N1A/PSP/SAI/PTC-CAPITAL APPRECIATION FUND-485A

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CNBXFkrG+V7QeHNCrYxOUpp08sIpADgd/udYIPqkvMQegWRY2/hdf2rMW4ZfHBdg 1fy5KgsdYgv7QoVUTtg1dw== 0000728889-02-000838.txt : 20021028 0000728889-02-000838.hdr.sgml : 20021028 20021028150225 ACCESSION NUMBER: 0000728889-02-000838 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20021028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER CAPITAL APPRECIATION FUND CENTRAL INDEX KEY: 0000319767 IRS NUMBER: 133054122 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-69719 FILM NUMBER: 02799832 BUSINESS ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2123230200 MAIL ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER TARGET FUND INC DATE OF NAME CHANGE: 19870616 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER TARGET FUND DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER CAPITAL APPRECIATION FUND CENTRAL INDEX KEY: 0000319767 IRS NUMBER: 133054122 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03105 FILM NUMBER: 02799833 BUSINESS ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2123230200 MAIL ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER TARGET FUND INC DATE OF NAME CHANGE: 19870616 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER TARGET FUND DATE OF NAME CHANGE: 19920703 485APOS 1 n1apspsaiptc485a1002.htm N1A,PSP,SAI AND PART C-485A CAP APPREC. N1A/PSP/SAI/PTC-CAPITAL APPRECIATION FUND-485A

                                                                                           Registration No. 2-69719
                                                                                                  File No. 811-3105

                                         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. 45                                                                        /X/


                                                       and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
      ACT OF 1940                                                                                               /X/


         Amendment No. 38                                                                                       /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)

                                                    303-768-3200
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                                                    (Registrant's Telephone Number)


                                                         Robert G. Zack, Esq.
                                                        OppenheimerFunds, Inc.
                                             498 Seventh Avenue, New York, New York 10018

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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)
      /   /   On __________, pursuant to paragraph (b)
      /   /   60 days after filing, pursuant to paragraph (a)(1)
      / X /   On December 27, 2002, 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 December 27, 2002

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

ABOUT YOUR ACCOUNT

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

Special Investor Services
AccountLink
PhoneLink
OppenheimerFunds Internet Website
Retirement Plans

How to Sell Shares
By Mail
By Telephone

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

ABOUT THE FUND

The Fund's Investment Objective and 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. The Fund currently focuses mainly on mid-cap and large-cap domestic
companies, but buys foreign stocks as well.

HOW DOES THE MANAGER DECIDE WHAT SECURITIES TO BUY OR SELL? The Fund's portfolio manager looks for growth
companies that she believes have reasonably priced stock in relation to overall stock market valuations. The
portfolio 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 portfolio manager
looks for:
o Companies with above-average growth potential,
o Companies with increasing earnings momentum and a history of positive earnings growth,
o Stocks with reasonable valuations relative to their growth potential,
o Companies with the potential for positive earnings surprises,
o Growth rates that the portfolio manager believes are sustainable over time.

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 investment
Manager, OppenheimerFunds, Inc., 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 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.

RISKS OF FOREIGN INVESTING. 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.

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.

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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.
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The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the Fund, by showing changes in the
Fund's performance (for its Class A shares) from year to year for the last 10 calendar years and by showing how
the average annual total returns of the Fund's shares, both before and after taxes, compare to those of a
broad-based market index. The after-tax returns are shown for Class A shares only and are calculated using the
historical highest individual federal marginal income tax rates in effect during the periods shown, and do not
reflect the impact of state or local taxes. The after-tax returns for the other classes of shares will vary. In
certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be
higher than the other return figures for the same period. A higher after-tax return results when a capital loss
occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. The after-tax
returns are calculated based on certain assumptions mandated by regulation and your actual after-tax returns may
differ from those shown, depending on your individual tax situation. The after-tax returns set forth below are
not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or
IRAs or to institutional investors not subject to tax. The Fund's past investment performance, before and after
taxes, is not necessarily an indication of how the Fund will perform in the future.

Annual Total Returns (Class A) (as of 12/31 each year)

[See appendix to prospectus for data in bar chart showing annual total returns]

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

For the period from 1/1/02 through 9/30/02, the cumulative return (not annualized) before taxes for Class A
shares was -30.89%. 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).

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

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

Class A Shares (inception 1/22/81)
Return Before Taxes -17.71% 12.58% 13.64%
Return After Taxes on Distributions -18.10% 10.22% 11.13%
Return After Taxes on Distributions and Sale of Fund -10.40% 9.63% 10.51%
Shares

Samp;P 500 Index (reflects no deduction for -11.88% 10.70% 12.93%1
fees, expenses or taxes)

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

Class B Shares (inception 11/1/95) -17.58% 12.77% 15.11%

Class C Shares (inception 12/1/93) -14.19% 13.02% 15.23%

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

Class Y Shares (inception 11/3/97) -12.41% 10.58% N/A

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

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

The Fund's average annual total returns include the applicable sales charge: for Class A, the current maximum
initial sales charge of 5.75%; for Class B, the contingent deferred sales charges of 5% (1-year) and 2%
(5-years); and for Class C, the 1% contingent deferred sales charge for the 1-year period. Because Class B shares
convert to Class A shares 72 months after purchase, Class B "life-of-class" performance does not include the
contingent deferred sales charge and uses Class A performance for the period after the conversion. There is no
sales charge for Class Y shares. Performance information for Class N shares is not included in the table above
since such shares were first available for sale on March 31, 2001.

The returns measure the performance of a hypothetical account and assume that all dividends and capital gains
distributions have been reinvested in additional shares. The performance of the Fund's Class A shares is compared
to the Samp;P 500 Index, an unmanaged index of equity securities. The index performance includes the reinvestment of
income but does not reflect transaction costs. The Fund's investments may vary from securities in the index.
Fees and Expenses of the Fund

The Fund pays a variety of expenses directly for management of its assets, administration, distribution of its
shares and other services. Those expenses are subtracted from the Fund's assets to calculate the Fund's net asset
values per share. All shareholders therefore pay those expenses indirectly. Shareholders pay other expenses
directly, such as sales charges and account transaction charges. 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 numbers below are based
on the Fund's expenses during its fiscal year ended August 31, 2002.

Shareholder Fees (charges paid directly from your investment):

Class A Shares Class B Shares Class C Class N4 Shares Class Y Shares
Shares
-------------------------------- --------------- --------------- -------------- ---------------- ----------------
-------------------------------- --------------- --------------- -------------- ---------------- ----------------
Maximum Sales Charge (Load) on
purchases 5.75% None None None None
(as % of offering price)
-------------------------------- --------------- --------------- -------------- ---------------- ----------------
-------------------------------- --------------- --------------- -------------- ---------------- ----------------
Maximum Deferred Sales Charge
(Load) (as % of the lower of
the original offering price or None1 5%2 1%3 1%4 None
redemption proceeds)
--------------------------------

1. A contingent deferred sales charge may apply to redemptions of investments of $1 million or more ($500,000
for certain retirement plan accounts) of Class A shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred sales charge declines to 1% in
the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of retirement plan's first purchase of Class N shares.

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

Class A Class B Class C Class N Class Y
Shares Shares Shares Shares Shares
-------------------------------------------
-------------------------------------------
Management Fees 0.58% 0.58% 0.58% 0.58% 0.58%
-------------------------------------------
-------------------------------------------

Distribution and/or Service (12b-1) Fees
0.24% 1.00% 1.00% 0.50% N/A

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

Other Expenses 0.40% 0.41% 0.36% 0.38% 0.31%

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

Total Annual Operating Expenses 1.22% 1.99% 1.94% 1.46% 0.89%

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

Expenses may vary in future years. "Other Expenses" include transfer agent fees, custodial fees, and accounting
and legal expenses the Fund pays. The Transfer Agent has voluntarily undertaken to the Fund to limit the
transfer agent fees to 0.25% of average daily net assets per fiscal year for Class Y shares and 0.35% of average
daily net assets per fiscal year for all other classes. That undertaking was effective October 1, 2001 (January
1, 2001 for Class Y), was pro-rated for the remainder of the fiscal year ending after that date, and may be
amended or withdrawn at any time. For the Fund's fiscal year ending August 31, 2002, the transfer agent fees did
not exceed the expense limitation described above.

Effective November 1, 2002, the transfer agent will limit its fees to 0.35% of average daily net assets per
fiscal year for Class Y. Had that reduced waiver been in effect during the past fiscal year for Class Y shares,
the actual "Other Expenses" and "Total Annual Operating Expenses" as percentages of daily net assets would not
have changed.

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

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

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

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

Class A Shares $692 $940 $1,207 $1,967

Class B Shares $702 $924 $1,273 $1,9361

Class C Shares $297 $609 $1,047 $2,264

Class N Shares $249 $462 $797 $1,746

Class Y Shares $91 $284 $493 $1,096

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

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

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

Class A Shares $692 $940 $1,207 $1,967

Class B Shares $202 $624 $1,073 $1,9361

Class C Shares $197 $609 $1,047 $2,264

Class N Shares $149 $462 $797 $1,746

Class Y Shares $91 $284 $493 $1,096

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

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

1. Class B expenses for years 7 through 10 are based on Class A expenses, since Class B shares
automatically convert to Class A after 6 years.

About the Fund's Investments

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

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

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 mid-cap and 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 assets
invested in foreign securities, although it has the ability to invest in them without limit.

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
federal 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.

o Hedging. The Fund can buy and sell futures contracts, put and call options, and forward contracts. These
are all referred to as "hedging instruments." The Fund does not currently use hedging extensively nor
for speculative purposes. It has limits on its use of hedging instruments and is not required to use
them in seeking its objective.

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

There are also special risks in particular hedging strategies. Options trading involves the payment of
premiums and can increase portfolio turnover. If the Manager used a hedging instrument at the wrong time
or judged market conditions incorrectly, the strategy could reduce the Fund's return.

Temporary Defensive and Interim Investments. In times of unstable adverse market or economic conditions, the Fund
can invest up to 100% of its assets in temporary defensive investments. 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.

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

Portfolio Manager. The portfolio manager of the Fund is Jane Putnam. She has been principally responsible for the
day-to-day management of the Fund's portfolio since July 1995 and is a Vice President of the Fund and
the Manager. Before joining the Manager in May 1994 she was a portfolio manager and equity research
analyst for Chemical Bank.

Advisory Fees. Under the investment advisory agreement, the Fund pays the Manager an advisory fee at an annual
rate that declines as the Fund's assets grow: 0.75% of the first $200 million of aggregate net assets;
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
$4.0 billion; and 0.52% of aggregate net assets over $8.5 billion. The Fund's management fee for its
last fiscal year ended August 31, 2002 was 0.58% of average annual net assets for each class of shares.

ABOUT your account

How to Buy Shares

HOW DO YOU 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.
Buying Shares Through the Distributor. Complete an OppenheimerFunds New Account Application and return it with a
check payable to "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217.
If you don't list a dealer on the application, the Distributor will act as your agent in buying the
shares. However, we recommend that you discuss your investment with a financial advisor before you make
a purchase to be sure that the Fund is appropriate for you.

Paying by Federal Funds Wire. Shares purchased through the Distributor may be paid for by Federal Funds
wire. The minimum investment is $2,500. Before sending a wire, call the Distributor's Wire Department at
1.800.225.5677 to notify the Distributor of the wire and to receive further instructions.
Buying Shares Through OppenheimerFunds AccountLink. With AccountLink, you pay for shares by electronic funds
transfers from your bank account. Shares are purchased for your account by a transfer of money from your
bank account through the Automated Clearing House (ACH) system. You can provide those instructions
automatically, under an Asset Builder Plan, described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. Please refer to "AccountLink," below for more details.

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

HOW MUCH MUST YOU INVEST? You can buy Fund shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $25 (effective November 1, 2002, the additional purchase amount is
$50). There are reduced minimum investments under special investment plans.
With Asset Builder Plans, 403(b) plans, Automatic Exchange Plans and military allotment plans, you can make
initial and subsequent investments for as little as $25. o The minimum additional investment in
any such plan accounts established on or after November 1, 2002 is $50. The minimum additional
investment to such plan accounts that were established prior to November 1, 2002 will remain $25. To
establish a new Asset Builder Plan account on or after November 1, 2002, you must first invest at least
$500.
Under retirement plans, such as IRAs, pension and profit-sharing plans and 401(k) plans, you can start your
account with as little as $250. If your IRA is started as an Asset Builder Plan, the $25 minimum
applies. Additional purchases may be for as little as o $25. To establish any type of IRA account on
or after November 1, 2002, the minimum investment is $500. The minimum additional investment to any type
of IRA account after November 1, 2002 is $50.

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

AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price which is the net asset value per share
plus any initial sales charge that applies. The offering price that applies to a purchase order is based on the
next calculation of the net asset value per share that is made after the Distributor receives the purchase order
at its offices in Colorado, or after any agent appointed by the Distributor receives the order.

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

The net asset value per share is determined by dividing the value of the Fund's net assets attributable
to a class by the number of shares of that class that are outstanding. To determine net asset value, the
Fund's Board of Trustees has established procedures to value the Fund's securities, in general, based on
market value. The Board has adopted special procedures for valuing illiquid and restricted securities
and obligations for which market values cannot be readily obtained. Because some foreign securities
trade in markets and on exchanges that operate on weekends and U.S. holidays, the values of some of the
Fund's foreign investments may change on days when investors cannot buy or redeem Fund shares.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix 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 the special conditions apply.

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 Concession As
Charge As a Charge As a
Amount of Purchase Percentage of Percentage of Net Percentage of
Offering Price Amount Invested Offering Price

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

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

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

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

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

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

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

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

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

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

Years Since Beginning of Month in 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%
- ----------------------------------------------------------- --------------------------------------------------------
--------------------------------------------------------- --------------------------------------------------------

After 6 None

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

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

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

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

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

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

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

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

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

DISTRIBUTION AND SERVICE (12b-1) PLANS.

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 quarterly for providing personal service and maintenance
of accounts of their customers that hold Class A shares. With respect to Class A shares subject to a
Class A contingent deferred sales charge purchased by grandfathered retirement accounts, the Distributor
pays the 0.25% service fee to dealers in advance for the first year after the shares are sold by the
dealer. After the shares have been held for a year, the Distributor pays the service fee to dealers on a
quarterly basis.

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

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

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

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

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

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

Special Investor Services

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

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

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

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that enables shareholders to perform a
number of account transactions automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification Number (PIN), by calling the
PhoneLink number, 1.800.225.5677.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by phone, by calling 1.800.225.5677. You
must have established AccountLink privileges to link your bank account with the Fund to pay for these
purchases.

Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described below, you can exchange shares
automatically by phone from your Fund account to another OppenheimerFunds account you have already
established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling the PhoneLink number and the Fund
will send the proceeds directly to your AccountLink bank account. Please refer to "How to Sell Shares,"
below for details.

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

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

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

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

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

as schools, hospitals and charitable organizations.
401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for businesses and self-employed individuals.
Please call the Distributor for OppenheimerFunds retirement plan documents, which include applications
and important plan information.

How to Sell Shares

You can sell (redeem) some or all of your shares on any regular business day. Your shares will be sold at the
next net asset value calculated after your order is received in proper form (which means that it must comply with
the procedures described below) and is accepted by the Transfer Agent. The Fund lets you sell your shares by
writing a letter 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:
a U.S. bank, trust company, credit union or savings association,
a foreign bank that has a U.S. correspondent bank,
a U.S. registered dealer or broker in securities, municipal securities or government securities, or
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.

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 New York Stock Exchange that day, which is normally 4:00 P.M.,
but may be earlier on some days. You may not redeem shares held in an OppenheimerFunds retirement plan account or
under a share certificate by telephone.
o To redeem shares through a service representative or automatically on PhoneLink, call 1.800.225.5677
Whichever method you use, you may have a check sent to the address on the account statement, or, if you

have linked your Fund account to your bank account on AccountLink, you may have the proceeds sent to that bank
account.

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

Telephone Redemptions Through AccountLink. 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.

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

HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase shares subject to a Class A, Class B,
Class C or Class N contingent deferred sales charge and redeem any of those shares during the applicable
holding period for the class of shares, the contingent deferred sales charge will be deducted from the
redemption proceeds (unless you are eligible for a waiver of that sales charge based on the categories
listed in Appendix 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:
the amount of your account value represented by an increase in net asset value over the initial purchase
price,
shares purchased by the reinvestment of dividends or capital gains distributions, or
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

Shares of the Fund may be exchanged for shares of certain Oppenheimer funds at net asset value per share at the
time of exchange, without sales charge. Shares of the Fund can be purchased by exchange of shares of other
Oppenheimer funds on the same basis. To exchange shares, you must meet several conditions:

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

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

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

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

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

ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you should be aware of:
Shares are normally redeemed from one fund and purchased from the other fund in the exchange transaction on
the same regular business day on which the Transfer Agent receives an exchange request that conforms to
the policies described above. It must be received by the close of The New York Stock Exchange that day,
which is normally 4:00 P.M. but may be earlier on some days. However, either fund may delay the purchase
of shares of the fund you are exchanging into up to seven days if it determines it would be
disadvantaged by the same day exchange.

The interests of the Fund's long-term shareholders and its ability to manage its investments may be
adversely affected when its shares are repeatedly bought and sold in response to short-term market
fluctuations--also known as "market timing." When large dollar amounts are involved, the Fund may have
difficulty implementing long-term investment strategies, because it cannot predict how much cash it will
have to invest. Market timing also may force the Fund to sell portfolio securities at disadvantageous
times to raise the cash needed to buy a market timer's Fund shares. These factors may hurt the Fund's
performance and its shareholders. When the Manager believes frequent trading would have a disruptive
effect on the Fund's ability to manage its investments, the Manager and the Fund may reject purchase
orders and exchanges into the Fund by any person, group or account that the Manager believes to be a
market timer.

o The Fund may amend, suspend or terminate the exchange privilege at any time. The Fund will provide you
notice whenever it is required to do so by applicable law, but it may impose changes at any time for
emergency purposes.

o If the Transfer Agent cannot exchange all the shares you request because of a restriction cited above,
only the shares eligible for exchange will be exchanged.

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling and exchanging shares is contained
in the Statement of Additional Information.
Effective September 27, 2002, a $12 annual fee is charged on any account valued at less than $500. See the
Statement of Additional Information for circumstances when this fee will not be charged.
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 within
seven days after the Transfer Agent receives redemption instructions in proper form. However, under
unusual circumstances determined by the Securities and Exchange Commission, payment may be delayed or
suspended. For accounts registered in the name of a broker-dealer, payment will normally be forwarded
within three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as described under "How to Sell Shares"
for recently purchased shares, but only until the purchase payment has cleared. That delay may be as
much as 10 days from the date the shares were purchased. That delay may be avoided if you purchase
shares by Federal Funds wire or certified check, or arrange with your bank to provide telephone or
written assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the account value has fallen below $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.
"Backup withholding" of federal income tax may be applied against taxable dividends, distributions and redemption
proceeds (including exchanges) if you fail to furnish the Fund your correct, certified Social Security
or Employer Identification Number when you sign your application, or if you under-report your income to
the Internal Revenue Service.

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

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

Dividends, Capital Gains and Taxes

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

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

WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your account, specify on your application how
you want to receive your dividends and distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all dividends and capital gains distributions

in additional shares of the Fund.

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

Receive All Distributions in Cash. You can elect to receive a check for all dividends and capital gains
distributions or have them sent to your bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can reinvest all distributions in the same
class of shares of another OppenheimerFunds account you have established.

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

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

Avoid "Buying a Dividend." If you buy shares on or just before the ex-dividend date, or just before the Fund
declares a capital gains distribution, you will pay the full price for the shares and then receive a
portion of the price back as a taxable dividend or capital gain.
Remember, There May be Taxes on Transactions. Because the Fund's share prices fluctuate, you may have a capital
gain or loss when you sell or exchange your shares. A capital gain or loss is the difference between the
price you paid for the shares and the price you received when you sold them. Any capital gain is subject
to capital gains tax.

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

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

Financial Highlights

The Financial Highlights Table is presented to help you understand the Fund's financial performance for the past
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 auditors, whose report, along with the Fund's financial statements, is included in the Statement of
Additional Information, which is available on request.

