the  Statement of  Additional  Information.  To  determine  whether a contingent
deferred  sales charge  applies to a redemption,  the Fund redeems shares in the
following order:

     1.  shares   acquired  by  reinvestment  of  dividends  and  capital  gains
distributions,

     2. shares held for the holding period that applies to the class, and

     3. shares held the longest during the holding period.

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

How to Exchange Shares

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

     o Shares of the fund  selected for exchange  must be available  for sale in
your state of residence.

     o The prospectus of the selected fund must offer the exchange privilege.

     o When you  establish  an account,  you must hold the shares you buy for at
least seven days before you can  exchange  them.  After your account is open for
seven days, you can exchange shares on any regular  business day, subject to the
limitations described below.

     o You must meet the minimum purchase requirements for the selected fund.

     o  Generally,  exchanges  may be made only between  identically  registered
accounts,  unless all account owners send written exchange  instructions  with a
signature  guarantee.

     o Before  exchanging into a fund, you must obtain its prospectus and should
read it carefully.

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

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

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


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


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

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


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


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


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

ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?


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

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

     o Timing of Exchanges. Exchanged shares are normally redeemed from one fund
and the proceeds are  reinvested  in the fund  selected for exchange on the same
regular  business  day on  which  the  Transfer  Agent or its  agent  (such as a
financial  intermediary holding the investor's shares in an "omnibus" or "street
name" account) receives an exchange request that conforms to these policies. The
request  must be received  by the close of the NYSE that day,  which is normally
4:00 p.m.  Eastern  time,  but may be earlier on some days,  in order to receive
that day's net asset value on the exchanged  shares.  Exchange requests received
after the close of the NYSE will  receive  the next net asset  value  calculated
after  the  request  is  received.   However,   the  Transfer  Agent  may  delay
transmitting  the proceeds  from an exchange for up to five  business days if it
determines,  in its  discretion,  that an earlier  transmittal of the redemption
proceeds  to the  receiving  fund would be  detrimental  to either the fund from
which the  exchange  is being made or the fund into which the  exchange is being
made. The proceeds will be invested in the fund into which the exchange is being
made at the next net asset value calculated after the proceeds are received.  In
the event that such a delay in the reinvestment of proceeds occurs, the Transfer
Agent will notify you or your financial representative.

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


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


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

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


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


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

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

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

     Additional  Policies  and  Procedures.  The Fund's  Board has  adopted  the
following  additional  policies and  procedures  to detect and prevent  frequent
and/or excessive exchanges and purchase and redemption activity:

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

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


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


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


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


Shareholder Account Rules and Policies


     More  information  about the Fund's  policies  and  procedures  for buying,
selling and  exchanging  shares is  contained  in the  Statement  of  Additional
Information.

     A $12 annual "Minimum  Balance Fee" is assessed on each Fund account with a
value of less than $500. The fee is

     automatically  deducted  from each  applicable  Fund  account  annually  in
September.  See the  Statement of  Additional  Information  to learn how you can
avoid this fee and for circumstances under which this fee will not be assessed.

     The  offering  of shares  may be  suspended  during any period in which the
determination of net asset value is suspended, and the offering may be suspended
by the Board of Trustees at any time the Board believes it is in the Fund's best
interest to do so.

     Telephone  transaction  privileges for purchases,  redemptions or exchanges
may be modified,  suspended or terminated by the Fund at any time. The Fund will
provide you notice  whenever it is  required to do so by  applicable  law. If an
account has more than one owner, the Fund and the Transfer Agent may rely on the
instructions of any one owner.  Telephone  privileges apply to each owner of the
account  and the  dealer  representative  of record for the  account  unless the
Transfer Agent receives cancellation  instructions from an owner of the account.

     The  Transfer  Agent  will  record  any  telephone  calls  to  verify  data
concerning  transactions  and has  adopted  other  procedures  to  confirm  that
telephone  instructions  are  genuine,  by  requiring  callers  to  provide  tax
identification  numbers  and  other  account  data  or by  using  PINs,  and  by
confirming such  transactions  in writing.  The Transfer Agent and the Fund will
not be liable for  losses or  expenses  arising  out of  telephone  instructions
reasonably  believed to be genuine.

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

     Dealers   that  perform   account   transactions   for  their   clients  by
participating in NETWORKING through the National Securities Clearing Corporation
are  responsible  for  obtaining  their  clients'  permission  to perform  those
transactions,  and are responsible to their clients who are  shareholders of the
Fund if the dealer performs any transaction erroneously or improperly.

     The redemption price for shares will vary from day to day because the value
of the securities in the Fund's  portfolio  fluctuates.  The  redemption  price,
which is the net asset value per share,  will normally  differ for each class of
shares.  The  redemption  value of your  shares  may be more or less than  their
original cost.

     Payment for redeemed shares  ordinarily is made in cash. It is forwarded by
check,  or  through  AccountLink  or by Federal  Funds  wire (as  elected by the
shareholder)  within seven days after the  Transfer  Agent  receives  redemption
instructions in proper form. However, under unusual circumstances  determined by
the Securities and Exchange Commission, payment may be delayed or suspended. For
accounts  registered  in the name of a  broker-dealer,  payment will normally be
forwarded within three business days after redemption.

     The Transfer Agent may delay  processing any type of redemption  payment as
described  under "How to Sell Shares" for recently  purchased  shares,  but only
until the  purchase  payment has  cleared.  That delay may be as much as 10 days
from the date the  shares  were  purchased.  That  delay may be  avoided  if you
purchase shares by Federal Funds wire or certified check.

     Involuntary  redemptions  of small  accounts may be made by the Fund if the
account  value has fallen  below $200 for  reasons  other than the fact that the
market value of shares has dropped. In some cases,  involuntary  redemptions may
be made to repay the  Distributor  for  losses  from the  cancellation  of share
purchase orders.

     Shares may be "redeemed  in kind" under  unusual  circumstances  (such as a
lack of liquidity in the Fund's portfolio to meet redemptions).  This means that
the  redemption  proceeds  will be paid with liquid  securities  from the Fund's
portfolio.  If the Fund  redeems your shares in kind,  you may bear  transaction
costs  and will  bear  market  risks  until  such  time as such  securities  are
converted into cash.

     Federal  regulations may require the Fund to obtain your name, your date of
birth (for a natural person), your residential street address or principal place
of business and your Social Security Number,  Employer  Identification Number or
other  government  issued  identification  when you open an account.  Additional
information  may be  required  in  certain  circumstances  or to open  corporate
accounts.  The Fund or the Transfer Agent may use this information to attempt to
verify your  identity.  The Fund may not be able to  establish an account if the
necessary information is not received. The Fund may also place limits on account
transactions  while it is in the process of attempting to verify your  identity.
Additionally,  if the Fund is unable to verify your identity  after your account
is  established,  the Fund may be  required to redeem your shares and close your
account.

     "Backup  withholding"  of federal income tax may be applied against taxable
dividends,  distributions and redemption proceeds  (including  exchanges) if you
fail to furnish the Fund your  correct,  certified  Social  Security or Employer
Identification  Number when you sign your  application,  or if you  under-report
your income to the Internal Revenue Service.

     To avoid sending duplicate copies of materials to households, the Fund will
mail only one copy of each prospectus,  annual and semi-annual report and annual
notice of the Fund's  privacy policy to  shareholders  having the same last name
and address on the Fund's records.  The consolidation of these mailings,  called
householding, benefits the Fund through reduced mailing expense.


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

Dividends, Capital Gains and Taxes

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

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

     WHAT CHOICES DO YOU HAVE FOR  RECEIVING  DISTRIBUTIONS?  When you open your
account,  specify on your application how you want to receive your dividends and
distributions.  You have four options:

     Reinvest  All  Distributions  in the Fund.  You can elect to  reinvest  all
dividends and capital  gains  distributions  in  additional  shares of the Fund.

     Reinvest  Dividends  or  Capital  Gains.  You can  elect to  reinvest  some
distributions  (dividends,  short-term  capital gains or long-term capital gains
distributions)  in the Fund while receiving the other types of  distributions by
check or having them sent to your bank account through AccountLink.

     Receive All Distributions in Cash. You can elect to receive a check for all
dividends and capital gains distributions or have them sent to your bank through
AccountLink.

     Reinvest Your Distributions in Another  OppenheimerFunds  Account.  You can
reinvest   all   distributions   in  the  same   class  of  shares  of   another
OppenheimerFunds account you have established.

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

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


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

     Avoid  "Buying a  Distribution."  If you buy  shares on or just  before the
ex-dividend date, or just before the Fund declares a capital gains distribution,
you will pay the full  price for the  shares  and then  receive a portion of the
price back as a taxable dividend or capital gain.

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

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

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

Financial Highlights


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




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

CLASS A  YEAR ENDED AUGUST 31,                          2006            2005             2004              2003            2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $     41.45     $     37.57      $     35.39       $     30.72     $     41.11
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                            (.12) 1          .26 1,2          .01              (.05)           (.09)
Net realized and unrealized gain (loss)                 2.00            3.62             2.17              4.72           (9.31)
                                                 -----------------------------------------------------------------------------------
Total from investment operations                        1.88            3.88             2.18              4.67           (9.40)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    (.25)             --               --                --              --
Distributions from net realized gain                      --              --               --                --            (.99)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $     43.08     $     41.45      $     37.57       $     35.39     $     30.72
                                                 ===================================================================================

- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                      4.53%          10.33%            6.16%            15.20%         (23.48)%
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $ 5,278,253     $ 5,633,688      $ 5,218,310       $ 4,288,332     $ 3,219,391
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $ 5,569,912     $ 5,597,821      $ 4,971,315       $ 3,655,594     $ 3,204,793
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                           (0.28)%          0.64% 2          0.09%            (0.11)%         (0.15)%
Total expenses                                          1.07% 5         1.06% 5          1.09% 5,6         1.17% 5         1.22% 5,6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   83%             38%              45%               42%             28%


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

2. Net investment income per share and the net investment income ratio include
$.17 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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



                   31 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

CLASS B  YEAR ENDED AUGUST 31,                        2006            2005              2004           2003           2002
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $   38.08     $     34.82       $     33.09    $     28.95    $     39.09
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                   (.45) 1         (.08) 1,2         (.36)          (.31)          (.26)
Net realized and unrealized gain (loss)               1.84            3.34              2.09           4.45          (8.89)
                                                 ---------------------------------------------------------------------------
Total from investment operations                      1.39            3.26              1.73           4.14          (9.15)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    --              --                --             --             --
Distributions from net realized gain                    --              --                --             --           (.99)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $   39.47     $     38.08       $     34.82    $     33.09    $     28.95
                                                 ===========================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                    3.65%           9.36%             5.23%         14.30%        (24.07)%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $ 851,836     $ 1,041,045       $ 1,104,348    $ 1,114,052    $ 1,029,322
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $ 964,658     $ 1,099,380       $ 1,169,402    $ 1,001,311    $ 1,221,005
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                  (1.13)%         (0.21)% 2         (0.81)%        (0.89)%        (0.92)%
Total expenses                                        1.93%           1.93%             1.99%          2.10%          1.99%
Expenses after payments and waivers
and reduction to custodian expenses                   1.92%           1.93%             1.97%          1.96%          1.99%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 83%             38%               45%            42%            28%


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

2. Net investment income per share and the net investment income ratio include
$.16 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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



                   32 | OPPENHEIMER CAPITAL APPRECIATION FUND



CLASS C  YEAR ENDED AUGUST 31,                          2006         2005            2004            2003          2002
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period               $   37.73     $  34.47       $   32.72       $   28.63     $   38.64
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                     (.41) 1      (.05) 1,2       (.16)           (.23)         (.11)
Net realized and unrealized gain (loss)                 1.82         3.31            1.91            4.32         (8.91)
                                                   -------------------------------------------------------------------------
Total from investment operations                        1.41         3.26            1.75            4.09         (9.02)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      --           --              --              --            --
Distributions from net realized gain                      --           --              --              --          (.99)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                     $   39.14     $  37.73       $   34.47       $   32.72     $   28.63
                                                   =========================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                      3.74%        9.46%           5.35%          14.28%       (24.01)%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)           $ 646,333     $691,467       $ 638,676       $ 540,118     $ 450,989
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                  $ 684,056     $681,646       $ 623,172       $ 463,768     $ 477,369
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                    (1.05)%      (0.14)% 2       (0.69)%         (0.89)%       (0.87)%
Total expenses                                          1.84% 5      1.84% 5         1.87% 5,6       1.96% 5       1.94% 5,6
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   83%          38%             45%             42%           28%


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

2. Net investment income per share and the net investment income ratio include
$.16 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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




                   33 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

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

PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period               $   40.91     $   37.21      $   35.17    $   30.60    $  41.05
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                            (.27) 1        .11 1,2       (.08)        (.10)       (.07) 1
Net realized and unrealized gain (loss)                 1.98          3.59           2.12         4.67       (9.39) 1
                                                   ------------------------------------------------------------------
Total from investment operations                        1.71          3.70           2.04         4.57       (9.46)
- ---------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    (.13)           --             --           --          --
Distributions from net realized gain                      --            --             --           --        (.99)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                     $   42.49     $   40.91      $   37.21    $   35.17    $  30.60
                                                   ==================================================================

- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                      4.16%         9.94%          5.80%       14.94%     (23.67)%
- ---------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)           $ 250,167     $ 245,932      $ 190,696    $ 111,374    $ 72,178
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                  $ 253,590     $ 221,007      $ 154,605    $  86,761    $ 38,232
- ------------------------------------------------------------------------------ --------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                           (0.63)%        0.27% 2       (0.25)%      (0.35)%     (0.37)%
Total expenses                                          1.42%         1.42%          1.46%        1.46%       1.46%
Expenses after payments and waivers
and reduction to custodian expenses                     1.42%         1.42%          1.44%        1.42%       1.46%
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   83%           38%            45%          42%         28%

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

2. Net investment income per share and the net investment income ratio include
$.17 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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




                   34 | OPPENHEIMER CAPITAL APPRECIATION FUND



CLASS Y  YEAR ENDED AUGUST 31,                          2006              2005             2004            2003            2002
- ----------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period               $   42.52       $     38.40      $     36.04     $     31.16       $   41.55
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                    .05 1             .45 1,2          .09             .01             .02 1
Net realized and unrealized gain (loss)                 2.05              3.67             2.27            4.87           (9.42) 1
                                                   -------------------------------------------------------------------------------
Total from investment operations                        2.10              4.12             2.36            4.88           (9.40)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    (.41)               --               --              --              --
Distributions from net realized gain                      --                --               --              --            (.99)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                     $   44.21       $     42.52      $     38.40     $     36.04       $   31.16
                                                   ===============================================================================

- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                      4.93%            10.73%            6.55%          15.66%         (23.23)%
- ----------------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)           $ 649,143       $ 1,186,649      $ 1,391,718     $ 1,152,318       $ 864,437
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                  $ 766,929       $ 1,210,587      $ 1,327,404     $   930,500       $ 968,867
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                   0.11%             1.10% 2          0.47%           0.29%           0.17%
Total expenses                                          0.70% 5,6         0.69% 5          0.71% 5         0.78% 5,6       0.89% 5
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   83%               38%              45%             42%             28%

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

2. Net investment income per share and the net investment income ratio include
$.18 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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



INFORMATION AND SERVICES

For More Information on Oppenheimer Capital Appreciation Fund
     The following  additional  information  about the Fund is available without
charge upon request:


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

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


How to Get More Information

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


- ------------------------------------------- ---------------------------------------------------------------------
By Telephone:                      Call OppenheimerFunds Services toll-free:
                                   1.800.CALL OPP (225.5677)
- ------------------------------------------- ---------------------------------------------------------------------
- ------------------------------------------- ---------------------------------------------------------------------
By Mail:                           Write to:
                                   OppenheimerFunds Services
                                   P.O. Box 5270
                                   Denver, Colorado 80217-5270
- ------------------------------------------- ---------------------------------------------------------------------
- ------------------------------------------- ---------------------------------------------------------------------
On the Internet:                   You can request these documents by e-mail
                                   or through the OppenheimerFunds website.
                                   You may also read or download certain
                                   documents on the OppenheimerFunds website at:
                                   www.oppenheimerfunds.com
- ------------------------------------------- ---------------------------------------------------------------------


     Information   about  the  Fund   including   the  Statement  of  Additional
Information  can be reviewed  and copied at the SEC's Public  Reference  Room in
Washington,  D.C.  Information on the operation of the Public Reference Room may
be obtained by calling the SEC at 1.202.942.8090.  Reports and other information
about the Fund are available on the EDGAR database on the SEC's Internet website
at  www.sec.gov.  Copies may be obtained  after payment of a duplicating  fee by
electronic request at the SEC's e-mail address: publicinfo@sec.gov or by writing
to the SEC's Public Reference Section, Washington, D.C. 20549-0102.

     No one has been authorized to provide any information  about the Fund or to
make any  representations  about the Fund other than what is  contained  in this
Prospectus.  This  Prospectus is not an offer to sell shares of the Fund,  nor a
solicitation  of an offer to buy shares of the Fund,  to any person in any state
or other jurisdiction where it is unlawful to make such an offer.




The Fund's shares are distributed by:   [logo] OppenheimerFunds Distributor, Inc.
The Fund's SEC File No.: 811-3105
PR0320.001.1006
Printed on recycled paper




                                           APPENDIX TO THE PROSPECTUS OF
                                       OPPENHEIMER CAPITAL APPRECIATION FUND

     Graphic  material  included  in  the  Prospectus  of  Oppenheimer   Capital
Appreciation Fund ("the Fund") "Annual Total Returns (Class A) (as of 12/31 each
year)":

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

                ------------------------ -----------------------
                Calendar Year Ended:             Annual
                                             Total Returns
                ------------------------ -----------------------
                ------------------------ -----------------------

                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/96                        27.96%
                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/97                        26.33%
                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/98                        24.04%
                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/99                       42.09%
                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/00                       -1.29%
                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/01                       -12.69%
                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/02                       -26.26%
                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/03                        29.46%
                ------------------------ -----------------------
                ------------------------ -----------------------
                12/31/04                        6.46%
                ------------------------ -----------------------
                ------------------------ -----------------------

             12/31/05                        4.70%

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


Oppenheimer
Capital Appreciation Fund

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


Statement of Additional Information dated October 26, 2006

     This Statement of Additional Information is not a Prospectus. This document
contains  additional  information about the Fund and supplements  information in
the  Prospectus  dated  October 26, 2006.  It should be read  together  with the
Prospectus.  You can obtain  the  Prospectus  by writing to the Fund's  Transfer
Agent,  OppenheimerFunds  Services, at P.O. Box 5270, Denver, Colorado 80217, or
by calling  the  Transfer  Agent at the  toll-free  number  shown  above,  or by
downloading    it   from    the    OppenheimerFunds    Internet    website    at
www.oppenheimerfunds.com.


Contents
                                                                      Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks....  2
     The Fund's Investment Policies......................................  2
     Other Investment Techniques and Strategies..........................  5
     Other Investment Restrictions.......................................  19
     Disclosure of Portfolio Holdings....................................  21
How the Fund is Managed .................................................  24
     Organization and History............................................  24
     Board of Trustees and Oversight Committees..........................  26
     Trustees and Officers of the Fund...................................  27
     The Manager.........................................................  37
Brokerage Policies of the Fund...........................................  40
Distribution and Service Plans...........................................  42
Payments to the Fund Intermediaries......................................  47
Performance of the Fund..................................................  50

About Your Account
How To Buy Shares........................................................  55
How To Sell Shares.......................................................  65
How To Exchange Shares...................................................  69
Dividends, Capital Gains and Taxes.......................................  73
Additional Information About the Fund....................................  77

Financial Information About the Fund
Report of the Independent Registered Public Accounting Firm..............  79
Financial Statements.....................................................  80

Appendix A: Industry Classifications.....................................  A-1
Appendix B: Special Sales Charge Arrangements and Waivers................  B-1




ABOUT THE FUND

Additional Information About the Fund's Investment Policies and Risks

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

The Fund's Investment Policies

     The  composition of the Fund's  portfolio and the techniques and strategies
that the Fund's Manager may use in selecting portfolio securities will vary over
time.  The Fund is not  required  to use all of the  investment  techniques  and
strategies  described  below at all times in seeking its  objective.  It may use
some of the special investment techniques and strategies at some times or not at
all.

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

     |X| Investments in Equity  Securities.  The Fund focuses its investments in
equity securities.  Equity securities  include common stocks,  preferred stocks,
rights and warrants,  and securities  convertible  into common stock. The Fund's
investments may include stocks of companies of all market capitalization ranges:
small-cap,  mid-cap and large-cap.  At times, the Fund may increase its emphasis
on equity investments in securities of one or more capitalization  ranges, based
upon the Manager's  judgment of where are the best market  opportunities to seek
the Fund's objective.  It may use some of the specific investment techniques and
strategies some times or not at all.

     In selecting  securities for the Fund's portfolio,  the Manager evaluates a
number of factors, including among them:

|_|      the history of the issuer's operations and financial results,
|_|      prospects for the industry of which the issuer is part,
|_|      pending product developments and those of competitors,
|_|      the effect of general market and economic conditions on the issuer's
         business,
|_|      legislative proposals that might affect the issuer, and
|_|      the issuer's current financial condition.

     Current  income  is not a  criterion  used  to  select  equity  securities.
However,  certain debt  securities may be selected for the Fund's  portfolio for
defensive  purposes  (including debt  securities  that the Manager  believes may
offer some  opportunities for capital  appreciation when stocks are disfavored).

     The Fund can  invest in  securities  of small cap  issuers  (having  market
capitalizations  of less than $1 billion).  Securities  of small  capitalization
issuers may be subject to greater price volatility in general than securities of
large-cap  and  mid-cap  companies.  Therefore,  to the degree that the Fund has
investments in smaller  capitalization  companies at times of market volatility,
the Fund's  share price may  fluctuate  more.  As noted  below,  the Fund limits
investments in unseasoned small cap issuers.

     |_| Convertible Securities. While convertible securities are a form of debt
security,  in many cases,  their conversion  feature  (allowing  conversion into
equity securities) causes them to be regarded more as "equity equivalents." As a
result,  the credit  rating  assigned  to the  security  has less  impact on the
Manager's investment decision with respect to convertible securities than in the
case of  non-convertible  fixed income  securities.  The value of a  convertible
security is a function of its "investment value" and its "conversion  value." If
the investment value exceeds the conversion value, the security will behave more
like a debt security and the security's price will likely increase when interest
rates fall and  decrease  when  interest  rates rise.  If the  conversion  value
exceeds  the  investment  value,  the  security  will behave more like an equity
security.  In that case it will  likely  sell at a premium  over its  conversion
value  and its  price  will  tend to  fluctuate  directly  with the price of the
underlying  security.  To determine  whether  convertible  securities  should be
regarded as "equity  equivalents,"  the Manager examines the following  factors:
(1) whether,  at the option of the  investor,  the  convertible  security can be
exchanged  for a fixed  number  of shares of  common  stock of the  issuer,  (2)
whether the issuer of the  convertible  securities has restated its earnings per
share of  common  stock on a fully  diluted  basis  (considering  the  effect of
conversion  of the  convertible  securities),  and (3) the  extent  to which the
convertible  security  may be a defensive  "equity  substitute,"  providing  the
ability to participate in any  appreciation  in the price of the issuer's common
stock.

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

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

     |_| Rights and  Warrants.  The Fund may invest up to 5% of its total assets
in warrants or rights.  That 5% limit does not apply to warrants  and rights the
Fund has acquired as part of units of  securities  or that are attached to other
securities that the Fund buys. Warrants basically are options to purchase equity
securities at specific prices valid for a specific period of time.  Their prices
do not  necessarily  move parallel to the prices of the  underlying  securities.
Rights are similar to  warrants,  but  normally  have a short  duration  and are
distributed directly by the issuer to its shareholders. Rights and warrants have
no voting  rights,  receive no dividends  and have no rights with respect to the
assets of the issuer.

     |X| Foreign  Securities.  The Fund can purchase equity securities issued or
guaranteed  by  foreign   companies  or  debt   securities   issued  by  foreign
governments.   "Foreign  securities"  include  equity  and  debt  securities  of
companies  organized  under the laws of countries  other than the United States.
They  may  be  traded  on  foreign  securities   exchanges  or  in  the  foreign
over-the-counter  markets.  The Fund currently does not expect to have more than
35% of its total  assets  invested  in foreign  securities,  although it has the
ability to invest in them without limit.

     Securities of foreign issuers that are  represented by American  Depository
Receipts or that are listed on a U.S.  securities exchange or traded in the U.S.
over-the-counter markets are not considered "foreign securities" for the purpose
of the Fund's  investment  allocations.  That is because they are not subject to
many of the special  considerations  and risks,  discussed below,  that apply to
foreign securities traded and held abroad.

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

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

     |_| Risks of Foreign Investing. Investments in foreign securities may offer
special  opportunities  for investing but also present special  additional risks
and  considerations  not  typically  associated  with  investments  in  domestic
securities. Some of these additional risks are:

     o reduction of income by foreign taxes;

     o fluctuation  in value of foreign  investments  due to changes in currency
rates,  currency  devaluation  or currency  control  regulations  (for  example,
currency blockage);

     o transaction charges for currency exchange;

     o lack of public information about foreign issuers;

     o lack of uniform accounting, auditing and financial reporting standards in
foreign countries comparable to those applicable to domestic issuers;

     o less volume on foreign exchanges than on U.S. exchanges;

     o greater  volatility  and less  liquidity  on foreign  markets than in the
U.S.;

     o less  governmental  regulation of foreign  issuers,  stock  exchanges and
brokers than in the U.S.;

     o greater difficulties in commencing lawsuits;

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

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

     o foreign withholding taxes on interest and dividends;

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

     o unfavorable differences between the U.S. economy and foreign economies.

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

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

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

     |X| Portfolio  Turnover.  "Portfolio  turnover" describes the rate at which
the Fund  traded its  portfolio  securities  during its last  fiscal  year.  For
example,  if a fund sold all of its  securities  during the year,  its portfolio
turnover  rate would have been 100%.  The Fund's  portfolio  turnover  rate will
fluctuate  from  year to year,  although  the Fund  does  not  expect  to have a
portfolio turnover rate of more than 100% annually. Increased portfolio turnover
creates higher  brokerage and transaction  costs for the Fund,  which may reduce
its overall  performance.  Additionally,  the  realization of capital gains from
selling  portfolio  securities may result in distributions of taxable  long-term
capital gains to  shareholders,  since the Fund will normally  distribute all of
its capital  gains  realized each year, to avoid excise taxes under the Internal
Revenue Code.

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

     |X|  Investing  in  Small,  Unseasoned  Companies.  The Fund can  invest in
securities of small, unseasoned companies. These are companies that have been in
operation  for  less  than  three  years,   including  the   operations  of  any
predecessors.  Securities  of these  companies  may be subject to  volatility in
their prices. They may have a limited trading market, which may adversely affect
the Fund's ability to dispose of them and can reduce the price the Fund might be
able to obtain for them.  Other investors that own a security issued by a small,
unseasoned  issuer for which there is limited liquidity might trade the security
when the Fund is attempting to dispose of its holdings of that security. In that
case the Fund might receive a lower price for its holdings than might  otherwise
be  obtained.  The Fund  currently  intends to invest no more than 5% of its net
assets in those securities.

     |X| Investment in Other Investment  Companies.  The Fund can also invest in
the securities of other investment companies,  which can include open-end funds,
closed-end funds and unit investment trusts,  subject to the limits set forth in
the Investment Company Act of 1940 (the "Investment  Company Act") that apply to
those types of investments,  and the following additional  limitation:  the Fund
cannot invest in the  securities  of other  registered  investment  companies or
registered unit  investment  trusts in reliance on  sub-paragraph  (F) or (G) of
section 12(d)(1) of the Investment Company Act. For example, the Fund can invest
in exchange-traded  funds, which are typically open-end funds or unit investment
trusts,  listed on a stock  exchange.  The Fund  might do so as a way of gaining
exposure to the segments of the equity or  fixed-income  markets  represented by
the Exchange-Traded Funds' portfolio,  at times when the Fund may not be able to
buy those portfolio securities directly.

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

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

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

     The  majority  of these  transactions  run from  day to day,  and  delivery
pursuant to the resale typically occurs within one to five days of the purchase.
Repurchase  agreements  having a maturity  beyond  seven days are subject to the
Fund's limits on holding  illiquid  investments.  The Fund will not enter into a
repurchase  agreement  that causes more than 10% of its net assets to be subject
to repurchase  agreements having a maturity beyond seven days. There is no limit
on the  amount of the  Fund's  net  assets  that may be  subject  to  repurchase
agreements having maturities of seven days or less.

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

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

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

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

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

     Illiquid  securities  include repurchase  agreements  maturing in more than
seven days and participation  interests that do not have puts exercisable within
seven days.


     |X|  Loans of  Portfolio  Securities.  The  Fund  may  lend  its  portfolio
securities  pursuant to policies  approved by the Fund's Board.  It may do so to
try to provide income or to raise cash for liquidity  purposes.  These loans are
limited to not more than 25% of the value of the Fund's net assets.

     The Fund has entered into a Securities  Lending  Agreement (the "Securities
Lending Agreement") with JPMorgan Chase Bank, N.A. ("JPMorgan Chase"). Under the
Securities Lending Agreement and applicable  regulatory  requirements (which are
subject to change), the collateral for such loans must, on each business day, be
at least equal to the value of the loaned  securities  and must consist of cash,
bank letters of credit or securities of the U.S.  Government (or its agencies or
instrumentalities),  or other cash equivalents in which the Fund is permitted to
invest.  To be acceptable as  collateral,  a bank letter of credit must obligate
the bank to pay to JPMorgan Chase, as agent, amounts demanded by the Fund if the
demand meets the terms of the letter. Both the issuing bank and the terms of the
letter of credit must be  satisfactory to JPMorgan Chase and the Fund. The terms
of the loans must also meet applicable tests under the Internal Revenue Code and
permit the Fund to reacquire loaned  securities on five business days' notice or
in time to vote on any material matters. The Securities Lending Agreement may be
terminated by either JPMorgan Chase or the Fund on 30 days' written notice.

     Pursuant  to the  Securities  Lending  Agreement,  the Fund will  receive a
percentage  of all annual net income  (i.e.,  net of rebates to the borrower and
certain other approved expenses) from securities lending transactions.  Such net
income  includes  earnings from the investment of any cash  collateral  received
from a borrower and loan fees paid or payable by a borrower in  connection  with
loans secured by collateral other than cash.

     There are some  risks in  connection  with  securities  lending,  including
possible delays in receiving additional collateral from the borrower to secure a
loan or delays in recovering  the loaned  securities  if the borrower  defaults.
JPMorgan Chase has agreed, in general, to guarantee the obligations of borrowers
to return  loaned  securities  to the Fund and to be  responsible  for  expenses
relating to securities lending. The Fund, however, will be responsible for risks
associated  with the  investment  of cash  collateral,  including  the risk of a
default by the issuer of a security in which cash  collateral has been invested.
If that  occurs,  the Fund may incur  additional  costs in seeking to obtain the
collateral  or may lose the amount of the  collateral  investment.  The Fund may
also lose money if the value of the  investments  purchased with cash collateral
decreases.



     |X|  Borrowing.  The  Fund  has the  ability  to  borrow  from  banks on an
unsecured  basis to invest the  borrowed  funds in  portfolio  securities.  This
speculative  technique is known as  "leverage."  The Fund may not borrow  money,
except to the extent  permitted  under the Investment  Company Act, the rules or
regulations  thereunder  or any  exemption  therefrom  that is applicable to the
Fund, as such statute,  rules or regulations may be amended or interpreted  from
time to time.  Currently,  under the  Investment  Company Act, a mutual fund may
borrow only from banks and the maximum  amount it may borrow is up to  one-third
of its total assets  (including  the amount  borrowed less all  liabilities  and
indebtedness  other than  borrowing),  except that a fund may borrow up to 5% of
its total assets for temporary  purposes from any person.  Under the  Investment
Company Act, there is a rebuttable presumption that a loan is temporary if it is
repaid within 60 days and not extended or renewed.  Any such  borrowing  will be
made only pursuant to the requirements of the Investment Company Act and will be
made  only  to the  extent  that  the  value  of each  Fund's  assets  less  its
liabilities,  other than borrowings, is equal to at least 300% of all borrowings
including the proposed borrowing.  If the value of a Fund's assets, so computed,
should fail to meet the 300% asset coverage  requirement,  the Fund is required,
within three  business  days to reduce its bank debt to the extent  necessary to
meet such  requirement  and may have to sell a portion of its  investments  at a
time when independent investment judgment would not dictate such sale.

     The Fund will pay interest on these loans,  and that interest  expense will
raise the  overall  expenses  of the Fund and  reduce  its  returns.  If it does
borrow,  its expenses will be greater than  comparable  funds that do not borrow
for leverage. Additionally, the Fund's net asset value per share might fluctuate
more  than  that of funds  that do not  borrow.  Currently,  the  Fund  does not
contemplate using this technique, but if it does so, it will not likely do so to
a substantial degree.

     |X| Debt  Securities.  While the Fund does not  invest  for the  purpose of
seeking  current  income,  at times certain debt  securities may be selected for
investment by the Fund for defensive purposes,  as described below. For example,
when the stock market is volatile,  or when the portfolio  manager believes that
growth opportunities in stocks are not attractive, certain debt securities might
provide not only defensive opportunities but also some opportunities for capital
appreciation.  These investments could include corporate bonds and notes of U.S.
companies,  as well as U.S.  government  securities,  especially  zero-coupon or
"stripped" U. S. government  securities.  It is not expected that this will be a
significant portfolio strategy of the Fund under normal market circumstances.

     |_|  Zero-Coupon  Securities.  The Fund  may buy  zero-coupon  and  delayed
interest debt  securities of U.S.  issuers.  Zero-coupon  securities do not make
periodic  interest  payments  and are sold at a deep  discount  from  their face
value.  The  buyer  recognizes  a rate  of  return  determined  by  the  gradual
appreciation  of the  security,  which is  redeemed at face value on a specified
maturity date. This discount  depends on the time remaining  until maturity,  as
well as prevailing  interest rates, the liquidity of the security and the credit
quality of the issuer. In the absence of threats to the issuer's credit quality,
the  discount  typically  decreases  as  the  maturity  date  approaches.   Some
zero-coupon securities are convertible,  in that they are zero-coupon securities
until a  predetermined  date,  at which time they  convert to a security  with a
specified coupon rate.

     Because zero-coupon  securities pay no interest and compound  semi-annually
at the rate fixed at the time of their  issuance,  their value is generally more
volatile  than the value of other  debt  securities.  Their  value may fall more
dramatically than the value of  interest-bearing  securities when interest rates
rise. When prevailing interest rates fall,  zero-coupon  securities tend to rise
more rapidly in value because they have a fixed rate of return.

     Investing  in  zero-coupon  securities  could  cause the Fund to  recognize
income  and make  distributions  to  shareholders  before it  receives  any cash
payments  on the  zero-coupon  investment.  To  generate  cash to satisfy  those
distribution requirements, the Fund might have to sell portfolio securities that
it  otherwise  might  have  continued  to hold or to use cash  flows  from other
sources such as the sale of Fund shares.

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

     |_| Interest Rate Risks.  In addition to credit risks,  debt securities are
subject  to  changes  in value  when  prevailing  interest  rates  change.  When
prevailing  interest  rates  fall,  the values of  outstanding  debt  securities
generally  rise,  and the bonds may sell for more than their face  amount.  When
prevailing  interest  rates  rise,  the values of  outstanding  debt  securities
generally decline,  and the bonds may sell at a discount from their face amount.
The magnitude of these price changes is generally  greater for bonds with longer
maturities.  Therefore,  when the average maturity of the Fund's debt securities
is longer, its share price may fluctuate more when interest rates change.

     |X| Derivatives. The Fund can invest in a variety of derivative investments
to seek income for  liquidity  needs or for hedging  purposes.  Some  derivative
investments the Fund can use are the hedging instruments described below in this
Statement of Additional  Information.  However,  the Fund does not use, and does
not  currently  contemplate  using,  derivatives  or  hedging  instruments  to a
significant degree.

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

     |X| Hedging.  Although the Fund does not  anticipate  the  extensive use of
hedging instruments, the Fund can use hedging instruments. To attempt to protect
against declines in the market value of the Fund's portfolio, to permit the Fund
to retain  unrealized  gains in the value of  portfolio  securities  which  have
appreciated,  or to facilitate  selling securities for investment  reasons,  the
Fund could:

     |_| sell futures contracts,

     |_| buy puts on such futures or on securities, or

     |_| write covered calls on securities or futures. Covered calls may also be
used to increase  the Fund's  income,  but the Manager does not expect to engage
extensively in that practice.

     The Fund can use hedging to establish a position in the  securities  market
as a temporary substitute for purchasing particular securities. In that case the
Fund would  normally seek to purchase the  securities  and then  terminate  that
hedging  position.  The Fund  might  also use this type of hedge to  attempt  to
protect against the possibility that its portfolio securities would not be fully
included  in a rise in value of the market.  To do so, the Fund  could:

     |_| buy futures, or

     |_| buy calls on such futures or on securities.

     The Fund's  strategy of hedging with futures and options on futures will be
incidental  to  the  Fund's  activities  in  the  underlying  cash  market.  The
particular  hedging  instruments the Fund can use are described  below. The Fund
may employ new hedging  instruments and strategies  when they are developed,  if
those investment methods are consistent with the Fund's investment objective and
are permissible under applicable regulations governing the Fund.

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

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

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

     No payment is paid or  received  by the Fund on the  purchase  or sale of a
future. Upon entering into a futures  transaction,  the Fund will be required to
deposit an initial  margin  payment with the futures  commission  merchant  (the
"futures  broker").  Initial  margin  payments will be deposited with the Fund's
custodian bank in an account  registered in the futures broker's name.  However,
the  futures  broker  can gain  access  to that  account  only  under  specified
conditions.  As the future is marked to market (that is, its value on the Fund's
books is  changed) to reflect  changes in its market  value,  subsequent  margin
payments,  called  variation  margin,  will be paid to or by the futures  broker
daily.

     At any time prior to expiration of the future,  the Fund may elect to close
out  its  position  by  taking  an  opposite  position,  at  which  time a final
determination  of variation  margin is made and any additional cash must be paid
by or released to the Fund.  Any loss or gain on the future is then  realized by
the Fund for tax purposes.  All futures  transactions (except forward contracts)
are effected  through a clearinghouse  associated with the exchange on which the
contracts are traded.

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

     |_|  Writing  Covered  Call  Options.  The Fund can write  (that is,  sell)
covered calls. If the Fund sells a call option,  it must be covered.  That means
the  Fund  must  own  the  security  subject  to the  call  while  the  call  is
outstanding,  or,  for  certain  types of  calls,  the call  may be  covered  by
segregating  liquid assets to enable the Fund to satisfy its  obligations if the
call is exercised.  Up to 25% of the Fund's total assets may be subject to calls
the Fund writes.

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

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

     The Fund's custodian,  or a securities depository acting for the custodian,
will act as the Fund's  escrow  agent,  through  the  facilities  of the Options
Clearing  Corporation  ("OCC"),  as to the  investments  on  which  the Fund has
written calls traded on exchanges or as to other acceptable  escrow  securities.
In that way, no margin will be required for such transactions.  OCC will release
the  securities  on the  expiration of the option or when the Fund enters into a
closing transaction.

     When the Fund writes an over-the-counter ("OTC") option, it will enter into
an  arrangement  with a primary  U.S.  government  securities  dealer which will
establish  a formula  price at which the Fund  will have the  absolute  right to
repurchase  that OTC option.  The  formula  price will  generally  be based on a
multiple of the premium  received  for the option,  plus the amount by which the
option is exercisable  below the market price of the  underlying  security (that
is, the option is "in the money").  When the Fund writes an OTC option,  it will
treat  as  illiquid  (for  purposes  of  its  restriction  on  holding  illiquid
securities)  the  mark-to-market  value of any OTC  option it holds,  unless the
option is subject to a buy-back agreement by the executing broker.

     To terminate its obligation on a call it has written, the Fund may purchase
a corresponding  call in a "closing  purchase  transaction."  The Fund will then
realize a profit or loss,  depending  upon  whether the net of the amount of the
option  transaction costs and the premium received on the call the Fund wrote is
more or less  than the  price of the call the Fund  purchases  to close  out the
transaction.  The Fund may  realize  a profit if the call  expires  unexercised,
because the Fund will retain the underlying security and the premium it received
when it wrote the call. Any such profits are considered short-term capital gains
for federal  income tax  purposes,  as are the  premiums on lapsed  calls.  When
distributed by the Fund they are taxable as ordinary income.  If the Fund cannot
effect a closing purchase  transaction due to the lack of a market, it will have
to hold the callable securities until the call expires or is exercised.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     |_| Forward  Contracts.  Forward  contracts are foreign  currency  exchange
contracts.  They are used to buy or sell foreign currency for future delivery at
a fixed  price.  The Fund  uses them to  "lock-in"  the U.S.  dollar  price of a
security  denominated in a foreign currency that the Fund has bought or sold, or
to protect  against  possible  losses from changes in the relative values of the
U.S.  dollar and a foreign  currency.  The Fund  limits its  exposure in foreign
currency  exchange  contracts in a particular  foreign currency to the amount of
its assets  denominated in that currency or a closely correlated  currency.  The
Fund may also use  "cross-hedging"  where the Fund  hedges  against  changes  in
currencies other than the currency in which a security it holds is denominated.

     Under a forward contract,  one party agrees to purchase,  and another party
agrees to sell, a specific currency at a future date. That date may be any fixed
number of days from the date of the  contract  agreed upon by the  parties.  The
transaction  price  is set at the time  the  contract  is  entered  into.  These
contracts are traded in the inter-bank market conducted  directly among currency
traders (usually large commercial banks) and their customers.

     The Fund may use forward  contracts to protect  against  uncertainty in the
level of future exchange rates. The use of forward  contracts does not eliminate
the risk of  fluctuations  in the prices of the  underlying  securities the Fund
owns or intends  to  acquire,  but it does fix a rate of  exchange  in  advance.
Although  forward  contracts  may  reduce the risk of loss from a decline in the
value of the hedged currency,  at the same time they limit any potential gain if
the value of the hedged currency increases.

     When the Fund enters into a contract for the purchase or sale of a security
denominated in a foreign  currency,  or when it anticipates  receiving  dividend
payments in a foreign  currency,  the Fund might  desire to  "lock-in"  the U.S.
dollar  price of the  security or the U.S.  dollar  equivalent  of the  dividend
payments.  To do so,  the Fund  could  enter  into a  forward  contract  for the
purchase or sale of the amount of foreign  currency  involved in the  underlying
transaction, in a fixed amount of U.S. dollars per unit of the foreign currency.
This is called a  "transaction  hedge." The  transaction  hedge will protect the
Fund against a loss from an adverse change in the currency exchange rates during
the period  between the date on which the  security is  purchased  or sold or on
which the payment is  declared,  and the date on which the  payments are made or
received.

     The Fund could also use forward  contracts to lock in the U.S. dollar value
of  portfolio  positions.  This is  called  a  "position  hedge."  When the Fund
believes that foreign  currency might suffer a substantial  decline  against the
U.S.  dollar,  it could enter into a forward  contract to sell an amount of that
foreign currency  approximating the value of some or all of the Fund's portfolio
securities denominated in that foreign currency. When the Fund believes that the
U.S. dollar might suffer a substantial  decline against a foreign  currency,  it
could enter into a forward  contract to buy that  foreign  currency  for a fixed
dollar amount.  Alternatively,  the Fund could enter into a forward  contract to
sell a different  foreign  currency for a fixed U.S.  dollar  amount if the Fund
believes that the U.S. dollar value of the foreign  currency to be sold pursuant
to its forward contract will fall whenever there is a decline in the U.S. dollar
value of the currency in which portfolio securities of the Fund are denominated.
That is referred to as a "cross hedge."

     The Fund will cover its short  positions in these cases by  identifying  on
its books  assets  having a value  equal to the  aggregate  amount of the Fund's
commitment  under  forward  contracts.  The Fund  will not  enter  into  forward
contracts or maintain a net exposure to such  contracts if the  consummation  of
the contracts  would obligate the Fund to deliver an amount of foreign  currency
in  excess of the  value of the  Fund's  portfolio  securities  or other  assets
denominated  in that  currency  or another  currency  that is the subject of the
hedge.

     However,  to avoid excess  transactions and transaction costs, the Fund may
maintain  a net  exposure  to  forward  contracts  in excess of the value of the
Fund's portfolio securities or other assets denominated in foreign currencies if
the excess amount is "covered" by liquid securities denominated in any currency.
The cover must be at least equal at all times to the amount of that  excess.  As
one  alternative,  the Fund may  purchase a call option  permitting  the Fund to
purchase the amount of foreign  currency being hedged by a forward sale contract
at a price no higher than the forward  contract price.  As another  alternative,
the Fund may  purchase  a put option  permitting  the Fund to sell the amount of
foreign currency  subject to a forward  purchase  contract at a price as high or
higher than the forward contact price.

     The precise  matching of the amounts under forward  contracts and the value
of the securities  involved  generally  will not be possible  because the future
value  of  securities  denominated  in  foreign  currencies  will  change  as  a
consequence of market movements between the date the forward contract is entered
into and the date it is sold. In some cases the Manager might decide to sell the
security  and  deliver  foreign   currency  to  settle  the  original   purchase
obligation.  If the  market  value of the  security  is less than the  amount of
foreign  currency  the Fund is  obligated  to  deliver,  the Fund  might have to
purchase  additional  foreign  currency on the "spot"  (that is, cash) market to
settle the security trade.  If the market value of the security  instead exceeds
the amount of foreign  currency  the Fund is  obligated to deliver to settle the
trade,  the Fund  might  have to sell on the  spot  market  some of the  foreign
currency  received  upon  the sale of the  security.  There  will be  additional
transaction costs on the spot market in those cases.

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

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

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

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

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

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

     Under  interpretations  of staff  members of the SEC  regarding  applicable
provisions of the Investment  Company Act, when the Fund purchases a future,  it
must  segregate cash or readily  marketable  short-term  debt  instruments in an
amount  equal to the  purchase  price of the  future,  less the  margin  deposit
applicable  to it. The account must be a segregated  account or accounts held by
the Fund's custodian bank.

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

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

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

     (2) gains or losses  attributable to fluctuations in the value of a foreign
currency  between the date of  acquisition  of a debt security  denominated in a
foreign  currency  or  foreign  currency  forward  contracts  and  the  date  of
disposition.

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

     |X| Temporary Defensive and Interim Investments.  When market,  economic or
political  conditions  are  unstable,  or the Manager  believes it is  otherwise
appropriate  to reduce  holdings in stocks,  the Fund can invest in a variety of
debt  securities  for  defensive  purposes.  The Fund can  also  purchase  these
securities  for liquidity  purposes to meet cash needs due to the  redemption of
Fund shares,  or to hold while  waiting  reinvest cash received from the sale of
other portfolio securities. The Fund can buy:

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

     |_| commercial paper (short-term,  unsecured,  promissory notes of domestic
or  foreign  companies)  rated  in  the  top  rating  category  of a  nationally
recognizes rating organization,

     |_| debt obligations of corporate issuers, rated investment grade (rated at
least Baa by  Moody's  Investors  Service,  Inc.  or at least BBB by  Standard &
Poor's Corporation,  or a comparable rating by another rating organization),  or
unrated  securities  judge by the Manager to have a comparable  quality to rated
securities in those categories,

     |_| preferred stocks,

     |_|  certificates  of deposit and  bankers'  acceptances  of  domestic  and
foreign banks and savings and loan associations,  and

     |_| repurchase  agreements.

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

Other Investment Restrictions

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

     |_| 67% or  more  of the  shares  present  or  represented  by  proxy  at a
shareholder  meeting,  if the holders of more than 50% of the outstanding shares
are present or represented by proxy, or

     |_| more than 50% of the outstanding shares.

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

     |X| Does the Fund  Have  Additional  Fundamental  Policies?  The  following
investment  restrictions are fundamental policies of the Fund as contemplated by
the Investment  Company Act. The  limitations  of the following  policies may be
changed to the extent that the corresponding  policies of the Investment Company
Act are changed by amendment, exemptive or interpretive relief.

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

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

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

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

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

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

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

     |X| Does the Fund Have Any Restrictions That Are Not Fundamental?  The Fund
has an investment  restriction that is not a fundamental policy,  which means it
can be changed by the Board of Trustees without shareholder approval.

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

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

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

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

     o Public  Disclosure.  The  Fund's  portfolio  holdings  are made  publicly
available  no later than 60 days  after the close of each of the  Fund's  fiscal
quarters in semi-annual and annual reports to shareholders, or in its Statements
of  Investments  on Form  N-Q,  which  are  publicly  available  at the SEC.  In
addition,  the top 10 or  more  holdings  are  posted  on the  OppenheimerFunds'
website  at  www.oppenheimerfunds.com  in the  "Fund  Profiles"  section.  Other
general  information about the Fund's portfolio  investments,  such as portfolio
composition  by asset  class,  industry,  country,  currency,  credit  rating or
maturity, may also be posted with a 15-day lag.

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

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

     A list  of the top 10 or  more  portfolio  securities  holdings  (based  on
invested  assets),  listed by security or by issuer, as of the end of each month
may be disclosed to third parties  (subject to the  procedures  below) no sooner
than 15 days after month-end.

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

     o The third-party recipient must first submit a request for release of Fund
portfolio  holdings,  explaining the business  reason for the request;  o Senior
officers (a Senior Vice President or above) in the Manager's Portfolio and Legal
departments  must approve the  completed  request for release of Fund  portfolio
holdings;  and

     o The  third-party  recipient  must sign the Manager's  portfolio  holdings
non-disclosure agreement before receiving the data, agreeing to keep information
that is not publicly  available  regarding the Fund's holdings  confidential and
agreeing not to trade directly or indirectly based on the information.

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

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

     o The Fund's certified public accountants and independent registered public
accounting firm,

     o Members of the Fund's Board and the Board's legal counsel,

     o The Fund's custodian bank,

     o A proxy voting service designated by the Fund and its Board,

     o Rating/ranking organizations (such as Lipper and Morningstar),

     o Portfolio  pricing services  retained by the Manager to provide portfolio
security prices, and

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

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

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

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

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

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

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

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

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

How the Fund is Managed


     Organization and History. The Fund is an open-end,  diversified  management
investment  company with an unlimited number of authorized  shares of beneficial
interest.  The Fund was  organized  as a  Maryland  corporation  in 1980 but was
reorganized as a Massachusetts business trust in February 1987.


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


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

o        has its own dividends and distributions,
o        pays certain expenses which may be different for the different classes,
o        will generally have a different net asset value,
o        will generally have separate voting rights on matters in which interests
         of one class are different from
         interests of another class, and
o        votes as a class on matters that affect that class alone.


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


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


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

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

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



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

     The Board of Trustees  has an Audit  Committee,  a  Regulatory  & Oversight
Committee,  a Governance  Committee  and a Proxy  Committee.  Each  committee is
comprised  solely  of  Trustees  who  are not  "interested  persons"  under  the
Investment  Company Act (the "Independent  Trustees").  The members of the Audit
Committee are Joel W. Motley (Chairman),  Mary F. Miller, Kenneth A. Randall and
Joseph M. Wikler.  The Audit  Committee held 6 meetings during the Fund's fiscal
year  ended  August  31,  2006.  The Audit  Committee  furnishes  the Board with
recommendations  regarding  the selection of the Fund's  independent  registered
public accounting firm (also referred to as the "independent  Auditors").  Other
main functions of the Audit Committee  outlined in the Audit Committee  Charter,
include,  but are not  limited  to:  (i)  reviewing  the  scope and  results  of
financial  statement audits and the audit fees charged;  (ii) reviewing  reports
from the Fund's independent  Auditors  regarding the Fund's internal  accounting
procedures and controls;  (iii)  reviewing  reports from the Manager's  Internal
Audit Department;  (iv) maintaining a separate line of communication between the
Fund's  independent  Auditors and the  Independent  Trustees;  (v) reviewing the
independence of the Fund's  independent  Auditors;  and (vi)  pre-approving  the
provision of any audit or non-audit services by the Fund's independent Auditors,
including tax services,  that are not prohibited by the  Sarbanes-Oxley  Act, to
the Fund, the Manager and certain affiliates of the Manager.

     The members of the  Regulatory  & Oversight  Committee  are Robert G. Galli
(Chairman),  Matthew P. Fink, Phillip A. Griffiths,  Joel W. Motley and Brian F.
Wruble.  The Regulatory & Oversight  Committee held 6 meetings during the Fund's
fiscal  year  ended  August 31,  2006.  The  Regulatory  &  Oversight  Committee
evaluates  and  reports  to the Board on the  Fund's  contractual  arrangements,
including the Investment Advisory and Distribution  Agreements,  transfer agency
and  shareholder  service  agreements  and  custodian  agreements as well as the
policies  and  procedures  adopted  by the Fund to  comply  with the  Investment
Company Act and other  applicable  law,  among other  duties as set forth in the
Regulatory & Oversight Committee's Charter.

     The  members  of  the   Governance   Committee  are  Phillip  A.  Griffiths
(Chairman),  Kenneth A. Randall, Russell S. Reynolds, Jr. and Peter I. Wold. The
Governance  Committee held 8 meetings during the Fund's fiscal year ended August
31, 2006. The Governance Committee reviews the Fund's governance guidelines, the
adequacy of the Fund's Codes of Ethics, and develops  qualification criteria for
Board members  consistent  with the Fund's  governance  guidelines,  among other
duties set forth in the Governance Committee's Charter.


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

     To date,  the  Governance  Committee has been able to identify from its own
resources  an ample  number  of  qualified  candidates.  Nonetheless,  under the
current policy of the Board, if the Board determines that a vacancy exists or is
likely to exist on the Board, the Governance  Committee will consider candidates
for Board membership including those recommended by the Fund's shareholders. The
Governance  Committee will consider  nominees  recommended by Independent  Board
members or  recommended  by any other  Board  members  including  Board  members
affiliated  with the Fund's  Manager.  The Governance  Committee may, upon Board
approval,  retain an  executive  search  firm to assist in  screening  potential
candidates.  Upon Board  approval,  the  Governance  Committee  may also use the
services of legal,  financial, or other external counsel that it deems necessary
or desirable in the screening process.  Shareholders wishing to submit a nominee
for election to the Board may do so by mailing  their  submission to the offices
of OppenheimerFunds,  Inc., Two World Financial Center, 225 Liberty Street, 11th
Floor, New York, New York 10281-1008,  to the attention of the Board of Trustees
of Oppenheimer Capital Appreciation Fund, c/o the Secretary of the Fund.

     Submissions should, at a minimum, be accompanied by the following:  (1) the
name, address, and business,  educational,  and/or other pertinent background of
the person being recommended;  (2) a statement  concerning whether the person is
an "interested  person" as defined in the Investment  Company Act; (3) any other
information  that the Fund would be  required  to  include in a proxy  statement
concerning the person if he or she was  nominated;  and (4) the name and address
of  the  person  submitting  the  recommendation   and,  if  that  person  is  a
shareholder,  the period for which that  person held Fund  shares.  Shareholders
should note that a person who owns  securities  issued by  Massachusetts  Mutual
Life  Insurance  Company (the parent  company of the Manager) would be deemed an
"interested person" under the Investment Company Act. In addition, certain other
relationships   with   Massachusetts   Mutual  Life  Insurance  Company  or  its
subsidiaries,  with registered broker-dealers,  or with the Funds' outside legal
counsel may cause a person to be deemed an "interested person."

     The Governance Committee has not established  specific  qualifications that
it believes must be met by a trustee nominee.  In evaluating  trustee  nominees,
the  Governance  Committee  considers,   among  other  things,  an  individual's
background,  skills,  and  experience;  whether the individual is an "interested
person" as defined in the  Investment  Company Act;  and whether the  individual
would be deemed an "audit  committee  financial  expert"  within the  meaning of
applicable  SEC rules.  The  Governance  Committee  also  considers  whether the
individual's background,  skills, and experience will complement the background,
skills, and experience of other Trustees and will contribute to the Board. There
are no  differences in the manner in which the  Governance  Committee  evaluates
nominees  for  trustees  based  on  whether  the  nominee  is  recommended  by a
shareholder. Candidates are expected to provide a mix of attributes, experience,
perspective  and skills  necessary  to  effectively  advance  the  interests  of
shareholders.


     The members of the Proxy Committee are Russell S. Reynolds, Jr. (Chairman),
Matthew P. Fink and Mary F. Miller.  The Proxy  Committee held 2 meetings during
the Fund's fiscal year ended August 31, 2006. The Proxy  Committee  provides the
Board with  recommendations for the proxy voting of portfolio securities held by
the Fund and monitors proxy voting by the Fund.

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


Oppenheimer AMT-Free Municipals                               Oppenheimer Limited Term California Municipal Fund
Oppenheimer AMT-Free New York Municipals                      Oppenheimer Money Market Fund, Inc.
Oppenheimer Balanced Fund                                     Oppenheimer Multi-State Municipal Trust
Oppenheimer California Municipal Fund                         Oppenheimer Portfolio Series
Oppenheimer Capital Appreciation Fund                         Oppenheimer Real Estate Fund
Oppenheimer Developing Markets Fund                           Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Discovery Fund                                    Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Dividend Growth Fund                              Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Emerging Growth Fund                              Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Emerging Technologies Fund                        Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Enterprise Fund                                   Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Global Fund                                       Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Global Opportunities Fund                         Oppenheimer Select Value Fund
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Series Fund, Inc.
Oppenheimer Growth Fund                                       OFI Tremont Core Strategies Hedge Fund
Oppenheimer International Diversified Fund                    OFI Tremont Market Neutral Hedge Fund
Oppenheimer International Growth Fund                       Oppenheimer Tremont Market Neutral Fund LLC
Oppenheimer International Small Company Fund                Oppenheimer Tremont Opportunity Fund LLC
Oppenheimer International Value Fund                        Oppenheimer U.S. Government Trust

     In addition to being a Board  member of each of the Board I Funds,  Messrs.
Galli and  Wruble are  directors  or  trustees  of ten other  portfolios  in the
OppenheimerFunds Complex.


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


     Messrs. Baylin,  Gillespie,  Murphy, Petersen,  Szilagyi,  Vandehey, Wilby,
Wixted and Zack and Mss.  Bloomberg and Ives, who are officers of the Fund, hold
the same offices  with one or more of the other Board I Funds.  As of October 6,
2006,  the  Trustees and  officers of the Fund,  as a group,  owned of record or
beneficially  less than 1% of any class of  shares  of the Fund.  The  foregoing
statement  does not  reflect  ownership  of shares held of record by an employee
benefit plan for  employees of the Manager,  other than the shares  beneficially
owned under that plan by the  officers of the Fund listed  above.  In  addition,
none of the  Independent  Trustees (nor any of their  immediate  family members)
owns securities of either the Manager or the Distributor of the Board I Funds or
of any entity directly or indirectly controlling,  controlled by or under common
control with the Manager or the Distributor.


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

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

                                                                                             As of December 31, 2005

- ------------------------------- -------------------------------------------------------- --------------------------------
- ------------------------------- -------------------------------------------------------- --------------- ----------------
Clayton K. Yeutter, Chairman    Director of American Commercial Lines (barge company)    None            Over $100,000
of the Board of                 (since January 2005); Attorney at Hogan & Hartson (law
Trustee since 1993              firm) (since June 1993); Director of Covanta Holding
Age: 75                         Corp. (waste-to-energy company) (since 2002); Director
                                of Weyerhaeuser Corp. (1999-April 2004); Director of
                                Caterpillar, Inc. (1993-December 2002); Director of
                                ConAgra Foods (1993-2001); Director of Texas

                                Instruments (1993-2001); Director of FMC Corporation
                                (1993-2001). Oversees  44 portfolios in the
                                OppenheimerFunds complex.

