N-14AE 1 body.htm FORM N-14, PART A, PART B, PART C OPPENHEIMER VALUE FUND 
As filed with the Securities and Exchange Commission on August 11, 2003

Registration No. ______________

                          U.S. SECURITIES AND EXCHANGE COMMISSION
                                   WASHINGTON, D.C. 20549

                                         FORM N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933           / X /

PRE-EFFECTIVE AMENDMENT NO.__                                     /   /

POST-EFFECTIVE AMENDMENT NO.__                                    /   /

                                  OPPENHEIMER VALUE FUND,
                         A series of Oppenheimer Series Fund, Inc.
                     (Exact Name of Registrant as Specified in Charter)

                     6803 South Tucson Way, Centennial, Colorado 80112
                          (Address of Principal Executive Offices)

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

                                    Robert G. Zack, Esq.
                          Senior Vice President & General Counsel
                                   OppenheimerFunds, Inc.
                        498 Seventh Avenue, New York, New York 10148
                                       (212) 323-0250
                          (Name and Address of Agent for Service)

         As soon as practicable after the Registration Statement becomes effective.
                       (Approximate Date of Proposed Public Offering)

Title of Securities Being Registered: Class A, Class B, Class C, Class N and Class Y shares
of Oppenheimer Value Fund, a series of Oppenheimer Series Fund, Inc.

It is proposed that this filing will become effective on September 11, 2003 pursuant to
Rule 488.

No filing fee is due because of reliance on Section 24(f) of the Investment Company Act of
1940.







                             CONTENTS OF REGISTRATION STATEMENT

This Registration Statement contains the following pages and documents:

Front Cover
Contents Page

Part A

Proxy Statement for Oppenheimer Select Managers - Salomon Brothers All Cap Fund and
Prospectus for Oppenheimer Value Fund

Part B

Statement of Additional Information

Part C

Other Information
Signatures
Exhibits























525-375_N-14-Initial_081103.doc


OPPENHEIMER SELECT MANAGERS - SALOMON BROTHERS ALL CAP FUND
          a series of Oppenheimer Select Managers
  498 Seventh Avenue, 10th Floor, New York, New York 10018
                       1.800.708.7780
         Notice of Special Meeting of Shareholders
                         To Be Held
                      October 31, 2003

To  the  Shareholders  of  Oppenheimer   Select  Managers  -
Salomon Brothers All Cap Fund:

Notice  is  hereby  given  that  a  Special  Meeting  of the
Shareholders  of  Oppenheimer   Select  Managers  -  Salomon
Brothers  All Cap  Fund,  a  series  of  Oppenheimer  Select
Managers, a registered  investment  management company, will
be held at 6803 South  Tucson Way,  Centennial,  CO 80112 at
1:00 P.M.,  Mountain  time,  on  October  31,  2003,  or any
adjournments  thereof  (the  "Meeting"),  for the  following
purposes:

1.    To approve  an  Agreement  and Plan of  Reorganization
between   Oppenheimer  Select  Managers  on  behalf  of  its
series,  Oppenheimer  Select Managers - Salomon Brothers All
Cap Fund ("Salomon  Brothers All Cap Fund") and  Oppenheimer
Series  Fund,  Inc.  on  behalf of its  series,  Oppenheimer
Value   Fund   ("Value   Fund"),    and   the   transactions
contemplated   thereby,   including   (a)  the  transfer  of
substantially  all the  assets of Salomon  Brothers  All Cap
Fund to Value Fund in  exchange  for Class A, Class B, Class
C,  Class N and  Class  Y  shares  of  Value  Fund,  (b) the
distribution   of  these   shares  of  Value   Fund  to  the
corresponding  Class A,  Class B, Class C, Class N and Class
Y shareholders of Salomon  Brothers All Cap Fund in complete
liquidation  of  Salomon  Brothers  All Cap Fund and (c) the
cancellation of the outstanding  shares of Salomon  Brothers
All Cap Fund (all of the foregoing  being referred to as the
"Proposal").

2.    To act upon such other  matters as may  properly  come
before the Meeting.

Shareholders  of record at the close of  business  on August
12,  2003 are  entitled  to notice  of,  and to vote at, the
Meeting.  The  Proposal  is  more  fully  discussed  in  the
Prospectus  and Proxy  Statement.  Please read it  carefully
before telling us, through your proxy or in person,  how you
wish  your  shares to be voted.  The  Board of  Trustees  of
Oppenheimer  Select  Managers  -  Salomon  Brothers  All Cap
Fund, a series of Oppenheimer Select Managers,  recommends a
vote in favor of the  Proposal.  WE URGE YOU TO MARK,  SIGN,
DATE, AND MAIL THE ENCLOSED PROXY PROMPTLY.

By Order of the Board of Trustees,
      Robert G. Zack, Secretary
      September 15, 2003
--------------------------------------------------------------------------------------------
Shareholders  who do not  expect to attend the  Meeting  are
requested to indicate  voting  instructions  on the enclosed
proxy  and  to  mark,  date,  sign  and  return  it  in  the
accompanying  postage-paid  envelope.  To avoid  unnecessary
duplicate  mailings,  we ask your  cooperation  in  promptly
mailing  your  proxy no  matter  how  large  or  small  your
holdings may be.








          COMBINED PROSPECTUS AND PROXY STATEMENT
                  DATED SEPTEMBER 15, 2003

 Acquisition of the Assets of Oppenheimer Select Managers -
   Salomon Brothers All Cap Fund, a series of Oppenheimer
                      Select Managers

 By and in exchange for Class A, Class B, Class C, Class N
                   and Class Y shares of
   Oppenheimer Value Fund, a series of Oppenheimer Series
                         Fund, Inc.

      This combined  Prospectus and Proxy Statement solicits
proxies  from  the   shareholders   of  Oppenheimer   Select
Managers  -  Salomon  Brothers  All Cap  Fund,  a series  of
Oppenheimer  Select  Managers  ("Salomon  Brothers  All  Cap
Fund")  to be voted at a  Special  Meeting  of  Shareholders
(the  "Meeting")  to  approve  the  Agreement  and  Plan  of
Reorganization  (the  "Reorganization  Agreement")  and  the
transactions  contemplated  thereby  (the  "Reorganization")
between Salomon Brothers All Cap Fund and Oppenheimer  Value
Fund,  a series of  Oppenheimer  Series Fund,  Inc.  ("Value
Fund").    This    combined    Prospectus/Proxy    Statement
constitutes  the  Prospectus  of Value  Fund  and the  Proxy
Statement  of  Salomon  Brothers  All Cap Fund filed on Form
N-14 with the  Securities and Exchange  Commission  ("SEC").
If   shareholders   vote  to  approve   the   Reorganization
Agreement and the Reorganization,  the net assets of Salomon
Brothers  All Cap Fund  will be  acquired  by Value  Fund in
exchange  for  shares of Value  Fund.  The  Meeting  will be
held at the offices of OppenheimerFunds,  Inc. at 6803 South
Tucson  Way,  Centennial,  CO 80112 at 1:00  P.M.,  Mountain
Time,  on  October  31,  2003.  The  Board  of  Trustees  of
Salomon  Brothers All Cap Fund is  soliciting  these proxies
on  behalf  of   Salomon   Brothers   All  Cap  Fund.   This
Prospectus/Proxy   Statement   will   first   be   sent   to
shareholders on or about September 15, 2003.

      If   the    shareholders    vote   to   approve    the
Reorganization  Agreement,  you will receive  Class A shares
of  Value  Fund  equal  in  value  to  the  value  as of the
Valuation  Date (as such term is  defined  in the  Agreement
and Plan of Reorganization  attached hereto as Exhibit A) of
your Class A shares of Salomon  Brothers All Cap Fund; Class
B shares  of Value  Fund  equal in value to the  value as of
the  Valuation  Date  of  your  Class B  shares  of  Salomon
Brothers  All Cap Fund;  Class C shares of Value  Fund equal
in  value  to the  value  as of the  Valuation  Date of your
Class C shares of  Salomon  Brothers  All Cap Fund;  Class N
shares of Value  Fund  equal in value to the value as of the
Valuation  Date of your Class N shares of  Salomon  Brothers
All Cap  Fund;  and Class Y shares  of Value  Fund  equal in
value to the value as of the Valuation  Date of your Class Y
shares of Salomon  Brothers All Cap Fund.  Salomon  Brothers
All Cap  Fund  will  then be  liquidated  and  de-registered
under the  Investment  Company Act of 1940 (the  "Investment
Company Act").

      Value   Fund's   investment   objective   is  to  seek
long-term  growth  of  capital  by  investing  primarily  in
common   stocks   with   low   price-earnings   ratios   and
better-than-anticipated  earnings.  Realization  of  current
income is a secondary  consideration.  In  selecting  equity
investments  for  Value  Fund's  portfolio,   the  portfolio
manager  currently uses a value investing style coupled with
fundamental  analysis of issuers. In using a value approach,
the  manager  looks for stocks and other  equity  securities
that  appear  to  be  temporarily  undervalued,  by  various
measures,  such as price/earnings  ratios and whose earnings
growth  prospects  appear  favorable.  Value investing seeks
stocks  having  prices  that are low in relation to what the
portfolio  manager believes to be their real worth or future
prospects,  with the  expectation  that they will appreciate
in value when 5ther  investors  realize the intrinsic  value
of the stock.
      This  Prospectus/Proxy   Statement  gives  information
about  Class A, Class B, Class C, Class N and Class Y shares
of Value Fund that you should  know  before  investing.  You
should  retain  it for  future  reference.  A  Statement  of
Additional   Information   relating  to  the  Reorganization
described  in this Proxy  Statement  and  Prospectus,  dated
September  15,  2003 (the  "Proxy  Statement  of  Additional
Information")   has  been  filed  with  the  Securities  and
Exchange  Commission  ("SEC")  as part  of the  Registration
Statement on Form N-14 (the  "Registration  Statement")  and
is  incorporated  herein  by  reference.  You may  receive a
copy by written  request to the Transfer Agent or by calling
the   toll-free   number  as  detailed   above.   The  Proxy
Statement of Additional  Information  includes the following
documents,  each of which is  available  free of  charge  by
calling  1.800.708.7780:  (i) unaudited financial statements
as  of  April  30,  2003  of  Value  Fund;   (ii)  unaudited
financial  statements  as May 31,  2003 of Salomon  Brothers
All Cap Fund;  (iii) the Value Fund  Statement of Additional
Information  dated  December 23, 2002,  revised  January 15,
2003  and as  supplemented  July  18,  2003;  and  (iv)  the
Salomon  Brothers  All  Cap  Fund  Statement  of  Additional
Information dated March 28, 2003.

      The  Prospectus of Value Fund dated  December 23, 2002
is   enclosed   with   and   considered   a  part   of  this
Prospectus/Proxy  Statement  and is  intended to provide you
with information about Value Fund.

Mutual fund shares are not  deposits or  obligations  of any
bank,  and are not  insured  or  guaranteed  by the  Federal
Deposit Insurance  Corporation or any other U.S.  government
agency.   Mutual  fund  shares  involve   investment   risks
including the possible loss of principal.

This Proxy  Statement and Prospectus is dated  September 15,
2003.

As with all mutual funds, the Securities and Exchange
Commission has not approved or disapproved these securities
or passed upon the adequacy of this combined
Prospectus/Proxy Statement.  Any representation to the
contrary is a criminal offense.






TABLE OF CONTENTS
          COMBINED PROSPECTUS AND PROXY STATEMENT

                                                        Page
                                                        ----
Synopsis
   What am I being asked to vote on?.........................................................
6
   What   are   the   general   tax   consequences   of  the
Reorganization?........................
7
  Comparisons of Some Important Features
   How do the  investment  objectives  and  policies  of the
Funds compare?...............
7
   Who manages the Funds?.....................................................................
8
   What are the fees and  expenses of each fund and what are
they expected to be after the
      Reorganization?.............................................................................
9
   Where can I find  more  financial  information  about the
Funds?...........................
14
   What are the  capitalizations of the Funds and what might
the capitalizations be after the
      Reorganization?..............................................................................
14
   How have the Funds performed?.............................................................
15
   What   are   other   Key    Features    of   the   Funds?
.................................................
23
         Investment Management and Fees...................................................
23
         Transfer     Agency    and     Custody     Services
   .............................................
   24
         Distribution Services...................................................................
   24
         Purchases,   Redemptions,   Exchanges   and   other
   Shareholder Services..........
   25
         Dividends and Distributions..........................................................
   25
What are the Principal  Risks of an Investment in Value Fund
and Salomon All Cap
Fund?.................................................................................................
25
Reasons for the Reorganization......................................................................
26
Information about the Reorganization
   How   will   the    Reorganization    be   carried   out?
.................................................
28
   Who  will  pay  the   Expenses  of  the   Reorganization?
..................... .....................
30
   What  are the  Tax  Consequences  of the  Reorganization?
............  ........................
30
   What  should  I know  about  Class A,  Class B,  Class C,
Class N and Class Y shares of
      Value                                            Fund?
..................
.............................
31
Comparison of Investment Objectives and Policies
   Are  there  any  significant   differences   between  the
investment objectives and strategies of
      the Funds?.....................................................................................
31
   What are the main risks  associated with an investment in
the Funds?.....................
32
   How   do   the   investment   policies   of   the   Funds
compare?..................................
32
   What are the fundamental  investment  restrictions of the
Funds?........................
36
   Do the Funds have any  additional  restrictions  that are
not fundamental?
38
   How do the Account Features and Shareholder  Services for
the Funds Compare?....
30
         Investment Management............................................................
      39
         Distribution..............................................................................
   40
         Purchases and Redemptions..........................................................
   40
         Shareholder Services..................................................................
   41
         Dividends and Distributions.........................................................
   41
Voting Information
   How   many   votes   are   necessary   to   approve   the
Reorganization Agreement?...........
42
   How  do  I  ensure  my  vote  is   accurately   recorded?
.........................................
42
   Can I revoke my proxy?.....................................................................
42
   What other  matters  will be voted  upon at the  Meeting?
..............................
42
   Who is entitled to vote?......................................................................
43
   Telephone Voting
43
   Voting By Broker-Dealers
43
   Voting  by  the  Trustee  for  OppenheimerFunds-Sponsored
Retirement Plans
43
   What other solicitations will be made?....................................................
44
   Are there any appraisal rights?.............................................................
45
Information about Value Fund.................................................
45
Information about Salomon Brothers All Cap Fund
46
Principal Shareholders
46
Exhibit  A -  Agreement  and Plan of  Reorganization  by and
between  Oppenheimer  Select Managers - Salomon Brothers All
Cap  Fund,  a series  of  Oppenheimer  Select  Managers  and
Oppenheimer  Value  Fund,  a series  of  Oppenheimer  Series
Fund, Inc.
Exhibit B - Principal Shareholders
Enclosures:
Prospectus of Oppenheimer Value Fund dated December 23,
2002.

Annual Report as of October 31, 2002, of Value Fund and
Semi-Annual Report as of April 30, 2003, of Value Fund are
available without charge upon request.






                          SYNOPSIS

      This  synopsis is only a summary and is  qualified  in
its entirety by the more detailed  information  contained in
or  incorporated  by reference in this  combined  Prospectus
and  Proxy  Statement  and by the  Reorganization  Agreement
which  is  attached  as  Exhibit  A.   Shareholders   should
carefully  review this  Prospectus  and Proxy  Statement and
the  Reorganization  Agreement  in their  entirety  and,  in
particular,  the  current  Prospectus  of Value  Fund  which
accompanies  this combined  Prospectus  and Proxy  Statement
and is incorporated herein by reference.

      If  shareholders  of  Salomon  Brothers  All Cap  Fund
approve  the  Reorganization,  the  net  assets  of  Salomon
Brothers All Cap Fund will be  transferred to Value Fund, in
exchange  for an equal  value of shares of Value  Fund.  The
shares of Value  Fund will then be  distributed  to  Salomon
Brothers All Cap Fund  shareholders and Salomon Brothers All
Cap Fund will be  liquidated.  If  shareholders  approve the
Reorganization,  you  will  cease  to  be a  shareholder  of
Salomon  Brothers All Cap Fund and will become a shareholder
of Value  Fund.  This  exchange  will  occur on the  Closing
Date  (as  such  term  is  defined  in  the   Reorganization
Agreement   attached   hereto   as   Exhibit   A)   of   the
Reorganization.

      Shareholders of Salomon  Brothers All Cap Fund holding
certificates  representing their shares will not be required
to  surrender  their  certificates  in  connection  with the
reorganization.  However,  former  shareholders  of  Salomon
Brothers  All Cap  Fund  whose  shares  are  represented  by
outstanding  share  certificates  will  not  be  allowed  to
redeem,  exchange  or  transfer  class  shares of Value Fund
they  receive  in the  Reorganization  until  the  exchanged
Salomon  Brothers  All  Cap  Fund   certificates  have  been
returned to the Transfer Agent.

What am I being asked to vote on?

      Your  Fund's  investment  manager,   OppenheimerFunds,
Inc. (the  "Manager"),  proposed to the Board of Trustees of
your  fund,  Salomon  Brothers  All  Cap  Fund,  that  it be
reorganized  with and into Value  Fund so that  shareholders
of Salomon Brothers All Cap Fund may become  shareholders of
a  substantially  larger fund with more favorable  long-term
performance,   and  an  investment  objective  and  policies
similar to those of their  current  fund.  Although  Salomon
Brothers  All Cap Fund's  performance  was  slightly  better
than Value  Fund's  performance  for the one year ended June
30,  2003,  Value  Fund's  long-term  performance  has  been
better  than  Salomon  Brothers  All  Cap  Fund's  long-term
performance.  The Board  also  considered  the fact that the
surviving   fund  has  the   potential   for  lower  overall
operating expenses.  In addition,  the Board considered that
both  funds  have  Class A,  Class B,  Class C,  Class N and
Class  Y  shares  offered  under   identical   sales  charge
arrangements.   The   Board   also   considered   that   the
Reorganization  would  be  a  tax-free  reorganization,  and
there  would be no sales  charge  imposed in  effecting  the
Reorganization.   In   addition,   due  to  the   relatively
moderate  costs of the  reorganization,  the  Boards of both
funds concluded that neither fund would experience  dilution
as a result of the Reorganization.

      A  reorganization  of  Salomon  Brothers  All Cap Fund
with and  into  Value  Fund is  recommended  by the  Manager
based on the fact that both  funds have  similar  investment
objectives, strategies and focuses.

      At a  meeting  held on April  28,  2003,  the Board of
Trustees  of  Salomon  Brothers  All  Cap  Fund  approved  a
reorganization   transaction   that  will,  if  approved  by
shareholders,  result in the  transfer  of the net assets of
Salomon  Brothers All Cap Fund to Value Fund in exchange for
an equal  value of  shares  of Value  Fund.  The  shares  of
Value Fund will then be distributed to Salomon  Brothers All
Cap Fund  shareholders  and  Salomon  Brothers  All Cap Fund
will  subsequently be liquidated.  If  shareholders  approve
the  Reorganization,  you will cease to be a shareholder  of
Salomon  Brothers All Cap Fund and will become a shareholder
of Value  Fund.  This  exchange  would  occur on the Closing
Date  (as  such  term  is  defined  in  the   Reorganization
Agreement   attached   hereto   as   Exhibit   A)   of   the
Reorganization.

      Approval of the Reorganization  means you will receive
Class A shares of Value  Fund equal in value to the value as
of the  Valuation  Date of your  Class A shares  of  Salomon
Brothers  All Cap Fund;  Class B shares of Value  Fund equal
in  value  to the  value  as of the  Valuation  Date of your
Class B shares of  Salomon  Brothers  All Cap Fund;  Class C
shares of Value  Fund  equal in value to the value as of the
Valuation  Date of your Class C shares of  Salomon  Brothers
All Cap Fund;  Class N shares of Value  Fund  equal in value
to the  value  as of the  Valuation  Date  of  your  Class N
shares of Salomon  Brothers All Cap Fund; and Class Y shares
of Value  Fund  equal in value as of the  Valuation  Date of
your Class Y shares of Salomon  Brothers  All Cap Fund.  The
shares  you  receive  will  be  issued  at net  asset  value
without  a  sales  charge  or the  payment  of a  contingent
deferred sales charge ("CDSC").  Although, if your shares of
Salomon  Brothers  All Cap Fund are subject to a CDSC,  your
Value Fund  shares  will  continue to be subject to the same
CDSC  applicable  to your  Salomon  Brothers  All  Cap  Fund
shares.  The  period  during  which  you held  your  Salomon
Brothers  All Cap Fund shares will  carryover  to your Value
Fund shares for  purposes of  determining  the CDSC  holding
periods.

      For the  reasons  set  forth in the  "Reasons  for the
Reorganization"  section  below,  the Board of  Trustees  of
Salomon  Brothers  All Cap  Fund  has  determined  that  the
Reorganization  is in the best interests of the shareholders
of Salomon  Brothers All Cap Fund. The Board  concluded that
no  dilution  in  value  would  result  to  shareholders  of
Salomon   Brothers   All  Cap  Fund  as  a  result   of  the
Reorganization.

       THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
    TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION

What are the general tax consequences of the Reorganization?

      It is expected that  shareholders of Salomon  Brothers
All Cap Fund who are U.S.  citizens  will not  recognize any
gain or loss for federal  income tax  purposes,  as a result
of the  exchange  of their  shares for shares of Value Fund.
You should, however,  consult your tax advisor regarding the
effect,  if any,  of the  Reorganization  in  light  of your
individual  circumstances.  You should also consult your tax
advisor  about  state  and  local  tax   consequences.   For
further  information  about  the  tax  consequences  of  the
Reorganization,   please  see  the  "Information  About  the
Reorganization--What   are  the  Tax   Consequences   of  the
Reorganization?" section below.

           COMPARISONS OF SOME IMPORTANT FEATURES

How do the investment objectives and policies of the Funds
compare?

      Salomon   Brothers   All  Cap   Fund   seeks   capital
appreciation.  While the  Sub-Advisor  (defined  below)  for
Salomon   Brothers  All  Cap  Fund  selects  an   investment
primarily for its capital appreciation potential,  secondary
consideration  is given to a company's  dividend  record and
the  potential  for an  improved  dividend  return.  Salomon
Brothers   All  Cap  Fund  and  Value   Fund  have   similar
investment  objectives.  Value Fund seeks  long-term  growth
of capital by investing  primarily in common stocks with low
price-earnings ratios and better-than-anticipated  earnings.
 Realization of current income is a secondary  consideration
for Value Fund.

      In  seeking  their  investment   objectives,   Salomon
Brothers  All Cap Fund and  Value  Fund  utilize  a  similar
investing  strategy.  Salomon  Brothers  All  Cap  Fund is a
non-diversified  mutual fund that  invests  mainly in common
stocks,  preferred  stocks and securities  convertible  into
common   stocks  of   companies   Salomon   Brothers   Asset
Management   Inc.   (the    "Sub-Advisor")    believes   are
undervalued  in the  marketplace.  Salomon  Brothers All Cap
Fund  generally  invests in securities of large,  well-known
companies.

      Value  Fund's   portfolio   manager  also  invests  in
securities  he believes  are  currently  undervalued  in the
marketplace.  Value Fund is a  diversified  mutual fund that
invests  primarily  in common  stocks of issuers that may be
of small,  medium or large  capitalization,  to seek capital
growth.  Value  Fund  currently  focuses  on  securities  of
large, well-known companies.

      Both funds can invest in preferred stocks,  rights and
warrants,  and  securities  convertible  into common  stock.
Both funds can buy securities  issued by foreign  companies,
although  neither  fund  invests  a  significant  amount  in
foreign securities.

      Please  refer to the Annual  Reports of both funds for
a complete listing of the investments for each fund.

Who manages the Funds?

       The   day-to-day   management  of  the  business  and
affairs of each fund is the  responsibility  of the Manager.
However,  Salomon  Brothers  All Cap Fund also  employs  the
Sub- Advisor to manage the  investment and  reinvestment  of
the Fund's assets.

       Salomon   Brothers   All  Cap  Fund,  a  "series"  or
portfolio of Oppenheimer  Select  Managers,  is an open-end,
management  investment  company with an unlimited  number of
authorized  shares  of  beneficial   interest.   Oppenheimer
Select  Managers,  of which Salomon Brothers All Cap Fund is
a series,  was organized as a  Massachusetts  business trust
on November  10,  2000.  The Fund  commenced  operations  on
February  16,  2001.  On May 1,  2002 the Fund  changed  its
name from Salomon  Brothers Capital Fund to Salomon Brothers
All Cap Fund.  The Fund is governed by a Board of  Trustees,
which  is  responsible   for  protecting  the  interests  of
shareholders under Massachusetts law.

       Value Fund is a series of  Oppenheimer  Series  Fund,
Inc. That corporation is an open-end,  management investment
company  organized as a Maryland  corporation  in 1981,  and
was called  Connecticut  Mutual  Investment  Accounts,  Inc.
until March 18, 1996,  when the Manager  became Value Fund's
investment  advisor.  Value  Fund  is a  diversified  mutual
fund.  On March  18,  1996 the Fund  changed  its name  from
Connecticut    Mutual   Growth    Account   to   Oppenheimer
Disciplined   Value  Fund  and   effective   March  1,  2001
subsequently  changed  its name to  Oppenheimer  Value Fund.
Value Fund is  governed  by a Board of  Directors,  which is
responsible  for  protecting  the interests of  shareholders
under Maryland law.

      Both funds are  located  at 498  Seventh  Avenue,  New
York,  New York  10018.  The  Manager,  also  located at 498
Seventh   Avenue,   New  York,  New  York  10018,   acts  as
investment advisor to both funds.

      Value Fund is managed by Christopher  Leavy. Mr. Leavy
is a Senior Vice  President of the Manager,  Vice  President
of  Value  Fund  and  serves  as an  officer  and  portfolio
manager of other  Oppenheimer  funds.  Prior to joining  the
Manager in  September  2000,  he was a portfolio  manager of
Morgan  Stanley  Dean  Witter  Investment  Management  (from
1997).

    The  Manager  has  retained   Salomon   Brothers   Asset
Management Inc.  ("Salomon  Brothers") as the Sub-Advisor to
provide  the  day-to-day  portfolio  management  of  Salomon
Brothers  All Cap Fund.  Salomon  Brothers is located at 399
Park Avenue,  New York, New York 10022. It is a wholly-owned
subsidiary of Salomon Smith Barney  Holdings Inc.,  which in
turn  is  a  wholly-owned  subsidiary  of  Citigroup,   Inc.
Salomon  Brothers  has  served as an  investment  advisor to
investment  companies  since 1987,  and as of  December  31,
2002,   Salomon   Brothers   and  its   affiliates   managed
approximately  $34.2  billion of assets.  The  Manager,  not
Salomon  Brothers  All Cap Fund,  pays  Salomon  Brothers an
annual fee based on the Fund's  average  annual net  assets.
Salomon  Brothers  All Cap Fund is team  managed  by Salomon
Brothers.  The team has an average of 26 years of investment
experience.

      Additional   information   about  the  Funds  and  the
Manager  is set forth  below in  "Comparison  of  Investment
Objectives and Policies."

What are the  fees  and  expenses  of each  fund  and  those
expected after the Reorganization?

      Salomon  Brothers All Cap Fund and Value Fund each pay
a variety  of  expenses  directly  for  management  of their
assets,  administration,  distribution  of their  shares and
other  services.  Those  expenses are  subtracted  from each
fund's assets to calculate the Funds'  respective  net asset
values  per   share.   Shareholders   therefore   pay  these
expenses  indirectly.  Shareholders  of both funds pay other
expenses directly, such as sales charges.

      The   following   tables  are  provided  to  help  you
understand  and compare the fees and  expenses of  investing
in shares  of  Salomon  Brothers  All Cap Fund with the fees
and expenses of  investing in shares of Value Fund.  The pro
forma  expenses  of the  surviving  Value Fund show what the
fees and expenses are expected to be after giving  effect to
the  Reorganization.  The  amounts  shown  are  stated  as a
percentage  of the net assets of each class of shares of the
Funds.







                    PRO FORMA FEE TABLE
        For the 12 month period ended March 31, 2003

------------------------------------------------------------------------------------
                                                                Pro Forma
                       Salomon Brothers                         Surviving Value
                       All Cap Fund        Value Fund           Fund
                       Class A shares      Class A Shares       Class A shares
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Maximum Sales Charge          5.75%               5.75%                5.75%
(Load) on purchases
(as a
 %  of offering price)
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)
(as a % of the lower
of the original              None 1               None 1              None 1
offering price or
redemption proceeds)
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Annual Fund Operating Expenses Deducted from Fund Assets (as a percentage of
average daily net assets)
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Management Fees               1.10%               0.625%              0.625%
------------------------------------------------------------------------------------
Distribution and/or           0.18%               0.24%                0.24%
Service (12b-1) Fees
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Other Expenses5               0.55%               0.34%                0.34%
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Total Fund Operating          1.83%               1.21%                1.21%
Expenses
------------------------------------------------------------------------------------

------------------------------------------------------------------------------------
                       Salomon Brothers    Value Fund           Pro Forma
                                                                Surviving Value
                       All Cap Fund                             Fund
                       Class B Shares      Class B Shares       Class B Shares
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Maximum Sales Charge          None                 None                None
(Load) on purchases
(as a  %  of offering
price)
------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)
(as a % of the lower
of the original                5%2                 5%2                  5%2
offering price or
redemption proceeds)
------------------------------------------------------------------------------------
Annual Fund Operating Expenses Deducted from Fund Assets (as a percentage of
average daily net assets)
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Management Fees               1.10%               0.625%              0.625%
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Distribution and/or           1.00%               1.00%                1.00%
Service (12b-1) Fees
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Other Expenses5               0.53%               0.45%                0.45%
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Total Fund Operating          2.63%               2.08%                2.08%
Expenses
------------------------------------------------------------------------------------








-----------------------------------------------------------------------------------
                       Salomon Brothers    Value Fund          Pro Forma
                                                               Surviving Value
                       All Cap Fund                            Fund
                       Class C Shares      Class C Shares      Class C Shares
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maximum Sales Charge          None                None                None
(Load) on purchases
(as a  %  of offering
price)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)
(as a % of the lower
of the original                1%3                 1%3                1%%3
offering price or
redemption proceeds)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Annual Fund Operating Expenses Deducted from Fund Assets (as a percentage of
average daily net assets)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Management Fees               1.10%              0.625%              0.625%
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Distribution and/or           1.00%               1.00%               1.00%
Service (12b-1) Fees
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Other Expenses5               0.38%               0.42%               0.42%
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Total Fund Operating          2.48%               2.05%               2.05%
Expenses
-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------
                       Salomon Brothers    Value Fund           Pro Forma
                                                                Surviving Value
                       All Cap Fund                             Fund
                       Class N shares      Class N Shares       Class N shares
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maximum Sales Charge          None                 None                None
(Load) on purchases
(as a  %  of offering
price)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)
(as a % of the lower
of the original                1%4                 1%4                 1%4
offering price or
redemption proceeds)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Annual Fund Operating Expenses Deducted from Fund Assets (as a percentage of
average daily net assets)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Management Fees               1.10%               0.625%              0.625%
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Distribution and/or           0.50%               0.50%               0.50%
Service (12b-1) Fees
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Other Expenses5               0.32%               0.48%               0.48%
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Total Fund Operating          1.92%               1.61%               1.61%
Expenses
-----------------------------------------------------------------------------------








-----------------------------------------------------------------------------------
                       Salomon Brothers    Value Fund           Pro Forma
                                                                Surviving Value
                       All Cap Fund                             Fund
                       Class Y  Shares     Class Y Shares       Class Y Shares
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maximum Sales Charge          None                None                None
(Load) on purchases
(as a  %  of offering
price)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)
(as a % of the lower
of the original               None                None                None
offering price or
redemption proceeds)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Annual Fund Operating Expenses Deducted from Fund Assets (as a percentage of
average daily net assets)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Management Fees               1.10%              0.625%              0.625%
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Distribution and/or            N/A                 N/A                 N/A
Service (12b-1) Fees
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Other Expenses5               1.65%               1.60%               1.60%
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Total Fund Operating          2.75%               2.23%               2.23%
Expenses
-----------------------------------------------------------------------------------
Note:  Expenses may vary in future years.
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"  in  each   fund's
   Prospectus.
2. Applies  to  redemptions  within  the  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 a
   retirement plan's first purchase of Class N shares.
5.    "Other Expenses" include transfer agent fees and
   custodial, accounting and legal expenses, and are based
   on, among other things, the fees the Funds would have
   paid if the transfer agent had not waived a portion of
   its fee under a voluntary undertaking to the Funds to
   currently limit these fees to 0.35% of average daily net
   assets per fiscal year for all classes. For the period
   April 1, 2002 through October 31, 2002, the transfer
   agent voluntarily undertook to limit Class Y other
   expenses to 0.25% of average daily net assets per fiscal
   year. The transfer agent fee limitations may be amended
   or withdrawn without notice at any time.

   For Value Fund, after that waiver, the actual "Other
   Expenses" and "Total Annual Operating Expenses" for the
   period shown were 0.39% and 2.02% for Class B shares,
   0.39% and 2.02% for Class C shares, 0.39% and 1.52% for
   Class N shares, and 0.25% and 0.88% for Class Y shares
   and were the same as shown above for Class A shares.

   For Salomon Brothers All Cap Fund, in addition to that
   waiver, "Total Annual Operating Expenses" were further
   reduced by a voluntary expense assumption undertaken by
   the Manager.  After that waiver and expense assumption,
   the actual "Total Annual Operating Expenses" for the
   period shown were 1.65% for Class A shares, 2.40% for
   Class B shares, 2.40% for Class C shares, 1.90% for
   Class N shares and 0.95% for Class Y shares.

      The 12b-1  fees for  Class A shares of both  funds are
service  plan fees  which are a maximum  of 0.25% of average
annual  net  assets  of Class A shares.  The 12b-1  fees for
Class  B,  Class C and  Class N  shares  of both  funds  are
Distribution  and Service Plan fees which  include a service
fee  of  0.25%  of  average   annual  net  assets,   and  an
asset-based  sales  charge for Class B and Class C shares of
0.75% and an  asset-based  sales charge of 0.25% for Class N
shares of the average net assets.







Examples

      These  examples below are intended to help you compare
the  cost  of  investing  in  each  fund  and  the  proposed
surviving  Value  Fund.  These  examples  assume  an  annual
return  for  each  class  of  5%,  the  operating   expenses
described  in the  table  above  and  reinvestment  of  your
dividends  and  distributions.  Your  actual  costs  may  be
higher or lower because  expenses  will vary over time.  The
first  example  for  each  fund and the  proposed  surviving
Value Fund  assumes  that you  redeem all of your  shares at
the end of the periods  shown.  The second  example  assumes
that you keep  your  shares.  For each  $10,000  investment,
you would pay the following  projected  expenses if you sold
your  shares  after the  number of years  shown or held your
shares for the number of years shown.

               12 Months Ended March 31, 2003
               ------------------------------

               Salomon Brothers All Cap Fund
--------------------------------------------------------------------------------
If     shares      are    1 year        3 years       5 years       10 years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A                    $750         $1,117        $1,508         $2,599
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B                    $766         $1,117        $1,595        $2,5921
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C                    $351          $773         $1,321         $2,816
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N                    $295          $603         $1,037         $2,243
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y                    $278          $853         $1,454         $3,080
--------------------------------------------------------------------------------

               Salomon Brothers All Cap Fund
--------------------------------------------------------------------------------
If   shares   are  not    1 year        3 years       5 years       10 years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A                    $750         $1,117        $1,508         $2,599
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B                    $266          $817         $1,395        $2,5921
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C                    $251          $773         $1,321         $2,816
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N                    $195          $603         $1,037         $2,243
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y                    $278          $853         $1,454         $3,080
--------------------------------------------------------------------------------

                         Value Fund
--------------------------------------------------------------------------------
If     shares      are    1 year        3 years       5 years       10 years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A                    $691          $937         $1,202         $1,957
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B                    $711          $952         $1,319        $1,9831
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C                    $308          $643         $1,103         $2,379
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N                    $264          $508          $876          $1,911
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y                    $226          $697         $1,195         $2,565
--------------------------------------------------------------------------------

                         Value Fund
--------------------------------------------------------------------------------
If   shares   are  not    1 year        3 years       5 years       10 years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A                    $691          $937         $1,202         $1,957
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B                    $211          $652         $1,119        $1,9831
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C                    $208          $643         $1,103         $2,379
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N                    $164          $508          $876          $1,911
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y                    $226          $697         $1,195         $2,565
--------------------------------------------------------------------------------








               Pro Forma Surviving Value Fund
--------------------------------------------------------------------------------
If shares are redeemed:    1 year       3 years       5 years       10 years
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A                     $691         $937         $1,202         $1,957
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B                     $711         $952         $1,319        $1,9831
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C                     $308         $643         $1,103         $2,379
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N                     $264         $508          $876          $1,911
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y                     $226         $697         $1,195         $2,565
--------------------------------------------------------------------------------

               Pro Forma Surviving Value Fund
--------------------------------------------------------------------------------
If   shares   are   not    1 year       3 years       5 years       10 years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A                     $691         $937         $1,202         $1,957
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B                     $211         $652         $1,119        $1,9831
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C                     $208         $643         $1,103         $2,379
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N                     $164         $508          $876          $1,911
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y                     $226         $697         $1,195         $2,565
--------------------------------------------------------------------------------
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  charge.  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 shares 72 months after purchase.

Where can I find more financial information about the Funds?

      Performance   information  for  both  Value  Fund  and
Salomon  Brothers  All Cap Fund is set forth in each  fund's
Prospectus under the section "The Fund's Past  Performance."
Value Fund's  Prospectus  accompanies this  Prospectus/Proxy
Statement and is incorporated by reference.

      The   financial   statements   of   Value   Fund   and
information  with  respect  to its  performance  during  its
fiscal year ended  October 31, 2002,  including a discussion
of factors  that  materially  affected its  performance  and
relevant  market  conditions  during that fiscal year is set
forth  in Value  Fund's  Annual  Report  dated  October  31,
2002.  Additional  information about the Fund's  performance
during  the six month  period  ended  April 30,  2003 is set
forth in the  Fund's  Semi-Annual  Report  dated  April  30,
2003.  Those reports are included in the Proxy  Statement of
Additional    Information   and   incorporated   herein   by
reference.  These documents are available upon request.  See
section entitled "Information About Value Fund."

      The financial  statements of Salomon  Brothers All Cap
Fund and additional  information  with respect to the Fund's
performance  during its fiscal year ended November 30, 2002,
including a discussion of factors that  materially  affected
its performance and relevant market  conditions  during that
fiscal year is set forth in Salomon  Brothers All Cap Fund's
Annual   Report  dated   November   30,   2002.   Additional
information  about the  Fund's  performance  during  the six
month  period  ended May 31, 2003 is set forth in the Fund's
Semi-Annual  Report  dated Day 31, 2003.  Those  reports are
included in the Proxy  Statement of  Additional  Information
and are  incorporated  herein by reference.  These documents
are   available   upon   request.   See   section   entitled
"Information About Salomon Brothers All Cap Fund."

What are the  capitalizations  of the Funds  and what  would
the capitalization be after the Reorganization?
      The  following  table  sets  forth the  capitalization
(unaudited) of Salomon  Brothers All Cap Fund and Value Fund
and indicates the pro forma  combined  capitalization  as of
March 31,  2003 as if the  Reorganization  had  occurred  on
that date.
                     Net Assets          Shares              Net Asset Value
                                         Outstanding         Per Share
Salomon Brothers All Cap Fund
Class A                       $5,111,895             727,315               $7.03
Class B                       $3,488,192             503,637               $6.93
Class C                       $5,795,777             837,531               $6.92
Class N                       $5,844,717             838,028               $6.97
Class Y                             $707                 100               $7.07
                     ----------------------------------------
                     ----------------------------------------
TOTAL                        $20,241,288           2,906,611

Value Fund
Class A                     $145,247,774           9,980,947              $14.55
Class B                      $45,981,866           3,193,972              $14.40
Class C                      $17,429,649           1,227,403              $14.20
Class N                       $2,322,318             161,097              $14.42
Class Y                       $1,320,206              89,224              $14.80
                     ----------------------------------------
                     ----------------------------------------
TOTAL                       $212,301,813          14,652,643

Value Fund
(Pro Forma Surviving Fund)
Class A                     $150,359,669          10,332,220              $14.55
Class B                      $49,470,058           3,436,267              $14.40
Class C                      $23,225,426           1,635,544              $14.20
Class N                       $8,167,035             566,539              $14.42
Class Y                       $1,320,913              89,272              $14.80
                     ----------------------------------------
                     ----------------------------------------
TOTAL                       $232,543,101          16,059,842

*Reflects  the issuance of 351,273  Class A shares,  242,295
Class B shares,  408,141  Class C shares,  405,442  Class N,
and 48 Class Y shares of Value Fund in a  tax-free  exchange
for  the net  assets  of  Salomon  Brothers  All  Cap  Fund,
aggregating $20,241,288.

How have the Funds performed?

      The following past  performance  information  for each
fund is set forth  below,  and for earlier  periods,  in its
respective  Prospectus:  (i) a bar  chart  detailing  annual
total  returns of Class A shares of each fund as of December
31st from year to year for the last 10 full  calendar  years
(for  Salomon  Brothers  All Cap  Fund,  since  that  Fund's
inception);  and  (ii)  tables  detailing  how  the  average
annual total returns,  both before and after taxes, of Value
Fund's and Salomon  Brothers  All Cap Fund's  Class A, Class
B, Class C,  Class N and Class Y shares  compare to those of
the   S&P  500   Index   and  the   Russell   3000(R) Index,
respectively.  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.  Past  performance is no guarantee
of how a fund will perform in the future.

      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
past  investment  performance  of either  fund,  before  and
after taxes,  is not necessarily an indication of how either
fund will perform in the future.

      Annual  total  returns  for  the  Funds  (for  Class A
shares) for the periods  ended  December  31,  2002,  are as
follows:

[See appendix to prospectus/proxy  statement for data in bar
chart showing annual total returns for Salomon  Brothers All
Cap Fund.]

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 1/1/03 through  6/30/03,  the cumulative
return for Salomon  Brothers  All Cap Fund (not  annualized)
before  taxes  for Class A shares  was  15.06%.  During  the
period  shown in the bar  chart,  the  highest  return  (not
annualized)  before taxes for a calendar quarter for Salomon
Brothers All Cap Fund was 11.84%  (4thQtr'02) and the lowest
return (not annualized)  before taxes for a calendar quarter
was -18.34% (3rd Qtr'02).

[See appendix to prospectus/proxy  statement for data in bar
chart showing annual total returns for Value Fund.]

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 1/1/03 through 6/30/03, the cumulative
return for Value Fund (not annualized) before taxes for
Class A shares was 10.61%. During the period shown in the
bar chart, the highest return (not annualized) before taxes
for a calendar quarter for the Value Fund was 18.26% (4th
Q'98) and the lowest return (not annualized) before taxes
for a calendar quarter was -16.69% (3rd Q'01).

Average annual total returns for the Funds for the period
ended December 31, 2002 are as follows:







-------------------------------------------------------------------
                                                      5 Years
                                                    (or life of
Salomon Brothers All Cap Fund       1 Year        class, if less)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  A   Shares   (inception
2/16/01)                            -26.57%           -17.26%
 Return Before Taxes                -26.57%           -17.41%
Return After Taxes on               -16.18%           -13.63%
  Distributions
Return    After    Taxes    on
Distributions   and   Sale  of
Fund Shares
-------------------------------------------------------------------
Russell 3000(R)Index (from           -21.54%           -15.19%
2/28/01)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  B   Shares   (inception      -26.50%           -17.11%
2/16/01)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  C   Shares   (inception      -23.52%           -15.32%
2/16/01)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  N   Shares   (inception      -23.07%           -14.45%
3/1/01)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  Y   Shares   (inception      -21.59%           -14.25%
2/16/01)
-------------------------------------------------------------------
Salomon  Brothers All Cap Fund's  average annual
total returns include  applicable sales charges:
for Class A, the current  maximum  initial sales
charge  of 5.75%;  for  Class B, the  contingent
deferred  sales  charge  of 5%  (1-year)  and 4%
(life of  class);  and for  Class C and Class N,
the 1% contingent  deferred sales charge for the
1-year  period.  There  is no sales  charge  for
Class Y. The returns  measure the performance of
a  hypothetical  account  and  assume  that  all
dividends and capital gains  distributions  have
been  reinvested  in  additional   shares.   The
performance  of the  Fund's  Class A  shares  is
compared  to  the  Russell   3000(R) Index,   an
unmanaged  index  of  large-capitalization  U.S.
companies.   The  index   performance   includes
reinvestment  of  income  but does  not  reflect
transaction   costs,   expenses  or  taxes.  The
Fund's   investments  vary  from  those  in  the
index.

-------------------------------------------------------------------------------------
Value Fund                          1 Year            5 Years          10 Years
                                                                      (or life of
                                                                    class, if less)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  A   Shares   (inception
9/16/85)                            -18.03%           -2.98%             7.53%
 Return Before Taxes                -18.10%           -4.04%             5.41%
Return After Taxes on               -10.98%           -2.49%             5.53%
  Distributions
Return    After    Taxes    on
Distributions   and   Sale  of
Fund Shares
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
S&P 500 Index (from 12/31/92)       -22.09%           -0.58%             9.34%
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  B   Shares   (inception      -18.03%           -2.90%             4.51%
10/02/95)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  C   Shares   (inception      -14.54%           -2.56%             2.88%
5/01/96)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  N   Shares   (inception      -14.17%           -8.67%              N/A
3/01/01)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  Y   Shares   (inception      -13.16%           -1.61%             2.74%
12/16/96)
-------------------------------------------------------------------------------------
Value Fund's  average  annual  total  returns  include  applicable
sales  charges:  for Class A, the current  maximum  initial  sales
charge  of  5.75%;  for  Class B, the  contingent  deferred  sales
charge of 5% (1-year) and 2% (5 years);  and for Class C and Class
N,  the  1%  contingent  deferred  sales  charge  for  the  1-year
period.  Because  Class B shares  convert  to  Class A  shares  72
months after purchase,  Class B "life-of class"  performance  does
not include any contingent  deferred sales charge and uses Class A
performance  for the period  after  conversion.  There is no sales
charge for Class Y shares.  The returns measure the performance of
a  hypothetical  account and assume that all dividends and capital
gains  distributions  have been  reinvested in additional  shares.
The  performance  of the Fund's  Class A shares is compared to the
S&P 500 Index, an unmanaged index of equity securities.  The index
performance  includes  reinvestment of income but does not reflect
transaction costs,  expenses or taxes. The Fund's investments vary
from those in the index.

Average  annual  total  returns for the Funds for the period
ended June 30, 2003 are as follows:







-------------------------------------------------------------------
Salomon Brothers All Cap Fund       1 Year            5 Years
                                                    (or life of
                                                  class, if less)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  A   Shares   (inception
2/16/01)                            -0.96%            -8.66%
 Return Before Taxes                -0.96%            -8.80%
Return After Taxes on               -0.62%            -7.37%
  Distributions
Return    After    Taxes    on
Distributions   and   Sale  of
Fund Shares
-------------------------------------------------------------------
Russell 3000(R)Index (from            0.77%            -14.77%
2/28/01)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  B   Shares   (inception      -0.75%            -8.30%
2/16/01)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  C   Shares   (inception       3.26%            -7.13%
2/16/01)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  N   Shares   (inception       3.86%            -6.13%
3/1/01)
-------------------------------------------------------------------
-------------------------------------------------------------------
Class  Y   Shares   (inception       5.69%            -5.98%
2/16/01)
-------------------------------------------------------------------
Salomon  Brothers All Cap Fund's  average annual
total returns include  applicable sales charges:
for Class A, the current  maximum  initial sales
charge  of 5.75%;  for  Class B, the  contingent
deferred  sales  charge  of 5%  (1-year)  and 3%
(life of  class);  and for  Class C and Class N,
the 1% contingent  deferred sales charge for the
1-year  period.  There  is no sales  charge  for
Class Y. The returns  measure the performance of
a  hypothetical  account  and  assume  that  all
dividends and capital gains  distributions  have
been  reinvested  in  additional   shares.   The
performance  of the  Fund's  Class A  shares  is
compared  to  the  Russell   3000(R) Index,   an
unmanaged  index  of  large-capitalization  U.S.
companies.   The  index   performance   includes
reinvestment  of  income  but does  not  reflect
transaction   costs,   expenses  or  taxes.  The
Fund's   investments  vary  from  those  in  the
index.

-------------------------------------------------------------------------------------
Value Fund                          1 Year            5 Years          10 Years
                                                                      (or life of
                                                                    class, if less)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  A   Shares   (inception
9/16/85)                            -1.06%            -2.60%             7.20%
 Return Before Taxes                -1.14%            -3.66%             5.20%
Return After Taxes on               -0.70%            -2.60%             5.22%
  Distributions
Return    After    Taxes    on
Distributions   and   Sale  of
Fund Shares
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
S&P 500 Index (from 6/30/93)         0.25%            -1.61%            10.04%
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  B   Shares   (inception      -0.84%            -2.51%             5.58%
10/02/95)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  C   Shares   (inception       3.15%            -2.19%             4.08%
5/01/96)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  N   Shares   (inception       3.66%            -2.81%              N/A
3/01/01)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  Y   Shares   (inception       5.19%            -1.14%             4.22%
12/16/96)
-------------------------------------------------------------------------------------
Value Fund's  average  annual  total  returns  include  applicable
sales  charges:  for Class A, the current  maximum  initial  sales
charge  of  5.75%;  for  Class B, the  contingent  deferred  sales
charge of 5% (1-year) and 2% (5 years);  and for Class C and Class
N,  the  1%  contingent  deferred  sales  charge  for  the  1-year
period.  Because  Class B shares  convert  to  Class A  shares  72
months after purchase,  Class B "life of class"  performance  does
not include any contingent  deferred sales charge and uses Class A
performance  for the period  after  conversion.  There is no sales
charge for Class Y shares.  The returns measure the performance of
a  hypothetical  account and assume that all dividends and capital
gains  distributions  have been  reinvested in additional  shares.
The  performance  of the Fund's  Class A shares is compared to the
S&P 500 Index, an unmanaged index of equity securities.  The index
performance  includes  reinvestment of income but does not reflect
transaction costs,  expenses or taxes. The Fund's investments vary
from those in the index.

      How Has Value Fund Performed?  - Below is a discussion
by the  Manager  of  Value  Fund's  performance  during  its
fiscal year ended October 31, 2002,  followed by a graphical
comparison  of Value Fund's  performance  to an  appropriate
broad-based market index.

      Management's  Discussion of Performance - During Value
Fund's  fiscal  year that ended  October 31, 2002 the Fund's
strong  performance  relative to its benchmark,  the S&P 500
and  peer  group  was  driven  by  its  security   selection
strategy.  The Fund particularly benefited from its holdings
of  technology,  industrial and financial  services  stocks,
which   performed   better  in  the  aggregate   than  their
respective  components  on the  value  side  of the  S&P 500
Index.  Only the  Fund's  energy and  health  care  holdings
trailed their  respective  Index  components  (10 sectors in
all),  and  in  each  case  the  margin  of  difference  was
minimal.  The Fund  slightly  reduced  its  exposure  to the
industrials  group after taking profits in stocks of defense
contractors   that  had  gained   value,   and  it  modestly
increased  its  exposure to health care  stocks.  The Fund's
portfolio holdings and allocations are subject to change.

      Comparing  Value  Fund's  Performance  to the Market -
The  graphs   that  follow   show  the   performance   of  a
hypothetical  $10,000  investment in each class of shares of
Value Fund held until June 30, 2003.  Class A performance is
shown  for  a  10-year   period.   For  each  other   class,
performance  is measured from  inception of the class:  from
October  2,  1995 for  Class B, from May 1, 1995 for Class C
shares,  from  March 1, 2001 for  Class N  shares,  and from
December   16,  1996  for  Class  Y  shares.   Value  Fund's
performance  reflects the  deduction of the maximum  initial
sales charge on Class A shares,  the  applicable  contingent
deferred  sales  charge  on  Class  B,  Class C and  Class N
shares,  and reinvestment of all dividends and capital gains
distributions.  Value Fund's  performance is compared to the
performance  of the S&P 500  Index,  an  unmanaged  index of
equity   securities.    Index   performance   reflects   the
reinvestment  of dividends but does not reflect  transaction
costs,  and none of the data in the graphs that follow shows
the effect of taxes. Value Fund's  performance  reflects the
effects  of Fund  business  and  operating  expenses.  While
index  comparisons  may be useful to provide a benchmark for
Value  Fund's  performance,  it must  be  noted  that  Value
Fund's  investments  are not limited to the  investments  in
the Index.

Class A Shares

Comparison of Change in Value of $10,000 Hypothetical
Investments in:
Value Fund (Class A) and S&P 500 Index.

[Line Graph]

---------------------------------------------------------------
        Date         Value of Investment in    S&P 500 Index
                              Fund
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1993              $9,425               $10,000
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1993              $9,846               $10,258
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1993              $9,985               $10,495
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1994              $9,754               $10,098
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1994              $9,563               $10,140
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1994              $10,025              $10,635
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1994              $9,919               $10,633
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1995              $10,792              $11,667
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1995              $11,708              $12,779
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1995              $12,703              $13,794
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1995              $13,530              $14,624
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1996              $14,174              $15,409
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1996              $14,352              $16,099
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1996              $14,751              $16,597
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1996              $16,016              $17,979
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1997              $16,049              $18,463
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1997              $18,219              $21,683
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1997              $20,109              $23,307
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1997              $19,860              $23,976
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1998              $21,833              $27,318
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1998              $21,547              $28,225
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1998              $21,555              $25,424
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1998              $21,072              $30,833
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1999              $22,146              $32,368
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1999              $19,900              $34,645
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1999              $20,541              $32,488
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1999              $20,517              $37,318
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2000              $20,261              $38,172
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2000              $20,308              $37,158
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2000              $20,225              $36,798
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2000              $19,978              $33,921
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2001              $21,707              $29,902
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2001              $18,085              $31,651
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2001              $20,828              $27,007
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2001              $21,440              $29,893
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2002              $19,166              $29,975
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2002              $19,087              $25,961
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2002              $16,145              $21,479
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2002              $18,115              $23,289
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2003              $17,159              $22,555
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2003              $20,037              $26,025
---------------------------------------------------------------

Class B Shares

Comparison of Change in Value of $10,000 Hypothetical
Investments in:
Value Fund (Class B) and S&P 500 Index.

[Line Graph]

---------------------------------------------------------------
        Date         Value of Investment in    S&P 500 Index
                              Fund
---------------------------------------------------------------
---------------------------------------------------------------
     10/02/1995              $10,000              $10,000
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1995              $10,804              $10,602
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1996              $11,294              $11,170
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1996              $11,399              $11,671
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1996              $11,683              $12,032
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1996              $12,657              $13,034
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1997              $12,657              $13,384
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1997              $14,341              $15,719
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1997              $15,798              $16,896
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1997              $15,574              $17,381
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1998              $17,082              $19,804
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1998              $16,835              $20,461
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1998              $14,208              $18,431
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1998              $16,773              $22,352
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1999              $16,367              $23,465
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1999              $17,171              $25,116
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1999              $15,402              $23,552
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1999              $15,865              $27,053
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2000              $15,820              $27,673
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2000              $15,596              $26,938
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2000              $15,605              $26,677
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2000              $15,502              $24,591
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2001              $15,296              $21,677
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2001              $16,580              $22,945
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2001              $13,787              $19,578
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2001              $15,878              $21,670
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2002              $16,344              $21,730
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2002              $14,550              $18,821
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2002              $12,308              $15,571
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2002              $13,809              $16,883
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2003              $13,080              $16,351
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2003              $15,230              $18,867
---------------------------------------------------------------







Class C Shares

Comparison of Change in Value of $10,000 Hypothetical
Investments in:
Value Fund (Class C) and S&P 500 Index.