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

CLASS A  YEAR ENDED AUGUST 31,                  2002        2001        2000        1999        1998
=====================================================================================================

PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------
 Net asset value, beginning of period        $ 41.11     $ 62.12     $ 44.73     $ 32.53     $ 38.63
- -----------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                   (.09)        .10        (.02)       (.04)        .17
 Net realized and unrealized gain (loss)       (9.31)     (15.86)      20.63       14.87       (1.55)
                                             --------------------------------------------------------
 Total from investment operations              (9.40)     (15.76)      20.61       14.83       (1.38)
- -----------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income             --          --          --        (.09)       (.15)
 Distributions from net realized gain           (.99)      (5.25)      (3.22)      (2.54)      (4.57)
                                             -------------------------------------------------------
 Total dividends and/or
 distributions to shareholders                  (.99)      (5.25)      (3.22)      (2.63)      (4.72)
- -----------------------------------------------------------------------------------------------------
 Net asset value, end of period               $30.72      $41.11      $62.12      $44.73      $32.53
                                             ========================================================

=====================================================================================================
 TOTAL RETURN, AT NET ASSET VALUE(1)          (23.48)%    (26.38)%     48.01%      47.36%      (4.06)%

=====================================================================================================
 RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------
 Net assets, end of period
   (in thousands)                         $3,219,391  $3,055,197  $3,648,961  $2,071,317  $1,233,958
- -----------------------------------------------------------------------------------------------------
 Average net assets (in thousands)        $3,204,793  $3,255,995  $2,898,088  $1,788,774  $1,352,628
- -----------------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income (loss)                  (0.15)%      0.28%       0.00%      (0.05)%      0.48%
 Expenses                                       1.22%       1.03%       1.06%       1.04%       1.00%(3)
- -----------------------------------------------------------------------------------------------------
 Portfolio turnover rate                          28%         46%         44%         59%         60%


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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                        21 OPPENHEIMER CAPITAL APPRECIATION FUND


FINANCIAL HIGHLIGHTS  Continued





CLASS B  YEAR ENDED AUGUST 31,                  2002        2001        2000        1999        1998
=====================================================================================================

PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------
 Net asset value, beginning of period        $ 39.09     $ 59.80     $ 43.48     $ 31.85     $ 38.07
- -----------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                            (.26)       (.07)       (.20)       (.21)       (.02)
 Net realized and unrealized gain (loss)       (8.89)     (15.39)      19.74       14.38       (1.62)
                                          -----------------------------------------------------------
 Total from investment operations              (9.15)     (15.46)      19.54       14.17       (1.64)
- -----------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income             --          --          --          --        (.01)
 Distributions from net realized gain           (.99)      (5.25)      (3.22)      (2.54)      (4.57)
                                          -----------------------------------------------------------
 Total dividends and/or
 distributions to shareholders                  (.99)      (5.25)      (3.22)      (2.54)      (4.58)
- -----------------------------------------------------------------------------------------------------
 Net asset value, end of period               $28.95      $39.09      $59.80      $43.48      $31.85
                                          ===========================================================

=====================================================================================================
 TOTAL RETURN, AT NET ASSET VALUE(1)          (24.07)%    (26.95)%     46.88%      46.20%      (4.86)%
- -----------------------------------------------------------------------------------------------------

=====================================================================================================
 RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands) $1,029,322  $1,242,098  $1,333,387    $531,625    $193,638
- -----------------------------------------------------------------------------------------------------
 Average net assets (in thousands)        $1,221,005  $1,265,753  $  922,480    $372,157    $132,908
- -----------------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment loss                           (0.92)%     (0.48)%     (0.76)%     (0.86)%     (0.37)%
 Expenses                                       1.99%       1.80%       1.83%       1.84%       1.81%(3)
- -----------------------------------------------------------------------------------------------------
 Portfolio turnover rate                          28%         46%         44%         59%         60%


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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                        22 OPPENHEIMER CAPITAL APPRECIATION FUND




CLASS C  YEAR ENDED AUGUST 31,                  2002        2001        2000        1999        1998
=====================================================================================================

PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------
 Net asset value, beginning of period        $ 38.64     $ 59.19     $ 43.06     $ 31.57     $ 37.76
- -----------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                            (.11)       (.01)       (.18)       (.23)       (.03)
 Net realized and unrealized gain (loss)       (8.91)     (15.29)      19.53       14.26       (1.59)
                                          -----------------------------------------------------------
 Total from investment operations              (9.02)     (15.30)      19.35       14.03       (1.62)
- -----------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income             --          --          --          --          --
 Distributions from net realized gain           (.99)      (5.25)      (3.22)      (2.54)      (4.57)
                                          -----------------------------------------------------------
 Total dividends and/or
 distributions to shareholders                  (.99)      (5.25)      (3.22)      (2.54)      (4.57)
- -----------------------------------------------------------------------------------------------------
 Net asset value, end of period               $28.63      $38.64      $59.19      $43.06      $31.57
                                          ===========================================================

=====================================================================================================
 TOTAL RETURN, AT NET ASSET VALUE(1)          (24.01)%    (26.95)%     46.89%      46.16%      (4.84)%

=====================================================================================================
 RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)   $450,989    $426,476    $402,442    $165,231     $76,058
- -----------------------------------------------------------------------------------------------------
 Average net assets (in thousands)          $477,369    $400,009    $278,800    $126,443     $61,503
- -----------------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment loss                           (0.87)%     (0.48)%     (0.76)%     (0.86)%     (0.36)%
 Expenses                                       1.94%       1.80%       1.83%       1.85%       1.82%(3)
- -----------------------------------------------------------------------------------------------------
 Portfolio turnover rate                          28%         46%         44%         59%         60%


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

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


                                        23 OPPENHEIMER CAPITAL APPRECIATION FUND


FINANCIAL HIGHLIGHTS  Continued




CLASS N  YEAR ENDED AUGUST 31,                              2002        2001(1)
================================================================================

PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------
 Net asset value, beginning of period                    $ 41.05     $ 45.58
- --------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                               (.07)(2)    (.01)
 Net realized and unrealized loss                          (9.39)(2)   (4.52)
                                          --------------------------------------
 Total from investment operations                          (9.46)      (4.53)
- --------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                         --          --
 Distributions from net realized gain                       (.99)         --
                                          --------------------------------------
 Total dividends and/or distributions to shareholders       (.99)         --
- --------------------------------------------------------------------------------
 Net asset value, end of period                           $30.60      $41.05
                                          ======================================

================================================================================
 TOTAL RETURN, AT NET ASSET VALUE(3)                      (23.67)%     (9.94)%
- --------------------------------------------------------------------------------

================================================================================
 RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
 Net assets, end of period (in thousands)                $72,178      $6,791
- --------------------------------------------------------------------------------
 Average net assets (in thousands)                       $38,232      $3,173
- --------------------------------------------------------------------------------
 Ratios to average net assets:(4)
 Net investment loss                                       (0.37)%     (0.11)%
 Expenses                                                   1.46%       1.36%
- --------------------------------------------------------------------------------
 Portfolio turnover rate                                      28%         46%


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


                                           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

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

12/31/92                                                              10.27%

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

12/31/93                                                              3.93%

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

12/31/94                                                                    0.46%

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

12/31/95                                                              34.85%

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

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%

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



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

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


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


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


The Fund's shares are distributed by:                 [logo] OppenheimerFunds Distributor, Inc.
The Fund's SEC File No. 811-3105
PR0320.001.1202
Printed on recycled paper

Oppenheimer Capital Appreciation Fund

498 Seventh Avenue, New York, New York 10018

1.800.225.5677

Statement of Additional Information dated December 27, 2002

This Statement of Additional Information is not a Prospectus. This document contains additional
information about the Fund and supplements information in the Prospectus dated December 27, 2002. 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 web site at
www.oppenheimerfunds.com.

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

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

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

Appendix A: Industry Classifications.................................................................... A-1
Appendix B: Special Sales Charge Arrangements and Waivers............................................... A-2

ABOUT THE FUND

Additional Information About the Fund's Investment Policies and Risks

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

The Fund's Investment Policies

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

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.

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 rating assigned to the security has less impact on the Manager's investment
decision with respect to convertible securities than in the case of non-convertible fixed income securities. To
determine whether convertible securities should be regarded as "equity equivalents," the Manager 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.

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.

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.

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.

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 or currency control
regulations (for example, currency blockage);
o transaction charges for currency exchange;
o lack of public information about foreign issuers;
o lack of uniform accounting, auditing and financial reporting standards in foreign countries comparable
to those applicable to domestic issuers;
o less volume on foreign exchanges than on U.S. exchanges;
o greater volatility and less liquidity on foreign markets than in the U.S.;
o less governmental regulation of foreign issuers, stock exchanges and brokers than in the U.S.;
o greater difficulties in commencing lawsuits;
o higher brokerage commission rates than in the U.S.;
o increased risks of delays in settlement of portfolio transactions or loss of certificates for portfolio
securities;
o possibilities in some countries of expropriation, confiscatory taxation, political, financial or social
instability or adverse diplomatic developments; and
o unfavorable differences between the U.S. economy and foreign economies.

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

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.

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. 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.

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 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.

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 the Securities Act of 1933, the Fund may have to cause
those securities to be registered. The expenses of registering restricted securities may be negotiated by the
Fund with the issuer at the time the Fund buys the securities. When the Fund must arrange registration because
the Fund wishes to sell the security, a considerable period may elapse between the time the decision is made to
sell the security and the time the security is registered so that the Fund could sell it. The Fund would bear the
risks of any downward price fluctuation during that period.

The Fund 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, 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.

Loans of Portfolio Securities. To raise cash for liquidity purposes, the Fund can lend its portfolio
securities to brokers, dealers and other types of financial institutions approved by the Fund's Board of
Trustees. As a fundamental policy, these loans are limited to not more than 25% of the value of the Fund's total
assets. The Fund currently does not intend to engage in loans of securities, but if it does so, such loans will
not likely exceed 5% of the Fund's total assets.
There are some risks in connection with securities lending. The Fund might experience a delay in
receiving additional collateral to secure a loan, or a delay in recovery of the loaned securities if the borrower
defaults. The Fund must receive collateral for a loan. Under current applicable regulatory requirements (which
are subject to change), on each business day the loan collateral must be at least equal to the value of the
loaned securities. It must consist of cash, bank letters of credit, securities of the U.S. Government or its
agencies or instrumentalities, or other cash equivalents in which the Fund is permitted to invest. To be
acceptable as collateral, letters of credit must obligate a bank to pay amounts demanded by the Fund if the
demand meets the terms of the letter. The terms of the letter of credit and the issuing bank both must be
satisfactory to the Fund.

When it lends securities, the Fund receives amounts equal to the dividends or interest on loaned
securities. It also receives one or more of (a) negotiated loan fees, (b) interest on securities used as
collateral, and (c) interest on any short-term debt securities purchased with such loan collateral. Either type
of interest may be shared with the borrower. The Fund may also pay reasonable finder's, custodian and
administrative fees in connection with these loans. The terms of the Fund's loans must meet applicable tests
under the Internal Revenue Code and must permit the Fund to reacquire loaned securities on five days' notice or
in time to vote on any important matter.

Borrowing for Leverage. 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.

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.

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 offer 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 interest rates fall, the values of outstanding debt securities
generally rise, and the bonds may sell for more than their face amount. When interest rates rise, the values of
outstanding debt securities generally decline, and the bonds may sell at a discount from their face amount. The
magnitude of these price changes is generally greater for bonds with longer maturities. Therefore, when the
average maturity of the Fund's debt securities is longer, its share price may fluctuate more when interest rates
change.

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.

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) other broadly-based securities indices (these are referred
to as "financial futures"), (3) debt securities (these are referred to as "interest rate futures") and (4)
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.

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 deposit in escrow 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 held in a segregated account by
its custodian bank) upon conversion or exchange of other foreign currency held in its portfolio.

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

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

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

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

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

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

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

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

Regulatory Aspects of Hedging Instruments. When using futures and options on futures, the Fund is
required to operate within certain guidelines and restrictions with respect to the use of futures as established
by the Commodities Futures Trading Commission (the "CFTC"). In particular, the Fund is exempted from registration
with the CFTC as a "commodity pool operator" if the Fund complies with the requirements of Rule 4.5 adopted by
the CFTC. The Rule does not limit the percentage of the Fund's assets that may be used for futures margin and
related options premiums for a bona fide hedging position. However, under the Rule, the Fund must limit its
aggregate initial futures margin and related options premiums to not more than 5% of the Fund's net assets for
hedging strategies that are not considered bona fide hedging strategies under the Rule. Under the Rule, the Fund
must also use short futures and options on futures solely for bona fide hedging purposes within the meaning and
intent of the applicable provisions of the Commodity Exchange Act.

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

Under the Investment Company Act, when the Fund purchases a future, it must maintain cash or readily
marketable short-term debt instruments in an amount equal to the market value of the securities underlying the
future, less the margin deposit applicable to it. 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.

Temporary Defensive Investments. When market 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 amp; 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.

Investment Restrictions

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

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

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

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 statue, 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 concentrate investments. That means it cannot invest 25% or more of its total assets in
companies in any one industry.

The Fund cannot invest in real estate, 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 invest in 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," but this does not prohibit certain investment activities for
which assets of the Fund are designated as segregated, or margin, collateral or escrow arrangements are
established, to cover the related obligations. Examples of those activities include borrowing money, reverse
repurchase agreements, delayed-delivery and when-issued arrangements for portfolio securities transactions, and
contracts to buy or sell derivates, hedging instruments, options or futures.

|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.

|_| The Fund cannot invest in securities of other investment companies, 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.

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

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

How the Fund is Managed

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

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

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

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

of another class, and
o votes as a class on matters that affect that class alone.

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

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

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

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

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

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

The Board of Trustees has an Audit Committee, a Study Committee and a Proxy Committee. The members of
the Audit Committee are Kenneth Randall (Chairman), Benjamin Lipstein and Edward Regan. The Audit Committee held
five meetings during the Fund's fiscal year ended August 31, 2002. The Audit Committee provides the Board with
recommendations regarding the selection of the Fund's independent auditor. The Audit Committee also reviews the
scope and results of audits and the audit fees charged, reviews reports from the Fund's independent auditor
concerning the Fund's internal accounting procedures, and controls and reviews reports of the Manager's internal
auditor, among other duties as set forth in the Committee's charter.

The members of the Study Committee are Benjamin Lipstein (Chairman), Robert Galli and Elizabeth
Moynihan. The Study Committee held eight meetings during the Fund's fiscal year ended August 31, 2002. The Study
Committee evaluates and reports to the Board on the Fund's contractual arrangements, including the Investment
Advisory and Distribution Agreements, transfer 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 Committee's charter.

The members of the Proxy Committee are Edward Regan (Chairman), Russell Reynolds and Clayton Yeutter.
The Proxy Committee held one meeting during the Fund's fiscal year ended August 31, 2002. The Proxy Committee
provides the Board with recommendations for proxy voting 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 of the
Fund ("Independent Trustee"). 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.
Mr. Murphy was elected as a Trustee of the Fund with the understanding that in the event he ceases to be the
chief executive officer of the Manager, he will resign as a trustee of the Fund and the other Board I Funds
(defined below) for which he is a trustee or director.

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

Oppenheimer California Municipal Fund Oppenheimer International Growth Fund
Oppenheimer Capital Appreciation Fund Oppenheimer International Small Company Fund
Oppenheimer Capital Preservation Fund Oppenheimer Money Market Fund, Inc.
Oppenheimer Concentrated Growth Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Developing Markets Fund Oppenheimer Multi-Sector Income Trust
Oppenheimer Discovery Fund Oppenheimer Multi-State Municipal Trust
Oppenheimer Emerging Growth Fund Oppenheimer Municipal Bond Fund
Oppenheimer Emerging Technologies Fund Oppenheimer New York Municipal Fund
Oppenheimer Enterprise Fund Oppenheimer Series Fund, Inc.
Oppenheimer Europe Fund Oppenheimer Special Value Fund
Oppenheimer Global Fund Oppenheimer Trinity Core Fund
Oppenheimer Global Growth amp; Income Fund Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Gold amp; Special Minerals Fund Oppenheimer Trinity Value Fund
Oppenheimer Growth Fund Oppenheimer U.S. Government Trust

In addition to being a trustee or director of the Board I Funds, Mr. Galli
is also a director or trustee of 10 other portfolios in the OppenheimerFunds
complex. Present or former officers, directors, trustees and employees (and
their immediate family members) of the Fund, the Manager and its affiliates, and
retirement plans established by them for their employees are permitted to
purchase Class A shares of the Fund and the other Oppenheimer funds at net asset
value without sales charge. The sales charges on Class A shares is waived for
that group because of the economies of sales efforts realized by the
Distributor.

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

|X| Affiliated Transactions and Material Business Relationships. Mr.
Reynolds has reported he has a controlling interest in The Directorship Search
Group, Inc. ("The Directorship Search Group"), a director recruiting firm that
provided consulting services to Massachusetts Mutual Life Insurance Company
(which controls the Manager) for fees aggregating $110,000 from January 1, 2000
through December 31, 2001, an amount representing less than 5% of the annual
revenues of The Directorship Search Group, Inc. Mr. Reynolds estimates that The
Directorship Search Group will bill Massachusetts Mutual Life Insurance Company
$150,000 for services to be provided during the calendar year 2002.

The Independent Trustees have unanimously (except for Mr. Reynolds, who
abstained) determined that the consulting arrangements between The Directorship
Search Group, Inc. and Massachusetts Mutual Life Insurance Company were not
material business or professional relationships that would compromise Mr.
Reynolds' status as an Independent Trustee. Nonetheless, to assure certainty as
to determinations of the Board and the Independent Trustees as to matters upon
which the 1940 Act or the rules thereunder require approval by a majority of
Independent Trustees, Mr. Reynolds will not be counted for purposes of
determining whether a quorum of Independent Trustees was present or whether a
majority of Independent Trustees approved the matter.

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

Independent Trustees

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

Name, Address, Age, Principal Occupation(s) During Past 5 Years / Other Dollar Range Aggregate
Dollar Range
of Shares
Beneficially
Owned in any
of Shares of the
Position(s) Held with Beneficially Oppenheimer
Fund and Length of Trusteeships/Directorships Held by Trustee / Number of Owned in the Funds Overseen
Service Portfolios in Fund Complex Currently Overseen by Trustee Fund by Trustee

As of December 31, 2001

Leon Levy, Chairman of General Partner (since 1982) of Odyssey Partners, L.P. $0 None
the Board of Trustees (investment partnership) and Chairman of the Board (since
Trustee since 1981 1981) of Avatar Holdings, Inc. (real estate development).
Age: 77 Oversees 31 portfolios in the OppenheimerFunds complex.

Robert G. Galli, A trustee or director of other Oppenheimer funds. Formerly $0 Over $100,000
Trustee since 1993 Vice Chairman (October 1995-December 1997) of the Manager.
Age: 69 Oversees 41 portfolios in the OppenheimerFunds complex.

Phillip A. Griffiths, The Director (since 1991) of the Institute for Advanced Over $100,000 Over $100,000
Trustee since 1999 Study, Princeton, N.J., director (since 2001) of GSI Lumonics
Age: 64 and a member of the National Academy of Sciences (since
1979); formerly (in descending chronological order) a
director of Bankers Trust Corporation, Provost and Professor
of Mathematics at Duke University, a director of Research
Triangle Institute, Raleigh, N.C., and a Professor of
Mathematics at Harvard University. Oversees 31 portfolios in
the OppenheimerFunds complex.

Benjamin Lipstein, Professor Emeritus of Marketing, Stern Graduate School of $0 Over $100,000
Trustee since 1981 Business Administration, New York University. Oversees 31
Age: 79 portfolios in the OppenheimerFunds complex.

Joel W. Motley, Director (January 2002-present), Columbia Equity Financial $None1 None1
Trustee since 2002 Corp. (privately-held financial adviser); Managing Director
Age: 50 (January 2002-present), Carmona Motley, Inc. (privately-held
financial adviser); Formerly he held the following positions:
Managing Director (January 1998-December 2001), Carmona
Motley Hoffman Inc. (privately-held financial adviser);
Managing Director (January 1992-December 1997), Carmona
Motley amp; Co. (privately-held financial adviser). Oversees 31
portfolios in the OppenheimerFunds complex.

Elizabeth B. Moynihan, Author and architectural historian; a trustee of the Freer $10,001 - $50,001-$100,000
Trustee since 1992 Gallery of Art and Arthur M. Sackler Gallery (Smithsonian
Age: 73 Institute), Trustees Council of the National Building Museum;
a member of the Trustees Council, Preservation League of New
York State. Oversees 31 portfolios in the OppenheimerFunds $50,000
complex.

Kenneth A. Randall, A director of Dominion Resources, Inc. (electric utility Over $100,000 Over $100,000
Trustee since 1981 holding company) and Prime Retail, Inc. (real estate
Age: 75 investment trust); formerly a director of Dominion Energy,
Inc. (electric power and oil amp; gas producer), President and
Chief Executive Officer of The Conference Board, Inc.
(international economic and business research) and a director
of Lumbermens Mutual Casualty Company, American Motorists
Insurance Company and American Manufacturers Mutual Insurance
Company. Oversees 31 portfolios in the OppenheimerFunds
complex.

Edward V. Regan, President, Baruch College, CUNY; a director of RBAsset (real $1 - $10,000 $50,001-$100,000
Trustee since 1993 estate manager); a director of OffitBank; formerly Trustee,
Age: 72 Financial Accounting Foundation (FASB and GASB), Senior
Fellow of Jerome Levy Economics Institute, Bard College,
Chairman of Municipal Assistance Corporation for the City of
New York, New York State Comptroller and Trustee of New York
State and Local Retirement Fund. Oversees 31 investment
companies in the OppenheimerFunds complex.

Russell S. Reynolds, Jr., Chairman (since 1993) of The Directorship Search Group, Inc. $1 - $10,000 $10,001-$50,000
Trustee since 1989 (corporate governance consulting and executive recruiting); a
Age: 70 life trustee of International House (non-profit educational
organization), and a trustee (since 1996) of the Greenwich
Historical Society. Oversees 31 portfolios in the
OppenheimerFunds complex.

Donald W. Spiro, Vice Chairman Emeritus (since January 1991) of the Manager. Over $100,000 Over $100,000
Chairman of the Board of
Trustees, Formerly a director (January 1969-August 1999) of the
Trustee since 1985 Manager. Oversees 31 portfolios in the OppenheimerFunds
Age: 76 complex.

Clayton K. Yeutter, Of Counsel (since 1993), Hogan amp; Hartson (a law firm). Other $0 $50,001-$100,000
Trustee since 1991 directorships: Caterpillar, Inc. (since 1993) and
Age: 71 Weyerhaeuser Co. (since 1999). Oversees 31 portfolios in the
OppenheimerFunds complex.

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


The address of Mr. Murphy in the chart below is 498 Seventh Avenue, New York, NY 10018. Mr. Murphy serves for an
indefinite term, until his resignation, death or removal.


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

                                              Interested Trustee and Officer

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

Name, Address, Age,        Principal   Occupation(s)   During   Past  5   Years  /  Other   Dollar Range      Aggregate
                                                                                                            Dollar Range
                                                                                                              of Shares
                                                                                             of Shares      Owned in any
Position(s) Held with                                                                       Beneficially       of the
Fund and Length of         Trusteeships/Directorships   Held  by   Trustee  /  Number  of   Owned in the     Oppenheimer
Service                    Portfolios in Fund Complex Currently Overseen by Trustee             Fund            Funds

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

                                                                                               As of December 31, 2001

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

John V. Murphy,            Chairman,  Chief  Executive  Officer and director  (since June
President and Trustee,     2001) and  President  (since  September  2000) of the Manager;        $0         Over $100,000
Trustee since 2001         President  and a  director  or  trustee  of other  Oppenheimer
Age: 53                    funds;   President  and  a  director   (since  July  2001)  of
                           Oppenheimer  Acquisition  Corp. (the Manager's  parent holding
                           company)  and of  Oppenheimer  Partnership  Holdings,  Inc. (a
                           holding company subsidiary of the Manager);  a director (since
                           November  2001)  of  OppenheimerFunds   Distributor,  Inc.  (a
                           subsidiary  of the  Manager);  Chairman and a director  (since
                           July 2001) of  Shareholder  Services,  Inc. and of Shareholder
                           Financial  Services,  Inc. (transfer agent subsidiaries of the
                           Manager);  President  and a  director  (since  July  2001)  of
                           OppenheimerFunds  Legacy  Program (a charitable  trust program
                           established  by the  Manager);  a director  of the  investment
                           advisory  subsidiaries of the Manager: OFI Institutional Asset
                           Management,  Inc. and Centennial Asset Management  Corporation
                           (since   November   2001),    HarbourView   Asset   Management
                           Corporation  and OFI  Private  Investments,  Inc.  (since July
                           2001);  President  (since  November  1,  2001) and a  director
                           (since July 2001) of Oppenheimer Real Asset Management,  Inc.;
                           a  director  (since  November  2001)  of  Trinity   Investment
                           Management  Corp.  and  Tremont  Advisers,   Inc.  (Investment
                           advisory affiliates of the Manager);  Executive Vice President
                           (since February 1997) of  Massachusetts  Mutual Life Insurance
                           Company (the  Manager's  parent  company);  a director  (since
                           June 1995) of DBL  Acquisition  Corporation;  formerly,  Chief
                           Operating Officer  (September  2000-June 2001) of the Manager;
                           President  and trustee  (November  1999-November  2001) of MML
                           Series  Investment  Fund and  MassMutual  Institutional  Funds
                           (open-end   investment   companies);   a  director  (September
                           1999-August 2000) of C.M. Life Insurance  Company;  President,
                           Chief Executive  Officer and director  (September  1999-August
                           2000) of MML Bay State  Life  Insurance  Company;  a  director
                           (June  1989-June  1998) of Emerald  Isle  Bancorp and Hibernia
                           Savings  Bank  (a  wholly-owned  subsidiary  of  Emerald  Isle
                           Bancorp).  Oversees  69  portfolios  in  the  OppenheimerFunds
                           complex.