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

Matthew P. Fink,                Trustee of the Committee for Economic Development        Over $100,000   Over $100,000
Trustee since 2005              (policy research foundation) (since 2005); Director of
Age: 65                         ICI Education Foundation (education foundation)
                                (October 1991-August 2006); President of the

                                Investment Company Institute (trade association)

                                (October 1991-June 2004); Director of ICI Mutual
                                Insurance Company (insurance company) (October
                                1991-June 2004). Oversees 44 portfolios in the

                                OppenheimerFunds complex.
- ------------------------------- -------------------------------------------------------- --------------- ----------------
- ------------------------------- -------------------------------------------------------- --------------- ----------------

Robert G. Galli,                A director or trustee of other Oppenheimer funds.        None            Over $100,000
Trustee since 1993              Oversees 54 portfolios in the OppenheimerFunds complex.
Age: 73


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

Phillip A. Griffiths,           Distinguished Presidential Fellow for International      $50,001-$100,000Over $100,000
Trustee since 1999              Affairs (since 2002) and Member (since 1979) of the
Age: 67                         National Academy of Sciences; Council on Foreign
                                Relations (since 2002); Director of GSI Lumonics Inc.
                                (precision medical equipment supplier) (since 2001);
                                Senior Advisor of The Andrew W. Mellon Foundation
                                (since 2001); Chair of Science Initiative Group (since
                                1999); Member of the American Philosophical Society
                                (since 1996); Trustee of Woodward Academy (since
                                1983); Foreign Associate of Third World Academy of
                                Sciences; Director of the Institute for Advanced Study
                                (1991-2004); Director of Bankers Trust New York
                                Corporation (1994-1999); Provost at Duke University
                                (1983-1991). Oversees 44 portfolios in the
                                OppenheimerFunds complex.

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

Mary F. Miller,                 Trustee of the American Symphony Orchestra               None            Over $100,000

Trustee since 2004              (not-for-profit) (since October 1998); and Senior Vice
Age: 63                         President and General Auditor of American Express
                                Company (financial services company) (July

                                1998-February 2003). Oversees 44 portfolios in the

                                OppenheimerFunds complex.
- ------------------------------- -------------------------------------------------------- --------------- ----------------
- ------------------------------- -------------------------------------------------------- --------------- ----------------

Joel W. Motley,                 Director of Columbia Equity Financial Corp.              None            Over $100,000
Trustee since 2002              (privately-held financial adviser) (since 2002);
Age: 54                         Managing Director of Carmona Motley, Inc.

                                (privately-held financial adviser) (since January
                                2002); Managing Director of Carmona Motley Hoffman
                                Inc. (privately-held financial adviser) (January
                                1998-December 2001); Member of the Finance and Budget
                                Committee of the Council on Foreign Relations, the
                                Investment Committee of the Episcopal Church of

                                America, the Investment Committee and Board of Human

                                Rights Watch and the Investment Committee of Historic

                                Hudson Valley. Oversees 44 portfolios in the

                                OppenheimerFunds complex.
- ------------------------------- -------------------------------------------------------- --------------- ----------------
- ------------------------------- -------------------------------------------------------- --------------- ----------------

Kenneth A. Randall,             Director of Dominion Resources, Inc. (electric utility   Over $100,000   Over $100,000
Trustee since 1987              holding company) (February 1972-October 2005); Former
Age: 79                         Director of Prime Retail, Inc. (real estate investment

                                trust), Dominion Energy Inc. (electric power and oil &

                                gas producer), Lumberman's Mutual Casualty Company,

                                American Motorists Insurance Company and American
                                Manufacturers Mutual Insurance Company; Former
                                President and Chief Executive Officer of The
                                Conference Board, Inc. (international economic and

                                business research). Oversees 44 portfolios in the
                                OppenheimerFunds complex.

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

Russell S. Reynolds, Jr.,       Chairman of The Directorship Search Group, Inc.          None            $10,001-$50,000

Trustee since 1989              (corporate governance consulting and executive

Age: 74                         recruiting) (since 1993); Life Trustee of
                                International House (non-profit educational
                                organization); Founder, Chairman and Chief Executive
                                Officer of Russell Reynolds Associates, Inc.
                                (1969-1993); Banker at J.P. Morgan & Co. (1958-1966);
                                1st Lt. Strategic Air Command, U.S. Air Force
                                (1954-1958). Oversees 44 portfolios in the
                                OppenheimerFunds complex.

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

Joseph M. Wikler,               Director of the  following  medical  device  companies:  None            Over $100,000
Trustee since 2005              Medintec   (since  1992)  and  Cathco   (since   1996);
Age: 65                         Director  of  Lakes  Environmental  Association  (since
                                1996);  Member  of  the  Investment  Committee  of  the
                                Associated  Jewish Charities of Baltimore (since 1994);
                                Director    of     Fortis/Hartford     mutual     funds
                                (1994-December  2001).  Oversees 44  portfolios  in the
                                OppenheimerFunds complex.

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

Peter I. Wold,                  President  of Wold Oil  Properties,  Inc.  (oil and gas  Over $100,000   Over $100,000

Trustee since 2005              exploration and production  company) (since 1994); Vice

Age: 58                         President,   Secretary  and  Treasurer  of  Wold  Trona
                                Company,  Inc.  (soda ash  processing  and  production)
                                (since  1996);  Vice  President  of Wold Talc  Company,
                                Inc.  (talc mining)  (since 1999);  Managing  Member of
                                Hole-in-the-Wall  Ranch (cattle ranching) (since 1979);
                                Director  and  Chairman  of the  Denver  Branch  of the
                                Federal  Reserve Bank of Kansas City  (1993-1999);  and
                                Director    of    PacifiCorp.     (electric    utility)
                                (1995-1999).    Oversees   44    portfolios    in   the
                                OppenheimerFunds complex.

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

Brian F. Wruble,                General Partner of Odyssey Partners,  L.P. (hedge fund)  $1-$10,000      Over $100,000
Trustee since 2005              (since  September  1995);  Director  of  Special  Value
Age: 63                         Opportunities   Fund,   LLC   (registered    investment
                                company)  (since  September  2004);  Member  of  Zurich
                                Financial  Investment Advisory Board (insurance) (since
                                October  2004);  Board  of  Governing  Trustees  of The
                                Jackson  Laboratory  (non-profit)  (since August 1990);
                                Trustee   of   the   Institute   for   Advanced   Study
                                (non-profit  educational  institute)  (since May 1992);
                                Special   Limited   Partner   of   Odyssey   Investment
                                Partners,  LLC  (private  equity  investment)  (January
                                1999-September  2004);  Trustee of Research  Foundation
                                of AIMR (2000-2002) (investment research,  non-profit);
                                Governor,  Jerome  Levy  Economics  Institute  of  Bard
                                College   (August   1990-September   2001)   (economics
                                research);  Director  of Ray &  Berendtson,  Inc.  (May
                                2000-April 2002) (executive  search firm).  Oversees 54
                                portfolios in the OppenheimerFunds complex.

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

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


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

Fund, Length of Service, Age    in the Fund Complex Currently Overseen                   the Fund        Funds

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

                                                                                             As of December 31, 2005

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

John V. Murphy,                 Chairman, Chief Executive Officer and Director (since    $50,001-$100,000 Over $100,000
Trustee since 2001and           June 2001) and President (since September 2000) of the
President and Principal         Manager; President and a director or trustee of other
Executive Officer since 2001    Oppenheimer funds; President and Director of
Age: 57                         Oppenheimer Acquisition Corp. ("OAC") (the Manager's

                                parent holding company) and of Oppenheimer Partnership

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

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


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


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

William L. Wilby,                      Senior Vice President (since July 1994) and Senior Investment Officer, Director
Vice President and Portfolio Manager   of Equities (since July 2004) of the Manager. Formerly, Senior Investment
since 1994                             Officer, Director of International Equities of the Manager (May 2000-July 2004)
Age:  62                               and Senior Vice President of HarbourView Asset Management Corporation (May
                                       1999-November 2001). An officer of 6 portfolios in the OppenheimerFunds complex.

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

Marc L. Baylin,                        Vice President of the Fund and the Manager and has been a member of the Manager's
Vice President and Portfolio Manager   Growth Equity Investment Team since September 2005. He was Managing Director and
since 2005                             Lead Portfolio Manager at JP Morgan Fleming Investment Management from June 2002
Age: 38                                to August 2005 and was a Vice President of T. Rowe Price, where he was an analyst

                                       from June 1993 and a portfolio manager from March 1999 to June 2002.
- -------------------------------------- -----------------------------------------------------------------------------------
- -------------------------------------- -----------------------------------------------------------------------------------

Mark S. Vandehey,                      Senior Vice President and Chief Compliance Officer of the Manager (since March
Vice President and Chief Compliance    2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset
Officer since 2004                     Management Corporation and Shareholder Services, Inc. (since June 1983). Former
Age: 56                                Vice President and Director of Internal Audit of the Manager (1997-February
                                       2004). An officer of 91 portfolios in the OppenheimerFunds complex.

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

Brian W. Wixted,                       Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer
Treasurer and  Principal  Financial &  of the following: HarbourView Asset Management Corporation, Shareholder Financial
Accounting Officer since 1999          Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management
Age: 47                                Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI
                                       Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd.
                                       (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset
                                       Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program
                                       (charitable trust program established by the Manager) (since June 2003);
                                       Treasurer and Chief Financial Officer of OFI Trust Company (trust company
                                       subsidiary of the Manager) (since May 2000); Assistant Treasurer of the
                                       following: OAC (since March 1999),Centennial Asset Management Corporation (March
                                       1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003);
                                       Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund
                                       Services Division (March 1995-March 1999). An officer of 91 portfolios in the
                                       OppenheimerFunds complex.

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

Brian Petersen,                        Assistant Vice President of the Manager (since August 2002); Manager/Financial
Assistant Treasurer since 2004         Product Accounting of the Manager (November 1998-July 2002). An officer of 91
Age: 36                                portfolios in the OppenheimerFunds complex.


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

Brian C. Szilagyi,                     Assistant Vice President of the Manager (since July 2004); Director of Financial
Assistant Treasurer since 2005         Reporting and Compliance of First Data Corporation (April 2003-July 2004);
Age: 36                                Manager of Compliance of Berger Financial Group LLC (May 2001-March 2003);
                                       Director of Mutual Fund Operations at American Data Services, Inc. (September
                                       2000-May 2001). An officer of 91 portfolios in the OppenheimerFunds complex.

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

Robert G. Zack,                        Executive Vice President (since January 2004) and General Counsel (since March
Secretary since 2001                   2002) of the Manager; General Counsel and Director of the Distributor (since
Age: 58                                December 2001); General Counsel of Centennial Asset Management Corporation (since
                                       December 2001); Senior Vice President and General Counsel of HarbourView Asset
                                       Management Corporation (since December 2001); Secretary and General Counsel of
                                       OAC (since November 2001); Assistant Secretary (since September 1997) and
                                       Director (since November 2001) of OppenheimerFunds International Ltd. and
                                       OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership
                                       Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset
                                       Management, Inc. (since November 2001); Senior Vice President, General Counsel
                                       and Director of Shareholder Financial Services, Inc. and Shareholder Services,
                                       Inc. (since December 2001); Senior Vice President, General Counsel and Director
                                       of OFI Private Investments, Inc. and OFI Trust Company (since November 2001);
                                       Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice
                                       President and General Counsel of OFI Institutional Asset Management, Inc. (since
                                       November 2001); Director of OppenheimerFunds (Asia) Limited (since December
                                       2003); Senior Vice President (May 1985-December 2003), Acting General Counsel
                                       (November 2001-February 2002) and Associate General Counsel (May 1981-October
                                       2001) of the Manager; Assistant Secretary of the following: Shareholder Services,
                                       Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November
                                       1989-November 2001), and OppenheimerFunds International Ltd. (September
                                       1997-November 2001). An officer of 91 portfolios in the OppenheimerFunds complex.

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

Kathleen T. Ives,                      Vice President (since June 1998) and Senior Counsel and Assistant Secretary
Assistant Secretary since 2001         (since October 2003) of the Manager; Vice President (since 1999) and Assistant
Age: 40                                Secretary (since October 2003) of the Distributor; Assistant Secretary of
                                       Centennial Asset Management Corporation (since October 2003); Vice President and
                                       Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant
                                       Secretary of OppenheimerFunds Legacy Program and Shareholder Financial Services,
                                       Inc. (since December 2001); Assistant Counsel of the Manager (August 1994-October
                                       2003). An officer of 91 portfolios in the OppenheimerFunds complex.

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

Lisa I. Bloomberg,                     Vice President and Associate Counsel of the Manager (since May 2004); First Vice
Assistant Secretary since 2004         President (April 2001-April 2004), Associate General Counsel (December 2000-April
Age: 38                                2004), Corporate Vice President (May 1999-April 2001) and Assistant General
                                       Counsel (May 1999-December 2000) of UBS Financial Services Inc. (formerly,
                                       PaineWebber Incorporated). An officer of 91 portfolios in the OppenheimerFunds
                                       complex.

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

Phillip S. Gillespie,                  Senior Vice President and Deputy General Counsel of the Manager (since September
Assistant Secretary since 2004         2004); Mr. Gillespie held the following positions at Merrill Lynch Investment
Age: 42                                Management: First Vice President (2001-September 2004); Director (2000-September
                                       2004) and Vice President (1998-2000). An officer of 91 portfolios in the
                                       OppenheimerFunds complex.

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


     Remuneration of the Officers and Trustees.  The officers and the interested
Trustee of the Fund,  who are affiliated  with the Manage,  receive no salary or
fee from the Fund. The Independent  Trustees'  compensation from the Fund, shown
below,  is for serving as a Trustee and member of a committee  (if  applicable),
with  respect  to the  Fund's  fiscal  year ended  August  31,  2006.  The total
compensation from the Fund and fund complex represents  compensation,  including
accrued retirement benefits,  for serving as a Trustee and member of a committee
(if   applicable)   of  the   Boards  of  the  Fund  and  other   funds  in  the
OppenheimerFunds complex during the calendar year ended December 31, 2005.




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

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

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

                                        Fiscal year ended August 31, 2006                                     Year ended
                                                                                                          December 31, 2005

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

Clayton K. Yeutter                     $29,701       None((16))        $103,146         $173,700
Chairman of the Board                     (3)

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

Matthew P. Fink                         $19,083
Proxy Committee Member and
Regulatory & Oversight Committee                     None((16))         $9,646          $61,936
Member

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

Robert G. Galli                                       $22,111         None((16))      $107,096(4)       $264,812(5)
Regulatory & Oversight Committee Chairman

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

Phillip A. Griffiths
Governance Committee Chairman and Regulatory &      $25,778 (6)        None(16)         $42,876          $150,760
Oversight Committee Member

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

Mary F. Miller
Audit Committee Member and Proxy Committee            $18,260                           $11,216          $103,254
Member                                                                 None(16)

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

Joel W. Motley
Audit Committee Chairman and Regulatory &            $25,778(7)                         $27,099          $150,760
Oversight Committee Member                                             None(16)

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

Kenneth A. Randall
Audit Committee Member and Governance  Committee      $22,926           None(8)         $91,953          $134,080
Member

- ------------------------------------------------- ----------------- ---------------- --------------- ------------------
- ------------------------------------------------- ----------------- ---------------- --------------- ------------------
Russell S. Reynolds, Jr.

Proxy Committee Chairman and Governance               $18,829                           $72,817          $108,593
Committee Member                                                       None(16)

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

Joseph M. Wikler(9)                                 $16,591(10)                         $26,401         $60,386(11)
Audit Committee Member                                                 None(16)

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

Peter I. Wold(9)                                      $16,591                           $25,454         $60,386(12)
Governance Committee Member                                            None(16)

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

Brian F. Wruble(13)                                   $15,768                         $49,899(14)      $159,354(15)
Regulatory & Oversight Committee Member                                None(16)

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

"

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

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

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


     2. "Estimated  Annual Benefits Upon Retirement" is based on a straight life
payment plan election with the assumption  that a Trustee will retire at the age
of 75 and is  eligible  (after 7 years of service)  to receive  retirement  plan
benefits  with  respect  to  certain  Board I Funds  as  described  below  under
"Retirement Plan for Trustees."

     3. Includes $7,425 deferred by Mr. Yeutter under the "Deferred Compensation
Plan" described below.

     4. Includes $49,811 estimated  benefits to be paid to Mr. Galli for serving
as a  director  or trustee  of 10 other  Oppenheimer  funds that are not Board I
Funds.

     5. Includes $135,500 paid to Mr. Galli for serving as a director or trustee
of 10 other Oppenheimer funds (at December 31, 2005) that are not Board I Funds.

     6.  Includes   $25,778  deferred  by  Mr.  Griffiths  under  the  "Deferred
Compensation Plan" described below.

     7. Includes $10,311 deferred by Mr. Motley under the "Deferred Compensation
Plan" described below.

     8. Due to actuarial considerations, no additional retirement benefits were
accrued with  respect to Mr.  Randall.

     9. Mr. Wikler and Mr. Wold were elected as Board members of 23 of the Board
I Funds,  including  the Fund as of August  17,  2005.  They had served as Board
members of 10 other Board I Funds prior to that date.

     10. Includes $2,773 deferred by Mr. Wikler under the "Deferred Compensation
Plan" described below.

     11. Includes $6,686 paid to Mr. Wikler for serving as a director or trustee
of one other  Oppenheimer  fund (at  December  31,  2005) that was not a Board I
Fund.

     12.  Includes  $6,686 paid to Mr. Wold for serving as a director or trustee
of one other  Oppenheimer  fund (at  December  31,  2005) that was not a Board I
Fund.

     13. Mr. Wruble was appointed as Trustee of the Board I Funds on October 10,
2005.

     14.  Includes  $45,544  estimated  benefits  to be paid to Mr.  Wruble  for
serving as a director  or  trustee  of 10 other  Oppenheimer  funds that are not
Board I Funds.  Mr. Wruble's service as a director or trustee of such funds will
not be counted  towards the  fulfillment  of his  eligibility  requirements  for
payments under the Board I retirement plan,  described below.

     15.  Includes  $135,500  paid to Mr.  Wruble for  serving as a director  or
trustee of 10 other  Oppenheimer funds (at December 31, 2005) that are not Board
I Funds.

     16. Due to the change of Net Assets,  the  retirement  benefits  reached to
maximum accrual amounts. No additional retirement benefits were accrued.

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

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


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


     Major Shareholders. As of October 6, 2006, the only persons or entities who
owned of record or were

     known by the Fund to own beneficially 5% or more of any class of the Fund's
outstanding shares were:


     MLPF&S for the sole benefit of its customers, Attn. Fund Admin.#98756, 4800
Deer  Lake  Dr.  E.  Floor  3,   Jacksonville,   FL   32246-6484,   which  owned
10,522,482.757 Class A shares (8.66% of the Class A shares then outstanding).

     Great-West Life & Annuity Insurance Company, Attn. Mutual Fund Trading 2T2,
8515 E. Orchard Rd., Greenwood Village, CO 80111-500,  which owned 8,308,761.696
Class A shares (6.84% of the Class A shares then outstanding).

     MLPF&S for the sole benefit of its customers, Attn. Fund Admin.#97C27, 4800
Deer Lake Dr. E. Floor 3, Jacksonville, FL 32246-6484, which owned 1,853,069.183
Class C shares (11.36% of the Class C shares then outstanding).

     UMB Bank NA Cust. AMFO & CO FBO 320 Pooled,  Attn. Employee Benefits,  1010
Grand Blvd., Kansas City, MO 64106-2202,  which owned 297,795.952 Class N shares
(5.03% of the Class N shares then outstanding).

     Mark Curran TR,  Boeing Co. Master Trust,  200 Newport  Avenue Ext.,  North
Quincy,  MA  02171-2102,  which owned  412,268.560  Class Y shares (6.97% of the
Class Y shares then outstanding).

     Oppenheimer  Portfolio Series Aggressive  Investor,  Attn. FPA Trade Settle
(2-FA).,  6803  South  Tucson  Way,  Centennial,  CO  80112-3924,   which  owned
1,067,276.084 Class Y shares (7.03% of the Class Y shares then outstanding).

     Oppenheimer  Portfolio  Series Active  Allocation,  Attn.  FPA Trade Settle
(2-FA).,  6803  South  Tucson  Way,  Centennial,  CO  80112-3924,   which  owned
2,858,961.040 Class Y shares (18.85% of the Class Y shares then outstanding).

     Oppenheimer  Portfolio  Series  Moderate  Investor,  Attn. FPA Trade Settle
(2-FA).,  6803  South  Tucson  Way,  Centennial,  CO  80112-3924,   which  owned
1,003,759.770 Class Y shares (6.61% of the Class Y shares then outstanding).

     Oppenheimer  Portfolio Series Active  Allocation Tact Comp, Attn. FPA Trade
Settle (2-FA).,  6803 South Tucson Way, Centennial,  CO 80112-3924,  which owned
1,157,345.649 Class Y shares (7.63% of the Class Y shares then outstanding).

     MLPF&S for the sole benefit of its customers,  Attn. Fund Admin., 4800 Deer
Lake Dr. E. Floor 3,  Jacksonville,  FL  32246-6484,  which owned  2,366,629.366
Class Y shares (15.60% of the Class Y shares then outstanding).

     Taynik & Co., c/o Investors Bank & Trust,  FPG90, P.O. Box 9130, Boston, MA
02117-9130,  which  owned  1,958,086.015  Class Y shares  (12.91% of the Class Y
shares then outstanding).

     Vanguard  Fiduciary Trust Co TR, Vanguard  Fiduciary Trust Co, PO Box 9130,
Valley Forge, PA 19482-2600,  which owned 1,090,814.166 Class Y shares (7.19% of
the Class Y shares then outstanding).


     The Manager. The Manager is wholly-owned by Oppenheimer  Acquisition Corp.,
a holding company  controlled by Massachusetts  Mutual Life Insurance Company, a
global, diversified insurance and financial services organization.


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

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

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

     o The  Fund  generally  votes  with  the  recommendation  of  the  issuer's
management  on  routine  matters,  including  ratification  of  the  independent
registered public accounting firm, unless circumstances indicate otherwise.

     o The Fund  evaluates  nominees for director  nominated by  management on a
case-by-case basis, examining the following factors,  among others:  Composition
of the board and key board committees,  attendance at board meetings,  corporate
governance  provisions and takeover activity,  long-term company performance and
the nominee's investment in the company.

     o In general,  the Fund opposes  anti-takeover  proposals  and supports the
elimination,  or the  ability of  shareholders  to vote on the  preservation  or
elimination, of anti-takeover proposals, absent unusual circumstances.

     o The Fund supports  shareholder  proposals to reduce a super-majority vote
requirement,  and opposes  management  proposals  to add a  super-majority  vote
requirement.

     o The  Fund  opposes  proposals  to  classify  the  board of  directors  or
trustees.

     o The Fund supports proposals to eliminate cumulative voting.

     o  The  Fund  opposes  re-pricing  of  stock  options  without  shareholder
approval.

     o The Fund generally  considers  executive  compensation  questions such as
stock option plans and bonus plans to be ordinary  business  activity.  The Fund
analyzes  stock option  plans,  paying  particular  attention to their  dilutive
effect. While the Fund generally supports management proposals, the Fund opposes
plans it considers to be excessive.

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



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


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

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



Fiscal Year ended 8/31         Management Fees Paid to OppenheimerFunds, Inc.

    2004                                                    $46,800,100

    2005                                                    $49,541,160


    2006                                                    $46,675,664




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

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

     Portfolio Managers. The Fund's portfolio is managed by William L. Wilby and
Marc L. Baylin  (each is referred to as a "Portfolio  Manager" and  collectively
they are referred to as the "Portfolio Managers").  They are the persons who are
responsible for the day-to-day management of the Fund's investments.

     Other  Accounts  Managed.  In addition to  managing  the Fund's  investment
portfolio,  Messrs. Wilby and Baylin also manage other investment  portfolios on
behalf  of  the  Manager  or  its  affiliates.   The  following  table  provides
information  regarding  those  portfolios as of August 31, 2006. No portfolio or
account has an advisory fee based on performance:




                                 Total Assets      Other      Total Assts in
                     Registered  in Registered     Pooled     Other Pooled                     Total Assets
                     Investment  Investment        Investment Investment         Other         in Other
                     Companies   Companies         Vehicles   Vehicles          Accounts       Accounts
Portfolio Manager    Managed     Managed (1)       Managed    Managed (1)       Managed        Managed 1,2

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

 William L. Wilby     5        $4,678.07            2             $847.2         None          None



Marc L. Baylin        5          $4,678.07          2             $847.2         None          None

     1. In millions.

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

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

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

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

     Ownership of Fund Shares.  As of August 31, 2006,  the  Portfolio  Managers
beneficially owned shares of the Fund as follows:



                                                   Range of Shares Beneficially
           Portfolio Manager                         Owned in the Fund


             William L. Wilby                                Over $1,000,000


             Marc L. Baylin                                  $50,001-$100,000




Brokerage Policies of the Fund


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

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

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

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

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

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


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

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


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

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

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


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


     During the fiscal years ended August 31, 2004, 2005 and 2006, the Fund paid
the total brokerage  commissions indicated in the chart below. During the fiscal
year ended August 31, 2006,  the Fund paid  $11,898,868  in commissions to firms
that  provide  brokerage  and  research  services  to the Fund with  respect  to
$12,072,721,826 of aggregate portfolio transactions.  All such transactions were
on a "best  execution"  basis,  as described  above.  The  provision of research
services was not necessarily a factor in the placement of all such transactions.







Fiscal Year Ended 8/31,          Total Brokerage Commissions Paid by the Fund*

       2004                                                    $9,930,875

       2005                                                    $5,876,407

       2006                                                    $13,247,088



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



Distribution and Service Plans

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

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

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

  Fiscal Year     Aggregate Front-End      Class A Front-End
                                             Sales Charges

                    Sales Charges on          Retained by
  Ended 8/31:        Class A Shares          Distributor(1)
- ---------------- ----------------------- -----------------------
- ---------------- ----------------------- -----------------------
     2004              $8,609,333              $2,506,575
- ---------------- ----------------------- -----------------------
- ---------------- ----------------------- -----------------------
     2005              $9,283,998              $2,594,826
- ---------------- ----------------------- -----------------------
- ------------------ ----------------------- ----------------------

      2006               $7,220,395             $2,074,436

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

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

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

  Fiscal Year     Concessions on Class   Concessions on Class   Concessions on Class C   Concessions on Class N
                  A Shares Advanced by   B Shares Advanced by     Shares Advanced by       Shares Advanced by
  Ended 8/31:        Distributor(1)         Distributor(1)          Distributor(1)           Distributor(1)

- ---------------- ----------------------- ---------------------- ------------------------ ------------------------
- ---------------- ----------------------- ---------------------- ------------------------ ------------------------
     2004              $1,173,421             $5,971,705              $1,566,277                $732,141
- ---------------- ----------------------- ---------------------- ------------------------ ------------------------
- ---------------- ----------------------- ---------------------- ------------------------ ------------------------
     2005               $976,097              $4,464,534              $1,284,533                $537,358
- ---------------- ----------------------- ---------------------- ------------------------ ------------------------
- ---------------- ----------------------- ----------------------- ------------------------- ------------------------

     2006               $737,155               $3,417,207                $722,081                 $220,503

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

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


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

  Fiscal Year      Class A Contingent      Class B Contingent       Class C Contingent       Class N Contingent
                     Deferred Sales          Deferred Sales
                  Charges Retained by     Charges Retained by     Deferred Sales Charges   Deferred Sales Charges
  Ended 8/31:         Distributor             Distributor        Retained by Distributor   Retained by Distributor

- ---------------- ----------------------- ----------------------- ------------------------- ------------------------
- ---------------- ----------------------- ----------------------- ------------------------- ------------------------
     2004               $78,402                $2,425,021                $105,674                 $115,630
- ---------------- ----------------------- ----------------------- ------------------------- ------------------------
- ---------------- ----------------------- ----------------------- ------------------------- ------------------------
     2005               $32,458                $2,448,819                $143,743                 $173,648
- ---------------- ----------------------- ----------------------- ------------------------- ------------------------
- ------------------ ----------------------- ----------------------- ------------------------- -----------------------

      2006                $36,741                $2,120,566                $129,157                 $120,628

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



     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 Trustees(1), cast in person at
a meeting called for the purpose of voting on that plan.

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


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

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

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

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

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


     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 0.25% of average
annual net assets of Class A shares.  The Board has set the rate at that  level.
The Distributor  does not receive or retain the service fee on Class A shares in
accounts  for which the  Distributor  has been  listed as the  broker-dealer  of
record.  While  the  plan  permits  the  Board  to  authorize  payments  to  the
Distributor  to reimburse  itself for services under the plan, the Board has not
yet done so,  except in the case of the  special  arrangement  described  below,
regarding  grandfathered  retirement accounts. The Distributor makes payments to
recipients  periodically  at an annual  rate not to exceed  0.25% of the average
annual net  assets  consisting  of Class A shares  held in the  accounts  of the
recipients or their customers.

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


     For the fiscal year ended August 31, 2006  payments  under the Class A plan
totaled $13,448,667, of which $123,416 was retained by the Distributor under the
arrangement described above,  regarding  grandfathered  retirement accounts, and
included $550,784 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.

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

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


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

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

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

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

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

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

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

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

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

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

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

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

     During a calendar year, 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
asset-based  sales  charges  paid  to the  Distributor  by the  Fund  under  the
distribution  and service plans.  Those excess  expenses are carried over on the
Distributor's  books and may be recouped from asset-based  sales charge payments
from the Fund in future years.  However,  the Distributor has voluntarily agreed
to cap the amount of expenses under the plans that may be carried over from year
to year and recouped  that relate to (i) expenses the  Distributor  has incurred
that represent  compensation  and expenses of its sales personnel and (ii) other
direct  distribution  costs it has  incurred,  such as sales  literature,  state
registration  fees,  advertising and prospectuses used to offer Fund shares. The
cap on the carry-over of those  categories of expenses is set at 0.70% of annual
gross sales of shares of the Fund. If those  categories  of expenses  exceed the
capped amount,  the Distributor  bears the excess costs. If the Class B, Class C
or Class N plan were to be terminated by the Fund,  the Fund's Board of Trustees
may allow the Fund to continue  payments of the asset-based  sales charge to the
Distributor for distributing shares prior to the termination of the plan.



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

               Distribution and Service Fees Paid to the Distributor for the Fiscal Year Ended 8/31/06

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

Class B Plan            $9,641,132(1)          $7,408,054               $15,236,268                   1.79%

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

Class C Plan            $6,837,706(2)          $ 1,046,866              $11,185,152                   1.73%

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

Class N Plan            $1,267,131(3)           $552,111                $3,393,557                    1.36%

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

1. Includes $161,469 paid to an affiliate of the Distributor's parent company.
2. Includes $236,176 paid to an affiliate of the Distributor's parent company.
3. Includes $34,286 paid to an affiliate of the Distributor's parent company.

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



Payments to Fund Intermediaries


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


     Possible  types of payments to financial  intermediaries  include,  without
limitation, those discussed below.

     o Payments made by the Fund, or by an investor  buying or selling shares of
the Fund may include:

     o  depending  on the share  class  that the  investor  selects,  contingent
deferred sales charges or initial  front-end sales charges,  all or a portion of
which  front-end  sales  charges are  payable by the  Distributor  to  financial
intermediaries (see "About Your Account" in the Prospectus);

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

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

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

     o These types of payments may reflect  compensation for marketing  support,
support provided in offering the Fund or other Oppenheimer funds through certain
trading platforms and programs, transaction processing or other services;

     o The Manager and Distributor  each may also pay other  compensation to the
extent the payment is not  prohibited by law or by any  self-regulatory  agency,
such as the NASD.  Payments are made based on the guidelines  established by the
Manager and Distributor, subject to applicable law.


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


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

     Revenue  sharing  payments  can  pay  for   distribution-related  or  asset
retention items including, without limitation,

     o  transactional  support,  one-time  charges for setting up access for the
Fund or other  Oppenheimer funds on particular  trading systems,  and paying the
intermediary's networking fees;

     o program  support,  such as expenses  related to including the Oppenheimer
funds in retirement plans, college savings plans, fee-based advisory or wrap fee
programs,  fund  "supermarkets",  bank or trust  company  products or  insurance
companies' variable annuity or variable life insurance products;

     o  placement  on  the  dealer's   list  of  offered   funds  and  providing
representatives  of the  Distributor  with access to a financial  intermediary's
sales meetings, sales representatives and management representatives.

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


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

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

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

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





Performance of the Fund

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

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

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

     Total returns measure the performance of a hypothetical account in the Fund
over  various  periods  and do not show the  performance  of each  shareholder's
account. Your account's performance will vary from the model performance data if
your  dividends  are  received  in cash,  or you buy or sell  shares  during the
period,  or you bought your shares at a different time and price than the shares
used in the model.

     The  Fund's  performance  returns  may not  reflect  the effect of taxes on
dividends and capital gains distributions.

     An  investment  in  the  Fund  is not  insured  by the  FDIC  or any  other
government agency.

     The  principal  value of the  Fund's  shares,  and  total  returns  are not
guaranteed and normally will fluctuate on a daily basis.

     When an investor's shares are redeemed, they may be worth more or less than
their  original  cost.

     Total returns for any given past period  represent  historical  performance
information  and are not, and should not be  considered,  a prediction of future
returns.

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

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


     In calculating total returns for Class A shares,  the current maximum sales
charge of 5.75% (as a  percentage  of the offering  price) is deducted  from the
initial  investment  ("P" in the  formula  below)  (unless  the  return is shown
without sales charge,  as described below).  For Class B shares,  payment of the
applicable contingent deferred sales charge is applied,  depending on the period
for which the return is shown:  5.0% in the first year, 4.0% in the second year,
3.0% in the third and fourth  years,  2.0% in the fifth year,  1.0% in the sixth
year and none thereafter. For Class C shares, the 1.0% contingent deferred sales
charge is deducted for returns for the one-year period.  For Class N shares, the
1.0%  contingent  deferred sales charge is deducted for returns for the one-year
period,  and total returns for the periods prior to 03/01/01 (the inception date
for Class N shares) are based on the Fund's Class A returns, adjusted to reflect
the higher Class N 12b-1 fees. There is no sales charge on Class Y shares.


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



ERV   l/n      - 1     = Average Annual Total Return
  P


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


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


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

ATV DR    l/n
- -------         - 1 = Average Annual Total Return (After Taxes on Distributions
  P                        and Redemptions)


     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 = Total Return 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
     --------
       P



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





             The Fund's Total Returns for the Periods Ended 8/31/06

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

Class A(1)       120.18%      133.59%      -1.49%       4.53%        0.34%        1.54%        8.21%         8.85%

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

Class B(2)       122.82%      122.82%      -1.35%       3.65%        0.30%        0.70%        8.34%         8.34%

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

Class C(3)       116.04%      116.04%      2.74%        3.74%        0.77%        0.77%        8.01%         8.01%

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

Class N(4)      -4.27%(4)    -4.27%(4)     3.16%        4.16%        1.23%        1.23%      -0.79% (4)   -0.79% (4)

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

Class Y(5)      65.25%(5)    65.25%(5)     4.93%        4.93%        1.91%        1.91%      5.86% (5)     5.86% (5)

- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ------------
1. Inception of Class A:      01/22/81
2. Inception of Class B:      11/01/95
3. Inception of Class C:      12/01/93
4. Inception of Class N:      03/01/01
5. Inception of Class Y:      11/03/97

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

                      Average Annual Total Returns for Class A(1) Shares (After Sales Charge)
                                           For the Periods Ended 8/31/06

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

                                                    1-Year                 5-Years                  10-Years
                                                                     (or life of class if     (or life of class if
                                                                            less)                    less)

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

After Taxes on Distributions                        -1.68%                  0.21%                    6.70%

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

After Taxes on Distributions and                    -0.96%                  0.24%                    6.38%

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

     1.  Inception of Class A: 01/22/81



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

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


     Morningstar Ratings. From time to time the Fund may publish the star rating
of  the   performance   of  its   classes   of  shares  by   Morningstar,   Inc.
("Morningstar"),  an independent  mutual fund  monitoring  service.  Morningstar
rates mutual funds in their specialized  market sector.  The Fund is rated among
Large Blend

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


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

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

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

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

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

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

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

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

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

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



ABOUT YOUR ACCOUNT


How to Buy Shares

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


     When you purchase shares of the Fund, your ownership interest in the shares
of the Fund will be  recorded  as a book entry on the  records of the Fund.  The
Fund will not issue or re-register physical share certificates.


     AccountLink.  When shares are purchased through AccountLink,  each purchase
must be at least $50 and shareholders  must invest at least $500 before an Asset
Builder Plan  (described  below) can be established  on a new account.  Accounts
established  prior  to  November  1,  2002  will  remain  at $25 for  additional
purchases.  Shares will be purchased on the regular business day the Distributor
is instructed to initiate the Automated  Clearing House ("ACH")  transfer to buy
the shares. Dividends will begin to accrue on shares purchased with the proceeds
of ACH  transfers on the business day the Fund  receives  Federal  Funds for the
purchase  through the ACH system before the close of the New York Stock Exchange
(the "NYSE").  The NYSE normally  closes at 4:00 p.m.,  but may close earlier on
certain days. If Federal Funds are received on a business day after the close of
the NYSE, the shares will be purchased and dividends will begin to accrue on the
next regular  business day. The proceeds of ACH transfers are normally  received
by the Fund three days after the transfers are initiated. If the proceeds of the
ACH transfer are not received on a timely basis,  the  Distributor  reserves the
right  to  cancel  the  purchase  order.  The  Distributor  and the Fund are not
responsible  for any delays in purchasing  shares  resulting  from delays in ACH
transmissions.

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

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


Oppenheimer AMT-Free Municipals                               Oppenheimer New Jersey Municipal Fund
Oppenheimer AMT-Free New York Municipals                      Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Balanced Fund                                     Oppenheimer Portfolio Series:
Oppenheimer Core Bond Fund                                    Active Allocation Fund
Oppenheimer California Municipal Fund                         Aggressive Investor Fund
Oppenheimer Capital Appreciation Fund                         Conservative Investor Fund
Oppenheimer Capital Income Fund                               Moderate Investor Fund
Oppenheimer Champion Income Fund                              Oppenheimer Principal Protected Main Street Fund
Oppenheimer Convertible Securities Fund                       Oppenheimer Principal Protected Main Street Fund II
Oppenheimer Developing Markets Fund                           Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Discovery Fund                                    Oppenheimer Quest Balanced Fund
Oppenheimer Dividend Growth Fund                              Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Emerging Growth Fund                              Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Emerging Technologies Fund                        Oppenheimer Quest Opportunity Value Fund
Oppenheimer Enterprise Fund                                   Oppenheimer Quest Value Fund, Inc.
Oppenheimer Equity Fund, Inc.                                 Oppenheimer Real Asset Fund

                                                              Oppenheimer Real Estate Fund

Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund                         Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Growth Fund                                       Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer International Bond Fund                           Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer International Diversified Fund                    Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer International Growth Fund                         Oppenheimer Rochester National Municipals
Oppenheimer International Small Company Fund                  Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer International Value Fund                          Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Limited Term California Municipal Fund            Oppenheimer Select Value Fund
Oppenheimer Limited-Term Government Fund                      Oppenheimer Senior Floating Rate Fund
Oppenheimer Limited Term Municipal Fund                       Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Main Street Fund                                    Oppenheimer Strategic Income Fund
Oppenheimer Main Street Opportunity Fund                      Oppenheimer U.S. Government Trust
Oppenheimer Main Street Small Cap Fund                        Oppenheimer Value Fund
Oppenheimer MidCap Fund                                       Limited-Term New York Municipal Fund
                                                              Rochester Fund Municipals



And the following money market funds:

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


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


     Letters of Intent. Under a Letter of Intent ("Letter"),  you can reduce the
sales  charge  rate  that  applies  to your  purchases  of Class A shares if you
purchase  Class A,  Class B or Class C shares  of the Fund or other  Oppenheimer
funds during a 13-month  period.  The total amount of your purchases of Class A,
Class B and Class C shares will  determine the sales charge rate that applies to
your  Class A share  purchases  during  that  period.  You can choose to include
purchases  that you made up to 90 days  before the date of the  Letter.  Class A
shares of Oppenheimer  Money Market Fund, Inc. and Oppenheimer  Cash Reserves on
which you have not paid a sales charge and any Class N shares you  purchase,  or
may have  purchased,  will  not be  counted  towards  satisfying  the  purchases
specified in a Letter.

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


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

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

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

     The Transfer  Agent will not hold shares in escrow for  purchases of shares
of the Fund and other  Oppenheimer  funds by  OppenheimerFunds  prototype 401(k)
plans under a Letter.  If the intended  purchase  amount under a Letter  entered
into by an  OppenheimerFunds  prototype 401(k) plan is not purchased by the plan
by the end of the Letter period, there will be no adjustment of concessions paid
to the broker-dealer or financial institution of record for accounts held in the
name of that plan.

     In determining  the total amount of purchases  made under a Letter,  shares
redeemed by the investor  prior to the  termination of the Letter period will be
deducted.  It is the  responsibility of the dealer of record and/or the investor
to advise the Distributor  about the Letter when placing any purchase orders for
the  investor  during  the Letter  period.  All of such  purchases  must be made
through the Distributor.

         |X|  Terms of Escrow That Apply to Letters of Intent.

     1. Out of the initial purchase (or subsequent  purchases if necessary) made
pursuant to a Letter, shares of the Fund equal in value up to 5% of the intended
purchase amount  specified in the Letter shall be held in escrow by the Transfer
Agent. For example, if the intended purchase amount is $50,000, the escrow shall
be  shares  valued  in the  amount of $2,500  (computed  at the  offering  price
adjusted for a $50,000 purchase).  Any dividends and capital gains distributions
on the escrowed shares will be credited to the investor's account.

     2. If the total minimum investment  specified under the Letter is completed
within the 13-month Letter period, the escrowed shares will be promptly released
to the investor.

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

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

     5. The shares  eligible  for  purchase  under the Letter (or the holding of
which may be counted toward completion of a Letter) include:

     (a) Class A shares sold with a front-end sales charge or subject to a Class
A contingent deferred sales charge,

     (b) Class B and Class C shares of other  Oppenheimer funds acquired subject
to a contingent deferred sales charge, and

     (c) Class A, Class B or Class C shares  acquired  by exchange of either (1)
Class A shares of one of the other  Oppenheimer funds that were acquired subject
to a Class A initial or contingent deferred sales charge or (2) Class B or Class
C shares of one of the other  Oppenheimer  funds that were acquired subject to a
contingent deferred sales charge.

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

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

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

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


     Retirement  Plans.  Certain  types of  retirement  plans  are  entitled  to
purchase  shares of the Fund without  sales  charges or at reduced  sales charge
rates,  as described in Appendix B to this Statement of Additional  Information.
Certain  special sales charge  arrangements  described in that Appendix apply to
retirement  plans whose  records are  maintained on a daily  valuation  basis by
Merrill Lynch Pierce Fenner & Smith,  Inc.  ("Merrill  Lynch") or an independent
record keeper that has a contract or special  arrangement with Merrill Lynch. If
on the date the plan sponsor  signed the Merrill  Lynch record  keeping  service
agreement  the plan has less than $1 million in assets  invested  in  applicable
investments  (other  than  assets  invested  in money  market  funds),  then the
retirement plan may purchase only Class C shares of the Oppenheimer funds. If on
the date the plan  sponsor  signed the  Merrill  Lynch  record  keeping  service
agreement  the plan has $1 million or more in assets but less than $5 million in
assets invested in applicable  investments  (other than assets invested in money
market funds),  then the retirement plan may purchase only Class N shares of the
Oppenheimer  funds.  If on the date the plan  sponsor  signed the Merrill  Lynch
record  keeping  service  agreement  the plan has $5  million  or more in assets
invested in applicable  investments  (other than assets invested in money market
funds),  then  the  retirement  plan may  purchase  only  Class A shares  of the
Oppenheimer funds.


     OppenheimerFunds  has entered into arrangements with certain record keepers
whereby the Transfer Agent  compensates the record keeper for its record keeping
and account  servicing  functions that it performs on behalf of the  participant
level accounts of a retirement plan.  While such  compensation may act to reduce
the record  keeping fees charged by the retirement  plan's record  keeper,  that
compensation  arrangement may be terminated at any time,  potentially  affecting
the record keeping fees charged by the retirement plan's record keeper.

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

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

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

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


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


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

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

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

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

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

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

     o to all trustee-to-trustee IRA transfers,

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

     o to Group  Retirement Plans (as defined in Appendix B 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 Retirement  Plans with at least 100 eligible  employees or $500,000 or
more in plan assets,

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

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

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

     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

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

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

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

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


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


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


     Listed  below  are  certain  cases in which  the Fund has  elected,  in its
discretion, not to assess the Fund Account Fees. These exceptions are subject to
change:

     o A fund account whose shares were  acquired  after  September  30th of the
prior year;
     o A fund  account  that  has a  balance  below  $500  due to the  automatic
conversion of shares from Class B to


Class A shares.  However,  once all Class B shares held in the account have
been  converted to Class A shares the new account  balance may become subject to
the Minimum Balance Fee;

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

     o A fund account that has only certificated shares and, has a balance below
$500 and is being escheated;

     o Accounts of shareholders that are held by  broker-dealers  under the NSCC
Fund/SERV system;

     o Accounts held under the Oppenheimer Legacy Program and/or holding certain
Oppenheimer  Variable  Account Funds;

     o Omnibus  accounts  holding  shares  pursuant to the  Pinnacle,  Ascender,
Custom Plus, Recordkeeper Pro and Pension Alliance Retirement Plan programs; and

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

     To access account documents  electronically via eDocs Direct,  please visit
the  Service  Center  on  our  website  at   www.oppenheimerfunds.com   or  call
1.888.470.0862 for instructions.

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

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


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


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

     |X|  Securities  Valuation.  The Fund's Board of Trustees  has  established
procedures  for  the  valuation  of the  Fund's  securities.  In  general  those
procedures are as follows:

     o Equity securities traded on a U.S. securities exchange or on NASDAQ(R)are
valued as follows:

     (1) if last sale information is regularly reported,  they are valued at the
last reported sale price on the

principal exchange on which they are traded or on NASDAQ(R), as applicable,
on that day, or

     (2) if last sale information is not available on a valuation date, they are
valued at the last  reported sale price  preceding  the valuation  date if it is
within the spread of the closing "bid" and "asked"  prices on the valuation date
or, if not, at the closing "bid" price on the valuation date.

     o Equity securities traded on a foreign  securities  exchange generally are
valued in one of the following ways:

     (1) at the last sale price available to the pricing service approved by the
Board of Trustees, or

     (2) at the last sale price  obtained by the Manager  from the report of the
principal  exchange on which the security is traded at its last trading  session
on or immediately before the valuation date, or

     (3) at the mean  between the "bid" and  "asked"  prices  obtained  from the
principal  exchange  on  which  the  security  is  traded  or,  on the  basis of
reasonable inquiry, from two market makers in the security.

     o Long-term  debt  securities  having a remaining  maturity in excess of 60
days  are  valued  based  on the mean  between  the  "bid"  and  "asked"  prices
determined  by a  portfolio  pricing  service  approved  by the Fund's  Board of
Trustees  or  obtained  by the  Manager  from two  active  market  makers in the
security on the basis of reasonable inquiry.

     o The  following  securities  are valued at the mean  between the "bid" and
"asked" prices  determined by a pricing service  approved by the Fund's Board of
Trustees  or  obtained  by the  Manager  from two  active  market  makers in the
security on the basis of reasonable inquiry:

     (1) debt  instruments  that  have a  maturity  of more  than 397 days  when
issued,

     (2) debt  instruments  that had a maturity  of 397 days or less when issued
and have a remaining maturity of more than 60 days, and

     (3) non-money  market debt  instruments  that had a maturity of 397 days or
less when issued and which have a remaining  maturity of 60 days or less.

     o The following securities are valued at cost, adjusted for amortization of
premiums and accretion of discounts:

     (1) money market debt securities held by a non-money market fund that had a
maturity of less than 397 days when issued that have a remaining  maturity of 60
days or less, and

     (2) debt  instruments  held by a money  market  fund that have a  remaining
maturity of 397 days or less.

     o Securities (including restricted securities) not having readily-available
market  quotations  are  valued  at fair  value  determined  under  the  Board's
procedures. If the Manager is unable to locate two market makers willing to give
quotes,  a  security  may be priced at the mean  between  the "bid" and  "asked"
prices  provided by a single  active market maker (which in certain cases may be
the "bid" price if no "asked" price is available).

     In the  case of U.S.  government  securities,  mortgage-backed  securities,
corporate bonds and foreign government securities, when last sale information is
not generally  available,  the Manager may use pricing services  approved by the
Board of  Trustees.  The pricing  service may use  "matrix"  comparisons  to the
prices for comparable  instruments on the basis of quality,  yield and maturity.
Other  special  factors may be involved  (such as the  tax-exempt  status of the
interest paid by municipal securities). The Manager will monitor the accuracy of
the pricing  services.  That  monitoring may include  comparing  prices used for
portfolio valuation to actual sales prices of selected securities.


     The closing prices in the New York foreign  exchange market on a particular
business  day that are  provided  to the  Manager  by a bank,  dealer or pricing
service that the Manager has determined to be reliable are used to value foreign
currency, including forward contracts, and to convert to U.S. dollars securities
that are denominated in foreign currency.

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


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


How to Sell Shares

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

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

     Reinvestment  Privilege.  Within six months of a redemption,  a shareholder
may reinvest all or part of the redemption proceeds of:

     o Class A shares  purchased  subject to an initial  sales charge or Class A
shares on which a contingent deferred sales charge was paid, or

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

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

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

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

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

     Involuntary  Redemptions.  The Fund's  Board of  Trustees  has the right to
cause the  involuntary  redemption  of the  shares  held in any  account  if the
aggregate  net asset  value of those  shares  is less  than $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.

     Distributions  From  Retirement  Plans.  Requests  for  distributions  from
OppenheimerFunds-sponsored  IRAs,  SEP-IRAs,  SIMPLE IRAs,  403(b)(7)  custodial
plans,  401(k) plans or pension or  profit-sharing  plans should be addressed to
"Trustee,  OppenheimerFunds  Retirement  Plans," c/o the  Transfer  Agent at its
address listed in "How To Sell Shares" in the Prospectus or on the back cover of
this Statement of Additional Information. The request must:

     (1) state the reason for the distribution;

     (2) state the owner's  awareness of tax  penalties if the  distribution  is
premature; and

     (3) conform to the requirements of the plan and the Fund's other redemption
requirements.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How to Exchange Shares

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


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


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


     The following funds do not offer Class N shares:

    Limited Term New York Municipal Fund                            Oppenheimer Rochester National Municipals
    Oppenheimer AMT-Free Municipals                                 Oppenheimer Senior Floating Rate Fund
    Oppenheimer AMT-Free New York Municipals                        Rochester Fund Municipals
    Oppenheimer California Municipal Fund                           Oppenheimer Rochester Massachusetts Municipal Fund
    Oppenheimer International Value Fund                            Oppenheimer Rochester Michigan Municipal Fund
    Oppenheimer Limited Term California Municipal Fund              Oppenheimer Rochester Ohio Municipal Fund
    Oppenheimer Limited Term Municipal Fund                         Oppenheimer Rochester Virginia Municipal Fund
     Oppenheimer Money Market Fund, Inc.                         Oppenheimer Rochester Arizona Municipal Fund
     Oppenheimer New Jersey Municipal Fund                       Oppenheimer Rochester Maryland Municipal Fund
     Oppenheimer Principal Protected Main Street Fund II         Oppenheimer Rochester North Carolina Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund



     The following funds do not offer Class Y shares:

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

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

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

     o Class B and Class C shares of  Oppenheimer  Cash  Reserves are  generally
available only by exchange from

the  same   class  of  shares  of  other   Oppenheimer   funds  or  through
OppenheimerFunds-sponsored 401(k) plans.

     o  Class  M  shares  of  Oppenheimer  Convertible  Securities  Fund  may be
exchanged only for Class A shares of other  Oppenheimer  funds.  They may not be
acquired  by  exchange  of shares of any  class of any other  Oppenheimer  funds
except Class A shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash
Reserves acquired by exchange of Class M shares.

     o Class A shares of  Oppenheimer  funds may be exchanged at net asset value
for shares of certain  money market 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.

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

     o  Shares  of  Oppenheimer  Principal  Protected  Main  Street  Fund may be
exchanged  at net asset  value for  shares of the same class of any of the other
Oppenheimer funds into which you may exchange shares. However,  shareholders are
not  permitted  to  exchange  shares of other  Oppenheimer  funds for  shares of
Oppenheimer  Principal  Protected Main Street Fund until after the expiration of
the warranty period (8/5/2010).

     o Shares of  Oppenheimer  Principal  Protected  Main  Street Fund II may be
exchanged  at net asset  value for  shares of the same class of any of the other
Oppenheimer funds into which you may exchange shares. However,  shareholders are
not  permitted  to  exchange  shares of other  Oppenheimer  funds for  shares of
Oppenheimer  Principal  Protected Main Street Fund II until after the expiration
of the warranty period (3/3/2011).

     o Shares of  Oppenheimer  Principal  Protected  Main Street Fund III may be
exchanged  at net asset  value for  shares of the same class of any of the other
Oppenheimer funds into which you may exchange shares. However,  shareholders are
not  permitted  to  exchange  shares of other  Oppenheimer  funds for  shares of
Oppenheimer  Principal Protected Main Street Fund III until after the expiration
of the warranty period (12/16/2011).

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


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

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


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

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


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

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

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

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


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


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

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

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

     |X| Limits on Multiple  Exchange  Orders.  The Fund  reserves  the right to
reject  telephone or written  exchange  requests  submitted in bulk by anyone on
behalf of more than one account.