[Line Graph]

---------------------------------------------------------------
        Date         Value of Investment in  S&P 500 Index
                     Fund
---------------------------------------------------------------
---------------------------------------------------------------
     05/01/1996              $10,000              $10,000
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1996              $10,061              $10,297
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1996              $10,314              $10,615
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1996              $11,178              $11,499
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1997              $11,178              $11,808
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1997              $12,664              $13,867
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1997              $13,954              $14,906
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1997              $13,757              $15,334
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1998              $15,090              $17,471
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1998              $14,871              $18,051
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1998              $12,551              $16,260
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1998              $14,814              $19,719
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1999              $14,458              $20,701
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1999              $15,163              $22,158
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1999              $13,603              $20,778
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1999              $14,009              $23,867
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2000              $13,977              $24,414
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2000              $13,776              $23,765
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2000              $13,784              $23,535
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2000              $13,699              $21,695
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2001              $13,506              $19,124
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2001              $14,648              $20,243
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2001              $12,179              $17,273
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2001              $13,997              $19,118
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2002              $14,391              $19,171
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2002              $12,782              $16,604
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2002              $10,795              $13,737
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2002              $12,082              $14,895
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2003              $11,422              $14,425
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2003              $13,313              $16,645
---------------------------------------------------------------

Class N Shares

Comparison of Change in Value of $10,000 Hypothetical
Investments in:
Value Fund (Class N) and S&P 500 Index.

[Line Graph]

---------------------------------------------------------------
        Date         Value of Investment in    S&P 500 Index
                              Fund
---------------------------------------------------------------
---------------------------------------------------------------
     03/01/2001              $10,000              $10,000
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2001              $9,397               $9,367
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2001              $10,199              $9,915
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2001              $8,490               $8,460
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2001              $9,768               $9,364
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2002              $10,051              $9,390
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2002              $8,941               $8,132
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2002              $7,566               $6,728
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2002              $8,468               $7,295
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2003              $8,023               $7,065
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2003              $9,358               $8,153
---------------------------------------------------------------

Class Y Shares

Comparison of Change in Value of $10,000 Hypothetical
Investments in:
Value Fund (Class Y) and S&P 500 Index.

[Line Graph]

---------------------------------------------------------------
        Date         Value of Investment in  S&P 500 Index
                     Fund
---------------------------------------------------------------
---------------------------------------------------------------
     12/16/1996              $10,000              $10,000
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1996              $10,280              $10,000
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1997              $10,291              $10,269
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1997              $11,689              $12,060
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1997              $12,918              $12,963
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1997              $12,769              $13,335
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1998              $14,045              $15,194
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1998              $13,873              $15,698
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1998              $11,743              $14,140
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1998              $13,907              $17,149
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/1999              $13,609              $18,003
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/1999              $14,301              $19,269
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/1999              $12,852              $18,069
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/1999              $13,280              $20,756
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2000              $13,280              $21,231
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2000              $13,122              $20,667
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2000              $13,145              $20,467
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2000              $13,107              $18,867
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2001              $12,964              $16,631
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2001              $14,108              $17,604
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2001              $11,767              $15,021
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2001              $13,561              $16,626
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2002              $13,977              $16,672
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2002              $12,456              $14,440
---------------------------------------------------------------
---------------------------------------------------------------
     09/30/2002              $10,549              $11,946
---------------------------------------------------------------
---------------------------------------------------------------
     12/31/2002              $11,777              $12,953
---------------------------------------------------------------
---------------------------------------------------------------
     03/31/2003              $11,216              $12,545
---------------------------------------------------------------
---------------------------------------------------------------
     06/30/2003              $13,103              $14,475
---------------------------------------------------------------
      Total returns and the ending account values in the
graphs show changes in share values and include
reinvestment of all dividends and capital gains
distributions. Past performance is not predictive of future
performance. Graphs are not drawn to the same scale.

What are other key features of the Funds?

      The  description  of certain key features of the Funds
below  is  supplemented   by  each  fund's   Prospectus  and
Statement of Additional Information,  which are incorporated
by reference.

Investment   Management   and  Fees  -  Under  each   fund's
investment advisory agreement,  the Fund pays the Manager an
advisory fee based on the Fund's  average  annual net assets
at a rate that  declines  on  additional  assets as the Fund
grows.

-------------------------------------------------------------------------------
     Salomon Brothers All Cap Fund                    Value Fund
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1.10% of the first $100 million of       0.625% of the first $300 million of
average annual net assets of the Fund    average annual net assets of the
and                                      Fund,
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1.00% of average annual net assets in    0.500% of the next $100 million, and
excess of $100 million
-------------------------------------------------------------------------------
                                        ---------------------------------------
                                        0.450% of average annual net assets
                                        in excess of $400 million.
                                        ---------------------------------------

      The management  fee for Salomon  Brothers All Cap Fund
for the 12  months  ended  March  31,  2003 was 1.10% of the
average  annual net  assets  for each  class of shares.  The
management  fee for Value Fund for the 12 months ended March
31,  2003 was  0.625% of the  average  annual net assets for
each  class of  shares.  The  12b-1  distribution  plans for
both funds are  substantially  similar.  However,  the other
expenses the Funds incurred,  including  transfer agent fees
and   custodial,   accounting  and  legal   expenses,   have
differed,  with Value  Fund's  "Other  Expenses"  being less
than those of Salomon  Brothers All Cap Fund  because  Value
Fund is a significantly larger fund.

-------------------------------------------------------------------------------
  June 30, 2003         Value Fund         Salomon Brothers     Combined Pro
                                             All Cap Fund     Forma Value Fund
                          Class A              Class A            Class A
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Management Fee            0.625%                1.10%              0.625%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
12b-1 Fees                 0.24%                0.18%1             0.24%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other Expenses             0.34%                0.55%              0.34%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total Expenses             1.21%                1.83%              1.21%
-------------------------------------------------------------------------------
"Other Expenses" include transfer agent fees and custodial,
accounting and legal expenses, and are based on, among
other things, the fees the Funds would have paid if the
transfer agent had not waived a portion of its fee under a
voluntary undertaking to the Funds to limit these 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.
For Value Fund, after that waiver, the actual "Other
Expenses" and "Total Annual Operating Expenses" for the
period shown were 0.39% and 2.02% for Class B shares, 0.39%
and 2.02% for Class C shares, 0.39% and 1.52% for Class N
shares, and 0.25% and 0.88% for Class Y shares and were the
same as shown above for Class A shares.
For Salomon Brothers All Cap Fund, in addition to that
waiver, "Total Annual Operating Expenses" were further
reduced by a voluntary expense assumption undertaken by the
Manager.  After that waiver and expense assumption, the
actual "Total Annual Operating Expenses" for the period
shown were 1.65% for Class A shares, 2.40% for Class B
shares, 2.40% for Class C shares, 1.90% for Class N shares
and 0.95% for Class Y shares.
1. Class A shares  12b-1  fee is not a full 25 basis  points
as provided for by the 12b-1 plan due to monies  invested by
the Manager  upon which the Manager and  Distributor  do not
collect a 12b-1 fee.


      The net  assets  under  management  for Value  Fund on
June 30, 2003 were  $256,347,822  as compared to $24,656,074
for  Salomon  Brothers  All Cap  Fund.  Effective  upon  the
Closing of the  Reorganization,  the management fee rate for
Value Fund is  expected  to be 0.625% of average  annual net
assets based on combined  assets of the Funds as of June 30,
2003.  The  "Other  Expenses"  of  the  surviving  Fund  are
expected  to be less than the  "Other  Expenses"  of Salomon
Brothers  All Cap Fund and  equal to or less  than  those of
Value Fund.

      For more  details  regarding  each  fund's  investment
management   agreement,   see  the  section  below  entitled
"Comparison  of Investment  Objectives and Policies - How do
the Account Features and Shareholder  Services for the Funds
Compare?"

      Transfer  Agency  and  Custody  Services  - Both funds
receive  shareholder  accounting and other clerical services
from  OppenheimerFunds  Services (the  "Transfer  Agent") in
its capacity as transfer  agent and dividend  paying  agent.
The Transfer  Agent  receives an annual per account fee from
both funds.  The terms of the transfer agency  agreement for
both funds and the Manager's voluntary  undertaking to limit
transfer  agency fees  (currently  0.35% per fiscal year for
each  class  of  both  funds)  are  substantially   similar.
Citibank,  N.A.,  located at 111 Wall Street,  New York,  NY
10005,  acts as custodian of the securities and other assets
of both funds.

      Distribution Services - OppenheimerFunds  Distributor,
Inc. (the "Distributor")  acts as the principal  underwriter
in a  continuous  public  offering  of shares of both funds,
but is not  obligated  to sell a specific  number of shares.
Both funds have adopted a Service Plan and  Agreement  under
Rule 12b-1 of the  Investment  Company Act for their Class A
shares.  The Service Plan provides for the  reimbursement to
the  Distributor,  for a portion  of its costs  incurred  in
connection  with the  personal  service and  maintenance  of
accounts that hold Class A shares of the  respective  Funds.
Under  the  Class A  Service  Plans,  reimbursement  is made
quarterly  at an annual  rate that may not  exceed  0.25% of
the  average  annual  net  assets  of Class A shares  of the
respective  Funds.  The  Distributor  currently  uses all of
those fees to compensate dealers,  brokers,  banks and other
financial  institutions  quarterly  for  providing  personal
service and  maintenance of accounts of their customers that
hold Class A shares of the respective Funds.

      Both  funds  have  adopted  Distribution  and  Service
Plans and  Agreements  under  Rule  12b-1 of the  Investment
Company  Act for Class B, Class C and Class N shares.  These
plans  compensate the Distributor for its services and costs
in connection with the  distribution of Class B, Class C and
Class N shares and the personal  service and  maintenance of
shareholder  accounts.  Under their  respective  Class B and
Class C Plans,  the Funds pay the  Distributor a service fee
at an annual rate of 0.25% of average  annual net assets and
an  asset-based  sales  charge at an annual rate of 0.75% of
average annual net assets.  Under their  respective  Class N
Plans  the  Funds pay the  Distributor  a service  fee at an
annual  rate of 0.25% of  average  annual  net assets and an
asset-based  sales  charge  at an  annual  rate of  0.25% of
average  annual net assets.  All fee amounts are computed on
the average annual net assets of the class  determined as of
the close of each  regular  business  day of each fund.  The
Distributor  uses  all of the  service  fees  to  compensate
dealers for providing  personal  services and maintenance of
accounts of their  customers  that hold shares of the Funds.
The  Class  B  and  Class  N  asset-based  sales  charge  is
retained  by the  Distributor.  After  the first  year,  the
Class   C   asset-based   sales   charge   is  paid  to  the
broker-dealer as an ongoing  concession for shares that have
been outstanding for a year or more.

      The terms of the Funds'  respective  Distribution  and
Service Plans are  substantially  similar.  For more details
regarding of each fund's distribution-related  services, see
the  section   below  titled   "Comparison   of   Investment
Objectives  and  Policies - How do the Account  Features and
Shareholder Services for the Funds Compare?"

      Purchases,    Redemptions,    Exchanges    and   other
Shareholder  Services  - Both  funds  have  nearly  the same
requirements  and restrictions in connection with purchases,
redemptions  and  exchanges.  In  addition,  each  fund also
offers  the  same  types  of  shareholder   services.   More
detailed  information   regarding  purchases,   redemptions,
exchanges  and  shareholder  services  can be found below in
the  section   below  titled   "Comparison   of   Investment
Objectives  and  Policies - How do the Account  Features and
Shareholder Services for the Funds Compare?"

      Dividends  and  Distributions  -  Both  funds  declare
dividends  separately  for  each  class of  shares  from net
investment  income  annually  and  pay  those  dividends  to
shareholders  in December on a date selected by the Board of
Trustees of each fund.

      For a detailed  description  of each fund's  policy on
dividends  and  distributions,   see  the  section  entitled
"Comparison  of Investment  Objectives and Policies - How do
the Account Features and Shareholder  Services for the Funds
Compare?"

What are the Principal Risks of an Investment in Value FunD
             OR SALOMON BROTHERS ALL CAP FUND?

      In  evaluating  whether to approve the  Reorganization
and  invest in Value  Fund,  shareholders  should  carefully
consider the following risk factors,  the other  information
set forth in this Proxy  Statement  and  Prospectus  and the
more complete  description  of risk factors set forth in the
documents  incorporated by reference  herein,  including the
Prospectuses  of the Funds and their  respective  Statements
of  Additional  Information.  The Value Fund  Prospectus  is
enclosed  with the other  proxy  materials,  including  this
combined Prospectus/Proxy Statement.

General

      All  investments  have  risks  to  some  degree.  Both
funds'  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  Manager  or
Sub-Advisor  will  cause  the  Funds to  underperform  other
funds having similar  objectives.  The main investment risks
of the Funds are substantially similar.
      These  risks  collectively  form the risk  profiles of
the   Funds,   and  can  affect  the  value  of  the  Funds'
investments,  investment  performance  and prices per share.
These  risks  mean that you can lose money by  investing  in
either fund. When you redeem your shares,  they may be worth
more or less  than  what  you  paid  for  them.  There is no
assurance  that  either  fund will  achieve  its  investment
objective.

Risks of  Investing  in Stocks.  Stocks  fluctuate in price,
and  their  short-term  volatility  at times  may be  great.
Because  both funds  currently  focus their  investments  in
stocks,  the value of the Funds' portfolios will be affected
by changes in the stock  markets.  Market  risk will  affect
the Funds' per share  prices,  which will  fluctuate  as the
values of the Funds' 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.  In  particular,  because  both funds  currently
emphasize  investments in stocks of U.S. issuers,  they will
be  affected  primarily  by changes in U.S.  stock  markets.
Both  funds   currently   emphasize   securities  of  larger
companies  but  they  can  also buy  stocks  of  small-  and
medium-size  companies,  which may have more volatile  stock
prices than stocks of larger companies.

Risks of  Value  Investing.  Value  investing  seeks  stocks
having  prices  that are low in relation to what is believed
to be their real worth or  prospects.  Both funds  expect to
realize  appreciation  in the value of their  holdings  when
other  investors   realize  the  intrinsic  value  of  those
stocks. In using a value investing style,  there is the risk
that the market will not recognize  that the  securities are
undervalued  and  they  might  not  appreciate  in  value as
anticipated.
Industry  Focus.  At  times  both  funds  may  increase  the
relative   emphasis  of  their   investments  in  stocks  of
companies in a particular  industry.  Stocks of issuers in a
particular  industry  may be affected by changes in economic
conditions, changes in government regulations,  availability
of basic resources or supplies,  or other events that affect
that  industry  more than  others.  To the  extent  that the
Funds  increase the relative  emphasis of their  investments
in a particular  industry,  their share values may fluctuate
in response to events affecting that industry.

Risks of  Foreign  Investing.  Both  funds  can buy  foreign
equity and debt securities.  However, neither fund currently
invests in foreign securities to a significant degree.

      These include equity and debt  securities of companies
organized  under the laws of countries other than the United
States and debt securities of foreign  governments and their
agencies and  instrumentalities.  While  foreign  securities
offer special investment opportunities,  they are subject to
special  risks that can reduce the Funds'  share  prices and
returns.

      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.
Currency rate changes can also affect the  distributions the
Funds  make  from  the  income  they  receive  from  foreign
securities.   Foreign   investing   can   result  in  higher
transaction  and  operating  costs  for the  Funds.  Foreign
issuers  are  not  subject  to  the  same   accounting   and
disclosure   requirements   to  which  U.S.   companies  are
subject.  The value of foreign  investments  may be affected
by   exchange   control   regulations,    expropriation   or
nationalization  of  a  company's  assets,   foreign  taxes,
delays   in   settlement   of   transactions,   changes   in
governmental  economic  or  monetary  policy in the U.S.  or
abroad, or other political and economic factors.

Risks  of  Investing  in Debt  Securities.  Both  funds  can
invest in debt securities.  However,  neither fund currently
invests in debt securities to a significant degree.

      Debt securities,  such as bonds,  involve credit risk.
This is the risk  that  the  borrower  will not make  timely
payments of  principal  and  interest.  The degree of credit
risk depends on the issuer's financial  condition and on the
terms of the  bonds.  Debt  securities  are also  subject to
interest  rate  risk.  That is the  risk  the  value  of the
security may fall when interest rates rise. In general,  the
market price of debt securities with longer  maturities will
go up or down more in response to changes in interest  rates
than the market price of shorter term securities.

Risks of Non-Diversification.  Salomon Brothers All Cap Fund
is  "non-diversified."  That  means that  compared  to funds
that are  diversified  such as Value  Fund,  it can invest a
greater  portion  of its  assets  in the  securities  of one
issuer.  Having a higher  percentage of its assets  invested
in the  securities  of fewer  issuers  can result in greater
fluctuations  of its share prices due to events  affecting a
particular issuer.

How Risky are the Funds Overall?  The risks  described above
collectively  form the  overall  risk  profile of the Funds,
and can affect the value of the  Funds'  investments,  their
investment   performance   and  their   prices   per  share.
Particular   investments  and  investment   strategies  have
risks.  The  share  prices of the Funds  will  change  daily
based on changes in market prices of  securities  and market
conditions,  and in response to other  economic  events.  In
the  OppenheimerFunds  spectrum,  both  funds are  generally
more  conservative  than aggressive  growth stock funds, but
more  aggressive  than funds  that  emphasize  investing  in
bonds as well as stocks.

               REASONS FOR THE REORGANIZATION

      At a  meeting  of the  Board of  Trustees  of  Salomon
Brothers  All Cap  Fund  held  April  28,  2003,  the  Board
considered  whether to approve the  proposed  Reorganization
and reviewed and discussed with the Manager and  independent
legal  counsel  the   materials   provided  by  the  Manager
relevant  to the  proposed  Reorganization.  Included in the
materials  was  information   with  respect  to  the  Funds'
respective  investment  objectives and policies,  management
fees,   distribution  fees  and  other  operating  expenses,
historical performance and asset size.

      The  Board  reviewed  information  demonstrating  that
Salomon  Brothers All Cap Fund is a relatively  smaller fund
with  approximately  $20  million in net  assets.  The Board
anticipates  that  Salomon  Brothers  All Cap Fund's  assets
will  not  increase   substantially  in  size  in  the  near
future.  In comparison,  Value Fund has  approximately  $200
million  in  net  assets.  After  the  Reorganization,   the
shareholders  of Salomon  Brothers All Cap Fund would become
shareholders  of a larger fund that is  anticipated  to have
lower overall  operating  expenses than Salomon Brothers All
Cap Fund.  Economies  of scale may benefit  shareholders  of
Salomon  Brothers  All Cap  Fund.  However,  there can be no
assurances that lower operating  expenses will continue into
the future.


      The Board  considered  the fact that both  funds  have
similar    investment    objectives   of   seeking   capital
appreciation  with the  realization  of current  income as a
secondary   consideration   for   Value   Fund.   The  Board
considered  that  although  both  funds  select   securities
believed  to be  undervalued,  their  respective  investment
decision making processes are different.

       The Board noted that Value Fund's  management  fee is
currently  lower  than  that  of  Salomon  Brothers  All Cap
Fund.  The Board  considered  that  Value  Fund's  long-term
performance  has been better  than that of Salomon  Brothers
All  Cap  Fund.   The  Board   also   considered   that  the
procedures  for  purchases,  exchanges  and  redemptions  of
shares of both  funds  are  substantially  similar  and that
both funds offer the same investor services and options.

      In  addition,  the  Board  considered  the  terms  and
conditions  of the  Reorganization,  including  the  fact no
sales   charge   would   be   imposed   in   effecting   the
Reorganization  and that the  Reorganization  is expected to
be a  tax-free  reorganization.  The  Board  concluded  that
Salomon  Brothers  All  Cap  Fund's   participation  in  the
transaction  is in the  best  interests  of the Fund and its
shareholders,  notwithstanding  that  the  lower  pro  forma
expenses  of  the  combined   funds   (relative  to  Salomon
Brothers   All  Cap  Fund)  and  the   historically   better
performance  of Value Fund are subject to change.  The Board
concluded  that the  Reorganization  would  not  result in a
dilution  of  the  interests  of  existing  shareholders  of
Salomon Brothers All Cap Fund.

      After  consideration  of the above  factors,  and such
other  factors  and  information  as the  Board  of  Salomon
Brothers All Cap Fund deemed relevant,  the Board, including
the  Trustees who are not  "interested  persons" (as defined
in the Investment  Company Act) of either  Salomon  Brothers
All Cap Fund or the Manager  (the  "Independent  Trustees"),
unanimously    approved   the    Reorganization    and   the
Reorganization   Agreement   and  voted  to  recommend   its
approval to the  shareholders  of Salomon  Brothers  All Cap
Fund.

      The Board of Directors  of Value Fund also  determined
that the  Reorganization  was in the best interests of Value
Fund and its  shareholders and that no dilution would result
to those  shareholders.  Value Fund shareholders do not vote
on the  Reorganization.  The Board of Value Fund,  including
the Independent  Directors,  also  unanimously  approved the
Reorganization and the Reorganization Agreement.

      For the reasons  discussed above, the Board, on behalf
of Salomon  Brothers All Cap Fund,  recommends that you vote
FOR  the  Reorganization   Agreement.   If  shareholders  of
Salomon   Brothers   All  Cap  Fund  do  not   approve   the
Reorganization  Agreement,  the Reorganization will not take
place.

            INFORMATION ABOUT THE REORGANIZATION

The  following  is only a summary of the  material  terms of
the  Reorganization  Agreement.  You should  read the actual
form  of  Reorganization   Agreement.   It  is  attached  as
Exhibit A.

How Will the Reorganization be Carried Out?

      If the  shareholders of Salomon  Brothers All Cap Fund
approve the  Reorganization  Agreement,  the  Reorganization
will take place after  various  conditions  are satisfied by
Salomon  Brothers  All Cap Fund and  Value  Fund,  including
delivery  of  certain   documents.   The  Closing   Date  is
presently  scheduled  for November 7, 2003 and the Valuation
Date is presently scheduled for November 6, 2003.

      If  shareholders  of  Salomon  Brothers  All Cap  Fund
approve the Reorganization  Agreement,  Salomon Brothers All
Cap Fund will  deliver  to Value Fund  substantially  all of
its assets on the Closing  Date.  In exchange,  shareholders
of  Salomon  Brothers  All Cap Fund  will  receive  Class A,
Class B,  Class C,  Class N and  Class Y Value  Fund  shares
that have a value  equal to the  dollar  value of the assets
delivered  by Salomon  Brothers  All Cap Fund to Value Fund.
Salomon  Brothers All Cap Fund will then be  liquidated  and
its  outstanding   shares  will  be  cancelled.   The  stock
transfer  books of  Salomon  Brothers  All Cap Fund  will be
permanently   closed  at  the  close  of   business  on  the
Valuation  Date. Only  redemption  requests  received by the
Transfer  Agent in  proper  form on or  before  the close of
business on the Valuation  Date will be fulfilled by Salomon
Brothers All Cap Fund.  Redemption  requests  received after
that time will be  considered  requests to redeem  shares of
Value Fund.

      Shareholders  of  Salomon  Brothers  All Cap  Fund who
vote  their  Class A,  Class B, Class C, Class N and Class Y
shares in favor of the  Reorganization  will be  electing in
effect to redeem  their  shares of Salomon  Brothers All Cap
Fund  at net  asset  value  on  the  Valuation  Date,  after
Salomon Brothers All Cap Fund subtracts a cash reserve,  and
reinvest  the proceeds in Class A, Class B, Class C, Class N
and Class Y shares of Value  Fund at net  asset  value.  The
cash  reserve  is that  amount of cash  retained  by Salomon
Brothers  All Cap Fund,  which is deemed  sufficient  in the
discretion  of the  Board  for  the  payment  of the  Fund's
outstanding debts,  taxes, and expenses of liquidation.  The
cash  reserve will consist of  approximately  $18,900  cash.
This amount of cash  reserve is  reflected  in the pro forma
presentation  of NAV.  Value Fund is not  assuming any debts
of Salomon  Brothers All Cap Fund except debts for unsettled
securities   transactions   and  outstanding   dividend  and
redemption  checks.  Salomon  Brothers  All  Cap  Fund  will
recognize  capital  gain or loss on any  sales of  portfolio
securities  made  prior  to the  Reorganization.  The  sales
contemplated in the  Reorganization are anticipated to be in
the ordinary course of business of Salomon  Brothers All Cap
Fund's activities.

      Under the  Reorganization  Agreement,  within one year
after  the  Closing  Date,  Salomon  Brothers  All Cap  Fund
shall:  (a)  either  pay or  make  provision  for all of its
debts and taxes;  and (b) either (i) transfer any  remaining
amount of the cash reserve to Value Fund, if such  remaining
amount  is  not   material   (as  defined   below)  or  (ii)
distribute  such  remaining  amount to the  shareholders  of
Salomon  Brothers All Cap Fund who were  shareholders on the
Valuation  Date. The remaining  amount shall be deemed to be
material if the amount to be  distributed,  after  deducting
the  estimated  expenses  of  the  distribution,  equals  or
exceeds  one  cent  per  share  of  the  number  of  Salomon
Brothers All Cap Fund shares  outstanding  on the  Valuation
Date. In order to qualify for this  distribution,  it is not
necessary  for a  shareholder  of Salomon  Brothers  All Cap
Fund to  continue  to hold  shares  of the  combined  entity
after   the   Closing   Date.   If  the  cash   reserve   is
insufficient  to  satisfy  any of Salomon  Brothers  All Cap
Fund's liabilities,  the Manager will assume  responsibility
for any such  unsatisfied  liability.  Within one year after
the  Closing  Date,  Salomon  Brothers  All  Cap  Fund  will
complete its liquidation.

      Under the  Reorganization  Agreement,  either  Salomon
Brothers  All  Cap  Fund  or  Value  Fund  may  abandon  and
terminate  the  Reorganization  Agreement for any reason and
there shall be no  liability  for damages or other  recourse
available to the other Fund, provided,  however, that in the
event  that  one  of the  Funds  terminates  this  Agreement
without  reasonable cause, it shall, upon demand,  reimburse
the  other  Fund  for  all  expenses,  including  reasonable
out-of-pocket  expenses and fees incurred in connection with
this Agreement.

      To the extent  permitted  by law,  the Funds may agree
to amend the  Reorganization  Agreement without  shareholder
approval.  They may also agree to terminate  and abandon the
Reorganization   at  any  time  before  or,  to  the  extent
permitted  by law,  after the  approval of  shareholders  of
Salomon Brothers All Cap Fund.

Who will pay the expenses of the Reorganization?

      The cost of printing  and mailing the proxies and this
Prospectus  and Proxy  Statement  will be borne  equally  by
Salomon   Brothers  All  Cap  Fund  and  Value  Fund.  Those
printing  costs  and  mailing  costs  are  estimated  to  be
$10,000  and $2,000,  respectively.  The Funds will bear the
cost of their  respective  tax opinions.  Any documents such
as  existing   prospectuses   or  annual  reports  that  are
included in the proxy mailing or at a shareholder's  request
will be a cost of the Fund issuing the  document.  Any other
out-of-pocket  expenses  associated with the  Reorganization
will be paid by the Funds in the  amounts  incurred by each.
Depending  on the  circumstances,  the  Manager  expects  to
absorb  some or  perhaps  all of the  audit  costs and other
fees related to this proxy  statement.  The approximate cost
of the  Reorganization  is $14,500 for Salomon  Brothers All
Cap Fund, and $15,000 for Value Fund.

What are the tax consequences of the Reorganization?

      The   Reorganization  is  intended  to  qualify  as  a
tax-free  reorganization  for  federal  income tax  purposes
under  Section  368(a)(1)  of the  Internal  Revenue Code of
1986,  as  amended.   Based  on  certain   assumptions   and
representations  received from Salomon Brothers All Cap Fund
and  Value  Fund,  it is  expected  to  be  the  opinion  of
Deloitte & Touche LLP,  tax advisor to Salomon  Brothers All
Cap Fund,  that  shareholders  of Salomon  Brothers  All Cap
Fund will not recognize any gain or loss for federal  income
tax  purposes as a result of the  exchange  of their  shares
for shares of Value  Fund,  and that  shareholders  of Value
Fund will not  recognize  any gain or loss upon  receipt  of
Salomon  Brothers  All Cap  Fund's  assets.  If this type of
tax  opinion is not  forthcoming  by the Closing  Date,  the
Fund   may   still   choose   to   go   forward   with   the
reorganization,  pending re-solicitation of shareholders and
shareholder   approval.   In   addition,   neither  fund  is
expected  to  recognize  a gain or loss as a  result  of the
Reorganization.

      Immediately  prior  to  the  Valuation  Date,  Salomon
Brothers  All Cap Fund will pay a  dividend  which will have
the  effect of  distributing  to  Salomon  Brothers  All Cap
Fund's  shareholders  all of Salomon Brothers All Cap Fund's
net  investment  company  taxable  income for taxable  years
ending on or prior to the  Closing  Date  (computed  without
regard to any deduction  for dividends  paid) and all of its
net capital gains, if any,  realized in taxable years ending
on or prior to the  Closing  Date (after  reduction  for any
available capital loss  carry-forward).  Such dividends will
be included in the taxable  income of Salomon  Brothers  All
Cap Fund's  shareholders  as  ordinary  income  and  capital
gain, respectively.

      You will continue to be  responsible  for tracking the
purchase  cost and holding  period of your shares and should
consult your tax advisor  regarding  the effect,  if any, of
the    Reorganization    in   light   of   your   individual
circumstances.  You should also  consult your tax advisor as
to state and local and other tax  consequences,  if any,  of
the  Reorganization  because this discussion only relates to
federal income tax consequences.

What should I know about Class A, Class B, Class C, Class N
and Class Y shares of Value Fund?

      The   rights  of   shareholders   of  both  funds  are
substantially  the same.  Class A, Class B, Class C, Class N
and/or Class Y shares of Value Fund will be  distributed  to
shareholders  of Class A,  Class B,  Class C, Class N and/or
Class  Y  shares   of   Salomon   Brothers   All  Cap  Fund,
respectively,  in connection with the  Reorganization.  Each
share  will be fully  paid and  nonassessable  when  issued,
will have no  preemptive  or  conversion  rights and will be
transferable  on the books of Value Fund.  Salomon  Brothers
All Cap  Fund's  Declaration  of Trust  contains  an express
disclaimer  of  shareholder  or  Trustee  liability  for the
Fund's  obligations,  and provides for  indemnification  and
reimbursement  of  expenses  out of  its  property  for  any
shareholder  held  personally  liable  for its  obligations.
Neither  fund permits  cumulative  voting.  If  shareholders
approve  the  Reorganization,  the shares of Value Fund will
be recorded  electronically in each  shareholder's  account.
Value   Fund  will  then   send  a   confirmation   to  each
shareholder.  Shareholders of Salomon  Brothers All Cap Fund
holding  certificates  representing their shares will not be
required to surrender their  certificates in connection with
the   Reorganization.   However,   former   shareholders  of
Salomon  Brothers All Cap Fund whose shares are  represented
by  outstanding  share  certificates  will not be allowed to
redeem,  transfer  or  exchange  class  shares of Value Fund
they receive in the  Reorganization  until the  certificates
for the  exchanged  Salomon  Brothers All Cap Fund have been
returned to the Transfer Agent.

      Like Salomon  Brothers  All Cap Fund,  Value Fund does
not routinely hold annual shareholder meetings.

      COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES

      This  section  describes  key  investment  policies of
Salomon  Brothers  All Cap Fund and Value Fund,  and certain
noteworthy  differences  between the  investment  objectives
and  policies of the two Funds.  For a complete  description
of  Value  Fund's  investment  policies  and  risks,  please
review its  prospectus  dated  December 23,  2002,  which is
enclosed with this combined Prospectus/Proxy Statement.
Are   there  any   significant   differences   between   the
investment objectives and strategies of the Funds?

      In considering  whether to approve the Reorganization,
shareholders  of  Salomon   Brothers  All  Cap  Fund  should
consider the differences in investment objectives,  policies
and risks of the  Funds.  Further  information  about  Value
Fund is set forth in its Prospectus,  which accompanies this
Prospectus/Proxy  Statement  and is  incorporated  herein by
reference.  Additional  information  about both funds is set
forth in their  Statements  of  Additional  Information  and
Annual  Reports,  which may be obtained  upon request to the
Transfer  Agent.  See  "Information  about Salomon  Brothers
All Cap Fund" and "Information about Value Fund," below.

      Salomon  Brothers  All Cap Fund and  Value  Fund  have
similar  investment  objectives.  Value Fund seeks long-term
growth  of  capital.  Salomon  Brothers  All Cap Fund  seeks
capital appreciation.
What are the main risks  associated  with an  investment  in
the Funds?

      Like all  investments,  an investment in either of the
Funds  involves  risk.  There is no  assurance  that  either
fund will meet its  investment  objective.  The  achievement
of  the  Funds'  goals   depends  upon  market   conditions,
generally,  and on the portfolio  manager's  analytical  and
portfolio  management  skills.  The  risks  described  above
under  "What are the  Principal  Risks of an  Investment  in
Value Fund and Salomon  Brothers All Cap Fund"  describe the
risk  profiles  of the Funds in  detail,  and can affect the
value of the Funds' investments,  investment performance and
prices per share.

How Do the Investment Policies of the Funds Compare?

      Both funds invest  primarily in common  stocks.  While
both funds can  invest in  different  market  capitalization
ranges,  they both  currently  emphasize  stocks of  larger,
well-known companies.  "Market capitalization" refers to the
total  market  value  of  an  issuer's  common  stock.   The
portfolio  managers  for each of the Funds  look for  stocks
they believe are  currently  undervalued  by the market with
the  expectation  that those  stocks will  increase in value
over time.

Value  Investing.  Both  funds  employ a "value"  investment
style.  Value  investing seeks stocks having prices that are
low in  relation  to their real  worth or future  prospects,
with   the   expectation   that  the   Fund   will   realize
appreciation  in  the  value  of  its  holdings  when  other
investors  realize  the  intrinsic  value of the  stock.  In
selecting  equity  investments  for Value Fund's  portfolio,
the  portfolio  manager  currently  considers  the following
factors  when  assessing  a  company's  business  prospects:
Future  supply/demand   conditions  for  its  key  products,
product cycles, quality of management,  competitive position
in the market place,  reinvestment plans for cash generated,
and  better-than-expected  earnings reports. Not all factors
are relevant for every individual security.

     The Sub-Advisor  for the Salomon  Brothers All Cap Fund
employs a  two-step  stock  selection  process in its search
for   undervalued   stocks  of  temporarily   out  of  favor
companies.   First,   it   uses   proprietary   models   and
fundamental  research  to try to  identify  stocks  that are
underpriced  in the  market  relative  to their  fundamental
value.  Second,  the  Sub-Advisor  emphasizes  companies  in
those  sectors  of  the  economy,   which  it  believes  are
undervalued  relative to other sectors.  When  evaluating an
individual  stock,  the  Sub-Advisor  looks for:  Low market
valuations  measured by the  Sub-Advisor's  valuation models
and  positive  changes  in  earnings  prospects  because  of
factors  such as:  new,  improved  or  unique  products  and
services,   new  or  rapidly   expanding   markets  for  the
company's   products,   new   management,   changes  in  the
economic,  financial  regulatory  or  political  environment
particularly  affecting  the  company,  effective  research,
product  development  and marketing and a business  strategy
not yet recognized by the marketplace.

Other  Equity   Securities.   While  both  funds   emphasize
investments  in  common  stocks,  they can  invest  in other
equity securities,  including  preferred stocks,  rights and
warrants,  and  securities  convertible  into common  stock.
Both  funds  can also  invest in debt  securities,  although
neither  fund   currently   emphasizes   investing  in  debt
securities.

      The  Manager  for Value Fund and the  Sub-Advisor  for
Salomon  Brothers All Cap Fund, as the case may be, consider
some  convertible  securities  to  be  "equity  equivalents"
because  of the  conversion  feature  and in that case their
rating may have less impact on the investment  decision than
in the case of other debt securities.

      Both funds can buy convertible securities.  Value Fund
can  buy  convertible  securities  rated  as  low  as "B" by
Moody's Investor Services,  Inc. or Standard & Poor's Rating
Service or having  comparable  ratings  by other  nationally
recognized  rating  organizations  (or, if they are unrated,
having a comparable  rating assigned by the Manager).  Those
ratings  are below  "investment  grade"  and the  securities
(commonly  referred  to as  "junk  bonds")  are  subject  to
greater risk of default by the issuer than  investment-grade
securities.  These  investments  are subject to Value Fund's
policy of not  investing  more than 10% of its net assets in
debt  securities.  Salomon  Brothers All Cap Fund can invest
in  convertible  securities  rated  below  the four  highest
rating  categories of S&P or Moody's or  equivalent  ratings
of other rating  agencies or ratings  assigned to a security
by the  Sub-Advisor.  Salomon  Brothers  All  Cap  Fund  can
invest  up to  20%  of it  assets  in  non-convertible  debt
securities rated below  investment grade or, if unrated,  of
equivalent quality as determined by the Sub-Advisor.

Non-Diversification.   Salomon  Brothers  All  Cap  Fund  is
classified as  "non-diversified"  fund under the  Investment
Company  Act,  which  means that the Fund is not  limited by
the  Investment  Company Act in the proportion of its assets
that may be invested in the  obligations of a single issuer.
The   Fund,   however,    intends   to   comply   with   the
diversification   requirements   imposed  by  the   Internal
Revenue  Code in order to continue to qualify as a regulated
investment  company.  To  the  extent  the  Fund  invests  a
greater  proportion  of its  assets in the  securities  of a
smaller number of issuers,  the Fund may be more susceptible
to any single economic,  political or regulatory  occurrence
than a more  widely  diversified  fund and may be subject to
greater  risk of loss with respect to its  portfolio.  Value
Fund is a  "diversified"  fund under the Investment  Company
Act.

Foreign  Investing.  Value  Fund can invest up to 25% of its
total assets in  securities of companies or  governments  in
any country,  developed or underdeveloped.  Salomon Brothers
All  Cap  Fund  can  invest  up to 20% of  total  assets  in
foreign  securities  including  foreign equity securities of
companies  located  in  any  country,   including  developed
countries  and  emerging  markets.  For  purposes  of  these
limits, the respective  advisors for Value Fund and Advisors
or  Sub-Advisors  for Salomon  Brothers  All Cap Fund do not
consider  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 to be foreign securities.  Neither
fund currently emphasizes foreign investing.

      "Foreign   securities"   include   equity   and   debt
securities  (which  may be  denominated  in U.S.  dollars or
non-U.S.  currencies) of companies  organized under the laws
of  countries   other  than  the  United   States  and  debt
securities  of  foreign   governments  that  are  traded  on
foreign securities exchanges or in foreign  over-the-counter
markets.   These   include   securities   issued   by   U.S.
corporations  denominated  in  non-U.S.   currencies.   Both
funds will hold foreign  currency  only in  connection  with
the purchase or sale of foreign securities.

Rights and  Warrants.  Both funds can invest in  warrants or
rights.  A warrant  gives a Fund the right to buy a quantity
of stock.  The warrant  specifies  the amount of  underlying
stock, the purchase (or "exercise")  price, and the date the
warrant  expires.  A Fund has no  obligation to exercise the
warrant and buy the stock.  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 noting  rights,  receive no dividends  and
have no rights with respect to the assets of the issuer.

Cash and Cash  Equivalents.  Both  funds can  invest in cash
and cash  equivalents such as commercial  paper,  repurchase
agreements,   Treasury  bills  and  other   short-term  U.S.
government  securities.   Under  normal  market  conditions,
Value  Fund can  invest up to 15% of its net  assets in cash
and cash equivalents.  This strategy would be used primarily
for cash  management  or liquidity  purposes.  To the extent
that the Funds use this  strategy,  they might  reduce their
opportunities  to seek their  objectives of long-term growth
of capital.

Debt Securities.  Under normal market conditions, Value Fund
can invest in debt securities,  such as securities issued or
guaranteed  by  the  U.S.  government  or its  agencies  and
instrumentalities,   foreign  government   securities,   and
foreign  and  domestic   corporate   bonds  and  debentures.
Normally these  investments are limited to not more than 10%
of Value  Fund's  net  assets,  including  convertible  debt
securities.

      Salomon  Brothers All Cap Fund may invest in corporate
bond  obligations,  as well as  government  obligations  and
mortgage-related  securities.  Debt  securities are selected
primarily for their income  possibilities and their relative
emphasis  in the  portfolio  may be  greater  when the stock
market is volatile.  For example,  when  interest  rates are
falling,  or when the credit quality of a particular  issuer
is  improving,   the   portfolio   manager  might  buy  debt
securities   for  their  own   appreciation   possibilities.
Salomon  Brothers  All Cap Fund has no limit on the range of
maturities of the debt securities they can buy.

      Neither fund currently emphasizes  investments in debt
securities.
      The  debt  securities  the  Funds  buy may be rated by
nationally  recognized  rating  organizations or they may be
unrated  securities  assigned  an  equivalent  rating by the
Manager  for  Value  Fund  or the  Sub-Advisor  for  Salomon
Brothers All Cap Fund.  The Funds' debt  investments  may be
"investment  grade"  (that  is,  rated in the  four  highest
rating   categories  of  a  nationally   recognized   rating
organization) or may be lower-grade  securities.  Value Fund
may  invest  up to 10% in debt  securities  rated  as low as
"B."  Salomon  Brothers All Cap Fund can invest up to 20% of
it assets in  non-convertible  debt  securities  rated below
investment  grade or, if unrated,  of equivalent  quality as
determined by the Sub-Advisor.

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

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

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

      These securities include:  U.S. Treasury  obligations,
U. S.  Treasury  securities  that have been  "stripped" by a
Federal Reserve Bank,  zero-coupon U.S. Treasury securities,
and  Treasury   Inflation-Protection   Securities  ("TIPS"),
obligations   issued  or  guaranteed   by  U.S.   government
agencies or  instrumentalities.  U.S.  Treasury  obligations
include:  Treasury  bills  (maturities  of one  year or less
when  issued),  Treasury  notes  (maturities  of  one  to 10
years),  and  Treasury  bonds  (maturities  of more  than 10
years).  Obligations issued or guaranteed by U.S. government
agencies or instrumentalities  include:  Government National
Mortgage   Association   ("GNMA")    pass-through   mortgage
certificates  ("Ginnie  Maes"),  Federal  National  Mortgage
Association  bonds  ("Fannie  Maes"),  and Federal Home Loan
Mortgage Corporation obligations ("Freddie Macs")

Derivative  Investments.  Both  funds 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.   Options,
futures,    mortgage-related   securities   and   "stripped"
securities are examples of  derivatives  Value Fund can use.
Options,   futures  contracts,   structured  notes  such  as
indexed  securities  or  inverse  securities,  equity-linked
debt securities of an issuer,  CMOs and hedging  instruments
are  derivative  instruments  Salomon  Brothers All Cap Fund
can use.  In  addition  to using  derivatives  for  hedging,
both funds might use other  derivative  investments  because
they offer the potential for increased  income and principal
value.

      Derivatives   have   risks.   If  the  issuer  of  the
derivative  does not pay the amount due,  the Funds can lose
money  on  the  investment.   The  underlying   security  or
investment  on  which  the  derivative  is  based,  and  the
derivative itself,  might not perform the way the Manager of
Value Fund and the  Sub-Advisor of Salomon  Brothers All Cap
Fund  expected  it  to  perform.  Interest  rate  and  stock
market  changes in the U.S.  and  abroad may also  influence
the  performance  of  derivatives.  As  a  result  of  these
risks,  both funds could  realize  less  principal or income
from the  investment  than  expected or their hedge might be
unsuccessful.  If that  happens,  the  Funds'  share  prices
could  fall.  Certain  derivative  investments  held  by the
Funds may be illiquid.

      Currently,  neither fund uses or  contemplates  using,
derivatives or hedging  instruments to a significant  degree
nor is either  fund  obligated  to use them in  seeking  its
objectives.

Hedging.  Both  funds  can buy and  sell  certain  kinds  of
futures  contracts,  swaps, put and call options and forward
contracts.   These   are  all   referred   to  as   "hedging
instruments."  The Funds are not  required  to hedge to seek
their  respective  objectives.  The  Funds  have  limits  on
their use of hedging and types of hedging  instruments  that
can be used, and do not use them for speculative purposes.

      There are also  special  risks in  particular  hedging
strategies.   Options   trading   involve   the  payment  of
premiums and have  special tax effects on the Funds.  If the
Sub-Advisor  for  Salomon  Brothers  All  Cap  Fund  or  the
Manager  for Value  Fund used a  hedging  instrument  at the
wrong  time or judged  market  conditions  incorrectly,  the
hedge might fail and the  strategy  could  reduce the Fund's
return.  Either  fund  could also  experience  losses if the
prices  of  its  futures  and  options  positions  were  not
correlated  with its  other  investments  or if it could not
close out a position because of an illiquid market.

      Neither fund  currently  uses hedging to a significant
degree.

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.  As a  non-fundamental
policy,  Value  Fund  will  not  invest  more  than  10% and
Salomon  Brothers All Cap Fund will not invest more than 15%
of their net assets in  illiquid or  restricted  securities.
Certain  restricted  securities that are eligible for resale
to qualified institutional  purchasers may not be subject to
that limit.  The  Manager of Value Fund and the  Sub-Advisor
of  Salomon  Brothers  All Cap  Fund  monitors  holdings  of
illiquid   securities  on  an  ongoing  basis  to  determine
whether  to  sell  any   holdings   to   maintain   adequate
liquidity.

Portfolio  Turnover.  Both  funds can  engage in  short-term
trading  to  achieve  their  objective.  Portfolio  turnover
increases  the  brokerage  costs the Funds pay (and  reduces
their  performance).  If the Funds  realize  a capital  gain
when  they  sell  their  portfolio   investments  they  must
generally  pay those  gains out to  shareholders  increasing
their taxable distributions.

Temporary  Defensive  and Interim  Investments.  In times of
adverse  or   unstable   market,   economic   or   political
conditions,  both  funds  can  invest  up to 100%  of  their
assets  in   temporary   defensive   investments   that  are
inconsistent   with   the   Funds'   principal    investment
strategies.  Generally they would be cash equivalents  (such
as commercial paper),  money market instruments,  short-term
debt  securities,  U.S.  government  securities,  repurchase
agreements  and in the  case  of  Salomon  Brothers  All Cap
Fund,  purchase  and sales  contracts.  They  could  include
other  investment  grade debt  securities.  Salomon Brothers
All Cap Fund can also invest in such  short-term  securities
for cash  management  purposes.  Value  Fund  can also  hold
these  types  of  securities   pending  the   investment  of
proceeds   from  the  sale  of  Fund  shares  or   portfolio
securities  or  to  meet  anticipated  redemptions  of  Fund
shares. To the extent the Funds invest  defensively in these
securities,   they  might  not  achieve   their   investment
objective of capital appreciation.

What  are the  fundamental  investment  restrictions  of the
Funds?

      Both  Salomon  Brothers  All Cap Fund and  Value  Fund
have certain  investment  restrictions  that are fundamental
policies,   changeable   only   by   shareholder   approval.
Although  Value  Fund's   investment   objective  is  not  a
fundamental policy that would require  shareholder  approval
to change,  any change in the  Fund's  investment  objective
would have to be  approved by the Fund's  directors  and any
such  change  would  be  described  in an  amendment  to the
Fund's  prospectus.  The manager has no  intention to seek a
change in the investment objective of Value Fund.

      Salomon Brothers All Cap Fund's  investment  objective
is a fundamental policy.  Generally,  the Funds' fundamental
investment  restrictions  are  similar.  They are  discussed
below:

Diversification:  Neither fund can buy securities  issued or
guaranteed  by any one issuer if more than 5% of their total
assets would be invested in  securities of that issuer or if
they  would then own more than 10% of that  issuer's  voting
securities.  This restriction applies to 75% of Value Fund's
and  50%  of the  Salomon  Brothers  All  Cap  Fund's  total
assets,  in light of the fact that Salomon  Brothers All Cap
Fund is a non-diversified  fund under the Investment Company
Act.  The limit does not apply to  securities  issued by the
U.S. government or any of its agencies or  instrumentalities
or securities of other investment companies.

Commodities:   Value   Fund   cannot   invest  in   physical
commodities or commodities  contracts.  However,  Value Fund
can invest in hedging  instruments  permitted  by any of its
other  investment  policies,  and can  buy or sell  options,
futures,  securities or other instruments  backed by, or the
investment  return  from which is linked to,  changes in the
price  of  physical  commodities,   commodity  contracts  or
currencies.  Salomon  Brothers  All  Cap  Fund  also  cannot
invest  in  physical   commodities  or  physical   commodity
contracts.  However, similar to Value Fund, Salomon Brothers
All Cap  Fund can buy and sell  hedging  instruments  to the
extent  specified in its  Prospectus  and this  Statement of
Additional  Information from time to time.  Salomon Brothers
All Cap  Fund  can  also  buy  and  sell  options,  futures,
securities   or  other   instruments   backed   by,  or  the
investment  return from  which,  is linked to changes in the
price of, physical commodities.

Loans:  Salomon  Brothers  All Cap Fund  cannot  make  loans
except (a) through  lending of  securities,  (b) through the
purchase  of  debt  instruments,   loan   participations  or
similar   evidences   of   indebtedness,   (c)   through  an
inter-fund  lending program with other affiliated funds, and
(d) through  repurchase  agreements.  Value Fund cannot make
loans,  except to the extent  permitted under the Investment
Company  Act,  the rules or  regulations  thereunder  or any
exemption  therefrom  that is  applicable  to Value Fund, as
such  statute,  rules  or  regulations  may  be  amended  or
interpreted from time to time.1

Borrowing:  Salomon  Brothers  All Cap  Fund  cannot  borrow
money  in  excess  of 33  1/3%  of the  value  of its  total
assets.  Salomon  Brothers All Cap Fund may borrow only from
banks and/or affiliated investment  companies.  With respect
to this  fundamental  policy,  Salomon Brothers All Cap Fund
can borrow  only if it  maintains  a 300% ratio of assets to
borrowings  at all  times  in the  manner  set  forth in the
Investment  Company  Act.  Value 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. 2
Concentration:  Neither  fund can  invest 25% or more of its
total assets in companies  in any one  industry.  That limit
does not apply to  securities  issued or  guaranteed  by the
U.S.  government  or its agencies and  instrumentalities  or
securities issued by investment companies.

Underwriting:  Neither  fund can  underwrite  securities  of
other  companies.  A permitted  exception  is in case either
fund is deemed  to be an  underwriter  under the  Securities
Act of 1933 when  reselling any  securities  held in its own
portfolio.

Real  Estate:  Neither  fund can invest in real estate or in
interests in real estate. However,  Salomon Brothers All Cap
Fund   can   purchase   readily-marketable   securities   of
companies  holding  real estate or interests in real estate.
Similarly,  Value Fund can  purchase  securities  of issuers
holding real estate or  interests in real estate  (including
securities  of real estate  investment  trusts) if permitted
by its other investment policies.

Senior   Securities:   Value  Fund   cannot   issue   senior
securities.  However,  it can make  payments  or deposits of
margin in connection  with options or futures  transactions,
lend  its  portfolio   securities,   enter  into  repurchase
agreements,  borrow money and pledge its assets as permitted
by its other  fundamental  policies.  For  purposes  of this
restriction,  the  issuance  of shares  of  common  stock in
multiple  classes  or  series,   the  purchase  or  sale  of
options,   futures   contracts   and   options   on  futures
contracts,  forward commitments,  and repurchase  agreements
entered  into in  accordance  with Value  Fund's  investment
policies,  and the  pledge,  mortgage  or  hypothecation  of
Value Fund's assets are not deemed to be senior  securities.
 Salomon   Brothers  All  Cap  Fund  cannot  issue   "senior
securities."   However,   similar   to  Value   Fund,   that
restriction  does not prohibit Salomon Brothers All Cap Fund
from borrowing  money subject to the provisions set forth in
its  Statement of Additional  Information,  or from entering
into margin,  collateral or escrow arrangements permitted by
its other investment policies.

Do the Funds have any additional  restrictions  that are not
fundamental?  The  Funds  have a number  of other  operating
policies  that are not  fundamental  policies,  which  means
that they can be changed  by vote of a  majority  of Salomon
Brothers  All Cap Fund's  Board of Trustees or Value  Fund's
Board  of  Directors,  as  applicable,  without  shareholder
approval.

Investment  for  Control:  Salomon  Brothers  All  Cap  Fund
cannot  invest in  companies  for the  purpose of  acquiring
control or  management of them.  Similarly,  Value Fund does
not  invest  in  companies  for  the  purpose  of  acquiring
control or management of them.

Pledging  Assets:  Salomon  Brothers  All  Cap  Fund  cannot
pledge,  mortgage or  hypothecate  any of its assets.  Value
Fund does not pledge,  mortgage or  hypothecate  its assets.
However,   this   policy  does  not   prohibit   the  escrow
arrangements  contemplated  by writing  covered call options
or other  collateral  or margin  arrangements  in connection
with  any of the  hedging  instruments  permitted  by any of
either fund's  investment policies.

Other  Investment  Companies:  Value  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.  Salomon  Brothers  All Cap
Fund  can  invest  up to 5% of its  total  assets  in any one
investment  company,  but  cannot  own  more  than  3% of the
outstanding  voting  securities of that  investment  company.
These  limitations  do not  apply  to  shares  acquired  in a
merger, consolidation, reorganization or acquisition.

How do the Account Features and Shareholder Services for
the Funds Compare?

      Investment  Management  -  Pursuant  to an  investment
advisory  agreement,  the  Manager  acts  as the  investment
advisor for both funds.  For Salomon  Brothers All Cap Fund,
the Manager has retained  Salomon  Brothers Asset Management
Inc.,  the  Sub-Advisor,  to  provide  day-to-day  portfolio
management   for  Salomon   Brothers   All  Cap  Fund.   The
sub-advisory   fee  is  paid  by  the  Manager  out  of  its
management  fee.  Under  the   Sub-Advisory   Agreement  for
Salomon   Brothers  All  Cap  Fund,   the   Sub-Advisor   is
authorized and directed to (i) regularly provide  investment
advice and  recommendations  to the Fund with respect to the
Fund's  investments,  investment  policies  and the purchase
and  sale  of  securities   and  other   investments;   (ii)
supervise  and  monitor the  investment  program of the Fund
and the  composition  of its  portfolio  to  determine  what
securities and other  investments shall be purchased or sold
by  the  Fund;   and  (iii)  arrange  for  the  purchase  of
securities and other  investments  for the Fund and the sale
of securities  and other  investments  held in the portfolio
of the Fund.  Under it investment  advisory  agreement  with
Value Fund,  the  Manager  provides  these same  services to
Value Fund.  If  shareholders  of Salomon  Brothers  All Cap
Fund approve the Reorganization,  the Sub-Advisory Agreement
between the Manager and Salomon  Brothers  Asset  Management
Inc. will terminate.