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


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



- ---------------------------------------------------------------------------------------------------------------------------
                                                   Officers of the Fund
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------- ----------------------------------------------------------------------------------------
Name, Address, Age, Position(s)    Principal Occupation(s) During Past 5 Years
Held with Fund and Length of
Service
- ---------------------------------- ----------------------------------------------------------------------------------------
- ---------------------------------- ----------------------------------------------------------------------------------------
Jane Putnam                        Vice President of the Manager (since October 1995);  and officer of 2 portfolios in the
Vice President and Portfolio
Manager since July 1995            OppenheimerFunds  complex;  before joining the Manager in May 1994, she was a portfolio
Age: 41                            manager and equity research analyst for Chemical Bank (June 1989 - May 1994).
- ---------------------------------- ----------------------------------------------------------------------------------------
- ---------------------------------- ----------------------------------------------------------------------------------------
Brian W. Wixted,                   Senior Vice  President  and  Treasurer  (since  March 1999) of the  Manager;  Treasurer
Treasurer, Principal Financial     (since March 1999) of HarbourView Asset Management  Corporation,  Shareholder Services,
and Accounting Officer since 1999  Inc.,  Oppenheimer Real Asset Management  Corporation,  Shareholder Financial Services,
Age: 42                            Inc.,  Oppenheimer  Partnership  Holdings,  Inc., OFI Private Investments,  Inc. (since
                                   March 2000),  OppenheimerFunds  International Ltd. and Oppenheimer Millennium Funds plc
                                   (since May 2000) and OFI  Institutional  Asset  Management,  Inc. (since November 2000)
                                   (offshore fund management  subsidiaries of the Manager);  Treasurer and Chief Financial
                                   Officer  (since May 2000) of Oppenheimer  Trust Company (a trust company  subsidiary of
                                   the Manager);  Assistant Treasurer (since March 1999) of Oppenheimer  Acquisition Corp.
                                   and  OppenheimerFunds  Legacy Program (since April 2000);  formerly Principal and Chief
                                   Operating Officer (March 1995-March 1999),  Bankers Trust  Company-Mutual Fund Services
                                   Division. An officer of 85 portfolios in the OppenheimerFunds complex.
- ---------------------------------- ----------------------------------------------------------------------------------------
- ---------------------------------- ----------------------------------------------------------------------------------------
Connie Bechtolt,                   Assistant Vice President of the Manager (since September 1998);  formerly  Manager/Fund
Assistant Treasurer since 2002     Accounting (September  1994-September 1998) of the Manager. An officer of 85 portfolios
Age: 39                            in the OppenheimerFunds complex
- ---------------------------------- ----------------------------------------------------------------------------------------
- ---------------------------------- ----------------------------------------------------------------------------------------
Philip Vottiero,                   Vice  President/Fund  Accounting  of the  Manager  (since  March  2002;  formerly  Vice
                                   President/Corporate  Accounting of the Manager (July 1999-March 2002) prior to which he
Assistant Treasurer since 2002     was Chief Financial Officer at Sovlink  Corporation  (April 1996-June 1999). An officer
Age: 39                            of 85 portfolios in the OppenheimerFunds complex.
- ---------------------------------- ----------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- -----------------------------------

Robert G. Zack, Senior   Vice   President(since May 1985) and
General Counsel (since February  2002)

Secretary since 2001
Age: 54

      of the  Manager;  General  Counsel  and a  director  (since
November 2001) of OppenheimerFunds Distributor,  Inc.; Senior Vice President and
General   Counsel  (since  November  2001)  of  HarbourView   Asset   Management
Corporation;  Vice President and a director (since November 2000) of Oppenheimer
Partnership  Holdings,  Inc.;  Senior  Vice  President,  General  Counsel  and a
director  (since  November  2001) of  Shareholder  Services,  Inc.,  Shareholder
Financial  Services,  Inc., OFI Private  Investments,  Inc.,  Oppenheimer  Trust
Company and OFI  Institutional  Asset Management,  Inc.;  General Counsel (since
November 2001) of Centennial  Asset  Management  Corporation;  a director (since
November 2001) of Oppenheimer Real Asset Management,  Inc.;  Assistant Secretary
and a director (since  November 2001) of  OppenheimerFunds  International  Ltd.;
Vice  President  (since  November  2001)  of  OppenheimerFunds  Legacy  Program;
Secretary  (since  November 2001) of  Oppenheimer  Acquisition  Corp.;  formerly
Acting  General  Counsel  (November  2001-February  2002) and Associate  General
Counsel  (May  1981-October  2001)  of  the  Manager;   Assistant  Secretary  of
Shareholder  Services,  Inc. (May  1985-November  2001),  Shareholder  Financial
Services,  Inc. (November  1989-November 2001);  OppenheimerFunds  International
Ltd. and  Oppenheimer  Millennium  Funds plc (October  1997-November  2001).  An
officer    of    85    portfolios    in    the     OppenheimerFunds     complex.
- ---------------------------------------------------------------------------------------------------------------------------
- ----------------------------------
- ----------------------------------------------------------------------------------------
Philip T. Masterson,  Vice President and Assistant Counsel of the Manager (since
July 1998);  formerly,  an Assistant  Secretary since 2002 associate with Davis,
Graham,  amp; Stubbs  LLP  (January  1997-June  1998).  An  officer  of 85 Age:  38
portfolios in the OppenheimerFunds  complex.  ----------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------
- ----------------------------------------------------------------------------------------
Denis R. Molleur,  Vice  President and Senior Counsel of the Manager (since July
1999);  formerly a Vice Assistant  Secretary  since 2001 President and Associate
Counsel of the Manager  (September  1995-July  1999).  An officer  Age: 44 of 85
portfolios in the OppenheimerFunds  complex.  ----------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------
- ----------------------------------------------------------------------------------------
Katherine P. Feld,  Vice  President and Senior  Counsel (since July 1999) of the
Manager;  Vice  President  Assistant  Secretary  since 2001 (since June 1990) of
OppenheimerFunds  Distributor,  Inc.;  Director,  Vice  President  and  Age:  44
Assistant   Secretary   (since  June  1999)  of  Centennial   Asset   Management
Corporation;  Vice President (since 1997) of Oppenheimer Real Asset  Management,
Inc.;  formerly  Vice  President  and  Associate  Counsel of the  Manager  (June
1990-July  1999). An officer of 85 portfolios in the  OppenheimerFunds  complex.
- ----------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------
- ----------------------------------------------------------------------------------------
Kathleen T. Ives, Vice President and Assistant  Counsel (since June 1998) of the
Manager;   Vice  President  Assistant  Secretary  since  2001  (since  1999)  of
OppenheimerFunds  Distributor,  Inc.;  Vice  President  and  Assistant  Age:  36
Secretary (since 1999) of Shareholder Services, Inc.; Assistant Secretary (since
December  2001) of  OppenheimerFunds  Legacy Program and  Shareholder  Financial
Services,  Inc.;  formerly Assistant Vice President and Assistant Counsel of the
Manager  (August  1997-June  1998);  Assistant  Counsel of the  Manager  (August
1994-August 1997). An officer of 85 portfolios in the OppenheimerFunds  complex.
- ----------------------------------
- ----------------------------------------------------------------------------------------


Remuneration  of  Trustees.  The  officers  of the Fund and one of the  Trustees  of the Fund (Mr.  Murphy) who are
affiliated  with the Manager  receive no salary or fee from the Fund.  The remaining  Trustees of the Fund received
the  compensation  shown below from the Fund with  respect to the Fund's  fiscal year ended  August 31,  2002.  The
compensation  from all of the Board I Funds  (including the Fund) represents  compensation  received as a director,
trustee or member of a committee of the Board during the calendar year 2001.

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

Trustee Name and Other Fund As of Fiscal Year Ended 8/31/02 For Calendar Year Ended 12/31/01
Position(s)
(as applicable)

Aggregate Retirement Estimated Annual Total Compensation From
Retirement Benefits All Oppenheimer Funds
Paid at Retirement For Which Individual
Benefits Accrued from all Board I Serves As
Compensation as Part of Fund Funds Trustee/Director
from Fund1 Expenses (33 Funds) 2 (33 Funds)

Leon Levy $37,845 $6,434 $137,560 $173,700
Chairman

Robert G. Galli $23,043 $19,056 $32,7662 $202,8863
Study Committee Member

Phillip Griffiths $12,9644 $5,031 $6,803 $54,889

Benjamin Lipstein $32,715 $0 $118,911 $150,152
Study Committee Chairman, Audit
Committee Member

Joel W. Motley5 $0 $0 $0 $0

Elizabeth B. Moynihan $23,043 $24,607 $52,348 $105,760
Study Committee Member

Kenneth A. Randall $21,137 $14,973 $76,827 $97,012
Audit Committee Chairman

Edward V. Regan $20,907 $26,076 $42,748 $95,960
Proxy Committee Chairman, Audit
Committee Member

Russell S. Reynolds, Jr. $15,642 $16,133 $46,197 $71,792
Proxy Committee Member

Donald Spiro $15,755 $6,053 3,625 $64,080

Clayton K. Yeutter $15,6426 $12,314 $31,982 $71,792
Proxy Committee Member

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

1. Aggregate compensation from the Fund includes fees and deferred compensation, if any.
2. Estimated annual retirement benefits paid at retirement is based on a straight life payment plan
election. The amount for Mr. Galli includes $14,818 for serving as a trustee or director of 10 Oppenheimer funds
that are not Board I Funds.
3. Includes $97,126 for Mr. Galli for serving as trustee or director of 10 Oppenheimer funds that are not
Board I Funds.
4. Aggregate total compensation from the Fund includes $12,964 deferred under Deferred Compensation Plan
described below.
5. Appointed to the Board on October 10, 2002 and therefore did not receive compensation.
6. Aggregate compensation from the Fund includes $3,911 deferred under Deferred Compensation Plan described
below.

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

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

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

|X| Major Shareholders. As of December _____, 2002, the only persons who owned of record or were known by
the Fund to own of record 5% or more of any class of the Fund's outstanding shares were:

Merrill Lynch Pierce Fenner amp; Smith, Inc., for the Sole Benefit of its Customers, Attn: Fund
Admin./#97C27, 4800 Deer Lake Drive, Floor 3, Jacksonville, FL, 32246-6484, which owned 943,413.677
Class C shares (7.52% of the Class C shares then outstanding).

Anthony Di Maria TR, TJH Medical Services PC 401K, 8906 135th Street, Suite 7E, Jamaica, NY 11418-2834,
who owned 42,368.169 Class N shares (8.89% of the Class N shares then outstanding).

Mark Curran, Trustee, Boeing Co. Master Trust, 200 Newport Avenue Extension, North Quincy, MA
02171-2102, who owned 19,204,284.254 Class Y shares (77.57% of the Class Y shares then outstanding).

MassMutual Life Insurance Co., Separate Investment Account, 1295 State Street, Springfield, MA
01111-0001, which owned 4,685,096.129 Class Y shares (18.92% of the Class Y shares then outstanding).

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

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

The Code of Ethics is an exhibit to the Fund's registration statement filed with the Securities and
Exchange Commission and can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. You
can obtain information about the hours of operation of the Public Reference Room by calling the SEC at
1-202-942-8090. The Code of Ethics can also be viewed as part of the Fund's registration statement on the SEC's
EDGAR database at the SEC's Internet web site at http://www.sec.gov. Copies may be obtained, after paying a
duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov., or by writing to the
SEC's Public Reference Section, Washington, D.C. 20549-0102.

|X| The Investment Advisory Agreement. The Manager provides investment advisory and management services to
the Fund under an investment advisory agreement between the Manager and the Fund. The Manager selects securities
for the Fund's portfolio and handles its day-to-day business. The portfolio manager of the Fund is employed by
the Manager and is the person who is principally responsible for the day-to-day management of the Fund's
portfolio. Other members of the Manager's Equity Portfolio Team provide the portfolio manager 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.

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

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

2000 $29,201,218

2001 $35,024,076

2002 $34,456,425

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

The investment advisory agreement states that in the absence of willful misfeasance, bad faith, gross
negligence in the performance of its duties or reckless disregard of its obligations and duties under the
investment advisory agreement, the Manager is not liable for any loss. The Fund sustains for any investment,
adoption of any investment policy, or the purchase, sale or retention of any security.

The agreement permits the Manager to act as investment adviser 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 adviser or general distributor. If the Manager shall no longer act as investment adviser to the Fund,
the Manager may withdraw the right of the Fund to use the name "Oppenheimer" as part of its name.

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

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

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

The Board considered that the Manager must be able to pay and retain high quality personnel at
competitive rates to provide services to the Fund. The Board also considered that maintaining the financial
viability of the Manager is important so that the Manager will be able to continue to provide quality services to
the Fund and its shareholders in adverse times. The Board also considered the investment performance of other
mutual funds advised by the Manager. The Board is aware that there are alternatives to the use of the Manager.
These matters were also considered by the Independent Trustees, meeting separately from the full Board
with experienced Counsel to the Fund who assisted the Board in its deliberations. The Fund's Counsel is
independent of the Manager within the meaning and intent of the SEC Rules regarding the independence of counsel.

In arriving at a decision, the Board did not single out any one factor or group of factors as being more
important than other factors, but considered all factors together. The Board judged the terms and conditions of
the investment advisory agreement, including the investment advisory fee, in light of all of the surrounding
circumstances.

Brokerage Policies of the Fund

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

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

Brokerage Practices Followed by the Manager. The Manager allocates brokerage for the Fund subject to the
provisions of the investment advisory agreement and the procedures and rules described above. Generally, the
Manager's portfolio traders allocate brokerage based upon recommendations from the Manager's portfolio managers.
In certain instances, portfolio 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 available in U.S.
markets. Brokerage commissions are paid primarily for transactions in listed securities or for certain
fixed-income agency transactions in the secondary market. Otherwise brokerage commissions are paid only if it
appears likely that a better price or execution can be obtained by doing so. In an option transaction, the Fund
ordinarily uses the same broker for the purchase or sale of the option and any transaction in the securities to
which the option relates.

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

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

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

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

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

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

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

Fiscal Year Ended 8/31: Total Brokerage Commissions Paid by the Fund1

2000 $4,345,771

2001 $5,996,124

20022 $5,238,458

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

1Amounts do not include spreads or commissions on principal transactions on a net trade basis.
2In the fiscal year ended 8/31/02, the amount of transactions directed to brokers for research services was
$1,498,315,552, and the amount of the commissions paid to broker-dealers for those services was $2,138,013.

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. Expenses normally attributable to sales are borne by the Distributor.

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

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

Fiscal Year Aggregate Front-End Class A Front-End
Sales Charges
Ended 08/31: Sales Charges on Retained by
Class A Shares Distributor

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

2000 $9,222,674 $2,675,878

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

2001 $10,082,655 $2,828,156

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

2002 $11,107,427 $2,473,8671

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

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

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

Fiscal Year Concessions on Class Concessions on Class Concessions on Class C Concessions on Class
Ended 08/31: A Shares Advanced by B Shares Advanced by Shares Advanced by N Shares Advanced by
Distributor1 Distributor1 Distributor1 Distributor1

2000 $1,710,262 $12,986,219 $1,180,044 N/A

2001 $1,634,569 $16,125,855 $1,835,899 N/A

2002 $2,999,939 $13,196,558 $2,463,444 $755,491

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

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

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

Fiscal Year Class A Contingent Class B Contingent Class C Contingent Class N Contingent
Deferred Sales Deferred Sales Deferred Sales
Ended 08/31 Charges Retained by Charges Retained by Deferred Sales Charges Charges Retained by
Distributor Distributor Retained by Distributor Distributor

2002 $93,365 $3,072,069 $152,225 $2,557

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

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.

Under the plans, the Manager and the Distributor may make payments to affiliates and, in their sole
discretion, from time to time, may use their own resources (at no direct cost to the Fund) to make payments to
brokers, dealers or other financial institutions for distribution and administrative services they perform. The
Manager may use its profits from the advisory fee it receives from the Fund. In their sole discretion, the
Distributor and the Manager may increase or decrease the amount of payments they make from their own resources to
plan recipients.

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

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

While the Plans are in effect, the Treasurer of the Fund shall provide separate written reports on the
plans to the Board of Trustees at least quarterly for its review. The Reports shall detail the amount of all
payments made under a plan, the purpose for which the payments were made and the identity of each recipient of a
payment. The reports on the Class B Plan and Class C Plan shall also include the Distributor's distribution costs
for that quarter and in the case of the Class B plan the amount of those costs for previous fiscal periods that
have been carried forward. Those reports are subject to the review and approval of the Independent Trustees.

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

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

|_| 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. While the plan permits the Board to authorize
payments to the Distributor to reimburse itself for services under the plan, the Board has not yet done so. The
Distributor makes payments to plan recipients quarterly at an annual rate not to exceed 0.25% of the average
annual net assets consisting of Class A shares acquired. 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. After the first year shares are outstanding, the
Distributor makes service fee payments to Recipients quarterly on those shares. The advance payment is based on
the net asset value of shares sold. Shares purchased by exchange do not qualify for the advance service fee
payment. If Class A shares purchased by grandfathered retirement accounts are redeemed during the first year
after their purchase, the Recipient of the service fees on those shares will be obligated to repay the
Distributor a pro rata portion of the advance payment of the service fee made on those shares.

For the fiscal year ended August 31, 2002 payments under the Class A Plan totaled $7,599,340, all of which
was paid by the Distributor to recipients. That included $401,632 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 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 Service and Distribution Plan Fees. Under each plan, service fees and
distribution fees are computed on the average of the net asset value of shares in the respective class,
determined as of the close of each regular business day during the period. The Class C plan allows the
Distributor to be reimbursed for its services and costs in distributing Class C shares and servicing accounts.
The Class B and Class N plans provide for the Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the amounts paid by the Fund under the plan during the
period for which the fee is paid. The types of services that recipients provide are similar to the services
provided under the Class A service plan, described above.

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

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

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

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

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

Distribution Fees Paid to the Distributor in the Fiscal Year Ended 8/31/02
Distributor's
- ------------------------- Aggregate Unreimbursed Distributor's
Total Payments Amount Retained Expenses Under Plan Unreimbursed Expenses
Under Plan by Distributor as % of Net Assets of
Class
Class:

Class B Plan $12,215,841 $10,030,5371 $30,841,033 3.00%

Class C Plan $4,579,140 $1,724,1702 $6,987,737 1.55%

Class N Plan $190,265 $185,9253 $1,268,502 1.76%

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

1. Includes $164,812 paid to an affiliate of the Distributor's parent company.
2. Includes $115,184 paid to an affiliate of the Distributor's parent company.
3. Includes $134 paid to an affiliate of the Distributor's parent company.

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

Performance of the Fund

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

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

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

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

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

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

In calculating total returns for Class A shares, the current maximum sales charge of 5.75% (as a
percentage of the offering price) is deducted from the initial investment ("P") (unless the return is shown
without sales charge, as described below). For Class B shares, payment of the applicable contingent deferred
sales charge is applied, depending on the period for which the return is shown: 5.0% in the first year, 4.0% in
the second year, 3.0% in the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth year and none
thereafter. For Class C shares, the 1% contingent deferred sales charge is deducted for returns for the 1-year
period. For Class N shares, the 1% contingent deferred sales charge is deducted for returns for the one-year
period and total returns for the periods prior to 3.1.01 (the inception date for Class N shares) is based on the
Fund's Class A returns, adjusted to reflect the higher Class N 12b-1 fees. There is no sales charge for 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 ) 1/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:

ATVD 1/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 below) held for a
number of years ("n" in the formula) to achieve an ending value ("ATVDR" in the formula) of that investment,
after taking into account the effect of taxes on fund distributions and on the redemption of Fund shares,
according to the following formula:

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

|_| Cumulative Total Return. The "cumulative total return" calculation measures the change in value of a
hypothetical investment of $1,000 over an entire period of years. Its calculation uses some of the same factors
as average annual total return, but it does not average the rate of return on an annual basis. Cumulative total
return is determined as follows:

ERV - P = TOTAL RETURN
----------
P

|_| 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 8/31/02

Cumulative Total Returns Average Annual Total Returns
(10 years or Life of
Class Class)
Of Shares

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

After Sales Without After Without After Without After Sales Without
Charge Sales Charge Sales Sales Sales Sales Charge Sales
Charge Charge Charge Charge Charge

Class A 184.06%(1) 201.39%(1) -27.89% -23.48% 2.13% 3.34% 11.00% 11.66%

Class B 80.35%(2) 80.35%(2) -27.77% -24.07% 2.26% 2.53% 9.01%2 9.01%2

Class C 137.21% (3) 137.21% (3) -24.75% 24.01% 2.55% 2.55% 10.38%3 10.38%3

Class N -31.93%(4) -31.25%(4) -24.41% -23.67% -22.61% -22.11% N/A N/A

Class Y 15.41% (5) 15.41% (5) -23.23% -23.23% 3.01% 3.01% N/A N/A

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

1. Inception A: 01/22/81
2. Inception B: 11/01/95
3. Inception C: 12/01/93
4. Inception N: 03/01/01
5. Inception Y: 11/03/97

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

Average Annual Total Returns for Class A Shares (After Sales Charge)
For the Periods Ended 8/31/02

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

After Taxes on Distributions -28.22% -0.01% 8.55%1

After Taxes on Distributions and -16.48% 1.32% 8.42%1
Redemption of Fund Shares

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

1. Inception date of Class A: 1/22/81
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.

|_| Lipper Rankings. From time to time the Fund may publish the ranking of the performance of its classes of
shares by Lipper, Inc. ("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring service.
Lipper monitors the performance of regulated investment companies, including the Fund, and ranks their
performance for various periods based on categories relating to investment styles. Lipper currently ranks the
Fund's performance against all other capital appreciation funds. The Lipper performance rankings are based on
total returns that include the reinvestment of capital gain distributions and income dividends but do not take
sales charges or taxes into consideration. 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 Rankings. From time to time the Fund may publish the star ranking of the performance of its
classes of shares by Morningstar, Inc., an independent mutual fund monitoring service. Morningstar ranks mutual
funds in their specialized market sector. The Fund is ranked among the Large Blend category within the domestic
stock funds.

Morningstar proprietary star rankings 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.

|_| 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.