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

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


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


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

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

Dividends, Capital Gains and Taxes

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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


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

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

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

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

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

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

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

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

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


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

Additional Information About the Fund

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

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

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


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


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER CAPITAL APPRECIATION FUND:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Capital Appreciation Fund, including the statement of investments,
as of August 31, 2006, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

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

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

/s/ KPMG LLP
KPMG LLP

Denver, Colorado

October 16, 2006



STATEMENT OF INVESTMENTS  August 31, 2006
- --------------------------------------------------------------------------------

                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.8%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.2%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.1%
Las Vegas Sands Corp. 1                               798,300    $   55,729,323
- --------------------------------------------------------------------------------
Panera Bread Co., Cl. A 1                             441,990        22,939,281
- --------------------------------------------------------------------------------
Scientific Games Corp., Cl. A 1                       959,870        27,903,421
- --------------------------------------------------------------------------------
Starbucks Corp. 1                                   1,619,860        50,231,859
                                                                 ---------------
                                                                    156,803,884

- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.4%
Harman International Industries, Inc.                 363,020        29,448,182
- --------------------------------------------------------------------------------
MEDIA--1.5%
Comcast Corp., Cl. A Special, Non-Vtg. 1            2,032,225        70,944,975
- --------------------------------------------------------------------------------
XM Satellite Radio Holdings, Inc., Cl. A 1          3,544,060        45,931,018
                                                                 ---------------
                                                                    116,875,993

- --------------------------------------------------------------------------------
MULTILINE RETAIL--2.5%
J.C. Penney Co., Inc. (Holding Co.)                 1,123,240        70,809,050
- --------------------------------------------------------------------------------
Kohl's Corp. 1                                      1,065,500        66,604,405
- --------------------------------------------------------------------------------
Target Corp.                                        1,183,470        57,268,113
                                                                 ---------------
                                                                    194,681,568

- --------------------------------------------------------------------------------
SPECIALTY RETAIL--3.0%
Best Buy Co., Inc.                                  1,315,640        61,835,080
- --------------------------------------------------------------------------------
Lowe's Cos., Inc.                                   2,983,760        80,740,546
- --------------------------------------------------------------------------------
Staples, Inc.                                       3,943,600        88,967,616
                                                                 ---------------
                                                                    231,543,242

- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.7%
Polo Ralph Lauren Corp.                               905,410        53,410,136
- --------------------------------------------------------------------------------
CONSUMER STAPLES--8.3%
- --------------------------------------------------------------------------------
BEVERAGES--1.1%
PepsiCo, Inc.                                       1,342,610        87,645,581

                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.9%
CVS Corp.                                           2,300,300    $   77,175,065
- --------------------------------------------------------------------------------
Sysco Corp.                                         1,502,340        47,158,453
- --------------------------------------------------------------------------------
Whole Foods Market, Inc.                              454,690        24,380,478
                                                                 ---------------
                                                                    148,713,996

- --------------------------------------------------------------------------------
FOOD PRODUCTS--2.2%
Cadbury Schweppes plc                               4,774,870        50,821,636
- --------------------------------------------------------------------------------
Nestle SA                                             331,918       114,135,998
                                                                 ---------------
                                                                    164,957,634

- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--3.1%
Procter & Gamble Co. (The)                          2,346,800       145,266,920
- --------------------------------------------------------------------------------
Reckitt Benckiser plc                               2,236,989        92,852,933
                                                                 ---------------
                                                                    238,119,853

- --------------------------------------------------------------------------------
ENERGY--6.3%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--4.5%
Halliburton Co.                                     3,675,110       119,882,088
- --------------------------------------------------------------------------------
Schlumberger Ltd.                                   2,049,630       125,642,319
- --------------------------------------------------------------------------------
Smith International, Inc.                           2,337,300        98,096,481
                                                                 ---------------
                                                                    343,620,888

- --------------------------------------------------------------------------------
OIL & GAS--1.8%
EOG Resources, Inc.                                   665,170        43,116,319
- --------------------------------------------------------------------------------
Kinder Morgan Management LLC                        1,019,934        43,051,414
- --------------------------------------------------------------------------------
Occidental Petroleum Corp.                            986,980        50,326,110
                                                                 ---------------
                                                                    136,493,843

- --------------------------------------------------------------------------------
FINANCIALS--10.6%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--4.5%
Franklin Resources, Inc.                              455,940        44,869,055
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The)                       456,200        67,814,130
- --------------------------------------------------------------------------------
Legg Mason, Inc.                                      927,770        84,668,290


               22 | OPPENHEIMER CAPITAL APPRECIATION FUND



                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
CAPITAL MARKETS Continued
Nomura Securities Co. Ltd.                          1,841,200    $   35,406,954
- --------------------------------------------------------------------------------
Northern Trust Corp.                                  993,500        55,626,065
- --------------------------------------------------------------------------------
T. Rowe Price Group, Inc.                             700,380        30,858,743
- --------------------------------------------------------------------------------
UBS AG                                                407,836        23,078,180
                                                                 ---------------
                                                                    342,321,417

- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.3%
SLM Corp.                                             553,950        26,883,194
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--2.5%
Bank of America Corp.                                 799,250        41,137,398
- --------------------------------------------------------------------------------
Chicago Mercantile Exchange (The)                     254,880       112,147,200
- --------------------------------------------------------------------------------
Citigroup, Inc.                                       777,371        38,363,259
                                                                 ---------------
                                                                    191,647,857

- --------------------------------------------------------------------------------
INSURANCE--3.3%
American International Group, Inc.                  1,798,500       114,780,270
- --------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The)         640,200        54,967,572
- --------------------------------------------------------------------------------
Prudential Financial, Inc.                          1,104,940        81,113,645
                                                                 ---------------
                                                                    250,861,487

- --------------------------------------------------------------------------------
HEALTH CARE--17.5%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--3.6%
Celgene Corp. 1                                       992,960        40,403,542
- --------------------------------------------------------------------------------
Genentech, Inc. 1                                     897,950        74,098,834
- --------------------------------------------------------------------------------
Genzyme Corp. (General Division) 1                  1,166,390        77,250,010
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1                               542,900        34,419,860
- --------------------------------------------------------------------------------
MedImmune, Inc. 1                                     552,450        15,269,718
- --------------------------------------------------------------------------------
PDL BioPharma, Inc. 1                               1,940,530        38,228,441
                                                                 ---------------
                                                                    279,670,405

                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--3.7%
Fisher Scientific International, Inc. 1             1,121,220    $   87,713,041
- --------------------------------------------------------------------------------
Medtronic, Inc.                                     1,237,475        58,037,578
- --------------------------------------------------------------------------------
St. Jude Medical, Inc. 1                            2,332,310        84,919,407
- --------------------------------------------------------------------------------
Varian Medical Systems, Inc. 1                        930,300        49,584,990
                                                                 ---------------
                                                                    280,255,016

- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--4.2%
Caremark Rx, Inc.                                   1,467,130        85,005,512
- --------------------------------------------------------------------------------
Covance, Inc. 1                                     1,091,440        68,618,833
- --------------------------------------------------------------------------------
Quest Diagnostics, Inc.                             1,075,000        69,101,000
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc.                            1,886,490        98,003,156
                                                                 ---------------
                                                                    320,728,501

- --------------------------------------------------------------------------------
PHARMACEUTICALS--6.0%
- --------------------------------------------------------------------------------
Novartis AG                                         2,371,819       135,370,098
- --------------------------------------------------------------------------------
Roche Holdings AG                                     702,097       129,427,476
- --------------------------------------------------------------------------------
Sanofi-Aventis SA                                     441,767        39,646,119
- --------------------------------------------------------------------------------
Sepracor, Inc. 1                                      795,120        37,378,591
- --------------------------------------------------------------------------------
Shionogi & Co. Ltd.                                 1,901,000        34,167,639
- --------------------------------------------------------------------------------
Teva Pharmaceutical Industries Ltd.,
Sponsored ADR                                       2,528,550        87,892,398
                                                                 ---------------
                                                                    463,882,321

- --------------------------------------------------------------------------------
INDUSTRIALS--8.7%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--4.1%
- --------------------------------------------------------------------------------
Empresa Brasileira de Aeronautica SA, ADR           2,035,500        78,570,300
- --------------------------------------------------------------------------------
General Dynamics Corp.                              1,033,700        69,826,435
- --------------------------------------------------------------------------------
Lockheed Martin Corp.                                 961,380        79,409,988
- --------------------------------------------------------------------------------
United Technologies Corp.                           1,399,300        87,750,103
                                                                 ---------------
                                                                    315,556,826


                   23 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.3%
Expeditors International of Washington, Inc.          661,092    $   26,357,738
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.0%
Corporate Executive Board Co.                         872,072        76,428,390
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--1.9%
General Electric Co.                                3,334,000       113,556,040
- --------------------------------------------------------------------------------
Textron, Inc.                                         381,070        31,956,530
                                                                 ---------------
                                                                    145,512,570

- --------------------------------------------------------------------------------
MACHINERY--0.9%
Danaher Corp.                                       1,068,600        70,837,494
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.5%
Fastenal Co.                                          983,130        36,061,208
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--31.2%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--7.7%
Cisco Systems, Inc. 1                              12,088,070       265,816,659
- --------------------------------------------------------------------------------
Corning, Inc. 1                                     4,379,170        97,392,741
- --------------------------------------------------------------------------------
F5 Networks, Inc. 1                                   821,220        41,134,910
- --------------------------------------------------------------------------------
Motorola, Inc.                                      1,854,330        43,354,235
- --------------------------------------------------------------------------------
QUALCOMM, Inc.                                      2,035,000        76,658,450
- --------------------------------------------------------------------------------
Telefonaktiebolaget LM Ericsson, Sponsored ADR      1,902,900        63,556,860
                                                                 ---------------
                                                                    587,913,855

- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--3.1%
Apple Computer, Inc. 1                              1,533,020       104,015,407
- --------------------------------------------------------------------------------
EMC Corp. 1                                         7,936,090        92,455,449
- --------------------------------------------------------------------------------
Network Appliance, Inc. 1                           1,261,820        43,204,717
                                                                 ---------------
                                                                    239,675,573

- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--6.3%
eBay, Inc. 1                                        5,237,220       145,908,949
- --------------------------------------------------------------------------------
Google, Inc., Cl. A 1                                 456,900       172,950,357
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1                                      5,707,270       164,483,521
                                                                 ---------------
                                                                    483,342,827

                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
IT SERVICES--4.2%
Affiliated Computer Services, Inc., Cl. A 1         2,402,540    $  123,346,404
- --------------------------------------------------------------------------------
Alliance Data Systems Corp. 1                         360,790        18,234,327
- --------------------------------------------------------------------------------
Automatic Data Processing, Inc.                     2,294,620       108,306,064
- --------------------------------------------------------------------------------
Cognizant Technology Solutions Corp. 1              1,081,500        75,607,665
                                                                 ---------------
                                                                    325,494,460

- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--4.5%
Advanced Micro Devices, Inc. 1                      3,382,560        84,530,174
- --------------------------------------------------------------------------------
Broadcom Corp., Cl. A 1                             3,208,070        94,445,581
- --------------------------------------------------------------------------------
Marvell Technology Group Ltd. 1                     2,346,250        41,082,838
- --------------------------------------------------------------------------------
Microchip Technology, Inc.                          1,787,140        61,048,702
- --------------------------------------------------------------------------------
Texas Instruments, Inc.                             1,935,580        63,080,552
                                                                 ---------------
                                                                    344,187,847

- --------------------------------------------------------------------------------
SOFTWARE--5.4%
Adobe Systems, Inc. 1                               3,092,038       100,305,713
- --------------------------------------------------------------------------------
Amdocs Ltd. 1                                       1,779,700        67,539,615
- --------------------------------------------------------------------------------
Autodesk, Inc. 1                                    1,373,360        47,737,994
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1                               819,770        41,783,677
- --------------------------------------------------------------------------------
Microsoft Corp.                                     3,555,021        91,328,489
- --------------------------------------------------------------------------------
NAVTEQ Corp. 1                                      1,248,140        33,150,598
- --------------------------------------------------------------------------------
Red Hat, Inc. 1                                     1,570,290        36,493,540
                                                                 ---------------
                                                                    418,339,626

- --------------------------------------------------------------------------------
MATERIALS--3.7%
- --------------------------------------------------------------------------------
CHEMICALS--3.7%
Monsanto Co.                                        3,665,800       173,905,552
- --------------------------------------------------------------------------------
Praxair, Inc.                                       1,914,990       109,939,576
                                                                 ---------------
                                                                    283,845,128


                   24 | OPPENHEIMER CAPITAL APPRECIATION FUND



                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.3%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--2.3%
America Movil SA de CV, Series L                      798,500    $   29,792,035
- --------------------------------------------------------------------------------
American Tower Corp. 1                              2,255,000        80,864,300
- --------------------------------------------------------------------------------
Crown Castle International Corp. 1                  1,280,720        44,005,539
- --------------------------------------------------------------------------------
NII Holdings, Inc. 1                                  418,380        22,320,570
                                                                 ---------------
                                                                    176,982,444
                                                                 ---------------
Total Common Stocks
(Cost $6,410,417,207)                                             7,589,100,984

                                                    PRINCIPAL
                                                       AMOUNT
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--1.3%
- --------------------------------------------------------------------------------
Undivided interest of 11.03% in joint
repurchase agreement (Principal Amount/Value
$886,796,000, with a maturity value of
$886,924,585) with UBS Warburg LLC, 5.22%,
dated 8/31/06, to be repurchased at $97,816,181
on 9/1/06, collateralized by Federal National
Mortgage Assn., 5%-5.50%, 9/1/35-12/1/35, with
a value of $906,809,462 (Cost $97,802,000)        $97,802,000        97,802,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $6,508,219,207)                                   100.1%    7,686,902,984
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS                    (0.1)      (11,171,350)
                                                  ------------------------------
NET ASSETS                                              100.0%   $7,675,731,634
                                                  ==============================

FOOTNOTE TO STATEMENT OF INVESTMENTS

1. Non-income producing security.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   25 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (cost $6,508,219,207)--see
accompanying statement of investments                           $ 7,686,902,984
- --------------------------------------------------------------------------------
Cash                                                                 12,232,519
- --------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts                    33,954
- --------------------------------------------------------------------------------
Receivables and other assets:
Investments sold                                                     23,403,811
Interest and dividends                                                5,351,371
Shares of beneficial interest sold                                    2,535,209
Other                                                                   309,617
                                                                ----------------
Total assets                                                      7,730,769,465

- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                30,132,048
Shares of beneficial interest redeemed                               18,123,749
Distribution and service plan fees                                    2,883,706
Transfer and shareholder servicing agent fees                         1,633,991
Trustees' compensation                                                1,315,680
Shareholder communications                                              779,212
Other                                                                   169,445
                                                                ----------------
Total liabilities                                                    55,037,831

- --------------------------------------------------------------------------------
NET ASSETS                                                      $ 7,675,731,634
                                                                ================

- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------
Par value of shares of beneficial interest                      $       181,191
- --------------------------------------------------------------------------------
Additional paid-in capital                                        6,973,686,535
- --------------------------------------------------------------------------------
Accumulated net investment loss                                      (1,315,915)
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions                                              (475,616,851)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies       1,178,796,674
                                                                ----------------
NET ASSETS                                                      $ 7,675,731,634
                                                                ================


                   26 | OPPENHEIMER CAPITAL APPRECIATION FUND



- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$5,278,252,479 and 122,523,079 shares of beneficial interest
outstanding)                                                             $ 43.08
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price)                                                 $ 45.71
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $851,836,380 and 21,581,512 shares of beneficial interest
outstanding)                                                             $ 39.47
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $646,332,806 and 16,514,642 shares of beneficial interest
outstanding)                                                             $ 39.14
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $250,167,403 and 5,887,926 shares of beneficial interest
outstanding)                                                             $ 42.49
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $649,142,566 and 14,684,272 shares of beneficial
interest outstanding)                                                    $ 44.21

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   27 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $1,691,576)        $  59,847,467
- --------------------------------------------------------------------------------
Interest                                                              5,151,251
- --------------------------------------------------------------------------------
Other income                                                            239,529
- --------------------------------------------------------------------------------
Portfolio lending fees                                                   67,283
                                                                  --------------
Total investment income                                              65,305,530

- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees                                                      46,675,664
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                              13,448,667
Class B                                                               9,641,132
Class C                                                               6,837,706
Class N                                                               1,267,131
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                              13,142,968
Class B                                                               2,927,632
Class C                                                               1,653,520
Class N                                                                 857,362
Class Y                                                                 977,807
- --------------------------------------------------------------------------------
Shareholder communications:
Class A                                                                 902,148
Class B                                                                 459,036
Class C                                                                 174,569
Class N                                                                  19,245
- --------------------------------------------------------------------------------
Trustees' compensation                                                  242,367
- --------------------------------------------------------------------------------
Custodian fees and expenses                                             140,280
- --------------------------------------------------------------------------------
Other                                                                   319,880
                                                                  --------------
Total expenses                                                       99,687,114
Less reduction to custodian expenses                                    (18,047)
Less waivers and reimbursements of expenses                             (15,986)
                                                                  --------------
Net expenses                                                         99,653,081

- --------------------------------------------------------------------------------
NET INVESTMENT LOSS                                                 (34,347,551)


                   28 | OPPENHEIMER CAPITAL APPRECIATION FUND



- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments                                                       $  25,779,396
Foreign currency transactions                                        (2,570,318)
                                                                  --------------
Net realized gain                                                    23,209,078
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments                                                         369,465,365
Translation of assets and liabilities denominated in foreign
currencies                                                           19,045,337
                                                                  --------------
Net change in unrealized appreciation                               388,510,702

- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS              $ 377,372,229
                                                                  ==============

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   29 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

YEAR ENDED AUGUST 31,                                                           2006              2005
- -------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income (loss)                                         $   (34,347,551)  $    46,793,824
- -------------------------------------------------------------------------------------------------------
Net realized gain                                                         23,209,078       273,189,073
- -------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation                                    388,510,702       556,958,801
                                                                     ----------------------------------
Net increase in net assets resulting from operations                     377,372,229       876,941,698

- -------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A                                                                  (32,952,692)               --
Class B                                                                           --                --
Class C                                                                           --                --
Class N                                                                     (755,526)               --
Class Y                                                                  (11,953,955)               --

- -------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A                                                                 (573,549,510)     (134,210,079)
Class B                                                                 (228,134,092)     (162,283,904)
Class C                                                                  (70,708,579)       (7,839,660)
Class N                                                                   (4,627,002)       34,784,677
Class Y                                                                 (577,739,853)     (352,359,573)

- -------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------
Total increase (decrease)                                             (1,123,048,980)      255,033,159
- -------------------------------------------------------------------------------------------------------
Beginning of period                                                    8,798,780,614     8,543,747,455
                                                                     ----------------------------------
End of period (including accumulated net investment income (loss)
of $(1,315,915) and $49,282,479, respectively)                       $ 7,675,731,634   $ 8,798,780,614
                                                                     ==================================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   30 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

CLASS A  YEAR ENDED AUGUST 31,                          2006            2005             2004              2003            2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $     41.45     $     37.57      $     35.39       $     30.72     $     41.11
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                            (.12) 1          .26 1,2          .01              (.05)           (.09)
Net realized and unrealized gain (loss)                 2.00            3.62             2.17              4.72           (9.31)
                                                 -----------------------------------------------------------------------------------
Total from investment operations                        1.88            3.88             2.18              4.67           (9.40)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    (.25)             --               --                --              --
Distributions from net realized gain                      --              --               --                --            (.99)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $     43.08     $     41.45      $     37.57       $     35.39     $     30.72
                                                 ===================================================================================

- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                      4.53%          10.33%            6.16%            15.20%         (23.48)%
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $ 5,278,253     $ 5,633,688      $ 5,218,310       $ 4,288,332     $ 3,219,391
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $ 5,569,912     $ 5,597,821      $ 4,971,315       $ 3,655,594     $ 3,204,793
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                           (0.28)%          0.64% 2          0.09%            (0.11)%         (0.15)%
Total expenses                                          1.07% 5         1.06% 5          1.09% 5,6         1.17% 5         1.22% 5,6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   83%             38%              45%               42%             28%


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

2. Net investment income per share and the net investment income ratio include
$.17 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   31 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

CLASS B  YEAR ENDED AUGUST 31,                        2006            2005              2004           2003           2002
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period             $   38.08     $     34.82       $     33.09    $     28.95    $     39.09
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                   (.45) 1         (.08) 1,2         (.36)          (.31)          (.26)
Net realized and unrealized gain (loss)               1.84            3.34              2.09           4.45          (8.89)
                                                 ---------------------------------------------------------------------------
Total from investment operations                      1.39            3.26              1.73           4.14          (9.15)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    --              --                --             --             --
Distributions from net realized gain                    --              --                --             --           (.99)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                   $   39.47     $     38.08       $     34.82    $     33.09    $     28.95
                                                 ===========================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                    3.65%           9.36%             5.23%         14.30%        (24.07)%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)         $ 851,836     $ 1,041,045       $ 1,104,348    $ 1,114,052    $ 1,029,322
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                $ 964,658     $ 1,099,380       $ 1,169,402    $ 1,001,311    $ 1,221,005
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                  (1.13)%         (0.21)% 2         (0.81)%        (0.89)%        (0.92)%
Total expenses                                        1.93%           1.93%             1.99%          2.10%          1.99%
Expenses after payments and waivers
and reduction to custodian expenses                   1.92%           1.93%             1.97%          1.96%          1.99%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                 83%             38%               45%            42%            28%


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

2. Net investment income per share and the net investment income ratio include
$.16 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   32 | OPPENHEIMER CAPITAL APPRECIATION FUND



CLASS C  YEAR ENDED AUGUST 31,                          2006         2005            2004            2003          2002
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period               $   37.73     $  34.47       $   32.72       $   28.63     $   38.64
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss                                     (.41) 1      (.05) 1,2       (.16)           (.23)         (.11)
Net realized and unrealized gain (loss)                 1.82         3.31            1.91            4.32         (8.91)
                                                   -------------------------------------------------------------------------
Total from investment operations                        1.41         3.26            1.75            4.09         (9.02)
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      --           --              --              --            --
Distributions from net realized gain                      --           --              --              --          (.99)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                     $   39.14     $  37.73       $   34.47       $   32.72     $   28.63
                                                   =========================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                      3.74%        9.46%           5.35%          14.28%       (24.01)%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)           $ 646,333     $691,467       $ 638,676       $ 540,118     $ 450,989
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                  $ 684,056     $681,646       $ 623,172       $ 463,768     $ 477,369
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss                                    (1.05)%      (0.14)% 2       (0.69)%         (0.89)%       (0.87)%
Total expenses                                          1.84% 5      1.84% 5         1.87% 5,6       1.96% 5       1.94% 5,6
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   83%          38%             45%             42%           28%


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

2. Net investment income per share and the net investment income ratio include
$.16 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   33 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

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

PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period               $   40.91     $   37.21      $   35.17    $   30.60    $  41.05
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                            (.27) 1        .11 1,2       (.08)        (.10)       (.07) 1
Net realized and unrealized gain (loss)                 1.98          3.59           2.12         4.67       (9.39) 1
                                                   ------------------------------------------------------------------
Total from investment operations                        1.71          3.70           2.04         4.57       (9.46)
- ---------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    (.13)           --             --           --          --
Distributions from net realized gain                      --            --             --           --        (.99)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                     $   42.49     $   40.91      $   37.21    $   35.17    $  30.60
                                                   ==================================================================

- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                      4.16%         9.94%          5.80%       14.94%     (23.67)%
- ---------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)           $ 250,167     $ 245,932      $ 190,696    $ 111,374    $ 72,178
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                  $ 253,590     $ 221,007      $ 154,605    $  86,761    $ 38,232
- ------------------------------------------------------------------------------ --------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                           (0.63)%        0.27% 2       (0.25)%      (0.35)%     (0.37)%
Total expenses                                          1.42%         1.42%          1.46%        1.46%       1.46%
Expenses after payments and waivers
and reduction to custodian expenses                     1.42%         1.42%          1.44%        1.42%       1.46%
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   83%           38%            45%          42%         28%

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

2. Net investment income per share and the net investment income ratio include
$.17 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   34 | OPPENHEIMER CAPITAL APPRECIATION FUND



CLASS Y  YEAR ENDED AUGUST 31,                          2006              2005             2004            2003            2002
- ----------------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period               $   42.52       $     38.40      $     36.04     $     31.16       $   41.55
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                    .05 1             .45 1,2          .09             .01             .02 1
Net realized and unrealized gain (loss)                 2.05              3.67             2.27            4.87           (9.42) 1
                                                   -------------------------------------------------------------------------------
Total from investment operations                        2.10              4.12             2.36            4.88           (9.40)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                    (.41)               --               --              --              --
Distributions from net realized gain                      --                --               --              --            (.99)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                     $   44.21       $     42.52      $     38.40     $     36.04       $   31.16
                                                   ===============================================================================

- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3                      4.93%            10.73%            6.55%          15.66%         (23.23)%
- ----------------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)           $ 649,143       $ 1,186,649      $ 1,391,718     $ 1,152,318       $ 864,437
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                  $ 766,929       $ 1,210,587      $ 1,327,404     $   930,500       $ 968,867
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                   0.11%             1.10% 2          0.47%           0.29%           0.17%
Total expenses                                          0.70% 5,6         0.69% 5          0.71% 5         0.78% 5,6       0.89% 5
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                   83%               38%              45%             42%             28%

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

2. Net investment income per share and the net investment income ratio include
$.18 and 0.43%, respectively, resulting from a special dividend from Microsoft
Corp. in November 2004.

3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.

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

5. Reduction to custodian expenses less than 0.01%.

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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                   35 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

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

Oppenheimer Capital Appreciation Fund (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 capital appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).

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

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

- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ(R) are valued based on the
closing price provided by NASDAQ prior to the time when the Fund's assets are
valued. In the absence of a sale, the security is valued at the last sale price
on the prior trading day, if it is within the spread of the closing "bid" and
"asked" prices, and if not, at the closing bid price. Securities traded on
foreign exchanges are valued based on the last sale price on the principal
exchange on which the security is traded, as identified by the portfolio pricing
service, prior to the time when the Fund's assets are valued. In the absence of
a sale, the security is valued at the official closing price on the principal
exchange. Corporate, government and municipal debt instruments having a
remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices. Futures
contracts traded on a commodities or futures exchange will be valued at the
final settlement price or official closing price on the principal exchange as
reported by such principal exchange at its


                   36 | OPPENHEIMER CAPITAL APPRECIATION FUND



trading session ending at, or most recently prior to, the time when the Fund's
assets are valued. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value. Foreign and
domestic securities whose values have been materially affected by what the
Manager identifies as a significant event occurring before the Fund's assets are
valued but after the close of their respective exchanges will be fair valued.
Fair value is determined in good faith using consistently applied procedures
under the supervision of the Board of Trustees. Short-term "money market type"
debt securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).

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

      Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.

      The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.

- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.

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


                   37 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

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

Operating expenses directly attributable to a specific class are charged against
the operations of that class.

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

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

                                                              NET UNREALIZED
                                                                APPRECIATION
                                                            BASED ON COST OF
                                                              SECURITIES AND
    UNDISTRIBUTED    UNDISTRIBUTED          ACCUMULATED    OTHER INVESTMENTS
    NET INVESTMENT       LONG-TERM                 LOSS   FOR FEDERAL INCOME
    INCOME                    GAIN   CARRYFORWARD 1,2,3         TAX PURPOSES
    ------------------------------------------------------------------------
    $--                        $--         $424,180,295       $1,127,326,158

1. As of August 31, 2006, the Fund had $424,180,295 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of August 31, 2006, details
of the capital loss carryforwards were as follows:

                       EXPIRING
                       -----------------------------
                       2011             $127,593,973
                       2012              296,586,322
                                        ------------
                       Total            $424,180,295
                                        ============

2. During the fiscal year ended August 31, 2006, the Fund utilized $30,330,104
of capital loss carryforward to offset capital gains realized in that fiscal
year.

3. During the fiscal year ended August 31, 2005, the Fund utilized $278,650,934
of capital loss carryforward to offset capital gains realized in that fiscal
year.

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

Accordingly, the following amounts have been reclassified for August 31, 2006.
Net assets of the Fund were unaffected by the reclassifications.


                   38 | OPPENHEIMER CAPITAL APPRECIATION FUND



                                   REDUCTION TO       INCREASE TO
                                    ACCUMULATED   ACCUMULATED NET
               REDUCTION TO      NET INVESTMENT     REALIZED LOSS
               PAID-IN CAPITAL             LOSS    ON INVESTMENTS
               --------------------------------------------------
               $29,093,907          $29,411,330          $317,423

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

                                                 YEAR ENDED        YEAR ENDED
                                            AUGUST 31, 2006   AUGUST 31, 2005
           ------------------------------------------------------------------
           Distributions paid from:
           Ordinary income                      $45,662,173               $--

The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of August 31, 2006 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.

           Federal tax cost of securities          $6,559,655,769
           Federal tax cost of other investments       11,939,913
                                                   --------------
           Total federal tax cost                  $6,571,595,682
                                                   ==============

           Gross unrealized appreciation           $1,301,373,864
           Gross unrealized depreciation             (174,047,706)
                                                   --------------
           Net unrealized appreciation             $1,127,326,158
                                                   ==============

- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended August
31, 2006, the Fund's projected benefit obligations were increased by $10,518 and
payments of $98,894 were made to retired trustees, resulting in an accumulated
liability of $986,913 as of August 31, 2006.

      The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and


                   39 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

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

will not materially affect the Fund's assets, liabilities or net investment
income per share. Amounts will be deferred until distributed in accordance to
the Plan.

- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.

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

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

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

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

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


                   40 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:

                                 YEAR ENDED AUGUST 31, 2006        YEAR ENDED AUGUST 31, 2005
                                  SHARES             AMOUNT         SHARES             AMOUNT
- ----------------------------------------------------------------------------------------------
CLASS A
Sold                          26,489,676    $ 1,142,952,788     40,436,717    $ 1,618,214,799
Dividends and/or
distributions reinvested         674,183         29,394,376             --                 --
Redeemed                     (40,570,510)    (1,745,896,674)   (43,402,126)    (1,752,424,878)
                             -----------------------------------------------------------------
Net decrease                 (13,406,651)   $  (573,549,510)    (2,965,409)   $  (134,210,079)
                             =================================================================

- ----------------------------------------------------------------------------------------------
CLASS B
Sold                           2,775,274    $   110,036,806      4,382,455    $   161,855,078
Dividends and/or
distributions reinvested              --                 --             --                 --
Redeemed                      (8,533,222)      (338,170,898)    (8,760,712)      (324,138,982)
                             -----------------------------------------------------------------
Net decrease                  (5,757,948)   $  (228,134,092)    (4,378,257)   $  (162,283,904)
                             =================================================================

- ----------------------------------------------------------------------------------------------
CLASS C
Sold                           3,099,965    $   121,778,447      4,571,487    $   167,476,288
Dividends and/or
distributions reinvested              --                 --             --                 --
Redeemed                      (4,912,952)      (192,487,026)    (4,774,468)      (175,315,948)
                             -----------------------------------------------------------------
Net decrease                  (1,812,987)   $   (70,708,579)      (202,981)   $    (7,839,660)
                             =================================================================

- ----------------------------------------------------------------------------------------------
CLASS N
Sold                           2,202,829    $    93,779,542      3,078,565    $   122,153,412
Dividends and/or
distributions reinvested          16,507            711,630             --                 --
Redeemed                      (2,343,662)       (99,118,174)    (2,190,999)       (87,368,735)
                             -----------------------------------------------------------------
Net increase (decrease)         (124,326)   $    (4,627,002)       887,566    $    34,784,677
                             =================================================================

- ----------------------------------------------------------------------------------------------
CLASS Y
Sold                           9,675,483    $   427,182,549      8,329,891    $   344,067,572
Dividends and/or
distributions reinvested         245,563         10,957,036             --                 --
Redeemed                     (23,144,721)    (1,015,879,438)   (16,663,524)      (696,427,145)
                             -----------------------------------------------------------------
Net decrease                 (13,223,675)   $  (577,739,853)    (8,333,633)   $  (352,359,573)
                             =================================================================


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

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


                   41 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

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

                                         PURCHASES            SALES
            -------------------------------------------------------
            Investment securities   $6,783,879,107   $8,141,910,796

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

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

FEE SCHEDULE AUG. 31, 2005 TO DEC. 31, 2005     FEE SCHEDULE EFFECTIVE JAN. 1, 2006
- --------------------------------------------    -----------------------------------------
Up to $200 million of net assets       0.75%    Up to $200 million of net assets    0.75%
Next $200 million of net assets        0.72     Next $200 million of net assets     0.72
Next $200 million of net assets        0.69     Next $200 million of net assets     0.69
Next $200 million of net assets        0.66     Next $200 million of net assets     0.66
Next $700 million of net assets        0.60     Next $700 million of net assets     0.60
Next $1 billion of net assets          0.58     Next $1 billion of net assets       0.58
Next $2 billion of net assets          0.56     Next $2 billion of net assets       0.56
Next $2 billion of net assets          0.54     Next $2 billion of net assets       0.54
Next $2 billion of net assets          0.52     Next $2 billion of net assets       0.52
Over $8.5 billion of net assets        0.50     Next $2.5 billion of net assets     0.50
                                                Over $11 billion of net assets      0.48

- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended August 31, 2006, the Fund paid
$19,713,914 to OFS for services to the Fund.

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

- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.

- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
periodically at an annual rate of up to 0.25% of the average annual net assets
of Class A shares of the Fund. The Distributor currently uses all of those fees
to pay dealers, brokers, banks and other financial institutions periodically for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
periods. Fees incurred by the Fund under the plan are detailed in the Statement
of Operations.


                   42 | OPPENHEIMER CAPITAL APPRECIATION FUND



- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% on Class B and
Class C shares and 0.25% on Class N shares. The Distributor also receives a
service fee of 0.25% per year under each plan. If either the Class B, Class C or
Class N plan is terminated by the Fund or by the shareholders of a class, the
Board of Trustees and its independent trustees must determine whether the
Distributor shall be entitled to payment from the Fund of all or a portion of
the service fee and/or asset-based sales charge in respect to shares sold prior
to the effective date of such termination. The Distributor's aggregate
uncompensated expenses under the plan at August 31, 2006 for Class B, Class C
and Class N shares were $15,236,268, $11,185,152 and $3,393,557, respectively.
Fees incurred by the Fund under the plans are detailed in the Statement of
Operations.

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

                                          CLASS A         CLASS B         CLASS C         CLASS N
                          CLASS A      CONTINGENT      CONTINGENT      CONTINGENT      CONTINGENT
                        FRONT-END        DEFERRED        DEFERRED        DEFERRED        DEFERRED
                    SALES CHARGES   SALES CHARGES   SALES CHARGES   SALES CHARGES   SALES CHARGES
                      RETAINED BY     RETAINED BY     RETAINED BY     RETAINED BY     RETAINED BY
YEAR ENDED            DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR
- -------------------------------------------------------------------------------------------------
August 31, 2006        $2,074,436         $36,741      $2,120,566        $129,157        $120,628

- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. During the year ended August 31, 2006, OFS
waived $5,846, $3,770 and $6,370 for Class B, Class N and Class Y shares,
respectively. This undertaking may be amended or withdrawn at any time.

- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS

A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.

      The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined


                   43 | OPPENHEIMER CAPITAL APPRECIATION FUND



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

- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued

using prevailing foreign currency exchange rates. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities as a receivable or payable and in the Statement of
Operations with the change in unrealized appreciation or depreciation.

      The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.

As of August 31, 2006, the Fund had outstanding foreign currency contracts as
follows:

                                     CONTRACT
                        EXPIRATION     AMOUNT     VALUATION AS OF     UNREALIZED
CONTRACT DESCRIPTION          DATE     (000S)     AUGUST 31, 2006   APPRECIATION
- --------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Swiss Franc [CHF]           9/1/06     14,696CHF      $11,939,913        $33,954

- --------------------------------------------------------------------------------
6. SECURITIES LENDING

The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of
securities, letters of credit or cash, against the loaned securities and
maintains collateral in an amount not less than 100% of the market value of the
loaned securities during the period of the loan. The market value of the loaned
securities is determined at the close of business each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. If the borrower defaults on its obligation
to return the securities loaned because of insolvency or other reasons, the Fund
could experience delays and cost in recovering the securities loaned or in
gaining access to the collateral. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of August 31, 2006, the Fund
had no securities on loan.

- --------------------------------------------------------------------------------
7. RECENT ACCOUNTING PRONOUNCEMENT

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be


                   44 | OPPENHEIMER CAPITAL APPRECIATION FUND



recorded in respect of any tax position that, in Management's judgment, will not
be fully realized. FIN 48 is effective for fiscal years beginning after December
15, 2006. As of August 31, 2006, the Manager is evaluating the implications of
FIN 48. Its impact in the Fund's financial statements has not yet been
determined.

- --------------------------------------------------------------------------------
8. LITIGATION

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

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

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




                                                    Appendix A

                                             Industry Classifications

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


                                                    Appendix B


OppenheimerFunds Special Sales Charge Arrangements and Waivers

     In certain  cases,  the initial  sales  charge that applies to purchases of
Class A shares(2) of the  Oppenheimer  funds or the  contingent  deferred  sales
charge  that may apply to Class A, Class B or Class C shares  may be  waived.(3)
That is because of the economies of sales efforts  realized by  OppenheimerFunds
Distributor,  Inc.,  (referred to in this document as the "Distributor"),  or by
dealers  or other  financial  institutions  that offer  those  shares to certain
classes of investors. Not all waivers apply to all funds.

     For  the  purposes  of  some  of the  waivers  described  below  and in the
Prospectus and Statement of Additional Information of the applicable Oppenheimer
funds, the term "Retirement Plan" refers to the following types of plans:

     1) plans  created  or  qualified  under  Sections  401(a)  or 401(k) of the
Internal Revenue Code,

     2) non-qualified deferred compensation plans,

     3) employee benefit plans(4)

     4) Group Retirement Plans(5)

     5) 403(b)(7) custodial plan accounts

     6) Individual  Retirement  Accounts ("IRAs"),  including  traditional IRAs,
        Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

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

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



   Applicability of Class A Contingent Deferred Sales Charges in Certain Cases


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

     There is no initial  sales  charge on purchases of Class A shares of any of
the Oppenheimer funds in the cases listed below. However, these purchases may be
subject to the Class A contingent  deferred  sales charge if redeemed  within 18
months (24 months in the case of Oppenheimer  Rochester National  Municipals and
Rochester  Fund  Municipals)  of the  beginning of the  calendar  month of their
purchase, as described in the Prospectus (unless a waiver described elsewhere in
this Appendix  applies to the  redemption).  Additionally,  on shares  purchased
under these  waivers that are subject to the Class A contingent  deferred  sales
charge,  the  Distributor  will pay the applicable  concession  described in the
Prospectus  under "Class A Contingent  Deferred  Sales  Charge."(6)  This waiver
provision applies to:

     |_| Purchases of Class A shares aggregating $1 million or more.

     |_| Purchases of Class A shares by a Retirement  Plan that was permitted to
purchase  such shares at net asset value but  subject to a  contingent  deferred
sales  charge  prior to March 1, 2001.  That  included  plans (other than IRA or
403(b)(7)  Custodial  Plans) that: 1) bought shares costing $500,000 or more, 2)
had at the time of purchase 100 or more eligible  employees or total plan assets
of $500,000 or more, or 3) certified to the Distributor that it projects to have
annual plan purchases of $200,000 or more.

     |_|  Purchases  by  an  OppenheimerFunds-sponsored  Rollover  IRA,  if  the
purchases are made:
     1) through a broker, dealer, bank or registered investment adviser that has
made special  arrangements with the Distributor for those purchases,  or
     2) by a direct rollover of a distribution from a qualified  Retirement Plan
if the  administrator  of that  Plan  has  made  special  arrangements  with the
Distributor for those purchases.

     |_|  Purchases of Class A shares by  Retirement  Plans that have any of the
following record-keeping arrangements:
     1) The record  keeping is performed by Merrill Lynch Pierce Fenner & Smith,
Inc.  ("Merrill  Lynch") on a daily valuation basis for the Retirement  Plan. On
the date the plan  sponsor  signs  the  record-keeping  service  agreement  with
Merrill Lynch,  the Plan must have $3 million or more of its assets  invested in
(a)  mutual  funds,  other than  those  advised  or  managed  by  Merrill  Lynch
Investment  Management,  L.P. ("MLIM"),  that are made available under a Service
Agreement  between Merrill Lynch and the mutual fund's principal  underwriter or
distributor,  and (b) funds  advised or managed by MLIM (the funds  described in
(a) and (b) are referred to as "Applicable Investments").
     2) The record  keeping  for the  Retirement  Plan is  performed  on a daily
valuation  basis by a record keeper whose services are provided under a contract
or arrangement  between the Retirement  Plan and Merrill Lynch.  On the date the
plan sponsor signs the record keeping service  agreement with Merrill Lynch, the
Plan must have $5 million or more of its assets  (excluding  assets  invested in
money market funds)  invested in Applicable  Investments.  3) The record keeping
for a Retirement  Plan is handled under a service  agreement  with Merrill Lynch
and on the date the plan sponsor signs that agreement,  the Plan has 500 or more
eligible employees (as determined by the Merrill Lynch plan conversion manager).


II.          Waivers of Class A Sales Charges of Oppenheimer Funds


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

     Class A shares purchased by the following  investors are not subject to any
Class A sales charges (and no  concessions  are paid by the  Distributor on such
purchases):

|_|      The Manager or its affiliates.

     |_| Present or former  officers,  directors,  trustees and  employees  (and
their  "immediate  families") of the Fund, the Manager and its  affiliates,  and
retirement plans  established by them for their  employees.  The term "immediate
family" refers to one's spouse, children, grandchildren,  grandparents, parents,
parents-in-law,  brothers and sisters,  sons- and daughters-in-law,  a sibling's
spouse, a spouse's siblings,  aunts,  uncles,  nieces and nephews;  relatives by
virtue of a remarriage (step-children, step-parents, etc.) are included.

     |_| Registered  management  investment  companies,  or separate accounts of
insurance  companies having an agreement with the Manager or the Distributor for
that purpose.

     |_| Dealers or brokers that have a sales agreement with the Distributor, if
they purchase  shares for their own accounts or for  retirement  plans for their
employees.

     |_| Employees and registered representatives (and their spouses) of dealers
or brokers  described  above or  financial  institutions  that have entered into
sales  arrangements  with such dealers or brokers (and which are  identified  as
such to the Distributor) or with the Distributor.  The purchaser must certify to
the Distributor at the time of purchase that the purchase is for the purchaser's
own account (or for the benefit of such employee's spouse or minor children).

     |_| Dealers,  brokers,  banks or registered  investment  advisors that have
entered into an agreement with the Distributor  providing  specifically  for the
use of shares of the Fund in particular  investment  products made  available to
their clients.  Those clients may be charged a transaction  fee by their dealer,
broker, bank or advisor for the purchase or sale of Fund shares.

     |_|  Investment  advisors and  financial  planners who have entered into an
agreement  for this  purpose  with the  Distributor  and who charge an advisory,
consulting or other fee for their services and buy shares for their own accounts
or the accounts of their clients.

     |_| "Rabbi trusts" that buy shares for their own accounts, if the purchases
are made through a broker or agent or other financial intermediary that has made
special arrangements with the Distributor for those purchases.

     |_| Clients of investment advisors or financial planners (that have entered
into an  agreement  for this purpose  with the  Distributor)  who buy shares for
their own accounts may also  purchase  shares  without  sales charge but only if
their  accounts are linked to a master  account of their  investment  advisor or
financial  planner on the books and  records of the broker,  agent or  financial
intermediary  with which the  Distributor  has made such special  arrangements .
Each of these  investors may be charged a fee by the broker,  agent or financial
intermediary for purchasing shares.

     |_| Directors,  trustees, officers or full-time employees of OpCap Advisors
or its  affiliates,  their  relatives or any trust,  pension,  profit sharing or
other benefit plan which beneficially owns shares for those persons.

     |_|  Accounts  for which  Oppenheimer  Capital  (or its  successor)  is the
investment  advisor (the  Distributor  must be advised of this  arrangement) and
persons  who are  directors  or  trustees  of the  company or trust which is the
beneficial owner of such accounts.

     |_| A unit investment trust that has entered into an appropriate  agreement
with the Distributor.

     |_| Dealers,  brokers,  banks, or registered  investment advisers that have
entered  into an  agreement  with the  Distributor  to sell  shares  to  defined
contribution   employee  retirement  plans  for  which  the  dealer,  broker  or
investment  adviser  provides  administration  services.  Retirement  Plans  and
deferred compensation plans and trusts used to fund those plans (including,  for
example, plans qualified or created under sections 401(a), 401(k), 403(b) or 457
of the Internal  Revenue Code), in each case if those purchases are made through
a  broker,  agent  or  other  financial   intermediary  that  has  made  special
arrangements with the Distributor for those purchases.

     |_| A  TRAC-2000  401(k)  plan  (sponsored  by the  former  Quest for Value
Advisors)  whose Class B or Class C shares of a Former Quest for Value Fund were
exchanged for Class A shares of that Fund due to the  termination of the Class B
and Class C TRAC-2000 program on November 24, 1995.

     |_| A qualified  Retirement  Plan that had agreed with the former Quest for
Value Advisors to purchase  shares of any of the Former Quest for Value Funds at
net asset value, with such shares to be held through  DCXchange,  a sub-transfer
agency mutual fund clearinghouse,  if that arrangement was consummated and share
purchases commenced by December 31, 1996.

     |_|  Effective  October  1, 2005,  taxable  accounts  established  with the
proceeds of Required Minimum Distributions from Retirement Plans.

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

     Class A shares  issued or purchased in the following  transactions  are not
subject to sales charges (and no concessions are paid by the Distributor on such
purchases):

     |_|  Shares  issued  in plans of  reorganization,  such as  mergers,  asset
acquisitions and exchange offers, to which the Fund is a party.

     |_|  Shares   purchased   by  the   reinvestment   of  dividends  or  other
distributions  reinvested  from  the  Fund or  other  Oppenheimer  funds or unit
investment  trusts for which  reinvestment  arrangements have been made with the
Distributor.

     |_|  Shares  purchased  by  certain  Retirement  Plans  that  are part of a
retirement plan or platform offered by banks, broker-dealers, financial advisors
or insurance companies, or serviced by recordkeepers.

     |_|  Shares   purchased  by  the  reinvestment  of  loan  repayments  by  a
participant  in a Retirement  Plan for which the Manager or an affiliate acts as
sponsor.

     |_| Shares purchased in amounts of less than $5.

     Class A shares issued and purchased in the following  transactions  are not
subject to sales  charges (a dealer  concession  at the annual  rate of 0.25% is
paid by the  Distributor  on  purchases  made  within the first 6 months of plan
establishment):  |_|  Retirement  Plans  that  have $5  million  or more in plan
assets.  |_| Retirement Plans with a single plan sponsor that have $5 million or
more in aggregate assets invested in Oppenheimer funds.

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

     The Class A contingent  deferred sales charge is also waived if shares that
would otherwise be subject to the contingent  deferred sales charge are redeemed
in the following cases:

     |_| To make Automatic Withdrawal Plan payments that are limited annually to
no more than 12% of the account value adjusted annually.

     |_|  Involuntary  redemptions  of shares by operation of law or involuntary
redemptions of small accounts  (please refer to  "Shareholder  Account Rules and
Policies," in the applicable fund Prospectus).

     |_| For distributions from Retirement Plans, deferred compensation plans or
other employee benefit plans for any of the following purposes:

     1) Following  the death or disability  (as defined in the Internal  Revenue
Code) of the  participant  or  beneficiary.  The death or disability  must occur
after the participant's account was established.

     2) To return excess contributions.

     3) To  return  contributions  made  due  to a  mistake  of  fact.  Hardship
withdrawals, as defined in the plan.(7)

     5) Under a Qualified  Domestic  Relations Order, as defined in the Internal
Revenue  Code,  or, in the case of an IRA,  a divorce  or  separation  agreement
described in Section 71(b) of the Internal Revenue Code.

     6) To meet the minimum  distribution  requirements of the Internal  Revenue
Code.

     7) To make "substantially  equal periodic payments" as described in Section
72(t) of the Internal Revenue Code.

     8) For loans to participants or beneficiaries.

     9) Separation from service.(8)

     10)  Participant-directed  redemptions to purchase  shares of a mutual fund
(other than a fund managed by the Manager or a subsidiary of the Manager) if the
plan has made special arrangements with the Distributor.

     11) Plan  termination  or  "in-service  distributions,"  if the  redemption
proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA.

     |_| For distributions  from 401(k) plans sponsored by  broker-dealers  that
have entered into a special agreement with the Distributor allowing this waiver.

     |_| For  distributions  from retirement plans that have $10 million or more
in plan  assets  and  that  have  entered  into a  special  agreement  with  the
Distributor.

     |_| For distributions  from retirement plans which are part of a retirement
plan product or platform  offered by certain  banks,  broker-dealers,  financial
advisors,  insurance  companies  or record  keepers  which have  entered  into a
special agreement with the Distributor.

III. Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds


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

A.   Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be waived for redemptions of shares in
the following cases:

     |_| Shares redeemed  involuntarily,  as described in  "Shareholder  Account
Rules and Policies," in the applicable Prospectus.

     |_|  Redemptions  from accounts other than  Retirement  Plans following the
death or disability of the last surviving  shareholder.  The death or disability
must have occurred  after the account was  established,  and for  disability you
must provide  evidence of a  determination  of disability by the Social Security
Administration.

     |_|  The  contingent  deferred  sales  charges  are  generally  not  waived
following the death or  disability of a grantor or trustee for a trust  account.
The contingent deferred sales charges will only be waived in the limited case of
the death of the trustee of a grantor trust or revocable  living trust for which
the  trustee is also the sole  beneficiary.  The death or  disability  must have
occurred after the account was established,  and for disability you must provide
evidence of a  determination  of disability (as defined in the Internal  Revenue
Code).

     |_|  Distributions  from accounts for which the broker-dealer of record has
entered into a special agreement with the Distributor allowing this waiver.

     |_|  Redemptions  of Class B shares held by Retirement  Plans whose records
are  maintained on a daily  valuation  basis by Merrill Lynch or an  independent
record keeper under a contract with Merrill Lynch.

     |_| Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
accounts of clients of financial  institutions  that have entered into a special
arrangement with the Distributor for this purpose.

     |_|  Redemptions of Class C shares of an Oppenheimer  fund in amounts of $1
million or more requested in writing by a Retirement  Plan sponsor and submitted
more than 12 months  after  the  Retirement  Plan's  first  purchase  of Class C
shares,  if the  redemption  proceeds are invested to purchase Class N shares of
one or more Oppenheimer funds.

     |_| Distributions(9)  from Retirement Plans or other employee benefit plans
for any of the following purposes:

     1) Following  the death or disability  (as defined in the Internal  Revenue
Code) of the  participant  or  beneficiary.  The death or disability  must occur
after the participant's account was established in an Oppenheimer fund.

     2) To return excess contributions made to a participant's account.

     3) To return contributions made due to a mistake of fact.

     4) To make hardship withdrawals, as defined in the plan.(10)

     5) To make  distributions  required  under a Qualified  Domestic  Relations
Order or, in the case of an IRA, a divorce or separation  agreement described in
Section 71(b) of the Internal Revenue Code.

     6) To meet the minimum  distribution  requirements of the Internal  Revenue
Code.

     7) To make "substantially  equal periodic payments" as described in Section
72(t) of the Internal Revenue Code.

     8) For loans to participants or beneficiaries.(11)

     9) On account of the participant's separation from service.(12)

     10)  Participant-directed  redemptions to purchase  shares of a mutual fund
(other  than a fund  managed by the  Manager  or a  subsidiary  of the  Manager)
offered  as an  investment  option  in a  Retirement  Plan if the  plan has made
special arrangements with the Distributor.

     11)  Distributions  made on account of a plan  termination or  "in-service"
distributions,  if the  redemption  proceeds  are  rolled  over  directly  to an
OppenheimerFunds-sponsored IRA.

     12) For  distributions  from a  participant's  account  under an  Automatic
Withdrawal  Plan  after  the  participant  reaches  age 59  1/2,  as long as the
aggregate value of the distributions does not exceed 10% of the account's value,
adjusted annually.

     13) Redemptions of Class B shares under an Automatic Withdrawal Plan for an
account other than a Retirement  Plan,  if the  aggregate  value of the redeemed
shares does not exceed 10% of the account's value, adjusted annually.

     14) For distributions  from 401(k) plans sponsored by  broker-dealers  that
have entered  into a special  arrangement  with the  Distributor  allowing  this
waiver.

     |_|  Redemptions  of Class B shares  or Class C shares  under an  Automatic
Withdrawal  Plan from an account  other than a Retirement  Plan if the aggregate
value  of the  redeemed  shares  does  not  exceed  10% of the  account's  value
annually.

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

     The contingent  deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:

     |_| Shares sold to the Manager or its affiliates.

     |_| Shares sold to registered  management  investment companies or separate
accounts of  insurance  companies  having an  agreement  with the Manager or the
Distributor for that purpose.

     |_| Shares issued in plans of reorganization to which the Fund is a party.

     |_| Shares  sold to  present or former  officers,  directors,  trustees  or
employees (and their  "immediate  families" as defined above in Section I.A.) of
the Fund, the Manager and its affiliates  and  retirement  plans  established by
them for their employees.

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



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

     Oppenheimer Quest Value Fund, Inc.              Oppenheimer Small- & Mid- Cap Value Fund
     Oppenheimer Quest Balanced Fund                 Oppenheimer Quest International Value Fund, Inc.
     Oppenheimer Quest Opportunity Value Fund

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

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

     All of the funds  listed  above are  referred  to in this  Appendix  as the
"Former Quest for Value Funds." The waivers of initial and  contingent  deferred
sales charges  described in this Appendix apply to shares of an Oppenheimer fund
that are either:

     |_|  acquired by such  shareholder  pursuant to an exchange of shares of an
Oppenheimer  fund  that was one of the  Former  Quest for  Value  Funds,  or

     |_|  purchased  by such  shareholder  by  exchange  of  shares  of  another
Oppenheimer fund that were acquired  pursuant to the merger of any of the Former
Quest for Value Funds into that other Oppenheimer fund on November 24, 1995.

A.   Reductions or Waivers of Class A Sales Charges.

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


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


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

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

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

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


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

     o Shareholders who were shareholders of the AMA Family of Funds on February
28, 1991 and who acquired

shares of any of the Former  Quest for Value Funds by merger of a portfolio
of the AMA Family of Funds.

     o  Shareholders  who acquired  shares of any Former Quest for Value Fund by
merger of any of the portfolios of the Unified Funds.


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


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

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


     |X| Waivers for Redemptions of Shares  Purchased Prior to March 6, 1995. In
the following  cases,  the  contingent  deferred sales charge will be waived for
redemptions  of Class A, Class B or Class C shares of an  Oppenheimer  fund. The
shares must have been  acquired  by the merger of a Former  Quest for Value Fund
into the fund or by exchange  from an  Oppenheimer  fund that was a Former Quest
for Value Fund or into  which  such fund  merged.  Those  shares  must have been
purchased  prior to March 6, 1995 in  connection  with: o  withdrawals  under an
automatic withdrawal plan holding only either Class B or Class C shares if the

annual  withdrawal  does not exceed 10% of the initial value of the account
value, adjusted annually, and

     o liquidation of a  shareholder's  account if the aggregate net asset value
of shares held in the account is less than the  required  minimum  value of such
accounts.

     |X| Waivers for  Redemptions of Shares  Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent  deferred
sales  charge  will be waived  for  redemptions  of Class A,  Class B or Class C
shares of an Oppenheimer  fund. The shares must have been acquired by the merger
of a  Former  Quest  for  Value  Fund  into  the  fund  or by  exchange  from an
Oppenheimer  fund  that was a Former  Quest For Value  Fund or into  which  such
Former Quest for Value Fund merged.  Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995:

     o redemptions  following the death or disability of the  shareholder(s) (as
evidenced by a  determination  of total  disability by the U.S.  Social Security
Administration);

     o withdrawals  under an automatic  withdrawal plan (but only for Class B or
Class C shares)  where the annual  withdrawals  do not exceed 10% of the initial
value of the account value; adjusted annually, and

     o liquidation of a  shareholder's  account if the aggregate net asset value
of shares held in the account is less than the required minimum account value.

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

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


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

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

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

     Those shareholders who are eligible for the prior Class A CDSC are:

     1) persons  whose  purchases  of Class A shares of a Fund and other  Former
Connecticut  Mutual Funds were $500,000  prior to March 18, 1996, as a result of
direct  purchases  or  purchases  pursuant  to the Fund's  policies  on Combined
Purchases or Rights of Accumulation, who still hold those shares in that Fund or
other Former Connecticut Mutual Funds, and

     2) persons whose intended  purchases under a Statement of Intention entered
into prior to March 18, 1996, with the former general  distributor of the Former
Connecticut  Mutual Funds to purchase  shares  valued at $500,000 or more over a
13-month  period  entitled  those persons to purchase  shares at net asset value
without being subject to the Class A initial sales charge

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

     |X| Class A Sales Charge Waivers.  Additional  Class A shares of a Fund may
be purchased without a sales charge, by a person who was in one (or more) of the
categories  below and acquired Class A shares prior to March 18, 1996, and still
holds  Class A shares:

     1) any purchaser, provided the total initial amount invested in the Fund or
any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more,
including  investments  made  pursuant to the Combined  Purchases,  Statement of
Intention  and  Rights of  Accumulation  features  available  at the time of the
initial  purchase and such investment is still held in one or more of the Former
Connecticut  Mutual  Funds  or a  Fund  into  which  such  Fund  merged;

     2) any  participant  in a qualified  plan,  provided that the total initial
amount  invested  by the  plan in the  Fund  or any  one or  more of the  Former
Connecticut  Mutual Funds totaled  $500,000 or more;

     3)  Directors  of the  Fund or any one or  more of the  Former  Connecticut
Mutual Funds and members of their immediate families;

     4)  employee  benefit  plans  sponsored  by  Connecticut  Mutual  Financial
Services,  L.L.C.  ("CMFS"),  the prior  distributor  of the Former  Connecticut
Mutual Funds, and its affiliated companies;

     5) one or more  members of a group of at least 1,000  persons  (and persons
who are  retirees  from such group)  engaged in a common  business,  profession,
civic or  charitable  endeavor  or other  activity,  and the  spouses  and minor
dependent children of such persons, pursuant to a marketing program between CMFS
and such group;  and

     6) an  institution  acting as a  fiduciary  on behalf of an  individual  or
individuals,  if such institution was directly  compensated by the individual(s)
for  recommending  the  purchase of the shares of the Fund or any one or more of
the Former Connecticut  Mutual Funds,  provided the institution had an agreement
with CMFS.

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

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

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

     In  addition  to the  waivers  set  forth  in the  Prospectus  and in  this
Appendix,  above,  the  contingent  deferred  sales  charge  will be waived  for
redemptions  of Class A and Class B shares of a Fund and exchanges of Class A or
Class B shares of a Fund into Class A or Class B shares of a Former  Connecticut
Mutual  Fund  provided  that the  Class A or  Class B  shares  of the Fund to be
redeemed or  exchanged  were (i)  acquired  prior to March 18, 1996 or (ii) were
acquired  by exchange  from an  Oppenheimer  fund that was a Former  Connecticut
Mutual Fund.  Additionally,  the shares of such Former  Connecticut  Mutual Fund
must have been purchased prior to March 18, 1996:

     1) by the estate of a deceased  shareholder;

     2) upon the disability of a shareholder,  as defined in Section 72(m)(7) of
the  Internal  Revenue  Code;

     3) for retirement distributions (or loans) to participants or beneficiaries
from  retirement  plans qualified under Sections 401(a) or 403(b)(7)of the Code,
or from IRAs, deferred compensation plans created under Section 457 of the Code,
or other employee benefit plans; as tax-free returns of excess  contributions to
such retirement or employee benefit plans;

     5) in  whole or in part,  in  connection  with  shares  sold to any  state,
county,  or city,  or any  instrumentality,  department,  authority,  or  agency
thereof,  that is prohibited by applicable  investment  laws from paying a sales
charge or concession in connection with the purchase of shares of any registered
investment management company;

     6) in  connection  with  the  redemption  of  shares  of the  Fund due to a
combination with another investment  company by virtue of a merger,  acquisition
or similar reorganization transaction;

     7) in connection with the Fund's right to involuntarily redeem or liquidate
the Fund;

     8) in connection  with automatic  redemptions of Class A shares and Class B
shares in certain  retirement plan accounts pursuant to an Automatic  Withdrawal
Plan but limited to no more than 12% of the original  value  annually;  or

     9) as  involuntary  redemptions  of shares by  operation  of law,  or under
procedures set forth in the Fund's Articles of  Incorporation,  or as adopted by
the Board of Directors of the Fund. VI. Special  Reduced Sales Charge for Former
Shareholders of Advance America Funds, Inc.


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

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


     Oppenheimer  Convertible Securities Fund (referred to as the "Fund" in this
section)  may sell Class M shares at net asset value  without any initial  sales
charge to the classes of investors  listed  below who,  prior to March 11, 1996,
owned shares of the Fund's  then-existing Class A and were permitted to purchase
those shares at net asset value without sales charge:

     |_| the Manager and its affiliates,

     |_| present or former  officers,  directors,  trustees and  employees  (and
their  "immediate  families" as defined in the Fund's  Statement  of  Additional
Information) of the Fund, the Manager and its affiliates,  and retirement  plans
established  by them or the  prior  investment  advisor  of the Fund  for  their
employees,

     |_|  registered  management  investment  companies or separate  accounts of
insurance  companies  that had an  agreement  with the Fund's  prior  investment
advisor or distributor for that purpose,

     |_| dealers or brokers that have a sales agreement with the Distributor, if
they purchase  shares for their own accounts or for  retirement  plans for their
employees,

     |_| employees and registered representatives (and their spouses) of dealers
or brokers  described in the preceding  section or financial  institutions  that
have entered into sales  arrangements  with those  dealers or brokers (and whose
identity is made known to the Distributor) or with the Distributor,  but only if
the  purchaser  certifies to the  Distributor  at the time of purchase  that the
purchaser meets these qualifications,

     |_| dealers,  brokers,  or registered  investment advisors that had entered
into an agreement  with the  Distributor  or the prior  distributor  of the Fund
specifically  providing  for the use of Class M shares  of the Fund in  specific
investment products made available to their clients, and

     |_| dealers,  brokers or  registered  investment  advisors that had entered
into an agreement with the Distributor or prior distributor of the Fund's shares
to sell shares to defined  contribution  employee retirement plans for which the
dealer, broker, or investment advisor provides administrative services.


     (1) In accordance  with Rule 12b-1 of the Investment  Company Act, the term
"Independent  Trustees" in this  Statement of Additional  Information  refers to
those Trustees who are not "interested  persons" of the Fund and who do not have
any direct or indirect  financial  interest in the operation of the distribution
plan or any agreement under the plan.

     (2) Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.

     (3)  In  the  case  of   Oppenheimer   Senior   Floating   Rate   Fund,   a
continuously-offered  closed-end fund,  references to contingent  deferred sales
charges mean the Fund's Early Withdrawal Charges and references to "redemptions"
mean "repurchases" of shares.

     (4) An "employee  benefit plan" means any plan or  arrangement,  whether or
not it is  "qualified"  under the  Internal  Revenue  Code,  under which Class N
shares of an  Oppenheimer  fund or funds are  purchased  by a fiduciary or other
administrator  for the account of  participants  who are  employees  of a single
employer or of affiliated  employers.  These may include,  for example,  medical
savings  accounts,  payroll  deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator  purchasing the
shares for the benefit of participants in the plan.

     (5) The term "Group  Retirement  Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole  proprietorship,  members
and  employees of a  partnership  or  association  or other  organized  group of
persons (the members of which may include other  groups),  if the group has made
special  arrangements  with  the  Distributor  and  all  members  of  the  group
participating  in (or who are  eligible  to  participate  in) the plan  purchase
shares  of an  Oppenheimer  fund or funds  through a single  investment  dealer,
broker or other  financial  institution  designated  by the  group.  Such  plans
include 457 plans, SEP-IRAs,  SARSEPs,  SIMPLE plans and 403(b) plans other than
plans for  public  school  employees.  The term  "Group  Retirement  Plan"  also
includes  qualified  retirement plans and  non-qualified  deferred  compensation
plans and IRAs that purchase  shares of an  Oppenheimer  fund or funds through a
single investment  dealer,  broker or other financial  institution that has made
special arrangements with the Distributor.

     (6)  However,  that  concession  will not be paid on purchases of shares in
amounts  of $1  million  or more  (including  any  right of  accumulation)  by a
Retirement Plan that pays for the purchase with the redemption proceeds of Class
C shares  of one or more  Oppenheimer  funds  held by the Plan for more than one
year.

     (7) This provision does not apply to IRAs.

     (8) This provision only applies to qualified retirement plans and 403(b)(7)
custodial  plans  after your  separation  from  service in or after the year you
reached age 55.

     (9) The  distribution  must be requested  prior to Plan  termination or the
elimination of the Oppenheimer funds as an investment option under the Plan.

     (10) This provision does not apply to IRAs.

     (11) This provision does not apply to loans from 403(b)(7)  custodial plans
and loans from the OppenheimerFunds-sponsored Single K retirement plan.

     (12) This  provision  does not apply to  403(b)(7)  custodial  plans if the
participant is less than age 55, nor to IRAs.


Oppenheimer Capital Appreciation Fund

Internet Website:

         www.oppenheimerfunds.com


Investment Advisor
         OppenheimerFunds, Inc.
         Two World Financial Center
         225 Liberty Street, 11th Floor
         New York, New York 10281-1008

Distributor
         OppenheimerFunds Distributor, Inc.
         Two World Financial Center
         225 Liberty Street, 11th Floor
         New York, New York 10281-1008

Transfer Agent
         OppenheimerFunds Services
         P.O. Box 5270
         Denver, Colorado 80217
         1.800.CALL OPP (225.5677)

Custodian Bank
         JPMorgan Chase Bank
         4 Chase Metro Tech Center
         Brooklyn, New York 11245

Independent Registered Public Accounting Firm
         KPMG LLP
         707 Seventeenth Street
         Denver, Colorado 80202

Legal Counsel
         Mayer, Brown, Rowe & Maw LLP
         1675 Broadway
         New York, New York 10019

(OppenheimerFunds logo)




PX0320.001.1006





                                       OPPENHEIMER CAPITAL APPRECIATION FUND

                                                     FORM N-1A

                                                      PART C

                                                 OTHER INFORMATION


Item 23.  Exhibits

     (a) Amended and  Restated  Declaration  of Trust dated  November  22, 2002:
Filed herewith.

     (b) By-Laws as amended through 6/16/05:  Previously filed with Registrant's
Post-Effective Amendment No. 50, 12/23/05, and incorporated herein by reference.

     (c)  (i)  Specimen  Class  A  Share  Certificate:   Previously  filed  with
Registrant's  Post-Effective Amendment No. 45, 10/28/02, and incorporated herein
by reference.

     (ii) Specimen Class B Share Certificate: Previously filed with Registrant's
Post-Effective Amendment No. 45, 10/28/02, and incorporated herein by reference.

     (iii)  Specimen   Class  C  Share   Certificate:   Previously   filed  with
Registrant's  Post-Effective Amendment No. 45, 10/28/02, and incorporated herein
by reference.

     (iv) Specimen Class N Share Certificate: Previously filed with Registrant's
Post-Effective Amendment No. 45, 10/28/02, and incorporated herein by reference.

     (v) Specimen Class Y Share Certificate:  Previously filed with Registrant's
Post-Effective Amendment No. 45, 10/28/02, and incorporated herein by reference.

     (d)  Amended and  Restated  Investment  Advisory  Agreement  dated  1/1/06:
Previously filed with  Registrant's  Post-Effective  Amendment No. 50, 12/23/05,
and incorporated herein by reference.

     (e) (i) General  Distributor's  Agreement dated 12/10/92:  Previously filed
with  Registrant's  Post-Effective  Amendment No. 27, 3/2/94,  and  incorporated
herein by reference.