      The  investment  advisory  agreements  state  that the
Manager will provide administrative  services for the Funds,
including    compilation   and   maintenance   of   records,
preparation  and  filing  of  reports  required  by the SEC,
reports   to   shareholders,   and   composition   of  proxy
statements and registration  statements  required by federal
and state  securities laws. The  administrative  services to
be  provided by the Manager  under the  investment  advisory
agreement will be at its own expense.


      Expenses not  expressly  assumed by the Manager  under
each  fund's  investment   advisory   agreement  or  by  the
Distributor  under the General  Distributor's  Agreement are
paid by the Funds. The investment  advisory  agreements list
examples   of  expenses   paid  by  the  Funds,   the  major
categories of which relate to taxes,  brokerage commissions,
fees to  certain  Trustees  or  Directors,  legal  and audit
expenses,  custodian  and  transfer  agent  expenses,  share
issuance costs,  certain printing and registration costs and
non-recurring expenses, including litigation costs.

      Both investment advisory agreements  generally provide
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  sustained  by reason of good  faith  errors or
omissions  in  connection  with any  matters  to  which  the
agreement(s)  relate.  The agreements  permit the Manager to
act as  investment  advisor  for any other  person,  firm or
corporation.  Pursuant  to each  agreement,  the  Manager is
permitted to use the name  "Oppenheimer"  in connection with
other   investment   companies  for  which  it  may  act  as
investment  advisor or general  distributor.  If the Manager
shall no longer act as investment  advisor to the Funds, the
Manager may  withdraw the right of the Funds to use the name
"Oppenheimer" as part of their names.

      The Manager is controlled by  Oppenheimer  Acquisition
Corp.,  a holding  company owned in part by senior  officers
of the Manager and controlled by  Massachusetts  Mutual Life
Insurance  Company,  a mutual life  insurance  company  that
also advises  pension plans and  investment  companies.  The
Manager has been an  investment  advisor since January 1960.
The  Manager  (including   subsidiaries  and  an  affiliate)
managed  more  than  $130  billion  in assets as of June 30,
2003,  including  other  Oppenheimer  funds  with  more than
seven million shareholder  accounts.  The Manager is located
at  498   Seventh   Avenue,   New  York,   New  York  10018.
OppenheimerFunds  Services, a division of the Manager,  acts
as   transfer   and   shareholder   servicing   agent  on  a
per-account  fee  for  both  funds  and  for  certain  other
open-end funds managed by the Manager and its affiliates.

      Distribution  -  Pursuant  to  General   Distributor's
Agreements,  the Distributor  acts as principal  underwriter
in  a  continuous  public  offering  of  shares  of  Salomon
Brothers All Cap Fund and Value Fund,  but is not  obligated
to sell a  specific  number  of  shares.  Expenses  normally
attributable  to sales,  including  advertising and the cost
of  printing  and  mailing  prospectuses  other  than  those
furnished  to  existing  shareholders,   are  borne  by  the
Distributor,  except for those for which the  Distributor is
paid under each fund's Rule 12b-1  Distribution  and Service
Plan described below.

      Both funds have adopted a Service  Plan and  Agreement
under Rule  12b-1 of the  Investment  Company  Act for their
Class  A  shares.   The  Service   Plan   provides  for  the
reimbursement  to the Distributor for a portion of its costs
incurred  in  connection  with  the  personal   service  and
maintenance  of  accounts  that hold  Class A shares.  Under
the plan,  reimbursement is made quarterly at an annual rate
that may not exceed  0.25% of the average  annual net assets
of Class A shares of the Funds.  The  Distributor  currently
uses  all of  those  fees to  compensate  dealers,  brokers,
banks  and  other  financial   institutions   quarterly  for
expenses  they  incur  in  providing  personal  service  and
maintenance  of accounts of their  customers that hold Class
A shares.

      Both  funds  have  adopted  Distribution  and  Service
Plans  under Rule 12b-1 of the  Investment  Company  Act for
their  Class  B,  Class C and  Class N  shares.  The  Funds'
Plans   compensate  the  Distributor  for  its  services  in
distributing  Class  B,  Class  C and  Class  N  shares  and
servicing  accounts.  Under both funds' Plans, the Funds pay
the  Distributor  an  asset-based  sales charge at an annual
rate of 0.75% of Class B and Class C  assets,  and an annual
asset-based  sales  charge of 0.25% on Class N  shares.  The
Distributor  also  receives  a service  fee 0.25% of average
annual net  assets  under each  plan.  All fee  amounts  are
computed  on the  average  annual  net  assets  of the class
determined  as of the close of each regular  business day of
each fund. The  Distributor  uses all of the service fees to
compensate  broker-dealers  for providing  personal services
and  maintenance  of accounts of their  customers  that hold
shares of the  Funds.  The  Class B and Class N  asset-based
sales  charges are  retained by the  Distributor.  After the
first year,  the Class C asset-based  sales charges are paid
to  broker-dealers  who hold or whose  clients  hold Class C
shares as an ongoing  concession  for shares  that have been
outstanding for a year or more.

      Purchases  and  Redemptions  - Both  funds are part of
the   OppenheimerFunds   family   of   mutual   funds.   The
procedures  for  purchases,  exchanges  and  redemptions  of
shares  of the Funds are  essentially  identical.  Shares of
either  fund may be  exchanged  for shares of the same class
of other  Oppenheimer  funds offering such shares.  Exchange
privileges  are subject to amendment or  termination  at any
time.

      Both  funds  have  the  same  initial  and  subsequent
minimum  investment  amounts  for the  purchase  of  shares.
These amounts are $1,000 and $50,  respectively.  Both funds
have a  maximum  initial  sales  charge  of 5.75% on Class A
shares  for  purchases  of  less  than  $25,000.  The  sales
charge of 5.75% is reduced for  purchases  of Class A shares
of $25,000 or more.  Investors  who  purchase  $1 million or
more of Class A shares pay no initial  sales  charge.  Class
B shares  of the Funds are sold  without a  front-end  sales
charge but investors  will pay an annual  asset-based  sales
charge.  If investors  sell their shares within six years of
buying them,  they will  normally pay a contingent  deferred
sales  charge  ("CDSC").  The CDSC  begins at 5% for  shares
redeemed  in the first year and  declines to 1% in the sixth
year and is  eliminated  after  that.  Class C shares may be
purchased  without an initial  sales  charge,  but investors
will  pay  an  annual   asset-based  sales  charge,  and  if
redeemed  within 12 months of buying  them, a CDSC of 1% may
be  deducted.   Class  N  shares   (available  only  through
certain  retirement  plans) are purchased without an initial
sales charge,  but investors will pay an annual  asset-based
sales  charge,  and if  redeemed  within  18  months  of the
retirement  plan's first purchase of Class N shares,  a CDSC
of 1% may be deducted.

      Class A,  Class B, Class C, Class N and Class Y shares
of Value Fund received in the Reorganization  will be issued
at net asset value,  without a sales charge and no CDSC will
be  imposed  on any  Salomon  Brothers  All Cap Fund  shares
exchanged   for  Value  Fund  shares  as  a  result  of  the
Reorganization.  However,  any CDSC that  applies to Salomon
Brothers  All Cap Fund shares as of the date of the exchange
will  carry  over  to  Value  Fund  shares  received  in the
Reorganization.

      Shareholder   Services--Both   funds   also  offer  the
following  privileges:  (i)  Right  of  Accumulation,   (ii)
Letter  of  Intent,  (iii)  reinvestment  of  dividends  and
distributions  at net  asset  value,  (iv) net  asset  value
purchases by certain  individuals  and  entities,  (v) Asset
Builder   (automatic   investment)   Plans,  (vi)  Automatic
Withdrawal  and  Exchange  Plans  for  shareholders  who own
shares  of  the  Funds  valued  at  $5,000  or  more,  (vii)
AccountLink and PhoneLink arrangements,  (viii) exchanges of
shares for shares of the same class of certain  other  funds
at  net  asset  value,   and  (ix)  telephone  and  Internet
redemption  and exchange  privileges.  Both funds offer wire
redemptions  of  fund  shares  (for  a  fee).  All  of  such
services  and   privileges   are  subject  to  amendment  or
termination  at any time and are subject to the terms of the
Funds' respective prospectuses.

      Dividends  and  Distributions  - Both funds  intend to
declare  dividends  separately for each class of shares from
net  investment  income on an annual  basis and to pay those
dividends to  shareholders in December on a date selected by
the Board of Trustees of Salomon  Brothers  All Cap Fund and
the  Board  of  Directors   of  Value  Fund,   respectively.
Dividends  and the  distributions  paid on Class A, Class B,
Class  C,  Class N or Class Y shares  may  vary  over  time,
depending  on  market  conditions,  the  composition  of the
Funds'  portfolios,  and  expenses  borne by the  particular
class  of  shares.  Dividends  paid on  Class A and  Class Y
shares will  generally be higher than those paid on Class B,
Class C and Class N shares.  That is  because  of the effect
of the  asset-based  sales  charge  on Class B,  Class C and
Class N  shares.  Neither  fund has a fixed  dividend  rate.
There  can be no  guarantee  that  either  fund will pay any
dividends or distributions.

      The Funds  may  realize  capital  gains on the sale of
portfolio   securities.   If  they   do,   they   may   make
distributions   out  of  any  net  short-term  or  long-term
capital  gains in December of each year.  The Funds may make
supplemental  distributions  of dividends  and capital gains
following the end of their fiscal years.

                     VOTING INFORMATION

How many votes are necessary to approve the Reorganization
Agreement?

      The  affirmative  vote of the holders of a majority of
the  outstanding   voting  securities  (as  defined  by  the
Investment  Company  Act) of Salomon  Brothers  All Cap Fund
outstanding  and entitled to vote  (voting in the  aggregate
and   not  by   class)   is   necessary   to   approve   the
Reorganization  Agreement and the transactions  contemplated
thereby.  As  defined in the  Investment  Company  Act,  the
vote of a majority of the outstanding  shares means the vote
of (1) 67% or  more  of  Salomon  Brothers  All  Cap  Fund's
outstanding  shares  present at a meeting if the  holders of
more  than  50% of the  outstanding  shares  of the Fund are
present  or  represented  by proxy;  or (2) more than 50% of
the Funds' outstanding shares, whichever is less.

      Each  shareholder  will be  entitled  to one  vote for
each full share,  and a fractional  vote for each fractional
share of  Salomon  Brothers  All Cap Fund held on the Record
Date.  If  sufficient  votes to approve the proposal are not
received  by the date of the  Meeting,  the  Meeting  may be
adjourned to permit  further  solicitation  of proxies.  The
holders  of a  majority  of shares  entitled  to vote at the
Meeting  and  present in person or by proxy  (whether or not
sufficient  to  constitute a quorum) may adjourn the Meeting
to permit further solicitation of proxies.

How do I ensure my vote is accurately recorded?

      You can vote in three (3) different ways:

o     By mail, with the enclosed ballot
o     In person at the Meeting (if you are a record owner)
o     By telephone (please see the insert for instructions)

      Voting by telephone is convenient and can help reduce
                             ----------     ----------------
Salomon Brothers All Cap Fund's  expenses.  Whichever method
-----------------------------------------
you  choose,  please  take the time to read the full text of
the proxy statement before you vote.

      Please be  advised  that the  deadline  for  voting by
telephone  is 3:00  P.M.  Eastern  time  ("ET")  on the last
business  day before the Meeting  (whether the initial or an
adjourned meeting).

      Proxy  ballots  that are  properly  signed,  dated and
received  at or prior  to the  Meeting,  or any  adjournment
thereof, will be voted as specified.  If you simply sign and
date the proxy but give no voting instructions,  your shares
will be  voted in  favor  of the  Reorganization  Agreement.
Telephonic   votes  will  be  recorded   according   to  the
telephone  voting  procedures   described  in  the  "Further
Information  About  Voting and the  Meeting"  section of the
Proxy Statement.

Can I revoke my proxy?

      You may  revoke  your  proxy at any time  before it is
voted by  forwarding a written  revocation  or a later-dated
proxy  ballot  to  Salomon  Brothers  All Cap  Fund  that is
received  at or prior  to the  Meeting,  or any  adjournment
thereof,  or by attending  the Meeting,  or any  adjournment
thereof,  and voting in person (if you are a record  owner).
Please be advised that the deadline for revoking  your proxy
by  telephone  is 3:00 P.M.  (ET) on the last  business  day
before the  Meeting  (whether  the  initial or an  adjourned
meeting).

What other matters will be voted upon at the Meeting?

      The Board of  Trustees  of  Salomon  Brothers  All Cap
Fund  does  not  intend  to bring  any  matters  before  the
Meeting  other than those  described  in this  proxy.  It is
not aware of any other  matters  to be  brought  before  the
Meeting  by  others.  If  any  other  matters  legally  come
before the Meeting,  the proxy ballots confer  discretionary
authority  with  respect  to  such  matters,  and  it is the
intention  of the persons  named to vote  proxies to vote in
accordance with their judgment in such matters.

Who is entitled to vote?

      Shareholders  of record of  Salomon  Brothers  All Cap
Fund at the  close of  business  on  August  12,  2003  (the
"record  date") are  entitled  to vote at the Meeting or any
adjournment  of the Meeting.  As of the close of business on
August 12, 2003,  there were __________  outstanding  shares
of Salomon  Brothers All Cap Fund,  consisting of __________
Class A shares,  _________ Class B shares,  __________ Class
C shares,  __________  Class N shares and _________  Class Y
shares.  As of the close of  business  on August  12,  2003,
there  were  _________  outstanding  shares  of Value  Fund,
consisting of _________  Class A shares,  _________  Class B
shares,  __________  Class  C  shares,  __________  Class  N
shares  and  __________  Class  Y  shares.   Each  share  of
Salomon  Brothers  All Cap Fund has voting  rights as stated
in this  Proxy  Statement  and is  entitled  to one vote for
each share (and a fractional vote for a fractional share).

Telephone   Voting.   Salomon  Brothers  All  Cap  Fund  has
arranged to have votes  recorded by telephone.  Shareholders
must  enter  a  unique   control   number   found  on  their
respective    proxy   ballots   before    providing   voting
instructions  by  telephone.  After a  shareholder  provides
his or her voting instructions,  those instructions are read
back to the  shareholder  and the  shareholder  must confirm
his or her  voting  instructions  before  disconnecting  the
telephone  call.  The voting  procedures  used in connection
with   telephone   voting   are   designed   to   reasonably
authenticate  the  identity  of   shareholders,   to  permit
shareholders  to  authorize  the  voting of their  shares in
accordance  with  their  instructions  and to  confirm  that
their instructions have been properly recorded.

Voting By  Broker-Dealers.  Shares of Salomon  Brothers  All
Cap Fund owned of record by a broker-dealer  for the benefit
of its customers  ("street account shares") will be voted by
the  broker-dealer  based on instructions  received from its
customers.    If   no   instructions   are   received,   the
broker-dealer   may  (if  permitted  by   applicable   stock
exchange  rules) vote, as record holder of such shares,  for
the   Reorganization   in  the  same   proportion   as  that
broker-dealer  votes street  account shares for which it has
received   voting   instructions   in  time  to  be   voted.
Beneficial  owners of street  account  shares cannot vote in
person  at the  meeting.  Only  record  owners  may  vote in
person at the meeting.

      A "broker  non-vote"  is deemed to exist  when a proxy
received  from a broker  indicates  that the broker does not
have  discretionary  authority  to vote the  shares  on that
matter.  Abstentions and broker non-votes will have the same
effect as a vote  against  the  Reorganization.  Under State
law,  proxies  representing  abstention and broker non-votes
will be included for determining if a quorum is present.

Voting  by  the   Trustee   for   OppenheimerFunds-Sponsored
Retirement  Plans.  Shares of Salomon  Brothers All Cap Fund
held in  OppenheimerFunds-sponsored  retirement accounts for
which  votes are not  received as of the last  business  day
before the  Meeting  Date,  will be voted by the trustee for
such  accounts  in the same  proportion  as Shares for which
voting  instructions  from  the  Salomon  Brothers  All  Cap
Fund's other shareholders have been timely received.

What other solicitations will be made?

      Salomon   Brothers   All   Cap   Fund   will   request
broker-dealer  firms,  custodians,  nominees and fiduciaries
to forward proxy  material to the  beneficial  owners of the
shares  of  record,   and  may  reimburse   them  for  their
reasonable  expenses  incurred in connection with such proxy
solicitation.   In  addition  to   solicitations   by  mail,
officers of Salomon  Brothers  All Cap Fund or officers  and
employees of OppenheimerFunds  Services,  without extra pay,
may  conduct  additional   solicitations  personally  or  by
telephone or  telegraph.  Any  expenses so incurred  will be
borne by OppenheimerFunds Services.

      Proxies also may be solicited by a proxy  solicitation
firm hired at  Salomon  Brothers  All Cap Fund's  expense to
assist  in  the  solicitation  of  proxies.   Currently,  if
Salomon  Brothers  All Cap Fund  determines  to  retain  the
services of a proxy  solicitation firm, Salomon Brothers All
Cap Fund  anticipates  retaining Alamo Direct Mail Services,
Inc.  Any  proxy   solicitation   firm  engaged  by  Salomon
Brothers  All Cap Fund,  among  other  things,  will be: (i)
required to maintain the  confidentiality of all shareholder
information;  (ii)  prohibited  from  selling  or  otherwise
disclosing  shareholder  information to any third party; and
(iii)  required  to  comply  with  applicable  telemarketing
laws.

      If Salomon  Brothers  All Cap Fund does engage a proxy
solicitation  firm, as the Meeting date approaches,  certain
shareholders   may   receive    telephone   calls   from   a
representative  of the  solicitation  firm if their vote has
not  yet  been   received.   Authorization   to  permit  the
solicitation  firm to execute  proxies  may be  obtained  by
telephonic   instructions   from   shareholders  of  Salomon
Brothers   All  Cap   Fund.   Proxies   that  are   obtained
telephonically  will be  recorded  in  accordance  with  the
procedures  set  forth  below.  These  procedures  have been
designed  to  reasonably  ensure  that the  identity  of the
shareholder  providing  voting  instructions  is  accurately
determined   and  that  the  voting   instructions   of  the
shareholder are accurately recorded.

      In all cases where a  telephonic  proxy is  solicited,
the solicitation firm  representative is required to ask for
each shareholder's full name, address,  the last four digits
of   the   shareholder's   social   security   or   employer
identification   number,   title  (if  the   shareholder  is
authorized  to  act  on  behalf  of  an  entity,  such  as a
corporation)   and  to  confirm  that  the  shareholder  has
received the combined Prospectus/Proxy  Statement and ballot
in the mail. If the  information  solicited  agrees with the
information   provided  to  the   solicitation   firm,   the
solicitation firm  representative  has the responsibility to
explain the process,  read the proposals listed on the proxy
ballot,  and ask for the shareholder's  instructions on such
proposals.  The solicitation firm  representative,  although
he or  she  is  permitted  to  answer  questions  about  the
process,  is not  permitted to recommend to the  shareholder
how to vote. The solicitation firm  representative  may read
any    recommendation    set    forth   in   the    combined
Prospectus/Proxy    Statement.    The   solicitation    firm
representative  will record the shareholder's  instructions.
Within   72   hours,   the   shareholder   will  be  sent  a
confirmation  of his or her vote asking the  shareholder  to
call  the  solicitation  firm  immediately  if  his  or  her
instructions   are   not   correctly    reflected   in   the
confirmation.

      It  is  anticipated  the  cost  of  engaging  a  proxy
solicitation   firm  would  not  exceed   $5,000   plus  the
                                                   ----
additional  out-of-pocket  costs,  that may be  substantial,
incurred in connection  with contacting  those  shareholders
that have not voted.  Brokers,  banks and other  fiduciaries
may be  required  to forward  soliciting  material  to their
principals and to obtain  authorization for the execution of
proxies.  For those  services,  they will be  reimbursed  by
Salomon Brothers All Cap Fund for their expenses.

      Shares  owned  of  record  by  broker-dealers  for the
benefit of their customers  ("street  account  shares") will
be  voted  by  the   broker-dealer   based  on  instructions
received  from  its  customers.   If  no  instructions   are
received,  and the broker-dealer does not have discretionary
power to vote such street  account  shares under  applicable
stock exchange rules,  the shares  represented  thereby will
be  considered  to be present at the Meeting for purposes of
only  determining the quorum ("broker  non-votes").  Because
of  the   need  to   obtain   a   majority   vote   for  the
Reorganization  proposal to pass, broker non-votes will have
the same effect as a vote "against" the Proposal.

      If  the  shareholder  wishes  to  participate  in  the
Meeting,  but  does  not  wish  to  give  his or  her  proxy
telephonically,  the  shareholder may still submit the proxy
ballot  originally  sent  with the  Proxy  Statement  in the
postage paid envelope  provided or attend in person.  Should
shareholders  require additional  information  regarding the
proxy  ballot  or  a  replacement  proxy  ballot,  they  may
contact us toll-free at  1.800.708.7780.  Any proxy given by
a  shareholder,  whether  in  writing  or by  telephone,  is
revocable as described  below under the  paragraph  entitled
"Can I Revoke My Proxy."

      Please  take a few  moments  to  complete  your  proxy
ballot  promptly.  You  may  provide  your  completed  proxy
ballot  via  facsimile,  telephonically  or by  mailing  the
proxy  ballot in the postage  paid  envelope  provided.  You
also may cast your vote by  attending  the Meeting in person
if you are a record owner.


Are there appraisal rights?

      No. Under the  Investment  Company  Act,  shareholders
do  not  have  rights  of  appraisal  as  a  result  of  the
Reorganization.  Although  appraisal rights are unavailable,
you have the right to redeem  your shares at net asset value
until the  Closing  Date for the  Reorganization.  After the
Closing  Date,  you may redeem your new Value Fund shares or
exchange  them into  shares of  certain  other  funds in the
OppenheimerFunds  family of  mutual  funds,  subject  to the
terms of the prospectuses of both funds.

                   INFORMATION ABOUT VALUE FUND

      Information  about Value Fund (File No.  811-3346)  is
included in Value Fund's Prospectus,  which is enclosed with
the proxy  statements  and  considered  a part of this Proxy
Statement  and  Prospectus.   Additional  information  about
Value Fund is included the Fund's  Statement  of  Additional
Information  dated  December 23, 2002,  revised  January 15,
2003 and as  supplemented  July 18, 2003,  the Annual Report
dated  October 31, 2002 and  Semi-Annual  Report dated April
30,  2003,  which  have  been  filed  with  the  SEC and are
incorporated  herein by  reference.  You may  request a free
copy of these  materials  and other  information  by calling
1.800.708.7780    or   by   writing   to   Value   Fund   at
OppenheimerFunds   Services,   P.O.  Box  5270,  Denver,  CO
80217-5270.  Value Fund also files proxy materials,  reports
and other  information  with the SEC in accordance  with the
informational  requirements  of the  Securities and Exchange
Act  of  1934  and  the   Investment   Company  Act.   These
materials  can be inspected  and copied at: the SEC's Public
Reference Room in Washington,  D.C. (Phone:  1.202.942.8090)
or the EDGAR  database  on the  SEC's  Internet  website  at
www.sec.gov.  Copies  may  be  obtained  upon  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.

         INFORMATION ABOUT Salomon Brothers All Cap Fund

      Information  about Salomon Brothers All Cap Fund (File
No.  811-10153) is included in the current Salomon  Brothers
All Cap Fund  Prospectus.  This document has been filed with
the   SEC  and  is   incorporated   by   reference   herein.
Additional  information  about Salomon Brothers All Cap Fund
is also  included  in the  Fund's  Statement  of  Additional
Information  dated March 28, 2003,  the Annual  Report dated
November  30,  2002 and  Semi-Annual  Report  dated  May 31,
2003,   which   have  been   filed  with  the  SEC  and  are
incorporated  by  reference  herein.  You may  request  free
copies  of these  or other  documents  relating  to  Salomon
Brothers  All  Cap  Fund  by  calling  1.800.708.7780  or by
writing  to  OppenheimerFunds   Services,   P.O.  Box  5270,
Denver,  CO 80217-5270.  Reports and other information filed
by  Salomon  Brothers  All Cap  Fund  can be  inspected  and
copied at: the SEC's Public  Reference Room in  www.sec.gov.
Copies may be obtained upon 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.

                   PRINCIPAL SHAREHOLDERS

      As of August 12,  2003,  the  officers and Trustees of
Salomon  Brothers All Cap Fund, as a group,  owned less than
1% of the outstanding  voting shares of Salomon Brothers All
Cap Fund and Value  Fund.  As of August 12,  2003,  the only
persons  who  owned  of  record  or  was  known  by  Salomon
Brothers All Cap Fund to own  beneficially 5% or more of any
class of the Fund's outstanding shares were as follows:

      5% Shareholder info to be updated after record date
      ---------------------------------------------------

By Order of the Board of Trustees

Robert G. Zack, Secretary

September 15, 2003






               EXHIBITS TO THE COMBINED PROXY
                  STATEMENT AND PROSPECTUS

Exhibit
-------

A  Agreement and Plan of Reorganization between Select
   Managers, on behalf of its series Salomon Brothers All
   Cap Fund  and Oppenheimer Series Fund, Inc., on behalf
   of its series Oppenheimer Value Fund d

B  Principal Shareholders






                                                   EXHIBIT A


            AGREEMENT AND PLAN OF REORGANIZATION

      AGREEMENT    AND   PLAN   OF    REORGANIZATION    (the
"Agreement")  dated  as of  April  28,  2003 by and  between
Oppenheimer  Select  Managers,   on  behalf  of  its  series
Salomon  Brothers  All Cap Fund  ("Salomon  Brothers All Cap
Fund"),  a  Massachusetts  business  trust,  and Oppenheimer
Series  Fund,  Inc.,  on  behalf of its  series  Oppenheimer
Value Fund ("Value Fund"), a Maryland corporation.

                                 W I T N E S S E T H:

      WHEREAS,  the  parties  are each  open-end  investment
companies of the management type; and

      WHEREAS,  the parties hereto desire to provide for the
reorganization   pursuant  to  Section   368(a)(1)   of  the
Internal  Revenue Code of 1986, as amended (the "Code"),  of
Salomon  Brothers  All Cap Fund through the  acquisition  by
Value  Fund of  substantially  all of the  assets of Salomon
Brothers All Cap Fund in exchange  for the voting  shares of
beneficial  interest  ("shares")  of Class A, Class B, Class
C,  Class  N and  Class  Y  shares  of  Value  Fund  and the
assumption by Value Fund of certain  liabilities  of Salomon
Brothers  All Cap Fund,  which  Class A,  Class B,  Class C,
Class  N  and  Class  Y  shares  of  Value  Fund  are  to be
distributed  by  Salomon  Brothers  All Cap Fund pro rata to
its   shareholders   in  complete   liquidation  of  Salomon
Brothers All Cap Fund and cancellation of its shares;

      NOW,   THEREFORE,   in  consideration  of  the  mutual
promises  herein  contained,  the  parties  hereto  agree as
follows:

   1. The  parties   hereto  hereby  adopt  this   Agreement
pursuant to Section  368(a)(1)  of the Code as follows:  The
reorganization  will  be  comprised  of the  acquisition  by
Value  Fund of  substantially  all of the  assets of Salomon
Brothers  All Cap Fund in  exchange  for  Class A,  Class B,
Class C,  Class N and Class Y shares  of Value  Fund and the
assumption by Value Fund of certain  liabilities  of Salomon
Brothers All Cap Fund,  followed by the distribution of such
Class A,  Class B,  Class C,  Class N and  Class Y shares of
Value  Fund to the Class A,  Class B,  Class C,  Class N and
Class Y  shareholders  of Salomon  Brothers  All Cap Fund in
exchange  for their  Class A,  Class B, Class C, Class N and
Class Y shares of Salomon  Brothers  All Cap Fund,  all upon
and subject to the terms of this  Agreement,  as hereinafter
set forth.

      The share transfer  books of Salomon  Brothers All Cap
Fund will be permanently  closed at the close of business on
the  Valuation  Date  (as  hereinafter   defined)  and  only
redemption  requests  received in proper form on or prior to
the  close  of  business  on the  Valuation  Date  shall  be
fulfilled  by  Salomon  Brothers  All Cap  Fund.  Redemption
requests  received  by Salomon  Brothers  All Cap Fund after
that date shall be treated as  requests  for the  redemption
of  the  shares  of  Value  Fund  to be  distributed  to the
shareholder in question as provided in Section 5 hereof.






2.    On the Closing Date (as hereinafter  defined),  all of
the  assets of Salomon  Brothers  All Cap Fund on that date,
excluding  a  cash  reserve  (the  "cash   reserve")  to  be
retained by Salomon  Brothers All Cap Fund sufficient in its
discretion  for  the  payment  of the  expenses  of  Salomon
Brothers  All Cap Fund's  dissolution  and its  liabilities,
but not in  excess of the  amount  contemplated  by  Section
10E,  shall be  delivered  as provided in Section 8 to Value
Fund,  in  exchange  for and  against  delivery  to  Salomon
Brothers  All Cap Fund on the  Closing  Date of a number  of
Class A,  Class B,  Class C,  Class N and  Class Y shares of
Value  Fund,  having an  aggregate  net asset value equal to
the value of the assets of Salomon  Brothers All Cap Fund so
transferred and delivered.

   3. The net  asset  value of Class  A,  Class B,  Class C,
Class N and  Class Y shares  of Value  Fund and the value of
the  assets  of  Salomon   Brothers   All  Cap  Fund  to  be
transferred  shall  in  each  case be  determined  as of the
close of  business  of The New York  Stock  Exchange  on the
Valuation  Date.  The  computation of the net asset value of
the Class A,  Class B,  Class C,  Class N and Class Y shares
of Value  Fund and the Class A,  Class B,  Class C,  Class N
and Class Y shares of  Salomon  Brothers  All Cap Fund shall
be done  in the  manner  used  by  Value  Fund  and  Salomon
Brothers All Cap Fund,  respectively,  in the computation of
such  net  asset  value  per  share  as set  forth  in their
respective  prospectuses.  The methods used by Value Fund in
such  computation  shall be applied to the  valuation of the
assets of Salomon  Brothers  All Cap Fund to be  transferred
to Value Fund.

    Salomon  Brothers  All Cap Fund shall  declare  and pay,
immediately  prior to the  Valuation  Date,  a  dividend  or
dividends which,  together with all previous such dividends,
shall have the effect of  distributing  to Salomon  Brothers
All Cap Fund's  shareholders all of Salomon Brothers All Cap
Fund's  investment  company taxable income for taxable years
ending on or prior to the  Closing  Date  (computed  without
regard to any  dividends  paid)  and all of its net  capital
gain,  if any,  realized in taxable years ending on or prior
to the Closing  Date (after  reduction  for any capital loss
carry-forward).

   4. The closing  (the  "Closing")  shall be at the offices
of OppenheimerFunds,  Inc. (the "Agent"),  6803 South Tucson
Way, Centennial,  Colorado 80112, on such time or such other
place as the parties  may  designate  or as  provided  below
(the  "Closing  Date").   The  business  day  preceding  the
Closing Date is herein referred to as the "Valuation Date."

    In the event that on the  Valuation  Date  either  party
has,  pursuant to the  Investment  Company  Act of 1940,  as
amended  (the  "Act"),  or any  rule,  regulation  or  order
thereunder,  suspended  the  redemption  of  its  shares  or
postponed  payment  therefore,  the  Closing  Date  shall be
postponed  until the first  business day after the date when
both parties have ceased such  suspension  or  postponement;
provided,  however,  that if such suspension  shall continue
for a period of 60 days beyond the Valuation  Date, then the
other  party  to  the   Agreement   shall  be  permitted  to
terminate  the Agreement  without  liability to either party
for such termination.

5.    In conjunction with the Closing, Salomon Brothers All
Cap Fund shall distribute on a pro rata basis to the
shareholders of Salomon Brothers All Cap Fund as of the
Valuation Date Class A, Class B, Class C, Class N and Class
Y shares of Value Fund received by Salomon Brothers All Cap
Fund on the Closing Date in exchange for the assets of
Salomon Brothers All Cap Fund in complete liquidation of
Salomon Brothers All Cap Fund.  For the purpose of the
distribution by Salomon Brothers All Cap Fund of Class A,
Class B, Class C, Class N and Class Y shares of Value Fund
to Salomon Brothers All Cap Fund's shareholders, Value Fund
will promptly cause its transfer agent to: (a) credit an
appropriate number of Class A, Class B, Class C, Class N
and Class Y shares of Value Fund on the books of Value Fund
to each Class A, Class B, Class C, Class N and Class Y
shareholders of Salomon Brothers All Cap Fund in accordance
with a list (the "Shareholder List") of Salomon Brothers
All Cap Fund shareholders received from Salomon Brothers
All Cap Fund; and (b) confirm an appropriate number of
Class A, Class B, Class C, Class N and Class Y shares of
Value Fund to each Class A, Class B, Class C, Class N and
Class Y shareholder of Salomon Brothers All Cap Fund.
Certificates for Class A shares of Value Fund will be
issued upon written request of a former shareholder of
Salomon Brothers All Cap Fund but only for whole shares,
with fractional shares credited to the name of the
shareholder on the books of Value Fund and only after any
share certificates for Salomon Brothers All Cap Fund are
returned to the transfer agent.

    The Shareholder List shall indicate,  as of the close of
business  on the  Valuation  Date,  the name and  address of
each   shareholder   of  Salomon   Brothers  All  Cap  Fund,
indicating  his or her share balance.  Salomon  Brothers All
Cap Fund  agrees to  supply  the  Shareholder  List to Value
Fund  not  later  than the  Closing  Date.  Shareholders  of
Salomon   Brothers   All  Cap  Fund   holding   certificates
representing   their   shares   shall  not  be  required  to
surrender  their  certificates  to anyone in connection with
the  reorganization.  After the Closing  Date,  however,  it
will be necessary for such  shareholders  to surrender their
certificates  in order to  redeem,  transfer  or pledge  the
shares of Value Fund which they received.

   6. Within  one  year  after  the  Closing  Date,  Salomon
Brothers  All  Cap  Fund  shall:  (a)  either  pay  or  make
provision for payment of all of its  liabilities  and taxes;
and (b)  either (i)  transfer  any  remaining  amount of the
cash  reserve to Value Fund,  if such  remaining  amount (as
reduced  by  the  estimated  cost  of   distributing  it  to
shareholders)  is not  material  (as defined  below) or (ii)
distribute  such  remaining  amount to the  shareholders  of
Salomon  Brothers All Cap Fund on the Valuation  Date.  Such
remaining  amount  shall be  deemed  to be  material  if the
amount to be  distributed,  after deduction of the estimated
expenses  of the  distribution,  equals or exceeds  one cent
per share of Salomon  Brothers All Cap Fund  outstanding  on
the Valuation Date.

   7. Prior   to  the   Closing   Date,   there   shall   be
coordination  between  the  parties  as to their  respective
portfolios  so that,  after the Closing,  Value Fund will be
in  compliance  with  all of  its  investment  policies  and
restrictions.  At the  Closing,  Salomon  Brothers  All  Cap
Fund  shall  deliver  to  Value  Fund two  copies  of a list
setting forth the securities then owned by Salomon  Brothers
All Cap Fund.  Promptly after the Closing,  Salomon Brothers
All Cap Fund shall  provide  Value Fund a list setting forth
the respective federal income tax bases thereof.

   8. Portfolio  securities or written  evidence  acceptable
to Value Fund of record ownership  thereof by The Depository
Trust  Company or through  the  Federal  Reserve  Book Entry
System or any other depository  approved by Salomon Brothers
All Cap Fund  pursuant  to Rule 17f-4 and Rule  17f-5  under
the Act shall be endorsed and  delivered,  or transferred by
appropriate  transfer or  assignment  documents,  by Salomon
Brothers All Cap Fund on the Closing Date to Value Fund,  or
at its direction,  to its custodian bank, in proper form for
transfer in such  condition as to  constitute  good delivery
thereof in  accordance  with the custom of brokers and shall
be accompanied by all necessary  state transfer  stamps,  if
any.  The cash  delivered  shall be in the form of certified
or  bank  cashiers'  checks  or by bank  wire or  intra-bank
transfer  payable to the order of Value Fund for the account
of Value  Fund.  Class  A,  Class  B,  Class C,  Class N and
Class Y shares  of Value  Fund  representing  the  number of
Class A,  Class B,  Class C,  Class N and  Class Y shares of
Value Fund  being  delivered  against  the assets of Salomon
Brothers  All Cap Fund,  registered  in the name of  Salomon
Brothers  All Cap  Fund,  shall be  transferred  to  Salomon
Brothers  All Cap  Fund on the  Closing  Date.  Such  shares
shall  thereupon  be  assigned by Salomon  Brothers  All Cap
Fund to its  shareholders  so that the  shares of Value Fund
may be distributed as provided in Section 5.

      If, at the  Closing  Date,  Salomon  Brothers  All Cap
Fund is  unable to make  delivery  under  this  Section 8 to
Value Fund of any of its  portfolio  securities  or cash for
the reason that any of such securities  purchased by Salomon
Brothers  All Cap Fund,  or the cash  proceeds  of a sale of
portfolio  securities,  prior to the  Closing  Date have not
yet been delivered to it or Salomon  Brothers All Cap Fund's
custodian,  then the delivery requirements of this Section 8
with respect to said undelivered  securities or cash will be
waived and  Salomon  Brothers  All Cap Fund will  deliver to
Value Fund by or on the  Closing  Date with  respect to said
undelivered   securities  or  cash  executed  copies  of  an
agreement or agreements  of assignment in a form  reasonably
satisfactory  to  Value  Fund,   together  with  such  other
documents,  including  a due bill or due bills and  brokers'
confirmation  slips as may  reasonably  be required by Value
Fund.

   9. Value Fund shall not  assume the  liabilities  (except
for portfolio  securities  purchased  which have not settled
and  for   shareholder   redemption   and  dividend   checks
outstanding)  of Salomon  Brothers All Cap Fund, but Salomon
Brothers  All Cap  Fund  will,  nevertheless,  use its  best
efforts to discharge  all known  liabilities,  so far as may
be  possible,  prior  to  the  Closing  Date.  The  cost  of
printing and mailing the proxies and proxy  statements  will
be  borne  by  Salomon   Brothers  All  Cap  Fund.   Salomon
Brothers  All Cap Fund and Value  Fund will bear the cost of
their   respective  tax  opinion.   Any  documents  such  as
existing  prospectuses  or annual  reports that are included
in  that  mailing  will be a cost of the  Fund  issuing  the
document.  Any other  out-of-pocket  expenses  of Value Fund
and  Salomon  Brothers  All Cap Fund  associated  with  this
reorganization,  including  legal,  accounting  and transfer
agent  expenses,  will be borne by Salomon  Brothers All Cap
Fund  and  Value  Fund,  respectively,  in  the  amounts  so
incurred by each.

   10.      The  obligations of Value Fund  hereunder  shall
be subject to the following conditions:

    A.      The Board of  Trustees of Salomon  Brothers  All
Cap  Fund  shall  have   authorized  the  execution  of  the
Agreement,  and the shareholders of Salomon Brothers All Cap
Fund shall have approved the Agreement and the  transactions
contemplated  hereby,  and  Salomon  Brothers  All Cap  Fund
shall have  furnished to Value Fund copies of resolutions to
that effect  certified  by the  Secretary  or the  Assistant
Secretary of Salomon  Brothers All Cap Fund such shareholder
approval  shall have been by the  affirmative  vote required
by the  Massachusetts  Law  and  the  charter  documents  of
Salomon  Brothers  All  Cap  Fund  at a  meeting  for  which
proxies  have  been  solicited  by the Proxy  Statement  and
Prospectus (as hereinafter defined).

      B. Value Fund shall have  received an opinion dated as
of the Closing  Date from  counsel to Salomon  Brothers  All
Cap Fund, to the effect that:  (i) Salomon  Brothers All Cap
Fund is a business trust duly  organized,  validly  existing
and  in  good  standing  under  the  laws  of the  State  of
Massachusetts  with  full  corporate  powers to carry on its
business  as then  being  conducted  and to  enter  into and
perform the  Agreement;  and (ii) that all action  necessary
to  make  the  Agreement,  according  to its  terms,  valid,
binding and  enforceable  on Salomon  Brothers  All Cap Fund
and to authorize  effectively the transactions  contemplated
by the  Agreement  have been taken by Salomon  Brothers  All
Cap  Fund.  Massachusetts  counsel  may be  relied  upon for
this opinion.

      C. The   representations  and  warranties  of  Salomon
Brothers  All Cap Fund  contained  herein  shall be true and
correct at and as of the Closing Date,  and Value Fund shall
have been furnished with a certificate of the President,  or
a  Vice  President,   or  the  Secretary  or  the  Assistant
Secretary  or the  Treasurer or the  Assistant  Treasurer of
Salomon  Brothers  All Cap  Fund,  dated  as of the  Closing
Date, to that effect.

D.    On the Closing  Date,  Salomon  Brothers  All Cap Fund
shall  have  furnished  to Value Fund a  certificate  of the
Treasurer  or Assistant  Treasurer  of Salomon  Brothers All
Cap Fund as to the  amount of the  capital  loss  carry-over
and net unrealized  appreciation  or  depreciation,  if any,
with  respect  to  Salomon  Brothers  All Cap Fund as of the
Closing Date.

      E. The cash reserve  shall not exceed 10% of the value
of the net assets,  nor 30% in value of the gross assets, of
Salomon  Brothers  All Cap Fund at the close of  business on
the Valuation Date.

F.    A  Registration  Statement on Form N-14 filed by Value
Fund  under the  Securities  Act of 1933,  as  amended  (the
"1933  Act"),  containing  a  preliminary  form of the Proxy
Statement and Prospectus,  shall have become effective under
the 1933 Act.

      G. On  the  Closing   Date,   Value  Fund  shall  have
received  a letter  from  Robert  G.  Zack or  other  senior
executive officer of  OppenheimerFunds,  Inc.  acceptable to
Value  Fund,  stating  that  nothing  has come to his or her
attention  which in his or her judgment  would indicate that
as of the Closing  Date there were any  material,  actual or
contingent  liabilities  of  Salomon  Brothers  All Cap Fund
arising out of litigation  brought against Salomon  Brothers
All Cap Fund or claims  asserted  against  it, or pending or
to the best of his or her  knowledge  threatened  claims  or
litigation  not  reflected  in or  apparent  from  the  most
recent audited  financial  statements and footnotes  thereto
of Salomon  Brothers  All Cap Fund  delivered to Value Fund.
Such  letter may also  include  such  additional  statements
relating  to the  scope  of the  review  conducted  by  such
person and his or her  responsibilities  and  liabilities as
are not unreasonable under the circumstances.

      H. Value Fund shall have  received an  opinion,  dated
as of the  Closing  Date,  of  Deloitte  & Touche LLP (or an
appropriate  substitute  tax expert),  to the same effect as
the opinion contemplated by Section 11.E. of the Agreement.

I.    Value Fund shall have  received  at the Closing all of
the assets of Salomon  Brothers  All Cap Fund to be conveyed
hereunder,  which  assets  shall  be free  and  clear of all
liens,  encumbrances,  security interests,  restrictions and
limitations whatsoever.

   11.      The  obligations  of  Salomon  Brothers  All Cap
Fund hereunder shall be subject to the following conditions:

      A. The Board of  Directors  of Value  Fund  shall have
authorized   the  execution  of  the   Agreement,   and  the
transactions  contemplated  thereby,  and Value  Fund  shall
have  furnished  to Salomon  Brothers All Cap Fund copies of
resolutions  to that effect  certified  by the  Secretary or
the Assistant Secretary of Value Fund.

      B. Salomon Brothers All Cap Fund's  shareholders shall
have   approved   the   Agreement   and   the   transactions
contemplated  hereby, by an affirmative vote required by the
Massachusetts  Law and its  charter  documents  and  Salomon
Brothers  All Cap  Fund  shall  have  furnished  Value  Fund
copies  of  resolutions  to  that  effect  certified  by the
Secretary or an Assistant  Secretary of Salomon Brothers All
Cap Fund.

C.    Salomon  Brothers All Cap Fund shall have  received an
opinion  dated as of the Closing  Date from counsel to Value
Fund,  to the effect that:  (i) Value Fund is a  corporation
duly organized,  validly existing and in good standing under
the laws of the State of Maryland  with full powers to carry
on its  business as then being  conducted  and to enter into
and perform the  Agreement;  (ii) all actions  necessary  to
make the Agreement,  according to its terms, valid,  binding
and   enforceable   upon   Value   Fund  and  to   authorize
effectively the  transactions  contemplated by the Agreement
have been  taken by Value  Fund;  and  (iii)  the  shares of
Value Fund to be issued  hereunder are duly  authorized  and
when  issued  will  be  validly   issued,   fully-paid   and
non-assessable.  Maryland  counsel  may be  relied  upon for
this opinion.

      D. The  representations  and  warranties of Value Fund
contained  herein shall be true and correct at and as of the
Closing Date,  and Salomon  Brothers All Cap Fund shall have
been furnished  with a certificate of the President,  a Vice
President  or the  Secretary or the  Assistant  Secretary or
the  Treasurer  or the  Assistant  Treasurer of the Trust to
that effect dated as of the Closing Date.

      E. Salomon  Brothers All Cap Fund shall have  received
an opinion of  Deloitte & Touche LLP to the effect  that the
federal tax consequences of the transaction,  if carried out
in the manner  outlined in the  Agreement  and in accordance
with (i)  Salomon  Brothers  All Cap  Fund's  representation
that there is no plan or intention  by any Salomon  Brothers
All Cap  Fund  shareholder  who  owns 5% or more of  Salomon
Brothers All Cap Fund's outstanding  shares, and, to Salomon
Brothers All Cap Fund's best knowledge,  there is no plan or
intention on the part of the remaining  Salomon Brothers All
Cap  Fund  shareholders,   to  redeem,   sell,  exchange  or
otherwise  dispose of a number of Value Fund shares received
in the  transaction  that would reduce Salomon  Brothers All
Cap Fund  shareholders'  ownership of Value Fund shares to a
number of shares having a value,  as of the Closing Date, of
less  than  50%  of  the  value  of  all  of  the   formerly
outstanding  Salomon  Brothers All Cap Fund shares as of the
same date,  and (ii) the  representation  by each of Salomon
Brothers  All  Cap  Fund  and  Value  Fund  that,  as of the
Closing Date,  Salomon  Brothers All Cap Fund and Value Fund
will qualify as regulated  investment companies or will meet
the diversification test of Section  368(a)(2)(F)(ii) of the
Code, will be as follows:

1.    The  transactions  contemplated  by the Agreement will
qualify as a tax-free  "reorganization"  within the  meaning
of Section  368(a)(1) of the Code, and under the regulations
promulgated thereunder.

         2. Salomon  Brothers  All Cap Fund and  Value  Fund
will each  qualify as a "party to a  reorganization"  within
the meaning of Section 368(b)(2) of the Code.

         3. No  gain  or  loss  will  be  recognized  by the
shareholders  of  Salomon  Brothers  All Cap  Fund  upon the
distribution  of Class  A,  Class  B,  Class C,  Class N and
Class Y shares of  beneficial  interest in Value Fund to the
shareholders  of Salomon  Brothers All Cap Fund  pursuant to
Section 354 of the Code.

         4. Under  Section  361(a)  of the  Code  no gain or
loss will be recognized by Salomon  Brothers All Cap Fund by
reason of the  transfer of  substantially  all its assets in
exchange  for Class A, Class B, Class C, Class N and Class Y
shares of Value Fund.

         5. Under  Section  1032 of the Code no gain or loss
will be  recognized  by Value Fund by reason of the transfer
of  substantially  all of  Salomon  Brothers  All Cap Fund's
assets in  exchange  for Class A,  Class B, Class C, Class N
and  Class  Y  shares  of  Value   Fund  and  Value   Fund's
assumption of certain  liabilities  of Salomon  Brothers All
Cap Fund.

         6. The  shareholders  of Salomon  Brothers  All Cap
Fund will have the same tax basis  and  holding  period  for
the Class A,  Class B,  Class C,  Class N and Class Y shares
of  beneficial  interest in Value Fund that they  receive as
they had for Salomon  Brothers All Cap Fund shares that they
previously  held,  pursuant to Section  358(a) and  1223(1),
respectively, of the Code.

         7. The securities  transferred by Salomon  Brothers
All Cap Fund to Value  Fund will have the same tax basis and
holding  period in the  hands of Value  Fund as they had for
Salomon  Brothers All Cap Fund,  pursuant to Section  362(b)
and 1223(1), respectively, of the Code.

      F. The cash reserve  shall not exceed 10% of the value
of the net assets,  nor 30% in value of the gross assets, of
Salomon  Brothers  All Cap Fund at the close of  business on
the Valuation Date.

      G. A  Registration  Statement  on Form  N-14  filed by
Value  Fund  under the 1933 Act,  containing  a  preliminary
form of the  Proxy  Statement  and  Prospectus,  shall  have
become effective under the 1933 Act.

      H. On the Closing Date,  Salomon Brothers All Cap Fund
shall have  received a letter  from  Robert G. Zack or other
senior   executive   officer   of   OppenheimerFunds,   Inc.
acceptable  to Salomon  Brothers All Cap Fund,  stating that
nothing  has  come to his or her  attention  which in his or
her  judgment  would  indicate  that as of the Closing  Date
there were any material,  actual or  contingent  liabilities
of Value Fund  arising  out of  litigation  brought  against
Value Fund or claims asserted  against it, or pending or, to
the  best  of his or her  knowledge,  threatened  claims  or
litigation  not  reflected in or apparent by the most recent
audited financial  statements and footnotes thereto of Value
Fund  delivered  to  Salomon  Brothers  All Cap  Fund.  Such
letter may also include such additional  statements relating
to the scope of the review  conducted by such person and his
or  her   responsibilities   and   liabilities  as  are  not
unreasonable under the circumstances.

I.    Salomon  Brothers  All  Cap  Fund  shall   acknowledge
receipt  of the Class A, Class B, Class C, Class N and Class
Y shares of Value Fund.

   12.      Salomon Brothers All Cap Fund hereby  represents
and warrants that:

      A. The  audited   financial   statements   of  Salomon
Brothers All Cap Fund as of November 30, 2002 and  unaudited
financial   statements   as  of  May  31,  2003   heretofore
furnished  to  Value  Fund,  present  fairly  the  financial
position,  results of operations,  and changes in net assets
of  Salomon  Brothers  All  Cap  Fund as of  that  date,  in
conformity  with generally  accepted  accounting  principles
applied on a basis  consistent  with the preceding year; and
that from May 31, 2003  through  the date hereof  there have
not been,  and through  the Closing  Date there will not be,
any  material  adverse  change in the  business or financial
condition of Salomon  Brothers All Cap Fund, it being agreed
that a  decrease  in the size of  Salomon  Brothers  All Cap
Fund  due to a  diminution  in the  value  of its  portfolio
and/or  redemption  of its shares shall not be  considered a
material adverse change;

B.    Contingent  upon  approval  of the  Agreement  and the
transactions  contemplated  hereby by Salomon  Brothers  All
Cap Fund's  shareholders,  Salomon Brothers All Cap Fund has
authority to transfer all of the assets of Salomon  Brothers
All Cap Fund to be conveyed  hereunder free and clear of all
liens,  encumbrances,  security interests,  restrictions and
limitations whatsoever;

C.    The   Prospectus,   as   amended   and   supplemented,
contained in Salomon  Brothers  All Cap Fund's  Registration
Statement under the 1933 Act, as amended,  is true,  correct
and complete,  conforms to the  requirements of the 1933 Act
and does not  contain  any  untrue  statement  of a material
fact or omit to state a material  fact required to be stated
therein or  necessary  to make the  statements  therein  not
misleading.  The Registration  Statement,  as amended,  was,
as of the  date of the  filing  of the  last  Post-Effective
Amendment,  true,  correct and  complete,  conformed  to the
requirements  of the 1933 Act and did not contain any untrue
statement  of a  material  fact or omit to state a  material
fact required to be stated  therein or necessary to make the
statements therein not misleading;

      D. There  is  no  material  contingent   liability  of
Salomon  Brothers All Cap Fund and no material  claim and no
material legal,  administrative or other proceedings pending
or,  to the  knowledge  of  Salomon  Brothers  All Cap Fund,
threatened  against  Salomon  Brothers  All  Cap  Fund,  not
reflected in such Prospectus;

      E. Except  for the  Agreement,  there are no  material
contracts  outstanding  to which  Salomon  Brothers  All Cap
Fund is a party other than those  ordinary in the conduct of
its business;

      F. Salomon  Brothers  All Cap Fund is a  Massachusetts
business trust duly organized,  validly existing and in good
standing under the laws of the State of  Massachusetts;  and
has  all   necessary   and   material   federal   and  state
authorizations  to own all of its assets and to carry on its
business as now being  conducted;  and Salomon  Brothers All
Cap  Fund  that is duly  registered  under  the Act and such
registration  has not been  rescinded  or revoked  and is in
full force and effect;

      G. All  federal  and other tax  returns and reports of
Salomon  Brothers  All Cap Fund  required by law to be filed
have been  filed,  and all federal and other taxes shown due
on said  returns  and  reports  have been paid or  provision
shall  have been  made for the  payment  thereof  and to the
best of the  knowledge  of Salomon  Brothers All Cap Fund no
such return is currently  under audit and no assessment  has
been asserted with respect to such returns; and

      H. Salomon  Brothers  All Cap  Fund has  elected  that
Salomon  Brothers  All Cap Fund be  treated  as a  regulated
investment   company  and,  for  each  fiscal  year  of  its
operations,  Salomon  Brothers  All  Cap  Fund  has  met the
requirements  of Subchapter M of the Code for  qualification
and treatment as a regulated  investment company and Salomon
Brothers  All Cap Fund  intends  to meet  such  requirements
with respect to its current taxable year.