AccountLink. When shares are purchased through AccountLink, each purchase must be at least $25. Effective
November 1, 2002, for any new Asset Builder Plan, each purchase through AccountLink must be at least $50 and
---
shareholders must invest at least $500 before an Asset Builder Plan can be established on a new account. Accounts
established prior to November 1, 2001 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
Oppenheimer Municipal Bond Fundhe close of The New

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

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

|X| Right of Accumulation. To qualify for the lower sales charge rates that
apply to larger purchases of Class A shares, you and your spouse can add
together:

o Class A and Class B shares you purchase for your individual accounts
(including IRAs and 403(b) plans), or for your joint accounts, or for trust or
custodial accounts on behalf of your children who are minors, and

o Current purchases of Class A and Class B shares of the Fund and other
Oppenheimer funds to reduce the sales charge rate that applies to current
purchases of Class A shares, and

o Class A and Class B shares of Oppenheimer funds you previously purchased
subject to an initial or contingent deferred sales charge to reduce the sales
charge rate for current purchases of Class A shares, provided that you still
hold your investment in one of the Oppenheimer funds.

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

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

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

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

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

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

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

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

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

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

The Transfer Agent will not hold shares in escrow for purchases of shares of the Fund and other
Oppenheimer funds by OppenheimerFunds prototype 401(k) plans under a Letter of Intent. If the intended purchase
amount under a Letter of Intent entered into by an OppenheimerFunds prototype 401(k) plan is not purchased by the
plan by the end of the Letter of Intent period, there will be no adjustment of concessions paid to the
broker-dealer or financial institution of record for accounts held in the name of that plan.

In determining the total amount of purchases made under a Letter, shares redeemed by the investor prior
to the termination of the Letter of Intent period will be deducted. It is the responsibility of the dealer of
record and/or the investor to advise the Distributor about the Letter in placing any purchase orders for the
investor during the Letter of Intent period. All of such purchases must be made through the Distributor.

|X| Terms of Escrow That Apply to Letters of Intent.

1. Out of the initial purchase (or subsequent purchases if necessary) made pursuant to a Letter,
shares of the Fund equal in value up to 5% of the intended purchase amount specified in the Letter shall be held
in escrow by the Transfer Agent. For example, if the intended purchase amount is $50,000, the escrow shall be
shares valued in the amount of $2,500 (computed at the offering price adjusted for a $50,000 purchase). Any
dividends and capital gains distributions on the escrowed shares will be credited to the investor's account.

2. If the total minimum investment specified under the Letter is completed within the 13-month Letter
of Intent period, the escrowed shares will be promptly released to the investor.

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

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

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

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

Asset Builder Plans. To establish an Asset Builder Plan to buy shares directly from a bank account, you must
enclose a check (the minimum is $25) for the initial purchase with your application. Currently, the minimum
investment is $25 to establish an Asset Builder Plan, and will remain at $25 for those accounts established prior
to November 1, 2002. However, as described above under "AccountLink," for Asset Builder Plans established on or
after November 1, 2002, the minimum investment for new Asset Builder Plans will increase to $50, each purchase
must be at least $50 and shareholders must invest at least $500 before an Asset Builder Plan can be established.
---
Shares purchased by Asset Builder Plan payments from bank accounts are subject to the redemption restrictions for
recent purchases described in the Prospectus. Asset Builder Plans are available only if your bank is an ACH
member. Asset Builder Plans may not be used to buy shares for OppenheimerFunds employer-sponsored qualified
retirement accounts. Asset Builder Plans also enable shareholders of Oppenheimer Cash Reserves to use their fund
account to make monthly automatic purchases of shares of up to four other Oppenheimer funds.

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

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

Retirement Plans. Certain types of retirement plans are entitled to purchase shares of the Fund without sales
charge or at reduced sales charge rates, as described in Appendix 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 amp; Smith, Inc. ("Merrill Lynch") or an
independent record keeper that has a contract or special arrangement with Merrill Lynch. If on the date the plan
sponsor signed the Merrill Lynch record keeping service agreement the plan has less than $3 million in assets
(other than assets invested in money market funds) invested in applicable investments, then the retirement plan
may purchase only Class B shares of the Oppenheimer funds. Any retirement plans in that category that currently
invest in Class B shares of the Fund will have their Class B shares converted to Class A shares of the Fund when
the plan's applicable investments reach $5 million. OppenheimerFunds has entered into arrangements with certain
record keepers whereby the Transfer Agent compensates the record keeper for its record keeping and account
servicing functions that it performs on behalf of the participant level accounts of a retirement plan. While
such compensation may act to reduce the record keeping fees charged by the retirement plan's record keeper, that
compensation arrangement may be terminated at any time, potentially affecting the record keeping fees charged by
the retirement plan's record keeper.

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

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

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

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

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

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

|X| Availability of Class N Shares. In addition to the description of the types of retirement plans which
may purchase Class N shares contained in the prospectus, Class N shares also are offered to the following:
o to all rollover IRAs (including SEP IRAs and SIMPLE IRAs),
o to all rollover contributions made to Individual 401(k) plans, Profit-Sharing Plans and Money Purchase
Pension Plans,
o to all direct rollovers from OppenheimerFunds-sponsored Pinnacle and Ascender retirement plans,
o to all trustee-to-trustee IRA transfers,
o to all 90-24 type 403(b) transfers,
o to Group Retirement Plans (as defined in Appendix 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 OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the purchase with the redemption
proceeds of Class A shares of one or more Oppenheimer funds.
o to certain customers of broker-dealers and financial advisors that are identified in a special agreement
between the broker-dealer or financial advisor and the Distributor for that purpose.

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

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

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

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

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

Account Fees. As stated in the Prospectus, effective September 27, 2002, a $12 annual fee is charged on any
account valued at less than $500. This fee will not be charged for:
o Accounts that have balances below $500 due to the automatic conversion of shares from Class B to Class A
shares;
o Accounts with an active Asset Builder Plan, payroll deduction plan or a military allotment plan;
o OppenheimerFunds-sponsored group retirement accounts that are making continuing purchases;
o Certain accounts held by broker-dealers through the National Securities Clearing Corporation; and
o Accounts that fall below the $500 threshold due solely to market fluctuations within the 12-month period
preceding the date the fee is deducted.

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

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

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

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

|X| Securities Valuation. The Fund's Board of Trustees has established procedures for the valuation of the
Fund's securities. In general those procedures are as follows:
o Equity securities traded on a U.S. securities exchange or on Nasdaq(R)are valued as follows:
(1) if last sale information is regularly reported, they are valued at the last reported sale price on the
principal exchange on which they are traded or on Nasdaq, as applicable, on that day, or
(2) if last sale information is not available on a valuation date, they are valued at the last reported sale
price preceding the valuation date if it is within the spread of the closing "bid" and
"asked" prices on the valuation date or, if not, at the closing "bid" price on the
valuation date.
o Equity securities traded on a foreign securities exchange generally are valued in one of the following
ways:
(1) at the last sale price available to the pricing service approved by the Board of Trustees, or
(2) at the last sale price obtained by the Manager from the report of the principal exchange on which the
security is traded at its last trading session on or immediately before the valuation date,
or
(3) at the mean between the "bid" and "asked" prices obtained from the principal exchange on which the
security is traded or, on the basis of reasonable inquiry, from two market makers in the
security.
o Long-term debt securities having a remaining maturity in excess of 60 days are valued based on the mean
between the "bid" and "asked" prices determined by a portfolio pricing service approved by the Fund's Board of
Trustees or obtained by the Manager from two active market makers in the security on the basis of reasonable
inquiry.
o The following securities are valued at the mean between the "bid" and "asked" prices determined by a
pricing service approved by the Fund's Board of Trustees or obtained by the Manager from two active market makers
in the security on the basis of reasonable inquiry:
(1) debt instruments that have a maturity of more than 397 days when issued,
(2) debt instruments that had a maturity of 397 days or less when issued and have a remaining maturity of
more than 60 days, and
(3) non-money market debt instruments that had a maturity of 397 days or less when issued and which have a
remaining maturity of 60 days or less.
o The following securities are valued at cost, adjusted for amortization of premiums and accretion of
discounts:
(1) money market debt securities held by a non-money market fund that had a maturity of less than 397 days
when issued that have a remaining maturity of 60 days or less, and
(2) debt instruments held by a money market fund that have a remaining maturity of 397 days or less.
o Securities (including restricted securities) not having readily-available market quotations are valued
at fair value determined under the Board's procedures. If the Manager is unable to locate two market makers
willing to give quotes, a security may be priced at the mean between the "bid" and "asked" prices provided by a
single active market maker (which in certain cases may be the "bid" price if no "asked" price is available).

In the case of U.S. government securities, mortgage-backed securities, corporate bonds and foreign
government securities, when last sale information is not generally available, the Manager may use pricing
services approved by the Board of Trustees. The pricing service may use "matrix" comparisons to the prices for
comparable instruments on the basis of quality, yield and maturity. Other special factors may be involved (such
as the tax-exempt status of the interest paid by municipal securities). The Manager will monitor the accuracy of
the pricing services. That monitoring may include comparing prices used for portfolio valuation to actual sales
prices of selected securities.

The closing prices in the London foreign exchange market on a particular business day that are provided to the
Manager by a bank, dealer or pricing service that the Manager has determined to be reliable are used to value
foreign currency, including forward contracts, and to convert to U.S. dollars securities that are denominated in
foreign currency.

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

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

How to Sell Shares

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

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 1940 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 New York Stock Exchange on
a regular business day, it will be processed at that day's net asset value if the order was received by the
dealer or broker from its customers prior to the time the Exchange closes. Normally, the Exchange closes at 4:00
P.M., but may do so earlier on some days. Additionally, the order must have been transmitted to and received by
the Distributor prior to its close of business that day (normally 5:00 P.M.).
Ordinarily, for accounts redeemed by a broker-dealer under this procedure, payment will be made within
three business days after the shares have been redeemed upon the Distributor's receipt of the required redemption
documents in proper form. The signature(s) of the registered owners on the redemption documents must be
guaranteed as described in the Prospectus.

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

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

The Fund cannot guarantee receipt of a payment on the date requested. The Fund reserves the right to
amend, suspend or discontinue offering these plans at any time without prior notice. Because of the sales charge
assessed on Class A share purchases, shareholders should not make regular additional Class A share purchases
while participating in an Automatic Withdrawal Plan. Class B, Class C and Class N shareholders should not
establish automatic withdrawal plans, because of the potential imposition of the contingent deferred sales charge
on such withdrawals (except where the Class B, Class C or Class N contingent deferred sales charge is waived as
described in Appendix 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 $25. Effective November 1, 2002, 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.

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

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

How to Exchange Shares

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

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

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

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

The following funds do not offer Class Y shares:
Oppenheimer California Municipal Fund Oppenheimer Limited Term Municipal Fund
Oppenheimer Capital Income Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Cash Reserves Oppenheimer New York Municipal Fund
Oppenheimer Champion Income Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Convertible Securities Fund Oppenheimer Rochester National Municipals
Oppenheimer Disciplined Allocation Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Gold amp; Special Minerals Fund Oppenheimer Small Cap Value Fund
Oppenheimer International Small Company Fund Limited Term New York Municipal Fund

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

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

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

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

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

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

o When Class A shares of Oppenheimer Cash Reserves and Oppenheimer Money Market Fund, Inc. acquired by
exchange of Class A shares of any Oppenheimer fund purchased subject to a Class A contingent deferred sales
charge are redeemed within the Class A holding period of the fund from which the shares were exchanged, the Class
A contingent deferred sales charge of the fund from which the shares were exchanged is imposed on the redeemed
shares. The Class B contingent deferred sales charge is imposed on Class B shares acquired by exchange if they
are redeemed within six years of the initial purchase of the exchanged Class B shares. The Class C contingent
deferred sales charge is imposed on Class C shares acquired by exchange if they are redeemed within 12 months of
the initial purchase of the exchanged Class C shares.

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

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

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

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

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

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

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

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

Dividends, Capital Gains and Taxes

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

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

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

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

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

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

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

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

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

|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.

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

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

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

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

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

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

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

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

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

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

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

Additional Information About the Fund

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

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

The Custodian. JPMorgan Chase Bank becomes the custodian of the Fund's assets on
or about November 8, 2002 (prior to which the custodian was Bank of New York).
The custodian's responsibilities include safeguarding and controlling the Fund's
portfolio securities and handling the delivery of such securities to and from
the Fund. It is the practice of the Fund to deal with the custodian in a manner
uninfluenced by any banking relationship the custodian may have with the Manager
and its affiliates. The Fund's cash balances with the custodian in excess of
$100,000 are not protected by federal deposit insurance. Those uninsured
balances at times may be substantial.

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



STATEMENT OF INVESTMENTS  August 31, 2002
- --------------------------------------------------------------------

                                                        MARKET VALUE
                                                SHARES    SEE NOTE 1
====================================================================
 COMMON STOCKS--88.4%
- --------------------------------------------------------------------
 CONSUMER DISCRETIONARY--24.8%
- --------------------------------------------------------------------
 AUTOMOBILES--0.7%
 Harley-Davidson, Inc.                         841,400  $ 41,422,122
- --------------------------------------------------------------------
 HOTELS, RESTAURANTS amp; LEISURE--3.5%
 Brinker International,
 Inc.(1)                                     1,093,300    30,306,276
- --------------------------------------------------------------------
 Carnival Corp.                              3,301,300    80,782,811
- --------------------------------------------------------------------
 Mandalay Resort
 Group(1)                                      294,600     8,867,460
- --------------------------------------------------------------------
 Royal Caribbean
 Cruises Ltd.                                3,486,500    61,711,050
- --------------------------------------------------------------------
 Ruby Tuesday, Inc.                            248,600     4,957,084
- --------------------------------------------------------------------
 Starwood Hotels
 amp; Resorts
 Worldwide, Inc.                               335,200     8,641,456
                                                       -------------
                                                         195,266,137

- --------------------------------------------------------------------
 HOUSEHOLD DURABLES--0.4%
 Ethan Allen
 Interiors, Inc.                               713,460    24,243,371
- --------------------------------------------------------------------
 INTERNET amp; CATALOG RETAIL--0.1%
 ValueVision Media,
 Inc., Cl. A(1)                                364,600     5,188,258
- --------------------------------------------------------------------
 LEISURE EQUIPMENT amp; PRODUCTS--0.5%
 Mattel, Inc.                                1,452,000    28,212,360
- --------------------------------------------------------------------
 MEDIA--14.8%
 AOL Time Warner,
 Inc.(1)                                     7,477,800    94,594,170
- --------------------------------------------------------------------
 Cablevision Systems
 New York Group,
 Cl. A(1)                                    1,197,900    11,415,987
- --------------------------------------------------------------------
 Clear Channel
 Communications,
 Inc.(1)                                     2,044,000    69,863,920
- --------------------------------------------------------------------
 Comcast Corp.,
 Cl. A Special(1)                            6,816,750   162,443,152
- --------------------------------------------------------------------
 Fox Entertainment
 Group, Inc., A Shares(1)                      928,200    20,726,706
- --------------------------------------------------------------------
 Hispanic Broadcasting
 Corp.(1)                                      979,000    18,943,650
- --------------------------------------------------------------------
 McGraw-Hill Cos.,
 Inc. (The)                                  1,771,100   112,305,451
 --------------------------------------------------------------------
 New York Times Co.,
 Cl. A                                         764,300    36,074,960
- --------------------------------------------------------------------
 News Corp. Ltd. (The),
 Sponsored ADR                               2,610,600    56,127,900

                                                        MARKET VALUE
                                                SHARES    SEE NOTE 1
====================================================================
 MEDIA Continued
 Omnicom Group, Inc.                           809,200  $ 48,956,600
- --------------------------------------------------------------------
 Univision
 Communications,
 Inc., Cl. A(1)                                816,700    19,029,110
- --------------------------------------------------------------------
 Viacom, Inc., Cl. B(1)                      4,516,400   183,817,480
                                                       -------------
                                                         834,299,086

- --------------------------------------------------------------------
 MULTILINE RETAIL--3.2%
 BJ's Wholesale
 Club, Inc.(1)                                 220,400     5,410,820
- --------------------------------------------------------------------
 Costco Wholesale
 Corp.(1)                                    1,216,700    40,649,947
- --------------------------------------------------------------------
 Kohl's Corp.(1)                               665,200    46,377,744
- --------------------------------------------------------------------
 Sears Roebuck amp; Co.                           690,200    31,411,002
- --------------------------------------------------------------------
 Target Corp.                                1,670,300    57,124,260
                                                        ------------
                                                         180,973,773
- --------------------------------------------------------------------
 SPECIALTY RETAIL--1.3%
 AutoNation, Inc.(1)                           402,300     5,310,360
- --------------------------------------------------------------------
 Gap, Inc. (The)                             2,291,800    26,882,814
- --------------------------------------------------------------------
 Limited Brands, Inc.                        1,869,800    28,589,242
- --------------------------------------------------------------------
 Tiffany amp; Co.                                 597,200    14,810,560
                                                         -----------
                                                          75,592,976
- --------------------------------------------------------------------
 TEXTILES amp; APPAREL--0.3%
 Nike, Inc., Cl. B                             360,900    15,583,662
- --------------------------------------------------------------------
 CONSUMER STAPLES--6.8%
- --------------------------------------------------------------------
 BEVERAGES--3.7%
 Anheuser-Busch
 Cos., Inc.                                  2,292,000   121,842,720
- --------------------------------------------------------------------
 PepsiCo, Inc.                               2,136,000    84,478,800
                                                        ------------
                                                         206,321,520
- --------------------------------------------------------------------
 FOOD amp; DRUG RETAILING--1.5%
 Kroger Co. (The)(1)                         1,461,800    26,429,344
- --------------------------------------------------------------------
 Rite Aid Corp.(1)                             591,500     1,242,150
- --------------------------------------------------------------------
 Safeway, Inc.(1)                            1,468,400    37,914,088
- --------------------------------------------------------------------
 Sysco Corp.                                   666,900    18,913,284
                                                        ------------
                                                          84,498,866
- --------------------------------------------------------------------
 FOOD PRODUCTS--1.4%
 Dean Foods Co.(1)                           1,146,100    43,379,885
- --------------------------------------------------------------------
 General Mills, Inc.                           840,900    35,393,481
                                                        ------------
                                                          78,773,366

OPPENHEIMER CAPITAL APPRECIATION FUND

                                                        MARKET VALUE
                                                SHARES    SEE NOTE 1
====================================================================
 PERSONAL PRODUCTS--0.2%
 Estee Lauder Cos.,
 Inc. (The), Cl. A                             437,400  $ 13,100,130
- --------------------------------------------------------------------
 ENERGY--6.5%
- --------------------------------------------------------------------
 ENERGY EQUIPMENT amp; SERVICES--1.6%
 BJ Services Co.(1)                          1,169,700    35,675,850
- --------------------------------------------------------------------
 Halliburton Co.                               968,600    14,722,720
- --------------------------------------------------------------------
 Noble Corp.(1)                                507,510    15,768,336
- --------------------------------------------------------------------
 Rowan Cos., Inc.                              638,400    13,138,272
- --------------------------------------------------------------------
 Varco International,
 Inc.(1)                                       651,600    11,487,708
                                                        ------------
                                                          90,792,886

- --------------------------------------------------------------------
 OIL amp; GAS--4.9%
 Amerada Hess Corp.                            833,200    60,906,920
- --------------------------------------------------------------------
 Encana Corp.                                1,145,510    33,616,312
 Exxon Mobil Corp.                           2,794,800    99,075,660
 TotalFinaElf SA,
 Sponsored ADR                               1,137,400    81,119,368
                                                        ------------
                                                         274,718,260

- --------------------------------------------------------------------
 FINANCIALS--14.8%
- --------------------------------------------------------------------
 BANKS--2.3%
 Bank of America
 Corp                                          748,400    52,447,872
- --------------------------------------------------------------------
 Bank One Corp.                              1,925,400    78,845,130
                                                        ------------
                                                         131,293,002
- --------------------------------------------------------------------
 DIVERSIFIED FINANCIALS--9.4%
 American
 Express Co.                                 1,511,900    54,519,114
- --------------------------------------------------------------------
 Citigroup, Inc.                             3,629,800   118,875,950
- --------------------------------------------------------------------
 Countrywide Credit
 Industries, Inc.                              621,800    32,638,282
- --------------------------------------------------------------------
 Fannie Mae                                    492,700    37,336,806
- --------------------------------------------------------------------
 Freddie Mac                                 1,269,500    81,374,950
- --------------------------------------------------------------------
 Goldman Sachs
 Group, Inc. (The)                             393,600    30,425,280
- --------------------------------------------------------------------
 J.P. Morgan Chase
 amp; Co.                                       1,435,400    37,894,560
- --------------------------------------------------------------------
 Merrill Lynch
 amp; Co., Inc.                                   852,800    30,888,416
- --------------------------------------------------------------------
 Morgan Stanley                              1,802,900    77,019,888
- --------------------------------------------------------------------
 Schwab (Charles)
 Corp.                                       3,132,600    28,757,268
                                                        ------------
                                                         529,730,514

                                                        MARKET VALUE
                                                SHARES    SEE NOTE 1
====================================================================
 INSURANCE--2.4%
- --------------------------------------------------------------------
 American
 International
 Group, Inc.                                 1,299,900  $ 81,633,720
- --------------------------------------------------------------------
 Everest Re
 Group Ltd.                                    222,500    12,059,500
- --------------------------------------------------------------------
 St. Paul Cos., Inc.                           451,000    13,719,420
- --------------------------------------------------------------------
 Travelers Property
 Casualty Corp., Cl. A(1)                      156,856     2,465,776
- --------------------------------------------------------------------
 Travelers Property
 Casualty Corp., Cl. B(1)                      322,266     5,249,713
- --------------------------------------------------------------------
 XL Capital Ltd., Cl. A                        254,000    18,696,940
                                                       -------------
                                                         133,825,069

- --------------------------------------------------------------------
 REAL ESTATE--0.7%
 Boston Properties,
 Inc.                                          292,200    11,068,536
- --------------------------------------------------------------------
 Host Marriott Corp.                         2,795,600    28,347,384
                                                        ------------
                                                          39,415,920
- --------------------------------------------------------------------
 HEALTH CARE--9.5%
- --------------------------------------------------------------------
 BIOTECHNOLOGY--1.7%
 Amgen, Inc.(1)                                437,400    19,696,122
- --------------------------------------------------------------------
 Genzyme Corp.
 (General Division)(1)                       1,325,700    27,415,476
- --------------------------------------------------------------------
 IDEC Pharmaceuticals
 Corp.(1)                                      625,590    25,136,206
- --------------------------------------------------------------------
 Medimmune, Inc.(1)                            106,800     2,741,556
- --------------------------------------------------------------------
 Serono SA,
 Sponsored ADR                               1,346,100    18,912,705
                                                        ------------
                                                          93,902,065
- --------------------------------------------------------------------
 HEALTH CARE EQUIPMENT amp; SUPPLIES--1.5%
 Applera Corp./
 Applied Biosystems
 Group                                       1,596,500    31,626,665
- --------------------------------------------------------------------
 Medtronic, Inc.                               677,100    27,882,978
- --------------------------------------------------------------------
 Stryker Corp.                                 429,800    24,227,826
                                                       -------------
                                                          83,737,469
- --------------------------------------------------------------------
 HEALTH CARE PROVIDERS amp; SERVICES--2.7%
 Anthem, Inc.(1)                               309,800    19,551,478
- --------------------------------------------------------------------
 Apria Healthcare
 Group, Inc.(1)                                270,400     6,240,832
- --------------------------------------------------------------------
 Caremark Rx, Inc.(1)                        1,388,600    22,495,320
- --------------------------------------------------------------------
 Covance, Inc.(1)                            1,124,300    21,946,336
- --------------------------------------------------------------------
 Humana, Inc.(1)                               996,900    13,258,770