     (ii)  Form of  Dealer  Agreement  of  OppenheimerFunds  Distributor,  Inc.:
Previously  filed  with  Post-Effective  Amendment  No.  34 to the  Registration
Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.33-17850), (10/23/06),
and incorporated herein by reference.

     (iii)  Form of Broker  Agreement  of  OppenheimerFunds  Distributor,  Inc.:
Previously  filed  with  Post-Effective  Amendment  No.  34 to the  Registration
Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.33-17850), (10/23/06),
and incorporated herein by reference.

     (iv)  Form of  Agency  Agreement  of  OppenheimerFunds  Distributor,  Inc.:
Previously  filed  with  Post-Effective  Amendment  No.  34 to the  Registration
Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.33-17850), (10/23/06),
and incorporated herein by reference.

     (v) Form of Trust Company Fund/SERV Purchase Agreement of  OppenheimerFunds
Distributor,  Inc.: Previously filed with Post-Effective Amendment No. 45 to the
Registration  Statement  of  Oppenheimer  High Yield Fund  (Reg.  No.  2-62076),
(10/26/01), and incorporated herein by reference.

     (vi)  Form  of  Trust   Company   Agency   Agreement  of   OppenheimerFunds
Distributor,  Inc.: Previously filed with Post-Effective Amendment No. 34 to the
Registration   Statement  of  Oppenheimer  Main  Street  Funds,   Inc.(Reg.  No.
33-17850), (10/26/01), and incorporated herein by reference.

     (f) (i) Amended and Restated Retirement Plan for Non-Interested Trustees or
Directors dated 8/9/01: Previously filed with Post-Effective Amendment No. 34 to
the Registration Statement of Oppenheimer Gold & Special Minerals Fund (Reg. No.
.. 2-82590), 10/25/01, and incorporated herein by reference.

     (ii)   Form   of    Deferred    Compensation    Plan   for    Disinterested
Trustees/Directors:   Filed  with   Post-Effective   Amendment  No.  26  to  the
Registration  Statements of Oppenheimer  Gold & Special  Minerals Fund (Reg. No.
2-82590), 10/28/98, and incorporated herein by reference.

     (g) (i) Global Custody Agreement dated August 16, 2002: Filed herewith.

     (ii) Amendment dated October 2, 2003 to the Global Custody  Agreement dated
August 16, 2002:  Previously  filed with  Pre-Effective  Amendment  No. 1 to the
Registration  Statement  of  Oppenheimer  Principal  Protected  Trust  II  (Reg.
333-108093), 11/6/03, and incorporated herein by reference.

(h)      Not applicable.

     (i) Opinion  and Consent of Counsel  dated  5/1/87:  Previously  filed with
Registrant's  Post-Effective Amendment No. 11, 5/1/87, refiled with Registrant's
Post-Effective Amendment No. 31, 4/28/95, pursuant to Item 102 of Regulation S-T
and incorporated herein by reference.

     (j)  Independent   Registered  Public  Accounting  Firm's  Consent:   Filed
herewith.

     (k) Not applicable.

     (l)  Investment  Letter from  OppenheimerFunds,  Inc. to  Registrant  dated
January 3, 1983: Previously filed with Registrant's Post-Effective Amendment No.
39, 10/29/98, and incorporated herein by reference.

     (m) (i) Amended and Restated  Service Plan and Agreement for Class A shares
dated October 26, 2005: Filed herewith.

     (ii) Amended and Restated  Distribution  and Service Plan and Agreement for
Class B shares dated October 26, 2005: Filed herewith.

     (iii) Amended and Restated  Distribution and Service Plan and Agreement for
Class C shares dated October 26, 2005: Filed herewith.

     (iv) Amended and Restated  Distribution  and Service Plan and Agreement for
Class N shares dated October 26, 2005: Filed herewith.

     (n) Oppenheimer  Funds Multiple Class Plan under Rule 18f-3 updated through
8/11/05:   Previously  filed  with   Post-Effective   Amendment  No.  5  to  the
Registration  Statement of Oppenheimer  Main Street  Opportunity  Fund (Reg. No.
333-40186), 9/27/05, and incorporated herein by reference.

    (o) (i) Power of Attorney for all Trustees/Directors dated October 11, 2006:
Filed herewith.

     (ii) Power of Attorney  for Brian W. Wixted dated  October 11, 2006:  Filed
herewith

     (p)  Amended and  Restated  Code of Ethics of the  Oppenheimer  Funds dated
March  31,  2006  under  Rule  17j-1  of the  Investment  Company  Act of  1940:
Previously  filed  with  Post-Effective  Amendment  No.  13 to the  Registration
Statement  of  Oppenheimer  MidCap  Fund (Reg.  No.  333-31533),  (4/7/06),  and
incorporated herein by reference.

     Item 24. Persons Controlled by or Under Common Control with the Fund

None.

Item 25. - Indemnification

     Reference  is made to the  provisions  of  Article  Seven  of  Registrant's
Amended  and  Restated  Declaration  of  Trust  filed as  Exhibit  23(a) to this
Registration Statement, and incorporated herein by reference.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be  permitted  to  trustees,  officers  and  controlling  persons of
Registrant  pursuant to the foregoing  provisions or otherwise,  Registrant  has
been advised that in the opinion of the Securities and Exchange  Commission such
indemnification  is against  public policy as expressed in the Securities Act of
1933  and  is,  therefore,   unenforceable.  In  the  event  that  a  claim  for
indemnification  against such liabilities  (other than the payment by Registrant
of expenses  incurred  or paid by a trustee,  officer or  controlling  person of
Registrant  in the  successful  defense of any action,  suit or  proceeding)  is
asserted by such trustee, officer or controlling person, Registrant will, unless
in the  opinion  of its  counsel  the matter  has been  settled  by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification  by it is  against  public  policy  as  expressed  in  the
Securities  Act of 1933 and will be governed by the final  adjudication  of such
issue.

Item 26. - Business and Other Connections of the Investment Adviser

     (a) OppenheimerFunds,  Inc. is the investment adviser of the Registrant; it
and  certain  subsidiaries  and  affiliates  act in the same  capacity  to other
investment  companies,  including without  limitation those described in Parts A
and B hereof and listed in Item 26(b) below.

     (b)  There  is  set  forth  below  information  as to any  other  business,
profession, vocation or employment of a substantial nature in which each officer
and  director of  OppenheimerFunds,  Inc. is, or at any time during the past two
fiscal  years has been,  engaged for  his/her own account or in the  capacity of
director, officer, employee, partner or trustee.

- ---------------------------------------- ----------------------------------------------------------------------------
Name and Current Position with
OppenheimerFunds, Inc.                   Other Business and Connections During the Past Two Years
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Timothy L. Abbuhl,                       Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Emeline S. Adwers,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Agan,                             Senior  Vice  President  of  Shareholder   Financial  Services,   Inc.  and
Senior Vice President                    Shareholders   Services,   Inc.;   Vice   President   of   OppenheimerFunds
                                         Distributor,  Inc., Centennial Asset Management Corporation and OFI Private
                                         Investments Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carl Algermissen,                        Formerly  Associate Counsel & Legal Compliance Officer at Great West-Life &
Vice President & Associate Counsel       Annuity Insurance Co. (February 2004-October 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Amato,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Erik Anderson,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Tracey Beck Apostolopoulos,              None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Janette Aprilante,                       Secretary   (since   December  2001)  of:   Centennial   Asset   Management
Vice President & Secretary               Corporation,   OppenheimerFunds   Distributor,   Inc.,   HarbourView  Asset
                                         Management   Corporation   (since  June  2003),   Oppenheimer   Real  Asset
                                         Management,   Inc.,  Shareholder  Financial  Services,   Inc.,  Shareholder
                                         Services,  Inc., Trinity Investment  Management  Corporation (since January
                                         2005),  OppenheimerFunds  Legacy  Program,  OFI  Private  Investments  Inc.
                                         (since June 2003) and OFI Institutional Asset Management,  Inc. (since June
                                         2003). Assistant Secretary of OFI Trust Company (since December 2001).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Hany S. Ayad,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Baker,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James F. Bailey,                         Senior Vice President of  Shareholder  Services,  Inc.  (since March 2006).
Senior Vice President                    Formerly  Vice  President at T. Row Price Group  (September  2000 - January
                                         2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Baldwin,                         President  and  Director  of  Shareholder  Financial  Services,   Inc.  and
Executive Vice President                 Shareholder  Services,  Inc.  Formerly  Managing  Director at Deutsche Bank
                                         (March 2001 - March 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Michael Banta,                      None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joanne Bardell,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Adam Bass,                               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kevin Baum,                              None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeff Baumgartner,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marc Baylin,                             Formerly Portfolio Manager at J.P. Morgan (June 2002-August 2005.)
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Todd Becerra,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lalit K. Behal                           Assistant Secretary of HarbourView Asset Management Corporation.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kathleen Beichert,                       Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gerald B. Bellamy,                       Assistant Vice President (Sales Manager of the  International  Division) of
Assistant Vice President                 OFI Institutional Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Erik S. Berg,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Bertucci,                         None
Assistant Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rajeev Bhaman,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Craig Billings,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark Binning,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert J. Bishop,                        Treasurer (since October 2003) of  OppenheimerFunds  Distributor,  Inc. and
Vice President                           Centennial Asset Management Corporation.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Beth Bleimehl,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John R. Blomfield,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa I. Bloomberg,                       None.
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Veronika Boesch,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Chad Boll,                               None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Antulio N. Bomfim,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michelle Borre Massick,                  None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lori E. Bostrom,                         Formerly Vice  President & Corporate  Counsel at Prudential  Financial Inc.
Vice President & Senior Counsel          (October 2002 - November 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Bourgeois,                          Assistant Vice President of Shareholder Services, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Boydell,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Bromberg,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joan Brunelle,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kristine Bryan-Levin,                    Formerly Senior Vice President at Brown Brothers Harriman  (November 2002 -
Vice President                           May 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Stephanie Bullington,                    Formerly Fund  Accounting  Manager at Madison  Capital  Management  Company
Assistant Vice President                 (July 2005 - October 2005 and Fund Accounting  Officer at Butterfield  Fund
                                         Services  (Bermuda)  Limited (a wholly owned  subsidiary  of the Bank of NT
                                         Butterfield & Sons) (September 2003 - June 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Paul Burke,                              None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark Burns,                              None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Geoffrey Caan,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patrick Campbell,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Catherine Carroll,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Debra Casey,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Maria Castro,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Chaffee,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles Chibnik,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patrick Sheng Chu,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brett Clark,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
H.C. Digby Clements,                     None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Peter V. Cocuzza,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gerald James Concepcion,                 Formerly   (until   November   2004)   an  RIA   Marketing   Associate   of
Assistant Vice President                 OppenheimerFunds, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Corbett,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Susan Cornwell,                          Senior  Vice  President  of  Shareholder   Financial  Services,   Inc.  and
Senior Vice President                    Shareholder   Services,    Inc.;   Vice   President   of   OppenheimerFunds
                                         Distributor,    Inc.,   Centennial   Asset   Management   Corporation   and
                                         OppenheimerFunds Legacy Program.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Cheryl Corrigan,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Belinda J. Cosper,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Scott Cottier,                           None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Laura Coulston,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
George Curry,                            Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie C. Cusker,                         None
Assistant Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kevin Dachille,                          Formerly Fixed Income Director at National Railroad  Retirement  Investment
Vice President                           Trust (May 2003 - May 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Damian,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard Demarco,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Craig P. Dinsell,                        None
Executive Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Randall C. Dishmon,                      None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gavin Dobson,                            Formerly President at Britannic Asset Management  International  (September
Vice President                           2001 - May 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rebecca K. Dolan,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Steven D. Dombrower,                     Senior Vice President of OFI Private  Investments  Inc.;  Vice President of
Vice President                           OppenheimerFunds Distributor, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas Doyle,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Bruce C. Dunbar,                         None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Dvorak,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard Edmiston,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
A. Taylor Edwards,                       Formerly Associate at Dechert LLP (September 2000 - December 2005).
Assistant Vice President & Assistant
Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Venkat Eleswarapu,                       Formerly  Associate  Professor  of Finance at Texas Tech  University  (July
Vice President                           2005 - December  2005) and  Assistant  Professor  of  Finance  at  Southern
                                         Methodist University (January 1999 - May 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel R. Engstrom,                      None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James Robert Erven                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
George R. Evans,                         None
Senior Vice President & Director of
International Equities
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Edward N. Everett,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kathy Faber,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Falicia,                           None Assistant  Secretary (as of July 2004) of HarbourView Asset Management
Assistant Vice President                 Corporation.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Matthew Farkas,                          Formerly Associate at Epstein Becker & Grenn, P.C.  (September 2000 - March
Assistant Vice President and Assistant   2006).
Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kristie Feinberg,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Emmanuel Ferreira,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ronald H. Fielding,                      Vice  President  of  OppenheimerFunds  Distributor,  Inc.;  Director of ICI
Senior Vice President;                   Mutual Insurance Company;  Governor of St. John's College;  Chairman of the
Chairman of the Rochester Division       Board of  Directors  of  International  Museum  of  Photography  at  George
                                         Eastman House.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Bradley G. Finkle,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John E. Forrest,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Foxhoven,                          Assistant Vice President of OppenheimerFunds Legacy Program.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Colleen M. Franca,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Barbara Fraser,                          Formerly Attorney in Private Practice (April 2000 - November 2005).
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas Frengillo,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dominic Freud,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dan Gagliardo,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Hazem Gamal,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Seth Gelman,                             None.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Timothy Gerlach,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Subrata Ghose,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles W. Gilbert,                      None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kurt Gibson,                             Formerly Manager at Barclays Capital (January 2002 - April 2006).
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Phillip S. Gillespie,                    None.
Senior Vice President & Assistant
Secretary
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Alan C. Gilston,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jacqueline Girvin-Harkins,               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jill E. Glazerman,                       None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Benjamin J. Gord,                        Vice  President of  HarbourView  Asset  Management  Corporation  and of OFI
Vice President                           Institutional Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Leyla Greengard,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert B. Grill,                         None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carol Guttzeit,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Haley,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marilyn Hall,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kelly Haney,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Steve Hauenstein,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert W. Hawkins,                       Formerly an  Associate  at Shearman  and  Sterling  LLP (July 2004 - August
Assistant Vice President & Assistant     2005).
Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas B. Hayes,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jennifer Heathwood,                      None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Heidi Heikenfeld,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Annika Helgerson,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Edward Henderson,                        Formerly  Director of Corporate  Purchasing and Risk  Management at StarTek
Assistant Vice President                 Inc. (January 2003 - May 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel Hermann,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dennis Hess,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joseph Higgins,                          Vice President of OFI Institutional Asset Management, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dorothy F. Hirshman,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel Hoelscher,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Hourihan,                          Assistant  Secretary of OFI  Institutional  Asset  Management,  Inc. (since
Vice President & Associate Counsel       April 2006).  Formerly Vice President and Senior  Counsel at  Massachusetts
                                         Financial Service Company (June 2004 - March 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Edward Hrybenko,                         Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Scott T. Huebl,                          Assistant Vice President of OppenheimerFunds Legacy Program.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Margaret Hui,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dana Hunter,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Huttlin,                            Senior Vice  President  (Director  of the  International  Division)  (since
Vice President                           January 2004) of OFI Institutional Asset Management,  Inc.; Director (since
                                         June 2003) of OppenheimerFunds (Asia) Limited.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James G. Hyland,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kelly Bridget Ireland,                   None.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kathleen T. Ives,                        Vice  President and Assistant  Secretary of  OppenheimerFunds  Distributor,
Vice President, Senior Counsel &         Inc. and  Shareholder  Services,  Inc.;  Assistant  Secretary of Centennial
Assistant Secretary                      Asset   Management   Corporation,   OppenheimerFunds   Legacy  Program  and
                                         Shareholder Financial Services, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
William Jaume,                           Senior Vice President of HarbourView  Asset Management  Corporation and OFI
Vice President                           Institutional Asset Management, Inc.; Director of OFI Trust Company.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Frank V. Jennings,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Jennings,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Michael Johnson,                    None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Kadehjian,                          Formerly  Vice  President,  Compensation  Manager  at The  Bank of New York
Assistant Vice President                 (November 1996-November 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles Kandilis,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rezo Kanovich,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas W. Keffer,                        None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Keogh,                           Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Kiernan,                            Formerly  Vice  President and Senior  Compliance  Officer,  Guardian  Trust
Assistant Vice President & Marketing     Company,  FSB at The  Guardian  Life  Insurance  Company of America  (since
Compliance Manager                       February 1998 - November 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Audrey Kiszla                            Formerly Vice President at First Horizon Merchant Services  (December 2005-
Vice President                           May 2006); Director at Janus (January 1998 - August 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Martin S. Korn,                          None.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dimitrios Kourkoulakos,                  None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Kramer,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Paul Kunz,                               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gloria LaFond,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Lamentino,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Tracey Lange,                            Vice  President  of  OppenheimerFunds  Distributor,  Inc.  and OFI  Private
Vice President                           Investments Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeffrey P. Lagarce,                      President of OFI Institutional  Asset Management,  Inc. as of January 2005.
Senior Vice President                    Formerly  Executive Vice  President-Head  of Fidelity  Tax-Exempt  Services
                                         Business at Fidelity Investments (August 1996-January 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Latino,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kristina Lawrence,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gayle Leavitt,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christopher M. Leavy,                    None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kevin Lee,                               Formerly Vice  President at Delaware  Investments  (October 2000 - February
Vice President                           2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Randy Legg,                              None
Vice President & Assistant Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Laura Leitzinger,                        Senior  Vice  President  of  Shareholder  Services,  Inc.  and  Shareholder
Senior Vice President                    Financial Services, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Justin Leverenz,                         None Formerly, a research/technology  analyst at Goldman Sachs, Taiwan (May
Vice President                           2002-May 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael S. Levine,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Levitt,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gang Li,                                 None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Shanquan Li,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie A. Libby,                          Senior Vice President of OFI Private  Investments Inc.  Formerly  Executive
Senior Vice President                    Vice President & Chief  Operating  Officer at Fred Alger  Management,  Inc.
                                         (July 1996 - February 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel Lifshey,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mitchell J. Lindauer,                    None
Vice President & Assistant General
Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Bill Linden,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Malissa B. Lischin,                      Assistant Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David P. Lolli,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel G. Loughran                       None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patricia Lovett,                         Vice  President of  Shareholder  Financial  Services,  Inc. and Senior Vice
Vice President                           President of Shareholder Services, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Misha Lozovik,                           Formerly Senior Director at Clinical  Development  Capital LLC/Care Capital
Vice President                           LLC (August 2002 - October 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Steven Lucaccini,                        Formerly  Director and High Yield  Analyst at UBS Global  Asset  Management
Assistant Vice President                 (November 2001 - April 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dongyan Ma,                              None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Steve Macchia,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark H. Madden,                          None.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jerry Mandzij,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Angelo G. Manioudakis                    Senior Vice President of HarbourView  Asset  Management  Corporation and of
Senior Vice President                    OFI Institutional Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carolyn Maxson,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
William T. Mazzafro,                     Formerly  self-employed as a consultant securities (January 2004 - December
Assistant Vice President                 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Trudi McKenna,                           Formerly Leadership  Development Supervisor at JetBlue Airways (July 2003 -
Assistant Vice President                 October 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jay Mewhirter,                           Formerly Director of Application  Development at AMVESCAP (September 1999 -
Vice President                           March 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Elizabeth McCormack,                     Vice  President and Assistant  Secretary of  HarbourView  Asset  Management
Vice President                           Corporation.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joseph McDonnell,                        Formerly Senior Vice President at Lehman Bros. (April 1995 - March 2006).
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joseph McGovern,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles L. McKenzie,                     Chairman of the Board,  Director,  Chief Executive Officer and President of
Senior Vice President                    OFI Trust Company;  Chairman,  Chief Executive  Officer,  Chief  Investment
                                         Officer and Director of OFI  Institutional  Asset  Management,  Inc.; Chief
                                         Executive  Officer,  President,  Senior  Managing  Director and Director of
                                         HarbourView Asset Management Corporation;  Chairman, President; Director of
                                         Trinity   Investment   Management   Corporation   and  Vice   President  of
                                         Oppenheimer Real Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Medev,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lucienne Mercogliano,                    None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Andrew J. Mika,                          None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jan Miller,                              Formerly a Supervisor at Janus (May 2004-October 2004).
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Heather Minks                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rejeev Mohammed,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Nikolaos D. Monoyios,                    None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jill Mulachy,                            None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John V. Murphy,                          President  and  Management  Director  of  Oppenheimer   Acquisition  Corp.;
Chairman, President, Chief               President  and  Director  of  Oppenheimer  Real  Asset  Management,   Inc.;
Executive Officer & Director             Chairman  and  Director  of  Shareholder  Services,  Inc.  and  Shareholder
                                         Financial   Services,   Inc.;   Director  of  Centennial  Asset  Management
                                         Corporation,  OppenheimerFunds  Distributor,  Inc., OFI Institutional Asset
                                         Management,  Inc.,  Trinity  Investment  Management  Corporation,   Tremont
                                         Capital Management,  Inc., HarbourView Asset Management Corporation and OFI
                                         Private Investments Inc.;  Executive Vice President of Massachusetts Mutual
                                         Life Insurance Company;  Director of DLB Acquisition Corporation;  a member
                                         of the Investment Company Institute's Board of Governors.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Meaghan Murphy,                          Formerly  Marketing  Professional,  RFP Writer at JP Morgan  Fleming  Asset
Assistant Vice President                 Management (May 2002 - October 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Suzanne Murphy,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas J. Murray,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kenneth Nadler,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Paul Newman,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard Nichols,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James B. O'Connell,                      Formerly a Senior Designer Manager of OppenheimerFunds,  Inc. (April 2002 -
Assistant Vice President                 December 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Matthew O'Donnell,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Tony Oh,                                 Formerly  Director of SEC Reporting at Teletech Holdings (July 2004 - April
Assistant Vice President                 2005.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John O'Hare,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John J. Okray,                           Formerly Vice President,  Head of Trust Operations at Lehman Brothers (June
Vice President                           2004-October 2004)
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lerae A. Palumbo,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Anthony Parish,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kathleen Patton,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David P. Pellegrino,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Allison C. Pells,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert H. Pemble,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lori L. Penna,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Petersen,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marmeline Petion-Midy,                   None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Pfeffer,                           Senior Vice President of HarbourView  Asset  Management  Corporation  since
Senior Vice President & Chief            February 2004.
Financial Officer
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Sanjeev Phansalkar,                      Formerly  Consultant at The  Solomon-Page  Group  (October 2004 - September
Assistant Vice President                 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James F. Phillips,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Scott Phillips,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gary Pilc,                               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Piper,                              Assistant Vice President of Shareholder Services, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeaneen Pisarra,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Nicolas Pisciotti,                       Formerly Assistant Vice President at ING (April 2002 - May 2005).
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Poiesz,                            None
Senior Vice President, Head of Growth
Equity Investments
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Sergei Polevikov,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Semyon Polyak,                           Formerly Vice  President and  Co-Portfolio  Manager at Pioneer  Investments
Vice President                           (June 1998 - August 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeffrey Portnoy,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Preuss,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ellen Puckett,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jane C. Putnam,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Paul Quarles,                            Formerly a Principal at AIM Management Group,  Inc.  (October  1997-October
Assistant Vice President                 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael E. Quinn,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie S. Radtke,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Norma J. Rapini,                         None
Assistant Vice President :
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Corry E. Read,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marc Reinganum,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jill Reiter,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Eric Rhodes,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Eric Richter,                            Vice  President  of  HarbourView  Asset  Management  Corporation.  Formerly
Vice President                           Investment  Officer at Alaska  Permanent  Fund  Corporation  (April  2005 -
                                         February  2006);  Vice  President at Loomis Sayles & Co. (July 1997 - April
                                         2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Claire Ring,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Grace Roberts,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Robertson,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Robis,                            Formerly a  Proprietary  Trader at J.P.  Morgan  Chase & Co. (May  2004-May
Assistant Vice President                 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Antoinette Rodriguez,                    None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Stacey Roode,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeffrey S. Rosen,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Stacy Roth,                              None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James H. Ruff,                           President & Director of OppenheimerFunds  Distributor,  Inc. and Centennial
Executive Vice President                 Asset  Management  Corporation;  Executive  Vice  President  of OFI Private
                                         Investments Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Adrienne Ruffle,                         Formerly  an  Associate  with  Sidley  Austin  Brown & Wood LLP  (September
Assistant Vice President & Assistant     2002-February 2005).
Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kim Russomanno,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gerald Rutledge,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie Anne Ryan,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Timothy Ryan,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rohit Sah,                               None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Valerie Sanders,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rudi W. Schadt,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ellen P. Schoenfeld,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patrick Schneider                        Formerly Human Resources Manager at ADT Security Services  (December 2001 -
Assistant Vice President                 July 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mary Beth Schellhorn,                    Formerly  Human  Resources  Generalist at Misys Banking  Systems  (November
Assistant Vice President                 2000 - June 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Scott A. Schwegel,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Allan P. Sedmak                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jennifer L. Sexton,                      Senior Vice President of OFI Private Investments Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Asutosh Shah,                            Formerly Vice  President at Merrill  Lynch  Investment  Managers  (February
Vice President                           2002 - February 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kamal Shah,                              Formerly Senior Vice President Chief Technology  Officer at Tremont Capital
Vice President                           Management (March 1998 - July 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Nava Sharma,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas Siomades,                         Formerly  Vice  President,  Portfolio  Management  at  Curian  Capital  LLC
Vice President                           (December 2002 - September 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David C. Sitgreaves,                     None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Edward James Sivigny                     None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Enrique H. Smith,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Louis Sortino,                           None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Keith J. Spencer,                        None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marco Antonio Spinar,                    None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brett Stein                              Formerly Vice President of Client Services at XAware,  Inc. (October 2002 -
Vice President                           August 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard A. Stein,                        None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Arthur P. Steinmetz,                     Senior Vice President of HarbourView Asset Management Corporation.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jennifer Stevens,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John P. Stoma,                           Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Amy Sullivan,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Deborah A. Sullivan,                     Secretary of OFI Trust Company.
Vice President & Assistant Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Sussman,                         Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas Swaney,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian C. Szilagyi,                       Director of Financial  Reporting and  Compliance at First Data  Corporation
Assistant Vice President                 (April 2003-June 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Matthew Tartaglia,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Martin Telles,                           Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Vincent Toner,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Melinda Trujillo,                        Formerly Senior Manager at CoBank, ACB (January 2004 - April 2006).
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Leonid Tsvayg,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Keith Tucker,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Cameron Ullyat,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Angela Uttaro,                           None
Assistant Vice President: Rochester
Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark S. Vandehey,                        Vice   President   and  Chief   Compliance   Officer  of   OppenheimerFunds
Senior Vice President & Chief            Distributor,  Inc., Centennial Asset Management Corporation and Shareholder
Compliance Officer                       Services,  Inc.; Chief Compliance  Officer of HarbourView  Asset Management
                                         Corporation,  Real Asset Management,  Inc., Shareholder Financial Services,
                                         Inc., Trinity Investment Management  Corporation,  OppenheimerFunds  Legacy
                                         Program,  OFI  Private  Investments  Inc.  and OFI  Trust  Company  and OFI
                                         Institutional Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Maureen Van Norstrand,                   None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Nancy Vann,                              Formerly  Assistant  General Counsel at Reserve  Management  Company,  Inc.
Vice President & Assistant Counsel       (April to December 2004).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rene Vecka,                              None
Assistant Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Vincent Vermette,                        Assistant Vice President of OppenheimerFunds Distributor, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Elaine Villas-Obusan,                    None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Phillip F. Vottiero,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Walsh,                              None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jerry A. Webman,                         Senior Vice President of HarbourView Asset Management Corporation.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christopher D. Weiler,                   None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Adam Weiner,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Barry D. Weiss,                          Vice  President  of  HarbourView   Asset  Management   Corporation  and  of
Vice President                           Centennial Asset Management Corporation.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Melissa Lynn Weiss,                      None
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christine Wells,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joseph J. Welsh,                         Vice President of HarbourView Asset Management Corporation.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Diederick Werdmolder,                    Director of OppenheimerFunds  International Ltd. and  OppenheimerFunds  plc
Senior Vice President                    and  OppenheimerFunds  (Asia)  Limited;  Senior  Vice  President  (Managing
                                         Director  of  the  International   Division)  of  OFI  Institutional  Asset
                                         Management, Inc..
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Catherine M. White,                      Assistant Vice President of OppenheimerFunds  Distributor,  Inc.; member of
Assistant Vice President                 the American Society of Pension Actuaries (ASPA) since 1995.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
William L. Wilby,                        None
Senior Vice President & Senior
Investment Officer, Director of
Equities
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Troy Willis,                             None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Donna M. Winn,                           President,  Chief Executive  Officer & Director of OFI Private  Investments
Senior Vice President                    Inc.; Director & President of OppenheimerFunds  Legacy Program; Senior Vice
                                         President of OppenheimerFunds Distributor, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Philip Witkower,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian W. Wixted,                         Treasurer of HarbourView  Asset  Management  Corporation;  OppenheimerFunds
Senior Vice President & Treasurer        International Ltd.,  Oppenheimer Real Asset Management,  Inc.,  Shareholder
                                         Services,   Inc.,   Shareholder  Financial  Services,   Inc.,  OFI  Private
                                         Investments    Inc.,   OFI   Institutional    Asset    Management,    Inc.,
                                         OppenheimerFunds  plc and  OppenheimerFunds  Legacy Program;  Treasurer and
                                         Chief  Financial  Officer  of OFI Trust  Company;  Assistant  Treasurer  of
                                         Oppenheimer Acquisition Corp.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carol E. Wolf,                           Senior Vice President of HarbourView  Asset  Management  Corporation and of
Senior Vice President                    Centennial  Asset  Management  Corporation;  serves  on  the  Board  of the
                                         Colorado Ballet.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Oliver Wolff,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kurt Wolfgruber,                         Director of Tremont Capital Management,  Inc., HarbourView Asset Management
Executive Vice President, Chief          Corporation  and OFI  Institutional  Asset  Management,  Inc.  (since  June
Investment Officer & Director            2003).   Management  Director  of  Oppenheimer   Acquisition  Corp.  (since
                                         December 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Caleb C. Wong,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Edward C. Yoensky,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Geoff Youell,                            Formerly Principal Consultant at XAware Inc (January 2004 - June 2005).
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lucy Zachman,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert G. Zack                           General  Counsel  of  Centennial  Asset  Management  Corporation;   General
Executive Vice President &               Counsel and Director of  OppenheimerFunds  Distributor,  Inc.;  Senior Vice
General Counsel                          President and General Counsel of HarbourView  Asset Management  Corporation
                                         and OFI  Institutional  Asset  Management,  Inc.;  Senior  Vice  President,
                                         General  Counsel and  Director of  Shareholder  Financial  Services,  Inc.,
                                         Shareholder  Services,  Inc.,  OFI Private  Investments  Inc. and OFI Trust
                                         Company;    Director   and   Assistant    Secretary   of   OppenheimerFunds
                                         International Ltd and OppenheimerFunds  plc; Vice President,  Secretary and
                                         General Counsel of Oppenheimer  Acquisition Corp.;  Director of Oppenheimer
                                         Real Asset  Management,  Inc. and  OppenheimerFunds  (Asia)  Limited;  Vice
                                         President of OppenheimerFunds Legacy Program.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Neal A. Zamore,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Anna Zatulovskaya,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark D. Zavanelli,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Alex Zhou,                               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ronald Zibelli,                          Formerly  Managing  Director  and Small Cap Growth  Team  Leader at Merrill
Vice President                           Lynch.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Arthur J. Zimmer,                        Senior Vice President of HarbourView Asset Management Corporation.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------


The Oppenheimer Funds include the following:

Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Limited Term New York Municipal Fund (a series of Rochester Portfolio Series)
OFI Tremont Core Strategies Hedge Fund
OFI Tremont Market Neutral Hedge Fund
Oppenheimer AMT-Free Municipals
Oppenheimer AMT-Free New York Municipals
Oppenheimer Balanced Fund
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Convertible Securities Fund (a series of Bond Fund Series)
Oppenheimer Core Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Dividend Growth Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Fund, Inc.
Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Bond Fund
Oppenheimer Institutional Money Market Fund
Oppenheimer International Diversified Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer International Value Fund (a series of Oppenheimer International Value Trust)
Oppenheimer Limited Term California Municipal Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal Fund)
Oppenheimer Main Street Fund (a series of Oppenheimer Main Street Funds, Inc.)
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals
Oppenheimer Portfolio Series (4 series)
     Active Allocation Fund
     Aggressive Investor Fund
     Conservative Investor Fund
     Moderate Investor Fund
Oppenheimer Principal Protected Main Street Fund (a series of Oppenheimer Principal
     Protected Trust)
Oppenheimer Principal Protected Main Street Fund II (a series of Oppenheimer Principal
     Protected Trust II)
Oppenheimer Principal Protected Main Street Fund III (a series of Oppenheimer Principal
     Protected Trust III)
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Select Value Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (1 series):
Oppenheimer Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Tremont Market Neutral Fund, LLC
Oppenheimer Tremont Opportunity Fund, LLC
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (11 series):
     Oppenheimer Balanced Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Core Bond Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer MidCap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Strategic Bond Fund/VA
     Oppenheimer Value Fund/VA
Panorama Series Fund, Inc. (4 series):
     Government Securities Portfolio
     Growth Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio
Rochester Fund Municipals

     The address of the Oppenheimer  funds listed above,  Shareholder  Financial
Services,   Inc.,  Shareholder  Services,   Inc.,   OppenheimerFunds   Services,
Centennial Asset Management Corporation, Oppenheimer Real Asset Management, Inc.
and  OppenheimerFunds  Legacy  Program is 6803  South  Tucson  Way,  Centennial,
Colorado 80112-3924.

     The address of OppenheimerFunds,  Inc., OppenheimerFunds Distributor, Inc.,
HarbourView Asset Management  Corporation,  Oppenheimer  Acquisition  Corp., OFI
Private  Investments  Inc.,  OFI  Institutional   Asset  Management,   Inc.  and
Oppenheimer  Trust Company is Two World  Financial  Center,  225 Liberty Street,
11th Floor, New York, New York 10281-1008.

     The  address of Tremont  Capital  Management,  Inc. is 555  Theodore  Fremd
Avenue, Suite 206-C, Rye, New York 10580.

     The address of  OppenheimerFunds  International  Ltd. is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

     The  address  of Trinity  Investment  Management  Corporation  is 301 North
Spring Street, Bellefonte, Pennsylvania 16823.

     The address of OppenheimerFunds (Asia) Limited is Central Tower, 28 Queen's
Road, Suite 1601, Central, Hong Kong.


Item 27. Principal Underwriter

     (a)   OppenheimerFunds   Distributor,   Inc.  is  the  Distributor  of  the
Registrant's  shares. It is also the Distributor of each of the other registered
open-end investment companies for which OppenheimerFunds, Inc. is the investment
adviser,  as described in Part A and Part B of this  Registration  Statement and
listed  in  Item  26(b)  above  (except  Panorama  Series  Fund,  Inc.)  and for
MassMutual Institutional Funds.

(b)      The directors and officers of the Registrant's principal underwriter are:

- ----------------------------------------------- ------------------------------------ ---------------------------------
Name & Principal                                Position & Office                    Position and Office
Business Address                                with Underwriter                     with Registrant
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Timothy Abbhul(1)                               Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Robert Agan(1)                                  Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Anthony Allocco(2)                              Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Janette Aprilante(2)                            Secretary                            None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
James Barker                                    Vice President                       None
1723 W. Nelson Street
Chicago, IL 60657
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Christopher Barlow(2)                           Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kathleen Beichert(1)                            Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Rocco Benedetto(2)                              Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Robert J. Bishop(1)                             Treasurer                            None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Tracey Blinzler(1)                              Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
David A. Borrelli                               Vice President                       None
105 Black Calla Ct.
San Ramon, CA 94583
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Jeffrey R. Botwinick                            Vice President                       None
4431 Twin Pines Drive
Manlius, NY 13104
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Sarah Bourgraf(1)                               Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michelle Brennan(2)                             Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kevin E. Brosmith                               Senior Vice President                None
5 Deer Path
South Natlick, MA 01760
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Jeffrey W. Bryan                                Vice President                       None
1048 Malaga Avenue
Coral Gables, FL 33134
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Patrick Campbell(1)                             Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Andrew Chonofsky                                Vice President                       None
109 Wade Avenue, Apt. 365
Raleigh, NC 27605
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Angelanto Ciaglia(2)                            Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Melissa Clayton(2)                              Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Craig Colby(2)                                  Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Rodney Constable(1)                             Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Susan Cornwell(1)                               Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Neev Crane                                      Vice President                       None
1530 Beacon Street, Apt. #1403
Brookline, MA 02446
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Julian C. Curry                                 Vice President                       None
5801 Nicholson Lane, Suite 420
North Bethesda, MD 20852
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Jeffrey D. Damia                                Vice President                       None
21 Woodhill Road
Chatham, NY 12037
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Fredrick Davis                                  Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John Davis(2)                                   Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Stephen J. Demetrovits(2)                       Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Steven Dombrower                                Vice President                       None
13 Greenbrush Court
Greenlawn, NY 11740
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
George P. Dougherty                             Vice President                       None
328 Regency Drive
North Wales, PA 19454
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Ryan C. Drier                                   Vice President                       None
2240 Breton Road SE
Grand Rapids, MI 49525
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Cliff H. Dunteman                               Vice President                       None
N 53 W 27761 Bantry Road
Sussex, WI 53089-45533
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Hillary Eigen(2)                                Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John Eiler(2)                                   Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kent M. Elwell                                  Vice President                       None
35 Crown Terrace
Yardley, PA 19067
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Gregg A. Everett                                Vice President                       None
4328 Auston Way
Palm Harbor, FL 34685-4017
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
George R. Fahey                                 Senior Vice President                None
9511 Silent Hills Lane
Lone Tree, CO 80124
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Eric C. Fallon                                  Vice President                       None
10 Worth Circle
Newton, MA 02458
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Deanna Farrugia(1)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Joseph Fernandez                                Vice President                       None
1717 Richbourg Park Drive
Brentwood, TN 37027
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Mark J. Ferro                                   Senior Vice President                None
104 Beach 221st Street
Breezy Point, NY 11697
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Ronald H. Fielding(3)                           Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Bradley Finkle(2)                               Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Eric P. Fishel                                  Vice President                       None
725 Boston Post Rd., #12
Sudbury, MA 01776
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Patrick W. Flynn                                Senior Vice President                None
14083 East Fair Avenue
Englewood, CO 80111
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John E. Forrest(2)                              Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John ("J") Fortuna(2)                           Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Jayme D. Fowler                                 Vice President                       None
3818 Cedar Springs Road, #101-349
Dallas, TX 75219
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Richard Fuermann                                Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Lucio Giliberti                                 Vice President                       None
6 Cyndi Court
Flemington, NJ 08822
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michael Gottesman                               Vice President                       None
255 Westchester Way
Birmingham, MI 48009
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Raquel Granahan(4)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Ralph Grant                                     Senior Vice President                None
10 Boathouse Close
Mt. Pleasant, SC 29464
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kahle Greenfield(2)                             Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Eric Grossjung                                  Vice President                       None
4002 N. 194th Street
Elkhorn, NE 68022
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michael D. Guman                                Vice President                       None
3913 Pleasant Avenue
Allentown, PA 18103
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
James E. Gunther                                Vice President                       None
603 Withers Circle
Wilmington, DE 19810
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kevin J. Healy(2)                               Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kevin Hennessey                                 Vice President                       None
8634 Forest Run Lane
Orlando, FL 32836
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Elyse R. Jurman Herman                          Vice President                       None
5486 NW 42 Avenue
Boca Raton, FL 33496
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Wendy G. Hetson(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
William E. Hortz(2)                             Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Edward Hrybenko(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Amy Huber(1)                                    Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Brian F. Husch                                  Vice President                       None
37 Hollow Road
Stonybrook, NY 11790
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kathleen T. Ives(1)                             Vice President & Assistant           Assistant Secretary
                                                Secretary
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Shonda Rae Jaquez(2)                            Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Nivan Jaleeli                                   Vice President                       None
13622 E. Geronimo Rd.
Scottsdale, AZ 85259
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Eric K. Johnson                                 Vice President                       None
8588 Colonial Drive
Lone Tree, CO 80124
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Christina J. Keller(2)                          Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michael Keogh(2)                                Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Lisa Klassen(1)                                 Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Richard Klein                                   Senior Vice President                None
4820 Fremont Avenue South
Minneapolis, MN 55419
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Richard Knott(1)                                Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Brent A. Krantz                                 Senior Vice President                None
61500 Tam McArthur Loop
Bend, OR 97702
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Eric Kristenson(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
David T. Kuzia                                  Vice President                       None
10258 S. Dowling Way
Highlands Ranch, CO 80126
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Tracey Lange(2)                                 Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Paul R. LeMire                                  Assistant Vice President             None
7 Cormorant Drive
Middletown, NJ 07748
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Eric J. Liberman                                Vice President                       None
27 Tappan Ave., Unit West
Sleepy Hollow, NY 10591
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Malissa Lischin(2)                              Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Thomas Loncar                                   Vice President                       None
1401 North Taft Street, Apt. 726
Arlington, VA 22201
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Craig Lyman                                     Vice President                       None
7425 Eggshell Drive
N. Las Vegas, NV 89084
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Peter Maddox(2)                                 Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michael Malik                                   Vice President                       None
546 Idylberry Road
San Rafael, CA 94903
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Steven C. Manns                                 Vice President                       None
1627 N. Hermitage Avenue
Chicago, IL 60622
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Todd A. Marion                                  Vice President                       None
24 Midland Avenue
Cold Spring Harbor, NY 11724
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
LuAnn Mascia(2)                                 Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Theresa-Marie Maynier                           Vice President                       None
2421 Charlotte Drive
Charlotte, NC 28203
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John C. McDonough                               Vice President                       None
533 Valley Road
New Canaan, CT 06840
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kent C. McGowan                                 Vice President                       None
9510 190th Place SW
Edmonds, WA 98020
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Brian F. Medina                                 Vice President                       None
3009 Irving Street
Denver, CO 80211
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Daniel Melehan                                  Vice President                       None
906 Bridgeport Court
San Marcos, CA 92069
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Mark Mezzanotte                                 Vice President                       None
16 Cullen Way
Exeter, NH 03833
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Matthew L. Michaelson                           Vice President                       None
1250 W. Grace, #3R
Chicago, IL 60613
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Noah Miller(1)                                  Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Clint Modler(1)                                 Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Robert Moser                                    Vice President                       None
9650 East Aspen Hill Circle
Lone Tree, CO 80124
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
David W. Mountford                              Vice President                       None
7820 Banyan Terrace
Tamarac, FL 33321
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Gzim Muja                                       Vice President                       None
269 S. Beverly Dr. #807
Beverly Hills, CA 90212
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John V. Murphy(2)                               Director                             President & Trustee
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Wendy Jean Murray                               Vice President                       None
32 Carolin Road
Upper Montclair, NJ 07043
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John S. Napier                                  Vice President                       None
17 Hillcrest Ave.
Darien, CT 06820
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Christina Nasta(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kathleen Nelkin(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kevin P. Neznek(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Bradford G. Norford                             Vice President                       None
5095 Lahinch Ct.
Westerville, OH 43082
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Alan Panzer                                     Vice President                       None
6755 Ridge Mill Lane
Atlanta, GA 30328
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michael Park(2)                                 Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Brian C. Perkes                                 Vice President                       None
6 Lawton Ct.
Frisco, TX 75034
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Charles K. Pettit(2)                            Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Elaine M. Puleo-Carter(2)                       Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Minnie Ra                                       Vice President                       None
100 Dolores Street, #203
Carmel, CA 93923
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Dusting Raring                                  Vice President                       None
27 Blakemore Drive
Ladera Ranch, CA 92797
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michael A. Raso                                 Vice President                       None
3 Vine Place
Larchmont, NY 10538
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Richard E. Rath                                 Vice President                       None
46 Mt. Vernon Ave.
Alexandria, VA 22301
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
William J. Raynor(5)                            Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Ruxandra Risko(2)                               Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
David R. Robertson(2)                           Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Nicole Robbins(2)                               Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Ian M. Roche                                    Vice President                       None
7070 Bramshill Circle
Bainbridge, OH 44023
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kenneth A. Rosenson                             Vice President                       None
24753 Vantage Pt. Terrace
Malibu, CA 90265
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
James H. Ruff(2)                                President & Director                 None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Matthew Rutig                                   Vice President                       None
199 North Street
Ridgefield, CT 06877
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
William R. Rylander                             Vice President                       None
85 Evergreen Road
Vernon, CT 06066
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Thomas Sabow                                    Vice President                       None
6617 Southcrest Drive
Edina, MN 55435
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John Saunders                                   Vice President                       None
2251 Chantilly Ave.
Winter Park, FL 32789
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Jill Schmitt(2)                                 Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Thomas Schmitt                                  Vice President                       None
40 Rockcrest Rd
Manhasset, NY 11030
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
William Schories                                Vice President                       None
3 Hill Street
Hazlet, NJ 07730
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Charles F. Scully                               Vice President                       None
125 Cypress View Way
Apex, NC 27502
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Jennifer Sexton(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Eric Sharp                                      Vice President                       None
862 McNeill Circle
Woodland, CA 95695
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
William Sheluck(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Debbie A. Simon                                 Vice President                       None
55 E. Erie St., #4404
Chicago, IL 60611
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Bryant Smith(1)                                 Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Douglas Bruce Smith                             Vice President                       None
3635 NW Sierra Drive,
Camas, WA 98607
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Christopher M. Spencer                          Vice President                       None
2353 W 118th Terrace
Leawood, KS 66211
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John A. Spensley                                Vice President                       None
375 Mallard Court
Carmel, IN 46032
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Alfred St. John(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Bryan Stein                                     Vice President                       None
8 Longwood Rd.
Voorhees, NJ 08043
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John Stoma(2)                                   Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Wayne Strauss(3)                                Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Brian C. Summe                                  Vice President                       None
2479 Legends Way
Crestview Hills, KY 41017
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michael Sussman(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
George T. Sweeney                               Senior Vice President                None
5 Smokehouse Lane
Hummelstown, PA 17036
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
William K. Tai                                  Vice President                       None
12701 Prairie Drive
Urbandale, IA 50323
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
James Taylor(2)                                 Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Martin Telles(2)                                Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Paul Temple(2)                                  Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
David G. Thomas                                 Vice President                       None
16628 Elk Run Court
Leesburg, VA 20176
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Barrie L. Tiedemann                             Vice President                       None
1774 Sheridan Drive
Ann Arbor, MI 48104
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Mark S. Vandehey(1)                             Vice President and Chief             Vice President and Chief
                                                Compliance Officer                   Compliance Officer
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Vincent Vermete(2)                              Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Cynthia Walloga(2)                              Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Kenneth Lediard Ward                            Vice President                       None
1400 Cottonwood Valley Circle N.
Irving, TX 75038
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Teresa Ward(1)                                  Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Michael J. Weigner                              Vice President                       None
4905 W. San Nicholas Street
Tampa, FL 33629
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Donn Weise                                      Vice President                       None
3249 Earlmar Drive
Los Angeles, CA 90064
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Chris G. Werner                                 Vice President                       None
98 Crown Point Place
Castle Rock, CO 80108
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Catherine White(2)                              Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Ryan Wilde(1)                                   Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Julie Wimer(2)                                  Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Donna Winn(2)                                   Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Peter Winters                                   Vice President                       None
911 N. Organce Ave, Pat. 514
Orlando, FL 32801
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Patrick Wisneski(1)                             Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Philip Witkower(2)                              Senior Vice President                None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Meredith Wolff(2)                               Assistant Vice President             None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Cary Patrick Wozniak                            Vice President                       None
18808 Bravata Court
San Diego, CA 92128
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
John Charles Young                              Vice President                       None
3914 Southwestern
Houston, TX 77005
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Jill Zachman(2)                                 Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Robert G. Zack(2)                               General Counsel & Director           Secretary

- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Walter Zinych                                   Vice President                       None
630 North Franklin St., Apt. 718
Chicago, IL 60610
- ----------------------------------------------- ------------------------------------ ---------------------------------
- ----------------------------------------------- ------------------------------------ ---------------------------------
Steven Zito(1)                                  Vice President                       None
- ----------------------------------------------- ------------------------------------ ---------------------------------

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY 10281-1008
(3)350 Linden Oaks, Rochester, NY 14623
(4)555 Theodore Fremd Avenue, Rye, NY 10580
(5)Independence Wharf, 470 Atlantic Avenue, 11th Floor, Boston, MA 02210



(c)      Not applicable.


Item 28. Location of Accounts and Records

     The  accounts,  books and other  documents  required  to be  maintained  by
Registrant  pursuant to Section 31(a) of the Investment  Company Act of 1940 and
rules promulgated thereunder are in the possession of OppenheimerFunds,  Inc. at
its offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.

Item 29. Management Services

Not applicable

Item 30. Undertakings

Not applicable.

                                                    SIGNATURES

     Pursuant  to  the  requirements  of the  Securities  Act of  1933  and  the
Investment  Company Act of 1940, the Registrant  certifies that it meets all the
requirements for effectiveness of this Registration  Statement  pursuant to Rule
485(b) under the  Securities  Act of 1933 and has duly caused this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the City of New  York  and  State of New York on the 23rd day of
October, 2006.


                                    Oppenheimer Capital Appreciation Fund


                               By:  /s/ John V. Murphy*
                                    John V. Murphy, President,
                                    Principal Executive Officer and Trustee

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been signed below by the  following  persons in the
capacities on the dates indicated:

Signatures                    Title                             Date


/s/ Clayton K. Yeutter*     Chairman of the
Clayton K.Yeutter           Board of Trustees                October 23, 2006


/s/ John V. Murphy*         President, Principal
John V. Murphy              Executive Officer and Trustee    October 23, 2006


/s/ Brian W. Wixted*        Treasurer, Principal             October 23, 2006
Brian W. Wixted             Financial & Accounting Officer


/s/ Matthew P. Fink*        Trustee                          October 23, 2006
Matthew P.Fink


/s/ Robert G. Galli*        Trustee                          October 23, 2006
Robert G. Galli


/s/ Phillip A. Griffiths*   Trustee                          October 23, 2006
Phillip A. Griffiths


/s/ Mary F. Miller*        Trustee                           October 23, 2006
Mary F. Miller


/s/ Joel W. Motley*        Trustee                           October 23, 2006
Joel W. Motley


/s/ Kenneth A. Randall*    Trustee                           October 23, 2006
Kenneth A. Randall


/s/ Russell S. Reynolds, Jr.* Trustee                        October 23, 2006
Russell S. Reynolds, Jr.


/s/ Joseph M. Wikler*         Trustee                        October 23, 2006
Joseph M. Wikler


/s/ Peter I. Wold*            Trustee                        October 23, 2006
Peter I. Wold


/s/ Brian F. Wruble*          Trustee                        October 23, 2006
Brian F. Wruble


*By:     /s/ Mitchell J. Lindauer
         Mitchell J. Lindauer, Attorney-in-Fact





                                       OPPENHEIMER CAPITAL APPRECIATION FUND

                                          Post-Effective Amendment No. 51
                                             Registration No. 2-69719


                                                   EXHIBIT INDEX



Exhibit No.                Description

     23(a) Amended and Restated Declaration of Trust, dated November 22, 2002

     23(g)(i) Global Custody Agreement, dated August 16, 2002

     23(j) Independent Registered Public Accounting Firm's Consent

     23(m)(i)  Amended  and  Restated  Service  Plan and  Agreement  for Class A
               shares, dated October 26, 2005

     23(m)(ii) Amended and Restated  Distribution and Service Plan and Agreement
               for Class B shares, dated October 26, 2005

     23(m)(iii) Amended and Restated Distribution and Service Plan and Agreement
                for Class C shares, dated October 26, 2005

     23(m)(iv) Amended and Restated  Distribution and Service Plan and Agreement
               for Class N shares, dated October 26, 2005

     23(o)(i)  Power of Attorney for all  Trustees/Directors,  dated October 11,
               2006

     23(o)(ii) Power of Attorney for Brian W. Wixted, dated October 11, 2006

EX-99

                                    AMENDED AND RESTATED DECLARATION OF TRUST
                                                          OF
                                        OPPENHEIMER CAPITAL APPRECIATION FUND


     This  DECLARATION  OF TRUST,  made as of the 22nd day of January,  1981 and
Amended  and  Restated  as of this 22nd day of  November,  2002 by and among the
individuals executing this Declaration of Trust as the Trustees.

     WHEREAS,  the Trustees wish to establish a trust fund under the laws of the
placePlaceTypeCommonwealth  of  PlaceNameMassachusetts,  for the  investment and
reinvestment of funds contributed thereto;

     NOW,   THEREFORE,   the  Trustees  declare  that  all  money  and  property
contributed  to the trust fund  hereunder  shall be held and managed  under this
Declaration of Trust in trust as herein set forth below.

     ARTICLE FIRST - NAME

     This Trust shall be known as  OPPENHEIMER  CAPITAL  APPRECIATION  FUND. The
address of Oppenheimer  Capital  Appreciation  Fund is  addressStreet6803  South
Tucson Way, CityCentennial,  StateCO  PostalCode80112.  The Registered Agent for
Service is CT Corporation System,  addressStreet101 Federal Street,  CityBoston,
StateMA PostalCode02110.

     ARTICLE SECOND - DEFINITIONS

     Whenever  used  herein,   unless  otherwise  required  by  the  context  or
specifically provided:

     1. All terms used in this Declaration of Trust that are defined in the 1940
Act (defined below) shall have the meanings given to them in the 1940 Act.

     2. "1940 Act"  refers to the  Investment  Company Act of 1940 and the Rules
and Regulations of the Commission thereunder, all as amended from time to time.

     3.  "Board" or "Board of  Trustees"  or the  "Trustees"  means the Board of
Trustees of the Trust.

     4. "By-Laws" means the By-Laws of the Trust as amended from time to time.

     5. "Class" means a class of a series of shares of the Trust established and
designated under or in accordance with the provisions of Article FOURTH.

     6. "Commission" means the Securities and Exchange Commission.

     7. "Declaration of Trust" shall mean this Amended and Restated  Declaration
of Trust as it may be amended or restated from time to time.

     8. "Majority Vote of  Shareholders"  shall mean, with respect to any matter
on which the  Shares of the Trust or of a Series or Class  thereof,  as the case
may be,  may be  voted,  the  "vote  of a  majority  of the  outstanding  voting
securities"  (as  defined  in the 1940 Act or the rules and  regulations  of the
Commission thereunder) of the Trust or such Series or Class, as the case may be.

     9. "Net asset value" means, with respect to any Share of any Series, (i) in
the case of a Share of a Series whose Shares are not divided into  Classes,  the
quotient  obtained by dividing the value of the net assets of that Series (being
the value of the assets belonging to that Series less the liabilities  belonging
to that  Series) by the total number of Shares of that Series  outstanding,  and
(ii) in the case of a Share of a Class of Shares of a Series  whose  Shares  are
divided into  Classes,  the  quotient  obtained by dividing the value of the net
assets of that  Series  allocable  to such Class  (being the value of the assets
belonging to that Series allocable to such Class less the liabilities  belonging
to such  Class) by the total  number of Shares of such  Class  outstanding;  all
determined  in accordance  with the methods and  procedures,  including  without
limitation those with respect to rounding, established by the Trustees from time
to time.

     10.  "Series"  refers to series  of  shares  of the Trust  established  and
designated under or in accordance with the provisions of Article FOURTH.

     11. "Shareholder" means a record owner of Shares of the Trust.

     12.  "Shares" refers to the  transferable  units of interest into which the
beneficial  interest  in the  Trust or any  Series or Class of the Trust (as the
context may require)  shall be divided from time to time and includes  fractions
of Shares as well as whole Shares.

     13. "Trust" refers to the placeStateMassachusetts business trust created by
this Declaration of Trust, as amended or restated from time to time.

     14.  "Trustees"  refers to the  individual  trustees  in their  capacity as
trustees  hereunder of the Trust and their  successor or successors for the time
being in office as such trustees.

         ARTICLE THIRD - PURPOSE OF TRUST

     The purpose or purposes  for which the Trust is formed and the  business or
objects to be transacted, carried on and promoted by it are as follows:

     1. To hold,  invest or reinvest its funds,  and in connection  therewith to
hold part or all of its funds in cash,  and to  purchase or  otherwise  acquire,
hold for investment or otherwise,  sell, lend, pledge,  mortgage,  write options
on,  lease,  sell short,  assign,  negotiate,  transfer,  exchange or  otherwise
dispose  of  or  turn  to  account  or  realize  upon,  securities  (which  term
"securities"  shall for the  purposes  of this  Declaration  of  Trust,  without
limitation of the generality thereof,  be deemed to include any stocks,  shares,
bonds,  financial futures contracts,  indexes,  debentures,  notes, mortgages or
other obligations, and any certificates, receipts, warrants or other instruments
representing  rights  to  receive,  purchase  or  subscribe  for  the  same,  or
evidencing  or  representing  any other rights or interests  therein,  or in any
property or assets)  created or issued by any issuer (which term "issuer"  shall
for the  purposes  of this  Declaration  of  Trust,  without  limitation  of the
generality  thereof,  be deemed to include  any  persons,  firms,  associations,
corporations,  syndicates, business trusts, partnerships,  investment companies,
combinations,  organizations,  governments,  or  subdivisions  thereof)  and  in
financial   instruments   (whether   they  are   considered   as  securities  or
commodities); and to exercise, as owner or holder of any securities or financial
instruments, all rights, powers and privileges in respect thereof; and to do any
and all  acts and  things  for the  preservation,  protection,  improvement  and
enhancement in value of any or all such securities or financial instruments.

     2. To borrow money and pledge assets in connection  with any of the objects
or purposes of the Trust,  and to issue  notes or other  obligations  evidencing
such  borrowings,  to the extent  permitted  by the 1940 Act and by the  Trust's
fundamental investment policies under the 1940 Act.

     3. To issue and sell its Shares in such  Series and Classes and amounts and
on such terms and  conditions,  for such purposes and for such amount or kind of
consideration   (including  without  limitation  thereto,   securities)  now  or
hereafter   permitted   by  the  laws  of  the   placePlaceTypeCommonwealth   of
PlaceNameMassachusetts  and by this  Declaration  of Trust,  as the Trustees may
determine.

     4. To purchase or otherwise acquire,  hold,  dispose of, resell,  transfer,
reissue,  redeem or cancel its Shares, or to classify or reclassify any unissued
Shares or any Shares  previously  issued and  reacquired  of any Series or Class
into one or more Series or Classes that may have been established and designated
from time to time,  all without the vote or consent of the  Shareholders  of the
Trust,  in any  manner  and to the extent  now or  hereafter  permitted  by this
Declaration of Trust.

     5. To conduct its  business in all its  branches at one or more  offices in
placeCityNew York, StateColorado and elsewhere in any part of the world, without
restriction or limit as to extent.

     6. To  carry  out  all or any of the  foregoing  objects  and  purposes  as
principal  or  agent,  and  alone or with  associates  or to the  extent  now or
hereafter  permitted  by the laws of  Massachusetts,  as a member  of, or as the
owner or holder of any securities or other  instruments of, or share of interest
in, any issuer, and in connection  therewith or make or enter into such deeds or
contracts  with any issuers and to do such acts and things and to exercise  such
powers, as a natural person could lawfully make, enter into, do or exercise.

     7. To do any and all such  further  acts and things and to exercise any and
all such further powers as may be necessary,  incidental,  relative,  conducive,
appropriate or desirable for the  accomplishment,  carrying out or attainment of
all or any of the foregoing purposes or objects.

     The foregoing  objects and purposes  shall,  except as otherwise  expressly
provided, be in no way limited or restricted by reference to, or inference from,
the terms of any other clause of this or any other  Article of this  Declaration
of Trust,  and shall each be regarded as independent  and construed as powers as
well as objects and purposes, and the enumeration of specific purposes,  objects
and powers shall not be construed to limit or restrict in any manner the meaning
of general terms or the general  powers of the Trust now or hereafter  conferred
by the laws of the Commonwealth of Massachusetts nor shall the expression of one
thing be deemed to  exclude  another,  though it be of a similar  or  dissimilar
nature, not expressed;  provided, however, that the Trust shall not carry on any
business, or exercise any powers, in any state,  territory,  district or country
except to the extent that the same may lawfully be carried on or exercised under
the laws thereof.