13.   Value Fund hereby represents and warrants that:

A.    The audited  financial  statements of Value Fund as of
October 31, 2002 and  unaudited  financial  statements as of
April 30, 2003 heretofore  furnished to Salomon Brothers All
Cap Fund, present fairly the financial position,  results of
operations,  and changes in net assets of Value Fund,  as of
that date, in conformity with generally accepted  accounting
principles  applied on a basis consistent with the preceding
year;  and that from April 30, 2003  through the date hereof
there have not been,  and  through  the  Closing  Date there
will not be, any  material  adverse  changes in the business
or financial  condition of Value Fund,  it being  understood
that  a  decrease  in  the  size  of  Value  Fund  due  to a
diminution in the value of its portfolio  and/or  redemption
of its shares shall not be  considered a material or adverse
change;

B.    The   Prospectus,   as   amended   and   supplemented,
contained in Value Fund's  Registration  Statement under the
1933 Act,  is true,  correct and  complete,  conforms to the
requirements  of the  1933  Act and  does  not  contain  any
untrue  statement  of a  material  fact or  omit to  state a
material fact required to be stated  therein or necessary to
make   the   statements   therein   not   misleading.    The
Registration  Statement,  as amended, was, as of the date of
the  filing  of the  last  Post-Effective  Amendment,  true,
correct and complete,  conformed to the  requirements of the
1933  Act and did not  contain  any  untrue  statement  of a
material  fact or omit to state a material  fact required to
be  stated  therein  or  necessary  to make  the  statements
therein not misleading;

      C. Except  for this  Agreement,  there is no  material
contingent  liability  of Value Fund and no  material  claim
and no material legal,  administrative  or other proceedings
pending  or,  to the  knowledge  of Value  Fund,  threatened
against Value Fund, not reflected in such Prospectus;

      D. There  are no  material  contracts  outstanding  to
which  Value Fund is a party  other than those  ordinary  in
the conduct of its business;

      E. Value  Fund  is  a  Corporation   duly   organized,
validly  existing and in good standing under the laws of the
State  of  Maryland;   Value  Fund  has  all  necessary  and
material  federal  and state  authorizations  to own all its
properties  and assets and to carry on its  business  as now
being conducted;  the Class A, Class B, Class C, Class N and
Class Y shares of Value  Fund  which it  issues  to  Salomon
Brothers  All Cap Fund  pursuant  to the  Agreement  will be
duly    authorized,    validly   issued,    fully-paid   and
non-assessable,  and will be duly registered  under the 1933
Act and in the states where  registration  is required;  and
Value  Fund  is duly  registered  under  the  Act  and  such
registration  has not been  revoked or  rescinded  and is in
full force and effect;

      F. All  federal  and other tax  returns and reports of
Value Fund required by law to be filed have been filed,  and
all federal  and other  taxes shown due on said  returns and
reports  have been paid or  provision  shall  have been made
for the payment  thereof and to the best of the knowledge of
Value Fund,  no such return is currently  under audit and no
assessment  has been  asserted  with respect to such returns
and to the  extent  such tax  returns  with  respect  to the
taxable  year of Value Fund ended  October 31, 2002 have not
been filed,  such  returns  will be filed when  required and
the  amount of tax shown as due  thereon  shall be paid when
due;

      G. Value   Fund  has   elected  to  be  treated  as  a
regulated  investment  company  and, for each fiscal year of
its  operations,  Value  Fund  has met the  requirements  of
Subchapter M of the Code for  qualification and treatment as
a regulated  investment  company  and Value Fund  intends to
meet such  requirements  with respect to its current taxable
year;

      H.  Value  Fund  has  no  plan  or  intention  (i)  to
dispose  of  any  of  the  assets   transferred  by  Salomon
Brothers All Cap Fund,  other than in the ordinary course of
business,  or (ii) to redeem or  reacquire  any of the Class
A, Class B,  Class C,  Class N and Class Y shares  issued by
it in  the  reorganization  other  than  pursuant  to  valid
requests of shareholders; and

      I. After     consummation    of    the    transactions
contemplated  by  the  Agreement,   Value  Fund  intends  to
operate its business in a substantially unchanged manner.

   14.       Each party hereby  represents to the other that
no broker or finder has been  employed by it with respect to
the Agreement or the transactions  contemplated hereby. Each
party also  represents  and  warrants  to the other that the
information   concerning  it  in  the  Proxy  Statement  and
Prospectus  will  not  as of its  date  contain  any  untrue
statement  of a  material  fact  or  omit  to  state  a fact
necessary to make the  statements  concerning it therein not
misleading and that the financial  statements  concerning it
will  present the  information  shown  fairly in  accordance
with generally accepted  accounting  principles applied on a
basis  consistent  with the preceding  year. Each party also
represents  and warrants to the other that the  Agreement is
valid,  binding and enforceable in accordance with its terms
and that the  execution,  delivery  and  performance  of the
Agreement  will not  result  in any  violation  of, or be in
conflict  with,  any  provision  of  any  charter,  by-laws,
contract,  agreement,  judgment, decree or order to which it
is  subject  or to which it is a party.  Value  Fund  hereby
represents  to and covenants  with Salomon  Brothers All Cap
Fund that, if the reorganization  becomes  effective,  Value
Fund will treat each  shareholder  of Salomon  Brothers  All
Cap  Fund  who  received  any of Value  Fund's  shares  as a
result  of the  reorganization  as having  made the  minimum
initial  purchase  of shares of Value Fund  received by such
shareholder   for   the   purpose   of   making   additional
investments  in  shares  of Value  Fund,  regardless  of the
value of the shares of Value Fund received.

   15.       Value  Fund  agrees  that it will  prepare  and
file a  Registration  Statement  on Form N-14 under the 1933
Act  which  shall  contain  a  preliminary   form  of  proxy
statement and prospectus  contemplated by Rule 145 under the
1933  Act.  The  final  form of  such  proxy  statement  and
prospectus  is  referred to in the  Agreement  as the "Proxy
Statement  and  Prospectus."  Each party agrees that it will
use its best  efforts  to have such  Registration  Statement
declared   effective   and  to   supply   such   information
concerning  itself for inclusion in the Proxy  Statement and
Prospectus   as  may  be  necessary  or  desirable  in  this
connection.  Salomon  Brothers  All Cap Fund  covenants  and
agrees  to  liquidate  and  dissolve  under  the laws of the
State of  Massachusetts,  following  the Closing,  and, upon
Closing,  to  cause  the  cancellation  of  its  outstanding
shares.

   16.       The   obligations   of  the  parties  shall  be
subject  to  the  right  of  either  party  to  abandon  and
terminate  the  Agreement  for any reason and there shall be
no liability  for damages or other  recourse  available to a
party not so terminating this Agreement;  provided, however,
that  in  the  event  that  a  party  shall  terminate  this
Agreement   without   reasonable   cause,   the   party   so
terminating  shall, upon demand,  reimburse the party not so
terminating   for   all   expenses,   including   reasonable
out-of-pocket  expenses and fees incurred in connection with
this Agreement.

   17.       The   Agreement  may  be  executed  in  several
counterparts,  each of which  shall be deemed  an  original,
but all taken together shall  constitute one Agreement.  The
rights  and  obligations  of  each  party  pursuant  to  the
Agreement shall not be assignable.

   18.       All  prior or  contemporaneous  agreements  and
representations   are  merged  into  the  Agreement,   which
constitutes   the  entire   contract   between  the  parties
hereto.  No  amendment  or  modification  hereof shall be of
any force and  effect  unless in  writing  and signed by the
parties  and no party  shall be  deemed to have  waived  any
provision  herein  for its  benefit  unless  it  executes  a
written acknowledgment of such waiver.

   19.      Value Fund  understands  that the obligations of
Salomon  Brothers All Cap Fund under the  Agreement  are not
binding upon any Trustee or shareholder of Salomon  Brothers
All Cap Fund personally,  but bind only Salomon Brothers All
Cap Fund  and  Salomon  Brothers  All Cap  Fund's  property.
Value Fund  represents  that it has notice of the provisions
of the  Declaration  of Trust of  Salomon  Brothers  All Cap
Fund disclaiming  shareholder and trustee liability for acts
or obligations of Salomon Brothers All Cap Fund.

   20.      Salomon  Brothers All Cap Fund  understands that
the  obligations  of Value Fund under the  Agreement are not
binding  upon any  Director  or  shareholder  of Value  Fund
personally,  but  bind  only  Value  Fund and  Value  Fund's
property.  Salomon  Brothers All Cap Fund represents that it
has   notice  of  the   provisions   of  the   Articles   of
Incorporation  of Value  Fund  disclaiming  shareholder  and
Director liability for acts or obligations of Value Fund.

    IN WITNESS  WHEREOF,  each of the parties has caused the
Agreement  to be  executed  and  attested  by  its  officers
thereunto  duly  authorized  on the  date  first  set  forth
above.

                                          Oppenheimer
                                          Select Managers -
                                          Salomon Brothers
                                          All Cap FUND



                                          By:   /s/   Robert
                                          G. Zack
                                                Robert    G.
                                          Zack
                                                Vice
                                          President      and
                                          Secretary

                                          OPPENHEIMER
                                          VALUE FUND



                                          By:   /s/   Robert
                                          G. Zack
                                                Robert    G.
                                          Zack
                                                Secretary






                                                   EXHIBIT B

                   PRINCIPAL SHAREHOLDERS

A.    Major Shareholders of Value Fund.  As of August 12,
   2003, the only persons who owned of record or who were
   known by Value Fund to own beneficially 5% or more of
   any class of that Fund's outstanding shares, and their
   holdings of that class as of that date, were the
   following:

                           [TBS]

   B. Major Shareholders of Salomon Brothers All Cap Fund.
   As of August 12, 2003, the only persons who owned of
   record or who were known by Salomon Brothers All Cap
   Fund to own beneficially 5% or more of any class of that
   Fund's outstanding shares, and their holdings of that
   class as of that date, were the following:

                           [TBS]







     Appendix to Combined Prospectus/Proxy Statement of
                   Oppenheimer Value Fund

      Graphic    material    included   in   the    combined
Prospectus/Proxy  Statement  under the heading "Annual Total
Returns (Class A) (as of 12/31 each year)":

      A bar chart will be included in the combined
Prospectus/Proxy Statement of Salomon Brothers All Cap Fund
depicting the annual total returns of a hypothetical
investment in Class A shares of the Fund for the last 10
calendar years, without deducting sales charges. Set forth
below are the relevant data points that will appear on the
bar chart.

Calendar
Year                                Oppenheimer Value Fund
Ended                               Class A Shares
-----                               --------------

12/31/93                            20.91%
12/31/94                            -0.65%
12/31/95                            36.40%
12/31/96                            18.38%
12/31/97                            24.00%
12/31/98                            8.54%
12/31/99                            -4.71%
12/31/00                            -1.54%
12/31/01                            2.98%
12/31/02                            -13.03%






     Appendix to Combined Prospectus/Proxy Statement of
Oppenheimer Select Managers - Salomon Brothers All Cap Fund

      Graphic    material    included   in   the    combined
Prospectus/Proxy  Statement of Oppenheimer Select Managers -
Salomon  Brothers  All Cap Fund  under the  heading  "Annual
Total Returns (Class A) (as of 12/31 each year)":

      A  bar  chart  will  be  included   in  the   combined
Prospectus/Proxy  Statement of the Fund depicting the annual
total  returns  of a  hypothetical  investment  in  Class  A
shares of the Fund for the  calendar  year  ended  12/31/02,
without  deducting  sales  charges.  Set forth  below is the
relevant data point that will appear on the bar chart.

Calendar
Year                                Oppenheimer Select
                                    Managers - Salomon
                                    Brothers All Cap Fund
Ended                               Class A Shares
-----                               --------------

12/31/02                            -22.09%




























proxy-all\proxy
2003\525-375_PartA_ProxyState_Initial_081103.doc

--------
1 Currently, the Investment Company Act permits (a) lending
of securities, (b) purchasing debt securities or similar
evidences of indebtedness, (c) repurchase agreements and
(d) interfund lending consistent with the Fund's exemptive
order. Similar to Salomon Brothers All Cap Fund, Value Fund
may lend to affiliated funds.
2 Currently, under the Investment Company Act, a mutual
fund may borrow only from banks and the maximum amount it
may borrow is up to one-third of its total assets
(including the amount borrowed). Similar to Salomon
Brothers All Cap Fund, Value Fund may borrow from
affiliated funds. A fund may borrow up to 5% of its total
assets for temporary purposes from any person. Under the
Investment Company Act, there is a rebuttable presumption
that a loan is temporary if it is repaid within 60 days and
not extended or renewed.

PROXY CARD                 OPPENHEIMER SELECT MANAGERS-SALOMON BROTHERS ALL
CAP FUND                   PROXY CARD
                    A Series of Oppenheimer Select Mangers

  PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 31, 2003

The  undersigned,  revoking  prior  proxies,  hereby  appoints  Brian  Wixted,
Philip Vottiero,  Connie  Bechtolt,  Kathleen Ives and Philip  Masterson,  and
each of them, as attorneys-in-fact  and proxies of the undersigned,  with full
power of  substitution,  to vote shares held in the name of the undersigned on
the record date at the Special Meeting of  Shareholders of Oppenheimer  Select
Managers-Salomon  Brothers All Cap Fund (the "Fund"),  a series of Oppenheimer
Select Managers,  to be held at 6803 South Tucson Way,  Centennial,  Colorado,
80112,  on  October  31,  2003,  at  1:00  P.  M.  Mountain  time,  or at  any
adjournment thereof,  upon the Proposal described in the Notice of Meeting and
accompanying  Prospectus  and Proxy  Statement,  which have been  received  by
the undersigned.

This proxy is solicited  on behalf of the Fund's  Board of  Trustees,  and the
Proposal  (as set forth on the  reverse  side) has been  proposed by the Board
of Trustees.  When  properly  executed,  this proxy will be voted as indicated
on the  reverse  side or "FOR" the  proposal  if no choice is  indicated.  The
proxy will be voted in  accordance  with the proxy  holders'  best judgment as
to any other matters that may arise at the Meeting.

                                                  VOTE VIA THE TELEPHONE:
                                                  1-800-597-7836
                                                  CONTROL NUMBER:  999
                                                  9999  9999  999

                                                  Note:   Please  sign  this
                                                  proxy   exactly   as  your
                                                  name   or   names   appear
                                                  hereon.  Each joint  owner
                                                  should   sign.    Trustees
                                                  and   other    fiduciaries
                                                  should     indicate    the
                                                  capacity   in  which  they
                                                  sign.  If  a  corporation,
                                                  partnership    or    other
                                                  entity,   this   signature
                                                  should  be  that of a duly
                                                  authorized  individual who
                                                  should  state  his  or her
                                                  title.


                                                  Signature


                                                  Signature  of joint  owner,
                                                  if any


                                                  Date

                                                  ---------

PLEASE VOTE ON THE REVERSE SIDE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY
                           IN THE ENCLOSED ENVELOPE






TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK.  Example: [ ]









1.    To approve an Agreement and Plan of Reorganization between Oppenheimer
  Select Managers-Salomon Brothers All Cap Fund ("Salomon Brothers All Cap
  Fund"), a series of Oppenheimer Select Managers, and Oppenheimer Value Fund
  ("Value Fund"), a series of Oppenheimer Series Fund, Inc., and the
  transactions contemplated thereby, including:  (a) the transfer of
  substantially all the assets of Salomon Brothers All Cap Fund to Value Fund
  in exchange for Class A, Class B, Class C, Class N and Class Y shares of
  Value Fund, (b) the distribution of such shares of Value Fund to the
  corresponding Class A, Class B, Class C, Class N and Class Y shareholders
  of Salomon Brothers All Cap Fund in complete liquidation of Salomon
  Brothers All Cap Fund, and (c) the cancellation of the outstanding shares
  of Salomon Brothers All Cap Fund.


  FOR          AGAINST     ABSTAIN

  [  ]      [  ]     [  ]   1.








John V. Murphy
President &                                           OppenheimerFunds Logo
Chief Executive Officer                                     OppenheimerFunds, Inc.
                                                      498 Seventh Avenue, 10th Floor
                                                      New York, NY 10018
                                                      www.oppenheimerfunds.com

                                                      September 15, 2003

Dear Oppenheimer Select Managers Salomon Brothers All Cap Fund Shareholder,

One of the things we are proud of at OppenheimerFunds, Inc. is our commitment to our Fund
shareholders. I am writing to you today to let you know about a positive change that has been
proposed for Oppenheimer Select Managers Salomon Brothers All Cap Fund ("Salomon Brothers All
Cap Fund").

After careful consideration, the Board of Trustees has determined that it would be in the best
interest of shareholders of Salomon Brothers All Cap Fund to reorganize into another
Oppenheimer fund, Oppenheimer Value Fund ("Value Fund").  A shareholder meeting has been
scheduled in October, and all Salomon Brothers All Cap Fund shareholders of record as of August
12th are being asked to vote either in person or by proxy, on the proposed reorganization.  You
will find a proxy statement detailing the proposal, a ballot card, a Value Fund prospectus,
instructions for voting by telephone and a postage-paid return envelope enclosed for your use.

Why does the Board of Trustees recommend this change?

Salomon Brothers All Cap Fund and Value Fund have similar investment objectives.  Salomon
Brothers All Cap Fund seeks capital appreciation, and Value Fund seeks long-term growth of
capital. Realization of current income is a secondary consideration for Value Fund.

Among other factors, the Salomon Brothers All Cap Fund Board OF Trustees considered that the
expense ratio of Value Fund has been lower than the expense ratio of Salomon Brothers All Cap
Fund.  Although past performance is not predictive of future results, shareholders of Salomon
Brothers All Cap Fund also would have an opportunity to become shareholders of a fund with a
better long-term performance history.

How do you vote?

To cast your vote, simply mark, sign and date the enclosed proxy ballot and return it in the
postage-paid envelope today. You also may vote by telephone by following the instructions on
the proxy ballot.  Using a touch-tone telephone to cast your vote saves you time and helps
reduce the Fund's expenses.  If you vote by phone, you do not need to mail the proxy ballot.

Remember, it can be expensive for the Fund--and ultimately for you as a shareholder--to remail
ballots if not enough responses are received to conduct the meeting.  If your vote is not
received before the scheduled meeting, you may receive a telephone call reminding you to vote.

Please read the enclosed proxy statement for complete details on the proposal.  Of course, if
you have any questions, please contact your financial advisor, or call us at 1.800.708.7780.
As always, we appreciate your confidence in OppenheimerFunds and look forward to serving you
for many years to come.

                                                      Sincerely,

                                                      John V. Murphy
Enclosures
XP0525.002.0903


                     STATEMENT OF ADDITIONAL INFORMATION
                      TO PROSPECTUS AND PROXY STATEMENT

                                    PART B

                         Acquisition of the Assets of
          OPPENHEIMER SELECT MANAGERS- SALOMON BROTHERS ALL CAP FUND

                       By and in exchange for Shares of
                           OPPENHEIMER VALUE FUND,
                  A series of Oppenheimer Series Fund, Inc.


      This  Statement  of  Additional  Information  to  Prospectus  and  Proxy
Statement  (the  "SAI")  relates  specifically  to the  proposed  delivery  of
substantially  all of the  assets of  Oppenheimer  Select  Managers  - Salomon
Brothers  All Cap  Fund  ("Salomon  Brothers  All Cap  Fund")  for  shares  of
Oppenheimer Value Fund ("Value Fund").

      This SAI consists of this Cover Page and the  following  documents:  (i)
the  Prospectus  of Salomon  Brothers  All Cap Fund dated March 28,  2003,  as
supplemented  May 7, 2003;  (ii) the  Statement of Additional  Information  of
Salomon  Brothers All Cap Fund dated March 28, 2003,  which  includes  audited
financial  statements for the 12-month  period ended November 30, 2002;  (iii)
unaudited  financial  statements  for the 6-month period ended May 31, 2003 of
Salomon  Brothers All Cap Fund;  (iv) the Statement of Additional  Information
of Value Fund  dated  December  23,  2002,  revised  January  15,  2003 and as
supplemented  July 18, 2003 which includes  audited  financial  statements for
the  12-month  period  ended  October 31, 2002;  and (v)  unaudited  financial
statements for the 6-month period ended April 30, 2003 of Value Fund.

      This SAI is not a  Prospectus;  you should read this SAI in  conjunction
with the Prospectus and Proxy Statement dated September 15, 2003,  relating to
the  above-referenced  transaction.  You can request a copy of the  Prospectus
and Proxy Statement by calling  1.800.708.7780 or by writing  OppenheimerFunds
Services at P.O. Box 5270,  Denver,  Colorado  80217.  The date of this SAI is
September 15, 2003.










525-375_PartB_Cover_Initial_081103.doc


                      OPPENHEIMER SELECT MANAGERS
                  Supplement dated May 7, 2003 to the
                    Prospectus dated March 28, 2003

The Prospectus is changed as follows:

1.    The  following  paragraph  is  added  to the  end  of the  section
   captioned "How the Fund is Managed" on Page 55:

   At a recent  meeting,  the Board of Trustees of the Funds  determined
   (i)  that it is in the best  interest  of the  shareholders  of OSM -
   Mercury  Advisors S&P 500 Index Fund that the OSM - Mercury  Advisors
   S&P 500 Index Fund  reorganize  into  Oppenheimer  Main Street Fund(R),
   (ii) that it is in the best  interest  of the  shareholders  of OSM -
   Mercury  Advisors Focus Growth Fund that OSM - Mercury Advisors Focus
   Growth Fund reorganize into  Oppenheimer  Growth Fund,  (iii) that it
   is in the best interest of  shareholders  of OSM - QM Active Balanced
   Fund that OSM - QM Active Balanced Fund  reorganize into  Oppenheimer
   Multiple  Strategies  Fund,  (iv) that it is in the best  interest of
   shareholders  of OSM -  Jennison  Growth  Fund  that  OSM -  Jennison
   Growth Fund reorganize into  Oppenheimer  Growth Fund, (v) that it is
   in the best interest of the  shareholders  of OSM - Salomon  Brothers
   All Cap Fund  that OSM -  Salomon  Brothers  All Cap Fund  reorganize
   into Oppenheimer  Value Fund and (vi) that it is the best interest of
   shareholders of OSM - Gartmore  Millennium  Growth Fund II that OSM -
   Gartmore  Millennium  Growth  Fund  II  reorganize  into  Oppenheimer
   MidCap Fund. The Board unanimously  approved an agreement and plan of
   reorganization for each of the reorganizations  described above to be
   entered  into between each  Oppenheimer  Select  Manager fund and the
   respective  acquiring  fund  (the  "reorganization   plan")  and  the
   transactions  contemplated thereby (the "reorganization").  The Board
   further  determined that the  reorganizations  should be submitted to
   the  Funds'   shareholders   for  approval,   and  recommended   that
   shareholders approve the  reorganizations.  Shareholders of record as
   of a date to be  determined  by the Board will be entitled to vote on
   the  reorganization  and will receive the proxy statement  describing
   the  reorganizations.  The  date  for the  shareholder  meeting,  the
   record  date for such  meeting and such other  information  necessary
   for  shareholders  to make a decision on the proposed  merger will be
   set forth in the proxy statement.

2.    Subject to approval by the Funds' shareholders,  concurrently with
   the  reorganization of OSM - Mercury Advisors S&P 500 Index Fund into
   Oppenheimer  Main Street Fund(R),  OSM - Mercury  Advisors Focus Growth
   Fund into  Oppenheimer  Growth Fund,  OSM - QM Active  Balanced  Fund
   into  Oppenheimer  Multiple  Strategies  Fund, OSM - Jennison  Growth
   Fund into  Oppenheimer  Growth Fund,  OSM - Salomon  Brothers All Cap
   Fund  into  Oppenheimer  Value  Fund  and OSM -  Gartmore  Millennium
   Growth  Fund II into  Oppenheimer  MidCap  Fund,  Oppenheimer  Select
   Managers will no longer exist.





May 7, 2003                                                   PS0505.018


Oppenheimer
Select Managers





Prospectus dated March 28, 2003






Mercury Advisors S&P 500 Index Fund
Mercury Advisors Focus Growth Fund
QM Active Balanced Fund
Jennison Growth Fund
Salomon Brothers All Cap Fund
Gartmore Millennium Growth Fund II















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









CONTENTS

            ABOUT THE FUNDS

            OSM - Mercury Advisors S&P 500 Index Fund
            OSM - Mercury Advisors Focus Growth Fund
            OSM - QM Active Balanced Fund
            OSM - Jennison Growth Fund
            OSM - Salomon Brothers All Cap Fund
            OSM - Gartmore Millennium Growth Fund II
            About the Funds' Investments
            How the Funds are 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 Wire
            By Mail
            By Telephone

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






ABOUT THE FUNDS

Oppenheimer Select Managers -
Mercury Advisors S&P 500 Index Fund

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks to match the performance of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") as closely as possible
before the deduction of Fund expenses.

WHAT DOES THE FUND MAINLY INVEST IN? The Fund is a non-diversified mutual fund series of
Oppenheimer Select Managers (referred to in this Prospectus as the "Trust" or "OSM") that
invests all of its assets in the Master S&P 500 Index Series of the Quantitative Master
Series Trust, a registered investment company (the "Master Fund") that has the same goals
as the Fund. All investments will be made by the Master Fund. This structure is sometimes
referred to as a "master/feeder" structure. The Fund's investment results will correspond
directly to the investment results of the Master Fund. For simplicity, the term "Fund"
refers to the Fund and/or the Master Fund, unless otherwise identified. For more
information on the master/feeder structure, see "Master/Feeder Structure" on page 74.

      The Fund normally invests at least 80% of its net assets (plus borrowings for
investment purposes) in securities or other financial instruments in, or correlated with,
the S&P 500. The Fund may invest in all 500 stocks in the S&P 500 in roughly the same
proportions as their weightings in the S&P 500. The Fund may also invest in a
strategically selected sample of the 500 stocks in the S&P 500 which has aggregate
investment characteristics, such as average market capitalization and industry
weightings, similar to the S&P 500 as a whole, but which involves less transaction cost
than would be incurred by purchasing all 500 stocks. Fund Asset Management L.P., doing
business as Mercury Advisors, the investment adviser to the Master Fund (the "Adviser"),
may also purchase stocks not included in the S&P 500 when it believes that it would be a
cost effective way of approximating the S&P 500's performance to do so. If the Adviser
uses these techniques, the Fund may not track the S&P 500 as closely as it would if it
were fully replicating the S&P 500. The Fund may change the index it attempts to match if
the Adviser believes a different index would better enable the Fund to match the
performance of the market segment represented by the S&P 500 and, accordingly, the
investment objective of the Fund may be changed without shareholder approval.

      The Fund may invest in illiquid securities, repurchase agreements, and may engage
in securities lending. The Fund will also invest in short term money market instruments
such as cash reserves to maintain liquidity. These instruments may include obligations of
the U.S. Government, its agencies, or instrumentalities, highly rated bonds or comparable
unrated bonds, commercial paper, bank obligations and repurchase agreements and
commingled short-term liquidity funds. To the extent the Fund invests in short term money
market instruments, it will generally also invest in options, futures or other
derivatives in order to seek to maintain full exposure to the S&P 500. The Fund will not
invest in options, futures, other derivative instruments or short term money market
instruments in order to lessen the Fund's exposure to common stocks as a defensive
strategy, but will instead generally attempt to remain fully invested at all times.


      The Fund may invest in derivative instruments, and will normally invest a
substantial portion of its assets in options and futures contracts linked to the
performance of the S&P 500. Derivatives allow the Fund to increase or decrease its
exposure to the S&P 500 quickly and at less cost than buying or selling stocks. The Fund
will invest in options, futures and other derivative instruments in order to gain market
exposure quickly in the event of subscriptions, to maintain liquidity in the event of
redemptions and to keep trading costs low. In connection with the use of derivative
instruments, the Fund may enter into short sales in order to adjust the weightings of
particular securities represented in a derivative to more accurately reflect the
securities' weightings in the target index.

How Does the Fund's Adviser Decide What Securities To Buy or Sell? The Adviser provides
the day-to-day portfolio management of the Fund's assets. The Master Fund's portfolio
manager is employed by the Adviser. The Adviser will not attempt to buy or sell
securities based on its economic, financial or market analysis, but will instead employ a
"passive" investment approach. This means that the Adviser will attempt to invest in a
portfolio of assets whose performance is expected to match approximately the performance
of the S&P 500 before deduction of Fund expenses. Except as otherwise provided in the
Prospectus, the Adviser will buy or sell securities only when it believes it is necessary
to do so in order to match the performance of the S&P 500. The portfolio manager monitors
individual issuers for changes in the factors above and these changes may trigger a
decision to sell a security.

Who is the Fund Designed For? The Fund is designed for investors who want to invest in
the securities of large U.S. companies contained in the S&P 500 and are willing to accept
the risk that the value of their investment may decline. The Fund does not seek current
income and the income from its investments will likely be small. The Fund is not designed
for investors needing current income or preservation of capital. Shares of the Fund are
available for purchase by retirement plans only. The Fund is not a complete investment
program.

Main Risks of Investing in the Fund

All investments have some degree of risk. The Fund's investments are subject to changes
in their value from a number of factors, some of which are described below. The risks
described below collectively form the risk profile of the Fund, and can affect the value
of the Fund's investments, its investment performance and its prices per share.
Particular investments and investment strategies also have risks. These risks mean that
you can lose money by investing in the Fund. When you redeem your shares, they may be
worth more or less than what you paid for them. There is no assurance that the Fund or
the Master Fund will achieve its investment objective.

Selection Risk. The Fund is subject to selection risk, which is the risk that the Fund's
investments, which may not fully mirror the index, may underperform the stock market or
other funds with similar investment objectives and investment strategies. The Fund will
attempt to be fully invested at all times, and will not hold a significant portion of its
assets in cash. The Fund will generally not attempt  to hedge against adverse market
movements. Therefore, the Fund might go down in value more than other mutual funds in the
event of a general market decline. In addition, the Fund has operating and other expenses
while the S&P 500 does not. As a result, while the Fund will attempt to track the S&P 500
as closely as possible, it will tend to underperform the S&P 500 to some degree over time.

Risks of Investing in Stocks. Because the Fund invests primarily in stocks, the value of
the Fund's portfolio will be affected by changes in the stock markets. Market risk will
affect the Fund's net asset value per share, which will fluctuate as the values of the
Fund's portfolio securities change. Prices of individual stocks do not all move in the
same direction uniformly or at the same time. Different stock markets may also behave
differently from each other. Securities in the Fund's portfolio may not increase as much
as the market as a whole. Some securities may not be actively traded, and therefore, may
not be readily bought or sold. Although at times some of the Fund's investments may
appreciate in value rapidly, investors should not expect that most of the Fund's
investments will appreciate rapidly.

      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.

Risks of Derivative Investments. The Fund can use derivatives for the management of cash
balances as well as to increase or decrease its exposure to the S&P 500 quickly. In
general terms, a derivative investment is an investment contract whose value depends on
(or is derived from) the value of an underlying asset, interest rate or index. Options
and futures are examples of derivatives the Fund can use.

      The Fund may use derivatives for anticipatory hedging. Anticipatory hedging is a
strategy in which the Fund uses a derivative to offset the risk that securities in which
the Fund intends to invest will increase in value before the Fund has an opportunity to
purchase the securities. The Fund will use derivatives for anticipatory hedging in order
to gain exposure efficiently to its underlying indices or market segments in the event
the Fund receives cash inflows. Derivatives may not always be available or cost
efficient. If the Fund invests in derivatives, the investments may not be as effective as
a hedge against price movements.

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

Risks of Short Sales. When the Fund makes a short sale, it must borrow the security sold
short and deliver it to the broker-dealer through which it made the short sale as
collateral for its obligation to deliver the security upon conclusion of the sale. If the
price of the security sold short increases between the time of the short sale and the
time the Fund replaces the borrowed security, the Fund will incur a loss; conversely, if
the price declines, the Fund will realize a gain. Any gain will be decreased, and any
loss increased, by transaction costs. Although the Fund's gain is limited to the price at
which it sold the security short, its potential loss is theoretically unlimited. If the
Fund makes short sales of securities that increase in value, it may underperform similar
mutual funds that do not make short sales of securities they do not own.

Risks of Non-Diversification. The Fund is "non-diversified." That means that compared to
funds that are diversified, it can invest a greater portion of its net assets in the
securities of one issuer, such as the Master Fund. However, the Master Fund invests,
under normal circumstances, at least 80% of its assets in securities or other financial
instruments which are contained in or correlated with securities in the S&P 500.
Therefore, the portfolio investments of the Master Fund may be diversified.

HOW RISKY IS THE FUND OVERALL? The Master Fund focuses its investments on the stocks of
large U.S. companies with the intent of replicating the S&P 500 before deduction of fees
and expenses. The price of the Master Fund's shares can go up and down substantially. The
Master Fund does not use income-oriented investments to help cushion the Master Fund's
total return from changes in stock prices. The Fund invests all of its assets in shares
of the Master Fund and is therefore non-diversified. It will therefore be vulnerable to
the effects of economic changes that affect shares of the Master Fund. These changes can
affect the value of the Fund's price per share. In the OppenheimerFunds spectrum, the
Fund is generally more aggressive than funds that invest in both stocks and bonds, but
may be less volatile than mid-cap stock funds.

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

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the Fund, by
showing the Fund's performance (for its Class A shares) since the Fund's inception and by
showing how the average annual total returns of the Fund's shares compare to those of a
broad-based market index. Please remember that the Fund is intended to be a long-term
investment, and that performance results are historical, and that past performance
(particularly over a short-term period) is not predictive of future results.

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

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

Sales charges and taxes are not included in the  calculations of return in this bar chart,
and if those charges and taxes were included, the returns may be less than those shown.
During the period  shown in the bar chart,  the  highest  return (not  annualized)  before
taxes for a calendar quarter was 7.71%  (4thQtr'02) and the lowest return (not annualized)
before taxes for a calendar quarter was -17.30% (3rdQtr'02).

--------------------------------------------------------------------------------
                                                                   5 Years
Average Annual Total Returns                                     (or life of
for the periods ended December 31, 2002             1 Year     class, if less)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares (inception 2/16/01)                  -27.62%        -21.15%
--------------------------------------------------------------------------------
S&P 500 Index (reflects no deduction for fees,      -22.09%       -15.80%1
expenses or taxes)
--------------------------------------------------------------------------------
Class B Shares (inception 2/16/01)                  -27.56%        -20.91%
--------------------------------------------------------------------------------
Class C Shares (inception 2/16/01)                  -24.54%        -19.23%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares (inception 3/1/01)                   -24.10%        -17.12%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares (inception 2/16/01)                  -23.06%        -18.29%
--------------------------------------------------------------------------------

1From 2/28/01.
The Fund's average annual total returns  include  applicable  sales charges:  for Class A,
the current  maximum initial sales charge of 5.75%;  for Class B, the contingent  deferred
sales  charge of 5% (1-year)  and 4% (life of class);  and for Class C and Class N, the 1%
contingent  deferred  sales  charge for the 1-year  period.  There is no sales  charge for
Class Y. The returns  measure the  performance of a  hypothetical  account and assume that
all dividends and capital gains  distributions  have been reinvested in additional shares.
The  performance  of the  Fund's  Class A shares  is  compared  to the S&P 500  Index,  an
unmanaged  index of equity  securities.  The index  performance  includes  reinvestment of
income but does not reflect  transaction costs,  expenses or taxes. The Fund's investments
may vary from those in the index.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and expenses you may
pay if you buy and hold shares of the Fund.  The Fund pays indirectly through its
investment in the Master Fund for management of its assets.  The Fund pays a variety of
expenses directly for administration, distribution of its shares and other services.
Those expenses are subtracted from the Fund's assets to calculate the Fund's net asset
value per share.  All shareholders therefore pay those expenses indirectly.  Shareholders
pay other expenses directly, such as sales charges and account transaction charges. The
numbers below are based on the Fund's expenses during its fiscal year ended December 31,
2002.

Shareholder Fees (charges paid directly from your investment):







---------------------------------------------------------------------------------
                                     Class A Class B  Class C  Class N  Class Y
                                     Shares   Shares   Shares   Shares   Shares
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on        5.75%    None     None     None     None
purchases (as % of offering price)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original
offering                              None1    5%2      1%3      1%4      None
price or redemption proceeds)
---------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of $500,000
or more 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                    0.005%   0.005%   0.005%   0.005%    0.005%
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Distribution and/or Service        0.24%    1.00%    1.00%    0.50%      N/A
(12b-1) Fees
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Other Expenses                     1.79%    1.78%    1.70%    1.66%     46.32%
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Total Annual Operating Expenses    2.035%   2.785%   2.705%   2.165%   46.325%
---------------------------------------------------------------------------------
The management fee listed is the fee paid by the Master Fund and incurred indirectly by
this Fund. This Fund does not pay a management fee directly to the Adviser. The Adviser
has entered into a contractual arrangement with the Master Fund to provide that the
management fee for the Master Fund, when combined with administrative fees of certain
funds that invest in the Master Fund (other than this Fund), will not exceed a specific
amount. As a result of this contractual arrangement, the Adviser currently receives
management fees of 0.005%. This arrangement has a one-year term and is renewable. Absent
that contractual arrangement, the management fee paid by the Master Fund to the Adviser
would be 0.05%.
Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, administration fees paid to OppenheimerFunds, Inc., and accounting and
legal expenses that the Fund pays as well as the Fund's pro rata share of the expenses of
the Master Fund. The "Other Expenses" in the table are based on, among other things, the
fees the Fund would have paid if the transfer agent had not waived a portion of its fee
under a voluntary undertaking to the Fund to limit these fees to 0.25% per annum for
Class Y shares and 0.35% per annum for all other classes. "Total Annual Operating
Expenses" were reduced by a voluntary expense assumption undertaking by the Manager. With
that expense assumption and the transfer agent waiver, "Total Annual Operating Expenses"
were 1.085% for Class A, 1.835% for Class  B, 1.805% for Class C, 1.295% for Class N and
0.835% for Class Y. Effective November 1, 2002, the limit on transfer agent fees for
Class Y shares increased to 0.35% of average daily net assets per fiscal year. Had that
limit been in effect during the Fund's prior fiscal year, the Class Y "Total Annual
Operating Expenses" as percentage of average daily net assets would have been .935%.
Those voluntary undertakings may be revised or terminated at any time.

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            $770          $1,176       $1,608        $2,803
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $782          $1,164       $1,672        $2,7711
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $374          $840         $1,432        $3,037
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $320          $678         $1,162        $2,498
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $10,000       $0           $0            $10,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares            $770          $1,176       $1,608        $2,803
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $282          $864         $1,472        $2,7711
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $274          $840         $1,432        $3,037
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $220          $678         $1,162        $2,498
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $10,000       $0           $0            $10,000
--------------------------------------------------------------------------------
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 are no sales charges
on Class Y shares.
1. Class B expenses for years 7 through 10 are based on Class A expenses, because Class B
shares automatically convert to Class A shares 72 months after purchase.







Oppenheimer Select Managers -
Mercury Advisors Focus Growth Fund

What is the Fund's Investment Objective? The Fund seeks long-term capital appreciation.

What Does the Fund Mainly Invest In? The Fund is a non-diversified aggressive growth
mutual fund that invests all of its assets in the Master Focus Twenty Trust (the "Master
Fund"), a mutual fund that has the same goals as the Fund. All investments will be made
by the Master Fund. This structure is sometimes referred to as a "master/feeder"
structure. The Fund's investment results will correspond directly to the investment
results of the Master Fund. For simplicity, the term "Fund" refers to the Fund and/or the
Master Fund, unless otherwise identified. For more information on the master/feeder
structure, see "Master/Feeder Structure" on page 74.

      The Fund generally invests at least 65% of its total assets in equity securities.
Normally, the Fund will invest in the common stock of approximately 20 to 30 companies
that Fund Asset Management L.P., doing business as Mercury Advisors, the investment
adviser to the Master Fund (the "Adviser"), believes have earnings growth and capital
appreciation potential (also known as "aggressive growth companies").  The Fund may
invest in companies of any size but currently emphasizes common stocks of companies with
large stock market capitalizations (greater than $5 billion).  To a lesser extent, the
Fund also may invest in preferred stock, convertible securities, warrants and rights to
subscribe to common stock of those companies. The Fund may invest in excess of 35% of its
total assets in cash or U.S. dollar denominated high quality short-term debt instruments
for temporary defensive purposes, to maintain liquidity or when economic or market
conditions are unfavorable for profitable investing.  The Master Fund may lend its
portfolio securities and may invest uninvested cash balances in affiliated money market
funds. The Fund may also invest in certain derivative securities.  Derivatives are
financial instruments whose value is derived from another security, a commodity (such as
gold or oil), or an index such as the S&P 500 Index. The Fund may also make short sales
of securities.

How Does the Adviser Decide What Securities To Buy or Sell? The Adviser provides the
day-to-day portfolio management of the Fund's assets. The Adviser selects securities of
companies that it believes have strong earnings growth and capital appreciation
potential. The Adviser begins its investment process by creating a universe of rapidly
growing companies that possess certain growth characteristics. That universe is
continually updated. The Adviser then ranks each company within its universe by using
research models that focus on growth characteristics such as positive earnings surprises,
upward earnings estimate revisions, and accelerating sales and earnings growth. Finally,
using its own fundamental research and bottom-up approach to investing, the Adviser
evaluates the quality of each company's earnings and tries to determine whether the
company can sustain or increase its current growth trend. The Adviser believes that this
disciplined investment process enables it to construct a portfolio of investments with
strong growth characteristics. The Adviser monitors individual issuers for changes in the
factors above and these changes may trigger a decision to sell a security.

Who Is the Fund Designed For? The Fund is designed primarily for investors seeking
capital appreciation in their investment over the long term (at least 5 years).  Those
investors should be willing to assume the greater risks of short-term share price
fluctuations that are typical for funds seeking long-term capital appreciation, and in
particular for a non-diversified fund consisting of relatively few aggressive growth
companies. The Fund is designed for investors who understand that the Fund's strategy of
investing in relatively few companies and industries may subject the Fund to sector risk
and increased volatility.  The Fund does not seek current income and is not designed for
investors needing current income or preservation of capital. Because of its focus on
long-term capital appreciation, the Fund may be appropriate for a portion of a retirement
plan investment. The Fund is not a complete investment program.

Main Risks of Investing in the Fund

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

      The risks described below can affect the value of the Fund's investments, its
investment performance and its prices per share. Particular investments and investment
strategies also have risks. These risks mean that you can lose money by investing in the
Fund. When you redeem your shares, they may be worth more or less than what you paid for
them. There is no assurance that the Fund or the Master Fund will achieve its investment
objective.

RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term volatility
at times may be great. Because the Fund invests primarily in common stocks, the value of
the Fund's portfolio will be affected by changes in the stock markets in which it
invests. Market risk will affect the Fund's net asset value 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.

Risks of Growth Stocks. Stocks of growth companies, particularly newer companies, may
offer opportunities for greater long-term capital appreciation but may be more volatile
than stocks of larger, more established companies. They have greater risks if the
company's earnings growth or stock price fails to increase as expected.

SELECTION RISK. Selection risk is the risk that the securities that Fund management
selects will underperform the markets, the relevant indices or other funds with similar
investment objectives and investment strategies. If Fund management's expectations
regarding particular stocks are not met, the Fund may not achieve its investment
objective.

SECTOR RISK. To the extent that the Fund concentrates its investments in a specific
sector, there is the possibility that the investments within that sector will decline in
price due to industry-specific market or economic developments.


Risks of Derivative Investments. The Fund can use derivatives for the management of cash
balances as well as to increase or decrease its exposure to risk quickly. In general
terms, a derivative investment is an investment contract whose value depends on (or is
derived from) the value of an underlying asset, interest rate or index. Options and
futures are examples of derivatives the Fund can use.

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

Risks of Non-Diversification. The Fund is "non-diversified."  That means that compared to
funds that are diversified, it can invest a greater portion of its assets in the
securities of one issuer. Having a higher percentage of its assets invested in the
securities of fewer issuers could result in greater fluctuations of the Fund's share
prices due to events affecting a particular issuer.  If the value of the Fund's
investments goes down, you may lose money.

HOW RISKY IS THE FUND OVERALL? 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 Master Fund generally does not use
income-oriented investments to help cushion its total return from changes in stock
prices. The Master Fund focuses its investments in a limited number of issuers. By
concentrating in a smaller number of investments, the Master Fund's and the Fund's risk
is increased because each investment has a greater effect on the Master Fund's and the
Fund's performance. The Fund invests all of its assets in shares of the Master Fund and
is therefore non-diversified. It will therefore be vulnerable to the effects of market
and economic changes that affect the Master Fund. These changes can affect the value of
the Fund's price per share.  Because of the Fund's volatile nature, when the markets or
specific market sectors decline, the Fund may underperform the market averages.  The Fund
is also subject to the risk that the stocks that Fund management selects will
underperform the stock market, the relevant indices or other funds with similar
investment objectives and investment strategies.  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.

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

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the Fund, by
showing the Fund (for its Class A shares) since the Fund's inception and by showing how
the average annual total returns of the Fund's shares, both before and after taxes,
compare to those of broad-based market indices.  The table compares the average annual
total returns of the Fund's performance (for its Class A shares) since the Fund's
inception with those of the Standard & Poor's (S&P) 500 Barra Growth Index, a broad
measure of market value. The Fund uses this index as its benchmark rather than the S&P
500 Index because the S&P 500 Barra Growth Index better reflects the Fund's growth
investing style. The table also compares the Fund's performance to the NASDAQ Index.  The
after-tax returns for the other classes of shares will vary.

      The after-tax returns are shown for Class A shares only and are calculated using
the historical highest individual federal marginal income tax rates in effect during the
periods shown, and do not reflect the impact of state or local taxes. In certain cases,
the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may
be higher than the other return figures for the same period. A higher after-tax return
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 the annual total return]

Sales charges and taxes are not included in the  calculations of return in this bar chart,
and if those charges and taxes were included, the returns may be less than those shown.
During the period  shown in the bar chart,  the  highest  return (not  annualized)  before
taxes for a calendar quarter was 2.19%  (4thQtr'02) and the lowest return (not annualized)
before taxes for a calendar quarter was -20.56% (3rdQtr'02).

--------------------------------------------------------------------------------
Average Annual Total Returns                        1 Year         5 Years
                                                                 (or life of
For the periods ended December 31, 2002                        class, if less)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares (inception 2/16/01)
     Return Before Taxes                           -42.51%         -55.45%
     Return After Taxes on Distributions           -42.51%         -55.45%
     Return  After Taxes on  Distributions  and    -25.89%         -40.68%
Sale of Fund Shares
--------------------------------------------------------------------------------
S&P 500 Barra Growth Index (reflects no            -23.59%         -15.48%1
deduction for fees, expenses or taxes)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NASDAQ  Composite  Index (reflects no deduction    -31.53%         -22.91%2
for fees, expenses or taxes)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares (inception 2/16/01)                 -42.50%         -55.32%
--------------------------------------------------------------------------------
Class C Shares (inception 2/16/01)                 -40.08%         -54.33%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares (inception 3/1/01)                  -39.62%         -49.92%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares (inception 2/16/01)                 -39.06%         -53.91%
--------------------------------------------------------------------------------

1From 2/28/01.
2From 2/28/01.
The Fund's average annual total returns include applicable sales charges: for Class A,
the current maximum initial sales charge of 5.75%; for Class B, the contingent deferred
sales charge of 5% (1-year) and 4% (life of class); and for Class C and Class N the 1%
contingent deferred sales charge for the 1-year period. There is no sales charge for
Class Y. The returns measure the performance of a hypothetical account and assume that
all dividends and capital gains distributions have been reinvested in additional shares.
The performance of the Fund's Class A shares is compared to the S&P Barra Growth Index
and the NASDAQ Composite Index. The S&P 500 Barra Growth Index is a widely recognized,
unmanaged index of common stock prices.  The NASDAQ Composite Index is an unmanaged
broad-based index comprised of common stocks.  The index performance includes
reinvestment of income but does not reflect transaction costs, expenses or taxes. The
Fund will have investments that vary from those in the indices.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and expenses you may
pay if you buy and hold shares of the Fund.  The Fund pays indirectly through its
investment in the Master Fund for management of its assets. The Fund pays a variety of
expenses directly for administration, distribution of its shares and other services.
Those expenses are subtracted from the Fund's assets to calculate the Fund's net asset
value per share. All shareholders therefore pay those expenses indirectly. Shareholders
pay other expenses directly, such as sales charges and account transaction charges. The
numbers below are based on the Fund's expenses during its fiscal period ended November
30, 2002.

Shareholder Fees (charges paid directly from your investment):







---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or 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                 0.60%    0.60%     0.60%     0.60%    0.60%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Distribution and/or Service     0.24%    1.00%     1.00%     0.50%    N/A
(12b-1) Fees
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other Expenses                  2.52%    2.56%     2.53%     2.68%    88.54%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total Annual Operating Expenses 3.36%    4.16%     4.13%     3.78%    89.14%
-------------------------------------------------------------------------------
The management fee listed is the fee paid by the Master Fund and incurred indirectly by
this Fund. This Fund does not pay a management fee directly to the Adviser. Expenses may
vary in future years. "Other Expenses" include transfer agent fees, custodial fees,
administration fees paid to OppenheimerFunds, Inc., and accounting and legal expenses
that the Fund pays as well as the Fund's pro rata share of the expenses of the Master
Fund. The "Other Expenses" in the table are based on, among other things, the fees the
Fund would have paid if the transfer agent had not waived a portion of its fee under a
voluntary undertaking to the Fund to limit these fees to 0.25% per annum for Class Y
shares and 0.35% per annum for all other classes. "Total Annual Operating Expenses" were
reduced by a voluntary expense assumption undertaking by the Manager. With that expense
assumption and the transfer agent waiver, "Total Annual Operating Expenses" were 2.34%
for Class A, 3.13% for Class B, 3.07% for Class C, 2.72% for Class N and 1.81% for Class
Y. Effective November 1, 2002, the limit on transfer agent fees for Class Y shares
increased to 0.35% of average daily net assets per fiscal year. Had that limit been in
effect during the Fund's prior fiscal year, the Class Y "Total Annual Operating Expenses"
as percentage of average daily net assets would have been 1.91%.  Those voluntary
undertakings may be revised or terminated at any time.

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  1 Year        3 Years      5 Years       10 Years
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares            $894          $1,549       $2,225        $4,014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $918          $1,564       $2,324        $4,0202
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $515          $1,255       $2,110        $4,314
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $480          $1,155       $1,949        $4,019
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,170        $5,981       $6,003        $10,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares            $894          $1,549       $2,225        $4,014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $418          $1,264       $2,124        $4,0202
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $415          $1,255       $2,110        $4,314
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $380          $1,155       $1,949        $4,019
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,170        $5,981       $6,003        $10,000
--------------------------------------------------------------------------------
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 are no sales charges
on Class Y shares.
1. Includes expenses of both the Fund and the Master Fund.
2. Class B expenses for years 7 through 10 are based on Class A expenses, because Class B
shares automatically convert to Class A shares 72 months after purchase.






Oppenheimer Select Managers - QM Active Balanced Fund

What is the Fund's Investment Objective? The Fund seeks income and long-term growth of
capital.

What Does the Fund Mainly Invest In? To seek income and long-term growth of capital, the
Fund invests mainly in a wide variety of equity securities, debt securities and money
market instruments. The Fund's investments will be actively shifted among these asset
classes in order to capitalize on valuation opportunities and to maximize the Fund's
total return. The Fund also invests in other equity securities, such as non-convertible
preferred stocks and securities convertible into common stock.

      Under normal market conditions, the Fund invests:
o     40% to 75% of its total assets in equity securities, including common stocks and
      preferred stocks of issuers of every size - small, medium and large capitalization.
o     25% to 60% of its total assets in investment-grade debt securities.
o     0% to 35% of its total assets in money market instruments.

      The Fund can invest up to 35% of its total assets in foreign equity and debt
securities. Up to 30% of the Fund's assets may be used in investment techniques involving
leverage, such as dollar rolls, forward rolls and reverse repurchase agreements. The
portfolio manager also may use derivatives for hedging or to improve the Fund's returns.

How Do The Portfolio Managers Decide What Securities To Buy or Sell? The Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager") has retained Prudential
Investment Management (the "Subadviser") to provide the day-to-day portfolio management
of the Fund's assets. The Fund's portfolio managers are employed by the Subadviser. In
selecting securities for the Fund, the Fund's portfolio managers use a quantitative
model. They manage the stock portion of the Fund's portfolio using behavioral finance
models to search for securities of companies believed to be underpriced, while
maintaining a risk profile like the Standard & Poor's 500 Composite Stock Price Index.

      The portfolio managers allocate the Fund's investments among equity and debt
securities after assessing the relative values of these different types of investments
under prevailing market conditions. The portfolio might hold stocks, bonds and money
market instruments in different proportions at different times. While stocks and other
equity securities are normally emphasized to seek growth of capital, the portfolio
managers might buy bonds and other fixed-income securities, instead of stocks, when they
think that:
      o  common stocks in general appear to be overvalued,
      o  debt securities offer meaningful capital growth opportunities relative to common
         stocks, or
      o  it is desirable to maintain liquidity pending investment in equity securities to
         seek capital growth opportunities.

      The portfolio managers monitor individual issuers for changes in the factors above
and these changes may trigger a decision to sell a security.

WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors seeking growth of
capital over the long term with the opportunity for some income. Those investors should
be willing to assume the risk of short-term share price fluctuations that are typical for
a fund emphasizing equity investments. Since the Fund's income level will fluctuate, it
is not designed for investors needing an assured level of current income. Because of its
primary focus on long-term growth of capital, the Fund may be appropriate for moderately
aggressive investors. Shares of the Fund are available for purchase by retirement plans
only. The Fund is not a complete investment program.

Main Risks of Investing in the Fund

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

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

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

      Other factors can affect a particular stock's price, such as poor earnings reports
by the issuer, loss of major customers, major litigation against the issuer, or changes
in government regulations affecting the issuer. The Fund invests in securities of large
companies and can also buy securities of small and medium-capitalization companies, which
may have more volatile stock prices than large companies.

Industry Focus. At times the Fund may increase the relative emphasis of its investments
in stocks of companies in a single industry. Stocks of issuers in a particular industry
may be affected by changes in economic conditions, or by changes in government
regulations, availability of basic resources or supplies, or other events that affect
that industry more than others. To the extent that the Fund increases the emphasis of its
investments in a particular industry, its share values may fluctuate in response to
events affecting that industry.

Risks of Foreign Investing. The Fund can invest in foreign securities. The Fund currently
does not intend to invest more than 35% of its total assets in foreign securities. It can
buy securities of both foreign governments and companies. While foreign securities may
offer special investment opportunities, they are subject to special risks that can reduce
the Fund's share prices and returns.

      The change in value of a foreign currency against the U.S. dollar will affect the
U.S. dollar value of securities denominated in that foreign currency. Currency rate
changes can also affect the distributions the Fund makes from the income it receives from
foreign securities. Foreign investing can result in higher transaction and operating
costs for the Fund. 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, currency devaluation, expropriation or
nationalization of a company's assets, foreign taxes, delays in settlement of
transactions, changes in governmental economic or monetary policy in the U.S. or abroad,
or other political and economic factors.

INTEREST RATE RISK. The values of debt securities, including U.S. government securities,
are subject to change when prevailing interest rates change. When interest rates fall,
the value of already-issued debt securities generally rise. When interest rates rise, the
values of already-issued debt securities generally fall, and they may sell at a discount
from their face amount. The magnitude of these fluctuations will often be greater for
longer-term debt securities. The Fund's share prices can go up or down when interest
rates change because of the effect of the changes on the value of the Fund's investments
in debt securities.

CREDIT RISK. Debt securities are subject to credit risk. Credit risk is the risk that the
issuer of a security might not make interest and principal payments on the security as
they become due. If the issuer fails to pay interest, the Fund's income may be reduced
and if the issuer fails to repay principal, the value of that security and of the Fund's
shares might fall. While the Fund's investments in U.S. Government securities are subject
to little credit risk, the Fund's other investments in debt securities are subject to
risks of default. A downgrade in an issuer's credit rating or other adverse news about an
issuer can reduce a security's market value.

      The Fund can invest up to 20% of its total assets in high yield, lower grade debt
obligations rated below BBB by Standard & Poor's Ratings Group or Baa by Moody's
Investors Service, Inc. or the equivalent rating by another major rating service. These
lower-rated obligations - also known as "junk bonds" - have a higher risk of default and
tend to be less liquid and more volatile than higher-grade obligations. The Fund also may
invest in obligations that are not rated, but that the Subadviser believes are of
comparable quality to these obligations.

HOW RISKY IS THE FUND OVERALL? In the short term, the stock markets can be volatile, and
the price of the Fund's shares can  go up and down substantially. The Fund's
income-oriented investments may help cushion the Fund's total return from changes in
stock prices, but fixed-income securities have their own risks and normally are not the
primary emphasis of the Fund. In the OppenheimerFunds spectrum, the Fund is more
conservative than aggressive growth stock funds, but has greater risk than
investment-grade bond funds.