                                        13 OPPENHEIMER CAPITAL APPRECIATION FUND


STATEMENT OF INVESTMENTS  Continued
- --------------------------------------------------------------------------------
                                                        MARKET VALUE
                                                SHARES    SEE NOTE 1
====================================================================
 HEALTH CARE PROVIDERS amp; SERVICES Continued
- --------------------------------------------------------------------
 McKesson Corp.                              1,042,900   $34,978,866
- --------------------------------------------------------------------
 Oxford Health
 Plans, Inc.(1)                                593,400    24,062,370
- --------------------------------------------------------------------
 Quest Diagnostics,
 Inc.(1)                                       198,100    11,103,505
                                                        ------------
                                                         153,637,477
- --------------------------------------------------------------------
 PHARMACEUTICALS--3.6%
 Abbott Laboratories                           874,700    35,014,241
- --------------------------------------------------------------------
 Johnson amp; Johnson                             970,800    52,724,148
- --------------------------------------------------------------------
 Perrigo Co.(1)                              1,418,370    15,165,212
- --------------------------------------------------------------------
 Pfizer, Inc.                                3,027,200   100,139,776
                                                        ------------
                                                         203,043,377
- --------------------------------------------------------------------
 INDUSTRIALS--5.8%
- --------------------------------------------------------------------
 AEROSPACE amp; DEFENSE--1.9%
 Boeing Co.                                    358,200    13,278,474
- --------------------------------------------------------------------
 Honeywell
 International, Inc.                         1,767,600    52,939,620
- --------------------------------------------------------------------
 Northrop Grumman
 Corp.                                         350,900    43,090,520
                                                        ------------
                                                         109,308,614
- --------------------------------------------------------------------
 COMMERCIAL SERVICES amp; SUPPLIES--2.5%
 Automatic Data
 Processing, Inc.                              619,100    23,383,407
- --------------------------------------------------------------------
 Concord EFS, Inc.(1)                        1,754,040    35,799,956
- --------------------------------------------------------------------
 First Data Corp.                              575,900    20,012,525
- --------------------------------------------------------------------
 Waste Management,
 Inc.                                        2,435,600    61,937,308
                                                        ------------
                                                         141,133,196
- --------------------------------------------------------------------
 INDUSTRIAL CONGLOMERATES--0.3%
 Tyco International
 Ltd.                                        1,174,479    18,427,576
- --------------------------------------------------------------------
 MACHINERY--0.8%
 Dover Corp.                                   402,300    11,558,079
- --------------------------------------------------------------------
 Ingersoll-Rand Co.,
 Cl. A                                         837,700    31,455,635
                                                        ------------
                                                          43,013,714
- --------------------------------------------------------------------
 ROAD amp; RAIL--0.3%
 Canadian Pacific Ltd.                         663,400    13,778,308

                                                        MARKET VALUE
                                                SHARES    SEE NOTE 1
====================================================================
 INFORMATION TECHNOLOGY--14.8%
- --------------------------------------------------------------------
 COMMUNICATIONS EQUIPMENT--2.9%
 Cisco Systems, Inc.(1)                      3,972,500  $ 54,899,950
- --------------------------------------------------------------------
 Lucent Technologies,
 Inc.(1)                                     5,178,000     8,957,940
- --------------------------------------------------------------------
 Nokia Corp.,
 Sponsored ADR,
 A Shares                                    6,058,300    80,514,807
- --------------------------------------------------------------------
 QUALCOMM, Inc.(1)                             678,600    18,804,006
                                                        ------------
                                                         163,176,703
- --------------------------------------------------------------------
 COMPUTERS amp; PERIPHERALS--0.0%
 Seagate Technology
 International, Inc.
 Escrow Shares(1,2)                          1,000,000            --
- --------------------------------------------------------------------
 ELECTRONIC EQUIPMENT amp; INSTRUMENTS--1.4%
 Flextronics
 International Ltd.(1)                       2,137,100    20,238,337
- --------------------------------------------------------------------
 Millipore Corp.                               304,600    10,749,334
- --------------------------------------------------------------------
 Sanmina-SCI Corp.(1)                        4,386,500    15,528,210
- --------------------------------------------------------------------
 Vishay
 Intertechnology,
 Inc.(1)                                     2,138,000    30,616,160
                                                        ------------
                                                          77,132,041
- --------------------------------------------------------------------
 INTERNET SOFTWARE amp; SERVICES--0.2%
 Check Point
 Software
 Technologies Ltd.(1)                          770,750    12,910,833
- --------------------------------------------------------------------
 SEMICONDUCTOR EQUIPMENT amp; PRODUCTS--4.5%
 Analog Devices, Inc.(1)                       510,600    12,305,460
- --------------------------------------------------------------------
 Atmel Corp.(1)                                312,100       720,951
- --------------------------------------------------------------------
 Cypress
 Semiconductor
 Corp.(1)                                    2,364,000    24,892,920
- --------------------------------------------------------------------
 Intel Corp.                                 4,121,000    68,697,070
- --------------------------------------------------------------------
 International
 Rectifier Corp.(1)                          1,078,100    23,459,456
- --------------------------------------------------------------------
 Micron Technology,
 Inc.(1)                                     2,045,600    35,286,600
- --------------------------------------------------------------------
 National
 Semiconductor
 Corp.(1)                                    1,183,500    18,924,165
- --------------------------------------------------------------------
 QLogic Corp.(1)                               959,500    32,191,225
- --------------------------------------------------------------------
 RF Micro Devices,
 Inc.(1)                                     1,993,000    13,333,170
- --------------------------------------------------------------------
 Texas Instruments,
 Inc.                                        1,126,100    22,184,170




                                                        MARKET VALUE
                                                SHARES    SEE NOTE 1
====================================================================
 SEMICONDUCTOR EQUIPMENT amp; PRODUCTS Continued
 Vitesse
 Semiconductor
 Corp.(1)                                    2,028,000  $  2,697,240
                                                        ------------
                                                         254,692,427
- --------------------------------------------------------------------
 SOFTWARE--5.8%
 Cadence Design
 Systems, Inc.(1)                            1,810,500    24,387,435
- --------------------------------------------------------------------
 Electronic Arts, Inc.(1)                      946,930    59,902,792
- --------------------------------------------------------------------
 Microsoft Corp.(1)                          3,880,300   190,445,124
- --------------------------------------------------------------------
 Peoplesoft, Inc.(1)                         1,246,500    20,043,720
- --------------------------------------------------------------------
 Reynolds amp;
 Reynolds Co., Cl. A                           117,200     2,912,420
- --------------------------------------------------------------------
 SAP AG (Systeme,
 Anwendungen,
 Produkte in der
 Datenverarbeitung),
 Sponsored ADR                                 850,500    16,372,125
- --------------------------------------------------------------------
 Veritas Software
 Corp.(1)                                      752,700    12,186,213
                                                        ------------
                                                         326,249,829
- --------------------------------------------------------------------
 MATERIALS--2.8%
- --------------------------------------------------------------------
 CHEMICALS--2.2%
 Air Products amp;
 Chemicals, Inc.                               623,100    29,229,621
- --------------------------------------------------------------------
 International Flavors
 amp; Fragrances, Inc.                          1,084,400    34,971,900
- --------------------------------------------------------------------
 PPG Industries, Inc.                          198,100    11,147,087
- --------------------------------------------------------------------
 Praxair, Inc.                                 857,900    48,068,137
                                                         -----------
                                                         123,416,745
- --------------------------------------------------------------------
 PAPER amp; FOREST PRODUCTS--0.6%
 International
 Paper Co.                                     970,800    36,550,620
- --------------------------------------------------------------------
 TELECOMMUNICATION SERVICES--0.6%
- --------------------------------------------------------------------
 DIVERSIFIED TELECOMMUNICATION SERVICES--0.1%
 Sprint Corp.
 (Fon Group)                                   437,400     5,073,840
- --------------------------------------------------------------------
 WIRELESS TELECOMMUNICATION SERVICES--0.5%
 Sprint Corp.
 (PCS Group)(1)                                563,900     2,233,044
- --------------------------------------------------------------------
 Vodafone Group
 plc, Sponsored ADR                          1,578,700    25,243,413
                                                         -----------
                                                          27,476,457

                                                        MARKET VALUE
                                                SHARES    SEE NOTE 1
====================================================================
 UTILITIES--2.0%
- --------------------------------------------------------------------
 ELECTRIC UTILITIES--0.9%
 Duke Energy Corp.                           1,856,500  $ 49,809,895
- --------------------------------------------------------------------
 GAS UTILITIES--1.1%
 El Paso Corp.                               2,435,900    41,191,069
- --------------------------------------------------------------------
 Kinder Morgan
 Management LLC                                635,900    20,355,159
                                                        ------------
                                                          61,546,228
- --------------------------------------------------------------------
 WATER UTILITIES--0.0%
 Philadelphia
 Suburban Corp.                                201,975     3,809,249
                                                        ------------
 Total Common Stocks
 (Cost $6,539,672,072)                                 4,985,077,941

- --------------------------------------------------------------------
 OTHER SECURITIES--0.4%
- --------------------------------------------------------------------
 Nasdaq-100 Unit
 Investment Trust(1)
 (Cost $26,132,356)                            933,400    21,925,566

                                             PRINCIPAL
                                                AMOUNT
================================================================================
 SHORT-TERM NOTES--3.9%
- --------------------------------------------------------------------
 Barton Capital Corp.,
 1.75%, 9/20/02                            $30,000,000    29,972,291
- --------------------------------------------------------------------
 New Center
 Asset Trust:
 2%, 9/13/02                                25,000,000    24,985,500
 2%, 9/16/02                                25,000,000    24,981,667
 2%, 10/10/02                               30,000,000    29,942,475
- --------------------------------------------------------------------
 Old Line Funding
 Corp., 1.75%,
 9/25/02                                    35,000,000    34,959,167
- --------------------------------------------------------------------
 Sheffield
 Receivables Corp.:
 2%, 9/19/02                                25,000,000    24,978,125
 2%, 9/25/02                                50,000,000    49,941,000
                                                        ------------
 Total Short-Term Notes
 (Cost $219,760,225)                                     219,760,225




STATEMENT OF INVESTMENTS  Continued
- ----------------------------------------------------------------------
                                             PRINCIPAL    MARKET VALUE
                                                AMOUNT      SEE NOTE 1
======================================================================
 JOINT REPURCHASE AGREEMENTS--8.5%
- ----------------------------------------------------------------------

 Undivided interest of 49.40% in joint
 repurchase agreement with PaineWebber,
 Inc., 1.85%, dated 8/30/02, to be repurchased
 at $969,046,152 on 9/3/02, collateralized by
 Federal National Mortgage Assn., 5.50%--6%,
 1/1/32--5/1/32, with a value of $989,261,165
 (Cost $478,618,000)
                                          $478,618,000  $  478,618,000

- ----------------------------------------------------------------------
 TOTAL INVESTMENTS,
 AT VALUE
 (COST $7,264,182,653)                           101.2%  5,705,381,732
- ----------------------------------------------------------------------
 LIABILITIES IN
 EXCESS OF
 OTHER ASSETS                                     (1.2)    (69,064,867)
                                                ----------------------
 NET ASSETS                                      100.0% $5,636,316,865
                                                ======================

FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Non-income producing security.

2. Identifies issues considered to be illiquid--See Note 6 of Notes to Financial
Statements.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.



STATEMENT OF ASSETS AND LIABILITIES  August 31, 2002
- ----------------------------------------------------------------------------

============================================================================
 ASSETS
- ----------------------------------------------------------------------------
 Investments, at value (cost $7,264,182,653) --
   see accompanying statement                                $ 5,705,381,732
- ----------------------------------------------------------------------------
 Receivables and other assets:
 Shares of beneficial interest sold                               18,361,605
 Investments sold                                                  7,971,498
 Interest and dividends                                            5,091,612
 Other                                                                35,777
                                                             ---------------
 Total assets                                                  5,736,842,224
============================================================================
 LIABILITIES
- ----------------------------------------------------------------------------
 Bank overdraft                                                    3,371,208
- ----------------------------------------------------------------------------
 Unrealized depreciation on foreign currency contracts                   437
- ----------------------------------------------------------------------------
 Payables and other liabilities:
 Investments purchased                                            82,270,723
 Shares of beneficial interest redeemed                            8,522,340
 Transfer and shareholder servicing agent fees                     2,407,796
 Distribution and service plan fees                                1,856,026
 Trustees' compensation                                              890,621
 Shareholder reports                                                 763,370
 Other                                                               442,838
                                                             ---------------
 Total liabilities                                               100,525,359
============================================================================
 NET ASSETS                                                  $ 5,636,316,865
- ----------------------------------------------------------------------------

============================================================================
 COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------
 Paid-in capital                                             $ 7,541,100,541
- ----------------------------------------------------------------------------
 Accumulated net investment loss                                    (858,396)
- ----------------------------------------------------------------------------
 Accumulated net realized loss on investments and
   foreign currency transactions                                (345,124,729)
- ----------------------------------------------------------------------------
 Net unrealized depreciation on investments and translation
 of assets and liabilities denominated in foreign currencies  (1,558,800,551)
                                                             ---------------
 NET ASSETS                                                  $ 5,636,316,865
                                                             ===============




STATEMENT OF ASSETS AND LIABILITIES  Continued
- --------------------------------------------------------------------------------

================================================================================
 NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$3,219,390,747 and 104,798,231 shares of beneficial interest
outstanding)                                                              $30.72
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price)                             $32.59
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $1,029,321,686 and 35,554,056 shares of beneficial interest
outstanding)                                                              $28.95
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $450,988,827 and 15,754,851 shares of beneficial interest
outstanding)                                                              $28.63
- --------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $72,178,153 and 2,358,575 shares of beneficial interest
outstanding)                                                              $30.60
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $864,437,452 and 27,744,518 shares of beneficial
interest outstanding)                                                     $31.16

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.




STATEMENT OF OPERATIONS  For the Year Ended August 31, 2002
- --------------------------------------------------------------------------------

================================================================================
 INVESTMENT INCOME
- --------------------------------------------------------------------------------
 Dividends (net of foreign withholding taxes of $620,443)       $    46,807,925
- --------------------------------------------------------------------------------
 Interest                                                            15,848,731
                                                                ---------------
 Total investment income                                             62,656,656

================================================================================
 EXPENSES
- --------------------------------------------------------------------------------
 Management fees                                                     34,456,425
- --------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                              7,599,340
 Class B                                                             12,215,841
 Class C                                                              4,579,140
 Class N                                                                190,265
- --------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                             10,642,784
 Class B                                                              4,112,807
 Class C                                                              1,576,970
 Class N                                                                118,011
 Class Y                                                              2,362,403
- --------------------------------------------------------------------------------
 Shareholder reports                                                  2,596,951
- --------------------------------------------------------------------------------
 Trustees' compensation                                                 349,369
- --------------------------------------------------------------------------------
 Custodian fees and expenses                                            119,785
- --------------------------------------------------------------------------------
 Other                                                                  665,078
                                                                ----------------
 Total expenses                                                      81,585,169
 Less reduction to custodian expenses                                   (13,476)
 Less voluntary waiver of transfer and shareholder
 servicing agent fees --
 Classes A, B, C and N                                                 (243,040)
                                                                ----------------
 Net expenses                                                        81,328,653
================================================================================
 NET INVESTMENT LOSS                                                (18,671,997)

================================================================================
 REALIZED AND UNREALIZED LOSS
- --------------------------------------------------------------------------------
 Net realized loss on:
 Investments                                                       (329,805,868)
 Foreign currency transactions                                         (266,185)
                                                                ----------------
 Net realized loss                                                 (330,072,053)
- --------------------------------------------------------------------------------
 Net change in unrealized depreciation on:
 Investments                                                     (1,276,079,992)
 Translation of assets and liabilities
    denominated in foreign currencies                                   (63,266)
                                                                ----------------
 Net change                                                      (1,276,143,258)
                                                                ----------------
 Net realized and unrealized loss                                (1,606,215,311)

- --------------------------------------------------------------------------------
 NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS           $(1,624,887,308)
                                                                ================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.



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

 YEAR ENDED AUGUST 31,                                    2002             2001
================================================================================
 OPERATIONS
- --------------------------------------------------------------------------------

 Net investment income (loss)                  $   (18,671,997) $     8,427,191
- --------------------------------------------------------------------------------
 Net realized gain (loss)                         (330,072,053)     216,477,612
- --------------------------------------------------------------------------------
 Net change in unrealized depreciation          (1,276,143,258)  (2,129,854,386)
                                               ---------------------------------
 Net decrease in net assets
    resulting from operations                   (1,624,887,308)  (1,904,949,583)

================================================================================
 DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------

 Distributions from net realized gain:
 Class A                                           (78,925,210)    (315,580,814)
 Class B                                           (32,881,006)    (125,027,291)
 Class C                                           (12,072,075)     (38,476,846)
 Class N                                              (448,693)              --
 Class Y                                           (23,930,560)    (110,054,951)

================================================================================
 BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------
 Net increase in net assets resulting from
 beneficial interest transactions:
 Class A                                         1,117,051,404      742,228,163
 Class B                                           155,846,095      436,276,561
 Class C                                           173,690,841      189,865,151
 Class N                                            78,890,789        7,285,737
 Class Y                                           178,600,006      143,938,999

================================================================================
 NET ASSETS
- --------------------------------------------------------------------------------
 Total decrease                                    (69,065,717)    (974,494,874)
- --------------------------------------------------------------------------------
 Beginning of period                             5,705,382,582    6,679,877,456
                                                --------------------------------
 End of period [including accumulated
 net investment losses of $858,396 and
 $739,767, respectively]                        $5,636,316,865   $5,705,382,582
                                                ================================

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.






CLASS Y  YEAR ENDED AUGUST 31,                  2002        2001        2000        1999        1998(1)
=====================================================================================================

PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------
 Net asset value, beginning of period        $ 41.55     $ 62.51     $ 44.81     $ 32.56     $ 40.15
- -----------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                    .02(2)      .27         .13         .13         .30
 Net realized and unrealized gain (loss)       (9.42)(2)  (15.98)      20.79       14.85       (3.11)
                                            ---------------------------------------------------------
 Total from investment operations              (9.40)     (15.71)      20.92       14.98       (2.81)
- -----------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income             --          --          --        (.19)       (.21)
 Distributions from net realized gain           (.99)      (5.25)      (3.22)      (2.54)      (4.57)
                                            ---------------------------------------------------------
 Total dividends and/or
 distributions to shareholders                  (.99)      (5.25)      (3.22)      (2.73)      (4.78)
- -----------------------------------------------------------------------------------------------------
 Net asset value, end of period               $31.16      $41.55      $62.51      $44.81      $32.56
                                            =========================================================

=====================================================================================================
 TOTAL RETURN, AT NET ASSET VALUE(3)          (23.23)%    (26.12)%     48.64%      47.90%      (7.45)%
- -----------------------------------------------------------------------------------------------------

=====================================================================================================
 RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)   $864,437  $  974,820  $1,295,087    $420,455    $180,512
- -----------------------------------------------------------------------------------------------------
 Average net assets (in thousands)          $968,867  $1,095,575  $  855,270    $307,498    $139,050
- -----------------------------------------------------------------------------------------------------
 Ratios to average net assets:(4)
 Net investment income                          0.17%       0.66%       0.45%       0.30%       0.75%
 Expenses                                       0.89%       0.66%       0.64%       0.68%       0.69%(5)
- -----------------------------------------------------------------------------------------------------
 Portfolio turnover rate                          28%         46%         44%         59%         60%


1. For the period from November 3, 1997 (inception of offering) to August 31,
1998.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year.
5. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.


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. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per share
may differ by minor amounts due to each class having its own expenses directly
attributable to that class. Classes A, B, C and N have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class B
shares will automatically convert to Class A shares six years after the date of
purchase.

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

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

- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.

     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. The Fund, along with other affiliated funds of the
Manager, may transfer uninvested cash balances into one or more joint repurchase


- --------------------------------------------------------------------------------
agreement accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal; however,
in the event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.

- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.

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

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

                              EXPIRING
                              ----------------------
                              2010       $61,636,235

As of August 31, 2002, the Fund had approximately $253,373,000 of post-October
losses available to offset future capital gains, if any. Such losses, if
unutilized, will expire in 2011. Additionally, the Fund had approximately
$16,000 of post-October foreign currency losses which were deferred.

- --------------------------------------------------------------------------------
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, 2002, the Fund's projected benefit obligations were increased by $130,676
and payments of $12,047 were made to retired trustees, resulting in an
accumulated liability of $858,431 as of August 31, 2002.

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



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

================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES Continued

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.

- --------------------------------------------------------------------------------
CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for tax purposes. The
character of dividends and distributions made during the fiscal year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or net realized gain was
recorded by the Fund.

     The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended August 31, 2002, amounts have been reclassified to reflect a decrease
in paid-in capital of $18,803,288, a decrease in accumulated net investment loss
of $18,553,368, and a decrease in accumulated net realized loss on investments
of $249,920. Net assets of the Fund were unaffected by the reclassifications.