         ARTICLE FOURTH - SHARES

     1. The beneficial  interest in the Trust shall be divided into Shares,  all
with $.001 par value per share,  but the Trustees  shall have the authority from
time to time,  without  obtaining  shareholder  approval,  to create one or more
Series  of  Shares  in  addition  to the  Series  specifically  established  and
designated  in part 3 of this  Article  FOURTH,  and to divide the shares of any
Series into two or more Classes  pursuant to part 2 of this Article FOURTH,  all
as they deem necessary or desirable,  to establish and designate such Series and
Classes, and to fix and determine the relative rights and preferences as between
the  different  Series of Shares or  Classes as to right of  redemption  and the
price,  terms and manner of redemption,  liabilities and expenses to be borne by
any Series or Class,  special  and  relative  rights as to  dividends  and other
distributions   and  on  liquidation,   sinking  or  purchase  fund  provisions,
conversion on liquidation,  conversion  rights,  and conditions  under which the
several  Series or Classes  shall  have  individual  voting  rights or no voting
rights.  Except as  established  by the Trustees  with respect to such Series or
Classes,  pursuant  to the  provisions  of this  Article  FOURTH,  and except as
otherwise  provided herein,  all Shares of the different Series and Classes of a
Series, if any, shall be identical.

     (a) The number of authorized Shares and the number of Shares of each Series
and each Class of a Series that may be issued is unlimited, and the Trustees may
issue Shares of any Series or Class of any Series for such  consideration and on
such terms as they may determine (or for no consideration if pursuant to a Share
dividend or split-up),  or may reduce the number of issued Shares of a Series or
Class in proportion to the relative net asset value of the Shares of such Series
or Class, all without action or approval of the Shareholders. All Shares when so
issued  on the  terms  determined  by the  Trustees  shall  be  fully  paid  and
non-assessable.  The Trustees may classify or reclassify any unissued  Shares or
any Shares  previously  issued  and  reacquired  of any Series  into one or more
Series or Classes of Series that may be established  and designated from time to
time.  The  Trustees  may hold as  treasury  Shares  (of the same or some  other
Series), reissue for such consideration and on such terms as they may determine,
or cancel,  at their discretion from time to time, any Shares  reacquired by the
Trust.

     (b) The  establishment  and  designation  of any Series or any Class of any
Series in addition to that  established and designated in part 3 of this Article
FOURTH  shall be  effective  upon either (i) the  execution by a majority of the
Trustees of an instrument  setting forth such  establishment and designation and
the relative rights and preferences of such Series or such Class of such Series,
whether  directly in such instrument or by reference to, or approval of, another
document that sets forth such relative  rights and  preferences of the Series or
any  Class  of  any  Series  including,  without  limitation,  any  registration
statement of the Trust,  (ii) upon the  execution of an instrument in writing by
an officer of the Trust  pursuant to the vote of a majority of the Trustees,  or
(iii) as otherwise  provided in either such  instrument.  At any time that there
are  no  Shares  outstanding  of  any  particular  Series  or  Class  previously
established  and  designated,  the Trustees may by an  instrument  executed by a
majority of their  number or by an officer of the Trust  pursuant to a vote of a
majority of the Trustees abolish that Series or Class and the  establishment and
designation  thereof.  Each instrument referred to in this paragraph shall be an
amendment  to this  Declaration  of Trust,  and the  Trustees  may make any such
amendment without shareholder approval.

     (c) Any Trustee,  officer or other agent of the Trust, and any organization
in which any such person is  interested  may acquire,  own,  hold and dispose of
Shares of any Series or Class of any  Series of the Trust to the same  extent as
if such person were not a Trustee,  officer or other agent of the Trust; and the
Trust may issue and sell or cause to be issued and sold and may purchase  Shares
of any  Series  or  Class  of any  Series  from  any  such  person  or any  such
organization  subject  only to the general  limitations,  restrictions  or other
provisions  applicable to the sale or purchase of Shares of such Series or Class
generally.

     2. (a) Classes.  The Trustees shall have the exclusive  authority from time
to time,  without obtaining  shareholder  approval,  to divide the Shares of any
Series into two or more  Classes as they deem  necessary  or  desirable,  and to
establish and  designate  such  Classes.  In such event,  each Class of a Series
shall  represent  interests in the designated  Series of the Trust and have such
voting,  dividend,  liquidation  and  other  rights  as may be  established  and
designated  by the  Trustees.  Expenses  and  liabilities  related  directly  or
indirectly  to the  Shares  of a Class of a Series  may be borne  solely by such
Class (as shall be determined by the Trustees)  and, as provided in this Article
FOURTH. The bearing of expenses and liabilities solely by a Class of Shares of a
Series  shall  be  appropriately  reflected  (in the  manner  determined  by the
Trustees) in the net asset value,  dividend and liquidation rights of the Shares
of such Class of a Series.  The  division of the Shares of a Series into Classes
and the terms and  conditions  pursuant  to which the Shares of the Classes of a
Series will be issued must be made in compliance  with the 1940 Act. No division
of Shares of a Series into  Classes  shall  result in the creation of a Class of
Shares having a preference as to dividends or  distributions  or a preference in
the event of any  liquidation,  termination  or winding up of the Trust,  to the
extent such a preference  is  prohibited by Section 18 of the 1940 Act as to the
Trust.  The  fact  that a Series  shall  have  initially  been  established  and
designated  without any specific  establishment or designation of Classes (i.e.,
that all  Shares of such  Series are  initially  of a single  Class),  or that a
Series shall have more than one  established  and  designated  Class,  shall not
limit the authority of the Trustees to establish and designate separate Classes,
or one or more  additional  Classes,  of said  Series  without  approval  of the
holders of the initial Class thereof,  or previously  established and designated
Class or Classes thereof.

     (b) Class  Differences.  The relative rights and preferences of the Classes
of any Series may differ in such other respects as the Trustees may determine to
be appropriate in their sole discretion,  provided that such differences are set
forth in the instrument  establishing  and designating such Classes and executed
by a majority of the Trustees (or by an instrument executed by an officer of the
Trust pursuant to a vote of a majority of the Trustees).


     The relative  rights and  preferences  of each Class of Shares shall be the
same in all  respects  except  that,  and unless and until the Board of Trustees
shall  determine  otherwise:  (i) when a vote of  Shareholders is required under
this  Declaration  of Trust or when a meeting of  Shareholders  is called by the
Board of Trustees,  the Shares of a Class shall vote exclusively on matters that
affect that Class only;  (ii) the  expenses and  liabilities  related to a Class
shall be borne solely by such Class (as  determined  and allocated to such Class
by the Trustees from time to time in a manner  consistent  with parts 2 and 3 of
this Article FOURTH); and (iii) pursuant to part 10 of Article NINTH, the Shares
of each Class shall have such other rights and preferences as are set forth from
time to time in the then  effective  prospectus  and/or  statement of additional
information relating to the Shares. Dividends and distributions on each Class of
Shares may differ from the dividends and  distributions on any other such Class,
and the net asset  value of each Class of Shares  may differ  from the net asset
value of any other such Class.

     3. Without  limiting the authority of the Trustees set forth in parts 1 and
2 of this  Article  FOURTH to  establish  and  designate  any further  Series or
Classes of Series, the Trustees hereby establish one Series of Shares having the
same name as the Trust,  and said  Shares  shall be divided  into five  Classes,
which  shall be  designated  Class A,  Class B, Class C, Class N and Class Y. In
addition  to the  rights  and  preferences  described  in  parts 1 and 2 of this
Article  FOURTH  with  respect to Series  and  Classes,  the Series and  Classes
established  hereby shall have the relative rights and preferences  described in
this part 3 of this Article  FOURTH.  The Shares of any Series or Class that may
from time to time be  established  and  designated by the Trustees shall (unless
the Trustees  otherwise  determine with respect to some Series or Classes at the
time of  establishing  and  designating  the same) have the  following  relative
rights and preferences:

     (a) Assets Belonging to Series or Class. All consideration  received by the
Trust  for the  issue or sale of  Shares  of a  particular  Series  or any Class
thereof,  together  with all assets in which such  consideration  is invested or
reinvested,  all income, earnings,  profits, and proceeds thereof, including any
proceeds derived from the sale,  exchange or liquidation of such assets, and any
funds or payments  derived from any  reinvestment  of such  proceeds in whatever
form  the same may be,  shall  irrevocably  belong  to that  Series  (and may be
allocated to any Classes  thereof) for all purposes,  subject only to the rights
of  creditors,  and shall be so recorded upon the books of account of the Trust.
Such consideration,  assets,  income,  earnings,  profits, and proceeds thereof,
including any proceeds  derived from the sale,  exchange or  liquidation of such
assets,  and any  funds  or  payments  derived  from  any  reinvestment  of such
proceeds,  in whatever  form the same may be,  together  with any General  Items
allocated  to that  Series as  provided in the  following  sentence,  are herein
referred to as "assets  belonging  to" that Series.  In the event that there are
any assets, income, earnings,  profits, and proceeds thereof, funds, or payments
which  are not  readily  identifiable  as  belonging  to any  particular  Series
(collectively  "General Items"),  the Trustees shall allocate such General Items
to and among any one or more of the Series  established and designated from time
to time in such manner and on such basis as they, in their sole discretion, deem
fair and  equitable;  and any General Items so allocated to a particular  Series
shall belong to that Series (and be allocable to any Classes thereof). Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series (and any Classes  thereof) for all  purposes.  No  Shareholder  or
former  Shareholder of any Series or Class shall have a claim on or any right to
any assets allocated or belonging to any other Series or Class.

     (b) (1) Liabilities Belonging to Series. The liabilities,  expenses, costs,
charges and reserves  attributable to each Series shall be charged and allocated
to the assets  belonging to each  particular  Series.  Any general  liabilities,
expenses, costs, charges and reserves of the Trust which are not identifiable as
belonging  to any  particular  Series  shall be  allocated  and  charged  by the
Trustees to and among any one or more of the Series  established  and designated
from time to time in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable.  The liabilities,  expenses,  costs, charges
and reserves  allocated and so charged to each Series are herein  referred to as
"liabilities   belonging  to"  that  Series.  Each  allocation  of  liabilities,
expenses,  costs,  charges and reserves by the Trustees  shall be conclusive and
binding upon the shareholders of all Series for all purposes.

     (2) Liabilities Belonging to a Class. If a Series is divided into more than
one Class, the liabilities,  expenses,  costs, charges and reserves attributable
to a  Class  shall  be  charged  and  allocated  to  the  Class  to  which  such
liabilities,  expenses, costs, charges or reserves are attributable. Any general
liabilities,  expenses, costs, charges or reserves belonging to the Series which
are not identifiable as belonging to any particular Class shall be allocated and
charged by the Trustees to and among any one or more of the Classes  established
and  designated  from  time  to time in such  manner  and on such  basis  as the
Trustees in their sole  discretion  deem fair and  equitable.  The  liabilities,
expenses, costs, charges and reserves allocated and so charged to each Class are
herein referred to as "liabilities  belonging to" that Class. Each allocation of
liabilities,  expenses,  costs,  charges and reserves by the  Trustees  shall be
conclusive and binding upon the holders of all Classes for all purposes.

     (c) Dividends. Dividends and distributions on Shares of a particular Series
or Class may be paid to the holders of Shares of that Series or Class, with such
frequency  as the  Trustees  may  determine,  which  may be daily  or  otherwise
pursuant to a standing  resolution or resolutions adopted only once or with such
frequency as the Trustees may determine,  from such of the income, capital gains
accrued or realized,  and capital and surplus, from the assets belonging to that
Series, or in the case of a Class,  belonging to such Series and being allocable
to such Class,  as the Trustees may  determine,  after  providing for actual and
accrued  liabilities  belonging  to such  Series or  Class.  All  dividends  and
distributions on Shares of a particular Series or Class shall be distributed pro
rata to the  Shareholders of such Series or Class in proportion to the number of
Shares of such Series or Class held by such Shareholders at the date and time of
record  established for the payment of such dividends or  distributions,  except
that in connection  with any dividend or  distribution  program or procedure the
Trustees  may  determine  that no dividend or  distribution  shall be payable on
Shares as to which the Shareholder's purchase order and/or payment have not been
received by the time or times  established by the Trustees under such program or
procedure.  Such  dividends and  distributions  may be made in cash or Shares of
that Series or Class or a  combination  thereof as determined by the Trustees or
pursuant to any program that the Trustees may have in effect at the time for the
election  by each  Shareholder  of the mode of the  making of such  dividend  or
distribution  to that  Shareholder.  Any such dividend or  distribution  paid in
Shares will be paid at the net asset value  thereof as  determined in accordance
with part 13 of Article SEVENTH. Notwithstanding anything in this Declaration of
Trust to the  contrary,  the Trustees  may at any time declare and  distribute a
dividend  of stock or  other  property  pro rata  among  the  Shareholders  of a
particular  Series or Class at the date and time of record  established  for the
payment of such dividends or distributions.

     (d)  Liquidation.  In the event of the  liquidation  or  dissolution of the
Trust or any Series or Class thereof,  the  Shareholders  of each Series and all
Classes of each Series that have been  established  and designated and are being
liquidated  and  dissolved  shall be entitled to receive,  as a Series or Class,
when and as declared by the Trustees, the excess of the assets belonging to that
Series or, in the case of a Class,  belonging  to that Series and  allocable  to
that Class,  over the  liabilities  belonging to that Series or Class.  Upon the
liquidation  or dissolution of the Trust or any Series or Class pursuant to this
part 3(d) of this Article  FOURTH the  Trustees  shall make  provisions  for the
payment of all outstanding obligations, taxes and other liabilities,  accrued or
contingent, of the Trust or that Series or Class. The assets so distributable to
the Shareholders of any particular  Class and Series shall be distributed  among
such  Shareholders in proportion to the relative net asset value of such Shares.
The  liquidation of the Trust or any  particular  Series or Class thereof may be
authorized  at any time by vote of a  majority  of the  Trustees  or  instrument
executed by a majority of their  number then in office,  provided  the  Trustees
find that it is in the best interest of the Shareholders of such Series or Class
or as  otherwise  provided  in  this  Declaration  of  Trust  or the  instrument
establishing  such Series or Class. The Trustees shall provide written notice to
affected  shareholders  of a termination  effected  under this part 3(d) of this
Article FOURTH.

     (e)  Transfer.  All  Shares of each  particular  Series  or Class  shall be
transferable,  but transfers of Shares of a particular  Class and Series will be
recorded on the Share transfer records of the Trust applicable to such Series or
Class of that Series,  as kept by the Trust or by any transfer or similar agent,
as the case may be, only at such times as  Shareholders  shall have the right to
require the Trust to redeem Shares of such Series or Class of that Series and at
such other times as may be permitted by the Trustees.

     (f) Equality.  Except as provided  herein or in the instrument  designating
and establishing any Series or Class, all Shares of a particular Series or Class
shall represent an equal proportionate  interest in the assets belonging to that
Series,  or in the case of a Class,  belonging  to that Series and  allocable to
that Class, (subject to the liabilities belonging to that Series or that Class),
and each Share of any  particular  Series or Class  shall be equal to each other
Share of that Series or Class;  but the  provisions of this  sentence  shall not
restrict any distinctions  permissible  under this Article FOURTH that may exist
with respect to Shares of the  different  Classes of a Series.  The Trustees may
from time to time divide or combine the Shares of any particular Class or Series
into a greater or lesser number of Shares of that Class or Series  provided that
such  division  or  combination  does not  change the  proportionate  beneficial
interest in the assets belonging to that Series or allocable to that Class or in
any way affect the rights of Shares of any other Class or Series.

     (g)  Fractions.  Any fractional  Share of any Class or Series,  if any such
fractional Share is outstanding,  shall carry proportionately all the rights and
obligations  of a whole Share of that Class and Series,  including  those rights
and obligations with respect to voting,  receipt of dividends and distributions,
redemption of Shares, and liquidation of the Trust.

     (h) Conversion  Rights.  Subject to compliance with the requirements of the
1940 Act, the Trustees  shall have the  authority to provide that (i) holders of
Shares of any Series shall have the right to exchange said Shares into Shares of
one or more other  Series of Shares,  (ii)  holders of shares of any Class shall
have the right to exchange  said Shares into Shares of one or more other Classes
of the same or a different  Series,  and/or (iii) the Trust shall have the right
to carry out  exchanges of the aforesaid  kind, in each case in accordance  with
such requirements and procedures as may be established by the Trustees.

     (i)  Ownership of Shares.  The ownership of Shares shall be recorded on the
books of the Trust or of a transfer or similar agent for the Trust,  which books
shall be maintained  separately for the Shares of each Class and Series that has
been established and designated.  No  certification  certifying the ownership of
Shares need be issued except as the Trustees may otherwise  determine  from time
to time. The Trustees may make such rules as they consider  appropriate  for the
issuance of Share certificates, the use of facsimile signatures, the transfer of
Shares and similar  matters.  The record books of the Trust as kept by the Trust
or any transfer or similar agent,  as the case may be, shall be conclusive as to
who are the Shareholders and as to the number of Shares of each Class and Series
held from time to time by each such Shareholder.

     (j)  Investments in the Trust.  The Trustees may accept  investments in the
Trust  from  such  persons  and on such  terms and for such  consideration,  not
inconsistent  with the  provisions  of the 1940  Act,  as they from time to time
authorize or determine.  Such investments may be in the form of cash, securities
or other property in which the appropriate Series is authorized to invest,  hold
or own,  valued as  provided  in part 13,  Article  SEVENTH.  The  Trustees  may
authorize any distributor,  principal underwriter,  custodian, transfer agent or
other person to accept orders for the purchase or sale of Shares that conform to
such  authorized  terms and to reject  any  purchase  or sale  orders for Shares
whether or not conforming to such authorized terms.

         ARTICLE FIFTH - SHAREHOLDERS' VOTING POWERS AND MEETINGS

     The following  provisions  are hereby adopted with respect to voting Shares
of the Trust and certain other rights:

     1. The Shareholders  shall have the power to vote only (a) for the election
of Trustees when that issue is submitted to Shareholders, or removal of Trustees
to the  extent  and as  provided  in  Article  SIXTH,  (b) with  respect  to the
amendment of this Declaration of Trust to the extent and as provided in part 12,
Article  NINTH,  (c) with respect to  transactions  with respect to the Trust, a
Series or Class as provided in part 4(a),  Article NINTH, (d) to the same extent
as the shareholders of a Massachusetts  business  corporation,  as to whether or
not a court  action,  proceeding  or  claim  should  be  brought  or  maintained
derivatively  or as a class  action on behalf of the Trust any Series,  Class or
the Shareholders, (e) with respect to those matters relating to the Trust as may
be required by the 1940 Act or required by law, by this Declaration of Trust, or
the By-Laws of the Trust or any  registration  statement of the Trust filed with
the Commission or any State, or as the Trustees may consider desirable,  and (f)
with  respect  to any  other  matter  as to which the  Trustees,  in their  sole
discretion, shall submit to the Shareholders.

     2. The Trust will not hold shareholder meetings unless required by the 1940
Act, the provisions of this  Declaration of Trust, or any other  applicable law.
The Trustees may call a meeting of shareholders from time to time.

     3. As to each matter submitted to a vote of Shareholders,  each Shareholder
shall  be  entitled  to one vote for each  whole  Share  and to a  proportionate
fractional vote for each fractional Share standing in such Shareholder's name on
the books of the Trust  irrespective  of the Series thereof or the Class thereof
and all Shares of all Series and Classes  shall vote together as a single Class;
provided,  however,  that (i) as to any matter with  respect to which a separate
vote of one or more Series or Classes thereof is required by the 1940 Act or the
provisions of the writing establishing and designating the Series or Class, such
requirements  as to a separate  vote by such Series or Class thereof shall apply
in lieu of all Shares of all Series and  Classes  thereof  voting  together as a
single Class;  and (ii) as to any matter which affects only the interests of one
or more particular Series or Classes thereof,  only the holders of Shares of the
one or more affected  Series or Classes  thereof shall be entitled to vote,  and
each such Series or Class shall vote as a separate Class. All Shares of a Series
shall have identical voting rights,  and all Shares of a Class of a Series shall
have identical voting rights. Shares may be voted in person or by proxy. Proxies
may be given by or on behalf of a  Shareholder  orally or in writing or pursuant
to any computerized, telephonic, or mechanical data gathering process.

     4. Except as required by the 1940 Act or other applicable law, the presence
in person or by proxy of  one-third  of the Shares  entitled  to vote shall be a
quorum for the  transaction of business at a  Shareholders'  meeting,  provided,
however, that if any action to be taken by the Shareholders of a Series or Class
requires  an  affirmative  vote of a majority,  or more than a majority,  of the
Shares  outstanding  and  entitled to vote,  then with respect to voting on that
particular issue the presence in person or by proxy of the holders of a majority
of the  Shares  outstanding  and  entitled  to  vote  at  such a  meeting  shall
constitute a quorum for the  transaction of business with respect to such issue.
Any number less than a quorum shall be sufficient  for  adjournments.  If at any
meeting  of the  Shareholders  there  shall be less than a quorum  present  with
respect to a  particular  issue to be voted on, such  meeting may be  adjourned,
without  further  notice,  with  respect to such issue from time to time until a
quorum shall be present  with  respect to such issue,  but voting may take place
with  respect  to  issues  for  which  a  quorum  is  present.  Any  meeting  of
Shareholders,  whether or not a quorum is present, may be adjourned with respect
to any one or more items of business for any lawful  purpose,  provided  that no
meeting  shall be  adjourned  for more than six  months  beyond  the  originally
scheduled  date.  Any  adjourned  session  or  sessions  may be  held,  within a
reasonable time after the date for the original meeting without the necessity of
further notice. A majority of the Shares voted at a meeting at which a quorum is
present shall decide any questions and a plurality shall elect a Trustee, except
when a  different  vote is required  by any  provision  of the 1940 Act or other
applicable law or by this Declaration of Trust or By-Laws.

     5. Each Shareholder, upon request to the Trust in proper form determined by
the Trust,  shall be entitled to require the Trust to redeem from the net assets
of that  Series all or part of the Shares of such  Series and Class  standing in
the name of such Shareholder.  The method of computing such net asset value, the
time at which such net asset value shall be computed  and the time within  which
the Trust  shall make  payment  therefor,  shall be  determined  as  hereinafter
provided in Article SEVENTH of this  Declaration of Trust.  Notwithstanding  the
foregoing,  the Trustees,  when  permitted or required to do so by the 1940 Act,
may suspend the right of the Shareholders to require the Trust to redeem Shares.

     6. No  Shareholder  shall,  as such  holder,  have any right to purchase or
subscribe  for any  Shares of the Trust  which it may issue or sell,  other than
such right, if any, as the Trustees, in their discretion, may determine.

     7. All persons who shall  acquire  Shares shall acquire the same subject to
the provisions of the Declaration of Trust.

     8. Cumulative voting for the election of Trustees shall not be allowed.

         ARTICLE SIXTH - THE TRUSTEES

     1. The persons who shall act as Trustees  until their  successors  are duly
chosen and qualify are the trustees  executing this  Declaration of Trust or any
counterpart  thereof.  However,  the  By-Laws of the Trust may fix the number of
Trustees at a number  greater or lesser than the number of initial  Trustees and
may  authorize  the Trustees to increase or decrease the number of Trustees,  to
fill any  vacancies  on the Board which may occur for any reason  including  any
vacancies  created by any such  increase in the number of  Trustees,  to set and
alter the terms of office of the  Trustees  and to lengthen or lessen  their own
terms of  office or make  their  terms of office  of  indefinite  duration,  all
subject  to the 1940 Act,  as  amended  from time to time,  and to this  Article
SIXTH.  Unless otherwise provided by the By-Laws of the Trust, the Trustees need
not be Shareholders.

     2. A Trustee at any time may be  removed  either  with or without  cause by
resolution duly adopted by the affirmative  vote of the holders of two-thirds of
the  outstanding  Shares,  present  in  person  or by  proxy at any  meeting  of
Shareholders  called  for such  purpose;  such a meeting  shall be called by the
Trustees  when  requested in writing to do so by the record  holders of not less
than ten per centum of the outstanding  Shares. A Trustee may also be removed by
the Board of Trustees, as provided in the By-Laws of the Trust.

     3. The Trustees  shall make  available a list of names and addresses of all
Shareholders as recorded on the books of the Trust,  upon receipt of the request
in writing signed by not less than ten Shareholders  (who have been shareholders
for at least six months) holding in the aggregate  shares of the Trust valued at
not less  than  $25,000  at  current  offering  price  (as  defined  in the then
effective Prospectus and/or Statement of Additional  Information relating to the
Shares  under  the  Securities  Act of 1933,  as  amended  from time to time) or
holding  not less than 1% in amount of the  entire  amount of Shares  issued and
outstanding;  such request must state that such Shareholders wish to communicate
with other  Shareholders with a view to obtaining  signatures to a request for a
meeting  to  take  action  pursuant  to  part 2 of  this  Article  SIXTH  and be
accompanied by a form of communication to the Shareholders. The Trustees may, in
their  discretion,  satisfy their  obligation under this part 3 by either making
available the Shareholder list to such  Shareholders at the principal offices of
the Trust,  or at the  offices of the Trust's  transfer  agent,  during  regular
business hours, or by mailing a copy of such  communication and form of request,
at the expense of such requesting Shareholders,  to all other Shareholders,  and
the Trustees may also take such other action as may be permitted  under  Section
16(c) of the 1940 Act.

         ARTICLE SEVENTH - POWERS OF TRUSTEES

     The following  provisions  are hereby  adopted for the purpose of defining,
limiting  and  regulating  the  powers  of  the  Trust,  the  Trustees  and  the
Shareholders.

     1. As soon  as any  Trustee  is duly  elected  by the  Shareholders  or the
Trustees and shall have accepted this Trust,  the Trust estate shall vest in the
new Trustee or Trustees,  together  with the  continuing  Trustees,  without any
further act or conveyance, and he or she shall be deemed a Trustee hereunder.

     2. The death, declination,  resignation, retirement, removal, or incapacity
of the Trustees, or any one of them, shall not operate to annul or terminate the
Trust or any  Series  but the Trust  shall  continue  in full  force and  effect
pursuant to the terms of this Declaration of Trust.

     3. The assets of the Trust shall be held separate and apart from any assets
now or  hereafter  held in any capacity  other than as Trustee  hereunder by the
Trustees or any successor Trustees.  All of the assets of the Trust shall at all
times be considered as vested in the Trustees.  No Shareholder  shall have, as a
holder of  beneficial  interest  in the  Trust,  any  authority,  power or right
whatsoever to transact  business for or on behalf of the Trust,  or on behalf of
the Trustees,  in connection with the property or assets of the Trust, or in any
part thereof.

     4. The Trustees in all instances shall act as principals, and are and shall
be free from the control of the Shareholders. The Trustees shall have full power
and  authority to do any and all acts and to make and execute,  and to authorize
the officers and agents of the Trust to make and execute,  any and all contracts
and  instruments  that they may consider  necessary or appropriate in connection
with the management of the Trust.  Except as otherwise provided herein or in the
1940 Act,  the  Trustees  shall not in any way be bound or limited by present or
future  laws or  customs  in regard to Trust  investments,  but shall  have full
authority  and  power  to make  any and all  investments  which  they,  in their
uncontrolled  discretion and to the same extent as if the Trustees were the sole
owners of the assets of the Trust and the  business  in their own  right,  shall
deem proper to accomplish  the purpose of this Trust.  Subject to any applicable
limitation in this  Declaration of Trust or by the By-Laws of the Trust,  and in
addition to the powers otherwise  granted herein,  the Trustees shall have power
and authority:

     (a) to adopt  By-Laws  not  inconsistent  with  this  Declaration  of Trust
providing  for the conduct of the business of the Trust,  including  meetings of
the  Shareholders  and  Trustees,  and other related  matters,  and to amend and
repeal  them  to  the  extent  that  they  do  not  reserve  that  right  to the
Shareholders;

     (b) to elect and remove  such  officers  and  appoint  and  terminate  such
officers as they consider  appropriate with or without cause, and to appoint and
terminate  agents and consultants and hire and terminate  employees,  any one or
more of the  foregoing  of  whom  may be a  Trustee,  and  may  provide  for the
compensation  of all of the  foregoing;  to appoint and designate from among the
Trustees  or  other  qualified  persons  such  committees  as the  Trustees  may
determine  and to  terminate  any such  committee  and remove any member of such
committee;

     (c) to employ as  custodian  of any assets of the Trust one or more  banks,
trust companies,  companies that are members of a national securities  exchange,
or any other entity  qualified and eligible to act as a custodian under the 1940
Act, as  modified by or  interpreted  by any  applicable  order or orders of the
Commission or any rules or regulations  adopted or interpretive  releases of the
Commission  thereunder,  subject to any conditions set forth in this Declaration
of Trust or in the By-Laws,  and may authorize  such  depository or custodian to
employ subcustodians or agents;

     (d) to retain one or more transfer agents and shareholder servicing agents,
or both,  and may authorize such transfer  agents or servicing  agents to employ
sub-agents;

     (e) to provide for the  distribution  of Shares either  through a principal
underwriter or the Trust itself or both or otherwise;

     (f) to set record  dates by  resolution  of the  Trustees  or in the manner
provided for in the By-Laws of the Trust;

     (g) to delegate such  authority as they consider  desirable to any officers
of the Trust and to any investment advisor,  manager,  custodian or underwriter,
or other agent or independent contractor;

     (h) to vote or give  assent,  or  exercise  any rights of  ownership,  with
respect to stock or other securities or property held in Trust hereunder; and to
execute and deliver  powers of attorney to or  otherwise  authorize  by standing
policies  adopted by the Trustees,  such person or persons as the Trustees shall
deem proper,  granting to such person or persons such power and discretion  with
relation to securities or property as the Trustees shall deem proper;

     (i) to exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities held in trust hereunder;

     (j) to hold any  security or property in a form not  indicating  any trust,
whether in bearer, unregistered or other negotiable form, either in its own name
or in the  name  of a  custodian,  subcustodian  or a  nominee  or  nominees  or
otherwise;

     (k) to  consent  to or  participate  in any  plan  for the  reorganization,
consolidation or merger of any corporation or concern,  any security of which is
held in the Trust; to consent to any contract,  lease,  mortgage,  purchase,  or
sale  of  property  by  such  corporation  or  concern,  and  to  pay  calls  or
subscriptions with respect to any security or instrument held in the Trust;

     (l) to join with other  holders of any  security  or  instrument  in acting
through a  committee,  depositary,  voting  trustee  or  otherwise,  and in that
connection to deposit any security or instrument  with, or transfer any security
to, any such  committee,  depositary  or  trustee,  and to delegate to them such
power and authority  with relation to any security  (whether or not so deposited
or transferred)  as the Trustees shall deem proper,  and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee, depositary
or trustee as the Trustees shall deem proper;

     (m) to sue or be sued in the name of the Trust;

     (n) to  compromise,  arbitrate,  or otherwise  adjust claims in favor of or
against the Trust or any matter in  controversy  including,  but not limited to,
claims for taxes;

     (o) to make,  by  resolutions  adopted  by the  Trustees  or in the  manner
provided  in the  By-Laws,  distributions  of  income  and of  capital  gains to
Shareholders;

     (p) to borrow money and to pledge,  mortgage or  hypothecate  the assets of
the Trust or any part thereof,  to the extent and in the manner permitted by the
1940 Act;

     (q) to enter into investment advisory or management  contracts,  subject to
the  1940  Act,  with  any  one  or  more  corporations,  partnerships,  trusts,
associations or other persons;

     (r) to make loans of cash and/or securities or other assets of the Trust;

     (s) to change  the name of the Trust or any Class or Series of the Trust as
they consider appropriate without prior shareholder approval;

     (t) to establish  officers' and Trustees' fees or compensation  and fees or
compensation  for  committees  of the  Trustees  to be paid by the Trust or each
Series thereof in such manner and amount as the Trustees may determine;

     (u) to invest all or any portion of the  Trust's  assets in any one or more
registered  investment  companies,  including investment by means of transfer of
such assets in exchange for an interest or interests in such investment  company
or investment companies or by any other means approved by the Trustees;

     (v) to determine  whether a minimum  and/or  maximum  value should apply to
accounts  holding  shares,  to fix such values and establish  the  procedures to
cause the involuntary  redemption of accounts that do not satisfy such criteria;
and

     (w) to enter into joint ventures,  general or limited  partnerships and any
other combinations or associations;

     (x) to endorse or guarantee  the payment of any notes or other  obligations
of any person; to make contracts of guaranty or suretyship,  or otherwise assume
liability for payment thereof;

     (y) to purchase and pay for entirely out of Trust  property such  insurance
and/or bonding as they may deem necessary or appropriate  for the conduct of the
business, including, without limitation,  insurance policies insuring the assets
of the Trust  and  payment  of  distributions  and  principal  on its  portfolio
investments,  and  insurance  policies  insuring  the  Shareholders,   Trustees,
officers,   employees,  agents,  consultants,   investment  advisors,  managers,
administrators,    distributors,    principal   underwriters,   or   independent
contractors,  or any thereof (or any person connected  therewith),  of the Trust
individually  against  all claims and  liabilities  of every  nature  arising by
reason of  holding,  being or having  held any such  office or  position,  or by
reason of any action alleged to have been taken or omitted by any such person in
any such capacity,  including any action taken or omitted that may be determined
to  constitute  negligence,  whether  or not the Trust  would  have the power to
indemnify such person against such liability;

     (z) to pay pensions  for faithful  service,  as deemed  appropriate  by the
Trustees, and to adopt, establish and carry out pension,  profit-sharing,  share
bonus,  share  purchase,  savings,  thrift and other  retirement,  incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and  annuity  contracts  as a means  of  providing  such  retirement  and  other
benefits, for any or all of the Trustees,  officers, employees and agents of the
Trust;

     (aa) to adopt on behalf  of the Trust or any  Series  with  respect  to any
Class thereof a plan of distribution and related  agreements thereto pursuant to
the terms of Rule 12b-1 of the 1940 Act and to make  payments from the assets of
the Trust or the relevant Series pursuant to said Rule 12b-1 Plan;

     (bb) to operate as and carry on the business of an  investment  company and
to exercise  all the powers  necessary  and  appropriate  to the conduct of such
operations;

     (cc) to issue, sell, repurchase,  redeem,  retire,  cancel,  acquire, hold,
resell,  reissue,  dispose of, and otherwise deal in Shares and,  subject to the
provisions set forth in Article  FOURTH and part 4, Article  FIFTH,  to apply to
any such  repurchase,  redemption,  retirement,  cancellation  or acquisition of
Shares any funds or  property  of the  Trust,  or the  particular  Series of the
Trust, with respect to which such Shares are issued;

     (dd) in  general  to carry on any  other  business  in  connection  with or
incidental to any of the foregoing powers, to do everything necessary,  suitable
or proper for the  accomplishment of any purpose or the attainment of any object
or the  furtherance  of any power  hereinbefore  set forth,  either  alone or in
association  with  others,  and to do every  other  act or thing  incidental  or
appurtenant  to or growing out of or connected  with the  aforesaid  business or
purposes, objects or powers.

     The foregoing clauses shall be construed both as objectives and powers, and
the  foregoing  enumeration  of  specific  powers  shall not be held to limit or
restrict in any manner the general powers of the Trustees.  Any action by one or
more of the  Trustees  in their  capacity as such  hereunder  shall be deemed an
action on behalf of the Trust or the  applicable  Series and not an action in an
individual capacity.

     5. No one dealing with the Trustees  shall be under any  obligation to make
any  inquiry  concerning  the  authority  of  the  Trustees,  or to  see  to the
application of any payments made or property transferred to the Trustees or upon
their order.

     6. (a) The Trustees shall have no power to bind any Shareholder  personally
or to  call  upon  any  Shareholder  for the  payment  of any  sum of  money  or
assessment  whatsoever  other  than  such  as the  Shareholder  may at any  time
personally agree to pay by way of subscription to any Shares or otherwise.  This
paragraph shall not limit the right of the Trustees to assert claims against any
shareholder  based upon the acts or  omissions  of such  shareholder  or for any
other reason.

     (b) Whenever this  Declaration  of Trust calls for or permits any action to
be taken by the  Trustees  hereunder,  such action  shall mean that taken by the
Board of Trustees  by vote of the  majority of a quorum of Trustees as set forth
from time to time in the By-Laws of the Trust or as required by the 1940 Act.

     (c) The Trustees  shall  possess and  exercise any and all such  additional
powers as are reasonably implied from the powers herein contained such as may be
necessary  or  convenient  in the conduct of any business or  enterprise  of the
Trust,  to do and  perform  anything  necessary,  suitable,  or  proper  for the
accomplishment  of any of the purposes,  or the attainment of any one or more of
the objects,  herein enumerated,  or which shall at any time appear conducive to
or expedient for the  protection or benefit of the Trust,  and to do and perform
all other acts and things  necessary or incidental to the purposes herein before
set forth, or that may be deemed necessary by the Trustees. Without limiting the
generality of the foregoing,  except as otherwise provided herein or in the 1940
Act, the Trustees  shall not in any way be bound or limited by present or future
laws or customs in regard to trust  investments,  but shall have full  authority
and power to make any and all investments that they, in their discretion,  shall
deem proper to accomplish the purpose of this Trust.

     (d) The Trustees shall have the power, to the extent not inconsistent  with
the 1940 Act, to determine conclusively whether any moneys, securities, or other
properties of the Trust are, for the purposes of this Trust, to be considered as
capital or income and in what  manner any  expenses or  disbursements  are to be
borne as  between  capital  and  income  whether  or not in the  absence of this
provision  such moneys,  securities,  or other  properties  would be regarded as
capital or income  and  whether or not in the  absence  of this  provision  such
expenses or disbursements would ordinarily be charged to capital or to income.

     7. The  By-Laws of the Trust may  divide  the  Trustees  into  classes  and
prescribe the tenure of office of the several  classes,  but no class of Trustee
shall be elected for a period  shorter  than that from the time of the  election
following  the  division  into  classes  until the next  meeting of Trustees and
thereafter for a period shorter than the interval  between  meetings of Trustees
or for a period  longer than five years,  and the term of office of at least one
class shall expire each year.

     8. The  Shareholders  shall,  for any  lawful  purpose,  have the  right to
inspect the  records,  documents,  accounts  and books of the Trust,  subject to
reasonable regulations of the Trustees, not contrary to Massachusetts law, as to
whether  and to what  extent,  and at what  times and  places,  and  under  what
conditions and regulations, such right shall be exercised.

     9. Any officer elected or appointed by the Trustees or by the  Shareholders
or otherwise, may be removed at any time, with or without cause.

     10. The Trustees shall have power to hold their meetings, to have an office
or offices and, subject to the provisions of the laws of Massachusetts,  to keep
the books of the Trust outside of said  Commonwealth  at such places as may from
time to time be designated by them.  Action may be taken by the Trustees without
a meeting by unanimous  written  consent or by  telephone  or similar  method of
communication.

     11.  Securities  held by the Trust  shall be voted in person or by proxy by
the President or a  Vice-President,  or such officer or officers of the Trust or
such other  agent of the Trust as the  Trustees  shall  designate  or  otherwise
authorize by standing policies adopted by the Trustees for the purpose,  or by a
proxy or proxies thereunto duly authorized by the Trustees.

     12. (a) Subject to the provisions of the 1940 Act, any Trustee,  officer or
employee,  individually,  or any  partnership  of which any Trustee,  officer or
employee  may be a  member,  or any  corporation  or  association  of which  any
Trustee,  officer or employee  may be an officer,  partner,  director,  trustee,
employee or stockholder,  or otherwise may have an interest,  may be a party to,
or may be pecuniarily or otherwise interested in, any contract or transaction of
the Trust, and in the absence of fraud no contract or other transaction shall be
thereby affected or invalidated;  provided that in such case a Trustee,  officer
or employee or a  partnership,  corporation  or  association of which a Trustee,
officer  or  employee  is a member,  officer,  director,  trustee,  employee  or
stockholder  is so  interested,  such fact shall be disclosed or shall have been
known to the Trustees including those Trustees who are not so interested and who
are neither  "interested" nor "affiliated" persons as those terms are defined in
the 1940 Act, or a majority  thereof;  and any Trustee who is so interested,  or
who is also a director,  officer,  partner,  trustee, employee or stockholder of
such other  corporation or a member of such partnership or association  which is
so interested,  may be counted in  determining  the existence of a quorum at any
meeting of the Trustees which shall  authorize any such contract or transaction,
and may vote thereat to authorize  any such contract or  transaction,  with like
force and effect as if he were not so interested.

     (b) Specifically,  but without  limitation of the foregoing,  the Trust may
enter into a management or investment advisory contract or underwriting contract
and other  contracts  with,  and may  otherwise do business  with any manager or
investment  advisor for the Trust and/or principal  underwriter of the Shares of
the Trust or any  subsidiary  or  affiliate  of any such  manager or  investment
advisor and/or principal underwriter and may permit any such firm or corporation
to enter  into  any  contracts  or other  arrangements  with any  other  firm or
corporation relating to the Trust notwithstanding that the Trustees of the Trust
may be composed in part of  partners,  directors,  officers or  employees of any
such firm or  corporation,  and officers of the Trust may have been or may be or
become  partners,   directors,  officers  or  employees  of  any  such  firm  or
corporation,  and in the  absence  of  fraud  the  Trust  and any  such  firm or
corporation may deal freely with each other, and no such contract or transaction
between the Trust and any such firm or  corporation  shall be  invalidated or in
any way  affected  thereby,  nor shall any  Trustee  or  officer of the Trust be
liable to the Trust or to any  Shareholder  or creditor  thereof or to any other
person for any loss incurred by it or him solely because of the existence of any
such contract or  transaction;  provided  that nothing  herein shall protect any
director or officer of the Trust  against any  liability  to the trust or to its
security  holders  to which he would  otherwise  be subject by reason of willful
misfeasance,  bad faith,  gross  negligence or reckless  disregard of the duties
involved in the conduct of his office.

     (c) As used in this  paragraph the following  terms shall have the meanings
set forth below:

     (i) the term "indemnitee" shall mean any present or former Trustee, officer
or employee of the Trust,  any present or former Trustee,  partner,  Director or
officer  of  another  trust,  partnership,   corporation  or  association  whose
securities  are or were  owned by the  Trust or of which  the  Trust is or was a
creditor and who served or serves in such  capacity at the request of the Trust,
and the heirs, executors,  administrators,  successors and assigns of any of the
foregoing;  however,  whenever  conduct by an  indemnitee  is  referred  to, the
conduct shall be that of the original  indemnitee  rather than that of the heir,
executor, administrator, successor or assignee;

     (ii) the term "covered  proceeding"  shall mean any threatened,  pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative,  to which an  indemnitee is or was a party or is threatened to be
made a  party  by  reason  of the  fact  or  facts  under  which  he or it is an
indemnitee as defined above;

     (iii) the term  "disabling  conduct"  shall mean willful  misfeasance,  bad
faith,  gross  negligence  or reckless  disregard of the duties  involved in the
conduct of the office in question;

     (iv) the term "covered expenses" shall mean expenses (including  attorney's
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by an indemnitee in connection with a covered proceeding; and

     (v) the term  "adjudication  of  liability"  shall mean,  as to any covered
proceeding  and  as to  any  indemnitee,  an  adverse  determination  as to  the
indemnitee whether by judgment, order, settlement,  conviction or upon a plea of
nolo contendere or its equivalent.

     (d) The Trust shall not indemnify any indemnitee  for any covered  expenses
in any covered proceeding if there has been an adjudication of liability against
such indemnitee expressly based on a finding of disabling conduct.

     (e) Except as set forth in paragraph (d) above,  the Trust shall  indemnify
any indemnitee for covered  expenses in any covered  proceeding,  whether or not
there  is  an   adjudication   of   liability  as  to  such   indemnitee,   such
indemnification  by the  Trust  to be to the  fullest  extent  now or  hereafter
permitted  by any  applicable  law  unless the  By-laws  limit or  restrict  the
indemnification  to which any indemnitee may be entitled.  The Board of Trustees
may adopt by-law provisions to implement subparagraphs (c), (d) and (e) hereof.

     (f) Nothing  herein shall be deemed to affect the right of the Trust and/or
any  indemnitee  to  acquire  and  pay  for any  insurance  covering  any or all
indemnities  to the extent  permitted by  applicable  law or to affect any other
indemnification  rights to which any  indemnitee  may be  entitled to the extent
permitted by applicable law. Such rights to indemnification shall not, except as
otherwise provided by law, be deemed exclusive of any other rights to which such
indemnitee may be entitled under any statute, By-Law, contract or otherwise.

     13. The Trustees are empowered, in their absolute discretion,  to establish
the bases or times,  or both, for  determining  the net asset value per Share of
any  Class and  Series  in  accordance  with the 1940 Act and to  authorize  the
voluntary purchase by any Class and Series, either directly or through an agent,
of Shares of any Class and Series  upon such terms and  conditions  and for such
consideration  as the Trustees shall deem advisable in accordance  with the 1940
Act.

     14.  Payment  of the net asset  value  per  Share of any  Class and  Series
properly  surrendered  to it for  redemption  shall be made by the Trust  within
seven days, or as specified in any applicable law or regulation, after tender of
such stock or request for redemption to the Trust for such purpose together with
any additional documentation that may be reasonably required by the Trust or its
transfer  agent to evidence the  authority of the tenderor to make such request,
plus any period of time  during  which the right of the holders of the shares of
such Class of that  Series to require  the Trust to redeem  such shares has been
suspended. Any such payment may be made in portfolio securities of such Class of
that  Series  and/or in cash,  as the  Trustees  shall  deem  advisable,  and no
Shareholder  shall have a right,  other than as determined  by the Trustees,  to
have Shares redeemed in kind.

     15. The Trust shall have the right,  at any time,  without  prior notice to
the  Shareholder  to redeem Shares of the Class and Series held by a Shareholder
held in any account  registered in the name of such  Shareholder for its current
net  asset  value,  for any  reason,  including,  but not  limited  to,  (i) the
determination  that such redemption is necessary to reimburse either that Series
or Class of the Trust or the distributor  (i.e.,  principal  underwriter) of the
Shares  for any loss  either  has  sustained  by reason of the  failure  of such
Shareholder  to make timely and good payment for Shares  purchased or subscribed
for  by  such  Shareholder,   regardless  of  whether  such  Shareholder  was  a
Shareholder at the time of such purchase or subscription,  (ii) the failure of a
Shareholder  to supply a tax  identification  number if required to do so, (iii)
the failure of a  Shareholder  to pay when due for the purchase of Shares issued
to him and subject to and upon such terms and  conditions  as the  Trustees  may
from time to time prescribe,  (iv) pursuant to authorization by a Shareholder to
pay fees or make other payments to one or more third parties, including, without
limitation,  any affiliate of the investment  advisor of the Trust or any Series
thereof,  or (v) if the  aggregate  net  asset  value  of  all  Shares  of  such
Shareholder  (taken at cost or  value,  as  determined  by the  Board)  has been
reduced below an amount  established  by the Board of Trustees from time to time
as the minimum amount required to be maintained by Shareholders.

         ARTICLE EIGHTH - LICENSE

     The name "Oppenheimer"  included in the name of the Trust and of any Series
shall  be  used  pursuant  to  a   royalty-free,   non-exclusive   license  from
OppenheimerFunds,  Inc.  ("OFI"),  incidental  to and as part of any one or more
advisory,  management or supervisory  contracts which may be entered into by the
Trust with OFI.  Such  license  shall  allow OFI to inspect  and  subject to the
control of the Board of  Trustees  to control the nature and quality of services
offered by the Trust under such name.  The license may be terminated by OFI upon
termination  of such advisory,  management or  supervisory  contracts or without
cause upon 60 days'  written  notice,  in which case  neither  the Trust nor any
Series or Class shall have any further  right to use the name  "Oppenheimer"  in
its name or  otherwise  and the Trust,  the  Shareholders  and its  officers and
Trustees shall promptly take whatever action may be necessary to change its name
and the names of any Series or Classes accordingly.

         ARTICLE NINTH - MISCELLANEOUS

     1. In case  any  Shareholder  or  former  Shareholder  shall  be held to be
personally liable solely by reason of his being or having been a Shareholder and
not because of his acts or omissions or for some other reason,  the  Shareholder
or former Shareholder (or the Shareholders' heirs, executors,  administrators or
other legal representatives or in the case of a corporation or other entity, its
corporate or other general  successor) shall be entitled out of the Trust estate
to be held harmless from and  indemnified  against all loss and expense  arising
from such liability.  The Trust shall,  upon request by the Shareholder,  assume
the  defense of any such  claim  made  against  any  Shareholder  for any act or
obligation of the Trust and satisfy any judgment thereon.

     2. It is hereby expressly declared that a trust is created hereby and not a
partnership, joint stock association,  corporation,  bailment, or any other form
of a legal  relationship  other than a trust, as  contemplated in  Massachusetts
General Laws Chapter 182. No individual  Trustee  hereunder shall have any power
to bind the Trust unless so authorized by the  Trustees,  or to personally  bind
the Trust's officers or any Shareholder.  All persons extending credit to, doing
business  with,  contracting  with or having or asserting  any claim against the
Trust or the Trustees  shall look only to the assets of the  appropriate  Series
for payment under any such credit,  transaction,  contract or claim; and neither
the  Shareholders  nor the  Trustees,  nor any of their  agents,  whether  past,
present  or  future,  shall  be  personally  liable  therefor;  notice  of  such
disclaimer and agreement thereto shall be given in each agreement, obligation or
instrument  entered into or executed by Trust or the  Trustees.  There is hereby
expressly  disclaimed  Shareholder  and  Trustee  liability  for  the  acts  and
obligations of the Trust.  Nothing in this  Declaration of Trust shall protect a
Trustee or officer  against any liability to which such Trustee or officer would
otherwise  be  subject  by reason  of  willful  misfeasance,  bad  faith,  gross
negligence  or reckless  disregard of the duties  involved in the conduct of the
office of Trustee or of such officer hereunder.

     3. The exercise by the Trustees of their powers and discretion hereunder in
good faith and with reasonable  care under the  circumstances  then  prevailing,
shall be binding upon everyone  interested.  Subject to the provisions of part 2
of this Article  NINTH,  the Trustees shall not be liable for errors of judgment
or mistakes of fact or law. Subject to the foregoing,  (a) Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant,  advisor,  administrator,  distributor or principal
underwriter,  custodian or transfer, dividend disbursing,  Shareholder servicing
or accounting  agent of the Trust,  nor shall any Trustee be responsible for the
act or  omission  of any other  Trustee;  (b) the  Trustees  may take  advice of
counsel or other  experts  with  respect to the meaning and  operations  of this
Declaration of Trust, applicable laws, contracts,  obligations,  transactions or
any other  business the Trust may enter into,  and subject to the  provisions of
part 2 of this  Article  NINTH,  shall  be  under  no  liability  for any act or
omission in  accordance  with such advice or for failing to follow such  advice;
and (c) in discharging  their duties,  the Trustees,  when acting in good faith,
shall be  entitled  to rely  upon the  books of  account  of the  Trust and upon
written  reports  made to the  Trustees by any officer  appointed  by them,  any
independent  public  accountant,  and (with respect to the subject matter of the
contract involved) any officer,  partner or responsible  employee of a party who
has been  appointed  by the  Trustees or with whom the Trust has entered  into a
contract pursuant to Article SEVENTH. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.

     4. This Trust shall continue without  limitation of time but subject to the
provisions of sub-sections (a) and (b) of this part 4.

     (a) Subject to  applicable  Federal and State law,  and except as otherwise
provided in part 5 of this Article NINTH,  the Trustees,  with the Majority Vote
of  Shareholders  of an  affected  Series or Class,  may sell and  convey all or
substantially  all the assets of that Series or Class (which sale may be subject
to the retention of assets for the payment of  liabilities  and expenses and may
be in the form of a statutory  merger to the extent permitted by applicable law)
to another issuer or to another Series or Class of the Trust for a consideration
which may be or include  securities  of such issuer or may merge or  consolidate
with any other  corporation,  association,  trust, or other  organization or may
sell,  lease,  or  exchange  all or a  portion  of the Trust  property  or Trust
property  allocated or  belonging  to such Series or Class,  upon such terms and
conditions and for such  consideration when and as authorized by such vote. Such
transactions may be effected  through  share-for-share  exchanges,  transfers or
sale of assets, shareholder in-kind redemptions and purchases,  exchange offers,
or any other method  approved by the  Trustees.  Upon making  provision  for the
payment of liabilities,  by assumption by such issuer or otherwise, the Trustees
shall  distribute the remaining  proceeds  among the holders of the  outstanding
Shares of the Series or Class, the assets of which have been so transferred,  in
proportion to the relative net asset value of such Shares.

     (b) Upon completion of the  distribution  of the remaining  proceeds or the
remaining  assets as provided in sub-section (a) hereof or pursuant to part 3(d)
of Article  FOURTH,  as applicable,  the Series the assets of which have been so
transferred  shall  terminate,  and if all the  assets of the Trust have been so
transferred,  the Trust shall  terminate and the Trustees shall be discharged of
any and all further  liabilities and duties  hereunder and the right,  title and
interest of all parties shall be canceled and discharged.

     5.  Subject to  applicable  Federal and state law, the Trustees may without
the  vote or  consent  of  Shareholders  cause  to be  organized  or  assist  in
organizing one or more  corporations,  trusts,  partnerships,  limited liability
companies,   associations,  or  other  organization,   under  the  laws  of  any
jurisdiction,  to take over all or a portion of the Trust  property  or all or a
portion of the Trust property  allocated or belonging to such Series or Class or
to carry on any business in which the Trust shall  directly or  indirectly  have
any interest,  and to sell,  convey and transfer the Trust property or the Trust
property allocated or belonging to such Series or Class to any such corporation,
trust, limited liability company,  partnership,  association, or organization in
exchange for the shares or securities  thereof or  otherwise,  and to lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any  such  corporation,   trust,   partnership,   limited   liability   company,
association, or organization or any corporation,  partnership, limited liability
company, trust,  association,  or organization in which the Trust or such Series
or Class holds or is about to acquire shares or any other  interest.  Subject to
applicable  Federal  and state  law,  the  Trustees  may also  cause a merger or
consolidation  between the Trust or any successor thereto or any Series or Class
thereof and any such corporation, trust, partnership, limited liability company,
association, or other organization.  Nothing contained herein shall be construed
as requiring  approval of shareholders for the Trustees to organize or assist in
organizing one or more  corporations,  trusts,  partnerships,  limited liability
companies,  associations,  or other  organizations  and selling,  conveying,  or
transferring  the Trust  property  or a portion  of the Trust  property  to such
organization  or entities;  provided,  however,  that the Trustees shall provide
written notice to the affected Shareholders of any transaction whereby, pursuant
to this part 5, Article  NINTH,  the Trust or any Series or Class thereof sells,
conveys,  or  transfers  all or a  substantial  portion of its assets to another
entity or merges or consolidates  with another entity.  Such transactions may be
effected  through  share-for-share  exchanges,   transfer  or  sale  of  assets,
shareholder  in-kind  redemptions and purchases,  exchange offers,  or any other
approved by the Trustees.

     6.  The  original  or a  copy  of  this  instrument  and of  each  restated
declaration  of trust or  instrument  supplemental  hereto  shall be kept at the
office of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each  supplemental  or restated  declaration of trust shall be
filed with the Secretary of the  Commonwealth of  Massachusetts,  as well as any
other  governmental  office where such filing may from time to time be required.
Anyone  dealing  with the Trust may rely on a  certificate  by an officer of the
Trust as to whether or not any such  supplemental  or restated  declarations  of
trust  have  been  made and as to any  matters  in  connection  with  the  Trust
hereunder,  and, with the same effect as if it were the original,  may rely on a
copy certified by an officer of the Trust to be a copy of this  instrument or of
any such supplemental or restated declaration of trust. In this instrument or in
any such  supplemental  or restated  declaration  of trust,  references  to this
instrument, and all expressions like "herein", "hereof" and "hereunder" shall be
deemed  to  refer  to  this  instrument  as  amended  or  affected  by any  such
supplemental or restated  declaration of trust.  This instrument may be executed
in any number of counterparts, each of which shall be deemed an original.

     7. The Trust set forth in this  instrument  is  created  under and is to be
governed  by  and  construed  and  administered  according  to the  laws  of the
Commonwealth of Massachusetts.  The Trust shall be of the type commonly called a
Massachusetts  business trust, and without limiting the provisions  hereof,  the
Trust may exercise all powers which are ordinarily exercised by such a trust.

     8. In the event that any person advances the organizational expenses of the
Trust,  such  advances  shall become an  obligation of the Trust subject to such
terms and  conditions  as may be fixed by, and on a date fixed by, or determined
with criteria  fixed by the Board of Trustees,  to be amortized over a period or
periods to be fixed by the Board.

     9. Whenever any action is taken under this  Declaration of Trust  including
action which is required or  permitted  by the 1940 Act or any other  applicable
law, such action shall be deemed to have been  properly  taken if such action is
in accordance with the construction of the 1940 Act or such other applicable law
then  in  effect  as  expressed  in "no  action"  letters  of the  staff  of the
Commission or any release,  rule,  regulation or order under the 1940 Act or any
decision of a court of competent  jurisdiction,  notwithstanding that any of the
foregoing  shall later be found to be invalid or otherwise  reversed or modified
by any of the foregoing.

     10.  Any  action  which may be taken by the Board of  Trustees  under  this
Declaration of Trust or its By-Laws may be taken by the  description  thereof in
the  then  effective  prospectus  and/or  statement  of  additional  information
relating  to the  Shares  under  the  Securities  Act of  1933  or in any  proxy
statement of the Trust rather than by formal resolution of the Board.

     11.  Whenever  under this  Declaration  of Trust,  the Board of Trustees is
permitted  or required to place a value on assets of the Trust,  such action may
be  delegated  by the Board,  and/or  determined  in  accordance  with a formula
determined by the Board, to the extent permitted by the 1940 Act.

     12.  The  Board  of  Trustees  may,  without  the  vote or  consent  of the
Shareholders,  amend  or  otherwise  supplement  this  Declaration  of  Trust by
executing  or  authorizing  an officer of the Trust to execute on their behalf a
Restated  Declaration  of Trust or a Declaration of Trust  supplemental  hereto,
which thereafter shall form a part hereof,  provided,  however, that none of the
following  amendments shall be effective unless also approved by a Majority Vote
of Shareholders:  (i) any amendment to parts 1, 3 and 4, Article FIFTH; (ii) any
amendment to this part 12, Article NINTH; (iii) any amendment to part 1, Article
NINTH; and (iv) any amendment to part 4(a),  Article NINTH that would change the
voting rights of Shareholders  contained  therein.  Any amendment required to be
submitted to the Shareholders that, as the Trustees determine,  shall affect the
Shareholders  of any Series or Class shall,  with respect to the Series or Class
so affected,  be authorized by vote of the  Shareholders of that Series or Class
and no vote of  Shareholders  of a Series or Class not affected by the amendment
with respect to that Series or Class shall be required. Notwithstanding anything
else herein,  any amendment to Article NINTH,  part 1 shall not limit the rights
to  indemnification  or  insurance  provided  therein  with respect to action or
omission or indemnities or Shareholder indemnities prior to such amendment.

     13. The  captions  used herein are intended  for  convenience  of reference
only, and shall not modify or affect in any manner the meaning or interpretation
of any of the provisions of this Agreement.  As used herein,  the singular shall
include the plural,  the masculine gender shall include the feminine and neuter,
and the neuter  gender shall  include the  masculine  and  feminine,  unless the
context otherwise requires.

     IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
22nd day of November, 2002.