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

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the Fund, by
showing the Fund's performance (for its Class A shares) since the Fund's inception and by
showing how the average annual total returns of the Fund's shares compare to those of
broad-based market indices.  Please remember that the Fund is intended to be a long-term
investment, and that performance results are historical, and that past performance
(particularly over a short-term period) is not predictive of future results.

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

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

Sales charges and taxes are not included in the  calculations of return in this bar chart,
and if those charges and taxes were included, the returns may be less than those shown.
During the period  shown in the bar chart,  the  highest  return (not  annualized)  before
taxes for a calendar quarter was 5.21%  (4thQtr'02) and the lowest return (not annualized)
before taxes for a calendar quarter was -11.11% (3rdQtr'02).

--------------------------------------------------------------------------------
Average Annual Total Returns             1 Year                 5 Years
for the  periods  ended  December                        (or life of class, if
31, 2002                                                         less)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class   A    Shares    (inception        -17.47%                -12.08%
2/16/01)
--------------------------------------------------------------------------------
S&P 500 Index (reflects no
deduction for fees, expenses or
taxes)                                   -22.09%               -15.80%1
--------------------------------------------------------------------------------
Lehman Brothers
Government/Credit Bond Index
(reflects no deduction for fees,          9.84%                 8.76%1
expenses or taxes)
--------------------------------------------------------------------------------
Class   B    Shares    (inception        -17.46%                -11.93%
2/16/01)
--------------------------------------------------------------------------------
Class   C    Shares    (inception        -14.01%                -9.98%
2/16/01)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares (inception 3/1/01)        -13.49%                -8.46%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class   Y    Shares    (inception        -12.32%                -9.09%
2/16/01)
--------------------------------------------------------------------------------

1From 2/28/01.
The Fund's average annual total returns  include  applicable  sales charges:  for Class A,
the current  maximum initial sales charge of 5.75%;  for Class B, the contingent  deferred
sales  charge of 5% (1-year)  and 4% (life of class);  and for Class C and Class N, the 1%
contingent  deferred  sales  charge for the 1-year  period.  There is no sales  charge for
Class Y. The returns  measure the  performance of a  hypothetical  account and assume that
all dividends and capital gains  distributions  have been reinvested in additional shares.
The  performance  of the Fund's  Class A shares is  compared  to the S&P 500 Index and the
Lehman Brothers  Government/Credit  Bond Index. The S&P 500 Index is an unmanaged index of
equity  securities and the Lehman  Brothers  Government/Credit  Bond Index is an unmanaged
index of  intermediate  and long-term  government  and  investment  grade  corporate  debt
securities.  The indices performance includes  reinvestment of income but does not reflect
transaction costs,  expenses or taxes. The Fund will have investments that vary from those
in the indices.

Fees and Expenses of the Fund

The following tables are meant to help you understand the fees and expenses you may pay
if you buy and hold shares of the Fund.  The Fund pays a variety of expenses directly for
management of its assets, administration, distribution of its shares and other services.
Those expenses are subtracted from the Fund's assets to calculate the Fund's net asset
values per share. All shareholders therefore pay those expenses indirectly.  Shareholders
pay other expenses directly, such as sales charges and account transaction charges.  The
numbers below are based on the Fund's expenses during its fiscal period ended November
30, 2002.

Shareholder Fees (charges paid directly from your investment):







---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or redemption proceeds)
---------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of $500,000
or more 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                    0.95%    0.95%    0.95%    0.95%    0.95%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution and/or Service        0.01%    1.00%    1.00%    0.50%    N/A
(12b-1) Fees
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other Expenses                     0.55%    0.80%    0.72%    0.77%    87.08%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Annual Operating Expenses    1.51%    2.75%    2.67%    2.22%    88.03%
--------------------------------------------------------------------------------
Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, and accounting and legal expenses that the Fund pays. "Other Expenses" in
the table are based on, among other things, the fees the Fund would have paid if the
transfer agent had not waived a portion of its fee under a voluntary undertaking to the
Fund to limit these fees to 0.25% per annum for Class Y shares and 0.35% per annum for
all other classes. "Total Annual Operating Expenses" were reduced by a voluntary expense
assumption undertaking by the Manager. With that expense assumption and the transfer
agent waiver, "Total Annual Operating Expenses" were 1.41% for Class A, 2.64% for Class
B, 2.56% for Class C, 2.12% for Class N and 1.54% for Class Y. Effective November 1,
2002, the limit on transfer agent fees for Class Y shares increased to 0.35% of average
daily net assets per fiscal year. Had that limit been in effect during the Fund's prior
fiscal year, the Class Y "Total Annual Operating Expenses" as percentage of average daily
net assets would have been 1.64%.  Those expense undertakings may be revised or
terminated at any time.

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            $720          $1,025       $1,351        $2,273
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $778          $1,153       $1,654        $2,5051
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $370          $829         $1,415        $3,003
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $325          $694         $1,190        $2,554
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,148        $6,170       $6,200        $10,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares            $720          $1,025       $1,351        $2,273
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $278          $853         $1,454        $2,5051
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $270          $829         $1,415        $3,003
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $225          $694         $1,190        $2,254
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,148        $6,170       $6,200        $10,000
--------------------------------------------------------------------------------
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 are no sales charges
on Class Y shares.
1. Class B expenses for years 7 through 10 are based on Class A expenses, because Class B
shares automatically convert to Class A shares 72 months after purchase.







Oppenheimer Select Managers - Jennison Growth Fund

What is the Fund's Investment Objective? The Fund seeks long-term growth of capital.

What Does the Fund Mainly Invest In? Under normal market conditions, the Fund invests at
least 65% of its total assets in equity-related securities of companies that exceed $1
billion in market capitalization and that the portfolio managers believe have
above-average growth prospects. These companies are generally considered medium to large
capitalization companies. They tend to have a unique market niche, a strong new product
profile or superior management. Equity-related securities in which the Fund primarily
invests are common stocks, non-convertible preferred stocks and convertible securities.
The Fund may also invest in American Depository Receipts ("ADRs"), warrants and rights
that can be exercised to obtain stock, and real estate investment trusts.

      The Fund can invest up to 20% of its total assets in foreign securities of both
foreign governments and companies. The Fund can invest in investment-grade fixed-income
securities, including mortgage-related securities, and U.S. government obligations but
does not generally do so. The Fund also may engage in short sales and may use derivatives
for hedging or to improve the Fund's returns.

How Do the Portfolio Managers Decide What Securities To Buy or Sell? The Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager") has retained Jennison
Associates LLC (the "Subadviser" or "Jennison") to provide the day-to-day portfolio
management of the Fund's assets. The Fund's portfolio managers are employed by the
Subadviser. In selecting securities for the Fund, the Fund's portfolio managers look to
invest in large companies experiencing some or all of the following:

o     above-average revenue and earnings per share growth
o     strong market position
o     improving profitability and distinctive attributes such as unique marketing ability
o     strong research and development
o     productive new product flow
o     financial strength

      Such companies generally trade at high prices relative to their current earnings.
The portfolio managers will consider selling or reducing a stock position when, in the
opinion of the portfolio managers, the stock has experienced a fundamental disappointment
in earnings; it has reached an intermediate-term price objective and its outlook no
longer seems sufficiently promising; a relatively more attractive stock emerges; or the
stock has experienced adverse price movement. The portfolio managers monitor individual
issuers for changes in the factors above and these changes may trigger a decision to sell
a security.

Who Is the Fund Designed For? The Fund is designed for investors seeking long-term growth
of capital. Those investors should be willing to assume the greater risks of 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 investments will likely be small, it is not
designed for investors needing current income. Because of its focus on long-term growth
of capital, the Fund may be appropriate for a portion of a retirement plan investment.
This Fund is not a complete investment program.

Main Risks of Investing in the Fund

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

     The risks described below collectively form the risk profile of the Fund, and can
affect the value of the Fund's investments, its investment performance and its prices per
share. 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.

RISKS OF INVESTING IN STOCKS. Because the Fund 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. The prices of
individual stocks do not all move in the same direction uniformly or at the same time.
Different stock markets may behave differently from each other. Because the Fund can buy
U.S. and foreign stocks and ADRs, it could be affected by changes in domestic and foreign
stock markets.

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

Risks of Foreign Investing. The Fund can invest in foreign securities and in the
securities of foreign issuers in the form of ADRs. It can buy securities of both foreign
governments and companies. While foreign securities may offer special investment
opportunities, they are subject to special risks that can reduce the Fund's share prices
and returns.

      The change in value of a foreign currency against the U.S. dollar will affect the
U.S. dollar value of securities denominated in that foreign currency. Currency rate
changes can also affect the distributions the Fund makes from the income it receives from
foreign securities. Foreign investing can result in higher transaction and operating
costs for the Fund. Foreign issuers are not subject to the same accounting and disclosure
requirements that U.S. companies are subject to. The value of foreign investments may be
affected by exchange control regulations, expropriation or nationalization of a company's
assets, foreign taxes, delays in settlement of transactions, changes in governmental
economic or monetary policy in the U.S. or abroad, or other political and economic
factors. ADRs may not necessarily be denominated in the same currency as the securities
into which they may be converted.

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

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

The Fund's Past Performance

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

      The after-tax returns are shown for Class A shares only and are calculated using
the historical highest individual federal marginal income tax rates in effect during the
periods shown, and do not reflect the impact of state or local taxes. 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 the annual total return]

Sales charges and taxes are not included in the  calculations of return in this bar chart,
and if those charges and taxes were included, the returns may be less than those shown.
During the period  shown in the bar chart,  the  highest  return (not  annualized)  before
taxes for a calendar quarter was 2.76%  (4thQtr'02) and the lowest return (not annualized)
before taxes for a calendar quarter was -16.89% (2ndQtr'02).

--------------------------------------------------------------------------------
Average Annual Total Returns                       1 Year          5 Years
                                                                 (or life of
for the periods ended December 31, 2002                        class, if less)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares (inception 2/16/01)
     Return Before Taxes                           -34.79%         -26.54%
     Return After Taxes on Distributions           -34.79%         -26.54%
     Return  After Taxes on  Distributions  and    -21.19%         -20.62%
Sale of Fund Shares
--------------------------------------------------------------------------------
S&P 500 Index (reflects no deduction for fees,     -22.09%        -15.80%1
expenses or taxes)
--------------------------------------------------------------------------------
Class B Shares (inception 2/16/01)                 -34.74%         -26.42%
--------------------------------------------------------------------------------
Class C Shares (inception 2/16/01)                 -31.99%         -24.80%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares (inception 3/1/01)                  -31.65%         -22.59%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares (inception 2/16/01)                 -30.78%         -24.12%
--------------------------------------------------------------------------------

1From 2/28/01.
The Fund's average annual total returns  include  applicable  sales charges:  for Class A,
the current  maximum initial sales charge of 5.75%;  for Class B, the contingent  deferred
sales  charge of 5% (1-year)  and 4% (life of class);  and for Class C and Class N, the 1%
contingent  deferred  sales  charge for the 1-year  period.  There is no sales  charge for
Class Y. The returns  measure the  performance of a  hypothetical  account and assume that
all dividends and capital gains  distributions  have been reinvested in additional shares.
The  performance  of the  Fund's  Class A shares  is  compared  to the S&P 500  Index,  an
unmanaged  index of equity  securities.  The index  performance  includes  reinvestment of
income but does not reflect  transaction costs,  expenses or taxes. The Fund's investments
vary from those in the index.

Fees and Expenses of the Fund

The following tables are meant to help you understand the fees and expenses you may pay
if you buy and hold shares of the Fund. The Fund pays a variety of expenses directly for
management of its assets, administration, distribution of its shares and other services.
Those expenses are subtracted from the Fund's assets to calculate the Fund's net asset
values per share. All shareholders therefore pay those expenses indirectly. Shareholders
pay other expenses directly, such as sales charges and account transaction charges. The
numbers below are based on the Fund's expenses during its fiscal period ended November
30, 2002.

Shareholder Fees (charges paid directly from your investment):







---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or 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   Class  Class   Class  Class Y
                               A       B      C       N      Shares
                               Shares  Shares Shares  Shares
----------------------------------------------------------------------
----------------------------------------------------------------------
Management Fees                0.95%   0.95%  0.95%   0.95%  0.95%
----------------------------------------------------------------------
----------------------------------------------------------------------
Distribution and/or Service    0.05%   1.00%  1.00%   0.50%  N/A
(12b-1) Fees
----------------------------------------------------------------------
----------------------------------------------------------------------
Other Expenses                 0.89%   1.13%  0.91%   1.11%  87.14%
----------------------------------------------------------------------
----------------------------------------------------------------------
Total Annual Operating         1.89%   3.08%  2.86%   2.56%  88.09%
Expenses
----------------------------------------------------------------------

Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, and accounting and legal expenses that the Fund pays. "Other Expenses" in
the table are based on, among other things, the fees the Fund would have paid if the
transfer agent had not waived a portion of its fee under a voluntary undertaking to the
Fund to limit these fees to 0.25% per annum for Class Y shares and 0.35% per annum for
all other classes. "Total Annual Operating Expenses" were reduced by a voluntary expense
assumption undertaking by the Manager. With that expense assumption and the transfer
agent waiver, "Total Annual Operating Expenses" were 1.39% for Class A, 2.51% for Class
B, 2.31% for Class C, 2.01% for Class N and 1.43% for Class Y. Effective November 1,
2002, the limit on transfer agent fees for Class Y shares increased to 0.35% of average
daily net assets per fiscal year. Had that limit been in effect during the Fund's prior
fiscal year, the Class Y "Total Annual Operating Expenses" as percentage of average daily
net assets would have been 1.53%.  Those expense undertakings may be revised or
terminated at any time.

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            $756          $1,135       $1,538        $2,659
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $811          $1,251       $1,816        $2,8591
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $389          $886         $1,509        $3,185
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $359          $796         $1,360        $2,895
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,149        $6,167       $6,196        $10,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares            $756          $1,135       $1,538        $2,659
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $311          $951         $1,616        $2,8591
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $289          $886         $1,509        $3,185
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $259          $796         $1,360        $2,895
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,149        $6,167       $6,196        $10,000
--------------------------------------------------------------------------------
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 are no sales charges
on Class Y shares.
1. Class B expenses for years 7 through 10 are based on Class A expenses, because Class B
shares automatically convert to Class A shares 72 months after purchase.







Oppenheimer Select Managers - Salomon Brothers All Cap Fund

What is the Fund's Investment Objective? The Fund seeks capital appreciation.

What Does the Fund Mainly Invest In? The Fund is a non-diversified mutual fund that
invests mainly in common stocks and common stock equivalents such as preferred stocks and
securities convertible into common stocks, of companies Salomon Brothers Asset Management
Inc. (the "Subadviser") believes are undervalued in the marketplace. While the Subadviser
selects an investment primarily for its capital appreciation potential, secondary
consideration is given to a company's dividend record and the potential for an improved
dividend return. The Fund generally invests in securities of large, well-known companies,
but may also invest a significant portion of its assets in securities of small to
medium-sized companies when the Subadviser believes smaller companies offer more
attractive value opportunities. The Fund may invest in non-dividend paying common stocks.

      The Fund may invest in investment grade fixed-income securities and may invest up
to 20% of its net assets in non-convertible debt securities rated below investment grade
or, if unrated, of equivalent quality as determined by the Sub-adviser. Debt securities
rated below investment grade are normally referred to as "junk bonds". The Fund may
invest without limit in convertible debt securities of any quality. The Fund may also
invest up to 20% of its total assets in securities of foreign issuers.

How Do The Portfolio Managers Decide What Securities To Buy or Sell? The Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager") has retained the Subadviser to
provide the day-to-day portfolio management of the Fund's assets. The Fund's portfolio
managers are employed by the Subadviser. The Subadviser employs a two-step stock
selection process in its search for undervalued stocks of temporarily out of favor
companies. First, it uses proprietary models and fundamental research to try to identify
stocks that are underpriced in the market relative to their fundamental value. Next, the
Subadviser also emphasizes companies in those sectors of the economy, which it believes
are undervalued relative to other sectors.

      When evaluating an individual stock, the Subadviser looks for:
o     Low market valuations measured by the Subadviser's valuation models,
o     Positive changes in earnings prospects because of factors such as:
           New, improved or unique products and services
           New or rapidly expanding markets for the company's products
           New management
           Changes in the economic, financial, regulatory or political environment
           particularly affecting the company
           Effective research, product development and marketing
           A business strategy not yet recognized by the marketplace.

      The portfolio managers monitor individual issuers for changes in the factors above
and these changes may trigger a decision to sell a security.

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

Main Risks of Investing in the Fund

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

     These risks collectively form the risk profile of the Fund, and can affect the value
of the Fund's investments, its investment performance and its prices per share. 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.

RISKS OF INVESTING IN STOCKS. Because the Fund 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. 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.

Industry Focus. At times the Fund may increase the relative emphasis of its investments
in stocks of companies in a single industry. Stocks of issuers in a particular industry
may be affected by changes in economic conditions, changes in government regulations,
availability of basic resources or supplies, or other events that affect that industry
more than others. To the extent that the Fund increases the relative emphasis of its
investments in a particular industry, its share values may  fluctuate in response to
events affecting that industry.

Risks of Foreign Investing. The Fund can invest in foreign securities. The Fund currently
does not intend to invest more than 20% of its net assets in foreign securities. It can
buy securities of both foreign governments and companies. While foreign securities may
offer special investment opportunities, they are subject to special risks that can reduce
the Fund's share prices and returns.

      The change in value of a foreign currency against the U.S. dollar will affect the
U.S. dollar value of securities denominated in that foreign currency. Currency rate
changes can also affect the distributions the Fund makes from the income it receives from
foreign securities. Foreign investing can result in higher transaction and operating
costs for the Fund. Foreign issuers are not subject to the same accounting and disclosure
requirements that U.S. companies are subject to. The value of foreign investments may be
affected by exchange control regulations, expropriation or nationalization of a company's
assets, foreign taxes, delays in settlement of transactions, changes in governmental
economic or monetary policy in the U.S. or abroad, or other political and economic
factors.

Risks of Investing in Debt Securities. Debt securities, such as bonds, involve credit
risk. This is the risk that the borrower will not make timely payments of principal and
interest. The degree of credit risk depends on the issuer's financial condition and on
the terms of the bonds. These securities are also subject to interest rate risk. There is
the risk that the value of the security may fall when interest rates rise. In general,
the market price of debt securities with longer maturities will go up or down more in
response to changes in interest rates than the market price of shorter term securities.

Risks of Non-Diversification. The Fund is "non-diversified."  That means that compared to
funds that are diversified, it can invest a greater portion of its assets in the
securities of one issuer. Having a higher percentage of its assets invested in the
securities of fewer issuers could result in greater fluctuations of the Fund's share
prices due to events affecting a particular issuer.

HOW RISKY IS THE FUND OVERALL? 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. The Fund focuses investments in a limited number of issuers and is
non-diversified. It will therefore be vulnerable to the effects of economic changes that
affect those issuers. In the OppenheimerFunds spectrum, the Fund is generally more
aggressive than funds that invest in bonds or in investment grade debt securities, but
may be less volatile than small-cap and emerging markets stock funds.

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

The Fund's Past Performance

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

      The after-tax returns are shown for Class A shares only and are calculated using
the historical highest individual federal marginal income tax rates in effect during the
periods shown, and do not reflect the impact of state or local taxes. 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 the annual total return]

Sales charges and taxes are not included in the  calculations of return in this bar chart,
and if those charges and taxes were included, the returns may be less than those shown.
During the period  shown in the bar chart,  the  highest  return (not  annualized)  before
taxes  for  a  calendar  quarter  was  11.84%  (4thQtr'02)  and  the  lowest  return  (not
annualized) before taxes for a calendar quarter was -18.34% (3rdQtr'02).

--------------------------------------------------------------------------------
Average Annual Total Returns                       1 Year          5 Years
                                                                 (or life of
for the periods ended December 31, 2002                        class, if less)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares (inception 2/16/01)
     Return Before Taxes                           -26.57%         -17.26%
     Return After Taxes on Distributions           -26.57%         -17.41%
     Return After Taxes on  Distributions  and     -16.18%         -13.63%
Sale of Fund Shares
--------------------------------------------------------------------------------
Russell 3000 Index (reflects no deduction for      -21.54%         -15.19%1
fees, expenses or taxes)
--------------------------------------------------------------------------------
Class B Shares (inception 2/16/01)                 -26.50%         -17.11%
--------------------------------------------------------------------------------
Class C Shares (inception 2/16/01)                 -23.52%         -15.32%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares (inception 3/1/01)                  -23.07%         -14.45%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares (inception 2/16/01)                 -21.59%         -14.25%
--------------------------------------------------------------------------------

1From 2/28/01.
The Fund's average annual total returns  include  applicable  sales charges:  for Class A,
the current  maximum initial sales charge of 5.75%;  for Class B, the contingent  deferred
sales  charge of 5% (1-year)  and 4% (life of class);  and for Class C and Class N, the 1%
contingent  deferred  sales  charge for the 1-year  period.  There is no sales  charge for
Class Y. The returns  measure the  performance of a  hypothetical  account and assume that
all dividends and capital gains  distributions  have been reinvested in additional shares.
The  performance  of the Fund's Class A shares is compared to the Russell  3000 Index,  an
unmanaged index of  large-capitalization  U.S. companies.  The index performance  includes
reinvestment  of income but does not reflect  transaction  costs,  expenses or taxes.  The
Fund will have investments that vary from those in the index.

Fees and Expenses of the Fund

The following tables are meant to help you understand the fees and expenses you may pay
if you buy and hold shares of the Fund. The Fund pays a variety of expenses directly for
management of its assets, administration, distribution of its shares and other services.
Those expenses are subtracted from the Fund's assets to calculate the Fund's net asset
values per share. All shareholders therefore pay those expenses indirectly. Shareholders
pay other expenses directly, such as sales charges and account transaction charges. The
numbers below are based on the Fund's expenses during its fiscal period ended November
30, 2002.

Shareholder Fees (charges paid directly from your investment):







---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or 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   Class  Class   Class  Class Y
                               A       B      C       N      Shares
                               Shares  Shares Shares  Shares
----------------------------------------------------------------------
----------------------------------------------------------------------
Management Fees                1.10%   1.10%  1.10%   1.10%  1.10%
----------------------------------------------------------------------
----------------------------------------------------------------------
Distribution and/or Service    0.13 %  1.00%  1.00%   0.50%  N/A
(12b-1) Fees
----------------------------------------------------------------------
----------------------------------------------------------------------
Other Expenses                 0.62%   0.65%  0.62%   0.63%  86.49%
----------------------------------------------------------------------
----------------------------------------------------------------------
Total Annual Operating         1.85%   2.75%  2.72%   2.23%  87.59%
Expenses
----------------------------------------------------------------------
Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, and accounting and legal expenses that the Fund paid. "Other Expenses" in
the table are based on, among other things, the fees the Fund would have paid if the
transfer agent had not waived a portion of its fee under a voluntary undertaking to the
Fund to limit these fees to 0.25% per annum for Class Y shares and 0.35% per annum for
all other classes. "Total Annual Operating Expenses" were reduced by a voluntary expense
assumption undertaking by the Manager.  With that expense assumption and the transfer
agent waiver, "Total Annual Operating Expenses" were 1.59% for Class A, 2.44% for Class
B, 2.41% for Class C, 1.98% for Class N and 1.12% for Class Y. Effective November 1,
2002, the limit on transfer agent fees for Class Y shares increased to 0.35% of average
daily net assets per fiscal year. Had that limit been in effect during the Fund's prior
fiscal year, the Class Y "Total Annual Operating Expenses" as percentage of average daily
net assets would have been 1.22%.  Those expense undertakings may be revised or
terminated at any time.

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            $752          $1,123       $1,518        $2,619
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $778          $1,153       $1,654        $2,6661
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $375          $844         $1,440        $3,051
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $326          $697         $1,195        $2,565
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,142        $6,193       $6,225        $10,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares            $752          $1,123       $1,518        $2,619
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $278          $853         $1,454        $2,6661
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $275          $844         $1,440        $3,051
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $226          $697         $1,195        $2,565
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,142        $6,193       $6,225        $10,000
--------------------------------------------------------------------------------
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 are no sales charges
on Class Y shares.
1. Class B expenses for years 7 through 10 are based on Class A expenses, because Class B
shares automatically convert to Class A shares 72 months after purchase.







Oppenheimer Select Managers -
Gartmore Millennium Growth Fund II

What is the Fund's Investment Objective? The Fund seeks long-term capital appreciation.

What Does the Fund Mainly Invest In? The Fund invests primarily in securities of growth
companies that are creating fundamental changes in the economy. Typically, these
companies are characterized by new or innovative products, services or processes, with
the potential to enhance earnings growth. Growth in earnings may lead to an increase in
the price of the stock. The Fund can invest in companies of any size but primarily
focuses on securities of small to mid sized companies.

      The Fund has the ability to have up to 20% of its total assets in short positions.

How Does the Portfolio Manager Decide What Securities To Buy or Sell? The Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager") has retained Gartmore Mutual
Fund Capital Trust (the "Subadviser") to provide the day-to-day portfolio management of
the Fund's assets. The Fund's portfolio managers are employed by the Subadviser. In
analyzing specific companies for possible investment, the Fund's portfolio managers
ordinarily perform an assessment of companies focusing on the following characteristics.:

      o  Global capacity.
      o  Market leadership.
      o  Brand and reputation.
      o  Management capability regarding innovation, execution and acquisition.

      It generally will sell securities if the portfolio manager believes:
o     the price of the security is overvalued
o     the company's earnings are consistently lower than expected
o     more favorable opportunities are identified

      The portfolio managers monitor individual issuers for changes in the factors above
and these changes may trigger a decision to sell a security.

Who is the Fund Designed For? The Fund is designed primarily for investors seeking
long-term capital appreciation. Those investors should be willing to assume the greater
risks of short-term share price fluctuations that are typical for an aggressive growth
fund. The Fund does not seek current income and the income from its investments will
likely be small. It is not designed for investors needing current income or preservation
of capital. Because of its focus on long-term capital appreciation, the Fund may be
appropriate for a portion of a retirement plan investment. This Fund is not a complete
investment program.

Main Risks of Investing in the Fund

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

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

RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term volatility
at times may be great. Because the Fund invests primarily in common stocks, the value of
the Fund's portfolio will be affected by changes in the stock markets. Market risk will
affect the Fund's net asset value 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.

Industry and Sector Focus. At times the Fund may increase the relative emphasis of its
investments in a particular industry or sector. The prices of stocks of issuers in a
particular industry or sector may go up and down in response to changes in economic
conditions, government regulations, availability of basic resources or supplies, or other
events that affect that industry or sector more than others. To the extent that the Fund
increases the relative emphasis of its investments in a particular industry or sector,
its share values may fluctuate in response to events affecting that industry or sector.

Risks of Growth Stocks. Stocks of growth companies, particularly newer companies, may
offer opportunities for greater long-term capital appreciation but may be more volatile
than stocks of larger, more established companies. They have greater risks if the
company's earnings growth or stock price fails to increase as expected.

Risks of Foreign Investing. The Fund can invest without limit in foreign securities. The
Fund currently does not intend to invest more than 25% of its net assets in foreign
securities. It can buy securities of both foreign governments and companies. While
foreign securities may offer special investment opportunities, they are subject to
special risks that can reduce the Fund's share prices and returns.

      The change in value of a foreign currency against the U.S. dollar will affect the
U.S. dollar value of securities denominated in that foreign currency. Currency rate
changes can also affect the distributions the Fund makes from the income it receives from
foreign securities. Foreign investing can result in higher transaction and operating
costs for the Fund. Foreign issuers are not subject to the same accounting and disclosure
requirements that U.S. companies are subject to. The value of foreign investments may be
affected by exchange control regulations, expropriation or nationalization of a company's
assets, foreign taxes, delays in settlement of transactions, changes in governmental
economic or monetary policy in the U.S. or abroad, or other political and economic
factors.

HOW RISKY IS THE FUND OVERALL? The Fund focuses its investments on equity securities of
growth companies for long-term capital appreciation, and in the short term, they can be
volatile. The price of the Fund's shares can go up and down substantially. The Fund
generally does not use income-oriented investments to help cushion the Fund's total
return from changes in stock prices, except for defensive purposes. Foreign securities
can be volatile, and the price of the Fund's shares can go up and down because of events
affecting foreign markets or issuers. In the OppenheimerFunds spectrum, the Fund is an
aggressive investment vehicle, designed for investors willing to assume greater risks in
the hope of achieving greater gains. In the short-term the Fund may be less volatile than
small-cap and emerging markets stock funds, but it may be subject to greater fluctuations
in its share prices than funds that emphasize large capitalization stocks, or funds that
focus on both stocks and bonds.

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

The Fund's Past Performance

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

      The after-tax returns are shown for Class A shares only and are calculated using
the historical highest individual federal marginal income tax rates in effect during the
periods shown, and do not reflect the impact of state or local taxes. 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 the annual total return]

Sales charges and taxes are not included in the  calculations of return in this bar chart,
and if those charges and taxes were included, the returns may be less than those shown.
During the period  shown in the bar chart,  the  highest  return (not  annualized)  before
taxes for a calendar quarter was 1.51%  (4thQtr'02) and the lowest return (not annualized)
before taxes for a calendar quarter was -16.71% (2ndQtr'02).

--------------------------------------------------------------------------------
Average Annual Total Returns                       1 Year          5 Years
                                                                 (or life of
for the periods ended December 31, 2002                        class, if less)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares (inception 2/16/01)
     Return Before Taxes                          -33.51%          -30.32%
     Return After Taxes on Distributions          -33.51%          -30.32%
     Return After Taxes on  Distributions  and    -20.41%          -23.42%
Sale of Fund Shares
--------------------------------------------------------------------------------
Russell MidCap Growth Index (reflects no          -27.41%         -20.08%1
deduction for fees, expenses or taxes)
--------------------------------------------------------------------------------
Class B Shares (inception 2/16/01)                -33.63%          -30.19%
--------------------------------------------------------------------------------
Class C Shares (inception 2/16/01)                -30.74%          -28.65%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares (inception 3/1/01)                 -30.36%          -24.90%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares (inception 2/16/01)                -29.37%          -27.94%
--------------------------------------------------------------------------------

1From 2/28/01.
The Fund's average annual total returns  include  applicable  sales charges:  for Class A,
the current  maximum initial sales charge of 5.75%;  for Class B, the contingent  deferred
sales  charge of 5% (1-year)  and 4% (life of class);  and for Class C and Class N, the 1%
contingent  deferred  sales  charge for the 1-year  period.  There is no sales  charge for
Class Y. The returns  measure the  performance of a  hypothetical  account and assume that
all dividends and capital gains  distributions  have been reinvested in additional shares.
The  performance  of the Fund's  Class A shares is compared to the Russell  MidCap  Growth
Index,  an  unmanaged  index  which  measures  the  performance  of those  Russell  Midcap
companies with higher  price-to-book ratios and higher forecasted growth values. The index
performance  includes  reinvestment  of income  but does not  reflect  transaction  costs,
expenses or taxes. The Fund will have investments that vary from those in the index.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and expenses you may
pay if you buy and hold shares of the Fund. The Fund pays a variety of expenses directly
for management of its assets, administration, distribution of its shares and other
services. Those expenses are subtracted from the Fund's assets to calculate the Fund's
net asset value per share. All shareholders therefore pay those expenses indirectly.
Shareholders pay other expenses directly, such as sales charges and account transaction
charges. The numbers below are based on the Fund's expenses during its fiscal period
ended November 30, 2002.

Shareholder Fees (charges paid directly from your investment):







---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or 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                 1.20%    1.20%     1.20%     1.20%    1.20%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Distribution and/or Service     0.02%    1.00%     1.00%     0.50%    N/A
(12b-1) Fees
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other Expenses                  1.02%    1.46%     1.31%     1.44%    87.49%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total Annual Operating Expenses 2.24%    3.66%     3.51%     3.14%    88.69%
-------------------------------------------------------------------------------
Expenses may vary in future years. "Other Expenses" include agent fees, custodial fees,
and accounting and legal expenses that the Fund pays. "Other Expenses" in the table are
based on, among other things, the fees the Fund would have paid if the transfer agent had
not waived a portion of its fee under a voluntary undertaking to the Fund to limit these
fees to 0.25% per annum for Class Y shares and 0.35% per annum for all other classes.
"Total Annual Operating Expenses" were reduced by a voluntary expense assumption
undertaking by the Manager. With that expense assumption and the transfer agent waiver,
"Total Annual Operating Expenses" were 1.73% for Class A, 2.77% for Class B, 2.79% for
Class C, 2.28% for Class N and 1.62% for Class Y.  Effective November 1, 2002, the limit
on transfer agent fees for Class Y shares increased to 0.35% of average daily net assets
per fiscal year. Had that limit been in effect during the Fund's prior fiscal year, the
Class Y "Total Annual Operating Expenses" as percentage of average daily net assets would
have been 1.72%.  Those expense undertakings may be revised or terminated at any time.

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            $789          $1,235       $1,706        $3,002
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $868          $1,420       $2,092        $3,3111
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $454          $1,077       $1,822        $3,783
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $417          $969         $1,645        $3,448
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,158        $6,136       $6,162        $10,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares            $789          $1,235       $1,706        $3,002
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares            $368          $1,120       $1,892        $3,3111
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares            $354          $1,077       $1,822        $3,783
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares            $317          $969         $1,645        $3,448
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares            $5,158        $6,136       $6,162        $10,000
--------------------------------------------------------------------------------
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 are no sales charges
on Class Y shares.
1. Class B expenses for years 7 through 10 are based on Class A expenses, because Class B
shares automatically convert to Class A shares 72 months after purchase.







About the Funds' Investments

THE FUNDS' PRINCIPAL INVESTMENT POLICIES. The allocation of each Fund's (except the OSM -
Mercury Advisors S&P 500 Index Fund) portfolio among different investments will vary over
time based on the portfolio manager's evaluation of economic and market trends. Each
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 Funds' investment policies and risks.

     The Adviser or the Subadvisers, as the case may be, may try to reduce risks for each
Fund (except the OSM - Mercury Advisors S&P 500 Index Fund) by carefully researching
securities before they are purchased. Each Fund other than the OSM - Mercury Advisors
Focus Growth Fund, the OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Salomon
Brothers All Cap Fund is a diversified fund and 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, each Fund does not concentrate 25% or more of its assets in
investments in any one industry. However, in replicating the weighting of a particular
industry in the S&P 500, the OSM - Mercury Advisors S&P 500 Index Fund may invest more
than 25% of its total assets in securities of issuers in that industry.

     However, changes in the overall market prices of securities and the income they pay
can occur at any time. The share prices of each 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 OSM - Mercury Advisors Focus Growth Fund, OSM - Jennison Growth
      Fund, OSM - Gartmore Millennium Growth Fund II and the OSM - Salomon Brothers All
      Cap Fund currently focus on more established U.S. companies. Growth companies, for
      example, may be developing new products or services, or they may be expanding into
      new markets for their products. Newer growth companies tend to retain a large part
      of their earnings for research, development or investment in capital assets.
      Therefore, they often do not tend to emphasize paying dividends and may not pay any
      dividends for some time. The portfolio managers for each of these Funds look for
      stocks of growth companies for each Fund's portfolio that they believe will
      increase in value over time.

      The OSM - Mercury Advisors Focus Growth Fund and  the OSM - Jennison Growth Fund do
      not limit their investments to issuers in a particular market capitalization range
      or ranges. However, the OSM - Mercury Advisors Focus Growth Fund currently
      emphasizes common stocks of large-cap issuers and the OSM - Jennison Growth Fund
      currently focuses on mid cap and large cap issuers. The OSM - QM Active Balanced
      Fund, the OSM - Salomon Brothers All Cap Fund, and the OSM - Gartmore Millennium
      Growth Fund II may invest in the common stocks of companies of every size, small,
      medium and large capitalization. "Market capitalization" refers to the total market
      value of an issuer's common stock. The stock prices of large cap issuers tend to be
      less volatile than the prices of midcap and small cap companies in the short term,
      but these companies may not afford the same growth opportunities as midcap and
      small cap companies.


Portfolio Turnover. A change in the securities held by each Fund is known as "portfolio
      turnover."  Each Fund, with the exception of the OSM - Mercury Advisors S&P 500
      Index Fund, may engage in short-term trading to try to achieve its objective. Each
      Fund other than the OSM - Mercury Advisors S&P 500 Index Fund might have a turnover
      rate in excess of 100% annually, which may be considered high. Portfolio turnover
      affects brokerage costs the Funds pay. Because the OSM - Mercury Advisors S&P 500
      Index Fund employs a passive investment approach, it is anticipated that its
      portfolio turnover and trading costs will be lower than "actively" managed funds.
      If a Fund realizes capital gains when it sells its portfolio investments, it must
      generally pay those gains out to the shareholders, increasing non-retirement plan
      or non-IRA or non-education savings account shareholders' taxable distributions.

Cyclical Opportunities. Each Fund (other than the OSM - Mercury Advisors S&P 500 Index
      Fund) may also seek to take advantage of changes in the business cycle by investing
      in companies that are sensitive to those changes if the respective Adviser or
      Subadviser believes they have growth potential. For example, when the economy is
      expanding, companies in the consumer durables and technology sectors may benefit
      and offer long-term growth opportunities. Other cyclical industries include
      insurance and forest products, for example. Those Funds focus on seeking growth
      over the long term, but may seek to take tactical advantage of short-term market
      movements or events affecting particular issuers or industries.

Debt Securities. The OSM - QM Active Balanced Fund, the OSM - Jennison Growth Fund and
      the OSM - Salomon Brothers All Cap Fund may invest in corporate bond obligations,
      as well as government obligations and mortgage-related securities. The weighted
      average maturity of the debt securities held by the OSM - QM Active Balanced Fund
      will normally be between three and thirty years. Debt securities are selected
      primarily for their income possibilities and their relative emphasis in the
      portfolio may be greater when the stock market is volatile. For example, when
      interest rates are falling, or when the credit quality of a particular issuer is
      improving, the portfolio manager might buy debt securities for their own
      appreciation possibilities. The Funds have no limit on the range of maturities of
      the debt securities they can buy.

      The Subadvisers for the OSM - QM Active Balanced Fund, the OSM - Jennison Growth
      Fund and the OSM - Salomon Brothers All Cap Fund do not rely solely on ratings by
      rating organizations in selecting debt securities, but also use their own judgment
      to evaluate particular issues as well as business and economic factors affecting an
      issuer. The debt securities those Funds buy may be rated by nationally-recognized
      rating organizations or they may be unrated securities assigned a rating by the
      respective  Sub-Adviser.

      The investments in debt securities by the OSM - QM Active Balanced Fund and the OSM
      - Salomon Brothers All Cap Fund, including convertible securities, can be above or
      below investment grade in quality. "Investment-grade" securities are those rated in
      the four highest rating categories by Moody's Investors Service or other rating
      organizations, or, if unrated, assigned a comparable rating by the respective
      Sub-Adviser. A list of the ratings definitions of the principal ratings
      organizations is in Appendix A to the Statement of Additional Information.

      The OSM - Mercury Advisors Focus Growth Fund may invest in investment grade,
      non-convertible debt securities and U.S. Government securities of any maturity,
      although typically not to a significant degree.

      Debt securities, such as bonds, involve credit risk. This is the risk that the
      borrower will not make timely payments of principal and interest. The degree of
      credit risk depends on the issuer's financial condition and on the terms of the
      bonds. These securities are also subject to interest rate risk. This is the risk
      that the value of the security may fall when interest rates rise. In general, the
      market price of debt securities with longer maturities will go up or down more in
      response to changes in interest rates than the market price of shorter term debt
      securities.

CAN EACH FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Trust's Board of Trustees
can change non-fundamental investment policies for each Fund without shareholder
approval, although significant changes will be described in supplements to this
Prospectus. The OSM - Mercury Advisors S&P 500 Index Fund's non-fundamental policy of
investing at least 80% of its net assets (plus borrowings for investment purposes) in
securities or other financial instruments in, or correlated with, the S&P 500 will not be
changed by the Fund's Trustees without first providing shareholders 60 days written
notice. Non-fundamental policies of the OSM - Mercury Advisors S&P 500 Index Fund and the
OSM - Mercury Advisors Focus Growth Fund can be changed by the Board of Trustees of the
Trust or the Board of Trustees of the Master Funds without shareholder approval.
Fundamental policies are those that cannot be changed without the approval of a majority
of each Fund's outstanding voting shares, as defined in the Investment Company Act of
1940, as amended. With the exception of the OSM - Mercury Advisors S&P 500 Index Fund and
the OSM - Gartmore Millennium Growth Fund II, each Fund's objective is a fundamental
policy. The OSM - Mercury Advisors S&P 500 Index Fund's objective is a non-fundamental
policy which may be changed at any time by the Board of Trustees of the Trust or the
Board of Trustees of the Master Fund without shareholder approval. The OSM - Gartmore
Millennium Growth Fund's objective is a non-fundamental policy which may be changed at
any time by the Trust's Board of Trustees without shareholder approval. Other investment
restrictions that are fundamental policies are listed in the Statement of Additional
Information. An investment policy or technique is not fundamental unless this Prospectus
or the Statement of Additional Information says that it is.

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

Forward Rolls. OSM - QM Active Balanced Fund may enter into "forward rolls" (also
      referred to as "mortgage dollar rolls") transactions with respect to
      mortgage-related securities. In this type of transaction, the Fund sells a
      mortgage-related security to a buyer and simultaneously agrees to repurchase a
      similar security at a later date at a set price.

      During the period between the sale and the purchase, the Fund will not be entitled
      to receive interest and principal payments on the securities that have been sold.
      It is possible that the market value of the securities the Fund sells may decline
      below the price at which the Fund is obligated to repurchase securities, or that
      the counterparty might default in its obligation.

Equity Securities. While the OSM - Mercury Advisors Focus Growth Fund, OSM - Jennison
      Growth Fund, OSM - Salomon Brothers All Cap Fund and the OSM - Gartmore Millennium
      Growth Fund II emphasize investments in common stocks, those Funds can also buy
      preferred stocks, warrants and securities convertible into common stock. The
      Adviser or Subadviser, as the case may be, considers some convertible securities to
      be "equity equivalents" because of the conversion feature and in that case their
      rating may have less impact on the investment decision than in the case of other
      debt securities. The OSM - QM Active Balanced Fund may also invest in
      non-convertible preferred stocks and convertible securities, warrants and rights.
      The OSM - Jennison Growth Fund can also invest in warrants and rights that can be
      exercised to obtain stock.

Convertible Securities. Convertible securities are generally debt securities or preferred
      stocks that may be converted into common stock. Convertible securities typically
      pay current income as either interest (debt security convertible) or dividends
      (preferred stocks). A convertible security's value usually reflects both the stream
      of current income payments and the value of the underlying common stock. The market
      value of a convertible security performs like a regular debt security, that is, if
      market interest rates rise, the value of a convertible security usually falls.
      Since it is convertible into common stock, the convertible security also has the
      same types of market and issuer risk as the underlying common stock.

Warrants. A warrant gives the Fund the right to buy a quantity of stock. The warrant
      specifies the amount of underlying stock, the purchase (or "exercise") price, and
      the date the warrant expires. The Fund has no obligation to exercise the warrant
      and buy the stock.

      A warrant has value only if the Fund exercises it before it expires. If the price
      of the underlying stock does not rise above the exercise price before the warrant
      expires, the warrant generally expires without any value and the Fund loses any
      amount it paid for the warrant. Thus, investments in warrants may involve
      substantially more risk than investments in common stock. Warrants may trade in the
      same markets as their underlying stock, however, the price of the warrant does not
      necessarily move with the price of the underlying stock.

Foreign Investing. The OSM - Jennison Growth Fund and the OSM - Salomon Brothers All Cap
      Fund each can invest up to 20% of its total assets in foreign securities including
      foreign equity securities of companies located in any country, including developed
      countries and emerging markets. The OSM - QM Active Balanced Fund may invest up to
      15% of its total assets in foreign equity securities and up to 20% of its total
      assets in debt securities of foreign issuers. The OSM - Gartmore Millennium Growth
      Fund II may invest without limit in foreign securities although it does not intend
      to invest more than 25% of its net assets in foreign securities. The OSM - Mercury
      Advisors Focus Growth Fund may invest without limit in the securities of foreign
      companies in the form of ADRs. In addition, the OSM - Mercury Advisors Focus Growth
      Fund may invest up to 10% of its total assets in other forms of securities of
      foreign companies, including European Depository Receipts ("EDRs") or other
      securities convertible into securities of foreign companies. For purposes of these
      limits, the respective Advisers or Subadvisers do not consider ADR's and other
      similar receipts or shares to be foreign securities.

      While foreign securities may offer special investment opportunities, they also have
      special risks that can reduce a Fund's share prices and income. The change in value
      of 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. Currency rate
      changes can also affect the distributions a Fund makes from the income it receives
      from foreign securities if foreign currency values change against the U.S. dollar.
      Foreign investing can result in higher transaction and operating costs for the Fund
      investing in them. Foreign issuers are not subject to the same accounting and
      disclosure requirements that U.S. companies are subject to. The value of foreign
      investments may be affected by exchange control regulations, expropriation or
      nationalization of a company's assets, foreign taxes, delays in settlement of
      transactions, changes in governmental, economic or monetary policy in the U.S. or
      abroad, or other political and economic factors. The risks of investing in foreign
      securities are generally greater for investments in emerging markets.

Depository Receipts. The OSM - Mercury Advisors Focus Growth Fund, OSM - QM Active
      Balanced Fund and OSM - Jennison Growth Fund may invest in securities of foreign
      issuers in the form of Depository Receipts. Depository Receipts involve the same
      risks as investing directly in foreign securities. Those risks are discussed above
      under "Foreign Investing."  ADRs are receipts typically issued by an American bank
      or trust company that show evidence of underlying securities issued by a foreign
      corporation. EDRs evidence a similar ownership arrangement. The OSM - Mercury
      Advisors Focus Growth Fund may also invest in unsponsored Depository Receipts. The
      issuers of such unsponsored Depository Receipts are not obligated to disclose
      material information in the United States. Therefore, there may be less information
      available regarding such issuers and there may not be a correlation between such
      information and the market value of the Depository Receipts.

Illiquid and Restricted Securities. Investments may be illiquid because of the absence of
      an active trading market. If a Fund buys illiquid securities it may be unable to
      quickly resell them or may be able to sell them only at a price below current
      value. A restricted security is one that has a contractual restriction on its
      resale or which cannot be sold publicly until it is registered under the Securities
      Act of 1933. Each Fund will not invest more than 15% of its net assets in illiquid
      or restricted securities. That percentage limitation is not a fundamental policy.
      Certain restricted securities that are eligible for resale to qualified
      institutional purchasers may not be subject to that limit. The respective Adviser
      or Subadviser monitors holdings of illiquid securities on an ongoing basis to
      determine whether to sell any holdings to maintain adequate liquidity.

Rule 144A Securities. Rule 144A securities are restricted securities that can be resold
      to qualified institutional buyers but not to the general public. Rule 144A
      securities may have an active trading market, but carry the risk that the active
      trading market may not continue.



Securities Lending. The Fund may lend securities with a value of up to 33-1/3% of its
      total assets to financial institutions that provide cash or securities issued or
      guaranteed by the U.S. government as collateral. Securities lending involves the
      risk that the borrower may fail to return the securities in a timely manner or at
      all. As a result, the Fund may lose money and there may be a delay in recovering
      the loaned securities. The Fund could also lose money if it does not recover the
      securities and/or the value of the collateral falls, including the value of
      investments made with cash collateral. These events could trigger adverse tax
      consequences.

Repurchase Agreements; Purchase and Sale Contracts. Each Fund may enter into certain
      types of repurchase agreements and each Fund other than OSM - Mercury Advisors S&P
      500 Index Fund may enter into purchase and sale contracts. Under a repurchase
      agreement, the seller agrees to repurchase a security (typically a security issued
      or guaranteed by the U.S. Government) at a mutually agreed upon time and price.
      This insulates the Fund from changes in the market value of the security during the
      period, except for currency fluctuations. A purchase and sale contract is similar
      to a repurchase agreement, but purchase and sale contracts provide that the
      purchaser receives any interest on the security paid during the period. If the
      seller fails to repurchase the security in either situation and the market value
      declines, the Fund may lose money.

Short Sales. The OSM - Gartmore Millennium Growth Fund II and the OSM - Mercury Advisors
      Focus Growth Fund may invest up to 20% and 5%, respectively, of their total assets
      in short positions. The OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
      Jennison Growth Fund may also invest in short positions.  The Fund may make short
      sales of securities, either as a hedge against potential declines in value of a
      portfolio security or to realize appreciation when a security that the Fund does
      not own declines in value.  When the Fund makes a short sale, it borrows the
      security sold short and delivers it to the broker-dealer through which it made the
      short sale as collateral for its obligation to deliver the security upon conclusion
      of the sale.  The Fund may have to pay a fee to borrow particular securities and is
      often obligated to turn over any payments received on such borrowed securities to
      the lender of the securities.

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

      The Fund will not make a short sale if, after giving effect to such sale, the
      market value of all securities sold short exceeds 5% of the value of its total
      assets.

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

Derivative Investments.  Each Fund can invest in a number of different kinds of
      "derivative" investments. Options, futures contracts, structured notes such as
      indexed securities or inverse securities, CMOs and hedging instruments are
      "derivative instruments" the Funds can use. In addition to using derivatives for
      hedging, including anticipatory hedging for the OSM - Mercury Advisors Focus Growth
      Fund and OSM - Mercury Advisors S&P 500 Index Fund, a Fund might use other
      derivative investments because they offer the potential for increased income and
      principal value. The Funds are not required to use derivative investments in
      seeking their 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 the derivative is based, and the derivative itself, may not
      perform the way the Adviser or Subadviser expected it to perform. As a result of
      these risks a Fund could realize less principal or income from the investment than
      expected or its hedge might be unsuccessful. If that happens, the Fund's share
      prices could fall. Certain derivative investments held by a Fund may be illiquid.

      Certain types of investments or trading strategies (such as borrowing money to
      increase the amount of investment) may be subject to leverage risk. This means a
      relatively small market movement may result in large changes in the value of an
      investment. Certain investments or trading strategies that involve leverage can
      result in losses that greatly exceed the amount originally invested. Derivatives
      may be difficult or impossible to sell at the time that the seller would like or at
      the price that the seller believes the security is currently worth.

Hedging. Each Fund can buy and sell certain kinds of futures contracts, put and call
      options. In addition, the OSM - Mercury Advisors Focus Growth Fund, the OSM -
      Jennison Growth Fund, the OSM - QM Active Balanced Fund, the OSM - Salomon Brothers
      All Cap Fund and the OSM - Gartmore Millennium Growth Fund II may enter into
      forward contracts. The OSM - Mercury Advisors Focus Growth Fund and the OSM -
      Salomon Brothers All Cap Fund may invest in swaps. These are all referred to as
      "hedging instruments."  The Funds do not use hedging instruments for speculative
      purposes. Each Fund has limits on the extent of its use of hedging and the types of
      hedging instruments that it can use.

      Some of these strategies could be used to hedge a Fund's portfolio against price
      fluctuations. Other hedging strategies, such as buying futures and call options,
      could increase a Fund's exposure to the securities market. Forward contracts can be
      used to try to manage foreign currency risks on the OSM - Jennison Growth Fund's
      and OSM - Mercury Advisors Focus Growth Fund's foreign investments. Foreign
      currency options can be used to try to protect against declines in the dollar value
      of foreign securities the OSM - Jennison Growth Fund, the OSM - Gartmore Millennium
      Growth Fund II or the OSM - Mercury Advisors Focus Growth Fund owns, or to protect
      against an increase in the dollar cost of buying foreign securities.

      There are also special risks in particular hedging strategies. Options trading
      involves the payment of premiums and has special tax effects on a Fund. If the
      Adviser or Sub-Adviser used a hedging instrument at the wrong time or judged market
      conditions incorrectly, the hedge might fail and the strategy could reduce the
      respective Fund's return. Each Fund could also experience losses if the prices of
      its futures and options positions were not correlated with its other investments or
      if it could not close out a position because of an illiquid market.

Temporary Defensive and Interim Investments. In times of unstable or adverse market or
      economic conditions, the OSM - Mercury Advisors Focus Growth Fund, OSM - QM Active
      Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund, and
      the OSM - Gartmore Millennium Growth Fund II can invest up to 100% of their assets
      in temporary defensive investments that are inconsistent with the Funds' principal
      investment strategies and the OSM - Mercury Advisors Focus Growth Fund can invest
      up to 35% of its assets in temporary defensive investments that are inconsistent
      with the Fund's principal investment strategies. Generally they would be cash
      equivalents (such as commercial paper), money market instruments, short-term debt
      securities, U.S. government securities, repurchase agreements, or purchase and
      sales contracts. They could include other investment grade debt securities. The
      Funds can also invest in such short-term securities for cash management purposes.
      To the extent a Fund invests in these securities, either defensively or for cash
      management purposes, the Fund's positions may be inconsistent with its principal
      investment strategies and the Fund might not achieve its investment objective.

How the Funds Are Managed

      OppenheimerFunds, Inc. supervises the investment program and handles the day-to-day
administrative business of the OSM - QM Active Balanced Fund, OSM - Jennison Growth Fund,
OSM - Salomon Brothers All Cap Fund and OSM - Gartmore Millennium Growth Fund II.
OppenheimerFunds, Inc. carries out its duties, subject to the policies established by the
Trust's Board of Trustees, under an investment advisory agreement that states
OppenheimerFunds, Inc.'s responsibilities. The agreement sets the fees each Fund pays to
OppenheimerFunds, Inc. and describes the expenses that each Fund is responsible to pay to
conduct its business.

      OppenheimerFunds, Inc. also selects, contracts with and compensates sub-advisers to
manage the investment and reinvestment of the assets of those Funds of the Trust.
OppenheimerFunds, Inc. does not manage any of the Funds' portfolio assets.
OppenheimerFunds, Inc. also (i) monitors the compliance of the Adviser or Subadvisers
with the investment objectives and related policies of each Fund, (ii) reviews the
performance of the Sub-advisers and (iii) reports periodically on such performance to the
Trustees of the Trust.

      The Trust and OppenheimerFunds, Inc. have received an order from the Securities and
Exchange Commission to permit OppenheimerFunds, Inc. to appoint a Subadviser or change
the terms of a Subadvisory Agreement for a subadvised Fund without first obtaining
shareholder approval. That means the Trust will be able to change subadvisers or the fees
paid to subadvisers from time to time without the expense and delays associated with
obtaining shareholder approval of the change.

      OppenheimerFunds, Inc. has been an investment adviser since January 1960.
OppenheimerFunds, Inc. and its subsidiaries and controlled affiliates managed assets of
more than $120 billion in assets as of December 31, 2002, including other Oppenheimer
funds with more than 7 million shareholder accounts. OppenheimerFunds, Inc. is located at
498 Seventh Avenue, 10th Floor, New York, New York 10018.

      OppenheimerFunds, Inc. has entered into an Administration Agreement with the Trust
on behalf of the OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors
Focus Growth Fund whereby OppenheimerFunds, Inc. will maintain certain books and records
on behalf of those Funds and prepare certain reports. OppenheimerFunds, Inc. shall also
be responsible for filing with the Securities and Exchange Commission and any state
securities regulators certain disclosure documents. Under the Agreement, both Funds pay
an Administration Fee to OppenheimerFunds, Inc. of 0.50% of the average annual net assets
of each such Fund.