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

                                           YEAR ENDED        YEAR ENDED
                                      AUGUST 31, 2002   AUGUST 31, 2001
- --------------------------------------------------------------------------------
                 Distributions paid from:
                 Ordinary income         $         --      $354,477,278
                 Long-term capital gain   148,257,544       234,662,624
                 Return of capital                 --                --
                                         ------------------------------
                 Total                   $148,257,544      $589,139,902
                                         ==============================

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

                 Accumulated net investment loss        $      (858,396)
                 Accumulated net realized loss             (345,124,729)
                 Net unrealized depreciation             (1,558,800,551)
                                                        ---------------
                 Total                                  $(1,904,783,676)
                                                        ===============

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

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

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

================================================================================
2. SHARES OF BENEFICIAL INTEREST

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



                              YEAR ENDED AUGUST 31, 2002   YEAR ENDED AUGUST 31, 2001(1)
                                SHARES            AMOUNT         SHARES           AMOUNT
- ----------------------------------------------------------------------------------------

 CLASS A
 Sold                       53,070,823    $1,905,539,371     22,608,674   $1,080,716,997
 Dividends and/or
 distributions reinvested    1,755,869        72,763,164      6,337,191      296,137,035
 Redeemed                  (24,347,868)     (861,251,131)   (13,365,396)    (634,625,869)
                           -------------------------------------------------------------
 Net increase               30,478,824    $1,117,051,404     15,580,469   $  742,228,163
                           =============================================================

- ----------------------------------------------------------------------------------------
 CLASS B
 Sold                       12,282,673     $ 436,416,730     12,135,550    $ 557,398,730
 Dividends and/or
 distributions reinvested      786,310        30,886,268      2,633,268      117,655,350
 Redeemed                   (9,289,206)     (311,456,903)    (5,291,430)    (238,777,519)
                           -------------------------------------------------------------
 Net increase                3,779,777     $ 155,846,095      9,477,388    $ 436,276,561
                           =============================================================

- ----------------------------------------------------------------------------------------
 CLASS C
 Sold                        8,394,929     $ 291,814,714      5,484,946     $247,461,141
 Dividends and/or
 distributions reinvested      277,019        10,753,885        812,514       35,888,768
 Redeemed                   (3,953,474)     (128,877,758)    (2,060,592)     (93,484,758)
                           -------------------------------------------------------------
 Net increase                4,718,474     $ 173,690,841      4,236,868     $189,865,151
                           =============================================================

- ----------------------------------------------------------------------------------------
 CLASS N
 Sold                        2,573,390      $ 92,009,980        178,524       $7,841,445
 Dividends and/or
 distributions reinvested       10,848           448,566             --               --
 Redeemed                     (391,091)      (13,567,757)       (13,096)        (555,708)
                           -------------------------------------------------------------
 Net increase                2,193,147      $ 78,890,789        165,428       $7,285,737
                           =============================================================

- ----------------------------------------------------------------------------------------
 CLASS Y
 Sold                       10,706,767     $ 404,655,100      7,131,501    $ 354,385,311
 Dividends and/or
 distributions reinvested      557,609        23,369,417      2,298,717      108,246,627
 Redeemed                   (6,979,040)     (249,424,511)    (6,689,239)    (318,692,939)
                           -------------------------------------------------------------
 Net increase                4,285,336     $ 178,600,006      2,740,979    $ 143,938,999
                           =============================================================

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

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

================================================================================
3. PURCHASES AND SALES OF SECURITIES

The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended August 31, 2002, were
$3,050,744,512 and $1,462,251,272, respectively.

     As of August 31, 2002, unrealized appreciation (depreciation) based on cost
of securities for federal income tax purposes of $7,294,282,568 was composed of:

                  Gross unrealized appreciation    $   192,603,506
                  Gross unrealized depreciation     (1,781,504,342)
                                                   ---------------
                  Net unrealized depreciation      $(1,588,900,836)
                                                   ===============

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

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

MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.75% of
the first $200 million of average annual net assets, 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 $4.0 billion, and 0.52% of average annual net assets
over $8.5 billion.

- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a $19.75 per account fee.

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

     OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees up to an annual rate of 0.25% of average net assets of Class Y shares
and for all other classes, up to an annual rate of 0.35% of average net assets
of each class. This undertaking may be amended or withdrawn at any time.

- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the different classes of shares of the Fund.

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



                   AGGREGATE        CLASS A      CONCESSIONS    CONCESSIONS    CONCESSIONS    CONCESSIONS
                   FRONT-END      FRONT-END       ON CLASS A     ON CLASS B     ON CLASS C     ON CLASS N
               SALES CHARGES  SALES CHARGES           SHARES         SHARES         SHARES         SHARES
                  ON CLASS A    RETAINED BY      ADVANCED BY    ADVANCED BY    ADVANCED BY    ADVANCED BY
YEAR ENDED            SHARES    DISTRIBUTOR   DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
- ---------------------------------------------------------------------------------------------------------

August 31, 2002  $11,107,427     $2,473,867       $2,999,939    $13,196,558     $2,463,444       $755,491


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

                           CLASS A        CLASS B        CLASS C        CLASS N
                        CONTINGENT     CONTINGENT     CONTINGENT     CONTINGENT
                          DEFERRED       DEFERRED       DEFERRED       DEFERRED
                     SALES CHARGES  SALES CHARGES  SALES CHARGES  SALES CHARGES
                       RETAINED BY    RETAINED BY    RETAINED BY    RETAINED BY
YEAR ENDED             DISTRIBUTOR    DISTRIBUTOR    DISTRIBUTOR    DISTRIBUTOR
- -------------------------------------------------------------------------------
August 31, 2002            $93,365     $3,072,069       $152,225         $2,557

- --------------------------------------------------------------------------------
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. For the year ended August 31, 2002, payments under
the Class A Plan totaled $7,599,340, all of which were paid by the Distributor
to recipients, and included $401,632 paid to an affiliate of the Manager. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years.

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

Distribution fees paid to the Distributor for the year ended August 31, 2002,
were as follows:

                                                                DISTRIBUTOR'S
                                                 DISTRIBUTOR'S      AGGREGATE
                                                     AGGREGATE   UNREIMBURSED
                                                  UNREIMBURSED  EXPENSES AS %
                 TOTAL PAYMENTS AMOUNT RETAINED       EXPENSES  OF NET ASSETS
                     UNDER PLAN  BY DISTRIBUTOR     UNDER PLAN       OF CLASS
- -----------------------------------------------------------------------------
Class B Plan        $12,215,841     $10,030,537    $30,841,033          3.00%
Class C Plan          4,579,140       1,724,170      6,987,737          1.55
Class N Plan            190,265         185,925      1,268,502          1.76

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

================================================================================
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 for operational purposes and to seek to protect against
adverse exchange rate fluctuations. Risks to the Fund include the potential
inability of the counterparty to meet the terms of the contract.

     The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided by
a reliable bank, dealer or pricing service. 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 currency transactions. Such realized gains and losses are reported with
all other foreign currency gains and losses in the Statement of Operations.

As of August 31, 2002, the Fund had outstanding foreign currency contracts as
follows:

                                      CONTRACT         VALUATION
                         EXPIRATION     AMOUNT             AS OF     UNREALIZED
CONTRACT DESCRIPTION           DATE     (000S)   AUGUST 31, 2002   DEPRECIATION
- --------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Canadian Dollar (CAD)        9/3/02     851CAD          $545,550           $437

================================================================================
6. ILLIQUID SECURITIES

As of August 31, 2002, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 10% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of August
31, 2002, was zero.

================================================================================
7. BANK BORROWINGS

The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable within 30 days after
such loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.

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








                                    Appendix

                        Industry Class A Classifications

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




                                   Appendix B

         OppenheimerFunds Special Sales Charge Arrangements and Waivers
- --------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class A shares2 of the Oppenheimer funds
or the contingent deferred sales charge that may apply to Class A, Class B or Class C shares may be waived.3
That is because of the economies of sales efforts realized by OppenheimerFunds Distributor, Inc., (referred to in
this document as the "Distributor"), or by dealers or other financial institutions that offer those shares to
certain classes of investors.

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

For the purposes of some of the waivers described below and in the Prospectus and Statement of Additional
Information of the applicable Oppenheimer funds, the term "Retirement Plan" refers to the following types of
plans:
              1)  plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code,
              2)  non-qualified deferred compensation plans,
              3)  employee benefit plans4
              4)  Group Retirement Plans5
              5)  403(b)(7) custodial plan accounts
              6)  Individual Retirement Accounts ("IRAs"), including traditional IRAs, Roth IRAs, SEP-IRAs,
                  SARSEPs or SIMPLE plans

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

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







                    Applicability of Class A Contingent Deferred Sales Charges in Certain Cases

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


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

         There is no initial sales charge on purchases of Class A shares of any of the Oppenheimer funds in the
cases listed below. However, these purchases may be subject to the Class A contingent deferred sales charge if
redeemed within 18 months (24 months in the case of Oppenheimer Rochester National Municipals and Rochester Fund
Municipals) of the beginning of the calendar month of their purchase, as described in the Prospectus (unless a
waiver described elsewhere in this Appendix applies to the redemption). Additionally, on shares purchased under
these waivers that are subject to the Class A contingent deferred sales charge, the Distributor will pay the
applicable concession described in the Prospectus under "Class A Contingent Deferred Sales Charge."6 This waiver
provision applies to:
|_|      Purchases of Class A shares aggregating $1 million or more.
|_|      Purchases of Class A shares by a Retirement Plan that was permitted to purchase such shares at net asset
              value but subject to a contingent deferred sales charge prior to March 1, 2001. That included plans
              (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares costing $500,000 or more, 2)
              had at the time of purchase 100 or more eligible employees or total plan assets of $500,000 or
              more, or 3) certified to the Distributor that it projects to have annual plan purchases of $200,000
              or more.
|_|      Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases are made:
              1)  through a broker, dealer, bank or registered investment adviser that has made special
                  arrangements with the Distributor for those purchases, or
              2)  by a direct rollover of a distribution from a qualified Retirement Plan if the administrator of
                  that Plan has made special arrangements with the Distributor for those purchases.
|_|      Purchases of Class A shares by Retirement Plans that have any of the following record-keeping
              arrangements:
              1)  The record keeping is performed by Merrill Lynch Pierce Fenner amp; Smith, Inc. ("Merrill Lynch")
                  on a daily valuation basis for the Retirement Plan. On the date the plan sponsor signs the
                  record-keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of
                  its assets invested in (a) mutual funds, other than those advised or managed by Merrill Lynch
                  Investment Management, L.P. ("MLIM"), that are made available under a Service Agreement between
                  Merrill Lynch and the mutual fund's principal underwriter or distributor, and  (b)  funds
                  advised or managed by MLIM (the funds described in (a) and (b) are referred to as "Applicable
                  Investments").
              2)  The record keeping for the Retirement Plan is performed on a daily valuation basis by a record
                  keeper whose services are provided under a contract or arrangement between the Retirement Plan
                  and Merrill Lynch. On the date the plan sponsor signs the record keeping service agreement with
                  Merrill Lynch, the Plan must have $3 million or more of its assets (excluding assets invested
                  in money market funds) invested in Applicable Investments.
              3)  The record keeping for a Retirement Plan is handled under a service agreement with Merrill
                  Lynch and on the date the plan sponsor signs that agreement, the Plan has 500 or more eligible
                  employees (as determined by the Merrill Lynch plan conversion manager).
II.



                               Waivers of Class A Sales Charges of Oppenheimer Funds

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


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

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

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

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

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

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

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

A.   Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be waived for redemptions of shares in
the following cases:
|_|      Shares redeemed involuntarily, as described in "Shareholder Account Rules and Policies," in the
              applicable Prospectus.
|_|      Redemptions from accounts other than Retirement Plans following the death or disability of the last
              surviving shareholder. The death or disability must have occurred after the account was
              established, and for disability you must provide evidence of a determination of disability by the
              Social Security Administration.
|_|      The contingent deferred sales charges are generally not waived following the death or disability of a
              grantor or trustee for a trust account. The contingent deferred sales charges will only be waived
              in the limited case of the death of the trustee of a grantor trust or revocable living trust for
              which the trustee is also the sole beneficiary. The death or disability must have occurred after
              the account was established, and for disability you must provide evidence of a determination of
              disability by the Social Security Administration.
|_|      Distributions from accounts for which the broker-dealer of record has entered into a special agreement
              with the Distributor allowing this waiver.
|_|      Redemptions of Class B shares held by Retirement Plans whose records are maintained on a daily valuation
              basis by Merrill Lynch or an independent record keeper under a contract with Merrill Lynch.
|_|      Redemptions of Class C shares of Oppenheimer U.S. Government Trust from accounts of clients of financial
              institutions that have entered into a special arrangement with the Distributor for this purpose.
|_|      Redemptions requested in writing by a Retirement Plan sponsor of Class C shares of an Oppenheimer fund
              in amounts of $500,000 or more and made more than 12 months after the Retirement Plan's first
              purchase of Class C shares, if the redemption proceeds are invested in Class N shares of one or
              more Oppenheimer funds.
|_|      Distributions9 from Retirement Plans or other employee benefit plans for any of the following purposes:
              1)  Following the death or disability (as defined in the Internal Revenue Code) of the participant
                  or beneficiary. The death or disability must occur after the participant's account was
                  established in an Oppenheimer fund.
              2)  To return excess contributions made to a participant's account.
              3)  To return contributions made due to a mistake of fact.
              4)  To make hardship withdrawals, as defined in the plan.10
              5)  To make distributions required under a Qualified Domestic Relations Order or, in the case of an
                  IRA, a divorce or separation agreement described in Section 71(b) of the Internal Revenue Code.
              6)  To meet the minimum distribution requirements of the Internal Revenue Code.
              7)  To make "substantially equal periodic payments" as described in Section 72(t) of the Internal
                  Revenue Code.
              8)  For loans to participants or beneficiaries.11
              9)  On account of the participant's separation from service.12
              10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed
                  by the Manager or a subsidiary of the Manager) offered as an investment option in a Retirement
                  Plan if the plan has made special arrangements with the Distributor.
              11) Distributions made on account of a plan termination or "in-service" distributions, if the
                  redemption proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA.
              12) For distributions from a participant's account under an Automatic Withdrawal Plan after the
                  participant reaches age 59 1/2, as long as the aggregate value of the distributions does not
                  exceed 10% of the account's value, adjusted annually.
              13) Redemptions of Class B shares under an Automatic Withdrawal Plan for an account other than a
                  Retirement Plan, if the aggregate value of the redeemed shares does not exceed 10% of the
                  account's value, adjusted annually.
              14) For distributions from 401(k) plans sponsored by broker-dealers that have entered into a
                  special arrangement with the Distributor allowing this waiver.
|_|      Redemptions of Class B shares or Class C shares under an Automatic Withdrawal Plan from an account other
              than a Retirement Plan if the aggregate value of the redeemed shares does not exceed 10% of the
              account's value annually.


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

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

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

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

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

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

A.   Reductions or Waivers of Class A Sales Charges.

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

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


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

Number of Eligible Employees     Initial Sales Charge as a    Initial Sales Charge as a % of    Concession as % of
or Members                       % of Offering Price          Net Amount Invested               Offering Price

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

9 or Fewer                                  2.50%                          2.56%                       2.00%

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

At least  10 but not more  than             2.00%                          2.04%                       1.60%
49

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

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

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

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

|X|      Waiver of Class A Sales Charges for Certain Shareholders.  Class A shares purchased by the following
investors are not subject to any Class A initial or contingent deferred sales charges:
o        Shareholders who were shareholders of the AMA Family of Funds on February 28, 1991 and who acquired
                  shares of any of the Former Quest for Value Funds by merger of a portfolio of the AMA Family of
                  Funds.
o        Shareholders who acquired shares of any Former Quest for Value Fund by merger of any of the portfolios
                  of the Unified Funds.

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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



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

Oppenheimer Capital Appreciation Fund

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


Internet Web Site:
         WWW.OPPENHEIMERFUNDS.COM
         ------------------------

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

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

Transfer Agent
         OppenheimerFunds Services
         P.O. Box 5270
         Denver, Colorado 80217
         1.800.CALL.OPP (225.5677)

Custodian Bank
         JPMorgan Chase Bank
         4 Chase MetroTech Center
         Brooklyn, NY  11245

Independent Auditors
         KPMG  LLP
         707 Seventeenth Street
         Denver, Colorado 80202

Legal Counsel
         Mayer, Brown, Rowe amp; Maw
         1675 Broadway
         New York, New York 10019-5820


1234

PX320.1202

OPPENHEIMER CAPITAL APPRECIATION FUND

FORM N-1A

PART C

OTHER INFORMATION

Item 23. Exhibits
- ------------------

(a) Amended and Restated Declaration of Trust dated December 18, 1996: Previously filed with Registrant's
Post-Effective Amendment No. 35, 12/18/96, and incorporated herein by reference.

(b) By-Laws as amended through December 14, 2000: Previously filed with Registrant's Post-Effective
Amendment No. 44, 12/21/01, and incorporated herein by reference.

(ii) Specimen Class B Share Certificate: Filed herewith.

(iii) Specimen Class C Share Certificate: Filed herewith.

(iv) Specimen Class N Share Certificate: Filed herewith.

(v) Specimen Class Y Share Certificate: Filed herewith.

(d) Amended and Restated Investment Advisory Agreement dated 1/1/01: Previously filed with Registrant's Post
Effective Amendment No. 43, 12/22/00, 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. 45 to the Registration Statement of Oppenheimer High Yield Fund (Reg. No.
2-62076), 10/26/01, and incorporated herein by reference.

(iii) Form of Broker Agreement of OppenheimerFunds Distributor, Inc.: Previously filed
with Post-Effective Amendment No. 45 to the Registration Statement of Oppenheimer High Yield Fund (Reg. No.
2-62076), 10/26/01, and incorporated herein by reference.

(iv) Form of Agency Agreement of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration Statement of Oppenheimer High Yield
Fund (Reg. No. 2-62076), 10/26/01, and incorporated herein by reference.

(iv) Form of Trust Company Fund/SERV Purchase Agreement (v) of OppenheimerFunds Distributor, Inc.:
Previously filed with Post-Effective Amendment No. 45 to the Registration Statement of Oppenheimer High Yield
Fund (Reg. No. 2-62076), 10/26/01, and incorporated herein by reference.

(iv) Form of Trust Company Agency Agreement of OppenheimerFunds(vi) Distributor, Inc.: Previously
filed with Post-Effective Amendment No. 45 to the Registration Statement of Oppenheimer High Yield Fund (Reg. No.
2-62076), 10/26/01, and incorporated herein by reference.

(f) (i) Amended and Reinstated 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 amp; 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 amp; Special Minerals Fund (Reg. No. 2-82590),
10/28/98, and incorporated herein by reference.

(g) (i) Custody Agreement with The Bank of New York dated 11/12/92: Previously filed with Registrant's
Post-Effective Amendment No. 25, 4/23/93, re-filed with Registrant's Post-Effective Amendment No. 31, 4/28/95,
pursuant to Item 102 of Regulation S-T, and incorporated herein by reference.

(ii) Amended and Restated Foreign Custody Manager Agreement dated 4/3/01:
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.

(iii) Amendment dated 4/3/01 to Custody Agreement dated 11/12/92: Previously filed
with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Gold amp; Special Minerals Fund
(Reg. No. 2-82590), 10/25/01, 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 Auditors Consent: To be filed by amendment.

(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 April 23, 2002: Filed
herewith.

(ii) Amended and Restated Distribution and Service Plan and Agreement for Class B shares dated 2/12/98:
Previously filed with Registrant's Post-Effective Amendment No. 39, 10/29/98, and incorporated herein by
reference.

(iii) Distribution and Service Plan and Agreement for Class C shares dated 12/1/93: Previously filed
with Registrant's Post-Effective Amendment No. 27, 3/2/94, and incorporated herein by reference.

(iv) Distribution and Service Plan and Agreement for Class N shares dated 10/12/00: Filed herewith.

(n) Oppenheimer Funds Multiple Class Plan under Rule 18f-3, March 18, 1996 and updated through 8/21/01:
Previously filed with Post-Effective Amendment No. 20 to the Registration Statement of Oppenheimer Cash Reserves
(Reg. No. 33-23223), 9/27/01, and incorporated herein by reference.

(i) Powers of Attorney for all Trustees/Directors and Principal Officers except for Joel W. Motley and John V.
Murphy (including Certified Board Resolutions): Previously filed with Pre-Effective Amendment No. 1 to the
Registration Statement of Oppenheimer Emerging Growth Fund (Reg. No. 333-44176), 10/5/00, and incorporated herein
by reference.

(i) (ii) Power of Attorney for John Murphy (including Certified Board Resolution): Previously filed with
Post-Effective Amendment No. 41 to the Registration Statement of Oppenheimer U.S. Government Trust (Reg. No.
2-76645), 10/22/01, and incorporated herein by reference.

(iii) Power of Attorney for Joel W. Motley (including Certified Board Resolution): Previously filed with
Post-Effective Amendment No. 8 to the Registration Statement of Oppenheimer International Small Company Fund
(Reg. 333-31537), 10/22/02, and incorporated herein by reference.

(p) Amended and Restated Code of Ethics of the Oppenheimer Funds dated March 1, 2000 under Rule 17j-1 of the
Investment Company Act of 1940: Previously filed with the Initial Registration Statement of Oppenheimer Emerging
Growth Fund (Reg. No. 333-44176), 8/21/00, 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,

Assistant Vice President None
Amy B. Adamshick,
Vice President None

Charles E. Albers,
Senior Vice President None
Edward J. Amberger,
Assistant Vice President None

Erik Anderson,
Assistant Vice President None
Janette Aprilante,
Vice President amp; Secretary As of January 2002: Secretary of OppenheimerFunds,
Distributor, Inc., Centennial Asset Management Corporation, Oppenheimer Partnership Holdings, Inc., Oppenheimer
Real Asset Management, Inc., Shareholder Financial Services, Inc., Shareholder Services, Inc.; Assistant
Secretary of HarbourView Asset Management Corporation, OFI Private Investments, Inc., Oppenheimer Trust Company
and OFI Institutional Asset Management, Inc.

Hany S. Ayad,
Assistant Vice President None
Victor W. Babin,
Senior Vice President None
Bruce L. Bartlett,

Senior Vice President None
John Michael Banta,
Assistant Vice President None
Lerae A. Barela,
Assistant Vice President None
George Batejan,

Executive Vice President/

Chief Information Officer None
Kevin Baum,
Vice President None
Jeff Baumgartner,
Assistant Vice President None
Connie Bechtolt,
Assistant Vice President None
Robert Behal
Assistant Vice President Assistant Vice President of HarbourView Asset Management Corporation.
Formerly, Associate Director at MetLife (Jan 2000-May 2000).

Kathleen Beichert,

Vice President Vice President of OppenheimerFunds Distributor, Inc.
Erik S. Berg,
Assistant Vice President None

Rajeev Bhaman,
Vice President None
Mark Binning,
Assistant Vice President None
Robert J. Bishop,
Vice President None
John R. Blomfield,
Vice President None
Chad Boll,
Assistant Vice President None
Lowell Scott Brooks,

Vice President Vice President of OppenheimerFunds Distributor, Inc.
Richard Buckmaster,
Vice President None
Mark Burns,
Assistant Vice President Formerly a Marketing Manager with Alliance Capital Management (October
1999-April 2001).
Bruce Burroughs
Vice President None
Claudia Calich,
Assistant Vice President None
Michael A. Carbuto,
Vice President None
Ronald G. Chibnik,
Assistant Vice President Director of technology for Sapient Corporation (July, 2000-August
2001); software architect for Sapient Corporation (March 1997-July 2000).
H.C. Digby Clements,
Vice President: Rochester Division None
Peter V. Cocuzza,
Vice President None

Julie C. Cusker,
Assistant Vice President:

Rochester Division None
John Damian,
Vice President Formerly senior analyst/director for Citigroup Asset Management
(November 1999-September 2001).
O. Leonard Darling,
Vice Chairman, Executive Vice
President, Chief Investment
Officer amp; Director Chairman of the Board and a director (since June 1999) and Senior
Managing Director (since December 1998) of HarbourView Asset Management
Corporation; a director (since July 2001) of Oppenheimer Acquisition Corp.; a
director (since March 2000) of OFI Private Investments, Inc.; Chairman of the
Board, Senior Managing Director and director (since February 2001) of OFI
Institutional Asset Management, Inc.; Trustee (since 1993) of Awhtolia College -
Greece.