/s/ Robert G. Galli                            /s/ Phillip A. Griffiths
_________________________________             ___________________________________
Robert G. Galli                                Phillip A. Griffiths
19750 Beach Road                               97 Olden Lane
Jupiter Island, Florida 33469                  Princeton, NJ  08540


/s/ Leon Levy                                 /s/ Benjamin Lipstein
__________________________________           ___________________________________
Leon Levy                                      Benjamin Lipstein
One Sutton Place South                         591 Breezy Hill Road
New York, NY  10022                            Hillsdale, NY  12529


/s/ Joel W. Motley                            /s/ Elizabeth B. Moynihan
__________________________________            ___________________________________
Joel W. Motley                                 Elizabeth B. Moynihan
409 Scarborough Road                           801 Pennsylvania Ave., N.W.
Scarborough, NY  10510                         Washington, D.C.  20004

/s/ John V. Murphy                            /s/ Kenneth A. Randall
_________________________________            ___________________________________
John V. Murphy                                 Kenneth A. Randall
498 Seventh Avenue                             6 Whittaker's Mill
New York, NY  10018                            Williamsburg, VA  23185


/s/ Edward V. Regan                           /s/ Russell S. Reynolds, Jr.
__________________________________          ___________________________________
Edward V. Regan                              Russell S. Reynolds, Jr.
67 Park Avenue                               98 Field Point Circle
New York, NY  10016                          Greenwich, CT  06830


/s/ Donald W. Spiro                          /s/ Clayton K. Yeutter
__________________________________          __________________________________
Donald W. Spiro                              Clayton K. Yeutter
399 Ski Trail                                10475 East Laurel Lane
Smoke Rise, NJ  07405                        Scottsdale, AZ  85259

EX-99.G

                                                     Exhibit 23(g)(i)
                 _______________________________________________________


                                        GLOBAL CUSTODY AGREEMENT

                                                BETWEEN

                                     OPPENHEIMERFUNDS, INC.
                             on behalf of each investment company identified
                                          as a Customer
                                  in Exhibit A attached hereto
                     individually and severally, and not jointly and severally


                                                AND

                                    JPMORGAN CHASE BANK




                                            August 16, 2002




                                                       GLOBAL CUSTODY AGREEMENT
                                                           TABLE OF CONTENTS

1.    INTENTION OF THE PARTIES;  DEFINITIONS--------------------------------4


   1.1   Intention of the Parties-------------------------------------------4

   1.2   Definitions---------------------------------------------------------4

    WHAT BANK IS REQUIRED TO DO----------------------------------------------6


   2.1   Set Up Accounts-----------------------------------------------------6

   2.2   Cash Account--------------------------------------------------------7

   2.3   Segregation of Assets; Nominee Name---------------------------------7

   2.4   Settlement of Trades------------------------------------------------7

   2.5   Settlement Procedures; Contractual Settlement Date Accounting-------8

   2.6   Settlement Procedures; Actual Settlement Date Accounting------------8

   2.7   Income Collection (Autocredit(R))-----------------------------------8

   2.8   Certain Ministerial Acts--------------------------------------------9

   2.9   Corporate Actions---------------------------------------------------9

   2.10    Proxies----------------------------------------------------------10

   2.11    Statements-------------------------------------------------------11

   2.12    Access to Bank's Records-----------------------------------------11

   2.13    Maintenance of Financial Assets at Subcustodian Locations--------12

   2.14    Tax Relief Services ---------------------------------------------12

   2.15    Foreign Exchange Transactions------------------------------------12
2.16     Compliance with SEC Rule 17f-5 ----------------------------------- 11
2.17     Compliance with SEC Rule 17f-7 ----------------------------------- 13
2.18     Securities Entitlement Orders ------------------------------------ 14
2.19     Confirmations  ----------------------------------------------------14

3.    INSTRUCTIONS----------------------------------------------------------15


   3.1   Acting on Instructions; Unclear Instructions-----------------------15

   3.2   Confirmation of Oral Instructions/Security Devices-----------------15

   3.3   Instructions; Contrary to Law/Market Practice----------------------16

   3.4     Cut-off Times----------------------------------------------------16

4.    FEES EXPENSES AND OTHER AMOUNTS OWING TO BANK-------------------------16


   4.1   Fees and Expenses--------------------------------------------------16

   4.2   Overdrafts---------------------------------------------------------16

5.    SUBCUSTODIANS, SECURITIES DEPOSITORIES AND OTHER AGENTS---------------17


   5.1   Appointment of Subcustodians---------------------------------------17

   5.2   Liability for Subcustodians----------------------------------------17

   5.3   Use of Agents------------------------------------------------------17

6.    ADDITIONAL PROVISIONS RELATING TO CUSTOMER----------------------------18


   6.1   Representations of Customer and Bank-------------------------------18

   6.2   Provision of Additional Information to Bank------------------------18

   6.3   Customer is Liable to Bank Even if it is Acting for Another Person--18

7.    WHEN BANK IS LIABLE TO CUSTOMER----------------------------------------18


   7.1   Standard of Care; Liability-----------------------------------------19

   7.2   Force Majeure-------------------------------------------------------20

   7.3   Bank May Consult With Counsel---------------------------------------20

   7.4   Bank Provides Diverse Financial Services and May Generate
             Profits as a Result---------------------------------------------20

8.    TAXATION---------------------------------------------------------------20


   8.1   Tax Obligations-----------------------------------------------------20

   8.2   Tax Reclaims--------------------------------------------------------21

9.    TERMINATION------------------------------------------------------------21


10.   Miscellaneous----------------------------------------------------------22


   10.1    Notices-----------------------------------------------------------22

   10.2    Successors and Assigns--------------------------------------------22

   10.3    Interpretation----------------------------------------------------22

   10.4    Entire Agreement--------------------------------------------------22

   10.5    Information Concerning Deposits at Bank's London Branch-----------22

   10.6    Insurance---------------------------------------------------------23

   10.7    Governing Law and Jurisdiction------------------------------------23

   10.8    Severability; Waiver; and Survival--------------------------------23

   10.9    Counterparts------------------------------------------------------24

   10.10   No Third Party Beneficiaries--------------------------------------24
   10.11   Confidentiality  -------------------------------------------------23
   10.12    Limited Obligations  --------------------------------------------23

                                                       GLOBAL CUSTODY AGREEMENT

     This  Agreement,  dated August 16, 2002, is by and between  JPMORGAN  CHASE
BANK ("Bank"),  with a place of business at 4 MetroTech Center,  Attn:  Investor
Services, Brooklyn, New York 11245; and OppenheimerFunds,  Inc., with a place of
business  at 6803  South  Tucson  Way,  Attn:  Banking  Operations,  Centennial,
Colorado  80112 on behalf of each  investment  company  identified  on Exhibit A
attached hereto (each  hereinafter  referred to as the "Customer")  individually
and severally, and not jointly and severally.


     1.INTENTION OF THE PARTIES; DEFINITIONS

1.1      Intention of the Parties.

     (a)  Customer  hereby  employs the Bank as the  Custodian  of all assets of
Customer  which are  delivered to and accepted by the Bank or any  Subcustodian,
including  Securities,  Financial  Assets and cash, and Bank hereby accepts such
employment,  pursuant to the terms and  conditions  set forth  herein  governing
custodial,  settlement and certain other associated  services offered by Bank to
Customer. Bank will be responsible for the performance of only those duties that
are  set  forth  in  this  Agreement.  Customer  acknowledges  that  Bank is not
providing any legal,  tax or investment  advice in connection  with the services
hereunder.

     (b) Investing in foreign markets may be a risky enterprise.  The holding of
Financial Assets and cash in foreign  jurisdictions may involve risks of loss or
other special considerations.  Bank will not be liable for any loss that results
from Country Risk, as defined herein.

1.2      Definitions.

     (a) As used  herein,  the  following  terms  have the  meaning  hereinafter
stated.

     "1940 Act" means the Investment Company Act of 1940, as amended.

     "Account" has the meaning set forth in Section 2.1 of this Agreement.

     "Affiliate"  means an entity  controlling,  controlled  by, or under common
control with, Bank.

     "Affiliated Subcustodian" means a Subcustodian that is an Affiliate.

     "Applicable  Law"  means any  statute,  whether  national,  state or local,
applicable  in the United States or any other  country,  the rules of the treaty
establishing  the  European  Community,  any  other  law,  rule,  regulation  or
interpretation  of any governmental  entity,  any applicable common law, and any
decree, injunction, judgment, order, ruling, or writ of any governmental entity.

     "Authorized  Person"  means any person who has been  designated  by written
notice from Customer (or by any agent designated by Customer, including, without
limitation,  an investment manager) to act on behalf of Customer hereunder. Such
persons will continue to be Authorized  Persons until such time as Bank receives
Instructions  from  Customer (or its agent) that any such person is no longer an
Authorized Person.

     "Bank  Indemnitees"  means  Bank  and its  nominees,  directors,  officers,
employees and agents.

     "Bank's  London  Branch" means the London  branch office of JPMorgan  Chase
Bank.

     "Cash Account" has the meaning set forth in Section 2.1(a)(ii).

     "Corporate  Action"  means  any  subscription  right,  bonus  issue,  stock
repurchase  plan,  redemption,  exchange,  tender offer,  class action notice or
similar matter with respect to a Financial Asset in the Securities  Account that
require discretionary action by the holder, but does not include proxy voting.

     "Country  Risk"  means  the  risk  of  investing  or  holding  assets  in a
particular country or market,  including, but not limited to, risks arising from
nationalization,  expropriation  or other  governmental  actions;  the country's
financial infrastructure, including prevailing custody and settlement practices;
laws  applicable to the  safekeeping  and recovery of Financial  Assets and cash
held in  custody;  the  regulation  of the banking  and  securities  industries,
including  changes  in market  rules;  currency  restrictions,  devaluations  or
fluctuations;   and  market  conditions   affecting  the  orderly  execution  of
securities transactions or the value of assets.

     "Entitlement  Holder" means the person named on the records of a Securities
Intermediary  as  the  person  having  a  Securities   Entitlement  against  the
Securities Intermediary.

     "Financial Asset" means, as the context  requires,  either the asset itself
or the means by which a person's  claim to it is  evidenced,  including  but not
limited to a Security,  a security  certificate,  or a  Securities  Entitlement.
"Financial Asset" does not include cash.

     "Foreign  Financial  Assets"  means  Financial  Assets,  including  foreign
currencies,  for which the primary  market is outside the United  States and any
cash and cash equivalents that are reasonably  necessary to effect  transactions
in those Financial Assets.

     "Institutional  Clients"  means  country-regionU.S.  registered  investment
companies,  major U.S. commercial banks,  insurance companies,  pension funds or
substantially  similar  financial  institutions  which as part of their ordinary
business  operations purchase or sell Financial Assets and make use of custodial
services in the applicable jurisdiction or market.

     "Instructions"  means  instructions  which:  (i)  are  received  by Bank in
writing or via Bank's electronic  instruction system, SWIFT,  telephone,  tested
telex,  facsimile  or such other  methods  as are for the time  being  agreed by
Customer  (or an  Authorized  Person) and Bank;  and (ii) Bank  believes in good
faith have been given by an  Authorized  Person or are  transmitted  with proper
testing  or  authentication  pursuant  to terms and  conditions  which  Bank may
specify.

     "Liabilities"  means  any  liabilities,  losses,  claims,  costs,  damages,
penalties,  fines,  obligations,  or expenses of any kind whatsoever (including,
without  limitation,   reasonable  and  appropriate  attorneys',   accountants',
consultants' or experts' fees and disbursements).

     "Securities" means stocks, bonds, rights, warrants and other negotiable and
non-negotiable  instruments,  whether issued in certificated  or  uncertificated
form, that are commonly traded or dealt in on securities  exchanges or financial
markets.  "Securities"  also means other  obligations  of an issuer,  or shares,
participations  and interests in an issuer recognized in the country in which it
is issued or dealt in as a medium for  investment  and any other property as may
be acceptable to Bank for the Securities Account.

     "Securities  Account"  means  each  Securities  custody  account  on Bank's
records to which Financial Assets are or may be credited pursuant hereto.

     "Securities Depository" means:

     (i) when referring to a securities  depository located outside the U.S., an
`Eligible Securities  Depository' which, in turn, shall have the same meaning as
in SEC Rule 17f-7(b)(1)(i)-(vi) as the same may be amended from time to time, or
that has otherwise been made exempt pursuant to an SEC exemptive order.

     (ii)  when   referring   to  a   securities   depository   located  in  the
country-regionplaceU.S.  shall mean a  securities  depository  as defined in SEC
Rule  17f-4(a).  "Securities  Entitlement"  means  the  rights  and  property
interests  of an  Entitlement  Holder with  respect to a Financial  Asset as set
forth in Part 5 of  Article  8 of the  Uniform  Commercial  Code of the State of
StateplaceNew York, as the same may be amended from time to time.

     "Securities   Intermediary"  means  Bank,  a  Subcustodian,   a  Securities
Depository,  and any other financial institution which in the ordinary course of
business maintains custody accounts for others and acts in that capacity.

     "Subcustodian" means the following:

     (i) a `U.S.  Bank',  which  shall  mean a U.S.  bank as defined in SEC rule
17f-5(a)(7);

     (ii) an  `Eligible  Foreign  Custodian',  which shall  mean:  (x) a banking
institution  or trust  company,  incorporated  or organized  under the laws of a
country  other  than  the  United  States,  that  is  regulated  as such by that
country's  government or an agency thereof,  and (y) a majority-owned  direct or
indirect  subsidiary of a U.S. bank or bank holding company which  subsidiary is
incorporated  or  organized  under the laws of a country  other  than the United
States.  In addition,  an Eligible  Foreign  Custodian shall also mean any other
entity  that shall have been so  qualified  by  exemptive  order,  rule or other
appropriate action of the SEC.

     (iii) For purposes of clarity, it is agreed that as used in Section 5.2(a),
the term  Subcustodian  shall not include any Eligible  Foreign  Custodian as to
which  Bank has not acted as  Foreign  Custody  Manager,  and that  Subcustodian
includes Affiliated Subcustodians.

     (b) All terms in the  singular  will have the same  meaning  in the  plural
unless the context  otherwise  provides and vice versa and the word "will" shall
be read to mean "shall."


     2.WHAT BANK IS REQUIRED TO DO

2.1      Set Up Accounts.

     (a) Bank will establish and maintain the following accounts ("Accounts"):

     (i) a  Securities  Account in the name of Customer  for  Financial  Assets,
which  may be  received  by or on  behalf  of Bank or its  Subcustodian  for the
account of Customer, including as an Entitlement Holder; and

     (ii) an account in the name of Customer  ("Cash  Account")  for any and all
cash in any currency  received by or on behalf of Bank or its  Subcustodian  for
the account of Customer.

     Notwithstanding paragraph (ii), cash held in respect of those markets where
Customer is required to have a cash account in its own name held  directly  with
the relevant Subcustodian or a Securities Depository will be held in that manner
and will not be part of the Cash Account.

     (b) At the request of  Customer,  additional  Accounts may be opened in the
future, which will be subject to the terms of this Agreement.

2.2      Cash Account.

     Except as otherwise  provided in Instructions  acceptable to Bank, all cash
held in the Cash Account  will be deposited  during the period it is credited to
the Accounts in one or more deposit accounts at Bank or at Bank's London Branch.
Any cash so deposited  with Bank's London Branch will be payable  exclusively by
Bank's  London Branch in the  applicable  currency,  subject to compliance  with
Applicable Law, including,  without limitation, any restrictions on transactions
in the applicable currency imposed by the country of the applicable currency.

2.3      Segregation of Assets; Nominee Name.

     (a) Bank will  identify in its records that  Financial  Assets  credited to
Customer's  Securities  Account  belong to Customer  (except as otherwise may be
agreed by Bank and Customer).

     (b) To the extent permitted by Applicable Law or market practice, Bank will
require each  Subcustodian to identify in its own records that Financial  Assets
credited to Customer's Securities Account belong to customers of Bank, such that
it is readily  apparent that the  Financial  Assets do not belong to Bank or the
Subcustodian.

     (c) Bank is authorized, in its discretion:

     (i) to hold in bearer form, such Financial  Assets as are customarily  held
in bearer form or are delivered to Bank or its Subcustodian in bearer form;

     (ii) to hold  Financial  Assets in or  deposit  Financial  Assets  with any
Securities Depository, settlement system or dematerialized book entry or similar
systems as to which, in the case of a foreign  Securities  Depository,  Bank has
provided the analysis of custody risks  contemplated by Section  (a)(1)(i)(A) of
Rule 17f-7 under the 1940 Act and not,  after  delivering  a notice  required by
Section  (a)(1)(i)(B)  of Rule 17f-7 under the 1940 Act,  received  Instructions
from Customer to withdraw securities therefrom (a "Reported Depository"); and

     (iii) to register in the name of Customer,  Bank, a Subcustodian,  or their
respective nominees, such Financial Assets as are customarily held in registered
form;  provided,  however,  that  if it is  market  practice  in a  country  for
Financial  Assets  customarily  held in registered  form to be registered in the
name of a Reported Depository,  Bank is authorized in its discretion to register
such Financial Assets in the name of such Reported Depository or its nominee.

     (d) Except with the specific consent of Customer,  Customer authorizes Bank
or  its  Subcustodian  to  hold  Financial  Assets  in  omnibus  accounts  or in
Customer's name, as required by local market practice,  and will accept delivery
of Financial  Assets of the same class and  denomination as those deposited with
Bank or its Subcustodian.

2.4      Settlement of Trades.

     When Bank receives an Instruction  directing settlement of a transaction in
(i.e.,  purchase or sale of)  Financial  Assets that  includes  all  information
reasonably  required  by Bank,  Bank will use  reasonable  care to  effect  such
settlement as instructed. Settlement of transactions in Financial Assets will be
conducted in  accordance  with  prevailing  standards of the market in which the
transaction  occurs for transactions by Institutional  Clients.  Notwithstanding
applicable  market  standards,  the Bank shall not deliver  Financial  Assets or
payment in advance of receipt or settlement of the expected consideration unless
instructed  to do so by  Customer.  In the  case of the  failure  of  Customer's
counterparty to deliver the expected  consideration as agreed, Bank will contact
the counterparty to seek settlement, but Bank will not be obligated to institute
legal proceedings,  file a proof of claim in any insolvency proceeding,  or take
any similar action.

     2.5 Settlement Procedures; Contractual Settlement Date Accounting.

     (a) Securities will be transferred, exchanged or delivered by the Custodian
or  Subcustodian  upon receipt by Custodian of  Instructions  which  include all
information  required by Custodian.  Bank will use "contractual  settlement date
accounting" as described below with respect to the settlement of trades in those
markets where Bank generally offers  contractual  settlement date accounting and
will notify Customer of those markets from time to time.

     (i) Sales:  On the  settlement  date for a sale,  Bank will credit the Cash
Account with the proceeds of the sale and transfer the relevant Financial Assets
to an account at Bank pending  settlement of the trade to the extent not already
delivered.

     (ii)  Purchases:  On the settlement  date for the purchase (or earlier,  if
market practice generally used by Institutional Clients requires delivery of the
purchase  price before the  settlement  date),  Bank will debit the Cash Account
with the settlement amount and credit a separate account at Bank. Bank then will
post the  Securities  Account  as  awaiting  receipt of the  expected  Financial
Assets. Customer will not be entitled to the credit in its Securities Account of
the  Financial  Assets that are awaiting  receipt  until Bank or a  Subcustodian
actually receives them.

     Bank  reserves  the right to  restrict  in good faith the  availability  of
contractual  settlement  date  accounting  for reasons of  insufficient  cash in
Customer's  Cash  Account  or  local  market  constraints  that  would  prohibit
settlement.

     (b) Bank may (in its absolute discretion) upon oral or written notification
to Customer  reverse any pending debit or credit made pursuant to Section 2.5(a)
prior to a transaction's actual settlement,  and Bank will not be liable for any
costs or liabilities  resulting from such reversal.  Customer  acknowledges that
the procedures  described in this sub-section are of an  administrative  nature,
and Bank does not undertake to make loans and/or  Financial  Assets available to
Customer.

2.6      Settlement  Procedures;  Actual Settlement Date Accounting.

     With respect to any sale or purchase  transaction that is not posted to the
Account on the  contractual  settlement date as referred to in Section 2.5, Bank
will  post the  transaction  on the date on which the cash or  Financial  Assets
received as consideration for the transaction is actually received by Bank.

2.7      Income Collection ; Autocredit(R).

     (a)  Autocredit(R).  Bank will credit all  interest and  dividends  and all
other income and payments,  including  redemption  proceeds on Financial Assets,
whether paid in cash or in kind, as the same become  payable and credit the same
to the Cash  Account,  net of any taxes that are  withheld  by Bank or any third
party.  Bank may  reverse  such  credits  upon oral or written  notification  to
Customer that Bank believes that the corresponding  payment will not be received
by Bank within a reasonable period or such credit was incorrect.

     (b) Income  Collection.  Bank will use  reasonable,  good faith  efforts to
contact appropriate parties to collect unpaid interest,  dividends or redemption
proceeds,  but neither  Bank nor its  Subcustodians  will be obliged to file any
formal notice of default, institute legal proceedings,  file a proof of claim in
any insolvency  proceeding,  or take any similar action. With Bank's permission,
which shall not be unreasonably withheld, Customer may use the name of Bank or a
Subcustodian  when necessary to comment and prosecute such legal  proceedings to
collect  amounts  due,  and Bank  will,  and will cause  each  Subcustodian  to,
cooperate fully with Customer in assisting in collecting such amounts.

2.8      Certain Ministerial Acts.

     (a) Until Bank receives Instructions to the contrary, Bank will:

     (i) present all  Financial  Assets for which Bank has received  notice of a
call for redemption or that have otherwise matured,  and all income and interest
coupons and other income items that call for payment upon presentation;

     (ii) execute in the name of Customer such  certificates  as may be required
to obtain payment in respect of Financial Assets; and

     (iii)  exchange  interim  or  temporary  documents  of  title  held  in the
Securities Account for definitive documents of title.

     (b) Bank may provide information  concerning the Accounts to Subcustodians,
Securities   Depositories,   counterparties,   issuers  of   Financial   Assets,
governmental  entities,  securities  exchanges,  self-regulatory  entities,  and
similar  entities to the extent required by Applicable Law or as may be required
by market practice for accounts of Institutional Clients in order to provide the
services contemplated by this Agreement.

     2.9 Corporate Actions.

     (a) Subject to the standard of reasonable care of Section 7.1(a), Bank will
follow  Corporate  Actions  through  receipt  of  notices  from  issuers,   from
Subcustodians,   Securities  Depositories  and  notices  published  in  industry
publications  and  reported in reporting  services.  Bank will  promptly  notify
Customer of any Corporate Action of which  information is either (i) received by
it or a  Subcustodian  to the  extent  that  Bank's  central  corporate  actions
department  has actual  knowledge of the Corporate  Action in time to notify its
customers  in a  timely  manner;  or  (ii)  published  via a  formal  notice  in
publications and reporting  services  routinely used by Bank for this purpose in
time for Bank to notify its customers in a timely manner. Bank also will use its
reasonable  efforts to notify Customer of any class action  litigation for which
information is actually received by Bank's central corporate actions  department
but shall not be liable for any  Liabilities  arising  out of Bank's  failure to
identify  Customer's  interest  in any class  action  litigation.  Bank does not
commit,  however, to provide information  concerning  Corporate Actions or class
action litigation  relating to Financial Assets being held at Customer's request
in a name not subject to the control of Bank or its Subcustodian.

     (b) If an Authorized Person fails to provide Bank with  Instructions  prior
to the deadline set by the Securities  Depository  with respect to any Corporate
Action,  neither Bank nor its  Subcustodians or their  respective  nominees will
take any action in relation to that Corporate Action, except as otherwise agreed
in  writing  by Bank and  Customer  or as may be set  forth by Bank as a default
action in the  notification  it provides  under  Section 2.9 (a) with respect to
that Corporate  Action. If Customer provides Bank with Instructions with respect
to any  Corporate  Action  after the  deadline  set by the Bank but  before  the
deadline  set  by  the  Securities  Depository,   Bank  shall  use  commercially
reasonable  efforts  to  act on  such  Instructions.  If  Bank  fails  to act on
Instructions provided by Customer prior to the deadline set by Bank with respect
to any  Corporate  Action,  Bank will be liable for direct  losses  incurred  by
Customer.

     Bank's deadline for receipt of  Instructions  from Customer with respect to
any  Corporate  Action  shall not precede  the  deadline  set by the  Securities
Depository  by more than a  commercially  reasonable  period of time,  with such
interval between the Bank's deadline and the Securities Depository's deadline as
agreed upon between Customer and Bank.


     (c) Bank may sell or otherwise dispose of fractional interests in Financial
Assets arising out of a Corporate Action and, to the extent necessary to protect
Customer's  interest in that Corporate Action,  credit the Cash Account with the
proceeds of the sale or  disposition.  If some,  but not all, of an  outstanding
class of  Financial  Asset is called for  redemption,  Bank may allot the amount
redeemed  among the  respective  beneficial  holders of such class of  Financial
Asset in any basis such that  Customer is not  allocated a higher  proportion of
the redeemed Financial Asset than it would on a pro rata basis.


     (d) Notices of Corporate  Actions and class actions  dispatched to Customer
may have been  obtained  from  sources  which Bank does not control and may have
been  translated  or  summarized.  Although  Bank  believes  such  sources to be
reliable,  Bank has no duty to verify the information  contained in such notices
nor the  faithfulness  of any  translation  or summary  and  therefore  does not
guarantee its accuracy, completeness or timeliness.

2.10     Proxies.

     (a) As may be agreed upon  between  Customer  and Bank,  and subject to and
upon the terms of this sub-section,  Bank will monitor information in accordance
with  standard  procedures  as notified to Customer  and will  promptly  provide
Customer  with  information  which it  receives  on  matters to be voted upon at
meetings of holders of Financial Assets ("Notifications"),  and Bank will act in
accordance with Customer's  Instructions in relation to such Notifications ("the
active proxy voting  service").  If information is received by Bank at its proxy
voting  department  too late to permit  timely  voting by Customer,  Bank's only
obligation will be to provide, so far as reasonably practicable,  a Notification
(or summary  information  concerning a Notification)  on an  "information  only"
basis.

     (b) The active proxy voting service is available  only in certain  markets,
details of which are  available  from Bank on request.  Provision  of the active
proxy voting  service is  conditional  upon receipt by Bank of a duly  completed
enrollment  form as well as  additional  documentation  that may be required for
certain markets.

     (c) Bank will act upon  Instructions  to vote on matters  referred  to in a
Notification,  provided  Instructions  are  received by Bank at its proxy voting
department  by  the  deadline  referred  to in  the  relevant  Notification.  If
Instructions are not received in a timely manner,  Bank will not be obligated to
provide further notice to Customer.

     (d) Bank  reserves the right to provide  Notifications  or parts thereof in
the language received, but shall use commercially  reasonable efforts to provide
such  Notifications  in English in a timely  manner.  Bank will  attempt in good
faith to provide accurate and complete Notifications, whether or not translated.

     (e)  Customer   acknowledges  that   Notifications  and  other  information
furnished  pursuant to the active proxy voting service  ("information")  not the
intellectual property of Customer.  Accordingly,  Customer will not make any use
of such  information  except in connection with the active proxy voting service,
and to the extent necessary to effectuate Customer's voting.

     (f) In markets  where the active proxy voting  service is not  available or
where Bank has not received a duly completed  enrollment  form or other relevant
documentation, Bank will not provide Notifications to Customer but will endeavor
to act upon  Instructions  to vote on  matters  before  meetings  of  holders of
Financial   Assets  where  it  is  reasonably   practicable  for  Bank  (or  its
Subcustodians  or  nominees  as  the  case  may  be)  to do so  and  where  such
Instructions  are received in time for Bank to take timely  action (the "passive
proxy voting service"). Bank shall in all events promptly send notices and proxy
information it receives either to Customer or as directed by Customer.

     (g) Customer  acknowledges  that the  provision  of proxy  voting  services
(whether  active or passive) may be precluded or  restricted  under a variety of
circumstances. These circumstances include, but are not limited to:

     (i) the Financial Assets being on loan or out for registration,

     (ii) the pendency of conversion or another Corporate Action;

     (iii)  Financial  Assets  being  held at  Customer's  request in a name not
subject to the control of Bank or its Subcustodian;

     (iv) Financial Assets being held in a margin or collateral  account at Bank
or another bank or broker, or otherwise in a manner which affects voting;

     (v) local market  regulations or practices,  or restrictions by the issuer;
and

     (vi) Bank may be required to vote all shares  held for a  particular  issue
for all of Bank's  customers  on a net basis (i.e. a net yes or no vote based on
voting  instructions  received from all its customers).  Where this is the case,
Bank will inform Customer by means of the Notification.

     (h) Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer  under other  agreements,  in  performing  active or passive
proxy voting  services Bank will be acting solely as the agent of Customer,  and
will not exercise any discretion, with regard to such proxy services or vote any
proxy except when directed by an Authorized Person.

2.11     Statements and Information Available On-Line.

     (a) Bank will send to Customer,  or make  available to Customer  on-line or
otherwise at  Customer's  reasonable  request,  at times  mutually  agreed upon,
formal  statements  of  account  in  Bank's  standard  format  for each  Account
maintained by Customer with Bank, identifying the Financial Assets and cash held
in each Account (each such  statement a "Statement  of Account").  Additionally,
Bank will send (or make available on-line to) Customer an advice or notification
of any transfers of cash or Financial Assets with respect to each Account.  Bank
will not be liable with respect to any matter set forth in those portions of any
Statement of Account or any such advice (or  reasonably  implied  therefrom)  to
which Customer has not given Bank a written exception or objection within ninety
(90) days of receipt of the  Statement of Account,  provided  such matter is not
the result of Bank's negligence,  willful misconduct or bad faith. References in
this  Agreement  to  Statements  of  Account  include  Statements  of Account in
electronic form.

     (b) Prices and other information obtained from non-affiliated third parties
which may be contained in any  Statement of Account or other  statement  sent to
Customer have been obtained from sources Bank believes to be reliable. Bank does
not, however,  make any representation as to the accuracy of such information or
that the  prices  specified  necessarily  reflect  the  proceeds  that  would be
received on a disposal of the relevant Financial Assets.

     (c) Customer  acknowledges  that,  except for  Statements  of Account or as
otherwise  expressly agreed by Bank, records and reports available to it on-line
may not be accurate  due to  valuation  differences  by reason of prices used by
Customer to value its Financial Assets,  delays in updating Account records, and
other causes.

2.12     Access to Bank's Records.

     Bank will allow Customer's  independent  public accountants such reasonable
access to the  records of Bank  relating to  Financial  Assets as is required in
connection with their examination of books and records  pertaining to Customer's
affairs.  Subject to restrictions under Applicable Law, Bank also will obtain an
undertaking to permit  Customer's  independent  public  accountants,  reasonable
access to the records of any  Subcustodian  of Securities held in the Securities
Account as may be required in connection with such examination.

2.13     Maintenance of Financial Assets at Subcustodian Locations.

     (a)  Unless  Instructions  require  another  location  acceptable  to Bank,
Financial  Assets  will be held in the  country or  jurisdiction  in which their
principal  trading  market  is  located,  where  such  Financial  Assets  may be
presented for payment,  where such Financial Assets were acquired, or where such
Financial Assets are held in a Reported  Depository.  Bank reserves the right to
refuse  to  accept  delivery  of  Financial  Assets  or  cash in  countries  and
jurisdictions  other than those referred to in Schedule 2 to this Agreement,  as
in effect from time to time.

     (b) Bank will not be obliged  to follow an  Instruction  to hold  Financial
Assets with, or have them  registered or recorded in the name of, any person not
chosen by Bank or its Subcustodian.  However,  if Customer does instruct Bank to
hold Financial Assets and/or cash with or register or record Financial Assets in
the name of a person not chosen by Bank or its Subcutodian and Bank agrees to do
so, except in a case in which  registration or recording in the name of a person
chosen by Bank or its Subcustodian would impose risks to Customer not present if
registration or recordation  were in a different name, the consequences of doing
so are at Customer's own risk and Bank (i) will not be liable  therefor and (ii)
may not provide services under this Agreement with respect to Financial Assets s
or cash so held, including, without limitation, services provided under Sections
2.8, 2.9, 2.10, and 8.2.

2.14     Tax Relief Services.

     Bank will provide tax relief services as provided in Section 8.2.


2.15 Foreign Exchange Transactions.

     To  facilitate  the  administration  of Customer's  trading and  investment
activity and pursuant to  Instructions  from  CustomerBank  may, but will not be
obliged to, enter into spot or forward foreign exchange contracts with Customer,
and may also provide  foreign  exchange  contracts  and  facilities  through its
Affiliates or Subcustodians.  Instructions, including standing Instructions, may
be issued  with  respect  to such  contracts,  but Bank may  establish  rules or
limitations  concerning any foreign  exchange  facility made  available.  In all
cases where Bank,  its Affiliates or  Subcustodians  enter into a master foreign
exchange  contract that covers foreign  exchange  transactions for the Accounts,
the terms and  conditions of that foreign  exchange  contract and, to the extent
not inconsistent, this Agreement, will apply to such transactions.

     2.16. Compliance with Securities and Exchange Commission ("SEC") Rule 17f-5
("Rule 17f-5").

     (a)  Customer's  board  of  directors  (or  equivalent  body)  (hereinafter
`Board') hereby delegates to Bank, and, as to those countries listed in Schedule
2 hereto  (and as the same may be  amended  on notice to  Customer  from time to
time), Bank hereby accepts the delegation to it, of the obligation to perform as
Customer's   `Foreign  Custody  Manager'  (as  that  term  is  defined  in  rule
17f-5(a)(3) as promulgated under the Investment  Company Act of 1940, as amended
("1940  Act"),  including for the purposes of: (i)  selecting  Eligible  Foreign
Custodians (as that term is defined in rule 17f-5(a)(1),  and as the same may be
amended from time to time, or that have otherwise  been exempted  pursuant to an
SEC exemptive order) to hold Foreign  Financial Assets and Cash, (ii) evaluating
the contractual arrangements with such Eligible Foreign Custodians (as set forth
in rule 17f-5(c)(2)), (iii) monitoring such foreign custody arrangements (as set
forth in rule 17f-5(c)(3)).

     (b) In connection with the foregoing, Bank shall:

     (i)  Promptly  advise  Customer of the  placement of  Customer's  Financial
Assets and Cash with an Eligible Foreign  Custodian in connection with execution
of this Agreement;

     (ii) provide written reports notifying Customer's Board of the placement of
Financial Assets and Cash with particular Eligible Foreign Custodians and of any
material change in the arrangements with such Eligible Foreign Custodians,  with
such reports to be provided to Customer's Board at such times as the Board deems
reasonable and  appropriate  based on the  circumstances  of Customer's  foreign
custody  arrangements (and until further notice from Customer such reports shall
be provided not less than  quarterly  with respect to the placement of Financial
Assets and Cash with particular  Eligible Foreign Custodians and with reasonable
promptness upon the occurrence of any material change in the  arrangements  with
such Eligible Foreign Custodians);

     (iii) exercise such reasonable  care,  prudence and diligence in performing
as Customer's Foreign Custody Manager as a person having  responsibility for the
safekeeping of Foreign Financial Assets and cash would exercise;

     (iv) in selecting an Eligible Foreign Custodian, first have determined that
Foreign  Financial  Assets and cash placed and maintained in the  safekeeping of
such Eligible  Foreign  Custodian shall be subject to reasonable  care, based on
the standards  applicable to  custodians  in the relevant  market,  after having
considered all factors  relevant to the  safekeeping  of such Foreign  Financial
Assets and cash, including,  without limitation, those factors set forth in rule
17f-5(c)(1)(i)-(iv);

     (v) determine that the written contract with an Eligible Foreign  Custodian
requires that the Eligible Foreign  Custodian shall provide  reasonable care for
Foreign  Financial  Assets  and  Cash  based  on  the  standards  applicable  to
custodians in the relevant market;

     (vi) determine that the written contract with an Eligible Foreign Custodian
contains the provisions set forth in Rule  17f-5(c)(2)(i)(A)-(F)  or, in lieu of
any of all of the  provisions  set  forth in Rule  17f-5(c)(2)(i)(A)-(F),  other
provisions  that Bank determines  will provide,  in their entirety,  the same or
level of care and protection for the Foreign  Financial Assets as the provisions
in Rule 17f-5(c)(2)(i)(A)-(F), in their entirety; and .

     (vii)  have  established  a system to monitor  the  initial  and  continued
appropriateness of maintaining Foreign Financial Assets and cash with particular
Eligible Foreign Custodians and of the governing  contractual  arrangements;  it
being  understood,  however,  that in the event that Bank shall have  determined
that the existing  Eligible Foreign Custodian in a given country would no longer
afford  Foreign  Financial  Assets  and cash  reasonable  care and that no other
Eligible  Foreign  Custodian in that country would afford  reasonable care, Bank
shall  promptly so advise  Customer  and shall then act in  accordance  with the
Instructions of Customer with respect to the disposition of the affected Foreign
Financial Assets and cash.

     Subject  to  (b)(i)-(vii)  above,  Bank is hereby  authorized  to place and
maintain  Foreign  Financial Assets and cash on behalf of Customer with Eligible
Foreign Custodians pursuant to a written contract deemed appropriate by Bank.

     (c) Bank  represents  to Customer that it is a U.S. Bank as defined in Rule
17f-5(a)(7).  Customer represents to Bank that: (1) the Foreign Financial Assets
and cash being placed and  maintained in Bank's  custody are subject to the 1940
Act, as the same may be amended from time to time;  (2) its Board has determined
that it is reasonable to rely on Bank to perform as Customer's  Foreign  Custody
in each  country  in which  Customer's  Financial  Assets and cash shall be held
hereunder and determined to accept Country Risk.  Nothing contained herein shall
require Bank to make any  selection or to engage in any  monitoring on behalf of
Customer that would entail consideration of Country Risk.

     For purposes  hereof,  "Country  Risk" shall mean systemic risks of holding
assets in a  particular  country  including,  but no limited to, (a) an Eligible
Foreign Custodian's use of an Eligible Securities  Depository as defined in Rule
17f-7 under the  Investment  Company Act of 1940 as amended,  (b) such country's
financial  infrastructure,  (c) such country's prevailing custody and settlement
practices, (d) nationalization, expropriation or other governmental actions, (e)
regulation  of the  banking  or  securities  industry,  (f)  currency  controls,
restrictions,  devaluations or  fluctuations,  and (g) market  conditions  which
affect the orderly  execution of securities  transactions or affect the value of
securities.

     (d) Bank shall  provide to Customer  such  information  relating to Country
Risk as is specified in Schedule 1 hereto.  Customer hereby  acknowledges  that:
(i) such information is solely designed to inform Customer of market  conditions
and procedures and is not intended as a  recommendation  to invest or not invest
in particular  markets;  and (ii) Bank has gathered the information from sources
it  considers  reliable,   but  that  Bank  shall  have  no  responsibility  for
inaccuracies or incomplete information.

2.17     Compliance with SEC Rule 17f-7 ("Rule 17f-7").

     (a) Bank shall have provided for  consideration  by Customer,  prior to the
placement of Customer's  Foreign  Financial Assets with any Eligible  Securities
Depository in connection  with execution of this  Agreement,  an analysis of the
custody risks associated with maintaining  Customer's  Foreign  Financial Assets
with each Eligible Securities Depository used by Bank as of the date hereof (or,
in the case of an Eligible Securities Depository not used by Bank as of the date
hereof, prior to the initial placement of Customer's Foreign Financial Assets at
such Depository).  The foregoing analysis will be provided to Customer at Bank's
Website.  In connection  with the  foregoing,  Customer shall notify Bank of any
Eligible Securities Depositories at which it does not choose to have its Foreign
Financial  Assets held.  Bank shall  monitor the custody risks  associated  with
maintaining Customer's Foreign Financial Assets at each such Eligible Securities
Depository  on a  continuing  basis and shall  promptly  notify  Customer or its
adviser of any material changes in such risks.

     In conducting the  aforementioned  analysis,  Bank shall  consider  factors
relevant to custody risks, including but not limited to:

(i)      the depository's expertise and market reputation;
(ii)     the quality of the despository's services;
(iii)    the depository's financial strength;
(iv)     insurance or indemnification arrangements;
(v)      the extent and quality of regulation and independent examination
         of the depository;
(vi)     the depository's standing in published ratings;
(vii)    the depository's internal controls and other procedures for
         safeguarding investments; and
(viii)   any related legal proceedings.

     (b)  Bank  shall  exercise  reasonable  care,  prudence  and  diligence  in
performing the requirements set forth in Section 2.17(a) above.

     (c) Based on the information  available to it in the exercise of diligence,
Bank shall determine the eligibility  under rule 17f-7 of each depository before
including  it on  Schedule 3 hereto and shall  promptly  advise  Customer if any
Eligible  Securities  Depository  ceases to be  eligible.  (Eligible  Securities
Depositories  used by Bank as of the date  hereof  are set forth in  Schedule  3
hereto, and as the same may be amended on notice to Customer from time to time.)


2.18           Securities Entitlement Orders.

     Bank  shall at all  times be bound by  Instructions  (except  as  otherwise
herein provided) as to Securities Entitlements of Customer and shall not permit,
honor or act upon any prior, equal or  contemporaneous  claim to or instructions
or orders of any kind with  respect to  Financial  Assets or Cash by or from any
other person or entity of any kind, and shall keep all Financial Assets and Cash
at all times  free from all  security  interests,  charges,  claims,  mortgages,
pledges or other liens, restrictions or encumbrances other than those arising in
connection with settlement of transactions  pursuant to this Agreement and other
charges and payments by Bank as permitted by this Agreement.


     2.19 Confirmations.

     Bank  shall  send  Customer  confirmations  of  transfers  to and  from the
Accounts at the end of each business day.


     3.INSTRUCTIONS

3.1      Acting on Instructions; Unclear Instructions.

     (a)  Customer  authorizes  Bank to  accept  and act upon  any  Instructions
received by it without  inquiry.  Customer will  indemnify the Bank  Indemnitees
against,  and hold  each of them  harmless  from,  any  Liabilities  that may be
imposed on, incurred by, or asserted against the Bank Indemnitees as a result of
any  action or  omission  taken in  accordance  with any  Instructions  or other
directions  upon  which  Bank is  authorized  to rely  under  the  terms of this
Agreement,  provided that Bank shall not be indemnified against or held harmless
from  any  liability  arising  out  of  Bank's  negligence,   fraud  or  willful
misconduct.

     (b) Unless otherwise expressly provided,  all Instructions will continue in
full force and effect until canceled or superseded.

     (c) Bank may (in its sole discretion and without affecting any part of this
Section  3.1) seek  clarification  or  confirmation  of an  Instruction  from an
Authorized  Person  and may  decline to act upon an  Instruction  if it does not
receive clarification or confirmation  satisfactory to it. Bank will not, except
as provided in Section 7.1 hereof, be liable for any loss arising from any delay
while it seeks such  clarification  or  confirmation  and it  documents  that it
sought clarification or confirmation.

     (d) In  executing  or  paying  a  payment  order  Bank  may  rely  upon the
identifying  number  (e.g.  Fedwire  routing  number or account) of any party as
instructed in the payment order.  Customer assumes full  responsibility  for any
inconsistency  between the name and  identifying  number of any party in payment
orders issued to Bank in Customer's name.

3.2      Confirmation of Oral Instructions/Security Devices.

     Any Instructions delivered to Bank by telephone will promptly thereafter be
confirmed in writing by an Authorized Person. Each confirmation is to be clearly
marked  "Confirmation."  Bank  will  not be  liable  for  having  followed  such
Instructions  notwithstanding  the failure of an Authorized  Person to send such
confirmation  in writing or the failure of such  confirmation  to conform to the
telephone  Instructions  received,  provided  that  Bank  shall  have  exercised
reasonable  care in following such  Instructions.  In the event of a discrepancy
between Instructions and a subsequent confirmation, Bank will immediately notify
Customer of such  discrepancy.  Either party may record any of their  telephonic
communications.  Customer  will comply with any security  procedures  reasonably
required by Bank from time to time with respect to verification of Instructions.
Customer will be  responsible  for  safeguarding  any test keys,  identification
codes or other security devices that Bank will make available to Customer or any
Authorized Person.

3.3      Instructions; Contrary to Law/Market Practice.

     Bank need not act upon  Instructions  which it  reasonably  believes  to be
contrary to law,  regulation or market  practice and will  immediately so notify
Customer, but Bank will be under no duty to investigate whether any Instructions
comply with Applicable Law or market practice.

3.4      Cut-off Times.

     Bank has  established  cut-off  times for  receipt  of some  categories  of
Instruction,  which are  consistent  with industry  standards for the receipt of
such instructions and which will be made available to Customer. If Bank receives
an Instruction after its established cut-off time, Bank will attempt to act upon
the  Instruction  on the day requested if Bank deems it  practicable to do so or
otherwise as soon as practicable on the next business day.

4.       FEES, EXPENSES AND OTHER AMOUNTS OWING TO BANK

4.1      Fees and Expenses.

     Customer  will pay Bank for its  services  hereunder  the fees set forth in
Schedule A hereto or such other  amounts as may be agreed  upon in writing  from
time to time,  together  with  Bank's  reasonable  out-of-pocket  or  incidental
expenses,  including, but not limited to, reasonable and appropriate legal fees.
Customer  authorizes  Bank to deduct  amounts owing to it from the Cash Account,
for any  undisputed  fees or  expenses  from  time to time  more than 60 days in
arrears.  Bank may increase the fees for its services hereunder by not less than
thirty days' notice in writing to  Customer.  Without  prejudice to Bank's other
rights, Bank reserves the right to charge interest on undisputed overdue amounts
from the due date  until  actual  payment  at such  rate as Bank may  reasonably
determine  but not to exceed an annual rate of the  then-current  Federal  funds
plus 0.25%.

4.2      Overdrafts.

     If a debit to any currency in the Cash Account  results in a debit  balance
in that currency (without regard to Cash Account investments), then Bank may, in
its  discretion,  (i) advance an amount equal to the  overdraft,  (ii) refuse to
settle in whole or in part the transaction  causing such debit balance, or (iii)
if any such  transaction is posted to the Securities  Account,  reverse any such
posting.  If Bank elects to make such an advance,  the advance  will be deemed a
loan to Customer,  payable on demand,  bearing  interest at the applicable  rate
charged by Bank from time to time to  customers  similar to  Customer,  for such
overdrafts,  from the date of such advance to the date of payment (both after as
well as before  judgment) and otherwise on the terms on which Bank makes similar
overdrafts  available from time to time. No prior action or course of dealing on
Bank's part with respect to the settlement of transactions on Customer's  behalf
will be asserted by Customer against Bank for Bank's refusal to make advances to
the Cash Account or to settle any  transaction  for which Customer does not have
sufficient available funds in the applicable currency in the Cash Account.

     Custodian  may,  without  prior  notice to  Customer,  set off any  payment
obligation owed to it by Customer under this Section 4.2 against Customer's Cash
Account,  regardless of currency involved.  If, after set off against Customer's
Cash Account,  there remains a debit balance under this Section 4.2, then,  with
respect to Financial Assets in the Securities  Account and without  prejudice to
Bank's rights as a Securities  Intermediary  under New York law (including,  but
not limited to,  under the Uniform  Commercial  Code),  upon notice to Customer,
Bank shall be entitled to withhold  delivery of such  Financial  Assets  against
settlement  of pending  trades,  sell or  otherwise  realize any such  Financial
Assets and to apply the proceeds in satisfaction of any such payment obligation,
provided  that the foregoing is not  prohibited by Section 18 of the  Investment
Company Act of 1940.


     5.SUBCUSTODIANS, SECURITIES DEPOSITORIES, AND OTHER AGENTS

5.1      Appointment of Subcustodians; Use of Securities Depositories.

     (a)  Bank is  authorized  under  this  Agreement  to act  through  and hold
Customer's  Financial  Assets  with  Subcustodians,  being  at the  date of this
Agreement the entities  listed in Schedule 2. Bank will use  reasonable  care in
the selection and continued appointment of such Subcustodians. In addition, Bank
and each  Subcustodian  may deposit  Financial  Assets with,  and hold Financial
Assets  in, any  Reported  Depository  or "other  U.S.  Securities  Depository."
Customer will provide Bank with such documentation or acknowledgements that Bank
may  reasonably  require  to  hold  the  Financial  Assets  in  such  Securities
Depositories.

     (b) Any agreement Bank enters into with a  Subcustodian  for holding Bank's
customers'  assets  will  provide  that such  assets  will not be subject to any
right,  charge,  security  interest,  lien or claim of any kind in favor of such
Subcustodian or its creditors  except a claim for payment for their safe custody
or administration,  or, in the case of cash deposits, except for liens or rights
in favor of creditors of the Subcustodian  arising under bankruptcy,  insolvency
or  similar  law,  and that the  beneficial  ownership  thereof  will be  freely
transferable  without the payment of money or value other than for safe  custody
or administration.  Where a Subcustodian  deposits  Securities with a Securities
Depository,  Bank will cause the  Subcustodian  to  identify  on its  records as
belonging to Bank, as agent, the Securities shown on the Subcustodian's  account
at such Securities Depository.  This Section 5.1(b) will not apply to the extent
of any special  agreement or  arrangement  made by Customer with any  particular
Subcustodian.

     (c) Bank will not be liable for any act or omission  by (or the  insolvency
of) any Securities  Depository.  In the event Customer  incurs a loss due to the
negligence,  willful misconduct, or insolvency of a Securities Depository,  Bank
will make good faith  efforts,  in its  discretion,  to seek  recovery  from the
Securities  Depository,  but  Bank  will not be  obligated  to  institute  legal
proceedings,  file a proof of claim in any  insolvency  proceeding,  or take any
similar action.

5.2      Liability for Subcustodians.

     (a)  Subject to  Section  7.1(b),  Bank will be liable  for  direct  losses
incurred by Customer that result from:

     (i) the failure by a Subcustodian  to use reasonable  care in the provision
of custodial  services by it in accordance with the standards  prevailing in the
relevant  market  for  Institutional  Clients  or  from  the  fraud  or  willful
misconduct  or  default  of such  Subcustodian  in the  provision  of  custodial
services by it; or

     (ii) the bankruptcy or insolvency of any Affiliated Subcustodian.

     (b) Subject to Section 7.1(b) and Bank's duty to use reasonable care in the
monitoring of a Subcustodian's financial condition as reflected in its published
financial   statements  and  other  publicly  available  financial   information
concerning  it,  Bank  will  not  be  responsible  for  the  insolvency  of  any
Subcustodian which is not a branch or an Affiliated Subcustodian.

     (c) Bank reserves the right to add, replace or remove  Subcustodians.  Bank
will give  prompt  notice of any such  action,  which will be advance  notice if
practicable.  Bank  will  identify  the name,  address  and  principal  place of
business of any Subcustodian and the name and address of the governmental agency
or other regulatory authority that supervises or regulates such Subcustodian.

5.3      Use of Agents.

     (a) Bank may provide  certain  services under this Agreement  through third
parties,  which may be Affiliates.  Except to the extent provided in Section 5.2
with respect to  Subcustodians,  Bank will not be responsible  for any loss as a
result of a failure by any broker or any other  third  party that it selects and
retains  using  reasonable  care to provide  ancillary  services that it may not
customarily provide itself, including, without limitation, delivery services and
providers of  information  regarding  matters  such as pricing,  proxy voting or
Corporate Actions. Nevertheless,  Bank will be liable for the performance of any
such service  provider  selected by Bank that is an Affiliate to the same extent
as Bank would have been liable if it performed such services itself.

     (b) In the case of the sale under Section  2.9(c) of a fractional  interest
(or in other cases where Customer has requested Bank to arrange for execution of
a trade)  Bank will place  trades  with a broker  which is an  Affiliate  to the
extent that Bank has established a program for such trading with such Affiliate.
An  affiliated  broker  may  charge  its  customary  commission  (or  retain its
customary spread) with respect to any such transaction.


                  6.ADDITIONAL PROVISIONS RELATING TO CUSTOMER

6.1      Representations of Customer and Bank.

     (a) Customer  represents  and warrants  that (i) it has full  authority and
power, and has obtained all necessary  authorizations  and consents,  to deposit
and control the Financial  Assets and cash in the  Accounts,  to use Bank as its
custodian in accordance with the terms of this Agreement,  to incur indebtedness
as  contemplated  by  this  Agreement,   and  to  enter  into  foreign  exchange
transactions;  (ii) assuming  execution and delivery of this  Agreement by Bank,
this Agreement is Customer's legal, valid and binding obligation, enforceable in
accordance  with its terms and it has full power and authority to enter into and
has taken all  necessary  corporate  action to authorize  the  execution of this
Agreement (iii) it has not relied on any oral or written  representation made by
Bank or any person on its behalf,  and acknowledges that this Agreement sets out
to the  fullest  extent  the duties of Bank;  and (iv) it is a  resident  of the
United States and shall notify Bank of any changes in residency.

     (b) Bank  represents and warrants that (i) assuming  execution and delivery
of this Agreement by Customer, this Agreement is Bank's legal, valid and binding
obligation, enforceable in accordance with its terms, (ii) it has full power and
authority  to  enter  into and has  taken  all  necessary  corporate  action  to
authorize the execution of this  Agreement,  (iii) it has not relied on any oral
or written  representation  made by Customer  or any person on its  behalf,  and
acknowledges  that this  Agreement  sets out to the fullest extent the duties of
Customer;  and  (iv)  it is  qualified  to act  as a  custodian  for  investment
companies registered under the 1940 Act.

     Each party may rely upon the above or the certification of such other facts
as may be required to perform its obligations hereunder.

     6.2 Provision of Additional Information.

     Upon  request,   each  party  will  promptly  provide  to  the  other  such
information  about  itself  and its  financial  status  as the  other  party may
reasonably  request,  including  its  organizational  documents  and its current
audited and unaudited financial statements.

6.3      Customer is Liable to Bank Even if it is Acting for Another Person.

     If Customer is acting as an agent for a disclosed or undisclosed  principal
in respect of any transaction,  cash, or Financial Asset, Bank nevertheless will
treat Customer as its principal for all purposes under this  Agreement.  In this
regard,  Customer  will be  liable  to Bank as a  principal  in  respect  of any
transactions  relating to the Account.  The foregoing will not affect any rights
Bank might have against Customer's principal.


     7.WHEN BANK IS LIABLE TO CUSTOMER

7.1      Standard of Care; Liability.

     (a) Bank will use reasonable care in performing its obligations  under this
Agreement.  Bank will not be in violation of this  Agreement with respect to any
matter as to which it has satisfied its obligation of reasonable care.

     (b) Bank will be liable for  Customer's  direct  damages to the extent they
result from Bank's negligence or willful  misconduct in performing its duties as
set out in this Agreement and to the extent provided in Section 5.2(a) or breach
of any warranty or  representation  made under this  Agreement.  In the event of
such  negligence or willful  misconduct  the liability of the Bank in connection
with  the  loss or  damage  will  not  exceed  (i)  the  lesser  of the  current
replacement  cost of any  Financial  Assets or the market value of the Financial
Assets to which such loss or damage relates at the time the Customer  reasonably
should  have been  aware of such  negligence  or willful  misconduct,  plus (ii)
compensatory  interest  up to  that  time at the  rate  applicable  to the  base
currency of the Customers' Cash Account.  Nevertheless,  under no  circumstances
will Bank be liable  for any  indirect,  incidental,  consequential  or  special
damages (including,  without  limitation,  lost profits) of any form incurred by
any person or entity,  whether or not  foreseeable and regardless of the type of
action in which  such a claim may be  brought,  with  respect  to the  Accounts,
Bank's performance hereunder, or Bank's role as custodian.

     (c) Customer will  indemnify the Bank  Indemnitees  against,  and hold them
harmless from, any  Liabilities  that may be imposed on, incurred by or asserted
against any of the Bank  Indemnitees to the extent in connection with or arising
out  of  (i)  Bank's  performance  under  this  Agreement,   provided  the  Bank
Indemnitees  have not acted  with  negligence  or  engaged  in fraud or  willful
misconduct in connection  with the Liabilities in question or (ii) any action or
omission  taken  by  Bank  or such  Bank  Indemnitees  in  accordance  with  any
Instructions  or  other  directions  of  Customer  on which  Bank is  authorized
hereunder to rely. Nevertheless, Customer will not be obligated to indemnify any
Bank Indemnitee  under the preceding  sentence with respect to any Liability for
which Bank is liable under Section 5.2 of this Agreement.

     (d) Without limiting Subsections 7.1(a), (b) or (c), Bank will have no duty
or  responsibility  to: (i) question  Instructions  or make any  suggestions  to
Customer or an Authorized Person regarding such Instructions, except as provided
in Section 3.2,  provided  that the  Instructions  are not clearly  incorrect on
their face; (ii) supervise or make  recommendations  with respect to investments
or the  retention of Financial  Assets;  (iii) advise  Customer or an Authorized
Person  regarding  any  default  in the  payment of  principal  or income of any
security other than as provided in Section 2.7(b) of this Agreement; (iv) except
as may  otherwise  be required by Sections  2.16 or 2.17,  evaluate or report to
Customer or an  Authorized  Person  regarding  the  financial  condition  of any
broker, agent or other party to which Bank is instructed by an Authorized Person
to  deliver  Financial  Assets  or  cash;  or  (v)  review  or  reconcile  trade
confirmations  received  from brokers (and  Customer or its  Authorized  Persons
issuing  Instructions will bear any  responsibility to review such confirmations
against Instructions issued to and Statements of Account issued by Bank).

     (e) Promptly after receipt by Bank of notice of commencement of any action,
Bank will,  if a claim in respect  thereof is made against  Customer  under this
Agreement,  notify Customer of the commencement  thereof; but the omission so to
notify  Customer  will not  relieve it from any  liability  which it may have to
Customer otherwise than under this Agreement. In case any such action is brought
against Bank, and it notified  Customer of the  commencement  thereof,  Customer
will be entitled to  participate  therein  and, to the extent that  Customer may
wish, assume the defense thereof;  provided,  that in the case of any claim that
Bank deems  significant,  Bank  shall  have the right to  consent to  Customer's
choice  of  counsel  in its  defense  of such  action,  such  consent  not to be
unreasonably  withheld.  After notice from Customer of  Customer's  intention to
assume the defense of an action,  Bank shall bear the expenses of any additional
counsel  obtained by Bank,  and Customer  shall not be liable to Bank under this
section  for any  legal  or  other  expenses  subsequently  incurred  by Bank in
connection   with  the  defense   thereof   other  than   reasonable   costs  of
investigation. Bank shall in no case confess any claim or make any compromise in
any case in which  Customer is asked to  indemnify  Bank except with  Customer's
prior written consent.

7.2      Force Majeure.

     Bank will maintain and update from time to time business  continuation  and
disaster  recovery  procedures  with  respect to its  custody  business  that it
determines from time to time meet  reasonable  commercial  standards.  Bank will
have no liability,  however,  for any damage,  loss, expense or liability of any
nature that Customer may suffer or incur,  caused by an act of God, fire, flood,
civil or labor disturbance,  war, act of any governmental authority or other act
or threat of any  authority (de jure or de facto),  malfunction  of equipment or
software  (except where such  malfunction  is primarily  attributable  to Bank's
negligence in maintaining  the equipment or software),  failure of operations of
any external  funds  transfer  system,  inability to obtain or  interruption  of
external communications  facilities,  or any cause beyond the reasonable control
of Bank  (including  without  limitation,  the  non-availability  of appropriate
foreign exchange).

7.3      Bank  May Consult With Counsel.

     Bank  will  be  entitled  to  rely  on,  and may act  upon  the  advice  of
professional  advisers  in  relation  to  matters of law,  regulation  or market
practice (which may be the professional  advisers of Customer),  and will not be
liable to Customer for any action  reasonably  taken or omitted pursuant to such
advice of which it promptly notifies Customer.

     7.4 Bank Provides Diverse Financial  Services and May Generate Profits as a
Result.

     Customer  acknowledges  that  Bank or its  Affiliates  may have a  material
interest in transactions entered into by Customer with respect to the Account or
that  circumstances are such that Bank may have a potential  conflict of duty or
interest.  For example,  Bank or its Affiliates may act as a market maker in the
Financial Assets to which  Instructions  relate,  provide brokerage  services to
other  customers,  act as  financial  adviser  to the  issuer of such  Financial
Assets, act in the same transaction as agent for more than one customer,  have a
material interest in the issue of the Financial Assets; or earn profits from any
of these activities.  Customer further  acknowledges that Bank or its Affiliates
may be in possession of investment-related  information tending to show that the
Instructions received may not be in the best interests of Customer but that Bank
is not under any duty to disclose any such information.


     8.TAXATION

     8.1 Tax Obligations.

     (a)  Customer  confirms  that Bank is  authorized  to deduct  from any cash
received  or credited  to the Cash  Account any taxes or levies  required by any
revenue or governmental  authority in respect of Customer's  Accounts;  provided
that such cash shall be paid to such  revenue or  governmental  authority or set
aside in a separate account of Customer for such purpose.

     (b) Customer will provide to Bank such certifications,  documentation,  and
information as it may reasonably require in connection with taxation.

     (c) Customer will be  responsible  for the payment of all taxes relating to
the Financial Assets in the Securities Account. Customer will indemnify and hold
Bank harmless from and against any and all liabilities,  penalties,  interest or
additions to tax with respect to or resulting from, any delay in, or failure by,
Bank (i) to pay,  withhold or report any U.S.  federal,  state or local taxes or
foreign  taxes  imposed  on  Customer's  Financial  Assets,  or (ii)  to  report
interest,  dividend  or other  income  paid or  credited  to the  Cash  Account,
provided,  however,  that Customer will not be liable to Bank for any penalty or
additions to tax due as a result of Bank's  failure to pay or withhold tax or to
report  interest,  dividend or other income paid or credited to the Cash Account
solely as a result of Bank's negligent acts or omissions.