      Fund Asset Management, L.P., doing business as Mercury Advisors (the "Adviser"),
has entered into a sub-administration agreement with OppenheimerFunds, Inc. Under that
agreement, the Adviser maintains certain books and records and prepares certain reports
on behalf of the OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors
Focus Growth Fund.

      OppenheimerFunds, Inc. has also entered into an investment advisory agreement
similar to those described above, with the Trust on behalf of the OSM - Mercury Advisors
S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund. If the Board
determines that the assets of the OSM - Mercury Advisors S&P 500 Index Fund or the OSM -
Mercury Advisors Focus Growth Fund should not be invested exclusively in the applicable
Master Fund, or if either Fund's ability to invest in the applicable Master Fund is
terminated, then OppenheimerFunds, Inc. will assume the role of adviser to those Funds
under that investment advisory agreement. Under that agreement, the OSM - Mercury
Advisors S&P 500 Index Fund would pay to OppenheimerFunds, Inc. an advisory fee of 0.55%
on an annual basis and the OSM - Mercury Advisors Focus Growth Fund would pay an advisory
fee of 1.10% on an annual basis. If OppenheimerFunds, Inc. assumes the role of adviser
for OSM - Mercury Advisors Focus Growth Fund or OSM - Mercury Advisors S&P 500 Index
Fund, the administration and sub-administration arrangements with respect to the
applicable Fund will be terminated since administrative services would be provided
through the investment advisory agreements.

      The Adviser supervises the investment program and handles the day-to-day business
of the Master S&P 500 Index Series of the Quantitative Master Series Trust and the Master
Focus Twenty Trust, the Master Funds in which the OSM - Mercury Advisors S&P 500 Index
Fund and the OSM - Mercury Advisors Focus Growth Fund, respectively, invest. The Adviser
carries out its duties, subject to the policies established by the Board of Trustees of
the applicable Master Fund, under an investment advisory agreement with the Master Fund
that states the Adviser's responsibilities. Such agreement sets the fees the Master Fund
pays to the Adviser, and describes the expenses that the Master Fund is responsible to
pay to conduct its business. The Adviser has entered into a contractual arrangement that
provides that the management fee for the Master S&P 500 Index Series, when combined with
administrative fees of certain funds that invest in the applicable Master Fund (excluding
the OSM - Mercury Advisors S&P 500 Index Fund), will not exceed the annual rate of 0.005%
of the average daily net assets of the Master Fund. Absent such contractual arrangement,
the management fee payable by the Master S&P 500 Index Series would be at the annual rate
of 0.05%. The Master Focus Twenty Trust pays the Adviser a management fee at the annual
rate of 0.60% of its average daily net assets. The fees and expenses which each Master
Fund pays, including the management fee it pays to the Adviser, are passed directly
through to the relevant Fund in proportion to the number of shares of the Master Fund
owned by that Fund.

      The Adviser was organized as an investment adviser in 1977 and offers investment
advisory services to more than 50 registered investment companies. The Adviser and its
advisory affiliates had approximately $439 billion in investment company and other
portfolio assets under management as of February 2003.

      The OSM - Mercury Advisors S&P 500 Index Fund is managed by a team of investment
professionals who are employed by Mercury Advisors.

      The portfolio manager for the OSM - Mercury Advisors Focus Growth Fund is Michael
S. Hahn. Mr. Hahn has been Portfolio Manager of the Master Fund and of OSM - Mercury
Advisors Focus Growth Fund since November 6, 2001 and has been a portfolio manager of
Merrill Lynch Investment Managers since 2000 and was Associate Portfolio Manager of
Merrill Lynch Investment Managers from 1999 to 2000. Mr. Hahn was a portfolio manager and
analyst for the PBHG family of mutual funds from 1996 to 1999.

Advisory Fees. Under each Fund's investment advisory agreement (other than OSM - Mercury
      Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth Fund), each
      Fund pays OppenheimerFunds, Inc. (the "Manager") an Advisory fee at an annual rate
      that declines on additional assets as the Fund grows. The advisory fees are as
      follows:

Fund                                Advisory Fee
----                                ------------

OSM - QM Active Balanced Fund       0.95% of the first $300 million of average
                                    annual net assets of the Fund and 0.90% of
                                    average annual net assets in excess of $300 million.

OSM - Jennison Growth Fund          0.95% of the first $300 million of average
                                    annual net assets of the Fund and 0.90% of
                                    average annual net assets in excess of $300 million.

OSM - Salomon Brothers All Cap Fund 1.10% of the first $100 million of average
                                    annual net assets of the Fund and 1.00% of
                                    average annual net assets in excess of $100 million.

OSM - Gartmore Millennium Growth    1.20% of the first $400 million of average
Fund II                             annual net assets of the Fund, 1.10% of the
                                    next $400 million, and 1.00% of average annual
                                    net assets in excess of $800 million.

The Subadvisers. The Manager has retained Jennison Associates LLC ("Jennison") as the
      Subadviser to provide the day-to-day portfolio management of the OSM - Jennison
      Growth Fund. Jennison is located at 466 Lexington Avenue, New York, NY 10017.
      Jennison is a direct, wholly-owned subsidiary of Prudential Investment Management,
      which is a direct, wholly-owned subsidiary of Prudential Asset Management Holding
      Company, which is a direct, wholly-owned subsidiary of Prudential Financial, Inc.
      Jennison has served as an investment adviser since 1969 and has advised investment
      companies since 1990. As of December 31, 2002, Jennison had approximately $48
      billion in assets under management. The Manager, not the Fund, pays Jennison an
      annual fee based on the Fund's average annual net assets.

      The OSM - Jennison Growth Fund's portfolio managers, Spiros "Sig" Segalas, Kathleen
      McCarragher and Michael Del Balso, are employed by Jennison and are the persons
      primarily responsible for the selection of the Fund's portfolio securities.

      Mr. Segalas has been in the investment business for over forty-two years and has
      managed equity portfolios for investment companies since 1990. Mr. Segalas is a
      founding member, Director, President and Chief Investment Officer of Jennison. Mr.
      Segalas received his B.A. from Princeton University.

      Ms. McCarragher is a Director and Executive Vice President of Jennison. Prior to
      joining Jennison in 1998 she was a Managing Director and Director of Large Cap
      Growth Equities at Weiss, Peck & Greer L.L.C. Prior to 1992, Ms. McCarragher served
      as an analyst, portfolio manager and member of the Investment Committee for State
      Street Research & Management Company. She received her B.B.A. from the University
      of Wisconsin and her M.B.A. from Harvard University.

      Mr. Del Balso is a Director and Executive Vice President of Jennison, where he has
      been part of the investment team since 1972. He received his B.A. from Yale
      University and his M.B.A. from Columbia University.

      The Manager has retained Prudential Investment Management as the Subadviser to
      provide the day-to-day portfolio management of the OSM - QM Active Balanced Fund.
      Prudential Investment Management is located at Prudential Plaza, 751 Broad Street,
      Newark, NJ 07102. Prudential Investment Management has served as an investment
      adviser to investment companies since 1984, and as of December 31, 2002, had
      approximately $288 billion in assets under management. The Manager, not the Fund,
      pays Prudential Investment Management an annual fee based on the Fund's average
      annual net assets.

      The portfolio managers for the QM Active Balanced Fund are Michael Lenarcic and
      John Van Belle. They became the Fund's portfolio managers on February 8, 2002. They
      are employed by Prudential Investment Management and are the persons primarily
      responsible for the selection of the Fund's securities. Mr. Lenarcic and Mr. Van
      Belle are Managing Directors of Prudential Investments Quantitative Management, a
      unit of Prudential Investment Management. Mr. Lenarcic is a member of Prudential
      Investment Management's Balanced Portfolio Management Team. Mr. Van Belle is a
      member of Prudential Investments International Asset Allocation Team.

      The Manager has retained Salomon Brothers Asset Management Inc. ("Salomon
      Brothers") as the Subadviser to provide the day-to-day portfolio management of the
      OSM - Salomon Brothers All Cap Fund. Salomon Brothers is located at 399 Park
      Avenue, New York , New York 10022. It is a wholly-owned subsidiary of Salomon Smith
      Barney Holdings Inc., which in turn is a wholly-owned subsidiary of Citigroup, Inc.
      Salomon Brothers has served as an investment adviser to investment companies since
      1987, and as of December 31, 2002, Salomon Brothers and its affiliates managed
      approximately $34.2 billion of assets. The Manager, not the Fund, pays Salomon
      Brothers an annual fee based on the Fund's average annual net assets.

      The Fund is team managed by Salomon Brothers. The team has an average of 26 years
      of investment experience..

      The Manager has retained Gartmore Mutual Fund Capital Trust ("GMFCT") as the
      Subadviser to provide the day-to-day portfolio management of the OSM - Gartmore
      Millennium Growth Fund II. GMFCT is located at 1200 River Road, Conshohocken, PA
      19428.

      GMFCT has served as an investment adviser to investment companies since 1999, and
      as of December 31, 2002, GMFCT and its affiliates and predecessors had
      approximately $30.3 billion in assets under management. The Manager, not the Fund,
      pays GMFCT an annual fee based on the Fund's average annual net assets.

      The Fund's portfolio managers, Aaron Harris (since inception) and Nick Ford (since
      October 1, 2001), are employed by GMFCT and are the persons primarily responsible
      for the selection of the OSM - Gartmore Millennium Growth Fund's portfolio
      securities. Mr. Harris joined GMFCT in April 2000. Prior to joining GMFCT, Mr.
      Harris was a portfolio manager, managing portions of several portfolios for
      Nicholas Applegate Capital Management. Mr. Harris manages funds similar to the OSM
      - Gartmore Millennium Growth Fund II and other global technology funds. Mr. Ford
      joined GMFCT in 1998, serving as an investment manager on the U.S. equity team.
      Prior to joining GMFCT, Mr. Ford served as the director of U.S. equities at
      Clerical Medical Investment Group in London. From 1995 to 1996, Mr. Ford was a U.S.
      equities fund manager for Sun Alliance Investment Management.

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

How to Buy Shares

HOW ARE SHARES PURCHASED?  Shares of the OSM - Mercury Advisors S&P 500 Index Fund and the
OSM - QM Active  Balanced  Fund are offered for sale only to retirement  plans.  Shares of
the other Funds may be purchased by retirement  plans and  non-retirement  plan  investors
alike.  A retirement  plan can buy shares several ways as described  below.  References in
this Prospectus to "you" or "your" apply to the retirement plan sponsor,  or account owner
in  the  case  of an IRA or  403(b)  account.  The  Funds'  Distributor,  OppenheimerFunds
Distributor,   Inc.,  may  appoint  certain  servicing  agents  to  accept  purchase  (and
redemption)  orders.  The  Distributor,  in its sole  discretion,  may reject any purchase
order for the Funds' shares.

      Participants in a qualified retirement plan (e.g., 401(k), profit-sharing plan or
money purchase pension plan) should note that shares of the Funds are purchased on their
behalf by the plan's administrator in accordance with the respective plan's provisions.
Plan participants should contact their Plan administrator to find out how to instruct the
Plan to buy shares of the Funds for their account. It is the responsibility of the Plan
administrator or other Plan service provider to forward purchase instructions to the
Fund's Distributor. In the case of qualified plans, the following explanation of how to
purchase Fund shares is intended for Plan administrators and Plan service providers.

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

WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund shares with a
minimum initial investment of $1,000 and make additional investments at any time with as
little as $50. There are reduced minimums available under the following special
investment plans:
o     If you establish one of the many types of retirement plan accounts that
      OppenheimerFunds offers, more fully described below under "Special Investor
      Services," you can start your account with as little as $500.
o     By using an Asset Builder Plan or Automatic Exchange Plan (details are in the
      Statement of Additional Information), or government allotment plan, you can make
      subsequent investments (after making the initial investment of $500) for as little
      as $50. For any type of account established under one of these plans prior to
      November 1, 2002, the minimum additional investment will remain $25.
o     The minimum investment requirement does not apply to reinvesting dividends from a
      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. Each Fund calculates the net asset value of each class of shares as of
      the close of The New York Stock Exchange ("the Exchange"), on each day the Exchange
      is open for trading (referred to in this Prospectus as a "regular business day").
      The Exchange normally closes at 4:00 P.M., Eastern time, but may close earlier on
      some days. All references to time in this Prospectus mean "Eastern time."

      The net asset value per share is determined by dividing the value of a 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 each 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 a 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 a Fund is
      traded, and before the time the Fund's securities are priced that day, an event
      occurs that the Manager or the Adviser deems likely to cause a material change in
      the value of such security, the Fund's Board of Trustees has authorized the Manager
      or the Adviser, as applicable, 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 the
      Exchange closes that day. If your order is received on a day when the Exchange is
      closed or after it has closed, the order will receive the next offering price that
      is determined after your order is received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must receive the
      order by the close of the Exchange and transmit it to the Distributor so that it is
      received before the Distributor's close of business on a regular business day
      (normally 5:00 P.M.) to receive that day's offering price, unless your dealer has
      made alternative arrangements with the Distributor. Otherwise, the order will
      receive the next offering price that is determined.

------------------------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? Each 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.
------------------------------------------------------------------------------------------
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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. Each 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 each 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.

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

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

      Additionally, the dividends payable to Class B, Class C and Class N shareholders
      will be reduced by the additional expenses borne by those classes that are not
      borne by Class A or Class Y shares, such as the Class B, Class C and Class N
      asset-based sales charge described below and in the Statement of Additional
      Information. 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 each Fund owned by the dealer or financial institution for its own
      account or for its customers.

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

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

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







 ------------------------------------------------------------------------------
 Amount of Purchase       Front-End Sales  Front-End Sales   Concession As
                                           Charge As a
                          Charge As a      Percentage of
                          Percentage of    Net               Percentage of
                          Offering Price   Amount Invested   Offering Price
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Less than $25,000             5.75%             6.10%             4.75%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $25,000 or more but           5.50%             5.82%             4.75%
 less than $50,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $50,000 or more but           4.75%             4.99%             4.00%
 less than $100,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $100,000 or more but          3.75%             3.90%             3.00%
 less than $250,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $250,000 or more but          2.50%             2.56%             2.00%
 less than $500,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $500,000 or more but          2.00%             2.04%             1.60%
 less than $1 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       Contingent Deferred Sales Charge on
Which Purchase Order was Accepted       Redemptions in That Year
                                        (As % of Amount Subject to Charge)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
0 - 1                                   5.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
1 - 2                                   4.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
2 - 3                                   3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3 - 4                                   3.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4 - 5                                   2.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5 - 6                                   1.0%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
More than 6                             None
-------------------------------------------------------------------------------
In the table, a "year" is a 12-month  period.  In applying the  contingent  deferred sales
charge,  all purchases are considered to have been made on the first regular  business day
of the month in which the purchase was made.

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

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

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

      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. Each 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.
      During the first year the shares are sold, the Distributor retains the service fee.
      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. Each 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, each 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 each 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 a 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 applicable 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 each 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. Each 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 a
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 each 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. Each Fund lets you sell your shares by writing a letter,
by wire, or by telephone. You can also set up Automatic Withdrawal Plans to redeem shares
on a regular basis. If you have questions about any of these procedures, and especially
if you are redeeming shares in a special situation, such as due to the death of the owner
or from a retirement plan account, please call the Transfer Agent first, at
1.800.225.5677, for assistance.

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

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

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

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

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

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

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of record may
also sell your shares by telephone. To receive the redemption price calculated on a
particular regular business day, your call must be received by the Transfer Agent by the
close of the Exchange that day, which is normally 4:00 P.M., but may be earlier on some
days. You may not redeem shares held in an OppenheimerFunds retirement plan account or
under a share certificate by telephone.
   o  To redeem shares through a service representative or automatically on PhoneLink,
      call 1.800.225.5677.
      Whichever method you use, you may have a check sent to the address on the account
statement, or, if you have linked your Fund account to your bank account on AccountLink,
you may have the proceeds sent to that bank account.

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

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

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

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

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

      A  contingent  deferred  sales  charge  will be based on the lesser of the net asset
value of the redeemed  shares at the time of redemption or the original net asset value. A
contingent deferred sales charge is not imposed on:
o     the amount of your account value  represented by an increase in net asset value over
      the initial purchase price,
o     shares purchased by the reinvestment of dividends or capital gains distributions, or
o     shares  redeemed  in  the  special  circumstances  described  in  Appendix  C to the
      Statement of Additional Information.
      To determine whether a contingent deferred sales charge applies to a redemption,
the Fund redeems shares in the following order:
   1. shares acquired by reinvestment of dividends and capital gains distributions,
   2. shares held for the holding period that applies to the class, and
   3. shares held the longest during the holding period.

      Contingent deferred sales charges are not charged when you exchange shares of a
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 a 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 the
applicable Fund.

How to Exchange Shares

Shares of each 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 each 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 each 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 a 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:
o     Shares are 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 Exchange that day, which is normally 4:00 P.M. but may
      be earlier on some days.
o     The interests of a 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, a 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 a 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 a Fund's performance and its shareholders. When the Manager
      believes frequent trading would have a disruptive effect on a 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  Each Fund may amend, suspend or terminate the exchange privilege at any time. Each
      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 each Fund's policies and procedures for buying, selling and
exchanging shares is contained in the Statement of Additional Information.
A $12 annual fee is assessed on any account valued at less than $500. The fee is
      automatically deducted from accounts annually on or about the second to last
      business day of September. See the Statement of Additional Information, or visit
      the OppenheimerFunds website, to learn how you can avoid this fee and for
      circumstances when this fee will not be assessed.
The offering of shares may be suspended during any period in which the determination of
      net asset value is suspended, and the offering may be suspended by the Board of
      Trustees at any time the Board believes it is in a Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may be modified,
      suspended or terminated by a 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 a 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 each Fund's portfolio fluctuates. The redemption price, which is the
      net asset value per share, will normally differ for each class of shares. The
      redemption value of your shares may be more or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by check, or
      through AccountLink or by Federal Funds wire (as elected by the shareholder) within
      seven days after the Transfer Agent receives redemption instructions in proper
      form. However, under unusual circumstances determined by the Securities and
      Exchange Commission, payment may be delayed or suspended. For accounts registered
      in the name of a broker-dealer, payment will normally be forwarded within three
      business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as described under
      "How to Sell Shares" for recently purchased shares, but only until the purchase
      payment has cleared. That delay may be as much as 10 days from the date the shares
      were purchased. That delay may be avoided if you purchase shares by Federal Funds
      wire or certified check, or arrange with your bank to provide telephone or written
      assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by each Fund if the account value
      has fallen below $500 for reasons other than the fact that the market value of
      shares has dropped. In some cases, involuntary redemptions may be made to repay the
      Distributor for losses from the cancellation of share purchase orders.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack of liquidity
      in the Fund's portfolio to meet redemptions). This means that the redemption
      proceeds will be paid with liquid securities from a 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
      a 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, a Fund will mail only one
      copy of each prospectus, annual and semi-annual report and annual notice of a
      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 Funds 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. Each Fund intends to declare dividends separately for each class of shares
from net investment income annually and to pay dividends to shareholders in December on a
date selected by the Board of Trustees. Dividends and distributions paid on Class A, and
Class Y shares will generally be higher than dividends for Class B shares, Class C shares
and Class N shares, which normally have higher expenses than Class A shares and Class Y
shares. Each Fund has no fixed dividend rate and cannot guarantee that it will pay any
dividends or distributions.

CAPITAL GAINS. Each 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. Each Fund may make supplemental distributions of
dividends and capital gains following the end of its fiscal year. There can be no
assurance that a 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. For retirement plan participants using each Fund as an investment option under
their plan, dividends and capital gain distributions from each Fund generally will not be
subject to current federal personal income tax, but if they are reinvested in the Fund
under the plan, those dividends and distributions will accumulate on a tax-deferred
basis. In general, retirement plans and, in particular, distributions from retirement
plans, are governed by complex federal and state tax rules. Plan participants should
contact their Plan administrator, refer to their plan's Summary Plan Description, and/or
speak to a professional tax adviser regarding the tax consequences of participating in
the Plan and making withdrawals from their Plan account.

      If your shares are not held in a tax-deferred retirement account, you should be
aware of the following tax implications of investing in each 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.

      If more than 50% of a Fund's assets are invested in foreign securities at the end
of any fiscal year, the Fund may elect under the Internal Revenue Code to permit
shareholders to take a credit or deduction on their federal income tax returns for
foreign taxes paid by that Fund.

      Every year each 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 a 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 a 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 each 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 a 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 a Fund on your particular tax situation.

MASTER/FEEDER STRUCTURE

Unlike many other mutual funds which directly buy and manage their own portfolio
securities, the OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors
Focus Growth Fund seek to achieve their investment objectives by investing all of their
assets in another registered investment company with the same goals as the Fund. All
investments are made by the respective Master Fund. Investors in each Fund will acquire
an indirect interest in the respective Master Fund.

      Other "feeder" funds may also invest in the Master Fund and all the feeder funds
bear the Master Fund's expenses in proportion to their assets. This structure may enable
the feeder funds to reduce costs through economies of scale. A larger investment
portfolio may also reduce certain transaction costs to the extent that contributions to
and redemptions from the Master Fund by feeder funds may offset each other and produce a
lower net cash flow. Each feeder fund can set its own transaction minimums, fund specific
expenses, and other conditions.

      Each Fund may withdraw from its respective Master Fund at any time for any reason
and may invest all of its assets in another pooled investment vehicle or retain an
investment adviser to manage the Fund's assets directly. The OSM - Mercury Advisors S&P
500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund may change the Master
Fund in which it will invest if the Trustees believe such change would be in the best
interests of Fund shareholders.

      Smaller feeder funds may be harmed by the actions of larger feeder funds. For
example, a larger feeder fund could have more voting power than a Fund over the
operations of the Master Fund. Whenever the Master Fund holds a vote of its feeder funds,
the feeder funds, including the OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
Mercury Advisors Focus Growth Fund, will pass the vote through to its own shareholders.

Financial Highlights

The Financial Highlights Table is presented to help you understand each Fund's financial
performance since inception. 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 a Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Deloitte & Touche LLP, the Funds'
independent auditors, whose report, along with each Fund's financial statements, is
included in the Statement of Additional Information, which is available on request.
FINANCIAL HIGHLIGHTS 

                                                         Class A           Class B           Class C
                                                            Year              Year              Year
                                                           Ended             Ended             Ended
                                                        Nov. 30,          Nov. 30,          Nov. 30,
                                                  2002    2001 1    2002    2001 1    2002    2001 1
-----------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period           $  9.25   $10.00   $ 9.18   $10.00  $  9.18   $10.00
-----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                     (.06)      .08     (.07)     .04     (.07)     .03
Net realized and unrealized loss                (1.05)     (.83)   (1.09)    (.86)   (1.09)    (.85)
                                               ------------------------------------------------------
Total from investment operations                (1.11)     (.75)   (1.16)    (.82)   (1.16)    (.82)
-----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income             (.09)       --     (.06)      --     (.07)      --
-----------------------------------------------------------------------------------------------------
Net asset value, end of period                  $8.05     $9.25    $7.96    $9.18    $7.95    $9.18
                                               ======================================================

-----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2             (12.17)%   (7.50)% (12.75)%  (8.20)% (12.78)%  (8.20)%

-----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)       $6,775    $8,717   $4,325   $2,071   $6,872   $3,729
-----------------------------------------------------------------------------------------------------
Average net assets (in thousands)              $9,404    $6,384   $3,416   $1,075   $5,788   $1,427
-----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                    (0.52)%    1.57%   (1.21)%   1.06%   (1.21)%   1.17%
Expenses                                         1.85%     1.59%    2.75%    2.54%    2.72%    2.55%
Expenses, net of voluntary reimbursement
of expenses and/or voluntary waiver of
transfer agent fees                              1.59%     1.59%    2.44%    2.39%    2.41%    2.38%
-----------------------------------------------------------------------------------------------------
Portfolio turnover rate                           139%       55%     139%      55%     139%      55%
1. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 2. 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. 3. Annualized for periods of less than one full year. See accompanying Notes to Financial Statements. 18 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND 

                                                                       Class N            Class Y
                                                                          Year               Year
                                                                         Ended              Ended
                                                                      Nov. 30,           Nov. 30,
                                                                2002    2001 1     2002    2001 2
---------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                          $ 9.21    $ 9.84   $ 9.26    $10.00
---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                            .02       .03      .01       .12
Net realized and unrealized loss                               (1.14)     (.66)   (1.06)     (.86)
                                                              -------------------------------------
Total from investment operations                               (1.12)     (.63)   (1.05)     (.74)
---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                            (.09)       --     (.11)       --
---------------------------------------------------------------------------------------------------
Net asset value, end of period                                 $8.00     $9.21    $8.10    $ 9.26
                                                              =====================================

---------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 3                            (12.30)%   (6.40)% (11.52)%   (7.40)%

---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)                      $5,698      $660       $1        $1
---------------------------------------------------------------------------------------------------
Average net assets (in thousands)                             $3,055      $158       $1        $1
---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                                   (0.66)%    2.08%    0.10%     1.52%
Expenses                                                        2.23%     2.07%   87.59%   501.53%
Expenses, net of voluntary reimbursement of expenses
and/or voluntary waiver of transfer agent fees                  1.98%     1.89%    1.12%     1.30%
---------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          139%       55%     139%       55%
1. For the period from March 1, 2001 (inception of offering) to November 30, 2001. 2. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 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. See accompanying Notes to Financial Statements. INFORMATION AND SERVICES For More Information on The Select Managers Funds The following additional information about each Fund is available without charge upon request: STATEMENT OF ADDITIONAL INFORMATION. This document includes additional information about each 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 each Fund's investments and performance is available in each 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 Funds' 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 Funds' privacy policy and other information about each 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 download documents on the OppenheimerFunds website: www.oppenheimerfunds.com Information about each 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 each 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 Funds or to make any representations about the Funds other than what is contained in this Prospectus. This Prospectus is not an offer to sell shares of the Funds, nor a solicitation of an offer to buy shares of the Funds, to any person in any state or other jurisdiction where it is unlawful to make such an offer. The Trust's SEC File No.: 811-10153 The Funds' shares are distributed by: PR0000.001.0303 (logo) OppenheimerFunds(R) Distributor, Inc. Printed on recycled paper. 
Oppenheimer Select Managers
      Mercury Advisors S&P 500 Index Fund
      Mercury Advisors Focus Growth Fund
      QM Active Balanced Fund
      Jennison Growth Fund
      Salomon Brothers All Cap Fund
      Gartmore Millennium Growth Fund II

6803 South Tucson Way, Centennial, Colorado 80112
1.800.525.7048

Statement of Additional Information dated March 28, 2003

      This Statement of Additional Information is not a Prospectus.
This document contains additional information about the Funds and
supplements information in the Prospectus dated March 28, 2003. It
should be read together with the Prospectus. You can obtain the
Prospectus by writing to the Funds' 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 Funds
Additional Information About the Funds' Investment Policies and Risks..
2
    The Funds' Investment Policies.....................................
2
    Other Investment Techniques and Strategies.........................
15
    Investment Restrictions............................................
34
How the Funds are Managed .............................................
42
    Organization and History...........................................
42
    Trustees and Officers of the Trust.................................
44
    The Manager........................................................
56
Brokerage Policies of the Funds........................................
64
Distribution and Service Plans.........................................
70
Performance of the Funds...............................................
75
About Your Account
How To Buy Shares......................................................
80
How To Sell Shares.....................................................
91
How To Exchange Shares.................................................
96
Dividends, Capital Gains and Taxes.....................................
99
Additional Information About the Funds.................................
104

Financial Information About the Funds
Independent Auditors' Reports and Financial Statements.................
106

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







                                  105
ABOUT  THE  FUNDS

Additional Information About the Funds' Investment Policies and Risks

      The investment objective, the principal investment policies and
the main risks of each 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 each
Fund's investment Adviser or subadviser 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 Funds' Investment Policies

Oppenheimer Select Managers - Mercury Advisors S&P 500 Index Fund

      The Fund seeks to achieve its investment objective by investing
all of its assets in the Master S&P 500 Index Series of the
Quantitative Master Series Trust (the "Master Fund") which has the same
investment objective as the Fund. The Fund's investment experience and
results will correspond directly to the investment experience of the
Master Fund in which it invests. Thus, all investments are made at the
level of the Master Fund. For simplicity, however, with respect to
investment objective, policies and restrictions, this Statement of
Additional Information, like the Prospectus, uses the term "Fund" to
include the Fund and the Master Fund in which the Fund invests. The
following is a description of the investment policies of the Fund.

      The Fund's investment objective is not a fundamental policy and
may be changed by the Board of Trustees of the Fund with 60 days notice
to shareholders but, without shareholder approval. The Trustees may
also change the target index of the Fund if they consider that a
different index would facilitate the management of the Fund in a manner
which better enables the Fund to seek to mirror the total return of the
market segment represented by the then existing target index.

      The investment objective of the Fund is to match the performance
of the Standard & Poor's 500 Composite Stock Price Index (the "S&P
500") as closely as possible before the deduction of Fund expenses.
There can be no assurance that the investment objective of the Fund
will be achieved.

      In seeking to mirror the total return of the S&P 500, Fund Asset
Management, L.P., doing business as Mercury Advisors (the "Adviser")
generally will allocate the Master Fund's investments among common
stocks in approximately the same weightings as the S&P 500. In
addition, the Adviser may use options and futures contracts and other
types of financial instruments relating to all or a portion of the S&P
500. At times the Fund may not invest in all of the common stocks in
the S&P 500, or in the same weightings as in the S&P 500. At those
times, the Fund chooses investments so that the market capitalizations,
industry weighting and other fundamental characteristics of the stocks
and derivative instruments chosen are similar to the S&P 500 as a
whole. The Fund may also engage in securities lending.

      The S&P 500 is composed of the common stocks of 500 large
capitalization companies from various industrial sectors, most of which
are listed on the New York Stock Exchange (the "NYSE"). A company's
stock market capitalization is the total market value of its
outstanding shares. The S&P 500 represents a significant portion of the
market value of all common stocks publicly traded in the United States.

About Indexing and Management of the Fund

      About Indexing. The Fund is not managed according to traditional
methods of "active" investment management, which involve the buying and
selling of securities based upon economic, financial, and market
analyses and investment judgment. Instead, the Fund, utilizing
essentially a "passive" or "indexing" investment approach, seeks to
replicate, before the Fund's expenses (which can be expected to reduce
the total return of a Fund), the total return of its respective index.

      Indexing and Managing the Fund. The Fund will be substantially
invested in securities in the S&P 500, and will invest at least 80% of
its net assets (plus any borrowings for investment purposes) at the
time of investment in equity securities or other financial instruments
which are contained in or correlated with securities in the S&P 500.

      Because the Fund seeks to mirror the total return of the S&P 500,
generally the Adviser will not attempt to judge the merits of any
particular security as an investment but will seek only to mirror the
total return of the securities in the S&P 500. However, the Adviser may
omit or remove a security which is included in the S&P 500 from the
Fund's portfolio if, following objective criteria, the Adviser judges
the security to be insufficiently liquid or believes the merit of the
investment has been substantially impaired by extraordinary events or
financial conditions.

      The Adviser may acquire certain financial instruments based upon
individual securities or based upon or consisting of one or more
baskets of securities (which basket may be based upon the S&P 500).
Certain of these instruments may represent an indirect ownership
interest in such securities or baskets. Others may provide for the
payment to the Fund or by the Fund of amounts based upon the
performance (positive, negative or both) of a particular security or
basket. The Adviser will select such instruments when it believes that
the use of the instrument will correlate substantially with the
expected total return of a target security or index. In connection with
the use of such instruments, the Adviser may enter into short sales in
an effort to adjust the weightings of particular securities represented
in the basket to more accurately reflect such securities' weightings in
the S&P 500.

      The Fund's ability to mirror the total return of the S&P 500 may
be affected by, among other things, transaction costs, administration
and other expenses incurred by the Fund, taxes, changes in either the
composition of the S&P 500 or the assets of the Fund, and the timing
and amount of Fund investors' contributions and withdrawals, if any. In
addition, the Fund's total return will be affected by incremental
operating costs (e.g., transfer agency, accounting) that will be borne
by the Fund. Under normal circumstances, it is anticipated that the
Fund's total return over periods of one (1) year and longer will, on a
gross basis and before taking into account expenses (incurred at either
the Master Fund or the Fund level), be within ten (10) basis points (a
basis point is one one-hundredth of one percent (0.01%)) of the total
return of the S&P 500. There can be no assurance that this level of
correlation will be achieved. In the event that this correlation is not
achieved over time, the Trustees of the Fund will consider alternative
strategies for the Fund. Information regarding correlation of the
Fund's performance to that of the S&P 500 will be reflected in the
Fund's annual report.

Other Investment Policies, Practices and Risk Factors

      Cash Management. Generally, the Adviser will employ futures and
options on futures to provide liquidity necessary to meet anticipated
redemptions or for day-to-day operating purposes. However, if
considered appropriate in the opinion of the Adviser, a portion of the
Fund's assets may be invested in certain types of instruments with
remaining maturities of  three hundred ninety seven (397) days or less
for liquidity purposes. Such instruments would consist of: (i)
obligations of the U.S. Government, its agencies, instrumentalities,
authorities or political subdivisions ("U.S. Government Securities");
(ii) other fixed-income securities rated Aa or higher by Moody's
Investors Service Inc. ("Moody's) or AA or higher by Standard & Poor's
Rating Service ("S&P") or, if unrated, of comparable quality in the
opinion of the Adviser; (iii) commercial paper; (iv) bank obligations,
including negotiable certificates of deposit, time deposits and
bankers' acceptances; and (v) repurchase agreements. At the time the
Fund invests in commercial paper, bank obligations or repurchase
agreements, the issuer or the issuer's parent must have outstanding
debt rated Aa or higher by Moody's or AA or higher by S&P or
outstanding commercial paper, bank obligations or other short-term
obligations rated Prime-1 by Moody's or A-1 by S&P; or, if no such
ratings are available, the instrument must be of comparable quality in
the opinion of the Adviser.

      Short Sales. In connection with the use of certain instruments
based upon or consisting of one or more baskets of securities, the
Adviser may sell a security the Fund does not own, or in an amount
greater than the Fund owns (i.e., make short sales). Such transactions
will be used only in an effort to adjust the weightings of particular
securities represented in the basket to reflect such securities'
weightings in the target index.

      Cash Flows; Expenses. The ability of the Fund to satisfy its
investment objective depends to some extent on the Adviser's ability to
manage cash flow (primarily from purchases and redemptions and
distributions from the Fund's investments). The Adviser will make
investment changes to the Fund's portfolio to accommodate cash flow
while continuing to seek to replicate the total return of the S&P 500.
Investors should also be aware that the investment performance of the
S&P 500 is a hypothetical number which does not take into account
brokerage commissions and other transaction costs, custody and other
costs of investing, and any incremental operating costs (e.g., transfer
agency, accounting) that will be borne by the Fund. Finally, since the
Fund seeks to replicate the total return of the S&P 500, the Adviser
generally will not attempt to judge the merits of any particular
security as an investment.

Additional Information Concerning the Index

      S&P 500. "Standard & Poor's", "S&P", "S&P 500", "Standard &
Poor's 500", and "500" are trademarks of The McGraw-Hill Companies,
Inc. and have been licensed for use by the Fund. The OSM - Mercury
Advisors S&P 500 Index Fund and the Master Fund are not sponsored,
endorsed, sold or promoted by S&P, a division of The McGraw-Hill
Companies, Inc. S&P makes no representation regarding the advisability
of investing in the Fund. S&P makes no representation or warranty,
express or implied, to the owners of shares of the Fund or any member
of the public regarding the advisability of investing in securities
generally or in the Fund particularly or the ability of the S&P 500 to
track general stock market performance. S&P's only relationship to the
Fund is the licensing of certain trademarks and trade names of S&P and
of the S&P 500 which is determined, composed and calculated by S&P
without regard to the Fund. S&P has no obligation to take the needs of
the Fund and the Master Fund or the owners of shares of the Fund and
the Master Fund into consideration in determining, composing or
calculating the S&P 500. S&P is not responsible for and has not
participated in the determination of the prices and amount of the Fund
and the Master Fund or the timing of the issuance of sale of shares of
the Fund and the Master Fund or in the determination or calculation of
the equation by which the Fund and the Master Fund is to be converted
into cash. S&P has no obligation or liability in connection with the
administration, marketing or trading of the Fund and the Master Fund.

      S&P does not guarantee the accuracy and/or the completeness of
the S&P 500 Index or any data included therein, and S&P shall have no
liability for any errors, omissions, or interruptions therein. S&P
makes no warranty, express or implied, as to results to be obtained by
the Fund, the Master Fund, owners of shares of the Fund and the Master
Fund, or any other person or entity from the use of the S&P 500 or any
data included therein. S&P makes no express or implied warranties and
expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use with respect to the S&P 500 or any data
included therein. Without limiting any of the foregoing, in no event
shall S&P have any liability for any special, punitive, indirect, or
consequential damages (including lost profits), even if notified of the
possibility of such damages.

Portfolio Turnover

      Although the Fund will use a passive indexing approach to
investing, the Fund may engage in a substantial number of portfolio
transactions. The rate of portfolio turnover will be a limiting factor
when the Adviser considers whether to purchase or sell securities for
the Fund only to the extent that the Adviser will consider the impact
of transaction costs on the Fund's tracking error. Changes in the
securities comprising the S&P 500, will tend to increase the Fund's
portfolio turnover rate, as the Investment Adviser restructures the
Fund's holdings to reflect the changes in the S&P 500. The portfolio
turnover rate is, in summary, the percentage computed by dividing the
lesser of the Fund's purchases or sales of securities by the average
net asset value of the Fund. High portfolio turnover involves
correspondingly greater brokerage commissions for the Fund investing in
equity securities and other transaction costs which are borne directly
by the Fund. A high portfolio turnover rate may also result in the
realization of taxable capital gains, including short-term capital
gains taxable at ordinary income rates.







Oppenheimer Select Managers - Mercury Advisors S&P 500 Index Fund
Oppenheimer Select Managers - Mercury Advisors Focus Growth Fund
Oppenheimer Select Managers - QM Active Balanced Fund
Oppenheimer Select Managers - Jennison Growth Fund
Oppenheimer Select Managers - Salomon Brothers All Cap Fund
Oppenheimer Select Managers - Gartmore Millennium Growth Fund II

Policies. The composition of each Fund's portfolio and the techniques
and strategies that the respective Subadviser (Adviser in the case of
the OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Mercury
Advisors Focus Growth Fund) may use in selecting portfolio securities
will vary over time. The Funds are not required to use all of the
investment techniques and strategies described below at all times in
seeking their goals. The Funds may use some of the special investment
techniques and strategies at some times or not at all.

      |X| Cyclical Opportunities. (All Funds except OSM - Mercury
Advisors S&P 500 Index Fund). The Fund's Adviser or the Subadvisers
might also seek to take advantage of changes in the business cycle by
investing in companies that are sensitive to those changes if the
Adviser or Subadviser 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. Each Fund focuses on seeking growth over the long term, but
could seek to take tactical advantage of short-term market movements or
events affecting particular issuers or industries.

      |X| Investments in Equity Securities. (All Funds except OSM -
Mercury Advisors S&P 500 Index Fund). Each Fund focuses its investments
in equity securities, all but the OSM - QM Active Balanced Fund
focusing its investments in the equity securities of growth companies.
The equity securities each Fund may invest in include common stocks,
preferred stocks, rights and warrants, and securities convertible into
common stock. The OSM - Mercury Advisors Focus Growth Fund and the OSM
- Jennison Growth Fund will invest primarily in the common stocks of
companies having a market capitalization that excess $1 billion. The
OSM - QM Active Balanced Fund, the OSM - Salomon Brothers All Cap Fund
and the OSM - Gartmore Millennium Growth Fund II may invest in the
stocks of companies of every size - small, medium and large
capitalization. The Funds generally measure a company's market
capitalization at the time of investment. However, a Fund is not
required to sell securities of an issuer it holds if the issuer's
capitalization exceeds the limits described above.

      Each Fund can also invest a portion of its assets in securities
of issuers having a market capitalization different from the limits
described above. At times, in the Adviser's or Subadviser's view, the
market may favor or disfavor securities of issuers of a particular
capitalization range. Therefore, although the Fund may normally invest
its assets in equity securities of a certain market capitalization, the
Fund may change the proportion of its equity investments in securities
of different capitalization ranges, based upon the Adviser's or
Subadviser's judgment of where the best market opportunities are to
seek the Fund's objective.

      Growth companies might be providing new products or services that
could enable them to capture a dominant or important market position.
They may have a special area of expertise or the capability to take
advantage of changes in demographic factors in a more profitable way
than larger, more established companies.

      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 some time. They are selected for a Fund's portfolio
because the Adviser or Subadviser for the particular Fund believes the
price of the stock will increase over the long term.

            |_| Over-the-Counter Securities. (All Funds except OSM -
Mercury Advisors S&P 500 Index Fund). Growth companies may offer
greater opportunities for capital appreciation than securities of
large, more established companies. However, securities of small-cap and
mid-cap companies also involve greater risks than securities of larger
companies. Securities of small and medium capitalization issuers may
trade on securities exchanges or in the over-the-counter market. The
over-the-counter markets, both in the U.S. and abroad, may have less
liquidity than securities exchanges. That lack of liquidity can affect
the price a Fund is able to obtain when it wants to sell a security,
because if there are fewer buyers and less demand for a particular
security, the Fund might not be able to sell it at an acceptable price
or might have to reduce the price in order to dispose of the security.

      In the U.S., the principal over-the-counter market is the NASDAQ
Stock Market, Inc., ("NASDAQ") which is regulated by the National
Association of Securities Dealers, Inc. It consists of an electronic
quotation system for certain securities, and a security must have at
least two (2) market makers to be included in NASDAQ. Other
over-the-counter markets exist in the U.S., as well as those abroad,
wherever a dealer is willing to make a market in a particular security.

            |_| Convertible Securities. (All Funds except OSM - Mercury
Advisors S&P 500 Index Fund). Convertible securities are debt
securities that are convertible into an issuer's common stock.
Convertible securities rank senior to common stock in a corporation's
capital structure and therefore are subject to less risk than common
stock in case of the issuer's bankruptcy or liquidation. Synthetic
convertible securities may be either (i) a debt security or preferred
stock that may be convertible only under certain contingent
circumstances or that may pay the holder a cash amount based on the
value of shares of underlying common stock partly or wholly in lieu of
a conversion right (a "Cash-Settled Convertible") or (ii) a combination
of separate securities chosen by the Adviser or Subadviser, as the case
may be, in order to create the economic characteristics of a
convertible security, i.e., a fixed income security paired with a
security with equity conversion features, such as an option or warrant
(a "Manufactured Convertible").

            The value of a convertible security is a function of its
"investment value" and its "conversion value."  If the investment value
exceeds the conversion value, the security will behave more like a debt
security, and the security's price will likely increase when interest
rates fall and decrease when interest rates rise. If the conversion
value exceeds the investment value, the security will behave more like
an equity security:  it will likely sell at a premium over its
conversion value, and its price will tend to fluctuate directly with
the price of the underlying security.

            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 an
Adviser's or Subadviser'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 Adviser or Subadvisers examine
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.

            As indicated above, synthetic convertible securities may
include either Cash-Settled Convertibles or Manufactured Convertibles.
Cash-Settled Convertibles are instruments that are created by the
issuer and have the economic characteristics of traditional convertible
securities but may not actually permit conversion into the underlying
equity securities in all circumstances. As an example, a private
company may issue a Cash-Settled Convertible that is convertible into
common stock only if the company successfully completes a public
offering of its common stock prior to maturity and otherwise pays a
cash amount to reflect any equity appreciation. Manufactured
Convertibles are created by the Adviser or Subadviser, as the case may
be, by combining separate securities that possess one of the two
principal characteristics of a convertible security, i.e., fixed income
("fixed income component") or a right to acquire equity securities
("convertible component"). The fixed income component is achieved by
investing in non-convertible fixed income securities, such as
non-convertible bonds, preferred stocks and money market instruments.
The convertibility component is achieved by investing in call options,
warrants, LEAPS, or other securities with equity conversion features
("equity features") granting the holder the right to purchase a
specified quantity of the underlying stocks within a specified period
of time at a specified price or, in the case of a stock index option,
the right to receive a cash payment based on the value of the
underlying stock index.

            A Manufactured Convertible differs from traditional
convertible securities in several respects. Unlike a traditional
convertible security, which is a single security having a unitary
market value, a Manufactured Convertible is comprised of two or more
separate securities, each with its own market value. Therefore, the
total "market value" of such a Manufactured Convertible is the sum of
the values of its fixed-income component and its convertibility
component.

            More flexibility is possible in the creation of a
Manufactured Convertible than in the purchase of a traditional
convertible security. Because many corporations have not issued
convertible securities, the Adviser or Subadviser, as the case may be,
may combine a fixed income instrument and an equity feature with
respect to the stock of the issuer of the fixed income instrument to
create a synthetic convertible security otherwise unavailable in the
market. The Adviser or Subadviser, as the case may be, may also combine
a fixed income instrument of an issuer with an equity feature with
respect to the stock of a different issuer when the Adviser or
Subadviser, as the case may be, believes such a Manufactured
Convertible would better promote the Fund's objective than alternative
investments. For example, the Adviser or Subadviser, as the case may
be, may combine an equity feature with respect to an issuer's stock
with a fixed income security of a different issuer in the same industry
to diversify the Fund's credit exposure, or with a U.S. Treasury
instrument to create a Manufactured Convertible with a higher credit
profile than a traditional convertible security issued by that issuer.
A Manufactured Convertible also is a more flexible investment in that
its two components may be purchased separately and, upon purchasing the
separate securities, "combined" to create a Manufactured Convertible.
For example, the Fund may purchase a warrant for eventual inclusion in
a Manufactured Convertible while postponing the purchase of a suitable
bond to pair with the warrant pending development of more favorable
market conditions.

            The value of a Manufactured Convertible may respond
differently to certain market fluctuations than would a traditional
convertible security with similar characteristics. For example, in the
event the Fund created a Manufactured Convertible by combining a
short-term U.S. Treasury instrument and a call option on a stock, the
Manufactured Convertible would likely outperform a traditional
convertible of similar maturity and which is convertible into that
stock during periods when Treasury instruments outperform corporate
fixed income securities and underperform during periods when corporate
fixed-income securities outperform Treasury instruments.

      |_| Preferred Stock (All Funds except OSM - Mercury Advisors S&P
500 Index Fund). Preferred stock, unlike common stock, has a stated
dividend rate payable from the corporation's earnings. Preferred stock
dividends may be cumulative or non-cumulative. "Cumulative" dividend
provisions require all or a portion of prior unpaid dividends to be
paid before dividends can be paid on the issuer's common stock.
Preferred stock may be "participating" stock, which means that it may
be entitled to a dividend exceeding the stated dividend in certain
cases.

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

      |_| Credit Risk. (All Funds except OSM - Mercury Advisors S&P 500
Index Fund). Convertible securities and 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, a 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 Adviser or
Subadvisers may rely to some extent on credit ratings by nationally
recognized ratings agencies in evaluating the credit risk of securities
selected for a Fund's portfolio. It may also use its own research and
analysis. Many factors affect an issuer's ability to make timely
payments, and the credit risks of a particular security may change over
time. The OSM - QM Active Balanced Fund and the OSM - Salomon Brothers
All Cap Fund may invest in higher-yielding lower-grade debt securities
(that is, securities below investment grade), which have special risks.
Those are securities rated below the four highest rating categories of
S&P or Moody's or equivalent ratings of other rating agencies or
ratings assigned to a security by the Adviser or Subadvisers. The QM
Active Balanced Fund can invest up to 20% of its total assets in
lower-grade debt securities and the OSM - Salomon Brothers All Cap Fund
can invest up to 20% of its assets in non-convertible debt securities
rated below investment grade or, if unrated, of equivalent quality as
determined by the Subadviser.

      |_| Special Risks of Lower-Grade Securities. "Lower-grade" debt
securities are those rated below "investment grade" which means they
have a rating lower than "Baa" by Moody's or lower than "BBB" by S&P or
similar ratings by other rating organizations. If they are unrated, and
are determined by the Adviser or Subadviser to be of comparable quality
to debt securities rated below investment grade, they are included in
the limitation on the percentage of the Fund's assets that can be
invested in lower-grade securities.

    Among the special credit risks of lower-grade securities is the
greater risk that the issuer may default on its obligation to pay
interest or to repay principal than in the case of investment grade
securities. The issuer's low creditworthiness may increase the
potential for insolvency. An overall decline in values in the high
yield bond market is also more likely during a period of general
economic downturn. An economic downturn or an increase in interest
rates could severely disrupt the market for high yield bonds, adversely
affecting the values of outstanding bonds as well as the ability of
issuers to pay interest or repay principal. In the case of foreign high
yield bonds, these risks are in addition to the special risk of foreign
investing discussed in the Prospectus and in this Statement of
Additional Information. To the extent they can be converted into stock,
convertible securities may be less subject to some of these risks than
non-convertible high yield bonds, since stock may be more liquid and
less affected by some of these risk factors.

    While securities rated "Baa" by Moody's or "BBB" by S&P are
investment grade and are not regarded as junk bonds, those securities
may be subject to special risks, and have some speculative
characteristics.

      |_| Interest Rate Risks. In addition to credit risks, convertible
debt securities in particular and debt securities in general 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 a
Fund's debt securities is longer, its share price may fluctuate more
when interest rates change.

      |_| Rights and Warrants. (All Funds except OSM - Mercury Advisors
S&P 500 Index Fund). Each Fund can invest in warrants or rights.
Warrants basically are options to purchase equity securities at
specific prices valid for a specific period of time. Their prices do
not necessarily move parallel to the prices of the underlying
securities. Rights are similar to warrants, but normally have a short
duration and are distributed directly by the issuer to its
shareholders. Rights and warrants have no voting rights, receive no
dividends and have no rights with respect to the assets of the issuer.

      |_| Investments in Debt Securities. (All Funds except OSM -
Mercury Advisors S&P 500 Index Fund). The Funds may invest in a variety
of domestic and foreign debt securities, including corporate bonds,
debentures and other debt securities, and foreign and U.S. government
securities including mortgage-related securities. The OSM - QM Active
Balanced Fund will invest in debt securities to seek investment income
as part of its investment objectives. Each Fund might invest in them
also to seek capital growth or for liquidity or defensive purposes.
Although the OSM - QM Active Balanced Fund will invest at least 25% of
its total assets in investment grade debt securities, the Fund
currently emphasizes investments in equity securities. Foreign debt
securities are subject to the risks of foreign investing described
below. In general, domestic and foreign debt securities are also
subject to credit risk and interest rate risk.

      ? Mortgage-Related Securities (OSM - QM Active Balanced Fund, OSM
- Salomon Brothers All Cap Fund and OSM - Jennison Growth Fund only).
Mortgage-related securities are a form of derivative investment
collateralized by pools of commercial or residential mortgages. Pools
of mortgage loans are assembled as securities for sale to investors by
government agencies or entities or by private issuers. These securities
include collateralized mortgage obligations ("CMOs"), mortgage
pass-through securities, stripped mortgage pass-through securities,
interests in real estate mortgage investment conduits ("REMICs") and
other real estate-related securities.

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

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

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

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

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

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

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

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

      |_| U.S. Government Securities (All Funds except OSM - Mercury
Advisors S&P 500 Index Fund). These are securities issued or guaranteed
by the U.S. Treasury or other U.S. government agencies or
federally-chartered corporate entities referred to as
"instrumentalities."  The obligations of U.S. government agencies or
instrumentalities in which the Funds may invest may or may not be
guaranteed or supported by the "full faith and credit" of the United
States. "Full faith and credit" means generally that the taxing power
of the U.S. government is pledged to the payment of interest and
repayment of principal on a security. If a security is not backed by
the full faith and credit of the United States, the owner of the
security must look principally to the agency issuing the obligation for
repayment. The owner might be able to assert a claim against the United
States if the issuing agency or instrumentality does not meet its
commitment. The Funds will invest in securities of U.S. government
agencies and instrumentalities only if the Adviser or Subadviser is
satisfied that the credit risk with respect to such instrumentality is
acceptable.

            |_| U.S. Treasury Obligations. These include Treasury bills
(which have maturities of one year or less when issued), Treasury notes
(which have maturities of from one to ten (10) years when issued), and
Treasury bonds (maturities of more than ten (10) years when issued).
Treasury securities are backed by the full faith and credit of the
United States as to timely payments of interest and repayments of
principal. They also can include U.S. Treasury securities that have
been "stripped" by a Federal Reserve Bank, and zero-coupon U.S.
Treasury securities.

            |_| Obligations Issued or Guaranteed by U.S. Government
Agencies or Instrumentalities. These include direct obligations and
mortgage-related securities that have different levels of credit
support from the government. Some are supported by the full faith and
credit of the U.S. government, such as Government National Mortgage
Association pass-through mortgage certificates (called "Ginnie Maes").
Some are supported by the right of the issuer to borrow from the U.S.
Treasury under certain circumstances, such as Federal National Mortgage
Association bonds ("Fannie Maes"). Others are supported only by the
credit of the entity that issued them, such as Federal Home Loan
Mortgage Corporation obligations ("Freddie Macs").

            |_| U.S. Government Mortgage-Related Securities (All Funds
except OSM - Mercury Advisors S&P 500 Index Fund). The Funds can invest
in a variety of mortgage-related securities that are issued by U.S.
government agencies or instrumentalities, some of which are described
below. Mortgage-backed securities are "pass-through" securities,
meaning that principal and interest payments made by the borrower on
the underlying mortgages are passed through to the Fund. The value of
mortgage-backed securities, like that of traditional fixed-income
securities, typically increases when interest rates fall and decreases
when interest rates rise. However, mortgage-backed securities differ
from traditional fixed-income securities because of their potential for
prepayment without penalty. The price paid by a Fund for its
mortgage-backed securities, the yield the Fund expects to receive from
such securities and the average life of the securities are based on a
number of factors, including the anticipated rate of prepayment of the
underlying mortgages. In a period of declining interest rates,
borrowers may prepay the underlying mortgages more quickly than
anticipated, thereby reducing the yield to maturity and the average
life of the mortgage-backed securities. Moreover, when a Fund reinvests
the proceeds of a prepayment in these circumstances, it will likely
receive a rate of interest that is lower than the rate on the security
that was prepaid. To the extent that a Fund purchases mortgage-backed
securities at a premium, mortgage foreclosures and principal
prepayments may result in a loss to the extent of the premium paid. If
a Fund buys such securities at a discount, both scheduled payments of
principal and unscheduled prepayments will increase current and total
returns and will accelerate the recognition of income which, when
distributed to shareholders, will be taxable as ordinary income. In a
period of rising interest rates, prepayments of the underlying
mortgages may occur at a slower than expected rate, resulting in
maturity extensions. This particular risk may effectively change a
security that was considered short or intermediate-term at the time of
purchase into a long-term security. Since long-term securities
generally fluctuate more widely in response to changes in interest
rates than shorter-term securities, maturity extension risk could
increase the inherent volatility of a Fund.

      |_| Zero-Coupon U.S. Government Securities (All Funds except OSM
- Mercury Advisors S&P 500 Index Fund and OSM - Gartmore Millennium
Growth Fund II). The Funds may buy zero-coupon U.S. government
securities. These will typically be U.S. Treasury Notes and Bonds that
have been stripped of their unmatured interest coupons, the coupons
themselves, or certificates representing interests in those stripped
debt obligations and coupons.