John M. Davis,

Assistant Vice President Assistant Vice President of OppenheimerFunds Distributor, Inc.
Robert A. Densen,
Senior Vice President None

Ruggero de'Rossi,

Vice President Vice President of HarbourView Asset Management Corporation.
Craig P. Dinsell,
Executive Vice President None

Randall C. Dishmon,

Assistant Vice President Formerly an Associate with Booz Allen amp; Hamilton (1998-June 2001).
Rebecca K. Dolan
Vice President None

Steven D. Dombrower,

Vice President Vice President of OppenheimerFunds Distributor, Inc.
Bruce C. Dunbar,
Vice President None

Richard Edmiston,
Assistant Vice President None
Daniel R. Engstrom,
Assistant Vice President None
Armand B. Erpf,

Assistant Vice President None
James Robert Erven
Assistant Vice President Formerly an Assistant Vice President/Senior Trader with Morgan Stanley
Investment Management (1999-April 2002).

George R. Evans,

Vice President None
Edward N. Everett,
Vice President None

George Fahey,

Vice President Vice President of OppenheimerFunds Distributor, Inc.
Scott T. Farrar,
Vice President Vice President of OFI Private Investments, Inc.

Katherine P. Feld,

Vice President, Senior Counsel Vice President of OppenheimerFunds, Distributor, Inc.; Vice President,
Assistant Secretary and Director of Centennial Asset Management Corporation;
Vice President of Oppenheimer Real
Asset Management, Inc.

Ronald H. Fielding,
Senior Vice President;

Chairman: Rochester Division Vice President of OppenheimerFunds Distributor, Inc.; Director of ICI
Mutual Insurance Company; Governor of St. John's College; Chairman of the
Board of Directors of International
Museum of Photography at George Eastman House.

P. Lyman Foster,

Senior Vice President Senior Vice President of OppenheimerFunds Distributor, Inc.
David Foxhoven,
Assistant Vice President Assistant Vice President of OppenheimerFunds Legacy Program.

Colleen M. Franca,
Assistant Vice President None
Crystal French,
Vice President None
Dan P. Gangemi,

Vice President None
Dan Gagliardo,
Assistant Vice President Formerly an Assistant Vice President with Mitchell Hutchins (January
2000-October 2000).

Subrata Ghose,

Assistant Vice President None
Charles W. Gilbert,
Assistant Vice President None

Alan C. Gilston,

Vice President None
Sharon M. Giordano,
Assistant Vice President None

Jill E. Glazerman,

Vice President None
Paul M. Goldenberg,
Vice President None
Mike Goldverg,
Assistant Vice President None
Bejamin J. Gord,
Vice President Vice President of HarbourView Asset Management Corporation. Formerly
Executive Director with Miller Anderson Sherrerd, a division of
Morgan Stanley Investment Management. (April 1992-March 2002).

Laura Granger,

Vice President Formerly a portfolio manager at Fortis Advisors (July 1998-October
2000).

Robert Grill,
Senior Vice President None
Robert Guy,
Senior Vice President None

David Hager,
Vice President None
Robert Haley,
Assistant Vice President None
Marilyn Hall,
Vice President None
Kelly Haney,
Assistant Vice President None

Thomas B. Hayes,
Vice President None
Dorothy F. Hirshman,
Vice President None
Merryl I. Hoffman,

Vice President amp; Senior Counsel As of December 2001: Secretary of HarbourView Asset Management
Corporation, OFI Private Investments, Inc. and OFI Institutional Asset Management, Inc.;
Assistant Secretary of
OppenheimerFunds Legacy Program.

Scott T. Huebl,

Vice President Assistant Vice President of OppenheimerFunds Legacy Program.
Margaret Hui,
Assistant Vice President None
John Huttlin,
Vice President None
James G. Hyland,
Assistant Vice President None

Steve P. Ilnitzki,
Senior Vice President Formerly Vice President of Product Management at Ameritrade (until
March 2000).
Kathleen T. Ives,

Vice President amp; Assistant Counsel Vice President of OppenheimerFunds Distributor, Inc.; Vice President
and Assistant Secretary of Shareholder Services, Inc.; Assistant Secretary of
OppenheimerFunds Legacy Program and
Shareholder Financial Services, Inc.

William Jaume,

Vice President Senior Vice President and Chief Compliance Officer (since April 2000)
of HarbourView Asset Management Corporation; and of OFI Institutional Asset Management, Inc.
(since February
2001).

Frank V. Jennings,

Vice President None
John Jennings,
Vice President None
John Michael Johnson,
Assistant Vice President Formerly Vice President, Senior Analyst/Portfolio Manager at Aladdin
Capital Holdings Inc. (February 2001-May 2002) prior to which he was Vice President and
Senior Analyst at Merrill Lynch Investment Managers (October 1996-February 2001).

Lewis A. Kamman,
Vice President None
Jennifer E. Kane,
Assistant Vice President None.
Lynn O. Keeshan,
Senior Vice President None
Thomas W. Keffer,
Senior Vice President None

Cristina J. Keller,
Vice President Vice President of OppenheimerFunds Distributor, Inc.
Michael Keogh,
Vice President None
Garrett K. Kolb,

Assistant Vice President None
Walter G. Konops,
Assistant Vice President None
Avram D. Kornberg,

Senior Vice President None
James Kourkoulakos,
Vice President None
Guy E. Leaf,
Vice President Vice President of Merrill Lynch (January 2000-September 2001.
Christopher M. Leavy,
Senior Vice President Formerly Vice President and portfolio manager at Morgan Stanley
Investment Management (1997-September 2000).

Dina C. Lee,

Assistant Vice President amp;
Assistant Counsel Formerly an attorney with Van Eck Global (until December 2000).

Laura Leitzinger,
Vice President Vice President of Shareholder Financial Services, Inc.
Michael S. Levine,
Vice President None
Gang Li,
Assistant Vice President None
Shanquan Li,
Vice President None

Mitchell J. Lindauer,

Vice President amp; Assistant
General Counsel None
Bill Linden,
Assistant Vice President None

Malissa B. Lischin,

Assistant Vice President Assistant Vice President of OppenheimerFunds Distributor, Inc.
Reed Litcher,
Vice President None

David P. Lolli,

Assistant Vice President None
Daniel G. Loughran
Vice President: Rochester Division None
Patricia Lovett,
Vice President Vice President of Shareholder Financial Services, Inc. and Senior Vice
President of Shareholder Services, Inc.

Steve Macchia,

Vice President None
Angelo G. Manioudakis
Senior Vice President Senior Vice President of HarbourView Asset Management Corporation.
Formerly Executive Director and portfolio manager for Miller, Anderson amp; Sherrerd, a division of Morgan Stanley
Investment Management (August 1993-April 2002).

Marianne Manzolillo,

Assistant Vice President None
Philip T. Masterson,
Vice President amp; Assistant Counsel None
Elizabeth McCormack
Assistant Vice President Assistant Secretary of HarbourView Asset Management Corporation.
Charles L. McKenzie,
Senior Vice President Senior Vice President of HarbourView Asset Management Corporation and
OFI Institutional Asset Management Corporation.

Lisa Migan,

Assistant Vice President None
Andrew J. Mika,
Senior Vice President None

Joy Milan,

Vice President None
Denis R. Molleur,
Vice President amp; Senior Counsel None

Nikolaos D. Monoyios,

Vice President None
Charles Moon,
Vice President Vice President of HarbourView Asset Management Corporation. Formerly
an Executive Director and Portfolio Manager with Miller Anderson amp; Sherrerd, a division of Morgan Stanley
Investment Management (June 1999-March 2002).

John Murphy,

Chairman, President, Chief Executive Officer & Director
Director of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation, HarbourView Asset
Management Corporation, OFI Private Investments, Inc., OFI Institutional Asset Management, Inc. and Tremont
Advisers, Inc.; Director (Class A) of Trinity Investments Management Corporation; President and Director of
Oppenheimer Acquisition Corp., Oppenheimer Partnership Holdings, Inc., Oppenheimer Real Asset Management, Inc.;
Chairman and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc.; Executive Vice
President of MassMutual Life Insurance Company; director of DLB Acquisition Corp.

Thomas J. Murray,
Vice President None
Kenneth Nadler,
Vice President None
David Negri,
Senior Vice President Senior Vice President of HarbourView Asset Management Corporation.
Richard Nichols,
Vice President None
Barbara Niederbrach,
Assistant Vice President None
Raymond C. Olson,
Assistant Vice President Assistant Vice President and Treasurer of OppenheimerFunds
Distributor, Inc.; Treasurer of Centennial Asset Management Corporation.
Frank J. Pavlak,
Vice President None
David P. Pellegrino,
Vice President None
Allison C. Pells,
Assistant Vice President None
James F. Phillips,
Vice President None
Raghaw Prasad,
Assistant Vice President Formerly Associate Vice President with Prudential Securities New York
(January 2001-November 2001) prior to which he was a Director/Analytics with Prudential Investments New Jersey
(April 1997-November 2001).
Jane C. Putnam,
Vice President None
Michael E. Quinn,
Vice President None
Julie S. Radtke,
Vice President None
Norma J. Rapini,
Assistant Vice President:
Rochester Division None
Thomas P. Reedy,
Vice President Vice President (since April 1999) of HarbourView Asset Management
Corporation.
Brian N. Reid,
Assistant Vice President Formerly an Assistant Vice President with Eaton Vance Management
(January 2000-January 2002).
Kristina Richardson,
Assistant Vice President None
David Robertson,
Senior Vice President Senior Vice President of OppenheimerFunds Distributor, Inc.
Rob Robis,
Assistant Vice President None
Antoinette Rodriguez,
Assistant Vice President None
Jeffrey S. Rosen,
Vice President None
Richard H. Rubinstein,
Senior Vice President None
James H. Ruff,
Executive Vice President President and director of OppenheimerFunds Distributor, Inc. and
Centennial Asset Management Corporation; Executive Vice President of OFI Private Investments, Inc.
Andrew Ruotolo
Executive Vice President and Director Director, Treasurer and Chief Financial Officer of Oppenheimer
Acquisition Corp.; President and director of Shareholder Services, Inc. and Shareholder Financial Services, Inc.;
Director (Class A) of Trinity Investment Management Corporation; Chairman of the Board, Chief Executive Officer,
President and Director of OFI Trust Company.
Rohit Sah,
Assistant Vice President None
Valerie Sanders,
Vice President None
Tricia Scarlata,
Assistant Vice President Formerly, Marketing Manager of OppenheimerFunds, Inc. (April
2001-August 2002); Client Service Support Manager for Sanford C. Bernstein (December 1999-April 2001).
Jeffrey R. Schneider,
Vice President None
Ellen P. Schoenfeld,
Vice President None
David Schultz,
Senior Vice President Chief Executive Officer, President & Senior Managing Director &
Director of OFI Institutional Asset Management, Inc. and HarbourView Asset Management Corporation; Director
(Class A) and Chairman of Trinity Investment Management Corporation; Director of Oppenheimer Trust Company.
Scott A. Schwegel,
Assistant Vice President None
Allan P. Sedmak
Assistant Vice President None
Jennifer L. Sexton,
Vice President Vice President of OFI Private Investments, Inc.
Martha A. Shapiro,
Vice President None
Navin Sharma,
Vice President Formerly, Manager at BNP Paribas Cooper Neff Advisors (May 2001-April
2002) prior to which he was Development Manager at Reality Online/Reuters America Inc. (June 2000-May 2001).
Steven J. Sheerin,
Vice President Formerly consultant with Pricewaterhouse Coopers (November 2000-May
2001) prior to which he was a Vice President of Merrill Lynch Pierce Fenner & Smith, Inc. (July 1998-October
2000).
Bonnie Sherman,
Assistant Vice President None
David C. Sitgreaves,
Assistant Vice President None
Edward James Sivigny
Assistant Vice President Formerly a Director for ABN Amro Securities (July 2001-July 2002)
prior to which he was Associate Director for Barclays Capital (1998-July 2001).
Enrique H. Smith,
Assistant Vice President Formerly a business analyst with Goldman Sachs (August 1999-August
2001).
Richard A. Soper,
Vice President None
Louis Sortino,
Assistant Vice President:
Rochester Division None
Keith J. Spencer,
Vice President None
Marco Antonio Spinar,
Assistant Vice President Formerly, Director of Business Operations at AOL Time Warner, AOL Time
Warner Book Group (June 2000-December 2001).
Richard A. Stein,
Vice President: Rochester Division None
Arthur P. Steinmetz,
Senior Vice President Senior Vice President of HarbourView Asset Management Corporation.
Jayne M. Stevlingson,
Vice President None
Gregory J. Stitt,
Vice President None
John P. Stoma,
Senior Vice President Senior Vice President of OppenheimerFunds Distributor, Inc.
Wayne Strauss,
Assistant Vice President:
Rochester Division None
Michael Stricker,
Vice President None
Deborah A. Sullivan,
Assistant Vice President,
Assistant Counsel Since December 2001, Secretary of Oppenheimer Trust Company.
Mary Sullivan,
Assistant Vice President None
Kevin L. Surrett,
Assistant Vice President None
Susan B. Switzer,
Vice President None
Anthony A. Tanner,
Vice President: Rochester Division None
Paul Temple,
Vice President Formerly a Vice President of Merrill Lynch (October 2001-January 2002)
prior to which he was a Vice President with OppenheimerFunds, Inc. (May 2000-October 5, 2001).
Vincent Toner,
Assistant Vice President None
Eamon Tubridy,
Assistant Vice President None
James F. Turner,
Vice President Formerly portfolio manager for Technology Crossover Ventures (May
2000-March 2001).
Cameron Ullyat,
Assistant Vice President None
Angela Utaro,
Assistant Vice President:
Rochester Division None
Mark S. Vandehey,
Vice President Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset
Management Corporation and Shareholder Services, Inc.
Maureen Van Norstrand,
Assistant Vice President None
Vincent Vermette,
Assistant Vice President Assistant Vice President of OppenheimerFunds Distributor, Inc.
Phillip F. Vottiero,
Vice President None
Samuel Sloan Walker,
Vice President Vice President of HarbourView Asset Management Corporation.
Teresa M. Ward,
Vice President Vice President of OppenheimerFunds Distributor, Inc.
Jerry A. Webman,
Senior Vice President Senior Vice President of HarbourView Asset Management Corporation.
Christopher D. Weiler,
Assistant Vice President:
Rochester Division None
Barry D. Weiss,
Vice President None
Melissa Lynn Weiss,
Vice President Formerly an Associate at Hoguet Newman & Regal, LLP (January 1998-May
2002).
Christine Wells,
Vice President None
Joseph J. Welsh,
Vice President Vice President of HarbourView Asset Management Corporation.
Diederick Wermolder,
Vice President Director of OppenheimerFunds International Ltd.; Senior Vice President
(Managing Director of the International Division) of OFI Institutional Asset Management, Inc.
Catherine M. White,
Assistant Vice President Assistant Vice President of OppenheimerFunds Distributor, Inc.
Formerly, Assistant Vice President with Gruntal & Co. LLC (September 1998 - October 2000); member of the American
Society of Pension Actuaries (ASPA) since 1995.
William L. Wilby,
Senior Vice President Formerly Senior Vice President of HarbourView Asset Management
Corporation (May 1999-July 2002).
Donna M. Winn,
Senior Vice President President, Chief Executive Officer and Director of OFI Private
Investments, Inc.; Director and President of OppenheimerFunds Legacy Program; Senior Vice President of
OppenheimerFunds Distributor, Inc.
Kenneth Winston,
Senior Vice President Principal at Richards & Tierney, Inc. (until June 2001).
Brian W. Wixted,
Senior Vice President and
Treasurer Treasurer of HarbourView Asset Management Corporation;
OppenheimerFunds International Ltd., Oppenheimer Partnership Holdings, Inc., Oppenheimer Real Asset Management
Corporation, Shareholder Services, Inc., Shareholder Financial Services, Inc., OFI Private Investments, Inc. and
OFI Institutional Asset Management, Inc.; Treasurer and Chief Financial Officer of Oppenheimer Trust Company;
Assistant Treasurer of Oppenheimer Acquisition Corp. and OppenheimerFunds Legacy Program.
Carol Wolf,
Senior Vice President Serves on the Board of the Colorado Ballet.
Kurt Wolfgruber,
Senior Vice President Director of Tremont Advisers, Inc. (as of January 2002).
Caleb C. Wong,
Vice President None
Edward C. Yoensky,
Assistant Vice President None
Robert G. Zack
Senior Vice President and
General Counsel General Counsel and Director of OppenheimerFunds Distributor, Inc.;
General Counsel of Centennial Asset Management Corporation; Senior Vice President and General Counsel of
HarbourView Asset Management Corporation and OFI Institutional Asset Management, Inc.; Senior Vice President,
General Counsel and Director of Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private
Investments, Inc. and Oppenheimer Trust Company; Vice President and Director of Oppenheimer Partnership Holdings,
Inc.; Secretary of OAC Acquisition Corp.; Director and Assistant Secretary of OppenheimerFunds International
Ltd.; Director of Oppenheimer Real Asset Management, Inc.; Vice President of OppenheimerFunds Legacy Program.
Jill Zachman,
Vice President: Rochester Division None
Neal A. Zamore,
Vice President None
Mark D. Zavanelli,
Vice President None
Alex Zhou,
Assistant Vice President None
Arthur J. Zimmer,
Senior Vice President Senior Vice President (since April 1999) of HarbourView Asset
Management Corporation.

The Oppenheimer Funds include the following:

Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Limited Term New York Municipal Fund (Rochester Portfolio Series)
Oppenheimer Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Capital Preservation Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Concentrated Growth Fund
Oppenheimer Convertible Securities Fund (Bond Fund Series)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Europe Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal Fund)
Oppenheimer Main Street Growth & Income 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 Multiple Strategies Fund
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Value Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small Cap Value Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Select Managers (6 series):
     Gartmore Millennium Growth Fund II
     Jennison Growth Fund
     Mercury Advisors Focus Growth Fund
     Mercury Advisors S&P 500 Index Fund
     QM Active Balanced Fund
     Salomon Brothers Capital Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (2 series):
     Oppenheimer Disciplined Allocation Fund
     Oppenheimer Value Fund
Oppenheimer Special Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Tremont Market Neutral Fund LLC
Oppenheimer Tremont Opportunity Fund LLC
Oppenheimer Trinity Core Fund
Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Trinity Value Fund
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (10 series):
     Oppenheimer Aggressive Growth Fund/VA
     Oppenheimer Bond Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Growth amp; Income Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Multiple Strategies Fund/VA
     Oppenheimer Strategic Bond Fund/VA
Panorama Series Fund, Inc. (4 series):
     Growth Portfolio
     Government Securities Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio
Rochester Fund Municipals

The address of the Oppenheimer funds listed above, Shareholder Financial Services, Inc., Shareholder Services,
Inc., OppenheimerFunds Services, Centennial Asset Management Corporation, Centennial Capital Corp., Oppenheimer
Real Asset Management, Inc. and OppenheimerFunds Legacy Program is 6803 South Tucson Way, Centennial, Colorado
80112-3924.

The address of OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc., HarbourView Asset Management
Corporation, Oppenheimer Partnership Holdings, Inc., Oppenheimer Acquisition Corp., OFI Private Investments,
Inc., OFI Institutional Asset Management, Inc. and Oppenheimer Trust Company is 498 Seventh Avenue, New York, New
York 10018.

The address of Tremont Advisers, Inc. is 555 Theodore Fremd Avenue, Suite 206-C, Rye, New York 10580.

The address of OppenheimerFunds International Ltd. is Bloc C, Irish Life Center, Lower Abbey Street, Dublin 1,
Ireland.

The address of Trinity Investment Management Corporation is 301 North Spring Street, Bellefonte, Pennsylvania
16823.

Item 27. Principal Underwriter
- ------------------------------

a) OppenheimerFunds Distributor, Inc. is the Distributor of the Registrant's shares. It is also the
Distributor of each of the other registered open-end investment companies for which OppenheimerFunds, Inc. is the
investment adviser, as described in Part A and B of this Registration Statement and listed in Item 26(b) above
(except Oppenheimer Multi-Sector Income Trust and Panorama Series Fund, Inc.) and for MassMutual Institutional
Funds.