8.2      Tax Reclaims.

     (a)  Subject  to the  provisions  of this  Section,  Bank will  apply for a
reduction  of  withholding  tax and any refund of any tax paid or tax credits in
respect of income  payments  on  Financial  Assets  credited  to the  Securities
Account that Bank believes may be available.  To defray  expenses  pertaining to
nominal tax claims, Bank may from time-to-time set minimum thresholds as to a de
minimus value of tax reclaims or reduction of  withholding  which it will pursue
in respect of income  payments under this section.  Notwithstanding  any minimum
threshold set by Bank, Bank will file a tax reclaim or application for reduction
of withholding if requested by Customer.

     (b) The provision of a tax reclaim service by Bank is conditional upon Bank
receiving from Customer (i) a declaration of its identity and place of residence
and (ii)  certain  other  documentation  requested  by Bank (pro forma copies of
which are available from Bank),  prior to the receipt of Financial Assets in the
Account or the payment of income.

     (c) Bank will  perform tax reclaim  services  only with respect to taxation
levied by the revenue authorities of the countries advised to Customer from time
to time and Bank may, by  notification in writing,  in its absolute  discretion,
supplement or amend the countries in which the tax relief  services are offered.
Other  than as  expressly  provided  in this  Section  8.2,  Bank  will  have no
responsibility  with  regard  to  Customer's  tax  position  or  status  in  any
jurisdiction.

     (d) Customer  confirms that Bank is authorized to disclose any  information
required by any revenue  authority or any  governmental  entity with appropriate
jurisdiction in relation to the processing of any tax reclaim.


     9.TERMINATION

     This  Agreement  will  continue  until  terminated by either Bank giving to
Customer,  or Customer giving to Bank , a notice in writing  specifying the date
of  termination,  which  date  shall be not less than 60 days  after the date of
giving such notice.  If Customer  gives notice of  termination,  Customer  shall
designate a  successor  custodian  or  custodian  to whom Bank must  deliver the
Financial Assets and cash. If Bank gives notice of termination,  Customer shall,
within  sixty days of the notice,  notify  Bank as to identity of the  successor
custodian or custodians.  Upon the date of termination  specified in the notice,
this Agreement shall terminate,  and Bank shall deliver the Financial Assets and
cash to the successor  custodian(s).  If a successor custodian is not designated
by Customer  in  accordance  with the  foregoing,  Bank shall,  upon the date of
termination specified in the notice of termination,  deliver the Financial Asset
and cash to Customer.

     Bank will in any event be entitled to deduct any  undisputed  amounts owing
to it prior to delivery of the Financial Assets and cash (and, accordingly, Bank
will be  entitled  to sell  Financial  Assets  and  apply the sale  proceeds  in
satisfaction  of undisputed  amounts owing to it).  Customer will reimburse Bank
promptly for all out-of-pocket expenses it incurs in delivering Financial Assets
upon  termination.  Termination  will not affect any of the  liabilities  either
party owes to the other arising under this Agreement prior to such termination.


     10.MISCELLANEOUS

     10.1 Notices.

     Notices (other than Instructions) will be served by registered mail or hand
delivery to the address of the  respective  parties as set out on the first page
of this Agreement, unless notice of a new address is given to the other party in
writing. Notice will not be deemed to be given unless it has been received.

     10.2 Successors and Assigns.

     This  Agreement  will be binding  on each of the  parties'  successors  and
assigns,  but the  parties  agree that  neither  party can assign its rights and
obligations  under this Agreement without the prior written consent of the other
party,  which  consent  will not be  unreasonably  withheld.  In the event  that
Customer  substitutes  another bank or trust company for Bank due to a change in
control of Bank, Bank shall pay all of Customer's  reasonable  expenses incurred
in connection with the transition to the successor custodian, including, without
limitation, the expenses associated with the transfer of securities,  monies and
other  properties  and  Customer's  negotiation  of  new  custodian  contractual
documentation.


     10.3 Interpretation.

     Headings  are  for  convenience   only  and  are  not  intended  to  affect
interpretation.  References  to sections are to sections of this  Agreement  and
references to  sub-sections  and paragraphs are to  sub-sections of the sections
and paragraphs of the sub-sections in which they appear.

10.4     Entire Agreement.

     (a) The following Rider(s) are incorporated into this Agreement:

                  ___      Cash Trade Execution;

                  ___      Cash Sweep;

                  ___      Accounting Services;

                  ___      Mutual Fund.


     (b) This Agreement,  including the Schedules, Exhibits, and Riders (and any
separate  agreement  which Bank and  Customer may enter into with respect to any
Cash Account),  sets out the entire Agreement  between the parties in connection
with the subject  matter,  and this Agreement  supersedes  any other  agreement,
statement,  or  representation  relating  to custody,  whether  oral or written.
Amendments must be in writing and signed by both parties.

     10.5 Information Concerning Deposits at Bank's CityplaceLondon Branch.

     Under U.S federal law, deposit  accounts that Customer  maintains in Bank's
foreign  branches  (outside of the U.S.) are not insured by the Federal  Deposit
Insurance  Corporation  ("FDIC");  in the event of Bank's  liquidation,  foreign
branch deposits have a lesser  preference than U.S.  deposits;  and such foreign
deposits are subject to cross-border  risks. Bank's London Branch is a member of
the United Kingdom Deposit  Protection  Scheme (the "Scheme")  established under
Banking Act 1987 (as amended).  This Scheme provides that in the event of Bank's
insolvency  payments may be made to certain  customers of Bank's London  Branch.
Payments  under the  Scheme  are  limited  to 90% of a  depositor's  total  cash
deposits subject to a maximum payment to any one depositor  of(pound)18,000  (or
20,000  euros if  greater).  Most  deposits  denominated  in sterling  and other
European   Economic  Area   Currencies  and  euro  made  with  Bank  within  the
country-regionplaceUnited Kingdom are covered. Further details of the Scheme are
available on request.

     10.6 Insurance.

     Bank will not be  required  to  maintain  any  insurance  coverage  for the
benefit of Customer.

     10.7 Governing Law and Jurisdiction.

     This Agreement will be construed,  regulated,  and  administered  under the
laws  of  the  country-regionUnited   States  or  State  of  StateNew  York,  as
applicable, without regard to StateplaceNew York's principles regarding conflict
of laws. The United States District Court for the Southern  District of New York
will have the sole and exclusive jurisdiction over any lawsuit or other judicial
proceeding  relating  to or arising  from this  Agreement.  If that court  lacks
federal subject matter jurisdiction, the Supreme Court of the State of New York,
New York  County  will have  sole and  exclusive  jurisdiction.  Either of these
courts will have proper venue for any such lawsuit or judicial  proceeding,  and
the parties waive any objection to venue or their  convenience  as a forum.  The
parties agree to submit to the  jurisdiction of any of the courts  specified and
to accept service of process to vest personal  jurisdiction  over them in any of
these  courts.   The  parties   further  hereby   knowingly,   voluntarily   and
intentionally  waive,  to the fullest  extent  permitted by Applicable  Law, any
right to a trial by jury with respect to any such lawsuit or judicial proceeding
arising or relating to this Agreement or the transactions  contemplated  hereby.
To the extent that in any jurisdiction Customer may now or hereafter be entitled
to claim, for itself or its assets,  immunity from suit,  execution,  attachment
(before or after judgment) or other legal process, Customer shall not claim, and
it hereby irrevocably waives, such immunity.

10.8     Severability; Waiver; and Survival.

     (a) If one or more  provisions of this Agreement are held invalid,  illegal
or unenforceable in any respect on the basis of any particular  circumstances or
in any jurisdiction, the validity, legality and enforceability of such provision
or provisions  under other  circumstances or in other  jurisdictions  and of the
remaining provisions will not in any way be affected or impaired.

     (b) Except as otherwise provided herein, no failure or delay on the part of
either party in exercising  any power or right  hereunder  operates as a waiver,
nor does any single or partial exercise of any power or right preclude any other
or further exercise, or the exercise of any other power or right. No waiver by a
party of any provision of this Agreement, or waiver of any breach or default, is
effective  unless it is in  writing  and  signed by the party  against  whom the
waiver is to be enforced.

     (c) Each party's  rights,  protections,  and remedies  under this Agreement
shall survive its termination.


     10.9 Counterparts.

     This Agreement may be executed in several  counterparts  each of which will
be  deemed to be an  original  and  together  will  constitute  one and the same
agreement.

10.10    No Third Party Beneficiaries.

     A  person  who is not a party  to this  Agreement  shall  have no  right to
enforce any term of this Agreement.

     10.11 Confidentiality.

     Bank shall not disclose any information  regarding  Customer's  Securities,
Securities  Account,  Financial Assets or cash under this Agreement except as is
reasonably  necessary  to provide  services to  Customer,  as required by law or
regulation or the organizational documents of the issuer of any Financial Asset,
or  otherwise  with the  consent  of  Customer.  Customer  agrees  to keep  this
Agreement  confidential  and,  except  where  disclosure  is  required by law or
regulation,  shall only  disclose it (or any part of it) with the prior  written
consent of Bank.

10.12       Limited Obligations.

     With respect to a Customer  organized as a Massachusetts  business trust, a
copy of such  Customer's  Declaration  of Trust is on file with the Secretary of
State of The  Commonwealth  of  Massachusetts,  the Bank  acknowledges  that the
obligations  of or arising out of this  Agreement  with respect to such Customer
are not  binding  upon any of such  Customer's  trustees,  officers,  employees,
agents or shareholders individually,  but are binding solely upon the assets and
property  of  the  Customer  in  accordance  with  its  proportionate   interest
hereunder.  Bank further  acknowledges  that the assets and  liabilities of each
series are separate and distinct,  and that the obligations of or arising out of
this  Agreement are binding  solely upon the assets or property of the series on
behalf of which the Customer has executed this instrument. Bank also agrees that
the  obligations of each Customer and series  hereunder shall be several and not
joint, in accordance with its proportionate  interest hereunder,  and agrees not
to  proceed  against  any  Customer  or series  for the  obligations  of another
Customer or series.

     Customers may be added or deleted as parties to this Agreement from time to
time by amendment to Exhibit A.

                             OPPENHEIMERFUNDS, INC.


                             By:/s/ Brian W. Wixted
                             Title:  Senior Vice President and Treasurer,
                             on behalf of each investment company
                             identified as a Customer in Exhibit A
                             attached hereto individually and
                             severally, and not jointly and severally



                              JPMORGAN CHASE BANK


                             By:/s/ Stephen Crowley
                             Title: Vice President


                                                  EXHIBIT A

     List of Investment  Companies that are a Party to this  Agreement  (each, a
"Customer"):


     Fund Name Oppenheimer Champion Income Fund

     Oppenheimer Strategic Income Fund

     Oppenheimer Balanced Fund

     Oppenheimer Variable Account Funds for the account of Oppenheimer Strategic
     Bond Fund/VA

     Oppenheimer High Yield Fund

     Oppenheimer Integrity Funds for the account of Oppenheimer Core Bond Fund

     Oppenheimer  Variable  Account  Funds for the account of  Oppenheimer  Main
     Street Fund/VA

     Oppenheimer Capital Appreciation Fund

     Oppenheimer Global Fund

     Oppenheimer  Variable  Account Funds for the account of Oppenheimer  Global
     Securities Fund/VA

     Panorama Series Fund, Inc. for the account of Growth Portfolio

     Panorama Series Fund, Inc. for the account of Total Return Portfolio

     Oppenheimer  Variable Account Funds for the account of Oppenheimer  Capital
     Appreciation/VA

     Panorama  Series  Fund,  Inc.  for the  account  of  Government  Securities
     Portfolio

     Panorama Series Fund, Inc. for the account of International  Growth Fund/VA

     Oppenheimer  Variable  Account Funds for the account of Oppenheimer  MidCap
     Growth Fund/VA

     Oppenheimer Variable Account Funds for the account of Oppenheimer Core Bond
     Fund/VA

     Oppenheimer  Variable  Account  Funds for the account of  Oppenheimer  High
     Income Fund/VA

     Oppenheimer  Variable  Account  Funds for the account of  Oppenheimer  Main
     Street Fund/VA

     Oppenheimer  Variable  Account Funds for the account of  Oppenheimer  Money
     Fund/VA

     Oppenheimer  Variable Account Funds for the account of Oppenheimer Balanced
     Fund/VA

     Oppenheimer Real Asset Fund

     Oppenheimer Developing Markets Fund

     Oppenheimer International Small Company Fund

     Oppenheimer International Growth Fund

     Oppenheimer Main Street Small Cap Fund

     Oppenheimer International Bond Fund


     Oppenheimer  Variable  Account Funds for the account of  Oppenheimer  Value
     Fund/VA

     Oppenheimer Principal Protected Main Street Fund

     Oppenheimer Principal Protected Main Street Fund II

     Oppenheimer Principal Protected Main Street Fund III



Schedule 1

Information Regarding Country Risk


     1. To aid Customer in its determinations regarding Country Risk, Bank shall
furnish  annually and upon the initial placing of Financial Assets and cash into
a country the following information (check items applicable):

     A Opinions of local counsel concerning:

     _X_ i. Whether  applicable  foreign law would restrict the access  afforded
Customer's  independent  public  accountants  to books  and  records  kept by an
eligible foreign custodian located in that country.

     _X__ ii. Whether applicable  foreign law would restrict  Customer's ability
to recover its  Financial  Assets and cash in the event of the  bankruptcy of an
Eligible Foreign Custodian located in that country.

     _X__ iii. Whether applicable foreign law would restrict  Customer's ability
to recover Financial Assets that are lost while under the control of an Eligible
Foreign Custodian located in the country.

     B. Written information concerning:

     _X__ i. The foreseeability of expropriation,  nationalization,  freezes, or
confiscation of Customer's Financial Assets.

     _X__  ii.  Whether  difficulties  in  converting  Customer's  cash and cash
equivalents to U.S. dollars are reasonably foreseeable.

     C. A market report with respect to the following topics:

     (i) securities regulatory environment, (ii) foreign ownership restrictions,
(iii)  foreign  exchange,  (iv)  securities  settlement  and  registration,  (v)
taxation, and (vi) depositories (including depository evaluation), if any.

     2. To aid Customer in monitoring Country Risk, Bank shall furnish board the
following additional information:

     Market  flashes,  including  with respect to changes in the  information in
market reports.

Schedule 2

LIST OF COUNTRIES and SUBCUSTODIANS


JPMORGAN INVESTOR SERVICES

AGENT AND CASH NETWORK

- ------------------------ ----------------------------------------------- ------------------------------------------------
COUNTRY                  SUB-CUSTODIAN                                   CASH CORRESPONDENT BANK
- ------------------------ ----------------------------------------------- ------------------------------------------------
ARGENTINA                JPMorgan Chase Bank                             JPMorgan Chase Bank
                         Arenales 707, 5th Floor                         Buenos Aires
                         1061 Buenos Aires

                         ARGENTINA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
AUSTRALIA                 JPMorgan Chase Bank                            Australia and New Zealand
                         Level 37                                        Banking Group Ltd.
                         APP Center 259, George Street                   Melbourne
                         Sydney NSW 2000
                         AUSTRALIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
AUSTRIA                  Bank Austria Creditanstalt AG                   J.P. Morgan AG
                         Julius Tandler Platz - 3                        Frankfurt
                         A-1090 Vienna
                         AUSTRIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
BAHRIAN                   HSBC Bank Middle East                           National Bank of Bahrain
                          PO Box 57                                       Manama
                          Manama, 304
                          BAHRAIN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
BANGLADESH                Standard Chartered Bank                         Standard Chartered Bank
                          18-20 Motijheel C.A                             Dhaka
                          Box 536
                          Dhaka-1000
                          BANGLADESH
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
BELGUIM                   Fortis Bank N.V.                                J.P. Morgan AG
                          3 Montagne Du Parc                              Frankfurt
                          1000 Brussels
                          BELGIUM
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
BERMUDA                  The Bank of Bermuda Limited                     The Bank of Bermuda Limited
                         6 Front Street                                  Hamilton
                         Hamilton HMDX
                         BERMUDA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
BOTSWANA                 Barclays Bank of Botswana Limited               Barclays Bank of Botswana Limited
                         Barclays House, Khama Crescent                  Gaborone
                         Gaborone
                         BOTSWANA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
BRAZIL                   Citibank, N.A.                                  Citibank, N.A..
                         Avenida Paulista, 1111                          Sao Paulo
                         Sao Paulo, SP 01311-920
                         BRAZIL
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
BULGARIA                 ING Bank N.V.                                   ING Bank N.V.
                         Sofia Branch                                    Sofia
                         12 Emil Bersinski Street
                         Ivan Vazov Region
                         1408 Sofia
                         BULGARIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
CANADA                   Royal Bank of Canada                            Royal Bank of Canada
                         200 Bay Street, Suite 1500                      Toronto
                         15th Floor
                         Royal Bank Plaza,
                         Toronto Ontario M5J
                         2J5
                         CANADA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
CHILE                     Citibank, N.A.                                  Citibank, N.A
                          Avda. Andres Bello 2687                         Santiago.
                          3rd and 5th Floors
                          Santiago
                          CHILE
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
CHINA -                   The Hongkong and Shanghai Banking               Citibank, N.A.
SHANGHAI                  Corporation Limited                              New York
                         34/F, Shanghai Senmao
                         International Building
                         101 Yin Cheng East Road
                         Pudong
                         Shanghai 200120
                         THE PEOPLE'S REPUBLIC OF
                         CHINA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
CHINA                    The Hongkong and Shanghai Banking                 JPMorgan Chase Bank
- - SHENZHEN               Corporation Limited                               Hong Kong
                         1st Floor
                         Century Plaza Hotel
                         No.1 Chun Feng Lu
                         Shenzhen
                         THE PEOPLE'S REPUBLIC OF
                         CHINA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
COLUMBIA                 Cititrust Colombia S.A.                         Cititrust Colombia S.A. Sociedad Fiduciaria
                         Sociedad Fiduciaria                             Santa Fe de Bogota
                         Carrera 9a No 99-02
                         First Floor
                         Santa Fe DE Bogota, StateD.C.
                         COLOMBIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
CROATIA                  Privredna banka Zagreb d.d.                     Privredna banka Zagreb d.d.
                         Savska c.28                                     Zagreb
                         10000 Zagreb
                         CROATIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
CYPRUS                   The Cyprus Popular Bank                         The Cyprus Popular Bank
                         Ltd.                                            Ltd.
                         154 Limassol Avenue                             Nicosia
                         P.O. Box 22032
                         CY-1598 Nicosia
                         CYPRUS
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
CZECH REPUBLIC           Ceskoslovenska obchodni banka, a.s.             Ceskoslovenska obchodni banka, a.s.
REPUBLIC                 Na Porici 24                                    Prague
                         110 00 Prague 1
                         CZECH REPUBLIC
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
DENMARK                  Danske Bank A/S                                 Nordea Bank Danmark A/S
                         2-12 Holmens Kanal                              Copenhagen
                         DK 1092 Copenhagen K
                         DENMARK
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
ECUADOR                  Citibank, N.A.                                  Citibank, N.A.
                         Av. Republica de El                             Quito
                         Salvador y Naciones Unidas (Esquina)
                         Quito
                         ECUADOR
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
EGYPT                    Citibank, N.A.                                    Citibank, N.A.
                         4 Ahmed Pasha Street                             CityCairo
                         Garden City
                         Cairo
                         EGYPT
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
ESTONIA                  Hansabank                                       Esti Uhispank
                         Liivalaia 8                                     Tallinn
                         EE0001 Tallinn
                         ESTONIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
FINLAND                  Nordea Bank Finland Plc                         J.P. Morgan AG
                         2598 Custody Services                           Frankfurt
                         Aleksis Kiven Katu 3-5
                         FIN-00020 MERITA, Helsinki
                         FINLAND
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
FRANCE                   BNP Paribas Securities Services S.A.            J.P. Morgan AG
                         Ref 256                                         Frankfurt
                         BP 141
                         3, Rue D'Antin
                         75078 Paris
                         Cedex 02
                         FRANCE
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
GERMANY                  Dresdner Bank AG                                J.P. Morgan AG
                         Juergen-Ponto-Platz 1                           Frankfurt
                         60284 Frankfurt/Main
                         GERMANY
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
GHANA                    Barclays Bank of Ghana Limited                  Barclays Bank of Ghana Limited
                         Barclays House, High Street                     Accra
                         Accra
                         GHANA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
GREECE                   HSBC Bank plc                                   J.P. Morgan AG
                         Messogion 109-111                               Frankfurt
                         11526 Athens
                         GREECE
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
HONG KONG                The Hongkong and Shanghai Banking      JPMorgan Chase Bank
                         Corporation Limited                    Hong Kong
                         36th Floor, Sun Hung Kai Centre
                         30 Harbour Road
                         Wan Chai
                         HONG KONG
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
HUNGARY                  Citibank Rt.                                    ING Bank Rt.
                         Szabadsag ter 7-9                               Budapest
                         H-1051 Budapest V
                         HUNGARY
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
ICELAND                  Islandsbanki-FBA                                Islandsbanki-FBA
                         Kirkjusandur 2                                  Reykjavik
                         155 Reykjavik
                         ICELAND
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
INDIA                    Standard Chartered Bank                         Standard Chartered Bank
                         CityPhoenix Centre, Phoenix Mills               Mumbai
                         Compound
                         Senapati Bapat Marg, Lower Parel
                         Mumbai 400 013
                         INDIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
INDONENESIA               The Hongkong and Shanghai Banking      The Hongkong and Shanghai Banking
                          Corporation Limited                             Corporation Limited
                          World Trade                                     Jakarta
                          Center 4th Floor
                          Jalan Jendral Sudirman Kav. 29-31
                          Jakarta 12920
                          INDONESIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
IRELAND                  Bank of Ireland                                     J.P. Morgan AG
                         International Financial Services Centre             Frankfurt
                         1 Harbourmaster Place
                         Dublin 1
                         IRELAND
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
                         Allied Irish Banks, p.l.c.                      J.P. Morgan AG
                         P.O. Box 518                                    Frankfurt
                         International Financial Services Centre
                         Dublin 1
                         IRELAND
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
ISRAEL                   Bank Leumi le-Israel B.M                        Bank Leumi le-Israel B.M.
                         35, Yehuda Halevi Street                        Tel Aviv
                         61000 Tel Aviv
                         nISRAEL
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
ITALY                    BNP Paribas Securities Services S.A.            J.P. Morgan AG
                         2 Piazza San Fedele                             Frankfurt
                         20121 Milan
                         ITALY
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
IVORY                     Societe Generale de Banques en                  Societe Generale
COAST                     Cote d'Ivoire                                   Paris
                          5 et 7, Avenue J. Anoma - 01 B.P. 1355
                          Abidjan 01
                          IVORY COAST
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
JAMAICA                   CIBC Trust and Merchant Bank Jamaica Limited    CIBC Trust and Merchant Bank Jamaica Limited
                          23-27 Knutsford Blvd.                           Kingston
                          Kingston 10
                          JAMAICA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
JAPAN                     Mizuho Corporate Bank, Limited                  JPMorgan Chase Bank
                          6-7 Nihonbashi-Kabutocho                        Tokyo
                          Chuo-Ku
                          Tokyo 103
                          JAPAN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
JORDAN                   Arab Bank Plc                                   Arab Bank Plc
                         P O Box 950544-5                                Amman
                         Amman
                         Shmeisani
                         JORDAN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
KAZAKHSTAN               ABN AMRO Bank Kazakhstan                         ABN AMRO Bank Kazakhstan
                         45, Khadzhi Mukana Street                        Almaty
                         480099 Almaty
                         KAZAKHSTAN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
KENYA                     Barclays Bank of Kenya Limited                  Barclays Bank of Kenya Limited
                         c/o Barclaytrust Investment Services &       Nairobi
                         Limited
                         Mezzanine 3, Barclays
                         Plaza, Loita Street
                         Nairobi
                         KENYA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
LATVIA                    Hansabanka                                      Hansabanka
                          Kalku iela 26                                   Riga
                          LV 1050
                          LATVIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
LEBANON                  HSBC Bank placeMiddle East                      JPMorgan Chase Bank
                         Ras-Beirut Branch                               New York
                         P.O. Box 11-1380
                         Abdel Aziz
                         Ras-Beirut
                         LEBANON
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
LITHUANIA                Vilniaus Bankas AB                              Vilniaus Bankas AB
                         12 Gedimino pr.                                 Vilnius
                         LT 2600 Vilnius
                         LITHUANIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
LUXEMBOURG               Banque Generale du Luxembourg S.A.              J.P. Morgan AG
                         50 Avenue J.F. Kennedy                          Frankfurt
                         L-2951
                         LUXEMBOURG
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
MALAYSia                 HSBC Bank Malaysia Berhad                      HSBC Bank Malaysia Berhad
                         2 Leboh Ampang                                 Kuala Lumpur
                         50100 Kuala Lumpur
                         MALAYSIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
MAURITIUS                The Hongkong and Shanghai Banking      The Hongkong and Shanghai Banking
                         Corporation Limited                             Corporation Limited
                         5/F Les Cascades                        Port Louis
                         Building
                         Edith Cavell Street
                         Port Louis
                         MAURITIUS
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
MEXICO                   Banco J.P. Morgan, S.A.                         Banco J.P. Morgan, S.A.
                         Torre Optima                                    Mexico, D.F
                         Paseo de las Palmas #405 Piso 15
                         Lomas de Chapultepec
                         11000 Mexico, D. F.
                         MEXICO
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
MOROCCO                  Banque Commerciale du Maroc                     Banque Commerciale du Maroc
                         S.A.                                            S.A.
                         2 Boulevard Moulay Youssef                      Casablanca
                         Casablanca 20000
                         MOROCCO
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
NAMIBIA                  Standard Bank Namibia Limited                   Standard Bank of Namibia Limited
                         Mutual Platz                                    Windhoek
                         Cnr. Stroebel and Post Streets
                         P.O.Box 3327
                         Windhoek
                         NAMIBIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
NETHERLANDS              ABN AMRO Bank N.V.                              J.P. Morgan AG
                         Kemelstede 2                                    Frankfurt
                         P. O. Box 3200
                         4800 De Breda
                         NETHERLANDS
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
NEW                      National Nominees Limited                       National Bank of New
ZEALAND                  Level 2 BNZ Tower                                Zealand
                         125 Queen Street                                Wellington
                         Auckland
                         NEW ZEALAND
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
*NIGERIA                 Stanbic Bank Nigeria Limited                    The Standard Bank of South Africa Limited
                         188 Awolowo Road                                Johannesburg
                         P.O. Box 54746
                         Falomo, Ikoyi
                         Lagos
                         NIGERIA
- -------------------------------------------------------------------------------------------------------------------------
*RESTRICTED SERVICE ONLY.  PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER INFORMATION.*
- -------------------------------------------------------------------------------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
NORWAY                    Den norske Bank ASA                             Den norske Bank ASA
                          Stranden 21                                     Oslo
                          PO Box 1171 Sentrum
                          N-0107 Oslo
                          NORWAY
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
OMAN                      HSBC Bank Middle East                      Oman Arab Bank
                         Bait Al Falaj Main Office                   Muscat
                         Ruwi, Muscat PC 112
                         OMAN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
PAKISTAN                 Standard Chartered Bank                         Standard Chartered Bank
                         Box 4896                                        Karachi
                         Ismail Ibrahim Chundrigar Road
                         Karachi 74000
                         PAKISTAN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
PERU                      Citibank, N.A.                                 Banco de Credito Statedel
                         Camino Real 457                                 Peru
                         Torre Real - 5th Floor                          Lima
                         San Isidro, Lima 27
                         PERU
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
PHILIPPINES             The Hongkong and Shanghai Banking      The Hongkong and Shanghai Banking
                         Corporation Limited                             Corporation Limited
                         30/F Discovery Suites                 Manila
                         25 ADB Avenue
                         Ortigas Center
                         Pasig City, Manila
                         PHILIPPINES
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
POLAND                   Bank Handlowy w. Warszawie                      Bank Rozwoju Eksportu S.A.
                         S.A.                                            Warsaw
                         ul. Senatorska 16
                         00-923 Warsaw 55
                         POLAND
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
PORTUGAL                 Banco Espirito Santo, S.A                       J.P. Morgan AG
                         7th floor                                       Frankfurt
                         Rua Castilho, 26
                         1250-069 Lisbon
                         PORTUGAL
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
ROMANIA                   ING Bank N.V.                                   ING Bank N.V.
                          13-15 Kiseleff Blvd                             Bucharest
                          Bucharest 1
                          ROMANIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
RUSSIA*                   J.P. Morgan Bank International                  JPMorgan Chase Bank
                         (Limited Liability Company)                      eNew York
                          Building 2/1, 8th floor                         A/C JPMorgan Chase Bank London (USD
                          Paveletskaya Square                             NOSTRO Account)
                          113054 Moscow
                          RUSSIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
*RESTRICTED SERVICE ONLY.  PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER INFORMATION.*
- -------------------------------------------------------------------------------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SINGAPORE                 Standard Chartered Bank                         Oversea-Chinese Banking Corporation
                          3/F, 6 Battery Road                              Singapore
                          049909
                          SINGAPORE
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SLOVAK                  Ceskoslovenska obchodni banka, a.s.             Vseobecno Uverova Banka S.A.
REPUBLIC                pobocka zahranicnej banky v SR                  Bratislava
                         Michalska 18
                         815 63 Bratislava
                         SLOVAK REPUBLIC
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SLOVENIA                 Bank Austria Creditanstalt d.d.               Bank country-regionAustria Creditanstalt d.d.
                         Ljubljana                                     Ljubljana
                         Wolfova 1                                     Ljubljana
                         SI-1000 Ljubljana
                         SLOVENIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SOUTH                    The Standard Bank of South Africa Limited       The Standard Bank of South Africa Limited
AFRICA                   Standard Bank Centre                            Johannesburg
                         1st Floor
                         5 Simmonds Street
                         Johannesburg 2001
                         SOUTH AFRICA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SOUTH                    The Hongkong Shanghai Banking                   The Hongkong and Shanghai Banking
KOREA                    Corporation Limited                             Corporation Limited
                         5/F HSBC PlaceTypeBuilding                      Seoul
                         #25, Bongrae-dong 1-ga
                         Seoul
                         SOUTH KOREA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SPAIN                    J.P. Morgan Bank, S.A.                          J.P. Morgan AG
                         Paseo de la Castellana, 51                      Frankfurt
                         28046 Madrid
                         SPAIN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SRI                      The Hongkong Shanghai Banking                The Hongkong and Shanghai Banking
LANKA                    Corporation Limited                             Corporation Limited
                         24 Sir Baron Jayatillaka Mawatha                Colombo
                         Colombo 1
                         SRI LANKA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SWEDEN                   Skandinaviska Enskilda Banken                   Svenska Handelsbanken
                         Sergels Torg 2                                  Stockholm
                         SE-106 40 Stockholm
                         SWEDEN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
SWITZERLAND              UBS AG                                          UBS AG
                         45 Bahnhofstrasse                               Zurich
                         8021 Zurich
                         SWITZERLAND
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
TAIWAN                   JPMorgan Chase Bank                             JPMorgan Chase Bank
                         14th Floor                                      Taipei
                         2, Tun Hwa S. Road Sec. 1
                         Taipei
                         TAIWAN
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
THAILAND                 Standard Chartered Bank                         Standard Chartered Bank
                         14th Floor, Zone B                              Bangkok
                         Sathorn Nakorn
                         Tower
                         100 North Sathorn Road Bangrak
                         Bangkok 10500
                         THAILAND
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
TUNISIA                  Banque Internationale Arabe de Tunisie, S.A.    Banque Internationale Arabe de Tunisie, S.A.
                         70-72 Avenue Habib Bourguiba                    Tunis
                         P.O. Box 520
                         1080 Tunis Cedex
                         TUNISIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
TURKEY                   JPMorgan Chase Bank                             JPMorgan Chase Bank
                         Emirhan Cad. No: 145                            Istanbul
                         Atakule, A Blok Kat:11
                         80700-Dikilitas/Besiktas
                         Istanbul
                         TURKEY
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
*UKRAINE                 ING Bank Ukraine                                  ING Bank placecountry-regionUkraine
                         28 Kominterna Street                              Kiev
                         5th Floor
                         Kiev, 252032
                         UKRAINE
- -------------------------------------------------------------------------------------------------------------------------
*RESTRICTED SERVICE ONLY.  PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER INFORMATION.*
- -------------------------------------------------------------------------------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
U.A.E.                   HSBC Bank placeMiddle East                      The National Bank of placeCityAbu Dhabi
                         P.O. Box 66                                     Abu Dhabi
                         Dubai
                         UNITED ARAB EMIRATES
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
U.K.                     JPMorgan Chase Bank                             National Westminster Bank
                         Crosby Court                                    London
                         Ground Floor
                         38 Bishopsgate
                         London EC2N 4AJ
                         UNITED KINGDOM
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
URUGUAY                  BankBoston, N.A.                                BankBoston, N.A
                         Zabala 1463                                     Montevideo.
                         Montevideo
                         URUGUAY
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
U.S.A.                   JPMorgan Chase Bank                             JPMorgan Chase Bank
                         4 New York Plaza                                New York
                         New York
                         NY 10004
                         U.S.A.
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
VENEZUELA                Citibank, N.A.                                  Citibank, N.A.
                         Carmelitas a Altagracia                         Caracas
                         Edificio Citibank
                         Caracas 1010
                         VENEZUELA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
VIETNAM                  The Hongkong and Shanghai Banking               The Hongkong and Shanghai Banking
                         Corporation Limited                             Corporation Limited
                         75 Pham Hong Thai, District 1                   Ho Chi Minh City
                         Ho Chi Minh City
                         VIETNAM
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
ZAMBIA                   Barclays Bank of Zambia Limited                 Barclays Bank of Zambia Limited
                         Kafue House, Cairo Road                         Lusaka
                         Lusaka
                         ZAMBIA
- ------------------------ ----------------------------------------------- ------------------------------------------------
- ------------------------ ----------------------------------------------- ------------------------------------------------
ZIMBABWE                 Barclays Bank of Zimbabwe Limited               Barclays Bank of Zimbabwe Limited
                         2nd Floor, 3 Anchor House                       Harare
                         Jason Mayo Avenue
                         Harare
                         ZIMBABWE
- ------------------------ ----------------------------------------------- ------------------------------------------------






Schedule 3

ELIGIBLE SECURITIES DEPOSITORIES

JPMORGAN INVESTOR SERVICES

SECURITIES DEPOSITORIES

- -------------------------- ---------------------------------------------- -----------------------------------------------
COUNTRY                    DEPOSITORY                                     INSTRUMENTS
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
ARGENTINA                  CVSA                                           Equity, Corporate Debt, Government Debt
                           (Caja de Valores S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CRYL                                           Government Debt
                           (Central de Registration y Liquidacion de
                           Instrumentos de Endeudamiento Publico)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
AUSTRALIA                  Austraclear Limited                            Corporate Debt, Money Market, Government Debt
                                                                          and Semi-Government Debt
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CHESS                                          Equity
                           (Clearing House Electronic Sub-register
                           System)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
AUSTRIA                     OeKB                                           Equity, Corporate Debt, Government Debt
                           (Oesterreichische Kontrollbank AG)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
BELGIUM CIK                                            Equity, Corporate Debt
                           (Caisse Interprofessionnelle de Depots et de
                           Virements de Titres S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           NBB                                            Corporate Debt, Government Debt
                           (National Bank of placecountry-regionBelgium)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
BRAZIL                      CBLC                                           Equity
                           (Companhia Brasileira de Liquidacao e
                           Custodia)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CETIP                                          Corporate Debt
                           (Central de Custodia e Liquidacao Financiera
                           de Titulos Privados)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           SELIC                                          Government Debt
                           (Sistema Especial de Liquidacao e Custodia)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
BULGARIA                    BNB                                            Government Debt
                           (Bulgaria National Bank)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CDAD                                           Equity, Corporate Debt
                           (Central Depository A.D.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
CANADA                      CDS                                            Equity, Corporate, Government Debt
                           (The Canadian Depository for Securities
                           Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
CHILE                       DCV                                            Equity, Corporate Debt, Government Debt
                           (Deposito Central de Valores S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
CHINA,                      CSDCC, placeCityShanghai Branch                Equity
SHANGHAI                     (China Securities Depository
                           and Clearing Corporation Limited,
                           Shanghai Branch)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
CHINA,                     CSDCC, Shenzhen Branch                         Equity
SHENZHEN                   (China Securities
                           Depository and Clearing Corporation Ltd,
                           Shenzhen Branch)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
nCOLOMBIA                  DCV                                            Government Debt
                           (Deposito Central de Valores)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           DECEVAL                                        Equity, Corporate Debt, Government Debt
                           (Deposito Centralizado de Valores de
                           Colombia S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
CROATIA                      SDA                                            Equity, Government Debt
                           (Central Depository Agency Inc. - Stredisnja
                           depozitarna agencija d.d.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           MOF                                            Short-term debt issued by the Ministry of
                           (Ministry of Finance of the                    Finance.
                           Republic of Croatia)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CNB                                            Short-term debt issued by the National Bank
                           (Croatian National Bank)                       of placecountry-regionCroatia.
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
CZECH                       SCP                                            Equity, Corporate Debt, Government Debt
REPUBLIC                   (Stredisko cennych papiru - Ceska republica)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CNB                                            Government Debt
                           (Czech National Bank)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
DENMARK                       VP                                             Equity, Corporate Debt, Government Debt
                           (Vaerdipapircentralen A/S)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
EGYPT                       MCSD                                           Equity, Corporate Debt
                           (Misr for Clearing, Settlement and
                           Depository)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
ESTONIA                     ECDS                                           Equity, Corporate Debt, Government Debt
                           (Estonian Central Depository for Securities
                           Limited - Eesti Vaatpaberite
                           Keskdepositoorium)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
EUROMARKET                 DCC                                            Euro-CDs
                           (The Depository and Clearing Centre)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CBL                                            Internationally Traded Debt, Equity
                           (Clearstream Banking,
                           S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           Euroclear Bank                                 Internationally Traded Debt, Equity
- -------------------------- ---------------------------------------------- -----------------------------------------------



- -------------------------- ---------------------------------------------- -----------------------------------------------
 FINLAND                    APK                                            Equity, Corporate Debt, Government Debt
                           (Finnish Central Securities Depository
                           Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
FRANCE                      Euroclear placecountry-regionFrance            Equity, Corporate Debt, Government Debt
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
GERMANY                     CBF                                            Equity, Corporate Debt, Government Debt
                           (Clearstream Banking AG)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
GREECE                     CSD                                            Equity, Corporate Debt
                           (Central Securities Depository S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           BoG                                            Government Debt
                           (Bank of placecountry-regionGreece)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
HONG KONG                   HKSCC                                          Equity
                           (Hong Kong Securities Clearing Company
                           Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CMU                                            Corporate Debt, Government Debt
                           (Central Moneymarkets Unit)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
HUNGARY                     KELER                                          Equity, Corporate Debt, Government Debt
                           (Central Clearing House and Depository
                           (Budapest) Ltd. - Kozponti Elszamolohaz
                           es Ertektar (Budapest) Rt.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
ICELAND                     ISD                                            Equity, Corporate Debt, Government Debt
                           (The Islandic Securities Depository)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
INDIA                       NSDL                                           Equity, Corporate Debt, Government Debt
                           (National Securities Depository Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CDSL                                           Equity
                           (Central Depository Services
                           (India) Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           RBI                                            Government Debt
                           (Reserve Bank of India)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
INDONESIA                  KSEI                                           Equity, Corporate Debt
                           (PT Kustodian Sentral Efek
                           Indonesia)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
IRELAND                     CREST                                          Equity, Corporate Debt
                           (CRESTCo Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
ISRAEL                      TECH                                           Equity, Corporate Debt, Government Debt
                           (Tel Aviv Stock Exchange Clearing House Ltd.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
ITALY                        Monte Titoli S.p.A.                            Equity, Corporate Debt, Government Debt
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
IVORY                         DC/BR                                          Equity
COAST                      (Le Depositaire Central / Banque de
                           Reglement)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
JAMAICA                    JCSD                                           Equity, Corporate Debt, Government Debt
                           (Jamaica Central
                           Securities Depository)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
JAPAN                      JASDEC                                         Equity, Convertible Debt
                           (Japan Securities
                           Depository Center,
                           Incorporated)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           BoJ                                            Registered Government Debt
                           (Bank of Japan)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
KAZAHKSTAN                 CSD                                            Equity
                           (Central Securities Depository CJSC)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
KENYA                       CBCD                                           Government Debt
                           (Central Bank Central Depository)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
LATVIA                     LCD                                            Equity, Corporate Debt, Government Debt
                           (Latvian Central Depository)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
LEBANON                    Midclear S.A.L.                                Equity
                           (Custodian and Clearing
                           Center of Financial Instruments for
                           Lebanon and the Middle
                           East S.A.L.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
LITHUANIA                   CSDL                                           Equity, Corporate Debt, Government Debt
                           (Central Securities Depository of
                           Lithuania)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
LUXEMBOURG                  CBL                                            Equity
                           (Clearstream Banking S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
MALAYSIA                    MCD                                            Equity, Corporate Debt
                           (Malaysian Central Depository Sdn. Bhd.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           BNM                                            Government Debt
                           (Bank Negara placecountry-regionMalaysia)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
MAURITIUS                   CDS                                            Equity, Corporate Debt
                           (Central Depository and Settlement Company
                           Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
MEXICO                      INDEVAL                                        Equity, Corporate Debt, Government Debt
                           (S.D. INDEVAL S.A. de C.V.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
MOROCCO                     Maroclear                                      Equity, Corporate Debt, Government Debt
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
NETHERLANDS                 NZCSD                                        Equity, Corporate Debt, Government Debt
                           (Nederlands Centraal Insituut voor Giraal
                           Effectenverkeer B.V.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
NEW                         NZCSD                                          Equity, Corporate Debt, Government Debt
ZEALAND                    (New Zealand Central
                           Securities Depository)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
NIGERIA                    CSCS                                           Equity, Corporate Debt, Government Debt
                           (Central Securities Clearing System Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
NORWAY                      VPS                                            Equity, Corporate Debt, Government Debt
                           (Verdipapirsentralen)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
OMAN                        MDSRC                                          Equity, Corporate Debt
                           (The Muscat Depository and
                           Securities Registration Company, S.A.O.C.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
PAKISTAN                    CDC                                            Equity, Corporate Debt
                           (Central Depository Company of Pakistan
                           Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           SBP                                            Government Debt
                           (State Bank of Pakistan)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
PERU                        CAVALI                                         Equity, Corporate Debt, Government Debt
                           (CAVALI ICLV S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
PHILIPPINES                PCD                                            Equity
                           (Philippine Central Depository, Inc.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           ROSS                                           Government Debt
                           (Bangko Sentral ng Pilipinas / Register of
                           Scripless Securities)
- -------------------------- ---------------------------------------------- -----------------------------------------------


- -------------------------- ---------------------------------------------- -----------------------------------------------
POLAND                      NDS                                            Equity, Long-Term Government Debt
                           (National Depository for Securities S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------


- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CRT                                            Short-Term Government Debt
                           (Central Registry of Treasury-Bills)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
PORTUGAL                   INTERBOLSA                                     Equity, Corporate Debt, Government Debt
                           (Sociedade Gestora de Sistemas de Liquidacao
                           e de Sistemas Centralizados de Valores
                           Mobiliarios, S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
ROMANIA                     SNCDD                                          Equity
                           (National Company for Clearing, Settlement
                           and Depository for Securities)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           BSE                                            Equity
                           (Bucharest Stock Exchange)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
RUSSIA                      VTB                                            Equity, Corporate Debt, Government Debt
                           (Vneshtorgbank)                                (Ministry of Finance Bonds)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           NDC                                            Equity, Corporate Debt, Government Debt
                           (National Depository Centre)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SINGAPORE                   CDP                                            Equity, Corporate Debt
                           (The Central Depository (Pte) Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           MAS                                            Government Debt
                           (Monetary Authority of
                           Singapore)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SLOVAK                     SCP                                            Equity, Corporate Debt, Government Debt
REPUBLIC                  (Stredisko cennych papierov SR, a.s.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           NBS                                            Government Debt
                           (National Bank of
                           Slovakia)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SLOVENIA                   KDD                                            Equity, Corporate Debt, Government Debt
                           (Centralna klirinsko depotna druzba d.d.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SOUTH                      CD                                             Corporate Debt, Government Debt
AFRICA                     (The Central Depository Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           STRATE                                         Equity
                           (Share Transactions Totally Electronic)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SOUTH                       KSD                                            Equity, Corporate Debt, Government Debt
KOREA                      (Korea Securities
                           Depository)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SPAIN                      SCLV                                           Equity, Corporate Debt
                           (Servicio de Compensacion y
                           Liquidacion de Valores,
                           S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           Bank of Spain                                  Corporate Debt, Government Debt
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SRI                        CDS                                            Equity, Corporate Debt
LANKA                      (Central Depository System (Private) Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SWEDEN                      VPC                                            Equity, Corporate Debt, Government Debt
                           (Vardepapperscentralen AB)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
SWITZERLAND                SIS                                            Equity, Corporate Debt, Government Debt
                           (SIS SegaInterSettle AG)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
TAIWAN                     TSCD                                           Equity, Government Debt
                           (Taiwan Securities Central Depository Co.,
                           Ltd.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
THAILAND                    TSD                                            Equity, Corporate Debt, Government Debt
                           (Thailand Securities Depository Company
                           Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
TUNISIA                     STICODEVAM                                     Equity, Corporate Debt, Government Debt
                           (Societe Tunisienne Interprofessionnelle
                           pour la Compensation et le Depot des Valeurs
                           Mobilieres)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
TURKEY                      TAKASBANK                                      Equity, Corporate Debt, Government Debt
                           (IMKB Takas ve Saklama Bankasi A.S.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
UNITED ARAB EMIRATES       DFM                                            Equity, Corporate Debt, Government Debt
                           (Dubai Financial Market Clearing
                           House)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
UNITED                      CREST                                          Equity, Corporate Debt, Government Debt
KINGDOM                    (CRESTCo Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CMO                                            Sterling & Euro CDs, Commercial Paper
                           (Central Moneymarkets Office)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
UNITED STATES              DTC                                            Equity, Corporate Debt
                           (Depository Trust Company)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           FED                                            Government Debt, Mortgage Back Debt
                           (The Federal Reserve Book-Entry System)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
VENEZUELA                   BCV                                            Government Debt
                           (Banco Central de Venezuela)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           CVV                                            Equity, Corporate Debt, Money Market
                           (Caja placeCityVenezolana de Valores,
                           S.A.)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
VIETNAM                    SCC                                            Equity, Corporate Debt, Government Debt
                           (Securities Custody Centre)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
ZAMBIA                      CSD                                            Equity, Government Debt
                           (LuSE Central Shares Depository Limited)
- -------------------------- ---------------------------------------------- -----------------------------------------------
- -------------------------- ---------------------------------------------- -----------------------------------------------
                           BoZ                                            Government Debt
                           (Bank of Zambia)
- -------------------------- ---------------------------------------------- -----------------------------------------------

EX-23

                                                  ACCOUNTING FIRM



The Board of Trustees of
Oppenheimer Capital Appreciation Fund:

     We consent to the use in this Registration Statement of Oppenheimer Capital
Appreciation  Fund,  of our report  dated  October  16,  2006,  included  in the
Statement  of  Additional  Information,  which  is  part  of  such  Registration
Statement,  and to the  references  to our firm  under the  headings  "Financial
Highlights" appearing in the Prospectus, which is also part of such Registration
Statement and "Independent  Registered  Public Accounting Firm" appearing in the
Statement of Additional Information.




                                            KPMG LLP

                                            /s/ KPMG LLP

Denver, Colorado
October 19, 2006

EX-99.M

                              AMENDED AND RESTATED

                            SERVICE PLAN AND AGREEMENT

                                     with

                         OppenheimerFunds Distributor, Inc.

                               For Class A Shares of

                          Oppenheimer Capital Appreciation Fund


     This Amended and Restated  SERVICE PLAN AND AGREEMENT (the "Plan") is dated
as of the  26th  day  of  October,  2005,  by and  between  Oppenheimer  Capital
Appreciation  Fund (the  "Fund") and  OppenheimerFunds  Distributor,  Inc.  (the
"Distributor").

     1. The Plan.  This Plan is the Fund's written  service plan for its Class A
Shares described in the Fund's  registration  statement as of the date this Plan
takes effect,  contemplated by and to comply with Rule 2830 of the Conduct Rules
of the National  Association of Securities Dealers,  Inc., pursuant to which the
Fund will  reimburse  the  Distributor  for a portion of its costs  incurred  in
connection  with the personal  service and  maintenance of shareholder  accounts
("Accounts")  that hold Class A Shares (the  "Shares") of the Fund. The Fund may
be deemed to be acting as  distributor  of securities of which it is the issuer,
pursuant  to Rule  12b-1  under the  Investment  Company  Act of 1940 (the "1940
Act"),  according to the terms of this Plan. The Distributor is authorized under
the Plan to pay "Recipients," as hereinafter defined, for rendering services and
for the  maintenance of Accounts.  Such  Recipients are intended to have certain
rights as third-party beneficiaries under this Plan.

     2.  Definitions.  As used in this Plan, the following  terms shall have the
following meanings:

     (a) "Recipient"  shall mean any broker,  dealer,  bank or other institution
which:  (i) has rendered  services in connection  with the personal  service and
maintenance of Accounts;  (ii) shall furnish the  Distributor  (on behalf of the
Fund) with such  information  as the  Distributor  shall  reasonably  request to
answer such questions as may arise  concerning such service;  and (iii) has been
selected by the Distributor to receive payments under the Plan.  Notwithstanding
the foregoing,  a majority of the Fund's Board of Trustees (the "Board") who are
not "interested  persons" (as defined in the 1940 Act) and who have no direct or
indirect  financial  interest in the operation of this Plan or in any agreements
relating  to this Plan (the  "Independent  Trustees")  may  remove  any  broker,
dealer, bank or other institution as a Recipient, whereupon such entity's rights
as a third-party beneficiary hereof shall terminate.

     (b) "Qualified Holdings" shall mean, as to any Recipient,  all Shares owned
beneficially  or of record by: (i) such  Recipient,  or (ii) such  brokerage  or
other  customers,  or  investment  advisory or other  clients of such  Recipient
and/or  accounts as to which such  Recipient  is a  fiduciary  or  custodian  or
co-fiduciary or co-custodian  (collectively,  the "Customers"),  but in no event
shall any such Shares be deemed owned by more than one Recipient for purposes of
this Plan. In the event that two entities would otherwise  qualify as Recipients
as to the same Shares, the Recipient which is the dealer of record on the Fund's
books shall be deemed the Recipient as to such Shares for purposes of this Plan.

3.       Payments.

     (a) Under the Plan, the Fund will make payments to the Distributor,  within
forty-five  (45)  days of the  end of each  calendar  quarter  or at such  other
interval as deemed  appropriate by the Distributor,  in the amount of the lesser
of: (i) 0.25% on an annual basis of the average  during the calendar  quarter of
the  aggregate  net asset value of the Shares,  computed as of the close of each
business day, or (ii) the Distributor's  actual expenses under the Plan for that
quarter of the type approved by the Board.  Notwithstanding  the foregoing,  the
Fund will not make  payments  to the  Distributor  in excess of the  amount  the
Distributor pays to Recipients.  The Distributor will use such fee received from
the Fund in its entirety to reimburse  itself for payments to Recipients and for
its other  expenditures  and costs of the type approved by the Board incurred in
connection with the personal service and maintenance of Accounts including,  but
not  limited  to,  the  services  described  in  the  following  paragraph.  The
Distributor may make Plan payments to any "affiliated person" (as defined in the
1940 Act) of the Distributor if such affiliated person qualifies as a Recipient.

     The services to be rendered by the Distributor and Recipients in connection
with the personal service and the maintenance of Accounts may include, but shall
not  be  limited  to,  the  following:  answering  routine  inquiries  from  the
Recipient's  customers  concerning  the  Fund,  providing  such  customers  with
information on their investment in Shares,  assisting in the  establishment  and
maintenance  of  accounts  or  sub-accounts  in  the  Fund,  making  the  Fund's
investment  plans and dividend  payment  options  available,  and providing such
other  information and customer liaison services and the maintenance of Accounts
as the Distributor or the Fund may reasonably request. It may be presumed that a
Recipient has provided services qualifying for compensation under the Plan if it
has  Qualified  Holdings of Shares to entitle it to payments  under the Plan. In
the event that either the Distributor or the Board should have reason to believe
that,  notwithstanding the level of Qualified  Holdings,  a Recipient may not be
rendering  appropriate  services,  then the  Distributor,  at the request of the
Board,  shall  require  the  Recipient  to  provide  a  written  report or other
information to verify that said Recipient is providing  appropriate  services in
this regard. If the Distributor still is not satisfied,  it may take appropriate
steps to terminate the Recipient's status as such under the Plan, whereupon such
entity's rights as a third-party beneficiary hereunder shall terminate.

     Payments  received by the Distributor from the Fund under the Plan will not
be used to pay any interest expense,  carrying charges or other financial costs,
or  allocation  of overhead by the  Distributor,  or for any other purpose other
than for the payments  described  in this  Section 3. The amount  payable to the
Distributor  each  quarter or other  period  will be reduced to the extent  that
reimbursement  payments  otherwise  permissible  under  the  Plan  have not been
authorized by the Board for that period. Any unreimbursed  expenses incurred for
any quarter by the Distributor may not be recovered in later periods.


     (b) The  Distributor  shall make payments to any Recipient  quarterly or at
such other interval as deemed appropriate by the Distributor,  within forty-five
(45) days of the end of each calendar  quarter or such other  period,  at a rate
not to exceed  0.25% on an  annual  basis of the  average  during  the  calendar
quarter of the aggregate net asset value of the Shares  computed as of the close
of each business day, of Qualified  Holdings owned  beneficially or of record by
the Recipient or by its  Customers.  However,  no such payments shall be made to
any Recipient  for any such period in which its Qualified  Holdings do not equal
or exceed,  at the end of such quarter,  the minimum amount ("Minimum  Qualified
Holdings"), if any, to be set from time to time by a majority of the Independent
Trustees.

     Alternatively,  the Distributor may, at its sole option, make the following
service fee payments to any  Recipient  quarterly  or at such other  interval as
deemed appropriate by the Distributor, within forty-five (45) days of the end of
each calendar  quarter or other such period:  (A) "Advance Service Fee Payments"
at a rate not to exceed 0.25% of the average during the calendar  quarter of the
aggregate net asset value of Shares, computed as of the close of business on the
day such Shares are sold, constituting Qualified Holdings, sold by the Recipient
during that quarter and owned  beneficially  or of record by the Recipient or by
its Customers, plus (B) service fee payments at a rate not to exceed 0.25% on an
annual basis of the average  during the calendar  quarter of the  aggregate  net
asset  value  of  Shares,  computed  as of  the  close  of  each  business  day,
constituting Qualified Holdings owned beneficially or of record by the Recipient
or by its Customers for a period of more than one (1) year. At the Distributor's
sole option, Advance Service Fee Payments may be made more often than quarterly,
and  sooner  than the end of the  calendar  quarter.  In the  event  Shares  are
redeemed less than one year after the date such Shares were sold,  the Recipient
is obligated to and will repay the  Distributor  on demand a pro rata portion of
such Advance  Service Fee  Payments,  based on the ratio of the time such Shares
were held to one (1) year.

     A majority of the Independent Trustees may at any time or from time to time
increase or decrease  and  thereafter  adjust the rate of fees to be paid to the
Distributor  or to any  Recipient,  but not to exceed the rate set forth  above,
and/or increase or decrease the number of shares constituting  Minimum Qualified
Holdings.  The Distributor  shall notify all Recipients of the Minimum Qualified
Holdings and the rate of payments hereunder applicable to Recipients,  and shall
provide each  Recipient  with written  notice  within thirty (30) days after any
change in these  provisions.  Inclusion of such  provisions  or a change in such
provisions in a revised current prospectus shall constitute sufficient notice.

     (c)  Under  the  Plan,   payments  may  be  made  to  Recipients:   (i)  by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived  from  the  advisory  fee it  receives  from the  Fund),  or (ii) by the
Distributor (a subsidiary of OFI), from its own resources.

     4. Selection and Nomination of Trustees.  While this Plan is in effect, the
selection or  replacement  of  Independent  Trustees and the nomination of those
persons to be Trustees of the Fund who are not "interested  persons" of the Fund
shall be committed to the discretion of the Independent Trustees. Nothing herein
shall  prevent  the  Independent  Trustees  from  soliciting  the  views  or the
involvement  of others in such  selection or nomination if the final decision on
any such  selection  and  nomination  is approved by a majority of the incumbent
Independent Trustees.

     5. Reports.  While this Plan is in effect,  the Treasurer of the Fund shall
provide at least  quarterly a written report to the Fund's Board for its review,
detailing  the  aggregate  amount of payments made pursuant to this Plan and the
purposes for which the payments  were made.  The report shall state  whether all
provisions of Section 3 of this Plan have been complied  with.  The  Distributor
shall annually  certify to the Board the amount of its total  expenses  incurred
that year with respect to the personal  service and  maintenance  of Accounts in
conjunction with the Board's annual review of the continuation of the Plan.

     6.  Related  Agreements.  Any  agreement  related  to this Plan shall be in
writing and shall  provide  that:  (i) such  agreement  may be terminated at any
time,  without payment of any penalty,  by vote of a majority of the Independent
Trustees  or by a vote of the  holders of a  "majority"  (as defined in the 1940
Act) of the Fund's  outstanding voting securities of the Class, on not more than
sixty  days  written  notice  to any  other  party to the  agreement;  (ii) such
agreement shall  automatically  terminate in the event of its  "assignment"  (as
defined in the 1940 Act);  (iii) it shall go into effect when approved by a vote
of the Board and its Independent Trustees cast in person at a meeting called for
the purpose of voting on such agreement; and (iv) it shall, unless terminated as
herein  provided,  continue  in  effect  from  year to year only so long as such
continuance  is  specifically  approved  at least  annually by the Board and its
Independent  Trustees  cast in person at a meeting  called  for the  purpose  of
voting on such continuance.

     7. Effectiveness,  Continuation,  Termination and Amendment.  This Plan has
been approved by a vote of the Independent  Trustees cast in person at a meeting
called on  October  26,  2005 for the  purpose  of voting on this  Plan.  Unless
terminated as hereinafter provided, it shall continue in effect until renewed by
the  Board  in  accordance  with  the  Rule  and  thereafter  from  year to year
thereafter  or as the  Board  may  otherwise  determine  only  so  long  as such
continuance  is  specifically  approved  at least  annually by the Board and its
Independent  Trustees  by a vote  cast in person  at a  meeting  called  for the
purpose of voting on such  continuance.  This Plan may be terminated at any time
by vote of a majority of the Independent  Trustees or by the vote of the holders
of a "majority"  (as defined in the 1940 Act) of the Fund's  outstanding  voting
securities of Class A. This Plan may not be amended to increase  materially  the
amount of payments to be made without  approval of the Class A Shareholders,  in
the manner described  above,  and all material  amendments must be approved by a
vote of the Board and of the Independent Trustees.


     8.  Disclaimer  of  Shareholder  and  Trustee  Liability.  The  Distributor
understands  that the  obligations  of the Fund under this Plan are not  binding
upon any Trustee or shareholder of the Fund  personally,  but bind only the Fund
and the Fund's  property.  The Distributor  represents that it has notice of the
provisions of the Declaration of Trust of the Fund  disclaiming  shareholder and
Trustee liability for acts or obligations of the Fund.

                     Oppenheimer Capital Appreciation Fund


                                /s/ Phillip S. Gillespie
                     By:      ____________________________
                              Phillip S. Gillespie, Assistant Secretary


                     OppenheimerFunds Distributor, Inc.


                                /s/ James H. Ruff
                     By:      _____________________
                              James H. Ruff
                              President

EX-99.M

                                               AMENDED AND RESTATED

                                    DISTRIBUTION AND SERVICE PLAN AND AGREEMENT

                                                       With

                                        OppenheimerFunds Distributor, Inc.

                                               For Class B Shares of

                                       Oppenheimer Capital Appreciation Fund

     This Amended and Restated  Distribution and Service Plan and Agreement (the
"Plan") is dated as of the 26th day of October, 2005, by and between Oppenheimer
Capital  Appreciation Fund (the "Fund") and OppenheimerFunds  Distributor,  Inc.
(the "Distributor").