      Zero-coupon securities do not make periodic interest payments and
are sold at a deep discount from their face value at maturity. 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. The discount
typically decreases as the maturity date approaches.

      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 that pay interest. 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.

      A Fund's investment in zero-coupon securities may 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, a Fund may 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 the
Fund's shares.

      |X| Money Market Instruments (All Funds except OSM - Mercury
Advisors S&P 500 Index Fund). The following is a brief description of
the types of money market securities the Funds (other than the OSM -
Mercury Advisors S&P 500 Index Fund) can invest in. Those money market
securities are high-quality, short-term debt instruments that are
issued by the U.S. government, corporations, banks or other entities.
They may have fixed, variable or floating interest rates.

      |_| U.S. Government Securities. These include obligations issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities.

            |_| Bank Obligations. These include time deposits,
certificates of deposit and bankers' acceptances. Time deposits, other
than overnight deposits, may be subject to withdrawal penalties and, if
so, they are deemed "illiquid" investments.

      The Funds can purchase bank obligations that are fully insured by
the Federal Deposit Insurance Corporation ("FDIC"). The FDIC insures
the deposits of member banks up to $100,000 per account. Insured bank
obligations may have a limited market and a particular investment of
this type may be deemed "illiquid" unless the Adviser or Subadviser, as
the case may be, determines that a readily-available market exists for
that particular obligation, or unless the obligation is payable at
principal amount plus accrued interest on demand or within seven (7)
days after demand.

?           |_| Commercial Paper. Each Fund can invest in commercial
paper if it is rated within the top two (2) rating categories of S&P
and Moody's. If the paper is not rated, it may be purchased if issued
by a company having a credit rating of at least "AA" by S&P or "Aa" by
Moody's.

      The Funds can buy commercial paper, including U.S.
dollar-denominated securities of foreign branches of U.S. banks, issued
by other entities if the commercial paper is guaranteed as to principal
and interest by a bank, government or corporation whose certificates of
deposit or commercial paper may otherwise be purchased by the Funds.

            |_| Variable Amount Master Demand Notes. Master demand
notes are corporate obligations that permit the investment of
fluctuating amounts by each of the Funds except the OSM - Mercury
Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth
Fund at varying rates of interest under direct arrangements between the
Funds, as lender, and the borrower. They permit daily changes in the
amounts borrowed. The Funds have the right to increase the amount under
the note at any time up to the full amount provided by the note
agreement, or to decrease the amount. The borrower may prepay up to the
full amount of the note without penalty. These notes may or may not be
backed by bank letters of credit.

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

      Each of the Funds has no limitations on the type of issuer from
whom these notes will be purchased. However, in connection with such
purchases and on an ongoing basis, the Adviser or Subadviser will
consider the earning power, cash flow and other liquidity ratios of the
issuer, and its ability to pay principal and interest on demand,
including a situation in which all holders of such notes made demand
simultaneously. Investments in master demand notes are subject to the
limitation on investments by each of the Funds in illiquid securities,
described in the Prospectus.

      |X| Portfolio Turnover. "Portfolio turnover" describes the rate
at which a 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%. Each Fund's
portfolio turnover rate will fluctuate from year to year. Each of the
Funds, except the OSM - Mercury Advisors S&P 500 Index Fund, may have a
portfolio turnover rate of more than 100% annually.

      Increased portfolio turnover creates higher brokerage and
transaction costs for a Fund, which can 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 each Fund will normally distribute all of
its capital gains realized each year, to avoid excise taxes under the
Internal Revenue Code.

      The portfolio turnover of the Master Fund of OSM - Mercury
Advisors Focus Growth Fund increased to 275.69% for the fiscal year
ended November 30, 2002, from 137.66% for the period ended November 30,
2001. The portfolio turnover was due in large part to the extraordinary
volatility of the markets during the year.

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

      |X| Foreign Securities (All Funds except OSM - Mercury Advisors
S&P 500 Index Fund). Each Fund can invest in foreign securities.
"Foreign securities" include equity and debt securities of companies
organized under the laws of countries other than the United States and
debt securities of foreign governments that are traded on foreign
securities exchanges or in foreign over-the-counter markets. Each Fund
can purchase equity and debt securities (which may be denominated in
U.S. dollars or non-U.S. currencies) issued by foreign corporations, or
that are issued or guaranteed by certain supranational entities
(described below), or foreign governments or their agencies or
instrumentalities. These include securities issued by U.S. corporations
denominated in non-U.S. currencies. In normal market conditions the
Funds do not expect to hold significant amounts of foreign debt
securities.

      Securities of foreign issuers that are represented by American
Depository Receipts ("ADRs") 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 each Fund's
investment allocations. That is because they are not subject to some 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. Each
Fund will hold foreign currency only in connection with the purchase or
sale of foreign securities.

      The OSM - Mercury Advisors Focus Growth Fund and the OSM -
Jennison Growth Fund may invest in the securities of foreign issuers in
the form of ADRs, European Depository Receipts ("EDRs") or other
securities convertible into securities of foreign issuers. These
securities may not necessarily be denominated in the same currency as
the securities into which they may be converted. ADRs are receipts
typically issued by an American bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation.
EDRs are receipts issued in Europe which evidence a similar ownership
arrangement. Generally, ADRs, which are issued in registered form, are
designed for use in the United States securities markets, and EDRs,
which are issued in bearer form, are designed for use in European
securities markets. The OSM - Mercury Advisors Focus Growth Fund may
invest in unsponsored ADRs. The issuers of unsponsored ADRs are not
obligated to disclose material information in the United States and,
therefore, there may not be a correlation between such information and
the market value of such ADRs.

      ADR facilities may be either "sponsored" or "un-sponsored."
While sponsored and un-sponsored ADR facilities are similar,
distinctions exist between the rights and duties of ADR holders and
market practices. Sponsored facilities have the backing or
participation of the underlying foreign issuers. Un-sponsored
facilities do not have the participation by or consent of the issuer of
the deposited shares. Un-sponsored facilities usually request a letter
of non-objection from the issuer. Holders of un-sponsored ADRs
generally bear all the costs of such facility. The costs of the
facility can include deposit and withdrawal fees, currency conversion
and other service fees. The depository of an un-sponsored facility may
not have a duty to distribute shareholder communications from the
issuer or to pass through voting rights. Issuers of un-sponsored ADRs
do not have an obligation to disclose material information about the
foreign issuers in the U.S. As a result, the value of the un-sponsored
ADR may not correlate with the value of the underlying security trading
abroad or any material information about the security or the issuer
disseminated abroad. Sponsored facilities enter into an agreement with
the issuer that sets out rights and duties of the issuer, the
depository and the ADR holder. The sponsored agreement also allocates
fees among the parties. Most sponsored agreements provide that the
depository will distribute shareholder notices, voting instructions and
other communications.

      |_| 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.

      |_| Special Risks of Emerging Markets. Emerging and developing
markets abroad may also offer special opportunities for growth
investing but have greater risks than more developed foreign markets,
such as those in Europe, Canada, Australia, New Zealand and Japan.
There may be even less liquidity in their securities markets, and
settlements of purchases and sales of securities may be subject to
additional delays. They are subject to greater risks of limitations on
the repatriation of income and profits because of currency restrictions
imposed by local governments. Those countries may also be subject to
the risk of greater political and economic instability, which can
greatly affect the volatility of prices of securities in those
countries.

      |X| Passive Foreign Investment Companies. Each Fund other than
OSM - Mercury Advisors S&P 500 Index Fund may purchase the securities
of certain foreign investment corporations called passive foreign
investment companies ("PFICs"). Such entities have been the only or
primary way to invest in certain countries because some foreign
countries limit, or prohibit, all direct foreign investment in the
securities of companies domiciled therein. However, the governments of
some countries have authorized the organization of investment funds to
permit indirect foreign investment in such securities. For tax
purposes, these funds also may be PFICs.

      Each Fund is subject to certain percentage limitations under the
1940 Act relating to the purchase of securities of investment
companies, and, consequently, the Funds may have to subject any of its
investment in other investment companies, including PFICs, to the
limitation that no more than 10% of the value of the Funds' total
assets may be invested in such securities. In addition to bearing their
proportionate share of a fund's expenses (management fees and operating
expenses), shareholders will also indirectly bear similar expenses of
such entities. Like other foreign securities, interests in PFICs also
involve the risk of foreign securities, as described above.

      |X| Investing in Small, Unseasoned Companies (All Funds except
OSM - Mercury Advisors S&P 500 Index Fund). Each Fund can invest in
securities of small, unseasoned companies. These are companies that
have been in operation for less than three (3) 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 a 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 a Fund is attempting to dispose of its holdings of that security.
In that case the Fund might receive a lower price for its holdings than
might otherwise be obtained. These are more speculative securities and
can increase the Funds' overall portfolio risks.

      |X| Real Estate Investment Trusts (All Funds). Each Fund may
invest in equity Real Estate Investment Trusts ("REITs"). REITs are
entities which either own properties or make construction or mortgage
loans. Equity REITs may also include operating or financing companies.
Equity REITs own real estate directly and the value of, and income
earned by, the Fund depends upon the income of the underlying
properties and the rental income they earn. Equity REITs can also
realize capital gains by selling properties that have appreciated in
value. The value of securities issued by REITs are affected by tax and
regulatory requirements and by perceptions of management skill. They
are also subject to heavy cash flow dependency, defaults by borrowers
or tenants, self-liquidation, the possibility of failing to qualify for
tax-free status under the Internal Revenue Code, and failing to
maintain exemption from the 1940 Act. Because REITs normally pay on
advisory fee and other expenses, a shareholder in these Funds may be
subject to duplicative fees and expenses.

      |X| Firm Commitments and When-Issued Securities (All Funds). Each
Fund may purchase securities on a firm commitment basis, including
when-issued securities. Securities purchased on a firm commitment basis
are purchased for delivery beyond the normal settlement date at a
stated price and yield. No income accrues to the purchaser of a
security on a firm commitment basis prior to delivery. Such securities
are recorded as an asset and are subject to changes in value based upon
changes in the general level of interest rates. Purchasing a security
on a firm commitment basis can involve a risk that the market price at
the time of delivery may be lower than the agreed upon purchase price,
in which case there could be an individual loss at the time of
delivery. The Fund will only make commitments to purchase securities on
a firm commitment basis with the intention of actually acquiring the
securities, but may sell them before the settlement date if it is
deemed advisable. The Fund will identify on its books liquid assets at
least equal in value to the value of the Fund's purchase commitments
until the Fund pays for the investment.

      |X| Repurchase Agreements and Purchase and Sale Contracts (All
Funds). Each Fund may invest in securities pursuant to repurchase
agreements and each Fund other than the OSM - Mercury Advisors S&P 500
Index Fund may invest in purchase and sale contracts. Under a
repurchase agreement or a purchase and sale contract, the seller
agrees, upon entering into the contract with the Fund, to repurchase
the security at a mutually agreed-upon time and price in a specified
currency, thereby determining the yield during the term of the
agreement. This results in a fixed rate of return insulated from market
fluctuations during such period although it may be affected by currency
fluctuations. In the case of repurchase agreements, the price at which
the trades are conducted do not reflect accrued interest on the
underlying obligation; whereas, in the case of purchase and sale
contracts, the prices take into account accrued interest. Such
agreements usually cover short periods, such as under one week.
Repurchase agreements may be construed to be collateralized loans by
the purchaser to the seller secured by the securities transferred to
the purchaser. In the case of a repurchase agreement, as a purchaser,
the Fund will require the seller to provide additional collateral if
the market value of the securities falls below the repurchase price at
any time during the term of the repurchase agreement; the Fund does not
have the right to seek additional collateral in the case of purchase
and sale contracts. In the event of default by the seller under a
repurchase agreement construed to be a collateralized loan, the
underlying securities are not owned by the Fund but only constitute
collateral for the seller's obligation to pay the repurchase price.
Therefore, the Fund may suffer time delays and incur costs or possible
losses in connection with the disposition of the collateral. 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
OppenheimerFunds, Inc. (the "Manager") (or in the case of OSM - Mercury
Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth
Fund, credit requirements set by the Advisor) from time to time. A
purchase and sale contract differs from a repurchase agreement in that
the contract arrangements stipulate that the securities are owned by
the Fund. In the event of a default under such a repurchase agreement
or under a purchase and sale contract, instead of the contractual fixed
rate, the rate of return to the Fund shall be dependent upon
intervening fluctuations of the market value of such securities and the
accrued interest on the securities. In such event, the Fund would have
rights against the seller for breach of contract with respect to any
losses arising from market fluctuations following the failure of the
seller to perform. While the substance of purchase and sale contracts
is similar to repurchase agreements, because of the different treatment
with respect to accrued interest and additional collateral, Fund
management believes that purchase and sale contracts are not repurchase
agreements as such term is understood in the banking and brokerage
community. No Fund may invest more than 15% of its net assets in
repurchase agreements or purchase and sale contracts maturing in more
than seven (7) days together with all other illiquid investments.

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

      |X| Illiquid and Restricted Securities (All Funds). Each Fund may
purchase illiquid or restricted securities. Under the policies and
procedures established by the Funds' Board of Trustees (or, in the case
of OSM - Mercury Advisors S&P 500 Index Fund and OSM - Mercury Advisors
Focus Growth Fund, the Board of Trustees of the applicable Master
Fund), the Adviser or Subadviser determines the liquidity of certain of
a Fund's investments. To enable a Fund to sell its holdings of a
restricted security not registered under the Securities Act of 1933, as
amended (the "Securities Act") that Fund may have to cause those
securities to be registered. The expenses of registering restricted
securities may be negotiated by a Fund with the issuer at the time a
Fund buys the securities. When a Fund must arrange registration because
a 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 a Fund could sell it. A Fund would
bear the risks of any downward price fluctuation during that period.

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

      Each Fund has limitations that apply to purchases of restricted
securities, as stated in the Prospectus. Those percentage restrictions
are not fundamental policies and do not limit purchases of restricted
securities that are eligible for sale to qualified institutional
purchasers under Rule 144A of the Securities Act, if those securities
have been determined to be liquid by the Adviser or Subadviser under
Board-approved guidelines (or, in the case of OSM - Mercury Advisors
S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth Fund,
guidelines approved by the Board of Trustees of the applicable Master
Fund). 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, each of a Fund's holdings of that security may be
considered to be illiquid. Illiquid securities include repurchase
agreements maturing in more than seven (7) days.

      |X| 144A Securities (All Funds). Each Fund may purchase
restricted securities that can be offered and sold to "qualified
institutional buyers" under Rule 144A under the Securities Act. The
Board of Trustees (or, in the case of OSM - Mercury Advisors S&P 500
Index Fund and OSM - Mercury Advisors Focus Growth Fund, the Board of
Trustees of the applicable Master Fund) has determined to treat as
liquid Rule 144A securities in accordance with the policies and
procedures adopted by the relevant Fund's Board of Trustees. The Board
of Trustees has adopted guidelines and delegated to the Adviser or
Subadviser, as the case may be, the daily function of determining and
monitoring liquidity of restricted securities. The relevant Board of
Trustees, however, will retain sufficient oversight and be ultimately
responsible for the determinations. Since it is not possible to predict
with assurance exactly how this market for restricted securities sold
and offered under Rule 144A will continue to develop, the relevant
Board of Trustees will carefully monitor investments in these
securities. This investment practice could have the effect of
increasing the level of illiquidity in a Fund to the extent that
qualified institutional buyers become for a time uninterested in
purchasing these securities.

      |X| Loans of Portfolio Securities (All Funds). To raise cash for
liquidity purposes, each Fund can lend its portfolio securities to
brokers, dealers and other types of financial institutions approved by
the Funds' Board of Trustees. These loans are limited to not more than
25% of the value of a Fund's total assets (33 1/3% for the OSM -
Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors
Focus Growth Fund). Each Fund except the OSM - Mercury Advisors S&P 500
Index Fund and the OSM - Mercury Advisors Focus Growth Fund, currently
does not intend to engage in loans of securities, but if it does so,
such loans will not likely exceed 5% of each of the Fund's total
assets.

      There are some risks in connection with securities lending. A
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. A 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 a
Fund is permitted to invest. To be acceptable as collateral, letters of
credit must obligate a bank to pay amounts demanded by a 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, a 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. A Fund may also pay reasonable finder's,
lending agent, custodian and administrative fees in connection with
these loans. The terms of each Fund's loans must meet applicable tests
under the Internal Revenue Code and must permit each Fund to reacquire
loaned securities on five (5) days' notice or in time to vote on any
important matter.

      The Master Fund(s) have received an exemptive order from the
Securities and Exchange Commission (the "Commission") permitting them
to lend portfolio securities to Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") or its affiliates, and to retain an
affiliate of the Master Funds as lending agent. See "Brokerage Policies
of the Funds," below.

      |X| Short Sales (OSM - Gartmore Millennium Growth Fund II, OSM -
Mercury Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus
Growth Fund). Generally, to complete a short sale transaction, the Fund
will borrow the security to make delivery to the buyer. The Fund is
then obligated to replace the security borrowed. If the price of a
security sold short goes up between the time of the short sale and the
time the Fund must deliver the security to the lender, the Fund will
incur a loss. The price at the time of replacement may be more or less
than the price at which the security was sold by the Fund. Until the
security is replaced, the Fund is required to pay to the lender any
interest which accrues during the period of the loan. To borrow the
security, the Fund may be required to pay a premium which would
increase the cost of the security sold. The proceeds of the short sale
will be retained by the broker to the extent necessary to meet margin
requirements until the short position is closed out. Until the Fund
replaces the borrowed security, it will (a) segregated on its books of
liquid assets cash or liquid securities at such a level that the amount
deposited in the account plus the amount deposited with the broker as
collateral will equal the current market value of the security sold
short or (b) otherwise cover its short position.

      |X| Borrowing for Leverage (All Funds). Each Fund has the ability
to borrow up to 33 1/3% of the value of its total assets from banks on
an unsecured basis to invest the borrowed funds in portfolio
securities. This speculative technique is known as "leverage."  A Fund
may borrow only from banks. Under current regulatory requirements,
borrowings can be made only to the extent that the value of a Fund's
assets, less its liabilities other than borrowings, is equal to at
least 300% of all borrowings (including the proposed borrowing). If the
value of a Fund's assets fails to meet this 300% asset coverage
requirement, a Fund will reduce its bank debt within three (3) days to
meet the requirement. To do so, a Fund might have to sell a portion of
its investments at a disadvantageous time.

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

      |X| Interfund Borrowing and Lending Arrangements. Consistent with
its fundamental policies and pursuant to an exemptive order issued by
the Securities and Exchange Commission ("SEC"), each Fund other than
the OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Mercury
Advisors Focus Growth Fund may engage in borrowing and lending
activities with other funds in the OppenheimerFunds complex. Borrowing
money from affiliated funds may afford the Funds the flexibility to use
the most cost-effective alternative to satisfy its borrowing
requirements. Lending money to an affiliated fund may allow the Funds
to obtain a higher rate of return than it could from interest rates on
alternative short-term investments. Implementation of interfund lending
will be accomplished consistent with applicable regulatory
requirements, including the provisions of the SEC order.

      o Interfund Borrowing. A Fund will not borrow from affiliated
funds unless the terms of the borrowing arrangement are at least as
favorable as the terms a Fund could otherwise negotiate with a third
party. To assure that a Fund will not be disadvantaged by borrowing
from an affiliated fund, certain safeguards may be implemented.
Examples of these safeguards include the following:
o     a Fund will not borrow money from affiliated funds unless the
           interest rate is more favorable than available bank loan
           rates;
o     a Fund's borrowing from affiliated funds must be consistent with
           its investment objective and investment policies;
o     the loan rates will be the average of the overnight repurchase
           agreement rate available through the OppenheimerFunds joint
           repurchase agreement account and  a pre-established formula
           based on quotations from independent banks to approximate
           the lowest interest rate at which bank loans would be
           available to a Fund;
o     if a Fund has outstanding borrowings from all sources greater
           than 10% of its total assets, then the Fund must secure each
           additional outstanding interfund loan by segregating liquid
           assets of the Fund as collateral;
o     a Fund cannot borrow from an affiliated fund in excess of 125% of
           its total redemptions for the preceding seven days;
o     each interfund loan may be repaid on any day by a Fund; and
o     the Trustees will be provided with a report of all interfund
           loans and the Trustees will monitor all such borrowings to
           ensure that the Fund's participation is appropriate.

      There is a risk that a borrowing fund could have a loan called on
one day's notice. In that circumstance, a Fund might have to borrow
from a bank at a higher interest cost if money to lend were not
available from another Oppenheimer fund.

o     Interfund Lending. To assure that a Fund will not be
disadvantaged by making loans to affiliated funds, certain safeguards
will be implemented. Examples of these safeguards include the following:

o     a Fund will not lend money to affiliated funds unless the
               interest rate on such loan is determined under the terms
               of the exemptive order;
o     a Fund may not make interfund loans in excess of 15% of its net
               assets;
o     an interfund loan to any one affiliated fund shall not exceed 5%
               of a Fund's net assets;
o     an interfund loan may not be outstanding for more than seven
               days;
o     each interfund loan may be called on one business day's notice;
               and
o     the Manager will provide the Trustees reports on all interfund
               loans demonstrating that a Fund's participation is
               appropriate and that the loan is consistent with its
               investment objectives and policies.

      When a Fund lends assets to another  affiliated  fund, the Fund is
subject to the risk that the borrowing fund may fail to repay the loan.

Non-Diversification. The OSM - Salomon Brothers All Cap Fund, the OSM -
Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors
Focus Growth Fund are classified as "non-diversified" funds under the
1940 Act, which means that each such Fund is not limited by the 1940
Act in the proportion of its assets that may be invested in the
obligations of a single issuer. Each Fund, however, intends to comply
with the diversification requirements imposed by the Internal Revenue
Code in order to continue to qualify as a regulated investment company.
To the extent those Funds invest a greater proportion of their assets
in the securities of a smaller number of issuers, those Funds may be
more susceptible to any single economic, political or regulatory
occurrence than a more widely diversified fund and may be subject to
greater risk of loss with respect to its portfolio.

      |X| Derivatives (All Funds). Each Fund can invest in a variety of
derivative investments to seek income for liquidity needs or for bona
fide hedging purposes, including anticipatory hedging. Some derivative
investments a Fund can use are the hedging instruments described below
in this Statement of Additional Information. However, each Fund except
for the OSM - QM Active Balanced Fund and OSM - Salomon Brothers All
Cap Fund does not use, and does not currently contemplate using,
derivatives or hedging instruments to a significant degree and each
Fund is not obligated to use them in seeking its objective.

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

      |X| Investment in Other Investment Companies. Each Fund except
the OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Mercury
Advisors Focus Growth Fund can invest up to 10% of its total assets in
shares of other investment companies. They can invest up to 5% of their
total assets in any one investment company, but cannot own more than 3%
of the outstanding voting securities of that investment company. These
limitations do not apply to shares acquired in a merger, consolidation,
reorganization or acquisition. The OSM - Mercury Advisors S&P 500 Index
Fund and the OSM - Mercury Advisors Focus Growth Fund are feeder funds
that invest 100% of their assets in a corresponding Master Fund, which
is a registered investment company. The Master Funds can also invest
their assets in shares of investment companies when permitted by
applicable law.

      Investment 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 of 1940 (the "Investment Company Act"). Each Fund does not
intend to invest in other investment companies unless the Adviser or
Subadviser believes that the potential benefits of the investment
justify the payment of any premiums or sales charges. As a shareholder
in an investment company, a Fund would be subject to its ratable share
of that investment company's expenses, including its advisory and
administration fees. At the same time, that Fund would bear its own
management fees and other expenses.

      |X| Hedging (All Funds). Although each Fund does not anticipate
the extensive use of hedging instruments, each Fund can use hedging
instruments. They are not required to do so in seeking their goal. To
attempt to protect against declines in the market value of a Fund's
portfolio, to permit a Fund to retain unrealized gains in the value of
portfolio securities which have appreciated, or to facilitate selling
securities for investment reasons, each Fund could:
      |_|   sell futures contracts,
      |_|   buy puts on such futures or on securities, or
      |_|   write covered calls on securities or futures. Covered calls
         can also be used to seek income, but the Adviser or Subadviser
         does not expect to engage extensively in that practice.

      A Fund can use hedging to establish a position in the securities
market as a temporary substitute for purchasing particular securities.
In that case a Fund would normally seek to purchase the securities and
then terminate that hedging position. A 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 a Fund could:
      |_|?buy futures, or
      |_|?buy calls on such futures or on securities.

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

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

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

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

      No payment is paid or received  by a Fund on the  purchase or sale
of a future.  Upon entering into a futures  transaction,  a 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,  a 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. Each Fund can buy and sell
certain kinds of put options ("puts") and call options ("calls"). Each
Fund can buy and sell exchange-traded and over-the-counter put and call
options, including options on indices, securities, currencies,
commodities and futures.

            |_| Writing Covered Call Options. Each Fund can write (that
is, sell) covered calls. If a Fund sells a call option, it must be
covered, other than with respect to closing transactions. That means a
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 a Fund to satisfy its obligations
if the call is exercised.

      When a Fund writes a call, it receives cash (a premium). In the
case of a call on a security, a 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 exercise price may differ
from the market price of the underlying security. A 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 a 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.

      With respect to the OSM - QM Active Balanced Fund, OSM - Jennison
Growth Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore
Millennium Growth Fund II, the Custodian, or a securities depository
acting for the Custodian, will act as the escrow agent for OSM - QM
Active Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon
Brothers All Cap Fund and OSM - Gartmore Millennium Growth Fund II,
through the facilities of the Options Clearing Corporation ("OCC"), as
to the investments on which each such 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 a Fund enters into a
closing transaction.

      To terminate its obligation on a call it has written, a 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. A 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 a Fund they are taxable as ordinary income.
If a 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.

      Each 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, a Fund must cover
the call by segregating an equivalent dollar amount of liquid assets. A
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 a
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 each Fund's hedging policies.

            |_| Writing Put Options. Each Fund can sell put options. A
put option on a security gives the purchaser the right to sell, and the
writer the obligation to buy, the underlying security at the exercise
price during the option period.

      If a Fund sells a put option, it must be covered by segregated
liquid assets, other than with respect to closing transactions. The
premium a Fund receives from writing a put option represents a profit,
as long as the price of the underlying investment remains above the
exercise price of the put. However, a 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 Fund writes a put that
expires unexercised, a Fund realizes a gain in the amount of the
premium less transaction costs. If the put is exercised, a 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, a 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 incurred.

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

      As long as a Fund's obligation as the put writer continues, it
may be assigned an exercise notice by the exchange or broker-dealer
through which the put was sold. That notice will require a Fund to
exchange currency (for a put written on a currency) at the specified
rate of exchange or to take delivery of the underlying security and pay
the exercise price. A 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 a Fund receives an exercise
notice, a Fund effects a closing purchase transaction by purchasing a
put of the same series as it sold. Once a Fund has been assigned an
exercise notice, it cannot effect a closing purchase transaction.

      Each 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 permit a Fund to write another put option on
the security or to sell the security and use the proceeds from the sale
for other investments. A 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 a Fund,
are taxable as ordinary income.

            |_| Purchasing Calls and Puts. Each 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. A 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 a 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.

      Each Fund other than the OSM - Mercury Advisors S&P 500 Index
Fund can buy puts whether or not it holds the underlying investment in
its portfolio. The Mercury S&P 500 Index Fund can buy put options on
securities held in its portfolio or securities indices the performance
of which is substantially replicated by securities held in its
portfolio. When a 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 a Fund owns enables that
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 a Fund does not own permits that
Fund either to resell the put or to buy the underlying investment and
sell it at the exercise price. The resale price will vary inversely to
the price of the underlying investment. If the market price of the
underlying investment is above the exercise price and, as a result, the
put is not exercised, the put will become worthless on its expiration
date.

      When a 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 that 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.

            |_| Buying and Selling Options on Foreign Currencies. Each
Fund except the OSM - Mercury Advisors S&P 500 Index 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. A 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 a Fund wants to
acquire.

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

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

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

      A Fund's option activities could affect its portfolio turnover
rate and brokerage commissions. The exercise of calls written by a Fund
might cause it to sell related portfolio securities, thus increasing
its turnover rate. The exercise by a 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 a 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.

      A Fund could pay a brokerage commission each time it buys a call
or put, sells a call, 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 a Fund's net
asset value being more sensitive to changes in the value of the
underlying investment.

      If a covered call written by a 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. A 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 a 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 a Fund's
securities. For example, it is possible that while a Fund has used
hedging instruments in a short hedge, the market may advance and the
value of the securities held in that 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
a 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, a 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.

      A 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 a Fund does so the market might decline. If a 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. A Fund uses them to "lock in" the
U.S. dollar price of a security denominated in a foreign currency that
it 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. Each 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. Each
Fund may also use "cross-hedging" where it 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.

      A 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 a 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 a 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.

      A Fund could also use forward contracts to lock in the U.S.
dollar value of portfolio positions. This is called a "position
hedge."  When a 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 a 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, a 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."

      Each 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. A
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, a
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, a
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, a 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 Adviser or Subadviser 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 a 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 a Fund to sustain losses on these contracts and to
pay additional transactions costs. The use of forward contracts in this
manner might reduce a 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 a Fund
to sell a currency, it might sell a portfolio security and use the sale
proceeds to make delivery of the currency. In the alternative a 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, a
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. A 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 a 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, a Fund must evaluate the credit and performance
risk of the counterparty under each forward contract.

      Although a 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. A 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 a Fund at one rate, while offering a lesser rate of
exchange if the Fund desires to resell that currency to the dealer.

            ? Swap Transactions. Each Fund (other than the OSM -
Mercury Advisors S&P 500 Index Fund) can enter into interest rate swap
agreements. In an interest rate swap, the Fund and another party
exchange their right to receive or their obligation to pay interest on
a security. For example, they might swap the right to receive floating
rate payments for fixed rate payments. A Fund can enter into swaps only
on securities that it owns. A Fund will not enter into swaps with
respect to more than 25% of its total assets. Also, a Fund will
segregate liquid assets (such as cash or U.S. government securities) to
cover any amounts it could owe under swaps that exceed the amounts it
is entitled to receive, and it will adjust that amount daily, as
needed.

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

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

      The OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
Salomon Brothers All Cap Fund are authorized to enter into equity swap
agreements, which are OTC contracts in which one party agrees to make
periodic payments based on the change in market value of a specified
equity security, basket of equity securities or equity index in return
for periodic payments based on a fixed or variable interest rate or the
change in market value of a different equity security, basket of
securities or equity index. Swap agreements may also be used to obtain
exposure to a security or market without owning or taking physical
custody of securities. The Fund will enter into an equity swap
transaction only if, immediately following the time the Fund enters
into the transaction, the aggregate notional principal amount of equity
swap transactions to which the Fund is a party would not exceed 5% of
the Fund's net assets.

      |_| Additional Risk Factors of OTC Transactions; Limitations on
the Use of OTC Derivatives. Certain Derivatives traded in OTC markets,
including indexed securities, swaps and OTC options, involve
substantial liquidity risk. The absence of liquidity may make it
difficult or impossible for the Fund to sell such instruments promptly
at an acceptable price. The absence of liquidity may also make it more
difficult for the Fund to ascertain a market value for such
instruments. The Fund will therefore acquire illiquid OTC instruments
(i) if the agreement pursuant to which the instrument is purchased
contains a formula price at which the instrument may be terminated or
sold, or (ii) for which the Adviser or Subadviser anticipates the Fund
can receive on each business day at least two independent bids or
offers, unless a quotation from only one dealer is available, in which
case that dealer's quotation may be used.

      Because Derivatives traded in OTC markets are not guaranteed by
an exchange or clearing corporation and generally do not require
payment of margin, to the extent that the Fund has unrealized gains in
such instruments or has deposited collateral with its counterparty, the
Fund is at risk that its counterparty will become bankrupt or otherwise
fail to honor its obligations. The Fund will attempt to minimize the
risk that a counterparty will become bankrupt or otherwise fail to
honor its obligations by engaging in transactions in derivatives traded
in OTC markets only with financial institutions which have substantial
capital or which have provided the Fund with a third party guaranty or
other credit enhancement.

      |_| Regulatory Aspects of Hedging Instruments. When using futures
and options on futures, a 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, a Fund is exempted from registration with the CFTC as a
"commodity pool operator" if it complies with the requirements of Rule
4.5 adopted by the CFTC. The Rule does not limit the percentage of a
Fund's assets that may be used for futures margin and related options
premiums for a bona fide hedging position. However, under the Rule, a
Fund must limit its aggregate initial futures margin and related
options premiums to not more than 5% of its net assets for hedging
strategies that are not considered bona fide hedging strategies under
the Rule. Under the Rule, a 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 a 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 a 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 a Fund (or an adviser that is an affiliate
of a 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 a 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.

      |_| Tax Aspects of Certain Hedging Instruments. Certain foreign
currency exchange contracts in which a 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 a
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 a Fund to exempt
those transactions from this marked-to-market treatment.

      Certain forward contracts a 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 a
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 a Fund's investment income available for
distribution to its shareholders.

      |X| Temporary Defensive and Interim Investments. When market
conditions are unstable, or the Adviser or Subadviser believes it is
otherwise appropriate to reduce holdings in stocks, a Fund (except for
the OSM - Mercury Advisors S&P 500 Index Fund) can invest in a variety
of debt securities for defensive purposes. A Fund can also purchase
these securities for liquidity purposes to meet cash needs due to the
redemption of Fund shares, or to hold while waiting to reinvest cash
received from the sale of other portfolio securities. A Fund can buy:
      |_|   high-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),
|_|   short-term debt obligations of corporate issuers,
      |_|   certificates of deposit and bankers' acceptances of
         domestic and foreign banks and savings and loan associations,
         and
      |_|   repurchase agreements and purchase and sale 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

      |X| What Are "Fundamental Policies?"  Fundamental policies are
those policies that each 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 investment objectives of the OSM - Mercury  Advisors Focus
Growth Fund, OSM - Jennison Growth Fund, OSM - QM Active Balanced Fund
and the OSM - Salomon Brothers All Cap Fund are fundamental policies.
The investment objectives of the OSM - Mercury Advisors S&P 500 Index
Fund and the OSM - Gartmore Millennium Growth Fund II are
non-fundamental policies. Other policies described in the Prospectus or
this Statement of Additional Information are "fundamental" only if they
are identified as such. The Funds' Board of Trustees can change
non-fundamental policies without shareholder approval. The Board of
Trustees of the Master Funds in which the OSM - Mercury Advisors S&P
500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund invest
can change non-fundamental policies of the respective Master Fund
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.
Each Fund's most significant investment policies are described in the
Prospectus.

      |X| Do the Funds Have Additional Fundamental Policies?

      OSM - Mercury Advisors S&P 500 Index Fund - The following
investment restrictions are fundamental policies of OSM - Mercury
Advisors S&P 500 Index Fund. Provided that none of the following
restrictions shall prevent the Fund from investing all of its assets in
shares of another registered investment company with the same
investment objective (in a master/feeder structure), the Fund may not:

1.    Make any investment inconsistent with the Fund's classification
         as a non-diversified company under the Investment Company Act.

2.    Invest more than 25% of its total assets, taken at market value,
         in the securities of issuers in any particular industry
         (excluding the U.S. Government and its agencies and
         instrumentalities); provided, that in replicating the
         weighting of a particular industry in its target index, the
         Fund may invest more than 25% of its total assets in
         securities of issuers in that industry when the assets of
         companies included in the target index that are in the
         industry represent more than 25% of the total assets of all
         companies included in the index.

3.    Make investments for the purpose of exercising control or
         management.

4.    Purchase or sell real estate, except that, to the extent
         permitted by law, the Fund may invest in securities directly
         or indirectly secured by real estate or interests therein or
         issued by companies which invest in real estate or interests
         therein.

5.    Make loans to other persons, except that the acquisition of
         bonds, debentures or other corporate debt securities and
         investment in government obligations, commercial paper,
         pass-through instruments, certificates of deposit, bankers'
         acceptances, repurchase agreements or any similar instruments
         shall not be deemed to be the making of a loan, and except
         further that the Fund may lend its portfolio securities,
         provided that the lending of portfolio securities may be made
         only in accordance with applicable law and the guidelines set
         forth in the Fund's Registration Statement, as it may be
         amended from time to time.

6.    Issue senior securities to the extent such issuance would violate
         applicable law.

7.    Borrow money, except that (i) the Fund may borrow from banks (as
         defined in the Investment Company Act) in amounts up to 33
         1/3% of its total assets (including the amount borrowed), (ii)
         the Fund may borrow up to an additional 5% of its total assets
         for temporary purposes, (iii) the Fund may obtain such short
         term credit as may be necessary for the clearance of purchases
         and sales of portfolio securities, and (iv) the Fund may
         purchase securities on margin to the extent permitted by
         applicable law. The Fund may not pledge its assets other than
         to secure such borrowings or, to the extent permitted by the
         Fund's investment policies as set forth in its Registration
         Statement, as it may be amended from time to time, in
         connection with hedging transactions, short sales, when issued
         and forward commitment transactions and similar investment
         strategies.

8.    Underwrite securities of other issuers except insofar as the Fund
         technically may be deemed an underwriter under the Securities
         Act in selling portfolio securities.

9.    Purchase or sell commodities or contracts on commodities, except
         to the extent that the Fund may do so in accordance with
         applicable law and the Fund's registration statement, as it
         may be amended from time to time, and without registering as a
         commodity pool operator under the Commodity Exchange Act.

      With respect to the Fund's fundamental restriction on purchasing
securities on margin, the Fund is currently prohibited by law from
purchasing securities on margin and will not do so unless current law
changes. In addition, although the Fund is classified as a
non-diversified fund under the Investment Company Act and is not
subject to the diversification requirements of the Investment Company
Act, the Fund is required to comply with certain requirements under the
Internal Revenue Code of 1986, as amended (the "Code"). These
requirements include limiting its investments so that at the close of
each quarter of the taxable year (i) not more than 25% of the market
value of the Fund's total assets are invested in the securities of a
single issuer, or any two (2) or more issuers which are controlled by
the Fund and engaged in the same, similar or related businesses, and
(ii) with respect to 50% of the market value of its total assets, not
more than 5% of the market value of its total assets are invested in
securities of a single issuer, and the Fund does not own more than 10%
of the outstanding voting securities of a single issuer. The U.S.
Government, its agencies and instrumentalities and other regulated
investment companies are not included within the definition of "issuer"
for purposes of the diversification requirements of the Code.

      The applicable Master Fund has adopted investment restrictions
substantially identical to the foregoing, which are fundamental
policies of the Master Fund and may not be changed without the approval
of the holders of a majority of the interests of the Master Fund.

      In addition, the Fund has adopted non-fundamental restrictions
that may be changed by the Trustees without shareholder approval. Like
the fundamental restrictions, none of the non-fundamental restrictions,
including but not limited to restriction (a) below, shall prevent the
Fund from investing all of its assets in shares of another registered
investment company with the same investment objective (in a
master/feeder structure). Under the non-fundamental investment
restrictions, the Fund may not:

(a)   Change its investment policy to invest at least 80% of its net
          assets (plus borrowings for investment purposes) in
          securities or other financial instruments in, or correlated
          with, its target index without providing shareholders with at
          least 60 days notice.

(b)   Purchase securities of other investment companies, except to the
          extent such purchases are permitted by applicable law. As a
          matter of policy, however, the Fund will not purchase shares
          of any registered open-end investment company or registered
          unit investment trust, in reliance on Section 12(d)(1)(F) or
          (G) (the "fund of funds" provisions) of the Investment
          Company Act, at any time the Fund's shares are owned by
          another investment company that is part of the same group of
          investment companies as the Fund.

(c)   Invest in securities that cannot be readily resold because of
          legal or contractual restrictions or that cannot otherwise be
          marketed, redeemed or put to the issuer or a third party
          because of a lack of an active trading market, if at the time
          of acquisition more than 15% of its net assets would be
          invested in such securities. This restriction shall not apply
          to securities that mature within seven (7) days or securities
          that the Trustees have otherwise determined to be liquid
          pursuant to applicable law. Securities purchased in
          accordance with Rule 144A under the Securities Act (which are
          restricted securities that can be resold to qualified
          institutional buyers, but not to the general public) and
          determined to be liquid by the Trustees are not subject to
          the limitations set forth in this investment restriction.

(d)   Make any additional investments if the amount of its borrowings
          exceeds 5% of its total assets. Borrowings do not include the
          use of investment techniques that may be deemed to create
          leverage, including, but not limited to, such techniques as
          dollar rolls, when-issued securities, options and futures.

      In addition to the non-fundamental investment restrictions listed
above notwithstanding fundamental restriction 9 listed above, as a
non-fundamental investment restriction the Fund will not change
fundamental restriction 9 without first obtaining shareholder approval.
If a percentage restriction on the investment or use of assets set
forth above is adhered to at the time a transaction is effected, later
changes in percentages resulting from changing values will not be
considered a violation (except for the Fund's policies on borrowing and
illiquid securities).

      The Master Fund has adopted non-fundamental investment
restrictions substantially identical to the foregoing, which may be
changed by the Trustees of the Master Fund without shareholder
approval.

      The staff of the Commission has taken the position that purchased
OTC options and the assets used as cover for written OTC options are
illiquid securities. Therefore, the Fund and Master Fund have adopted
an investment policy pursuant to which neither the Fund nor the Master
Fund will purchase or sell OTC options (including OTC options on
futures contracts) if, as a result of such transaction, the sum of the
market value of OTC options currently outstanding which are held by the
Fund or the Master Fund, the market value of the underlying securities
covered by OTC call options currently outstanding which were sold by
the Fund or the Master Fund and margin deposits on the Fund's or the
Master Fund's existing OTC options on futures contracts exceeds 15% of
the net assets of the Fund or the Master Fund taken at market value,
together with all other assets of such Fund or the Master Fund which
are illiquid or are not otherwise readily marketable. However, if the
OTC option is sold by the Fund or the Master Fund to a primary U.S.
Government securities dealer recognized by the Federal Reserve Bank of
New York and if the Fund or the Master Fund has the unconditional
contractual right to repurchase such OTC option from the dealer at a
predetermined price, then the Fund or the Master Fund will treat as
illiquid such amount of the underlying securities as is equal to the
repurchase price less the amount by which the option is "in-the-money"
(i.e., current market value of the underlying securities minus the
option's strike price). The repurchase price with the primary dealers
is typically a formula price which is generally based on a multiple of
the premium received for the option, plus the amount by which the
option is "in-the-money."  This policy as to OTC options is not a
fundamental policy of the Fund or the Master Fund and may be amended by
the Trustees or the Directors without the approval of the shareholders.
However, the Trustees will not change or modify this policy prior to
the change or modification by the Commission staff of its position.

      Rule 10f-3 under the Investment Company Act sets forth the
conditions under which the Master Fund may purchase from an
underwriting syndicate in which Merrill Lynch is a member. Otherwise,
the Fund and the Master Fund are prohibited from engaging in portfolio
transactions with Merrill Lynch or its affiliates acting as principal
without an exemptive order. See "Portfolio Transactions and Brokerage."

      OSM - Mercury Advisors Focus Growth Fund - The following
investment restrictions are fundamental policies of OSM - Mercury
Advisors Focus Growth Fund. Unless otherwise provided, all references
to the Fund's assets below are in terms of current market value.
Provided that none of the following restrictions shall prevent the Fund
from investing all of its assets in shares of another registered
investment company with the same investment objective (in a
master/feeder structure), the Fund may not:

1.    Invest more than 25% of its total assets, taken at market value
         at the time of each investment, in the securities of issuers
         in any particular industry (excluding the U.S. Government and
         its agencies and instrumentalities).

2.    Make investments for the purpose of exercising control or
         management. Investments by the Fund in wholly-owned investment
         entities created under the laws of certain countries will not
         be deemed the making of investments for the purpose of
         exercising control or management.

3.    Purchase or sell real estate, except that, to the extent
         permitted by applicable law, the Fund may invest in securities
         directly or indirectly secured by real estate or interests
         therein or issued by companies that invest in real estate or
         interests therein.

4.    Make loans to other persons, except that the acquisition of
         bonds, debentures or other corporate debt securities and
         investment in governmental obligations, commercial paper,
         pass-through instruments, certificates of deposit, bankers'
         acceptances, repurchase agreements, purchase and sale
         contracts or any similar instruments shall not be deemed to be
         the making of a loan, and except further that the Fund may
         lend its portfolio securities, provided that the lending of
         portfolio securities may be made only in accordance with
         applicable law and the guidelines set forth in the Fund's
         Prospectus and Statement of Additional Information, as they
         may be amended from time to time.

5.    Issue senior securities to the extent such issuance would violate
         applicable law.

6.    Borrow money, except that (i) the Fund may borrow from banks (as
         defined in the Investment Company Act) in amounts up to 33
         1/3% of its total assets (including the amount borrowed), (ii)
         the Fund may borrow up to an additional 5% of its total assets
         for temporary purposes, (iii) the Fund may obtain such
         short-term credit as may be necessary for the clearance of
         purchases and sales of portfolio securities and (iv) the Fund
         may purchase securities on margin to the extent permitted by
         applicable law. The Fund may not pledge its assets other than
         to secure such borrowings or, to the extent permitted by the
         Fund's investment policies as set forth in its Prospectus and
         Statement of Additional Information, as they may be amended
         from time to time, in connection with hedging transactions,
         short sales, when-issued and forward commitment transactions
         and similar investment strategies.

7.    Underwrite securities of other issuers except insofar as the Fund
         technically may be deemed an underwriter under the Securities
         Act of 1933 in selling portfolio securities.

8.    Purchase or sell commodities or contracts on commodities, except
         to the extent that the Fund may do so in accordance with
         applicable law and the Fund's Prospectus and Statement of
         Additional Information, as they may be amended from time to
         time, and without registering as a commodity pool operator
         under the Commodity Exchange Act.

      The applicable Master Fund in which the Fund invests has adopted
investment restrictions substantially identical to the foregoing, which
are fundamental policies of the Master Fund and may not be changed with
respect to the Master Fund without the approval of the holders of a
majority of the interests of the Master Fund.

      In addition, the Fund has adopted non-fundamental restrictions
that may be changed by the Board of Trustees of the Fund without
shareholder approval. Like the fundamental restrictions, none of the
non-fundamental restrictions, including but not limited to restriction
(1) below, shall prevent the Fund from investing all of its assets in
shares of another registered investment company with the same
investment objective (in a master/feeder structure). The applicable
Master Fund has adopted investment restrictions substantially identical
to the following, which are non-fundamental policies of the Master Fund
and may be changed by the Trustees of the Master Fund without
shareholder approval. Under the non-fundamental investment
restrictions, the Fund may not:

1.    Purchase securities of other investment companies, except to the
         extent such purchases are permitted by applicable law. As a
         matter of policy, however, the Fund will not purchase shares
         of any registered open-end investment company or registered
         unit investment trust, in reliance on Section 12(d)(1)(F) or
         (G) (the "fund of funds" provisions) of the Investment Company
         Act, at any time its shares are owned by another investment
         company that is part of the same group of investment companies
         as the Fund.

2.    Make short sales of securities or maintain a short position,
         except to the extent permitted by applicable law.

3.    Invest in securities that cannot be readily resold because of
         legal or contractual restrictions or that cannot otherwise be
         marketed, redeemed or put to the issuer or a third party, if
         at the time of acquisition more than 15% of its net assets
         would be invested in such securities. This restriction shall
         not apply to securities that mature within seven (7) days or
         securities that the Trustees of the Fund have otherwise
         determined to be liquid pursuant to applicable law. Securities
         purchased in accordance with Rule 144A under the Securities
         Act (which are restricted securities that can be resold to
         qualified institutional buyers, but not to the general public)
         and determined to be liquid by the Board of Trustees of the
         Fund are not subject to the limitations set forth in this
         investment restriction.

4.    Notwithstanding fundamental investment restriction (6) above,
         borrow money or pledge its assets, except that the Fund (a)
         may borrow from a bank as a temporary measure for
         extraordinary or emergency purposes or to meet redemption in
         amounts not exceeding 33 1/3% (taken at market value) of its
         total assets and pledge its assets to secure such borrowing,
         (b) may obtain such short-term credit as may be necessary for
         the clearance of purchases and sales of portfolio securities
         and (c) may purchase securities on margin to the extent
         permitted by applicable law. However, at the present time,
         applicable law prohibits the Fund from purchasing securities
         on margin. The deposit or payment by the Fund of initial or
         variation margin in connection with financial futures
         contracts or options transactions is not considered to be the
         purchase of a security on margin. The purchase of securities
         while a borrowing is outstanding will have the effect of
         leveraging the Fund. Such leveraging or borrowing increases
         the Fund's exposure to capital risk and borrowed funds are
         subject to interest costs which will reduce net income. The
         Fund will not purchase securities while borrowing exceeds 5%
         of its total assets.

      The staff of the Commission has taken the position that purchased
OTC options and the assets used as cover for written OTC options are
illiquid securities. Therefore, the Fund and the Master Fund have
adopted an investment policy pursuant to which neither the Fund nor the
Master Fund will purchase or sell OTC options (including OTC options on
futures contracts) if, as a result of such transaction, the sum of the
market value of OTC options currently outstanding that are held by the
Fund or the Master Fund, the market value of the underlying securities
covered by OTC call options currently outstanding that were sold by the
Fund or the Master Fund and margin deposits on the Fund's or the Master
Fund's existing OTC options on financial futures contracts exceeds 15%
of the net assets of the Fund or the Master Fund, taken at market
value, together with all other assets of the Fund or the Master Fund
that are illiquid or are not otherwise readily marketable. However, if
the OTC option is sold by the Fund or the Master Fund to a primary U.S.
Government securities dealer recognized by the Federal Reserve Bank of
New York and if the Fund or the Master Fund has the unconditional
contractual right to repurchase such OTC option from the dealer at a
predetermined price, then the Fund or the Master Fund will treat as
illiquid such amount of the underlying securities as is equal to the
repurchase price less the amount by which the option is "in-the-money"
(i.e., current market value of the underlying securities minus the
option's strike price). The repurchase price with the primary dealers
is typically a formula price that is generally based on a multiple of
the premium received for the option, plus the amount by which the
option is "in-the-money."  This policy as to OTC options is not a
fundamental policy of the Fund or the Master Fund and may be amended by
the Board of Trustees of the Fund or the Board of Trustees of the
Master Fund without the approval of the Fund's shareholders. However,
the Trustees will not change or modify this policy prior to the change
or modification by the Commission staff of its position.

      In addition, as a non-fundamental policy that may be changed by
the Board of Trustees and to the extent required by the Commission or
its staff, the Fund will, for purposes of fundamental investment
restrictions (1) and (2), treat securities issued or guaranteed by the
government of any one foreign country as the obligations of a single
issuer.

      As another non-fundamental policy, the Fund will not invest in
securities that are (a) subject to material legal restrictions on
repatriation of assets or (b) cannot be readily resold because of legal
or contractual restrictions or which are not otherwise readily
marketable, including repurchase agreements and purchase and sales
contracts maturing in more than seven (7) days, if, regarding all such
securities, more than 15% of its net assets, taken at market value
would be invested in such securities.

      Because of the affiliation of Merrill Lynch with Mercury
Advisors, the Master Fund is prohibited from engaging in certain
transactions involving Merrill Lynch or its affiliates except for
brokerage transactions permitted under the Investment Company Act
involving only usual and customary commissions or transactions pursuant
to an exemptive order under the Investment Company Act. See "Portfolio
Transactions and Brokerage."  Without such an exemptive order the
Master Fund would be prohibited from engaging in portfolio transactions
with Merrill Lynch or any of its affiliates acting as principal. Rule
10f-3 under the Investment Company Act sets forth the conditions under
which the Master Fund may purchase from an underwriting syndicate in
which Merrill Lynch is a member.

      OSM - QM Active Balanced Fund, OSM - Jennison Growth Fund, OSM -
Salomon Brothers All Cap Fund and OSM - Gartmore Millennium Growth Fund
II - The following investment restrictions are fundamental policies of
the OSM - QM Active Balanced Fund, OSM - Jennison Growth Fund, OSM -
Salomon Brothers All Cap Fund and the OSM - Gartmore Millennium Growth
Fund II.

      |_|   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 (50% of
         the OSM - Salomon Brothers All Cap Fund's total assets). The
         limit does not apply to securities issued by the U.S.
         Government or any of its agencies or instrumentalities or
         securities of other investment companies.
      |_|   The Fund cannot invest in physical commodities or physical
         commodity contracts. However, the Fund can buy and sell
         hedging instruments to the extent specified in its Prospectus
         and this Statement of Additional Information from time to
         time. The Fund can also buy and sell options, futures,
         securities or other instruments backed by, or the investment
         return from which, is linked to changes in the price of,
         physical commodities.
|_|   The Fund cannot make loans except (a) through lending of
         securities, (b) through the purchase of debt instruments, loan
         participations or similar evidences of indebtedness, (c)
         through an inter-fund lending program with other affiliated
         funds, and (d) through repurchase agreements.
|_|   The Fund cannot borrow money in excess of 33 1/3% of the value of
         its total assets. The Fund may borrow only from banks and/or
         affiliated investment companies. With respect to this
         fundamental policy, the Fund can borrow only if it maintains a
         300% ratio of assets to borrowings at all times in the manner
         set forth in the Investment Company Act.
|_|   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 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 invest in real estate or in interests in real
         estate. However, the Fund can purchase readily-marketable
         securities of companies holding real estate or interests in
         real estate.
|_|   The Fund cannot issue "senior securities."  However, that
         restriction does not prohibit the Fund from borrowing money
         subject to the provisions set forth in this Statement of
         Additional Information, or from entering into margin,
         collateral or escrow arrangements permitted by its other
         investment policies.

      |X| Do the Funds Have Any Restrictions That Are Not Fundamental?
Each Fund has a number of other investment restrictions that are not
fundamental policies, which means that they can be changed by vote of a
majority of a Fund's Board of Trustees without shareholder approval.

|_|   A Fund cannot invest in companies for the purpose of acquiring
         control or management of them.
|_|   A Fund cannot pledge, mortgage or hypothecate any of its assets.
         However, this does not prohibit the escrow arrangements
         contemplated by writing covered call options or other
         collateral or margin arrangements in connection with any of
         the hedging instruments permitted by any of its other
         investment policies.

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

How the Funds are Managed

Organization and History. Oppenheimer Select Managers (the "Trust") is
an open-end management investment company with an unlimited number of
authorized shares of beneficial interest. The Trust was organized as a
Massachusetts business trust on November 10, 2000.

      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 a 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.

      Each 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 a 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
Trust is not required to hold, and does not plan to hold, regular
annual meetings of shareholders. The Trust 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 Trust, 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 Trust'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
a Fund valued at $25,000 or more or constituting at least 1% of a
Fund's outstanding shares. The Trustees may also take other action as
permitted by the Investment Company Act.

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

      The Trust's contractual arrangements state that any person doing
business with the Trust and each Fund (and each shareholder of a Fund)
agrees under its Declaration of Trust to look solely to the assets of
each series for satisfaction of any claim or demand that may arise out
of any dealings with that series. 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 Trust and each series
of the Trust 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 each
Fund's activities, review its performance, and review the actions of
the Adviser and Subadvisers. Although the Trust will not normally hold
annual meetings of its shareholders, it may hold shareholder meetings
from time to time on important matters, and shareholders have certain
rights to call a meeting to remove a Trustee or to take other action as
described in the Trust's Declaration of Trust.