(b) The directors and officers of the Registrant's principal underwriter are:

Name amp; Principal
Business Address Position amp; Office
with Underwriter Position and Office
with Registrant
Robert Agan(1) Vice President None
Janette Aprilante(1) Secretary None
Jason R. Bach
3264 Winthrop Cricle
Marietta, GA 30067 Vice President None
Kathleen Beichert(1) Vice President None
Gabriella Bercze(2) Vice President None
Douglas S. Blankenship
17011 Woodbark
Spring, TX 77379 Vice President None
Tracey Blinzler(1) Assistant Vice President None
Kevin Bonner(1) Vice President None
L. Scott Brooks(2) Vice President None
Kevin E. Brosmith
170 Phillip Court
Lake Bluff, IL 60044 Senior Vice President None
Jeffrey W. Bryan(2) Vice President None
Susan Burton
412 Towne Green Circle
Addison, TX 75001 Vice President None
Kathleen Mary Byron
6 Dahlia Drive
Irvine, CA 92618 Vice President None
Robert A. Coli
12 White Tail Lane
Bedminster, NJ 07921 Vice President None
Jill E. Crockett(2) Assistant Vice President None
Jeffrey D. Damia(2) Vice President None
John Davis(2) Assistant Vice President None
Stephen J. Demetrovits(2) Vice President None
Joseph A. DiMauro
244 McKinley Avenue
Grosse Pointe Farms, MI 48236 Vice President None
Steven Dombrower(w) Vice President None
George P. Dougherty
4090 Redbud Circle
Doylestown, PA 18901 Vice President None
Cliff H. Dunteman
1196 Fieldstone Dr.
Crystal Lake, IL 60014-1642 Vice President None
John Eiler(2) Vice President None
Kent M. Elwell
35 Crown Terrace
Yardley, PA 19067 Vice President None
Gregg A. Everett
7124 Trysail Circle
Tampa, FL 33607 Vice President None
George R. Fahey
9 Townview Court
Flemington, NJ 08822 Vice President None
Eric C. Fallon
10 Worth Circle
Newton, MA 02458 Vice President None
Katherine P. Feld(2) Vice President Assistant Secretary
Mark J. Ferro(2) Vice President None
Ronald H. Fielding(3) Vice President None
Patrick W. Flynn (1) Senior Vice President None
John E. Forrest(2) Senior Vice President None
John ("J) Fortuna(2) Vice President None
P. Lyman Foster(2) Senior Vice President None
Luiggino J. Galleto
10302 Riesling Court
Charlotte, NC 28277 Vice President None
Michelle M. Gans
2700 Polk Street, Apt. #9
San Francisco, CA 94109 Vice President None
Lucio Giliberti
6 Cyndi Court
Flemington, NJ 08822 Vice President None
Raquel Granahan(2) Vice President None
Ralph Grant(2) Senior Vice President None
Michael D. Guman
3913 Pleasant Avenue
Allentown, PA 18103 Vice President None
Tonya N. Hammet
2612 W. Grand Reserve Circle #227
Clearwater, FL 33759 Assistant Vice President None
Clifford W. Heidinger
90 Gates Street
Portsmouth, NH 03801 Vice President None
Phillipe D. Hemery
184 Park Avenue
Rochester, NY 14607 Vice President None
Elyse R. Jurman Herman
1194 Hillsboro Mile, Villa 51
Hillsboro Beach, FL 33062 Vice President None
Wendy G. Hetson
4 Craig Street
Jericho, NY 11753 Vice President None
Kristen L. Heyburn
2315 Mimosa Drive #2
Houston, TX 77019 Vice President None
William E. Hortz(2) Vice President None
Edward Hrybenko(2) Vice President None
Brian F. Husch(2) Vice President None
Richard L. Hymes(2) Assistant Vice President None
Kathleen T. Ives(1) Vice President Assistant Secretary
Eric K. Johnson
28 Oxford Avenue
Mill Valley, CA 94941 Vice President None
Mark D. Johnson
15792 Scenic Green Court
Chesterfield, MO 63017 Vice President None
John S. Kavanaugh
2 Cervantes, Apt. #301
San Francisco, CA 94123 Vice President None
Christina J. Keller(2) Vice President None
Brian G. Kelly
60 Larkspur Road
Fairfield, CT 06430 Vice President None
Michael Keogh(2) Vice President None
Lisa Klassen(1) Assistant Vice President None
Richard Klein
4820 Fremont Avenue So.
Minneapolis, MN 55409 Senior Vice President None
Richard Knott(2) Vice President None
Dean Kopperud(2) Senior Vice President None
Brent A. Krantz
P. O. Box 1313
Seahurst, WA 98062 Senior Vice President None
David T. Kuzia
9697 S. Golden Eagle Dr.
Highlands, CO 80126 Vice President None
Tracey Lange(2) Vice President None
Paul R. LeMire Vice President None
Dawn Lind
21 Meadow Lane
Rockville Centre, NY 11570 Vice President None
Malissa Lischin(2) Assistant Vice President None
James V. Loehle
30 Wesley Hill Lane
Warwick, NY 10990 Vice President None
John J. Lynch
5341 Ellsworth
Dallas, TX 75206 Vice President None
Mark Macken
462 Lincoln Avenue
Sayville, NY 11782 Vice President None
Michael Magee(2) Vice President None
Steven C. Manns
1941 W. Wolfram
Chicago, IL 60657 Vice President None
Todd A. Marion
3 St. Marks Place
Cold Spring Harbor, NY 11724 Vice President None
David M. Martin
10155 S. Woodrose Lane
Highlands Ranch, CO 80126 Vice President None
LuAnn Mascia(2) Assistant Vice President None
Theresa-Marie Maynier
2421 Charlotte Drive
Charlotte, NC 28203 Vice President None
Anthony P. Mazzariello
704 Beaver Road
Leetsdale, PA 15056 Vice President None
John C. McDonough
3812 Leland Street
Chevy Chase, MD 20815 Vice President None
Kent C. McGowan
18424 12th Avenue West
Lynnwood, WA 98037 Vice President None
John V. Murphy(2) Director President, Principal Executive
Officer and Trustee/Director
Wendy Jean Murray
32 Carolin Road
Upper Montclair, NJ 07043 Vice President None
Christina Nasta(2) Assistant Vice President None
Kevin P. Neznek(2) Vice President None
Chad V. Noel
2408 Eagleridge Drive
Henderson, NV 89014 Vice President None
Raymond C. Olson(1) Assistant Vice President amp; Treasurer None
Brian C. Perkes
8734 Shady Shore Drive
Frisco, TX 75034 Vice President None
Charles K. Pettit
22 Fall Meadow Drive
Pittsford, NY 14534 Vice President None
William L. Presutti
238 Kemp Avenue
Fair Haven, NJ 07704 Vice President None
Elaine Puleo-Carter(2) Senior Vice President None
Christopher L. Quinson
19 Cayuga Street
Rye, NY 10580 Vice President None
Minnie Ra
100 Dolores Street, #203
Carmel, CA 93923 Vice President None
Heather Rabinowitz(2) Assistant Vice President None
Gary D. Rakan
25031 Woodridge Triangle
Farmington, MI 48335 Vice President None
Michael A. Raso
16 N. Chatsworth Ave., Apt. 301
Larchmont, NY 10538 Vice President None
Douglas Rentschler
677 Middlesex Road
Grosse Pointe Park, MI 48230 Vice President None
Louis H. Reynolds(2) Vice President None
Michelle Simone Richter(2) Vice President None
Ruxandra Risko(2) Vice President None
David R. Robertson(2) Senior Vice President None
Kenneth A. Rosenson
24753 Bantage Point Terr.
Malibu, CA 90265 Vice President None
James H. Ruff(2) President amp; Director None
William R. Rylander
85 Evergreen Road
Vernon, CT 06066 Vice President None
Thomas Sabow(2) Vice President None
Alfredo Scalzo
9616 Lake Chase Island Way
Tampa, FL 33626 Vice President None
Michael Sciortino
785 Beau Chene Drive
Mandeville, LA 70471 Vice President None
Eric Sharp
862 McNeill Circle
Woodland, CA 95695 Vice President None
Debbie Simon(2) Vice President None
Douglas Bruce Smith
808 South 194th Street
Seattle,WA 98148 Vice President None
William A. Spetrino
7631 Yennicook Way
Hudson, OH 44236 Vice President None
Bryan Stein(2) Vice President None
John Stoma(2) Senior Vice President None
Brian C. Summe
239 N. Colony Drive
Edgewood, KY 41017 Vice President None
Michael Sussman(2) Vice President None
George T. Sweeney
5 Smoke House Lane
Hummelstown, PA 17036 Senior Vice President None
Scott McGregor Tatum
704 Inwood
Southlake, TX 76092 Vice President None
James Taylor(2) Assistant Vice President None
Martin Telles(2) Senior Vice President None
David G. Thomas
1328 N. Cleveland Street
Arlington, VA 22201 Vice President None
Bryan K.Toma
14575 S. Gallery
Olathe, KS 66062 Vice President None
Floyd A. Tucker
1930 W. Barry Ave., #2
Chicago, IL 60657 Vice President None
Tanya Valency(2) Vice President None
Mark Vandehey(1) Vice President None
Vincent Vermete Assistant Vice President None
Teresa Ward(1) Vice President None
Michael J. Weigner
4905 W. San Nicholas Street
Tampa, FL 33629 Vice President None
Donn Weise
3249 Earlmar Drive
Los Angeles, CA 90064 Vice President None
Catherine White(2) Assistant Vice President None
Thomas Wilson(2) Vice President None
Donna Winn(2) Senior Vice President None
Philip Witkower(2) Senior Vice President None
Cary Patrick Wozniak
18808 Bravata Court
San Diego, CA 92128 Vice President None
Gregor D. Yuska
16035 Canterbury Estates Dr.
Ellisville, MO 63021 Vice President None
Robert G. Zack(2) General Counsel amp; Director Secretary

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)498 Seventh Avenue, New York, NY 10018
(3)350 Linden Oaks, Rochester, NY 14623

(c)      Not applicable.

Item 28. Location of Accounts and Records
- -----------------------------------------

The accounts,  books and other documents  required to be maintained by Registrant  pursuant to Section 31(a) of the
Investment  Company Act of 1940 and rules promulgated  thereunder are in the possession of  OppenheimerFunds,  Inc.
at its offices at 6803 South Tucson Way, Centennial, Colorado 80112.

Item 29. Management Services
- ----------------------------

Not applicable

Item 30. Undertakings
- ---------------------

Not applicable.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and/or the Investment Company Act of 1940, the
Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York and State of New York on the 23rd day of October, 2002.

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/ Leon Levy* Chairman of the
- ---------------------------------- Board of Trustees October 23, 2002
Leon Levy

/s/ Donald W. Spiro* Vice Chairman of the October 23, 2002
- ---------------------------------- Board and Trustee
Donald W. Spiro

/s/ John V. Murphy* President, Principal
- --------------------------------- Executive Officer October 23, 2002
John V. Murphy and Trustee

/s/ Brian W. Wixted* Treasurer, Principal October 23, 2002
- --------------------------------- Financial and
Brian W. Wixted Accounting Officer

/s/ Robert G. Galli* Trustee October 23, 2002
- ----------------------------------
Robert G. Galli

/s/ Phillip A. Griffiths Trustee October 23, 2002
- ---------------------------------
Phillip A. Griffiths

/s/ Benjamin Lipstein* Trustee October 23, 2002
- ---------------------------------
Benjamin Lipstein

/s/ Elizabeth B. Moynihan* Trustee October 23, 2002
- ---------------------------------
Elizabeth B. Moynihan

/s/ Kenneth A. Randall* Trustee October 23, 2002
- ---------------------------------
Kenneth A. Randall

/s/ Edward V. Regan* Trustee October 23, 2002
- ---------------------------------
Edward V. Regan

/s/ Russell S. Reynolds, Jr.* Trustee October 23, 2002
- ---------------------------------
Russell S. Reynolds, Jr.

/s/ Clayton K. Yeutter* Trustee October 23, 2002
- ---------------------------------
Clayton K. Yeutter

*By: /s/ Robert G. Zack
- -----------------------------------------
Robert G. Zack, Attorney-in-Fact

OPPENHEIMER CAPITAL APPRECIATION FUND

Post-Effective Amendment No. 45

Registration No 2-69719

EXHIBIT INDEX

Exhibit No. Description
- ----------- -----------

23(c) (i) Specimen Class A Share Certificate.
(ii) Specimen Class B Share Certificate
(iii) Specimen Class C Share Certificate
(iv) Specimen Class N Share Certificate
(v) Specimen Class Y Share Certificate

23(m) (i) Amended and Restated Service Plan and Agreement for Class A Shares
(iv) Distribution and Service Plan and Agreement for Class N shares

EX-99 4 cap320certs485a1002.htm SHARED CERTS (A,B,C,N AND Y) 485A SHARED CERTIFICATES A,B,C,N AND Y/485A CAPITAL APPRECIATION FUND

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                     Class A Share Certificate (8-1/2" x 11")


I.       FRONT OF CERTIFICATE (All text and other matter lies within 8-1/4"
         --------------------
         x 10-3/4" decorative border, 5/16" wide)

(upper left corner, box with heading: NUMBER [of shares]
                                                 (upper right corner)  [share certificate no.] XX-000000
                                                 (upper right box, CLASS A SHARES below cert. no.)
                                                 (centered below boxes)

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                                       CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 68379A107

(at left)  is the owner of

                            (centered) FULLY PAID CLASS A SHARES OF BENEFICIAL INTEREST

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                       -------------------------------------

         (hereinafter  called  the  "Fund"),  transferable  only on the books of the Fund By the  holder  hereof in
         person or by duly  authorized  attorney,  upon  surrender  of this  certificate  properly  endorsed.  This
         certificate  and the  shares  represented  hereby  are  issued  and  shall be held  subject  to all of the
         provisions  of the  Declaration  of Trust of the Fund to all of which  the  holder  by  acceptance  hereof
         assents. This certificate is not valid until countersigned by the Transfer Agent.

         WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

(at left of seal) Dated:                                               (at right of seal)

(signature)                                                            (signature)

/s/  Brian W. Wixted                                                   /s/ Robert G. Zack
- -----------------------                                       -------------------
TREASURER                                                              SECRETARY



                                               (centered at bottom)
                                          1-1/2" diameter facsimile seal
                                                    with legend

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                                       SEAL
                                                       1999
                                           COMMONWEALTH OF MASSACHUSETTS


(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature


II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC -       as joint tenants with
                                    rights of suvivorship and not
                                    as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)


Additional abbreviations may also be used though not on above list.

For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)

(Please print or type name and address of assignee)

________________________________________________Class  A Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)

                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor
                                                     by:         _____________________________
                                                                       Signature of
                                                                       Officer/Title


(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.

PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle.  It is invalid without this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                     Class B Share Certificate (8-1/2" x 11")


I.       FRONT OF CERTIFICATE (All text and other matter lies within 8-1/4"
         --------------------
         x 10-3/4" decorative border, 5/16" wide)

(upper left corner, box with heading: NUMBER [of shares]
                                                 (upper right corner)  [share certificate no.] XX-000000
                                                 (upper right box, CLASS B SHARES below cert. no.)
                                                 (centered below boxes)

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                                       CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 68379A206

(at left)  is the owner of

                            (centered) FULLY PAID CLASS B SHARES OF BENEFICIAL INTEREST

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                       -------------------------------------

         (hereinafter  called  the  "Fund"),  transferable  only on the books of the Fund by the  holder  hereof in
         person or by duly  authorized  attorney,  upon  surrender  of this  certificate  properly  endorsed.  This
         certificate  and the  shares  represented  hereby  are  issued  and  shall be held  subject  to all of the
         provisions  of the  Declaration  of Trust of the Fund to all of which  the  holder  by  acceptance  hereof
         assents. This certificate is not valid until countersigned by the Transfer Agent.

         WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

(at left of seal) Dated:                                               (at right of seal)

(signature)                                                            (signature)

/s/  Brian W. Wixted                                                   /s/ Robert G. Zack
- -----------------------                                       -------------------
TREASURER                                                              SECRETARY



                                               (centered at bottom)
                                          1-1/2" diameter facsimile seal
                                                    with legend

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                                       SEAL
                                                       1999
                                           COMMONWEALTH OF MASSACHUSETTS


(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature


II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC -       as joint tenants with
                                    rights of suvivorship and not
                                    as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)


Additional abbreviations may also be used though not on above list.

For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)

(Please print or type name and address of assignee)

________________________________________________Class
B Shares of beneficial interest represented by the within certificate, and do
hereby irrevocably constitute and appoint ___________________________ Attorney
to transfer the said shares on the books of the within named Fund with full
power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     ___________________________________
                                                     (Both must sign if joint owners)

                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor
                                                     by:         _____________________________
                                                                       Signature of
                                                                       Officer/Title


(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.

PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle.  It is invalid without this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY




                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                     Class C Share Certificate (8-1/2" x 11")


I.       FRONT OF CERTIFICATE (All text and other matter lies within 8-1/4"
         --------------------
         x 10-3/4" decorative border, 5/16" wide)

(upper left corner, box with heading: NUMBER [of shares]
                                                 (upper right corner)  [share certificate no.] XX-000000
                                                 (upper right box, CLASS C SHARES below cert. no.)
                                                 (centered below boxes)

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                                       CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 68379A305

(at left)  is the owner of

                            (centered) FULLY PAID CLASS C SHARES OF BENEFICIAL INTEREST

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                       -------------------------------------
(hereinafter called the Fund), transferable only on the books of the Fund by the
holder hereof in person or by duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the shares represented
hereby are issued and shall be held subject to all of the provisions of the
Declaration of Trust of the Fund to all of which the holder by acceptance hereof
assents. This certificate is not valid until countersigned by the Transfer
Agent.

WITNESS the facsimile seal of the Fund and the signatures of its duly authorized
officers.

(at left of seal) Dated:                                               (at right of seal)

(signature)                                                            (signature)

/s/  Brian W. Wixted                                                   /s/ Robert G. Zack
_______________________                                       ___________________
TREASURER                                                              SECRETARY

                                               (centered at bottom)
                                          1-1/2" diameter facsimile seal
                                                    with legend

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                                       SEAL
                                                       1999
                                           COMMONWEALTH OF MASSACHUSETTS


(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature


II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC -       as joint tenants with
                                    rights of suvivorship and not
                                    as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)


Additional abbreviations may also be used though not on above list.

For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)

(Please print or type name and address of assignee)

________________________________________________Class  C Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)

                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor
                                                     by:         _____________________________
                                                                       Signature of
                                                                       Officer/Title


(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.

PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle.  It is invalid without this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY




                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                     Class N Share Certificate (8-1/2" x 11")


I.       FRONT OF CERTIFICATE (All text and other matter lies within 8-1/4"
         --------------------
         x 10-3/4" decorative border, 5/16" wide)

(upper left corner, box with heading: NUMBER [of shares]
                                                 (upper right corner)  [share certificate no.] XX-000000
                                                 (upper right box, CLASS N SHARES below cert. no.)
                                                 (centered below boxes)

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                                       CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 68379A503

(at left)  is the owner of

                            (centered) FULLY PAID CLASS N SHARES OF BENEFICIAL INTEREST

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                       -------------------------------------

         (hereinafter  called  the  "Fund"),  transferable  only on the books of the Fund by the  holder  hereof in
         person or by duly  authorized  attorney,  upon  surrender  of this  certificate  properly  endorsed.  This
         certificate  and the  shares  represented  hereby  are  issued  and  shall be held  subject  to all of the
         provisions  of the  Declaration  of Trust of the Fund to all of which  the  holder  by  acceptance  hereof
         assents. This certificate is not valid until countersigned by the Transfer Agent.

         WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

(at left of seal) Dated:                                               (at right of seal)

(signature)                                                            (signature)

/s/  Brian W. Wixted                                                   /s/ Robert G. Zack
- -----------------------                                       -------------------
TREASURER                                                              SECRETARY



                                               (centered at bottom)
                                          1-1/2" diameter facsimile seal
                                                    with legend

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                                       SEAL
                                                       1999
                                           COMMONWEALTH OF MASSACHUSETTS


(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature


II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC -       as joint tenants with
                                    rights of suvivorship and not
                                    as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)


Additional abbreviations may also be used though not on above list.

For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)

(Please print or type name and address of assignee)

________________________________________________Class  N Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)

                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor
                                                     by:         _____________________________
                                                                       Signature of
                                                                       Officer/Title


(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.

PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle.  It is invalid without this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                     Class Y Share Certificate (8-1/2" x 11")


I.       FRONT OF CERTIFICATE (All text and other matter lies within 8-1/4"
         --------------------
         x 10-3/4" decorative border, 5/16" wide)

(upper left corner, box with heading: NUMBER [of shares]
                                                 (upper right corner)  [share certificate no.] XX-000000
                                                 (upper right box, CLASS Y SHARES below cert. no.)
                                                 (centered below boxes)

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                                       CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 68379A404

(at left)  is the owner of

                            (centered) FULLY PAID CLASS Y SHARES OF BENEFICIAL INTEREST

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                       -------------------------------------

         (hereinafter  called  the  "Fund"),  transferable  only on the books of the Fund by the  holder  hereof in
         person or by duly  authorized  attorney,  upon  surrender  of this  certificate  properly  endorsed.  This
         certificate  and the  shares  represented  hereby  are  issued  and  shall be held  subject  to all of the
         provisions  of the  Declaration  of Trust of the Fund to all of which  the  holder  by  acceptance  hereof
         assents. This certificate is not valid until countersigned by the Transfer Agent.

         WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

(at left of seal) Dated:                                               (at right of seal)

(signature)                                                            (signature)

/s/  Brian W. Wixted                                                   /s/ Robert G. Zack
- -----------------------                                       -------------------
TREASURER                                                              SECRETARY


                                               (centered at bottom)
                                          1-1/2" diameter facsimile seal
                                                    with legend

                                       OPPENHEIMER CAPITAL APPRECIATION FUND
                                                       SEAL
                                                       1999
                                           COMMONWEALTH OF MASSACHUSETTS


(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature


II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC -       as joint tenants with
                                    rights of suvivorship and not
                                    as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)


Additional abbreviations may also be used though not on above list.

For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)

(Please print or type name and address of assignee)

________________________________________________Class  Y Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)

                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor
                                                     by:         _____________________________
                                                                       Signature of
                                                                       Officer/Title


(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.

PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle.  It is invalid without this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY

EX-99 5 serviceagrmt320classa485a.htm AMENDED/RESTATED SERVICE PLAN/AGRMT -485A 485A AMENDED & RESTATED SERVICE/AGREEMENT PLAN CLASS A (12B-1)

                                               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 11th day of April,  2002, 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  (the  "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,  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 will be reduced to the extent that  reimbursement  payments
         otherwise  permissible  under  the Plan  have not been  authorized  by the  Board  for that  quarter.  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, within forty-five (45)
         days of the end of each  calendar  quarter,  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 quarter 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,  within  forty-five  (45) days of the end of each  calendar  quarter:  (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 amount of all payments  made  pursuant to this
Plan,  the identity of the Recipient of each such payment,  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 April 11,  2002 for Board I 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



                                    By:     _____________________________
                                                     Robert G. Zack, Secretary


                                            OppenheimerFunds Distributor, Inc.



                                    By:     _____________________________
                                                     Katherine P. Feld
                                                     Vice President & Secretary

EX-99 6 serviceagrmt320classn485a.htm SERVICE PLAN/AGRMT CLASS N - 485A DISTRIBUTION SERVICE PLAN/AGREEMENT CLASS N - 485A

                                    DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
                                                       with
                                        OppenheimerFunds Distributor, Inc.
                                               For Class N Shares of
                                       Oppenheimer CAPITAL APPRECIATION Fund

This  Distribution  and Service Plan and  Agreement  (the "Plan") is dated as of the 12th day of October,  2000, 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 that calendar  quarter 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 quarter in which its  Qualified  Holdings do not equal or exceed,  at the end of such
quarter,  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
                      -----------
during a calendar  quarter,  the Distributor  shall make service fee payments to that Recipient  quarterly,  within
forty-five  (45) days of the end of each  calendar  quarter,  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  quarterly,  within  forty-five  (45)  days of the end of each  calendar  quarter:  (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  0.0625%  (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 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.

                  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,
within  forty-five (45) days after the end of each calendar  quarter,  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 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 Plan has been  approved by a vote of the
         -------------------------------------------------------------
Board and of its  Independent  Trustees cast in person at a meeting  called on October 12, 2000, for the purpose of
voting on this Plan and shall take effect as of the date first set forth above.  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: ___________________________
                                                              Robert G. Zack
                                                              Assistant Secretary


                                                     OppenheimerFunds Distributor, Inc.



                                                     By: ___________________________
                                                              Katherine P. Feld
                                                              Vice President and Secretary

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