     1. The Plan. This Plan is the Fund's written  distribution and service plan
for Class B shares of the Fund (the "Shares"),  contemplated by Rule 12b-1 as it
may be amended from time to time (the "Rule") under the  Investment  Company Act
of 1940  (the  "1940  Act"),  pursuant  to which the Fund  will  compensate  the
Distributor for its services in connection with the distribution of Shares,  and
the personal  service and  maintenance of shareholder  accounts that hold Shares
("Accounts").  The Fund may act as  distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner  consistent
with the  provisions  and  definitions  contained in (i) the 1940 Act,  (ii) the
Rule,  (iii)  Rule 2830 of the  Conduct  Rules of the  National  Association  of
Securities Dealers,  Inc., or any amendment or successor to such rule (the "NASD
Conduct    Rules")   and   (iv)   any    conditions    pertaining    either   to
distribution-related  expenses or to a plan of distribution to which the Fund is
subject under any order on which the Fund relies, issued at any time by the U.S.
Securities and Exchange Commission ("SEC").

     2.  Definitions.  As used in this Plan, the following  terms shall have the
following meanings:

     (a)  "Recipient"  shall mean any broker,  dealer,  bank or other  person or
entity which: (i) has rendered  assistance  (whether direct,  administrative  or
both) in the  distribution  of Shares  or has  provided  administrative  support
services  with  respect  to  Shares  held by  Customers  (defined  below) of the
Recipient;  (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise  concerning the sale of Shares;  and (iii) has been selected by the
Distributor to receive payments under the Plan.

     (b)  "Independent  Trustees"  shall mean the members of the Fund's Board of
Trustees  who are not  "interested  persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect  financial  interest in the operation of
this Plan or in any agreement relating to this Plan.

     (c) "Customers"  shall mean such brokerage or other customers or investment
advisory  or other  clients of a  Recipient,  and/or  accounts  as to which such
Recipient  provides  administrative  support services or is a custodian or other
fiduciary.

     (d) "Qualified Holdings" shall mean, as to any Recipient,  all Shares owned
beneficially  or of record  by:  (i) such  Recipient,  or (ii) such  Recipient's
Customers,  but in no event shall any such  Shares be deemed  owned by more than
one  Recipient for purposes of this Plan. In the event that more than one person
or entity would  otherwise  qualify as  Recipients  as to the same  Shares,  the
Recipient which is the dealer of record on the Fund's books as determined by the
Distributor shall be deemed the Recipient as to such Shares for purposes of this
Plan.

3.    Payments for Distribution Assistance and Administrative Support Services.

     (a) Payments to the  Distributor.  In consideration of the payments made by
the Fund to the  Distributor  under this Plan,  the  Distributor  shall  provide
administrative  support  services and  distribution  assistance  services to the
Fund. Such services include distribution  assistance and administrative  support
services  rendered in connection with Shares (1) sold in purchase  transactions,
(2) issued in exchange  for shares of another  investment  company for which the
Distributor serves as distributor or sub-distributor,  or (3) issued pursuant to
a plan of  reorganization  to which the Fund is a party.  If the Board  believes
that the Distributor may not be rendering appropriate distribution assistance or
administrative  support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report  or other  information  to  verify  that  the  Distributor  is  providing
appropriate  services in this regard. For such services,  the Fund will make the
following payments to the Distributor:

     (i)  Administrative  Support Services Fees.  Within forty-five (45) days of
the end of each calendar  quarter,  the Fund will make payments in the aggregate
amount of 0.0625% (0.25% on an annual basis) of the average during the period of
the  aggregate  net asset  value of the Shares  computed as of the close of each
business day (the "Service  Fee").  Such Service Fee payments  received from the
Fund will  compensate  the  Distributor  for  providing  administrative  support
services  with  respect to  Accounts.  The  administrative  support  services in
connection  with  Accounts  may  include,  but  shall  not be  limited  to,  the
administrative  support  services  that a Recipient  may render as  described in
Section 3(b)(i) below.

     (ii) Distribution  Assistance Fees (Asset-Based  Sales Charge).  Within ten
(10) days of the end of each month, the Fund will make payments in the aggregate
amount of 0.0625%  (0.75% on an annual basis) of the average during the month of
the  aggregate  net  asset  value of  Shares  computed  as of the  close of each
business day (the "Asset-Based  Sales Charge")  outstanding for no more than six
years (the "Maximum Holding  Period").  Such  Asset-Based  Sales Charge payments
received  from  the  Fund  will   compensate  the   Distributor   for  providing
distribution assistance in connection with the sale of Shares.

     The distribution assistance to be rendered by the Distributor in connection
with the Shares may  include,  but shall not be limited to, the  following:  (i)
paying sales commissions to any broker,  dealer,  bank or other person or entity
that sells Shares, and/or paying such persons "Advance Service Fee Payments" (as
defined  below) in  advance  of,  and/or in  amounts  greater  than,  the amount
provided for in Section 3(b) of this Agreement;  (ii) paying compensation to and
expenses of personnel of the Distributor  who support  distribution of Shares by
Recipients;  (iii) obtaining  financing or providing such financing from its own
resources,  or from an affiliate,  for the interest and other borrowing costs of
the  Distributor's  unreimbursed  expenses  incurred in  rendering  distribution
assistance  and  administrative  support  services to the Fund;  and (iv) paying
other direct distribution costs, including without limitation the costs of sales
literature,   advertising  and  prospectuses   (other  than  those  prospectuses
furnished to current  holders of the Fund's shares  ("Shareholders"))  and state
"blue sky" registration expenses.

     (b) Payments to Recipients. The Distributor is authorized under the Plan to
pay  Recipients  (1)  distribution  assistance  fees for rendering  distribution
assistance  in  connection  with the sale of Shares  and/or (2) service fees for
rendering administrative support services with respect to Accounts.  However, no
such  payments  shall be made to any  Recipient  for any  period  in  which  its
Qualified  Holdings  do not  equal or  exceed,  at the end of such  period,  the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time
to time by a majority of the Independent Trustees.  All fee payments made by the
Distributor  hereunder  are  subject  to  reduction  or  chargeback  so that the
aggregate  service fee payments  and Advance  Service Fee Payments do not exceed
the limits on payments to  Recipients  that are, or may be,  imposed by the NASD
Conduct Rules. The Distributor may make Plan payments to any "affiliated person"
(as  defined  in the 1940  Act) of the  Distributor  if such  affiliated  person
qualifies as a Recipient or retain such payments if the Distributor qualifies as
a Recipient.

     (i) Service Fee. In  consideration of the  administrative  support services
provided by a Recipient, the Distributor shall make service fee payments to that
Recipient  quarterly  or at such other  interval  as deemed  appropriate  by the
Distributor,  within forty-five (45) days of the end of each calendar quarter or
other period,  at a rate not to exceed 0.0625% (0.25% on an annual basis) of the
average during the calendar  quarter of the aggregate net asset value of Shares,
computed as of the close of each business day,  constituting  Qualified Holdings
owned  beneficially  or of record by the  Recipient  or by its  Customers  for a
period of more than the minimum period (the "Minimum Holding  Period"),  if any,
that may be set from time to time by a majority of the Independent Trustees.

     Alternatively,  the Distributor may, at its sole option, make the following
service fee payments to any Recipient, within forty-five (45) days of the end of
each calendar  quarter or at such other  interval as deemed  appropriate  by the
Distributor: (i) "Advance Service Fee Payments" at a rate not to exceed 0.25% of
the average  during the calendar  quarter or other period of the  aggregate  net
asset  value of Shares,  computed  as of the close of  business  on the day such
Shares are sold,  constituting Qualified Holdings,  sold by the Recipient during
that  period  and owned  beneficially  or of record by the  Recipient  or by its
Customers, plus (ii) service fee payments at a rate not to exceed 0.0625% (0.25%
on an annual basis) of the average  during the period of the aggregate net asset
value of Shares,  computed as of the close of each  business  day,  constituting
Qualified  Holdings owned  beneficially  or of record by the Recipient or by its
Customers  for a period  of more  than one (1) year.  In the  event  Shares  are
redeemed less than one year after the date such Shares were sold,  the Recipient
is obligated to and will repay the  Distributor  on demand a pro rata portion of
such Advance  Service Fee  Payments,  based on the ratio of the time such Shares
were held to one (1) year.

     The  administrative  support  services  to be  rendered  by  Recipients  in
connection  with the  Accounts  may  include,  but shall not be limited  to, the
following:  answering  routine inquiries  concerning the Fund,  assisting in the
establishment  and  maintenance  of  accounts  or  sub-accounts  in the Fund and
processing Share redemption transactions, making the Fund's investment plans and
dividend  payment options  available,  and providing such other  information and
services  in  connection  with the  rendering  of personal  services  and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably request.

     (ii) Distribution  Assistance Fees (Asset-Based Sales Charge) Payments.  In
its sole discretion and irrespective of whichever  alternative  method of making
service fee payments to Recipients is selected by the  Distributor,  in addition
the  Distributor  may make  distribution  assistance fee payments to a Recipient
quarterly,  or at such other interval as deemed  appropriate by the Distributor,
within  forty-five  (45) days  after the end of each  calendar  quarter or other
period,  at a rate not to  exceed  0.1875%  (0.75%  on an  annual  basis) of the
average during the period of the aggregate net asset value of Shares computed as
of the  close  of  each  business  day  constituting  Qualified  Holdings  owned
beneficially or of record by the Recipient or its Customers for no more than six
years  and  for  any  minimum  period  that  the   Distributor   may  establish.
Distribution  assistance fee payments shall be made only to Recipients  that are
registered with the SEC as a broker-dealer or are exempt from registration.

     The distribution  assistance to be rendered by the Recipients in connection
with the sale of Shares may include, but shall not be limited to, the following:
distributing  sales  literature and  prospectuses  other than those furnished to
current Shareholders, providing compensation to and paying expenses of personnel
of the Recipient who support the  distribution  of Shares by the Recipient,  and
providing  such  other   information   and  services  in  connection   with  the
distribution of Shares as the Distributor or the Fund may reasonably request.

     (c) A majority of the Independent  Trustees may at any time or from time to
time increase or decrease the rate of fees to be paid to the  Distributor  or to
any  Recipient,  but not to exceed the rates set forth above,  and/or direct the
Distributor  to increase or decrease  the Maximum  Holding  Period,  any Minimum
Holding Period or any Minimum Qualified  Holdings.  The Distributor shall notify
all Recipients of any Minimum  Qualified  Holdings,  Maximum  Holding Period and
Minimum Holding Period that are  established and the rate of payments  hereunder
applicable to  Recipients,  and shall provide each Recipient with written notice
within thirty (30) days after any change in these provisions.  Inclusion of such
provisions or a change in such provisions in a revised current  prospectus shall
constitute sufficient notice.

     (d) The Service Fee and the Asset-Based  Sales Charge on Shares are subject
to reduction or elimination under the limits to which the Distributor is, or may
become, subject under the NASD Conduct Rules.

     (e)  Under  the  Plan,  payments  may  also be made to  Recipients:  (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived  from  the  advisory  fee it  receives  from the  Fund),  or (ii) by the
Distributor  (a subsidiary of OFI),  from its own  resources,  from  Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.

     (f)   Recipients  are  intended  to  have  certain  rights  as  third-party
beneficiaries  under this Plan,  subject to the  limitations set forth below. It
may be  presumed  that a  Recipient  has  provided  distribution  assistance  or
administrative  support services qualifying for payment under the Plan if it has
Qualified  Holdings of Shares that entitle it to payments under the Plan. In the
event that  either the  Distributor  or the Board  should have reason to believe
that,  notwithstanding the level of Qualified  Holdings,  a Recipient may not be
rendering  appropriate  distribution  assistance in connection  with the sale of
Shares or administrative support services for Accounts, then the Distributor, at
the  request of the Board,  shall  require  the  Recipient  to provide a written
report  or  other  information  to  verify  that  said  Recipient  is  providing
appropriate  distribution  assistance  and/or  services in this  regard.  If the
Distributor or the Board of Trustees still is not satisfied after the receipt of
such report,  either may take  appropriate  steps to terminate  the  Recipient's
status  as  such  under  the  Plan,  whereupon  such  Recipient's  rights  as  a
third-party  beneficiary  hereunder  shall  terminate.  Additionally,  in  their
discretion, a majority of the Fund's Independent Trustees at any time may remove
any broker,  dealer,  bank or other person or entity as a Recipient,  where upon
such  person's or entity's  rights as a  third-party  beneficiary  hereof  shall
terminate.  Notwithstanding any other provision of this Plan, this Plan does not
obligate or in any way make the Fund liable to make any  payment  whatsoever  to
any person or entity other than directly to the Distributor. The Distributor has
no obligation  to pay any Service Fees or  Distribution  Assistance  Fees to any
Recipient  if the  Distributor  has not  received  payment  of  Service  Fees or
Distribution Assistance Fees from the Fund.

     4. Selection and Nomination of Trustees.  While this Plan is in effect, the
selection  and  nomination  of  persons to be  Trustees  of the Fund who are not
"interested persons" of the Fund  ("Disinterested  Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees.  Nothing herein shall
prevent the incumbent  Disinterested  Trustees from  soliciting the views or the
involvement  of others in such  selection  or  nominations  as long as the final
decision on any such  selection and  nomination is approved by a majority of the
incumbent Disinterested Trustees.

     5. Reports.  While this Plan is in effect,  the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan and the purpose for which the payments were
made.  The reports  shall be  provided  quarterly,  and shall state  whether all
provisions of Section 3 of this Plan have been complied with.

     6.  Related  Agreements.  Any  agreement  related  to this Plan shall be in
writing and shall  provide  that:  (i) such  agreement  may be terminated at any
time, without payment of any penalty, by a vote of a majority of the Independent
Trustees  or by a vote of the  holders of a  "majority"  (as defined in the 1940
Act) of the Fund's  outstanding  Class B voting  shares;  (ii) such  termination
shall be on not more than sixty days'  written  notice to any other party to the
agreement;  (iii) such agreement shall  automatically  terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement shall go into
effect when approved by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such agreement;  and (v)
such agreement shall,  unless terminated as herein provided,  continue in effect
from year to year only so long as such  continuance is specifically  approved at
least  annually  by a vote of the Board  and its  Independent  Trustees  cast in
person at a meeting called for the purpose of voting on such continuance.

     7. Effectiveness, Continuation, Termination and Amendment. This Amended and
Restated  Plan has been  approved by a vote of the Board and of the  Independent
Trustees and replaces the Fund's  prior  Amended and Restated  Distribution  and
Service Plan for Class B Shares.  Unless terminated as hereinafter  provided, it
shall continue in effect until renewed by the Board in accordance  with the Rule
and  thereafter  from year to year or as the Board may  otherwise  determine but
only so long as such continuance is specifically approved at least annually by a
vote of the  Board  and its  Independent  Trustees  cast in  person at a meeting
called for the purpose of voting on such continuance.

     This Plan may not be amended to increase  materially the amount of payments
to be made under this Plan,  without  approval of the Class B Shareholders  at a
meeting called for that purpose, and all material amendments must be approved by
a vote of the Board and of the Independent Trustees.

     This  Plan  may be  terminated  at any  time by vote of a  majority  of the
Independent  Trustees or by the vote of the holders of a "majority"  (as defined
in the 1940 Act) of the Fund's  outstanding  Class B voting shares. In the event
of such  termination,  the Board and its  Independent  Trustees shall  determine
whether the  Distributor  shall be entitled to payment from the Fund of all or a
portion of the Service  Fee and/or the  Asset-Based  Sales  Charge in respect of
Shares sold prior to the effective date of such termination.

     8.  Disclaimer  of  Shareholder  and  Trustee  Liability.  The  Distributor
understands  that the  obligations  of the Fund under this Plan are not  binding
upon any Trustee or shareholder of the Fund  personally,  but bind only the Fund
and the Fund's  property.  The Distributor  represents that it has notice of the
provisions of the Declaration of Trust of the Fund  disclaiming  shareholder and
Trustee liability for acts or obligations of the Fund.

                                    Oppenheimer Capital Appreciation Fund

                                    By:   /s/ Robert G. Zack
                                        ____________________________
                                          Robert G. Zack, Secretary

                                    OppenheimerFunds Distributor, Inc.

                                    By:   /s/ James H. Ruff
                                         ___________________________
                                          James H. Ruff, President

EX-99.M

                                               AMENDED AND RESTATED

                                    DISTRIBUTION AND SERVICE PLAN AND AGREEMENT

                                                       with

                                        OppenheimerFunds Distributor, Inc.

                                               For Class C Shares of

                                       Oppenheimer Capital Appreciation Fund

     This  Distribution  and Service Plan and Agreement (the "Plan") is dated as
of  the  26th  day  of  October,   2005,  by  and  between  Oppenheimer  Capital
Appreciation  Fund (the  "Fund") and  OppenheimerFunds  Distributor,  Inc.  (the
"Distributor").

     1. The Plan. This Plan is the Fund's written  distribution and service plan
for Class C shares  of the Fund  (the  "Shares"),  designed  to comply  with the
provisions  of Rule  12b-1 as it may be amended  from time to time (the  "Rule")
under the Investment Company Act of 1940 (the "1940 Act"). Pursuant to this Plan
the Fund will compensate the Distributor for its services in connection with the
distribution of Shares,  and the personal service and maintenance of shareholder
accounts  that hold  Shares  ("Accounts").  The Fund may act as  distributor  of
securities  of which it is the issuer,  pursuant to the Rule,  according  to the
terms of this Plan.  The terms and  provisions of this Plan shall be interpreted
and defined in a manner consistent with the provisions and definitions contained
in (i) the Fund's  Registration  Statement,  (ii) the 1940 Act,  (iii) the Rule,
(iv) Rule 2830 of the Conduct Rules of the NASD, or any applicable  amendment or
successor  to such  rule  (the  "NASD  Conduct  Rules")  and (v) any  conditions
pertaining either to distribution-related  expenses or to a plan of distribution
to which the Fund is subject under any order on which the Fund relies, issued at
any time by the U.S. Securities and Exchange Commission ("SEC").

     2.  Definitions.  As used in this Plan, the following  terms shall have the
following meanings:

     (a)  "Recipient"  shall mean any broker,  dealer,  bank or other  person or
entity which: (i) has rendered  assistance  (whether direct,  administrative  or
both) in the  distribution  of Shares  or has  provided  administrative  support
services  with  respect  to  Shares  held by  Customers  (defined  below) of the
Recipient;  (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise  concerning the sale of Shares;  and (iii) has been selected by the
Distributor to receive payments under the Plan.

     (b)  "Independent  Trustees"  shall mean the members of the Fund's Board of
Trustees  who are not  "interested  persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect  financial  interest in the operation of
this Plan or in any agreement relating to this Plan.

     (c) "Customers"  shall mean such brokerage or other customers or investment
advisory  or other  clients of a  Recipient,  and/or  accounts  as to which such
Recipient  provides  administrative  support services or is a custodian or other
fiduciary.  (d) "Qualified Holdings" shall mean, as to any Recipient, all Shares
owned beneficially or of record by: (i) such Recipient, or (ii) such Recipient's
Customers,  but in no event shall any such  Shares be deemed  owned by more than
one  Recipient for purposes of this Plan. In the event that more than one person
or entity  would  otherwise  qualify as  Recipients  as to the same  Shares with
respect to the payment of the  Asset-Based  Sales Charge  and/or the Service Fee
(defined below), the Recipient which is the dealer of record on the Fund's books
as determined by the Distributor shall be deemed the Recipient as to such Shares
for purposes of this Plan.

     3.  Payments  for  Distribution   Assistance  and  Administrative   Support
Services.

     (a) Payments to the  Distributor.  In consideration of the payments made by
the Fund to the  Distributor  under this Plan,  the  Distributor  shall  provide
administrative  support  services and  distribution  services to the Fund.  Such
services include  distribution  assistance and  administrative  support services
rendered in connection with Shares (1) sold in purchase transactions, (2) issued
in exchange for shares of another  investment  company for which the Distributor
serves as distributor or  sub-distributor,  or (3) issued  pursuant to a plan of
reorganization  to which  the Fund is a party.  If the Board  believes  that the
Distributor  may  not  be  rendering  appropriate   distribution  assistance  or
administrative  support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report  or other  information  to  verify  that  the  Distributor  is  providing
appropriate  services in this regard. For such services,  the Fund will make the
following payments to the Distributor:

     (i) Administrative Support Service Fees. Within forty-five (45) days of the
end of each  calendar  quarter,  the Fund will make  payments  in the  aggregate
amount of 0.25% on an  annual  basis of the  average  during  the  period of the
aggregate  net  asset  value  of the  Shares  computed  as of the  close of each
business day (the "Service  Fee").  Such Service Fee payments  received from the
Fund will  compensate  the  Distributor  for  providing  administrative  support
services  with  respect to  Accounts.  The  administrative  support  services in
connection  with  Accounts  may  include,  but  shall  not be  limited  to,  the
administrative  support  services  that a Recipient  may render as  described in
Section 3(b)(i) below.

     (ii) Distribution  Assistance Fees (Asset-Based  Sales Charge).  Within ten
(10) days of the end of each month, the Fund will make payments in the aggregate
amount  of 0.75% on an  annual  basis of the  average  during  the  month of the
aggregate  net asset value of Shares  computed as of the close of each  business
day.  Such  Asset-Based  Sales  Charge  payments  received  from the  Fund  will
compensate the Distributor for providing  distribution  assistance in connection
with the sale of Shares.

     The distribution  assistance  services to be rendered by the Distributor in
connection  with the  Shares  may  include,  but shall not be  limited  to,  the
following:  (i) paying sales  commissions to any broker,  dealer,  bank or other
person or entity that sells Shares,  and/or paying such persons "Advance Service
Fee Payments" (as defined below) in advance of, and/or in amounts  greater than,
the  amount  provided  for in  Section  3(b)  of  this  Agreement;  (ii)  paying
compensation  to and  expenses  of  personnel  of the  Distributor  who  support
distribution  of Shares by Recipients;  (iii)  obtaining  financing or providing
such financing from its own  resources,  or from an affiliate,  for the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering  distribution  assistance and  administrative  support services to the
Fund;  and (iv)  paying  other  direct  distribution  costs,  including  without
limitation the costs of sales  literature,  advertising and prospectuses  (other
than  those  prospectuses  furnished  to current  holders  of the Fund's  shares
("Shareholders")) and state "blue sky" registration expenses.

     (b) Payments to Recipients. The Distributor is authorized under the Plan to
pay  Recipients  (1)  distribution  assistance  fees for rendering  distribution
assistance  in  connection  with the sale of Shares  and/or (2) service fees for
rendering administrative support services with respect to Accounts.  However, no
such  payments  shall be made to any  Recipient  for any  period  in  which  its
Qualified  Holdings  do not  equal or  exceed,  at the end of such  period,  the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time
to time by a majority of the Independent Trustees.  All fee payments made by the
Distributor  hereunder  are  subject  to  reduction  or  chargeback  so that the
aggregate  service fee payments  and Advance  Service Fee Payments do not exceed
the limits on payments to  Recipients  that are, or may be,  imposed by the NASD
Conduct Rules. The Distributor may make Plan payments to any "affiliated person"
(as  defined  in the 1940  Act) of the  Distributor  if such  affiliated  person
qualifies as a Recipient or retain such payments if the Distributor qualifies as
a Recipient.

     In  consideration of the services  provided by Recipients,  the Distributor
shall make the following payments to Recipients:

     (i) Service  Fee.  In  consideration  of  administrative  support  services
provided by a Recipient, the Distributor shall make service fee payments to that
Recipient  quarterly  or at such other  interval  as deemed  appropriate  by the
Distributor,  within forty-five (45) days of the end of each calendar quarter or
other  period,  at a rate not to exceed  0.25% on an annual basis of the average
during the period of the aggregate net asset value of Shares, computed as of the
close of each business day,  constituting  Qualified Holdings owned beneficially
or of record by the  Recipient or by its Customers for a period of more than the
minimum period (the "Minimum Holding Period"), if any, that may be set from time
to time by a majority of the Independent Trustees.

     Alternatively,  the Distributor may, at its sole option, make the following
service fee payments to any Recipient, within forty-five (45) days of the end of
each calendar  quarter or at such other  interval as deemed  appropriate  by the
Distributor: (A) "Advance Service Fee Payments" at a rate not to exceed 0.25% of
the average  during the calendar  quarter or other period of the  aggregate  net
asset  value of Shares,  computed  as of the close of  business  on the day such
Shares are sold,  constituting Qualified Holdings,  sold by the Recipient during
that  period  and owned  beneficially  or of record by the  Recipient  or by its
Customers,  plus (B)  service fee  payments at a rate not to exceed  0.25% on an
annual basis of the average  during the period of the  aggregate net asset value
of Shares, computed as of the close of each business day, constituting Qualified
Holdings  owned  beneficially  or of record by the Recipient or by its Customers
for a period of more than one (1) year.  In the event Shares are  redeemed  less
than one year after the date such Shares were sold,  the  Recipient is obligated
to and will repay the  Distributor  on demand a pro rata portion of such Advance
Service  Fee  Payments,  based on the ratio of the time such Shares were held to
one (1) year.

     The  administrative  support  services  to be  rendered  by  Recipients  in
connection  with the  Accounts  may  include,  but shall not be limited  to, the
following:  answering  routine inquiries  concerning the Fund,  assisting in the
establishment  and  maintenance  of  accounts  or  sub-accounts  in the Fund and
processing Share redemption transactions, making the Fund's investment plans and
dividend  payment options  available,  and providing such other  information and
services  in  connection  with the  rendering  of personal  services  and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably request.

     (ii)  Distribution  Assistance  Fee  (Asset-Based  Sales Charge)  Payments.
Irrespective of whichever  alternative  method of making service fee payments to
Recipients is selected by the  Distributor,  in addition the  Distributor  shall
make  distribution  assistance fee payments to each Recipient  quarterly,  or at
such other interval as deemed appropriate by the Distributor,  within forty-five
(45) days after the end of each calendar quarter or other period,  at a rate not
to exceed  0.75% on an annual  basis of the  average  during  the  period of the
aggregate  net asset value of Shares  computed as of the close of each  business
day  constituting  Qualified  Holdings  owned  beneficially  or of record by the
Recipient  or  its   Customers   for  a  period  of  more  than  one  (1)  year.
Alternatively,  at its  sole  option,  the  Distributor  may  make  distribution
assistance fee payments to a Recipient  quarterly,  at the rate described above,
on Shares constituting Qualified Holdings owned beneficially or of record by the
Recipient or its Customers without regard to the 1-year holding period described
above.  Distribution  assistance  fee payments  shall be made only to Recipients
that  are  registered  with  the  SEC  as a  broker-dealer  or are  exempt  from
registration.

     The distribution  assistance to be rendered by the Recipients in connection
with the sale of Shares may include, but shall not be limited to, the following:
distributing  sales  literature and  prospectuses  other than those furnished to
current Shareholders, providing compensation to and paying expenses of personnel
of the Recipient who support the  distribution  of Shares by the Recipient,  and
providing  such  other   information   and  services  in  connection   with  the
distribution of Shares as the Distributor or the Fund may reasonably request.

     (c) A majority of the Independent  Trustees may at any time or from time to
time (i) increase or decrease the rate of fees to be paid to the  Distributor or
to any  Recipient,  but not to exceed the maximum rates set forth above,  and/or
(ii) direct the  Distributor to increase or decrease any Minimum Holding Period,
any maximum period set by a majority of the  Independent  Trustees  during which
fees will be paid on Shares  constituting  Qualified Holdings owned beneficially
or of record by a Recipient or by its Customers (the "Maximum Holding  Period"),
or Minimum  Qualified  Holdings.  The Distributor shall notify all Recipients of
any Minimum  Qualified  Holdings,  Maximum  Holding  Period and Minimum  Holding
Period that are  established  and the rate of payments  hereunder  applicable to
Recipients,  and shall provide each  Recipient with written notice within thirty
(30) days after any change in these provisions.  Inclusion of such provisions or
a  change  in  such  provisions  in a  supplement  or  Statement  of  Additional
Information  or  amendment  to or revision of the  prospectus  or  Statement  of
Additional Information of the Fund shall constitute sufficient notice.

     (d) The Service Fee and the Asset-Based  Sales Charge on Shares are subject
to reduction or  elimination  under the limits that apply to such fees under the
NASD Conduct Rules relating to sales of shares of open-end funds

     (e)  Under  the  Plan,  payments  may  also be made to  Recipients:  (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived  from  the  advisory  fee it  receives  from the  Fund),  or (ii) by the
Distributor  (a subsidiary of OFI),  from its own  resources,  from  Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.

     (f)   Recipients  are  intended  to  have  certain  rights  as  third-party
beneficiaries  under this Plan,  subject to the  limitations set forth below. It
may be  presumed  that a  Recipient  has  provided  distribution  assistance  or
administrative  support services qualifying for payment under the Plan if it has
Qualified  Holdings of Shares that  entitle it to  payments  under the Plan.  If
either the Distributor or the Board believe that,  notwithstanding  the level of
Qualified Holdings,  a Recipient may not be rendering  appropriate  distribution
assistance  in  connection  with the sale of  Shares or  administrative  support
services for Accounts, then the Distributor,  at the request of the Board, shall
require the Recipient to provide a written report or other information to verify
that said  Recipient is providing  appropriate  distribution  assistance  and/or
services in this regard.  If the  Distributor  or the Board of Trustees still is
not  satisfied  after the receipt of such  report,  either may take  appropriate
steps to  terminate  the  Recipient's  status  as a  Recipient  under  the Plan,
whereupon such Recipient's rights as a third-party  beneficiary  hereunder shall
terminate.   Additionally,   in  their  discretion  a  majority  of  the  Fund's
Independent  Trustees at any time may remove any broker,  dealer,  bank or other
person or entity as a Recipient, whereupon such person's or entity's rights as a
third-party  beneficiary  hereof  shall  terminate.  Notwithstanding  any  other
provision of this Plan,  this Plan does not obligate or in any way make the Fund
liable  to make any  payment  whatsoever  to any  person or  entity  other  than
directly  to the  Distributor.  The  Distributor  has no  obligation  to pay any
Service Fees or Distribution Assistance Fees to any Recipient if the Distributor
has not received  payment of Service Fees or  Distribution  Assistance Fees from
the Fund.

     4. Selection and Nomination of Trustees.  While this Plan is in effect, the
selection  and  nomination  of  persons to be  Trustees  of the Fund who are not
"interested persons" of the Fund  ("Disinterested  Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees.  Nothing herein shall
prevent the incumbent  Disinterested  Trustees from  soliciting the views or the
involvement  of  others in such  selection  or  nomination  as long as the final
decision on any such  selection and  nomination is approved by a majority of the
incumbent Disinterested Trustees.

     5. Reports.  While this Plan is in effect,  the Treasurer of the Fund shall
provide  written  reports  to the Fund's  Board for its  review,  detailing  the
aggregate  amount of payments made under this Plan and the purpose for which the
payments  were made.  The reports shall be provided  quarterly,  and shall state
whether all provisions of Section 3 of this Plan have been complied with.

     6.  Related  Agreements.  Any  agreement  related  to this Plan shall be in
writing and shall  provide  that:  (i) such  agreement  may be terminated at any
time, without payment of any penalty, by a vote of a majority of the Independent
Trustees  or by a vote of the  holders of a  "majority"  (as defined in the 1940
Act) of the Fund's  outstanding  voting  Class C shares;  (ii) such  termination
shall be on not more than sixty days'  written  notice to any other party to the
agreement;  (iii) such agreement shall  automatically  terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement shall go into
effect when approved by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such agreement;  and (v)
such agreement shall,  unless terminated as herein provided,  continue in effect
from year to year only so long as such  continuance is specifically  approved at
least  annually  by a vote of the Board  and its  Independent  Trustees  cast in
person at a meeting called for the purpose of voting on such continuance.

     7. Effectiveness, Continuation, Termination and Amendment. This Amended and
Restated  Plan has been  approved  by a vote of the  Board  and its  Independent
Trustees and replaces the Fund's  prior  Amended and Restated  Distribution  and
Service Plan and Agreement for Class C shares.  Unless terminated as hereinafter
provided,  it shall  continue in effect until renewed by the Board in accordance
with the Rule and  thereafter  from year to year or as the  Board may  otherwise
determine but only so long as such continuance is specifically approved at least
annually by a vote of the Board and its Independent Trustees cast in person at a
meeting called for the purpose of voting on such continuance.

     This Plan may not be amended to increase  materially the amount of payments
to be made under this Plan,  without  approval of the Class C Shareholders  at a
meeting called for that purpose and all material  amendments must be approved by
a vote of the Board and of the Independent Trustees.

     This  Plan may be  terminated  at any time by a vote of a  majority  of the
Independent  Trustees or by the vote of the holders of a "majority"  (as defined
in the 1940 Act) of the Fund's  outstanding  Class C voting shares. In the event
of such  termination,  the Board and its  Independent  Trustees shall  determine
whether the  Distributor  shall be entitled to payment from the Fund of all or a
portion of the Service  Fee and/or the  Asset-Based  Sales  Charge in respect of
Shares sold prior to the effective date of such termination.

     8.  Disclaimer  of  Shareholder  and  Trustee  Liability.  The  Distributor
understands  that the  obligations  of the Fund under this Plan are not  binding
upon any Trustee or shareholder of the Fund  personally,  but bind only the Fund
and the Fund's  property.  The Distributor  represents that it has notice of the
provisions  of the  Declaration  of Trust of the Fund  disclaiming  Trustee  and
shareholder liability for acts or obligations of the Fund.

                                 Oppenheimer Capital Appreciation Fund


                                  By: /s/ Robert G. Zack
                                      Robert G. Zack, Secretary


                                  OppenheimerFunds Distributor, Inc.


                                  By: /s/ James H. Ruff
                                        James H. Ruff, President

EX-99.M

                                                 AMENDED AND RESTATED

                                     DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
                                                         WITH
                                          OPPENHEIMERFUNDS DISTRIBUTOR, INC.
                                                FOR CLASS N SHARES OF
                                        OPPENHEIMER CAPITAL APPRECIATION FUND

     This Amended and Restated  Distribution and Service Plan and Agreement (the
"Plan") is dated as of the 26th day of October, 2005, by and between Oppenheimer
Capital  Appreciation Fund (the "Fund") and OppenheimerFunds  Distributor,  Inc.
(the "Distributor").

     1. The Plan. This Plan is the Fund's written  distribution and service plan
for Class N shares of the Fund (the "Shares"),  contemplated by Rule 12b-1 as it
may be amended from time to time (the "Rule") under the  Investment  Company Act
of 1940  (the  "1940  Act"),  pursuant  to which the Fund  will  compensate  the
Distributor for its services in connection with the distribution of Shares,  and
the personal  service and  maintenance of shareholder  accounts that hold Shares
("Accounts").  The Fund may act as  distributor of securities of which it is the
issuer, pursuant to the Rule, according to the terms of this Plan. The terms and
provisions of this Plan shall be interpreted and defined in a manner  consistent
with the  provisions  and  definitions  contained in (i) the 1940 Act,  (ii) the
Rule,  (iii)  Rule 2830 of the  Conduct  Rules of the  National  Association  of
Securities Dealers,  Inc., or any applicable amendment or successor to such rule
(the  "NASD  Conduct  Rules")  and  (iv) any  conditions  pertaining  either  to
distribution-related  expenses or to a plan of distribution to which the Fund is
subject under any order on which the Fund relies, issued at any time by the U.S.
Securities and Exchange Commission ("SEC").

     2.  Definitions.  As used in this Plan, the following  terms shall have the
following meanings:

     (a)  "Recipient"  shall mean any broker,  dealer,  bank or other  person or
entity which: (i) has rendered  assistance  (whether direct,  administrative  or
both) in the  distribution  of Shares  or has  provided  administrative  support
services  with  respect  to  Shares  held by  Customers  (defined  below) of the
Recipient;  (ii) shall furnish the Distributor (on behalf of the Fund) with such
information as the Distributor shall reasonably request to answer such questions
as may arise  concerning the sale of Shares;  and (iii) has been selected by the
Distributor to receive payments under the Plan.

     (b)  "Independent  Trustees"  shall mean the members of the Fund's Board of
Trustees  who are not  "interested  persons" (as defined in the 1940 Act) of the
Fund and who have no direct or indirect  financial  interest in the operation of
this Plan or in any agreement relating to this Plan.

     (c) "Customers"  shall mean such brokerage or other customers or investment
advisory  or other  clients of a  Recipient,  and/or  accounts  as to which such
Recipient  provides  administrative  support services or is a custodian or other
fiduciary.

     (d) "Qualified Holdings" shall mean, as to any Recipient,  all Shares owned
beneficially  or of record  by:  (i) such  Recipient,  or (ii) such  Recipient's
Customers,  but in no event shall any such  Shares be deemed  owned by more than
one  Recipient for purposes of this Plan. In the event that more than one person
or entity would  otherwise  qualify as  Recipients  as to the same  Shares,  the
Recipient which is the dealer of record on the Fund's books as determined by the
Distributor shall be deemed the Recipient as to such Shares for purposes of this
Plan.

     3.  Payments  for  Distribution   Assistance  and  Administrative   Support
Services.

     (a) Payments to the  Distributor.  In consideration of the payments made by
the Fund to the  Distributor  under this Plan,  the  Distributor  shall  provide
administrative  support  services and  distribution  services to the Fund.  Such
services include  distribution  assistance and  administrative  support services
rendered in connection with Shares (1) sold in purchase transactions, (2) issued
in exchange for shares of another  investment  company for which the Distributor
serves as distributor or  sub-distributor,  or (3) issued  pursuant to a plan of
reorganization  to which  the Fund is a party.  If the Board  believes  that the
Distributor  may  not  be  rendering  appropriate   distribution  assistance  or
administrative  support services in connection with the sale of Shares, then the
Distributor, at the request of the Board, shall provide the Board with a written
report  or other  information  to  verify  that  the  Distributor  is  providing
appropriate  services in this regard. For such services,  the Fund will make the
following payments to the Distributor:

     (i) Administrative Support Service Fees. Within forty-five (45) days of the
end of each  calendar  quarter,  the Fund will make  payments  in the  aggregate
amount of 0.0625% (0.25% on an annual basis) of the average during the period of
the  aggregate  net asset  value of the Shares  computed as of the close of each
business day (the "Service  Fee").  Such Service Fee payments  received from the
Fund will  compensate  the  Distributor  for  providing  administrative  support
services  with  respect to  Accounts.  The  administrative  support  services in
connection  with  Accounts  may  include,  but  shall  not be  limited  to,  the
administrative  support  services  that a Recipient  may render as  described in
Section 3(b)(i) below.

     (ii) Distribution  Assistance Fees (Asset-Based  Sales Charge).  Within ten
(10) days of the end of each month, the Fund will make payments in the aggregate
amount of 0.02083% (0.25% on an annual basis) of the average during the month of
the  aggregate  net  asset  value of  Shares  computed  as of the  close of each
business day (the  "Asset-Based  Sales Charge").  Such Asset-Based  Sales Charge
payments  received from the Fund will  compensate the  Distributor for providing
distribution assistance in connection with the sale of Shares.

     The distribution  assistance  services to be rendered by the Distributor in
connection  with the  Shares  may  include,  but shall not be  limited  to,  the
following:  (i) paying sales  commissions to any broker,  dealer,  bank or other
person or entity that sells Shares,  and/or paying such persons "Advance Service
Fee Payments" (as defined below) in advance of, and/or in amounts  greater than,
the  amount  provided  for in  Section  3(b)  of  this  Agreement;  (ii)  paying
compensation  to and  expenses  of  personnel  of the  Distributor  who  support
distribution  of Shares by Recipients;  (iii)  obtaining  financing or providing
such financing from its own  resources,  or from an affiliate,  for the interest
and other borrowing costs of the Distributor's unreimbursed expenses incurred in
rendering  distribution  assistance and  administrative  support services to the
Fund;  and (iv)  paying  other  direct  distribution  costs,  including  without
limitation the costs of sales  literature,  advertising and prospectuses  (other
than  those  prospectuses  furnished  to current  holders  of the Fund's  shares
("Shareholders")) and state "blue sky" registration expenses.

     (b) Payments to Recipients. The Distributor is authorized under the Plan to
pay  Recipients  (1)  distribution  assistance  fees for rendering  distribution
assistance  in  connection  with the sale of Shares  and/or (2) service fees for
rendering administrative support services with respect to Accounts.  However, no
such  payments  shall be made to any  Recipient  for any  period  in  which  its
Qualified  Holdings  do not  equal or  exceed,  at the end of such  period,  the
minimum amount ("Minimum Qualified Holdings"), if any, that may be set from time
to time by a majority of the Independent Trustees.  All fee payments made by the
Distributor  hereunder  are  subject  to  reduction  or  chargeback  so that the
aggregate  service fee payments  and Advance  Service Fee Payments do not exceed
the limits on payments to  Recipients  that are, or may be,  imposed by the NASD
Conduct Rules. The Distributor may make Plan payments to any "affiliated person"
(as  defined  in the 1940  Act) of the  Distributor  if such  affiliated  person
qualifies as a Recipient or retain such payments if the Distributor qualifies as
a Recipient.

     In  consideration of the services  provided by Recipients,  the Distributor
may make the following payments to Recipients:

     (i) Service  Fee.  In  consideration  of  administrative  support  services
provided by a Recipient, the Distributor shall make service fee payments to that
Recipient  quarterly  or at such other  interval  as deemed  appropriate  by the
Distributor,  within forty-five (45) days of the end of each calendar quarter or
other period,  at a rate not to exceed 0.0625% (0.25% on an annual basis) of the
average  during the period of the aggregate net asset value of Shares,  computed
as of the close of each  business day,  constituting  Qualified  Holdings  owned
beneficially  or of record by the  Recipient or by its Customers for a period of
more than the minimum period (the "Minimum Holding Period"), if any, that may be
set from time to time by a majority of the Independent Trustees.

     Alternatively,  the Distributor may, at its sole option, make the following
service fee payments to any Recipient, within forty-five (45) days of the end of
each calendar  quarter or at such other  interval as deemed  appropriate  by the
Distributor: (A) "Advance Service Fee Payments" at a rate not to exceed 0.25% of
the average  during the calendar  quarter or other period of the  aggregate  net
asset  value of Shares,  computed  as of the close of  business  on the day such
Shares are sold,  constituting Qualified Holdings,  sold by the Recipient during
that  period  and owned  beneficially  or of record by the  Recipient  or by its
Customers,  plus (B) service fee payments at a rate not to exceed 0.0625% (0.25%
on an annual basis) of the average  during the period of the aggregate net asset
value of Shares,  computed as of the close of each  business  day,  constituting
Qualified  Holdings owned  beneficially  or of record by the Recipient or by its
Customers  for a period  of more  than one (1) year.  In the  event  Shares  are
redeemed less than one year after the date such Shares were sold,  the Recipient
is obligated to and will repay the  Distributor  on demand a pro rata portion of
such Advance  Service Fee  Payments,  based on the ratio of the time such Shares
were held to one (1) year.

     The  administrative  support  services  to be  rendered  by  Recipients  in
connection  with the  Accounts  may  include,  but shall not be limited  to, the
following:  answering  routine inquiries  concerning the Fund,  assisting in the
establishment  and  maintenance  of  accounts  or  sub-accounts  in the Fund and
processing Share redemption transactions, making the Fund's investment plans and
dividend  payment options  available,  and providing such other  information and
services  in  connection  with the  rendering  of personal  services  and/or the
maintenance of Accounts, as the Distributor or the Fund may reasonably request.

     (ii)  Distribution  Assistance  Fee  (Asset-Based  Sales Charge)  Payments.
Irrespective of whichever  alternative  method of making service fee payments to
Recipients  is selected by the  Distributor,  the  Distributor  may, at its sole
option, make distribution  assistance fee payments to each Recipient  quarterly,
or at such other  interval  as deemed  appropriate  by the  Distributor,  within
forty-five (45) days after the end of each calendar quarter or other period,  at
a rate not to exceed  0.0625%  (0.25% on an annual basis) of the average  during
the period of the aggregate  net asset value of Shares  computed as of the close
of each business day constituting  Qualified  Holdings owned  beneficially or of
record by the Recipient or its Customers for a period of more than one (1) year.
Alternatively,  at its  sole  option,  the  Distributor  may  make  distribution
assistance fee payments to a Recipient  quarterly,  at the rate described above,
on Shares constituting Qualified Holdings owned beneficially or of record by the
Recipient or its Customers without regard to the 1-year holding period described
above.  Distribution  assistance  fee payments  shall be made only to Recipients
that  are  registered  with  the  SEC  as a  broker-dealer  or are  exempt  from
registration.

     The distribution  assistance to be rendered by the Recipients in connection
with the sale of Shares may include, but shall not be limited to, the following:
distributing  sales  literature and  prospectuses  other than those furnished to
current Shareholders, providing compensation to and paying expenses of personnel
of the Recipient who support the  distribution  of Shares by the Recipient,  and
providing  such  other   information   and  services  in  connection   with  the
distribution of Shares as the Distributor or the Fund may reasonably request.

     (c) A majority of the Independent  Trustees may at any time or from time to
time (i) increase or decrease the rate of fees to be paid to the  Distributor or
to any  Recipient,  but not to exceed  the rates set forth  above,  and/or  (ii)
direct the Distributor to increase or decrease any Minimum  Holding Period,  any
maximum period set by a majority of the  Independent  Trustees during which fees
will be paid on Shares constituting  Qualified Holdings owned beneficially or of
record by a Recipient or by its Customers  (the "Maximum  Holding  Period"),  or
Minimum Qualified  Holdings.  The Distributor shall notify all Recipients of any
Minimum  Qualified  Holdings,  Maximum Holding Period and Minimum Holding Period
that  are  established  and  the  rate  of  payments  hereunder   applicable  to
Recipients,  and shall provide each  Recipient with written notice within thirty
(30) days after any change in these provisions.  Inclusion of such provisions or
a change in such  provisions  in a supplement or amendment to or revision of the
prospectus of the Fund shall constitute sufficient notice.

     (d) The Service Fee and the Asset-Based  Sales Charge on Shares are subject
to reduction or elimination under the limits to which the Distributor is, or may
become, subject under the NASD Conduct Rules.

     (e)  Under  the  Plan,  payments  may  also be made to  Recipients:  (i) by
OppenheimerFunds, Inc. ("OFI") from its own resources (which may include profits
derived  from  the  advisory  fee it  receives  from the  Fund),  or (ii) by the
Distributor  (a subsidiary of OFI),  from its own  resources,  from  Asset-Based
Sales Charge payments or from the proceeds of its borrowings, in either case, in
the discretion of OFI or the Distributor, respectively.

     (f)   Recipients  are  intended  to  have  certain  rights  as  third-party
beneficiaries  under this Plan,  subject to the  limitations set forth below. It
may be  presumed  that a  Recipient  has  provided  distribution  assistance  or
administrative  support services qualifying for payment under the Plan if it has
Qualified  Holdings of Shares that  entitle it to  payments  under the Plan.  If
either the Distributor or the Board believe that,  notwithstanding  the level of
Qualified Holdings,  a Recipient may not be rendering  appropriate  distribution
assistance  in  connection  with the sale of  Shares or  administrative  support
services for Accounts, then the Distributor,  at the request of the Board, shall
require the Recipient to provide a written report or other information to verify
that said  Recipient is providing  appropriate  distribution  assistance  and/or
services in this regard.  If the  Distributor  or the Board of Trustees still is
not  satisfied  after the receipt of such  report,  either may take  appropriate
steps to  terminate  the  Recipient's  status  as a  Recipient  under  the Plan,
whereupon such Recipient's rights as a third-party  beneficiary  hereunder shall
terminate.   Additionally,   in  their  discretion  a  majority  of  the  Fund's
Independent  Trustees at any time may remove any broker,  dealer,  bank or other
person or entity as a Recipient, whereupon such person's or entity's rights as a
third-party  beneficiary  hereof  shall  terminate.  Notwithstanding  any  other
provision of this Plan,  this Plan does not obligate or in any way make the Fund
liable  to make any  payment  whatsoever  to any  person or  entity  other  than
directly  to the  Distributor.  The  Distributor  has no  obligation  to pay any
Service Fees or Distribution Assistance Fees to any Recipient if the Distributor
has not received  payment of Service Fees or  Distribution  Assistance Fees from
the Fund.

     4. Selection and Nomination of Trustees.  While this Plan is in effect, the
selection  and  nomination  of  persons to be  Trustees  of the Fund who are not
"interested persons" of the Fund  ("Disinterested  Trustees") shall be committed
to the discretion of the incumbent Disinterested Trustees.  Nothing herein shall
prevent the incumbent  Disinterested  Trustees from  soliciting the views or the
involvement  of  others in such  selection  or  nomination  as long as the final
decision on any such  selection and  nomination is approved by a majority of the
incumbent Disinterested Trustees.

     5. Reports.  While this Plan is in effect,  the Treasurer of the Fund shall
provide written reports to the Fund's Board for its review, detailing the amount
of all payments made under this Plan and the purpose for which the payments were
made.  The reports  shall be  provided  quarterly,  and shall state  whether all
provisions of Section 3 of this Plan have been complied with.

     6.  Related  Agreements.  Any  agreement  related  to this Plan shall be in
writing and shall  provide  that:  (i) such  agreement  may be terminated at any
time, without payment of any penalty, by a vote of a majority of the Independent
Trustees  or by a vote of the  holders of a  "majority"  (as defined in the 1940
Act) of the Fund's  outstanding  voting  Class N shares;  (ii) such  termination
shall be on not more than sixty days'  written  notice to any other party to the
agreement;  (iii) such agreement shall  automatically  terminate in the event of
its "assignment" (as defined in the 1940 Act); (iv) such agreement shall go into
effect when approved by a vote of the Board and its Independent Trustees cast in
person at a meeting called for the purpose of voting on such agreement;  and (v)
such agreement shall,  unless terminated as herein provided,  continue in effect
from year to year only so long as such  continuance is specifically  approved at
least  annually  by a vote of the Board  and its  Independent  Trustees  cast in
person at a meeting called for the purpose of voting on such continuance.

     7. Effectiveness, Continuation, Termination and Amendment. This Amended and
Restated  Plan has been  approved  by a vote of the  Board  and its  Independent
Trustees and replaces the Fund's  prior  Amended and Restated  Distribution  and
Service Plan and Agreement for Class C shares.  Unless terminated as hereinafter
provided,  it shall  continue in effect until renewed by the Board in accordance
with the Rule and  thereafter  from year to year or as the  Board may  otherwise
determine but only so long as such continuance is specifically approved at least
annually by a vote of the Board and its Independent Trustees cast in person at a
meeting called for the purpose of voting on such continuance.

     This Plan may not be amended to increase  materially the amount of payments
to be made under this Plan,  without  approval of the Class N Shareholders  at a
meeting called for that purpose and all material  amendments must be approved by
a vote of the Board and of the Independent Trustees.

     This  Plan may be  terminated  at any time by a vote of a  majority  of the
Independent  Trustees or by the vote of the holders of a "majority"  (as defined
in the 1940 Act) of the Fund's  outstanding  Class N voting shares. In the event
of such  termination,  the Board and its  Independent  Trustees shall  determine
whether the  Distributor  shall be entitled to payment from the Fund of all or a
portion of the Service  Fee and/or the  Asset-Based  Sales  Charge in respect of
Shares sold prior to the effective date of such termination.

     8.  Disclaimer  of  Shareholder  and  Trustee  Liability.  The  Distributor
understands  that the  obligations  of the Fund under this Plan are not  binding
upon any Trustee or shareholder of the Fund  personally,  but bind only the Fund
and the Fund's  property.  The Distributor  represents that it has notice of the
provisions of the Declaration of Trust of the Fund  disclaiming  shareholder and
Trustee liability for acts or obligations of the Fund.

                                Oppenheimer Capital Appreciation Fund



                                 By: /s/ Robert G. Zack
                                        Robert G. Zack, Secretary


                                OppenheimerFunds Distributor, Inc.



                                 By: /s/ James H. Ruff
                                         James H. Ruff, President

EX-24

                               POWER OF ATTORNEY


     KNOW  ALL MEN BY THESE  PRESENTS,  that the  undersigned,  constitutes  and
appoints Phillip S. Gillespie, Mitchell J. Lindauer and Kathleen T. Ives each as
my true and lawful  attorney-in-fact  and agent, with full power of substitution
and  resubstitution,  for me and in my  capacity  as a  Trustee/Director  and/or
Officer of Oppenheimer  Absolute Return Fund,  Oppenheimer  AMT-Free Municipals,
Oppenheimer AMT-Free New York Municipals, Oppenheimer Balanced Fund, Oppenheimer
Baring  China  Fund,  Oppenheimer  Baring  Japan  Fund,  Oppenheimer  California
Municipal Fund,  Oppenheimer Capital Appreciation Fund,  Oppenheimer  Developing
Markets Fund,  Oppenheimer  Discovery  Fund,  Oppenheimer  Dividend Growth Fund,
Oppenheimer  Emerging  Growth  Fund,  Oppenheimer  Emerging  Technologies  Fund,
Oppenheimer   Enterprise  Fund,  Oppenheimer  Global  Fund,  Oppenheimer  Global
Opportunities  Fund,  Oppenheimer Gold & Special Minerals Fund,  Oppenheimer
Growth  Fund,   Oppenheimer   Institutional   Money  Market  Fund,   Oppenheimer
International   Diversified  Fund,   Oppenheimer   International   Growth  Fund,
Oppenheimer  International Large-Cap Core Fund, Oppenheimer  International Small
Company Fund,  Oppenheimer  International  Value Fund,  Oppenheimer Limited Term
California  Municipal Fund,  Oppenheimer  Money Market Fund,  Inc.,  Oppenheimer
Multi-State  Municipal  Trust (on  behalf of its series  Oppenheimer  New Jersey
Municipal  Fund,   Oppenheimer   Pennsylvania  Municipal  Fund  and  Oppenheimer
Rochester National  Municipals),  Oppenheimer Portfolio Series (on behalf of its
series Active Allocation Fund,  Aggressive Investor Fund,  Conservative Investor
Fund and Moderate  Investor  Fund),  Oppenheimer  Real Estate Fund,  Oppenheimer
Rochester Arizona Municipal Fund, Oppenheimer Rochester Maryland Municipal Fund,
Oppenheimer  Rochester   Massachusetts  Municipal  Fund,  Oppenheimer  Rochester
Michigan  Municipal  Fund,   Oppenheimer  Rochester  Minnesota  Municipal  Fund,
Oppenheimer Rochester North Carolina Municipal Fund,  Oppenheimer Rochester Ohio
Municipal Fund,  Oppenheimer  Rochester  Virginia  Municipal  Fund,  Oppenheimer
Select  Value  Fund,  Oppenheimer  Series  Fund,  Inc.  (on behalf of its series
Oppenheimer Value Fund),  Oppenheimer SMA Core Bond Fund, Oppenheimer SMA Global
Fund, Oppenheimer SMA International Bond Fund, Oppenheimer Transition 2010 Fund,
Oppenheimer  Transition 2015 Fund, Oppenheimer Transition 2020 Fund, Oppenheimer
Transition 2030 Fund,  Oppenheimer Tremont Market Neutral Fund LLC,  Oppenheimer
Tremont  Opportunity  Fund LLC,  OFI Tremont  Core  Strategies  Hedge Fund,  OFI
Tremont Market Neutral Hedge Fund and Oppenheimer U.S. Government Trust, to sign
on my behalf any and all Registration  Statements  (including any post-effective
amendments to  Registration  Statements)  under the  Securities  Act of 1933, as
amended,  and the Investment Company Act of 1940, as amended, and any amendments
and supplements  thereto,  and any proxy statements,  Forms 3, 4 and 5, or other
documents  in  connection  therewith,  and to file the same,  with all  exhibits
thereto, and other documents in connection  therewith,  with the U.S. Securities
and Exchange Commission,  granting unto said  attorneys-in-fact  and agents, and
each of them,  full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,  as fully as
to all intents and purposes as I might or could do in person,  hereby  ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, may
lawfully do or cause to be done by virtue hereof.

Dated this 11th day of October 2006.


/s/ Matthew P. Fink                             /s/ Kenneth A. Randall
Matthew P. Fink                                     Kenneth A. Randall



/s/  Robert G. Galli                           /s/ Russell S. Reynolds, Jr.
Robert G. Galli                                    Russell S. Reynolds, Jr.



/s/ Philip A. Griffiths                        /s/ Joseph M. Wikler
Phillip A. Griffiths                               Joseph M. Wikler


/s/ Mary F. Miller                             /s/ Peter I. Wold
Mary F. Miller                                     Peter placeI. Wold


/s/ Joel W. Motley                             /s/ Brian F. Wruble
Joel W. Motley                                     Brian F. Wruble


/s/ John V. Murphy                            /s/ Clayton K. Yeutter
John V. Murphy                                    Clayton K. Yeutter




Witness:      /s/ Phillip S. Gillespie
              Phillip S. Gillespie, Assistant Secretary

EX-24

                                                  POWER OF ATTORNEY


     KNOW  ALL MEN BY THESE  PRESENTS,  that the  undersigned,  constitutes  and
appoints Phillip S. Gillespie, Mitchell J. Lindauer and Kathleen T. Ives each as
my true and lawful  attorney-in-fact  and agent, with full power of substitution
and  resubstitution,  for me and in my  capacity  as a  Trustee/Director  and/or
Officer of Oppenheimer  Absolute Return Fund,  Oppenheimer  AMT-Free Municipals,
Oppenheimer AMT-Free New York Municipals, Oppenheimer Balanced Fund, Oppenheimer
Baring  China  Fund,  Oppenheimer  Baring  Japan  Fund,  Oppenheimer  California
Municipal Fund,  Oppenheimer Capital Appreciation Fund,  Oppenheimer  Developing
Markets Fund,  Oppenheimer  Discovery  Fund,  Oppenheimer  Dividend Growth Fund,
Oppenheimer  Emerging  Growth  Fund,  Oppenheimer  Emerging  Technologies  Fund,
Oppenheimer   Enterprise  Fund,  Oppenheimer  Global  Fund,  Oppenheimer  Global
Opportunities  Fund,  Oppenheimer Gold & Special Minerals Fund,  Oppenheimer
Growth  Fund,   Oppenheimer   Institutional   Money  Market  Fund,   Oppenheimer
International   Diversified  Fund,   Oppenheimer   International   Growth  Fund,
Oppenheimer  International Large-Cap Core Fund, Oppenheimer  International Small
Company Fund,  Oppenheimer  International  Value Fund,  Oppenheimer Limited Term
California  Municipal Fund,  Oppenheimer  Money Market Fund,  Inc.,  Oppenheimer
Multi-State  Municipal  Trust (on  behalf of its series  Oppenheimer  New Jersey
Municipal  Fund,   Oppenheimer   Pennsylvania  Municipal  Fund  and  Oppenheimer
Rochester National  Municipals),  Oppenheimer Portfolio Series (on behalf of its
series Active Allocation Fund,  Aggressive Investor Fund,  Conservative Investor
Fund and Moderate  Investor  Fund),  Oppenheimer  Real Estate Fund,  Oppenheimer
Rochester Arizona Municipal Fund, Oppenheimer Rochester Maryland Municipal Fund,
Oppenheimer  Rochester   Massachusetts  Municipal  Fund,  Oppenheimer  Rochester
Michigan  Municipal  Fund,   Oppenheimer  Rochester  Minnesota  Municipal  Fund,
Oppenheimer Rochester North Carolina Municipal Fund,  Oppenheimer Rochester Ohio
Municipal Fund,  Oppenheimer  Rochester  Virginia  Municipal  Fund,  Oppenheimer
Select  Value  Fund,  Oppenheimer  Series  Fund,  Inc.  (on behalf of its series
Oppenheimer Value Fund),  Oppenheimer SMA Core Bond Fund, Oppenheimer SMA Global
Fund, Oppenheimer SMA International Bond Fund, Oppenheimer Transition 2010 Fund,
Oppenheimer  Transition 2015 Fund, Oppenheimer Transition 2020 Fund, Oppenheimer
Transition 2030 Fund,  Oppenheimer Tremont Market Neutral Fund LLC,  Oppenheimer
Tremont  Opportunity  Fund LLC,  OFI Tremont  Core  Strategies  Hedge Fund,  OFI
Tremont Market Neutral Hedge Fund and Oppenheimer U.S. Government Trust, to sign
on my behalf any and all Registration  Statements  (including any post-effective
amendments to  Registration  Statements)  under the  Securities  Act of 1933, as
amended,  and the Investment Company Act of 1940, as amended, and any amendments
and supplements  thereto,  and any proxy statements,  Forms 3, 4 and 5, or other
documents  in  connection  therewith,  and to file the same,  with all  exhibits
thereto, and other documents in connection  therewith,  with the U.S. Securities
and Exchange Commission,  granting unto said  attorneys-in-fact  and agents, and
each of them,  full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,  as fully as
to all intents and purposes as I might or could do in person,  hereby  ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, may
lawfully do or cause to be done by virtue hereof.

Dated this 11th day of October 2006.


/s/ Brian W. Wixted
Brian W. Wixted




Witness:      /s/ Phillip S. Gillespie
              Phillip S. Gillespie, Assistant Secretary