      The Board of Trustees has an Audit Committee and a Review
Committee. The Audit Committee is comprised solely of Independent
Trustees. The members of the Audit Committee are Edward L. Cameron
(Chairman), William L. Armstrong, George C. Bowen and Robert J. Malone.
The Audit Committee held 7 meetings during the fiscal years ended
November 30, 2002 and December 3, 2002. The Audit Committee furnishes
the Board with recommendations regarding the selection of the Trust's
independent auditors. Other main functions of the Audit Committee
include, but are not limited to: (i) reviewing the scope and results of
audits and the audit fees charged; (ii) reviewing reports from the
Trust's independent auditors regarding the Fund's internal accounting
procedures and controls; and (iii) establishing a separate line of
communication between the Trust's independent auditors and its
independent Trustees.

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

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

      The members of the Review Committee are Jon S. Fossel (Chairman),
Robert G. Avis, Sam Freedman, Beverly Hamilton and F. William Marshall,
Jr. The Review Committee held 7 meetings during the fiscal years ended
November 30, 2002 and December 31, 2002. Among other functions, the
Review Committee reviews reports and makes recommendations to the Board
concerning the fees paid to the Trust's transfer agent and the services
provided to each Fund by the transfer agent. The Review Committee also
reviews each Fund's investment performance and policies and procedures
adopted by the Trust to comply with Investment Company Act and other
applicable law.

Trustees and Officers of the Trust. Except for Mr. Murphy, each of the
Trustees is an "Independent Trustee," as defined in the Investment
Company Act. 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 Trust 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 Trust and
the other Board II Funds (defined below) for which he is a trustee or
director.

      The Trust's Trustees and officers and their positions held with
the Trust 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 Funds as well as the
aggregate dollar range of shares beneficially owned in any of the
Oppenheimer funds overseen by the Trustees. All of the Trustees are
also trustees or directors of the following Oppenheimer funds (except
for Ms. Hamilton and Mr. Malone, who are not Trustees of Oppenheimer
Senior Floating Rate Fund and Mr. Murphy is not a Trustee or Managing
General Partner of any of the Centennial trusts) (referred to as "Board
II Funds"):

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

      Present or former  officers,  directors,  trustees  and  employees
(and their immediate  family members) of the Trust,  the Manager and its
affiliates,   and  retirement  plans   established  by  them  for  their
employees are permitted to purchase  Class A shares of the Funds 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. Bechtolt, Feld and Ives who are officers of the Trust,
respectively hold the same offices with one or more of the other Board
II Funds as with the Trust. As of March 11 2003, the Trustees and
officers of the Trust, as a group, owned of record or beneficially less
than 1% of each class of shares of any Fund. The foregoing statement
does not reflect ownership of shares held of record by an employee
benefit plan for employees of the Manager, other than the shares
beneficially owned under that plan by the officers of the Trust listed
above. In addition, each Independent Trustee, and his family members,
do not own securities of either the Manager or Distributor of the Board
II Funds or any person directly or indirectly controlling, controlled
by or under common control with the Manager or Distributor.

      Trustees and Officers of the Merrill Lynch Maser Funds. For
information about the Trustees and Officers of the Quantitative Master
Series Trust (the Master Fund in which the OSM - Mercury Advisors S&P
500 Index Fund invests all of its assets) you should refer to the
Registration Statement of the Quantitative Master Series Trust
(Investment Company Act File No. 811-7885). For information about the
Trustees and Officers of the Master Focus Twenty Trust (the Master Fund
in which the OSM - Mercury Advisors Focus Growth Fund invests all of
its assets) you should refer to the Registration Statement of the Mast
Focus Twenty Trust (Investment Company Act File No. 811-08735). You can
review each Trust's Registration Statement at the SEC's website at
www.sec.gov.

      Affiliated Transactions and Material Business Relationships. In
2001, Mr. Swain surrendered for cancellation 60,000 options of
Oppenheimer Acquisition Company ("OAC") (the Manager's parent holding
company) to MassMutual for a cash payment of $2,700,600.

      Mr. Swain has reported that he sold a residential property to Mr.
Freedman on October 23, 2001 for $1.2 million. An independent appraisal
of the property supported the sale price.

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

-------------------------------------------------------------------------------------
                                Independent Trustees
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name,               Principal Occupation(s) During Past 5     Dollar     Aggregate
                                                                         Dollar
                                                                         Range Of
                                                                         Shares
                                                                         Beneficially
                                                                         Owned in
                    Years;                                    Range of   Any of the
Position(s) Held    Other Trusteeships/Directorships Held by  Shares     Oppenheimer
with Fund,          Trustee;                                  BeneficiallFunds
Length of Service,  Number of Portfolios in Fund Complex      Owned in   Overseen
Age                 Currently Overseen by Trustee             each Fund  by Trustee
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                                                                As of December 31,
                                                                       2002
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
James C. Swain,     Formerly,  Chief Executive Officer (until $0         Over
Chairman and        August  27,  2002) of the Board II Funds,            $100,000
Trustee since 2001  Vice Chairman  (until January 2, 2002) of
Age: 69             the Manager and  President and a director
                    (until   1997)   of   Centennial    Asset
                    Management  Corporation  (a  wholly-owned
                    investment  advisory  subsidiary  of  the
                    Manager).  Oversees 42  portfolios in the
                    OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
William L.          Chairman   of   the   following   private $0         $50,001-
Armstrong,          mortgage banking companies:  Cherry Creek            $100,000
Trustee since 2001  Mortgage     Company     (since    1991),
Age: 66             Centennial  State Mortgage Company (since
                    1994),   The  El  Paso  Mortgage  Company
                    (since   1993),    Transland    Financial
                    Services,  Inc. (since 1997); Chairman of
                    the following  private  companies:  Great
                    Frontier  Insurance   (insurance  agency)
                    (since    1995),     Ambassador     Media
                    Corporation and Broadway  Ventures (since
                    1984);   a  director  of  the   following
                    public  companies:   Helmerich  &  Payne,
                    Inc.  (oil  and  gas  drilling/production
                    company)  (since 1992) and  UNUMProvident
                    (insurance  company)  (since  1991).  Mr.
                    Armstrong is also a  Director/Trustee  of
                    Campus   Crusade   for   Christ  and  the
                    Bradley  Foundation.  Formerly a director
                    of  the  following:   Storage  Technology
                    Corporation  (a  publicly-held   computer
                    equipment company)  (1991-February 2003),
                    International     Family    Entertainment
                    (television   channel)   (1992-1997)  and
                    Natec  Resources,   Inc.  (air  pollution
                    control  equipment and services  company)
                    (1991-1995),  Frontier Real Estate,  Inc.
                    (residential   real   estate   brokerage)
                    (1994-1999),  and  Frontier  Title (title
                    insurance  agency)  (1995-June  1999);  a
                    U.S.   Senator   (January    1979-January
                    1991).  Oversees  42  portfolios  in  the
                    OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Avis,     Formerly,  Director and President of A.G. $0         $1-$10,000
Trustee since 2001  Edwards  Capital,  Inc.  (General Partner
Age: 71             of private equity funds) (until  February
                    2001);  Chairman,   President  and  Chief
                    Executive   Officer   of   A.G.   Edwards
                    Capital,  Inc.  (until March 2000);  Vice
                    Chairman  and  Director of A.G.  Edwards,
                    Inc. and Vice Chairman of A.G.  Edwards &
                    Sons,   Inc.   (its   brokerage   company
                    subsidiary) (until March 1999);  Chairman
                    of A.G.  Edwards Trust Company and A.G.E.
                    Asset  Management   (investment  advisor)
                    (until  March   1999);   and  a  Director
                    (until  March  2000)  of A.G.  Edwards  &
                    Sons  and  A.G.  Edwards  Trust  Company.
                    Oversees    42    portfolios    in    the
                    OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
George C. Bowen,    Formerly (until April 1999):  Senior Vice $0         Over
Trustee since 2001  President   (from   September  1987)  and            $100,000
Age: 66             Treasurer   (from   March  1985)  of  the
                    Manager;  Vice President (from June 1983)
                    and  Treasurer   (since  March  1985)  of
                    OppenheimerFunds   Distributor,  Inc.  (a
                    subsidiary of the  Manager);  Senior Vice
                    President    (since    February    1992),
                    Treasurer  (since  July  1991)  Assistant
                    Secretary and a director  (since December
                    1991)  of  Centennial   Asset  Management
                    Corporation;    Vice   President   (since
                    October 1989) and Treasurer  (since April
                    1986)  of  HarbourView  Asset  Management
                    Corporation   (an   investment   advisory
                    subsidiary  of the  Manager);  President,
                    Treasurer    and   a    director    (June
                    1989-January  1990) of Centennial Capital
                    Corporation   (an   investment   advisory
                    subsidiary   of   the   Manager);    Vice
                    President  and  Treasurer  (since  August
                    1978) and  Secretary  (since  April 1981)
                    of   Shareholder   Services,    Inc.   (a
                    transfer   agent    subsidiary   of   the
                    Manager);  Vice President,  Treasurer and
                    Secretary   (since   November   1989)  of
                    Shareholder  Financial Services,  Inc. (a
                    transfer   agent    subsidiary   of   the
                    Manager);   Assistant   Treasurer  (since
                    March  1998) of  Oppenheimer  Acquisition
                    Corp.      (the     Manager's      parent
                    corporation);  Treasurer  (since November
                    1989)    of    Oppenheimer    Partnership
                    Holdings,   Inc.   (a   holding   company
                    subsidiary   of   the   Manager);    Vice
                    President  and   Treasurer   (since  July
                    1996)   of    Oppenheimer    Real   Asset
                    Management,  Inc. (an investment advisory
                    subsidiary   of   the   Manager);   Chief
                    Executive  Officer  and  director  (since
                    March  1996)  of  MultiSource   Services,
                    Inc. (a  broker-dealer  subsidiary of the
                    Manager);  Treasurer (since October 1997)
                    of  OppenheimerFunds  International  Ltd.
                    and  Oppenheimer   Millennium  Funds  plc
                    (offshore  fund  management  subsidiaries
                    of the  Manager).  Oversees 42 portfolios
                    in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Edward L. Cameron,  A  member  of The  Life  Guard  of  Mount $0         $50,001-
Trustee since 2001  Vernon,  George  Washington's home (since            $100,000
Age: 64             June  2000).  Formerly  (March 2001 - May
                    2002)  Director of Genetic  ID, Inc.  and
                    its   subsidiaries   (a  privately   held
                    biotech   company);    a   partner   with
                    PricewaterhouseCoopers      LLP     (from
                    1974-1999)  (an   accounting   firm)  and
                    Chairman    (from    1994-1998),    Price
                    Waterhouse    LLP    Global    Investment
                    Management   Industry   Services   Group.
                    Oversees    42    portfolios    in    the
                    OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Jon S. Fossel,      Chairman  and  Director  (since  1998) of $0         Over
Trustee since 2001  Rocky    Mountain   Elk   Foundation   (a            $100,000
Age: 61             not-for-profit    foundation);    and   a
                    director  (since  October  1999)  of P.R.
                    Pharmaceuticals    (a   privately    held
                    company) and  UNUMProvident (an insurance
                    company)  (since June 1, 2002).  Formerly
                    Chairman  and a director  (until  October
                    1996) and President  and Chief  Executive
                    Officer   (until  October  1995)  of  the
                    Manager;   President,   Chief   Executive
                    Officer  and a  director  of  Oppenheimer
                    Acquisition Corp.,  Shareholders Services
                    Inc.    and    Shareholder     Financials
                    Services,   Inc.  (until  October  1995).
                    Oversees    42    portfolios    in    the
                    OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Sam Freedman,       Director    of    Colorado    Uplift   (a $0         Over
Trustee since 2001  non-profit   charity)  (since   September            $100,000
Age: 62             1984).  Formerly (until October 1994) Mr.
                    Freedman   held   several   positions  in
                    subsidiary  or  affiliated  companies  of
                    the Manager.  Oversees 42  portfolios  in
                    the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Beverly          L. Trustee   (since   1996)  of   MassMutual $0         $10,001-$50,000
Hamilton,           Institutional  Funds  and of  MML  Series
Trustee since 2002  Investment   Fund  (open-end   investment
Age: 56             companies);   Director  of  MML  Services
                    (since  April  1987)  and  America  Funds
                    Emerging   Markets   Growth  Fund  (since
                    October   1991)   (both  are   investment
                    companies),  The California  Endowment (a
                    philanthropy  organization)  (since April
                    2002),   and   Community    Hospital   of
                    Monterey   Peninsula,   (since   February
                    2002);  a trustee  (since  February 2000)
                    of  Monterey  International  Studies  (an
                    educational    organization),    and   an
                    advisor to Unilever  (Holland)'s  pension
                    fund and to Credit Suisse First  Boston's
                    Sprout   venture   capital   unit.   Mrs.
                    Hamilton   also  is  a   member   of  the
                    investment  committees of the Rockefeller
                    Foundation,  the  University  of Michigan
                    and    Hartford    Hospital.    Formerly,
                    President   (February   1991-April  2000)
                    ARCO   Investment   Management   Company.
                    Oversees    42    portfolios    in    the
                    OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert J. Malone,   Director    (since    2001)    of   Jones $0         Over
Trustee since 2002  Knowledge,   Inc.   (a   privately   held            $100,000
Age: 58             company), U.S. Exploration,  Inc., (since
                    1997),   Colorado  UpLIFT  (a  non-profit
                    organization)  (since 1986) and a trustee
                    of  the   Gallagher   Family   Foundation
                    (non-profit  organization)  (since 2000).
                    Formerly,   Chairman  of  U.S.   Bank  (a
                    subsidiary  of U.S.  Bancorp and formerly
                    Colorado     National     Bank,)    (July
                    1996-April  1,  1999) and a  director  of
                    Commercial   Assets,    Inc.   (a   REIT)
                    (1993-2000).  Oversees 42  portfolios  in
                    the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
F. William          Trustee   (since   1996)  of   MassMutual $0         Over
Marshall, Jr.,      Institutional  Funds  and of  MML  Series            $100,000
Trustee since 2001  Investment   Fund  (open-end   investment
Age: 60             companies);    Trustee    (since   1987),
                    Chairman  of the Board  (since  2003) and
                    Chairman  of  the  investment   committee
                    (since 1994) for the  Worcester  Polytech
                    Institute;    President   and   Treasurer
                    (since  January  1999) of the SIS Fund (a
                    private not for profit  charitable fund);
                    Trustee  (since 1995) of the  Springfield
                    Library and Museum  Association;  Trustee
                    (since  1996)  of  the  Community   Music
                    School of Springfield.  Formerly,  member
                    of  the   investment   committee  of  the
                    Community     Foundation    of    Western
                    Massachusetts  (1998  -  2003);  Chairman
                    (January  1999-July 1999) of SIS & Family
                    Bank,   F.S.B.   (formerly   SIS   Bank);
                    President,  Chief  Executive  Officer and
                    Director (May 1993-December  1998) of SIS
                    Bankcorp,  Inc.  and SIS  Bank  (formerly
                    Springfield  Institution for Savings) and
                    Executive   Vice    President    (January
                    1999-July   1999)  of  Peoples   Heritage
                    Financial   Group,   Inc.   Oversees   42
                    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,              Principal Occupation(s) During Past 5      Dollar     Aggregate
                                                                         Dollar
                                                                         Range Of
                                                                         Shares
                   Years;                                     Range of   Beneficially
Position(s) Held   Other Trusteeships/Directorships Held by   Shares     Owned in
with Fund,         Trustee;                                   BeneficiallAny of the
Length of Service, Number of Portfolios in Fund Complex       Owned in   Oppenheimer
Age                Currently Overseen by Trustee              each Fund  Funds
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                                                                As of December 31,
                                                                       2002
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
John V. Murphy,    Chairman,   Chief  Executive  Officer  and $0         Over
President and      director  (since June 2001) and  President            $100,000
Trustee since 2001 (since  September  2000)  of the  Manager;
Age: 53            President  and a  director  or  trustee of
                   other Oppenheimer  funds;  President and a
                   director  (since July 2001) of Oppenheimer
                   Acquisition   Corp.   and  of  Oppenheimer
                   Partnership  Holdings,  Inc.;  a  director
                   (since November 2001) of  OppenheimerFunds
                   Distributor,    Inc.;   Chairman   and   a
                   director  (since July 2001) of Shareholder
                   Services,    Inc.   and   of   Shareholder
                   Financial Services,  Inc.; President and a
                   director     (since    July    2001)    of
                   OppenheimerFunds    Legacy    Program   (a
                   charitable  trust program  established  by
                   the Manager);  a director of the following
                   investment   advisory    subsidiaries   of
                   OppenheimerFunds,  Inc.: 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  DLB
                   Acquisition    Corporation    (a   holding
                   company  that  owns  shares  of  David  L.
                   Babson & Company,  Inc.); 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    74     portfolios    in    the
                   OppenheimerFunds complex.
-------------------------------------------------------------------------------------

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

-------------------------------------------------------------------------------------
                                Officers of the Fund
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name,                   Principal Occupation(s) During Past 5 Years
Position(s) Held with
Fund,
Length of Service,
Age
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian W. Wixted,        Senior Vice  President and  Treasurer  (since March 1999) of
Treasurer,    Principal the Manager;  Treasurer  (since  March 1999) of  HarbourView
Financial           and Asset Management  Corporation,  Shareholder Services,  Inc.,
Accounting      Officer Oppenheimer Real Asset Management  Corporation,  Shareholder
since 2001              Financial Services,  Inc., Oppenheimer Partnership Holdings,
Age: 43                 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); 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 90
                        portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Connie Bechtolt,        Assistant Vice President of the Manager  (since September
Assistant Treasurer     1998); formerly Manager/Fund Accounting (September
since 2002              1994-September 1998) of the Manager. An officer of 90
Age: 39                 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Philip Vottiero,        Vice  President/Fund  Accounting of the Manager (since March
Assistant Treasurer     2002;  formerly Vice  President/Corporate  Accounting of the
since 2002              Manager (July  1999-March  2002) prior to which he was Chief
Age: 39                 Financial  Officer at Sovlink  Corporation  (April 1996-June
                        1999).  An officer of 90 portfolios in the  OppenheimerFunds
                        complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Zack,         Senior Vice President  (since May 1985) and General  Counsel
Vice President &        (since February 2002) of the Manager;  General Counsel and a
Secretary since 2001    director   (since   November   2001)   of   OppenheimerFunds
Age: 54                 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 90 portfolios in the  OppenheimerFunds
                        complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Katherine P. Feld,      Vice  President and Senior  Counsel (since July 1999) of the
Assistant Secretary     Manager;    Vice    President    (since    June   1990)   of
since 2001              OppenheimerFunds    Distributor,    Inc.;   Director,   Vice
Age: 44                 President  and  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 90 portfolios
                        in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Kathleen T. Ives,       Vice  President and Assistant  Counsel  (since June 1998) of
Assistant Secretary     the    Manager;    Vice    President    (since    1999)   of
since 2001              OppenheimerFunds  Distributor,   Inc.;  Vice  President  and
Age: 37                 Assistant  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 90 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Philip T. Masterson,    Vice President and Assistant Counsel of the Manager (since
Assistant Secretary     July 1998); formerly, an associate with Davis, Graham, &
since 2002              Stubbs LLP (January 1997-June 1998). An officer of 90
Age: 39                 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Denis R. Molleur,       Vice  President  and Senior  Counsel of the  Manager  (since
Assistant Secretary     July 1999);  formerly a Vice President and Associate Counsel
since 2001              of the Manager (September  1995-July 1999). An officer of 83
Age: 45                 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------

      |X| Remuneration of Trustees. The officers of the Trust and one
Trustee, Mr. Murphy, are affiliated with the Manager and receive no
salary or fee from the Funds. The remaining Trustees receive the
compensation shown below. The aggregate compensation from each Fund is
for its fiscal year ending November 31, 2002 (December 31, 2002 for the
OSM - Mercury Advisors S&P 500 Index Fund). The compensation from all
of the Board II funds includes the compensation from the Funds and
represents compensation received as a director, trustee, managing
general partner or member of a committee of the Board during the
calendar year 2002.







---------------------------------------------------------------------------------
                             Aggregate Compensation from Funds          Total
                                                                      Compensation
                                                                      from
                                                                      Funds and
                                                                      Fund
                                                                      Complex
                                                                      Paid to
                                                                      Trustees*
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Name of Trustee       MercuryMercury         Jennison
                      AdvisorAdvisors  QM            SalomonGartmore
                      S&P     Focus  Active          BrotherMillennium
                       500   Growth  Balanced        All     Growth
                      Index   Fund2   Fund2  Growth   Cap     Fund2
                      Fund1                   Fund2  Fund2
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
James C. Swain         $726   $676    $663    $647    $691    $661     $177,996
Chairman of the Board
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
William Armstrong
Audit Committee        $375   $350    $343    $335    $357    $342     $92,076
Member
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert G. Avis
Review Committee       $376   $350    $344    $335    $358    $342     $92,199
Member
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
George C. Bowen
Audit Committee        $372   $346    $340    $331    $354    $338     $91,124
Member
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Edward Cameron
Audit Committee        $407   $379    $372    $363    $387    $370     $99,743
Chairman
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
John S. Fossel
Review Committee       $386   $382    $375    $366    $391    $374     $100,723
Chairman
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Sam Freedman
Review Committee       $376   $350    $344    $335    $358    $342     $92,199
Member
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Beverly Hamilton5
Review Committee      $2386   $2216   $2176   $2126  $2266    $2166    $58,3267
Member
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Robert J. Malone5
Audit Committee       $2388   $2218   $2178   $2128  $2268    $2168    $58,326
Member
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
F. William Marshall
Review Committee       $372   $346    $340    $331    $354    $338     $91,1249
Member
---------------------------------------------------------------------------------
1. For the Fund's fiscal year ended December 31, 2002.
2. For the Fund's fiscal year ended November 30, 2002.
3. Effective July 1, 2002, C. Howard Kast and Robert M. Kirchner
retired as Trustees from the Board II Funds For the fiscal years shown
in the table, Mr. Kast received $946 and Mr. Kirchner received $867
aggregate compensation from the Fund. For the calendar year ended
December 31, 2002, Mr. Kast received $41,451 and Mr. Kirchner received
$38,001 total compensation from all of the Oppenheimer funds for which
they served as Trustees.
4. Aggregate Compensation From Fund includes fees and deferred
compensation, if any, for a Trustee.
5. Mrs. Hamilton and Mr. Malone were elected as Trustees of the Board
II Funds effective June 1, 2002. Compensation for Mrs. Hamilton and Mr.
Malone was paid by all the Board II Funds, with the exception of
Oppenheimer Senior Floating Rate Fund for which they currently do not
serve as Trustees (total of 42 Oppenheimer funds).
6. Includes $660 deferred under Deferred Compensation Plan described
below.
7. Includes $55,333 compensation (of which 100% was deferred under a
deferred compensation plan) paid to Mrs. Hamilton for serving as a
trustee by two open-end investment companies (MassMutual Institutional
Funds and MML Series Investment Fund) the investment adviser for which
is the indirect parent company of the Fund's Manager. The Manager also
serves as the Sub-Advisor to the MassMutual International Equity Fund,
a series of MassMutual Institutional Funds.
8. Includes $1,130 deferred under Deferred Compensation Plan described
below.
9. Includes $47,000 of compensation paid to Mr. Marshall for serving as
a trustee by two open-end investment companies (MassMutual
Institutional Funds and MML Series Investment Fund) the investment
adviser for which is the indirect parent company of the Fund's Manager.
The Manager also serves as the Sub-Advisor to the MassMutual
International Equity Fund, a series of MassMutual Institutional Funds.
* For purposes of this section only, "Fund Complex" includes the
Oppenheimer funds, MassMutual Institutional Funds and MML Series
Investment Fund in accordance with the instructions for Form N-1A. The
Manager does not consider MassMutual Institutional Funds and MML Series
Investment Fund to be part of the OppenheimerFunds "Fund Complex" as
that term may be otherwise interpreted.

      |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 a 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 Funds' assets, liabilities and 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 Commission, the Funds 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 March 11, 2003, the only persons
who owned of record or were known by the Funds to own beneficially 5%
or more of any class of the Funds' outstanding securities were:

      OSM - Mercury Advisors S&P 500 Index Fund
      RELIANCE TRUST CO CUST FBO PATHLORE , 401K PROF SHARING PLAN, PO
      BOX 48529, ATLANTA GA 30362-1529, which owned 69,200.816 Class A
      shares (6.72% of the Class A shares then outstanding);
      RPSS TR, TRIM SYSTEMS LLC, 401K PLAN, ATTN: HALLIE BURKE, 5700
      PERIMETER DR STE A, DUBLIN OH 43017-3253, which owned 65,410.310
      Class A shares (6.35% of the Class A shares then outstanding);
      RPSS TR, J KINGS FOOD SERVICE, PROFESSIONALS INC 401K PLAN, ATTN:
      MELISSA SHULMAN. 700 FURROWS RD, HOLTSVILLE NY 11742-2001, which
      owned 60,753.569 Class A shares (5.89% of the Class A shares then
      outstanding);
      RELIANCE TRUST COMPANY TR, CORNELL COMPANIES INC, PO BOX 48529,
      ATLANTA GA 30362-1529, which owned 207,188.686 Class N shares
      (10.21% of the Class N shares then outstanding);
      OPPENHEIMERFUNDS INC, C/O RAY OLSON BLDG 2, 6803 S TUCSON WAY,
      CENTENNIAL CO 80112-3924, which owned 100.00 Class Y shares
      (81.16% of the Class Y shares then outstanding);
      RPSS TR ROLLOVER IRA, FBO DOUGLAS J SCHOENFELD, 503 ALPINE LN,
      HOLMEN WI 54636-9143, which owned 23.201 Class Y shares (18.83%
      of the Class Y shares then outstanding).

      OSM - Mercury Advisors Focus Growth Fund
      RPSS TR ROLLOVER IRA, FBO JOHN R HAYES, 7026 SAN ALTOS CIR,
      CITRUS HEIGHTS CA 95621-4362, which owned 22,677.685 Class B
      shares (7.19% of the Class B shares then outstanding);
      MARLENE CASTLE / DOUG CASTLE TR, EXCEL FABRICATING INC, 2301
      NEVADA AVE N, GOLDEN VALLEY MN  55427-3609, which owned
      17,252.852 Class C shares (6.59% of the Class Y shares then
      outstanding);
      G CANINO T WALSH & J VAN SON TR, ISLAND RISK MANAGEMENT ASSOC,
      401K PLAN, 65 W HILLS RD, HUNTINGTN STA NY  11746-2305, which
      owned 10,849.813 Class N shares (34.52% of the Class N shares
      then outstanding);
      RPSS TR ROLLOVER IRA, FBO SUZANNE M OSTRANDER, 34 GARROW AVE,
      PEQUANNOCK NJ 07440-1603, which owned 4,119.850 Class N shares
      (13.10% of the Class N shares than outstanding);
      RPSS TR ROLLOVER IRA, FBO MOUSTAFA O NASR, 25525 VIA PALADAR,
      VALENCIA CA 91355-3153, which owned 3,662.149 Class N shares
      (11.65% of the Class N shares then outstanding);
      OPPENHEIMERFUNDS INC, C/O RAY OLSON BLDG 2, 6803 S TUCSON WAY,
      CENTENNIAL CO 80112-3924, which owned 100.00 Class Y shares
      (100.00% of the Class Y shares then outstanding).

      OSM - QM Active Balanced Fund
      OPPENHEIMERFUNDS,  DISTRIBUTOR INC, ATTN: RAY OLSON, 6803 S TUCSON
      WAY,  ENGLEWOOD CO  80112-3924,  which owned  500,000.000  Class A
      shares (84.87% of the Class A shares then outstanding);
      LAWRENCE  T  BLOCH,  365 W 28TH ST #18H,  NEW YORK NY  10001-7917,
      which owned  5,292.000 Class B shares (7.88% of the Class B shares
      then outstanding);
      MLPF&S CUST FBO, KENNETH GOTTLIEB IRA, FBO KENNETH GOTTLIEB,  7715
      SOUTHAMPTON  TER  #E411,   TAMARAC  FL  33321-9110,   which  owned
      4,721.000  Class  B  shares  (7.03%  of the  Class B  shares  then
      outstanding);
      RPSS CUST 403-B PLAN, ROME CITY SCHOOLS,  FBO ANTHONY J VINCI, 804
      HICKORY ST, ROME NY  13440-2132,  which  owned  7,157.194  Class B
      shares (10.65% of the Class B shares then outstanding);
      RPSS TR IRA,  FBO GLENN R  WHITNEY,  PO BOX 27,  MOUNTAINVILLE  NY
      10953-0027,  which owned  3,863.063  Class B shares  (5.75%of  the
      Class B shares then outstanding);
      RPSS TR, GAZETTEN  CONTRACTING INC, 401(K) PLAN,  ATTN:  WILLIAM A
      CYNE, 58 W 40TH ST, NEW YORK NY 10018-2658,  which owned 3,679.244
      Class B shares (5.47% of the Class B shares then outstanding);
      RPSS TR ROLLOVER IRA, FBO MARTIN C SCHNEIDER,  7860 MISSION CENTER
      CT STE 205, SAN DIEGO CA 92108-1331,  which owned  6,476.275 Class
      C shares (8.79% of the Class C shares then outstanding);
      RPSS TR ROLLOVER IRA, FBO SALLY HENSLEY,  3812 MINERS LOOP,  COEUR
      D ALENE  ID  83815-9691,  which  owned  4,394.186  Class C  shares
      (5.96% of the Class C shares then outstanding);
      RPSS TR,  MATHENY MOTOR TRUCK CO, 401(K) PLAN,  ATTN MARNI KEPPLE,
      PO BOX 1304,  PARKERSBURG  WV 26102-1304,  which owned  21,406.576
      Class N shares (39.00% of the Class N  shares then outstanding);
      RPSS TR,  BLACHFORD  INVESTMENTS  INC, 401K PLAN, ATTN: DORI WITT,
      1400  NUCLEAR  DR,  WEST  CHICAGO  IL   60185-1636,   which  owned
      20,939.496  Class N shares  (38.14%  of the  Class N  shares  then
      outstanding);
      RPSS TR  ROLLOVER  IRA,  FBO  KENNETH T HARTMAN,  614  HANOVER LN,
      IRVING TX 75062-8918,  which owned 3,272.463 Class N shares (5.96%
      of the Class N shares then outstanding);
      OPPENHEIMERFUNDS  INC,  C/O RAY OLSON  BLDG 2, 6803 S TUCSON  WAY,
      CENTENNIAL  CO  80112-3924,  which  owned  100.00  Class Y  shares
      (100.00% of the Class Y shares then outstanding).

      OSM - Jennison Growth Fund
      OPPENHEIMERFUNDS,  DISTRIBUTOR  INC, ATTN: RAY OLSON, 803 S TUCSON
      WAY,  ENGLEWOOD CO  80112-3924,  which owned  500,000.000  Class A
      shares (62.02% of the Class A shares then outstanding);
      RPSS TR,  GREYSTAR  MANAGEMENT  SERVICES LP, 401K PLAN,  ATTN TONY
      WHEELER,  3411 RICHMOND AVE STE 200, HOUSTON TX 77046-3412,  which
      owned  41,115.372Class N shares (16.27% of the Class N shares then
      outstanding);
      RPSS TR, CAPITAL COMMUNICATIONS  FEDERAL,  401(K) PLAN, ATTN NANCY
      DURIVAGE,  18  COMPUTER DR E,  ALBANY NY  12205-1111,  which owned
      34,817.417  Class N shares  (13.78%  of the  Class N  shares  then
      outstanding);
      ROLLIN M DICK TR,  HAVERSTICK  CONSULTING INC, 401K PLAN,  11405 N
      PENNSYLVANIA  ST  STE  210,  CARMEL  IN  46032-6905,  which  owned
      31,919.001  Class N shares  (12.63%  of the  Class N  shares  then
      outstanding);
      RPSS  TR,  COSMETIC  ESSENCE  INC,  401(K)  PLAN,  ATTN:   CAMILLE
      CALVONI,  2182  ROUTE  35,  HOLMDEL  NJ  07733-1125,  which  owned
      27,676.000  Class N shares  (10.95%  of the  Class N  shares  then
      outstanding);
      RPSS TR, FIDELITY  DEPOSIT & DISCOUNT BAN, 401(K) PLAN,  BLAKELY &
      DRINKER  STS,  DUNMORE PA 18512,  which owned  15,118.713  Class N
      shares (5.98% of the Class N shares then outstanding);
      LYN H HAMMOND TR,  PELHAM FAMILY  PRACTICE  401K, 25 CREEKVIEW CT,
      GREENVILLE SC 29615-4800,  which owned  12,785.683  Class N shares
      (5.06% of the Class N shares then outstanding);
      OPPENHEIMERFUNDS  INC,  C/O RAY OLSON  BLDG 2, 6803 S TUCSON  WAY,
      CENTENNIAL  CO  80112-3924,  which  owned  100.00  Class Y  shares
      (100.00% of the Class Y shares then outstanding).

      OSM - Salomon Brothers All Cap Fund
      RPSS TR, UMG  MANUFACTURING  & LOGISTICS  INC 401K,  ATTN ANGELA M
      JONES, 700 S BATTLEGROUND  AVE, GROVER NC 28073-9541,  which owned
      41,618.100  Class A  shares  (5.74%  of the  Class A  shares  then
      outstanding);
      SHELIA  LITTLETON ET AL TR, LEGACY BANK OF TEXAS 401K, 5000 LEGACY
      DR, PLANO TX  75024-3100,  which owned  83,321.069  Class N shares
      (10.18% of the Class N shares then outstanding);
      MCB TRUST  SERVICES  TTEE,  LINDEN MOTOR FREIGHT CO INC, NON UNION
      EMPLOYEE,  700 17TH ST STE 150, DENVER CO 80202-3507,  which owned
      75,784.126  Class N  shares  (9.26%  of the  Class N  shares  then
      outstanding);
      WEBB,  BECK & DAWSON TR,  BECK,REDDEN & SECREST PSP, 1221 MCKINNEY
      ST STE 4500,  HOUSTON TX 77010-2029,  which owned 68,349.298 Class
      N shares (8.35% of the Class N shares then outstanding);
      RPSS TR, DOBBS  BROTHERS  MANAGEMENT  SERVI,  401(K)  PLAN,  ATTN:
      JOYCE HOWELL,  5170 SANDERLIN AVE STE 102,  MEMPHIS TN 38117-4359,
      which  owned  47,431.106  Class N  shares  (5.79%  of the  Class N
      shares then outstanding);
      OPPENHEIMERFUNDS  INC,  C/O RAY OLSON  BLDG 2, 6803 S TUCSON  WAY,
      CENTENNIAL  CO  80112-3924,  which  owned  100.00  Class Y  shares
      (100.00% of the Class Y shares then outstanding);

      OSM - Gartmore Millennium Growth Fund II
      OPPENHEIMERFUNDS,  DISTRIBUTOR INC, ATTN: RAY OLSON, 6803 S TUCSON
      WAY,  ENGLEWOOD CO  80112-3924,  which owned  500,000.000  Class A
      shares (92.28% of the Class A shares then outstanding);
      MARY S.  GIRARDI - IRA,  397 WINDSOR  PLACE,  OCEANSIDE  NY 11572,
      which  owned  6,685.620  Class B  shares  (16.43%  of the  Class B
      shares then outstanding);
      JOHN GARRABRANT - IRA, 173 SHERIDAN AVE, LONGWOOD FL 32750,  which
      owned  6,173.718 Class B shares (15.17% of the Class B shares then
      outstanding);
      RPSS TR, CLAIMS  CONFERENCE  401K PLAN,  ATTN:  CELESTE LEVY, 15 E
      26TH ST STE 906,  NEW YORK NY  10010-1533,  which owned  2,314.341
      Class B shares (5.68% of the Class B shares then outstanding);
      MARGARET  HARWELL - IRA, 6712 NW 1st , MARGATE FL 33063, who owned
      2,252.747  Class  B  shares  (5.53%  of the  Class B  shares  then
      outstanding);
      MORGAN  STANLEY  DW INC  CUST FOR MARY  ELLEN  MALLOY,  PO BOX 250
      CHURCH  STREET  STATION,  NEW  YORK  NY  10008-0250,  which  owned
      2,834.994  Class C  shares  (10.68%  of the  Class C  shares  then
      outstanding);
      RPSS TR ROLLOVER IRA, FBO PATRICK J BARNETT,  122 N PROVIDENCE RD,
      WALLINGFORD PA 19086-6135,  which owned  1,826.445  Class C shares
      (6.88% of the Class C shares then outstanding);
      RPSS CUST 403-B PLAN,  LEVITTOWN SCHOOLS,  FBO LAURA A DAMURO, 181
      STEWART  AVE,  GARDEN CITY NY  11530-2507,  which owned  1,728.374
      Class C shares (6.51% of the Class C shares then outstanding);
      ROBERT  H LYNCH  JR TR,  ARISTEIA  CAPITAL  LLC,  ATTN:  EDWARD  P
      GOLDMAN,  381 5TH AVE FL 6, NEW YORK NY  10016-3322,  which  owned
      1,524.927  Class  C  shares  (5.74%  of the  Class C  shares  then
      outstanding);
      RPSS TR IRA,  FBO PAUL J  GIAMBALVO,  123 WALNUT ST,  MIDDLESEX NJ
      08846-1031,  which owned  1,486.773  Class C shares  (5.60% of the
      Class C shares then outstanding);
      RPSS TR IRA, FBO MONICA V WOJTYNIAK,  14 TERRACE PL, HICKSVILLE NY
      11801-4336,  which owned  1,428.890  Class C shares  (5.38% of the
      Class C shares then outstanding);
      ALFRED P  DOUGHERTY - IRA,  445  COVETOWER  DR APT 601,  NAPLES FL
      34110,  who owned  1,336.761  Class C shares (5.03% of the Class C
      shares then outstanding);
      RPSS TR, FIDELITY  DEPOSIT & DISCOUNT BAN, 401(K) PLAN,  BLAKELY &
      DRINKER  STS,  DUNMORE PA 18512,  which  owned  6,184.927  Class N
      shares (47.45% of the Class N shares then outstanding);
      NGOC MINH PHAM TR, NGOC MINH PHAM MD & SUONG MY,  TUONG MD APC DEF
      BENEFIT PLAN, 2363 ULRIC ST STE B, SAN DIEGO CA 92111-6447,  which
      owned  4,055.946 Class N shares (31.12% of the Class N shares then
      outstanding);
      JOHN VAN DE WIELE  TR,  VAN DE WIELE  ENGINEERING  INC,  401K PSP,
      2925  BRIARPARK  DR STE 275,  HOUSTON TX  77042-3725,  which owned
      2,097.265  Class N  shares  (16.09%  of the  Class N  shares  then
      outstanding);
      OPPENHEIMERFUNDS  INC,  C/O RAY OLSON  BLDG 2, 6803 S TUCSON  WAY,
      CENTENNIAL  CO  80112-3924,  which  owned  100.00  Class Y  shares
      (100.00% 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 Funds, the Manager, the Adviser and each
Subadviser, and the Distributor each have a Code of Ethics. Each Code
is designed to detect and prevent improper personal trading by certain
employees 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 Funds and other
funds advised by the Manager. The Codes of Ethics do permit personnel
subject to the relevant Code to invest in securities, including
securities that may be purchased or held by the Funds, subject to a
number of restrictions and controls. Compliance with the Code of Ethics
is carefully monitored and enforced by the Manager.

      Each Fund's Code of Ethics is an exhibit to the Funds'
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.

Management and Advisory Arrangements - OSM - Mercury Advisors S&P 500
Index Fund and OSM - Mercury Advisors Focus Growth Fund

      Management Services and Management Fee. The OSM - Mercury
Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth
Fund each invests all of its assets in shares of a Master Fund.
Accordingly, these Funds do not invest directly in portfolio securities
and do not require investment advisory services. All portfolio
management occurs at the level of the respective Master Fund. Each
Master Fund has entered into an investment management agreement with
Fund Asset Management, L.P., doing business as Mercury Advisors, as
Adviser (the "Management Agreement"). The Adviser receives monthly
compensation at the annual rate of 0.60% of the average daily net
assets of the Master Fund in which the OSM - Mercury Advisors Focus
Growth Fund invests. The Adviser is entitled to receive a monthly
management fee at the annual contractual rate of 0.05% of the average
daily net assets of the Master Fund in which the OSM - Mercury Advisors
S&P 500 Index Fund invests. The Adviser has entered into a contractual
arrangement with this Master Fund to provide that the management fee
for the Master Fund, when combined with administration fees of certain
funds that invest in the Master Fund (other than OSM - Mercury Advisors
S&P 500 Index Fund), will not exceed a specific amount. As a result of
this contractual arrangement, the Adviser currently receives management
fees of 0.005%. This arrangement has a one-year term and is renewable.

                                                Management Fee
      Fund                                      Paid to the Adviser
      ----                                      -------------------

      OSM - Mercury Advisors Focus Growth Fund
           For the period ended 11/30/01           $4,617,970
           For the fiscal year ended 11/30/02      $1,718,971

      OSM - Mercury Advisors S&P 500 Index Fund
           For the period ended 12/31/01           $91,454
           For the fiscal year ended 12/31/02      $93,240

      The Adviser has also entered into a subadvisory agreement (the
"Sub-Advisory Agreement") with Merrill Lynch Asset Management U.K.
Limited ("MLAM U.K.") pursuant to which MLAM U.K. provides investment
advisory services to the Adviser with respect to the OSM - Mercury
Advisors Focus Growth Fund. The following entities may be considered
"controlling persons" of MLAM U.K.: Merrill Lynch Europe PLC (MLAM
U.K.'s parent), a subsidiary of Merrill Lynch International Holdings,
Inc., a subsidiary of Merrill Lynch International, Inc., a subsidiary
of ML & Co. For the fiscal period ended November 30, 2001 and for the
fiscal year ended November 30, 2002, the Adviser paid no fees to MLAM
U.K. pursuant to the Sub-Advisory Agreement.

      Payment of Master Fund Expenses. The Management Agreement
obligates the Adviser to provide investment advisory services and to
pay, or cause an affiliate to pay, for maintaining its staff and
personnel and to provide office space, facilities and necessary
personnel for the Master Fund. The Adviser is also obligated to pay, or
cause an affiliate to pay, the fees of all officers and Trustees of the
Master Fund who are affiliated persons of the Adviser or any affiliate.
The Master Fund pays, or causes to be paid, all other expenses incurred
in the operation of the Master Fund (except to the extent paid by its
placement agent), including, among other things, taxes, expenses for
legal and auditing services, costs of printing proxies, shareholder
reports, copies of the Registration Statement, charges of the
custodian, any sub-custodian and the transfer agent, expenses of
portfolio transactions, expenses of redemption of shares, Commission
fees, expenses of registering the shares under federal, state or
non-U.S. laws, fees and actual out-of-pocket expenses of Trustees who
are not affiliated persons of the Adviser or an affiliate of the
Adviser, accounting and pricing costs (including the daily calculation
of net asset value), insurance, interest, brokerage costs, litigation
and other extraordinary or non-recurring expenses, and other expenses
properly payable by the Master Fund. The Master Fund's placement agent
will pay certain of the expenses of the Master Fund incurred in
connection with the offering of its shares of beneficial interest.
Certain accounting services are provided to the Master Fund by State
Street Bank & Trust Company ("State Street") pursuant to an agreement
between State Street and the Master Fund. The Master Fund pays a fee
for these services. In addition, the Master Fund will reimburse the
Adviser for the cost of certain additional accounting services.

      Organization of the Adviser. Fund Asset Management, L.P. is a
limited partnership, the partners of which are Merrill Lynch & Co.,
Inc., a financial services holding company and the parent of Merrill
Lynch and Princeton Services, Inc. Merrill Lynch & Co., Inc. and
Princeton Services are "controlling persons" of the Adviser as defined
under the Investment Company Act because of their ownership of its
voting securities and their power to exercise a controlling influence
over its management or policies.

      Duration and Termination. Unless earlier terminated as described
below, each Management Agreement will remain in effect for two (2)
years from its effective date. Thereafter, it will remain in effect
from year to year if approved annually (a) by the Board of Trustees of
the Master Fund or by a majority of the outstanding shares of the
Master Fund and (b) by a majority of the Trustees who are not parties
to such contract or interested persons (as defined in the Investment
Company Act) of any such party. Each contract is not assignable,
automatically terminates in the event of its assignment, and may be
terminated without penalty on sixty (60) days' written notice at the
option of either party thereto or by the vote of the majority of the
outstanding voting securities of the appropriate Master Fund.

      Investment Advisory Agreement with OppenheimerFunds, Inc. The OSM
- Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors
Focus Growth Fund have entered into an Investment Advisory Agreement
with OppenheimerFunds, Inc. Those Advisory Agreements are substantially
similar to the Advisory Agreements entered into with OppenheimerFunds,
Inc. by the other series of the Trust, as further described below.
Those Agreements have been approved by the Trust's Board of Trustees
and OppenheimerFunds, Inc., as the sole shareholder of each Fund, but
will not become effective unless and until the Master-Feeder
Participation Agreement between OppenheimerFunds, Inc.,
OppenheimerFunds Distributor, Inc., the Trust and FAM Distributors,
Inc. is terminated. The fees payable under those Advisory Agreements
are discussed in the Prospectus.

      At respective meetings of the Board of Trustees of the Trust, the
Board of Trustees of the Master Fund of the OSM - S&P 500 Index Fund
and the Board of Trustees of Master Fund of the OSM - Mercury Advisors
Focus Growth Fund, held on May 8, 2002 and March 13, 2002,
respectively, each Board approved the continuation of the applicable
Master Fund's Management Agreement with the Adviser for an additional
year. In connection with its consideration of the applicable Management
Agreement, each Board reviewed information derived from a number of
sources and covering a range of issues. Each Board considered the
services provided to the Master Fund by the Adviser under the
applicable Management Agreement, as well as other services provided by
the Adviser and its affiliates under other agreements, including the
Subadministration Agreement, and the personnel who provided these
services. In addition to investment advisory services, the Adviser and
its affiliates provide administrative services, oversight of Master
Fund accounting, assistance in meeting legal and regulatory
requirements, and other services necessary for the operation of the
Master Funds. Each Board also considered the Adviser's costs of
providing services, and the direct and indirect benefits to the Adviser
from its relationship with the applicable Master Fund. The benefits
considered by each Board included not only the Adviser's compensation
for investment advisory services and the Adviser's profitability under
the applicable Management Agreement, but also compensation paid to the
Adviser or its affiliates for other, non-advisory, services provided to
the Master Fund and the Funds. Each Board also considered the Adviser's
access to research services from brokers to which the Adviser may have
allocated Master Fund brokerage in a "soft dollar" arrangement. In
connection with its consideration of the applicable Management
Agreement, each Board also compared the advisory fee rate, expense
ratios and historical performance of the Master Fund to those of
comparable funds. Based in part on this comparison, and taking into
account the various services provided to the applicable Master Fund and
Fund by the Adviser and its affiliates, each Board concluded that the
management fee rate was reasonable. Each Board also considered whether
there should be changes in the advisory fee rate or structure in order
to enable the Master Fund to participate in any economies of scale that
the Adviser may experience as a result of growth in the applicable
Master Fund's assets.

      Based on the information reviewed and the discussions, each Board
concluded that it was satisfied with the nature and quality of the
services provided by the Adviser to the Master Fund and that the
management fee rate was reasonable in relation to such services. The
non-interested Trustees of each Board were represented by independent
counsel who assisted them in their deliberations.

      |X| The Investment Advisory Agreement - OSM - QM Active Balanced
Fund, OSM - Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund
and OSM - Gartmore Millennium Growth Fund II. The Manager provides
investment advisory and management services to the OSM - QM Active
Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon Brothers All
Cap Fund and OSM - Gartmore Millennium Growth Fund II under investment
advisory agreements between the Manager and the Trust on behalf of each
such Fund. The Manager handles those Funds' day-to-day administrative
business, and the agreements permit the Manager to enter into
Subadvisory agreements with other registered investment advisers to
obtain specialized services for the Funds, as long as the Funds are not
obligated to pay any additional fees for those services. The Manager
has retained the Subadvisers pursuant to separate subadvisory
agreements, described below, under which each Subadviser buys and sells
portfolio securities for the respective Fund. The portfolio manager of
each of the Funds is employed by the Subadviser and is the person who
is principally responsible for the day-to-day management of each of the
Fund's portfolio, as described below.

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

    Each of the Funds pays expenses not expressly assumed by the
Manager under the advisory agreement. Expenses for the Trust's QM
Active Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon
Brothers All Cap Fund and OSM - Gartmore Millennium Growth Fund II are
allocated to those Funds in proportion to their net assets, unless
allocations of expenses can be made directly to a Fund. The advisory
agreements list examples of expenses paid by those Funds. The major
categories relate to calculation of each of the Fund's net asset values
per share, interest, taxes, brokerage commissions, fees to certain
Trustees, legal and audit expenses, custodian and transfer agent
expenses, share issuance costs, certain printing and registration costs
and non-recurring expenses, including litigation costs. The management
fees paid by the Funds to the Manager are calculated at the rates
described in the Prospectus, which are applied to the assets of the
Funds as a whole. The fees are allocated to each class of shares based
upon the relative proportion of each of the Fund's net assets
represented by that class. The management fees paid by the Funds to the
Manager during their last two fiscal years are listed below.

----------------------------------------------------------------
Fund                                 Management Fee Paid to
                                     OppenheimerFunds, Inc.
----------------------------------------------------------------
----------------------------------------------------------------
                                     For the        For the
                                  fiscal period      fiscal
                                  ended 11/30/01   year ended
                                                    11/30/02
----------------------------------------------------------------
----------------------------------------------------------------
QM Active Balanced Fund              $36,322        $53,310
----------------------------------------------------------------
----------------------------------------------------------------
Jennison Growth Fund                 $39,198        $76,321
----------------------------------------------------------------
----------------------------------------------------------------
Salomon Brothers All Cap Fund        $77,987        $238,043
----------------------------------------------------------------
----------------------------------------------------------------
Gartmore Millennium Growth Fund      $41,736        $46,707
----------------------------------------------------------------

    The investment advisory agreement states that in the absence of
willful misfeasance, bad faith, gross negligence in the performance of
its duties or reckless disregard of its obligations and duties under
the investment advisory agreement, the Manager is not liable for any
loss resulting from a good faith error or omission on its part with
respect to any of its duties under the agreement.

    The agreement permits the Manager to act as investment adviser for
any other person, firm or corporation and to use the 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 Funds to use the name "Oppenheimer" as part of its
name.

      |X| Advisory Agreement Approvals - OSM - Mercury Advisors S&P 500
Index Fund and OSM - Mercury Advisors Focus Growth Fund. The Trust and
each Fund commenced the public sale of its shares in February of 2001.
As explained in the Prospectus and in other parts of this Statement of
Additional Information, investment advisory and portfolio management
services for the OSM - Mercury Advisors S&P 500 Index Fund and OSM -
Mercury Advisors Focus Growth Fund are provided by the Advisor and the
investment advisory fees for those services are paid by each Master
Fund to the Advisor. The OSM Mercury Advisers S&P 500 Index Fund and
OSM - Mercury Advisors Focus Growth Fund do not pay an investment
advisory fee other than its proportionate share of the amounts paid by
the Master Fund to the Advisor. The investment advisory agreements for
these two Funds are approved by the Board of Trustees of the respective
Master Fund.

      |X| Annual Approval of Investment Advisory Agreement - OSM - QM
Active Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon
Brothers All Cap Fund and OSM - Gartmore Millennium Growth Fund II.
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 each Fund pays. These distribution fees are reviewed and approved
at a different time of the year.

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

      The Board considered that the Manager must be able to pay and
retain high quality personnel at competitive rates to provide services
to the Funds. 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 Funds 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
Independent Trustees who assisted the Board in its deliberations. The
Counsel to the Independent Trustees is independent of the Manager
within the meaning and intent of the SEC Rules regarding the
independence of counsel.

      After careful deliberation, the Board of concluded that it was in
the best interest of shareholders to continue the investment advisory
agreement for another year. In arriving at a decision, the Board did
not single out any one factor or group of factors as being more
important than other factors, but considered all factors together. The
Board judged the terms and conditions of the investment advisory
agreement, including the investment advisory fee, in light of all of
the surrounding circumstances.

      |X| The Administration and Subadministration Agreements - OSM -
Mercury Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus
Growth Fund. The Trust, on behalf of the OSM - Mercury Advisors S&P 500
Index Fund and the OSM - Mercury Advisors Focus Growth Fund, has
entered into an Administration Agreement with the Manager. The
Agreement states that the Manager, at its own expense, shall provide
assistance in the supervision of all administrative and clerical
personnel as shall be required to provide effective corporate
administration for the Trust, including the compilation and maintenance
of such records with respect to the Trust's operations as may be
reasonably required; the preparation and filing of such reports as
shall be required by the Securities and Exchange Commission;
composition of periodic reports with respect to its operation of each
Fund for the shareholders of the Fund; composition of proxy materials
for meetings of the Fund's shareholders and the composition of such
registration statements as may be required by federal securities laws
and preparation of required filings in each state for continuous public
sale of the Fund; provide the Trust and the Fund with adequate office
space, facilities and equipment; compensate all officers of the Trust
and all Trustees of the Trust who are affiliated persons of the
Manager; and compensate any Subadministrator that the Manager might
retain.

      The Trust assumes and pays or causes to be paid all other
expenses of the Trust, on behalf of the OSM - Mercury Advisors S&P 500
Index Fund and the OSM - Mercury Advisors Focus Growth Fund under the
Administration Agreement, including, without limitation: (i) interest
and taxes; (ii) insurance premiums for fidelity and other coverage
requisite to its operations; (iii) compensation and expenses of its
trustees other than those associated or affiliated with the Manager;
(iv) legal and audit expenses; (v) custodian and transfer agent fees
and expenses; (vi) expenses incident to the redemption of its shares;
(vii) expenses incident to the issuance of its shares against payment
therefor by or on behalf of the subscribers thereto; (viii) fees and
expenses, other than as described above, incident to the registration
under federal and state securities laws of shares of each Fund for
public sale; (ix) expenses of printing and mailing reports,
prospectuses, notices and proxy materials to shareholders of each Fund;
(x) except as noted above, all other expenses incidental to holding
meetings of the Funds' shareholders; and (xi) such extraordinary
non-recurring expenses as may arise, including litigation, affecting a
Fund and any legal obligation which the Trust may have on behalf of a
Fund to indemnify its officers and trustees with respect thereto.

      The Administration Agreement states that in the absence of
willful misfeasance, bad faith or gross negligence in the performance
of its duties, or reckless disregard of its obligations and duties
under the Administration Agreement, the Manager shall not be liable for
any loss resulting from any error of judgement or mistake of law or for
any loss arising out of any act or omission in the management and
administration of the Trust and any Fund.

       Each Fund pays the Manager an annual Administration fee of 0.50%
of average daily net assets. That fee is included in the "Annual Fund
Operating Expenses" table in the Prospectus under "Other Expenses."
The Manager has entered into a Subadministration Agreement with FAM
whereby FAM will maintain records of share purchases of the applicable
Master Fund by each feeder fund, maintain tax records relating to the
Master Funds, maintaining, preparing or providing records relating to
the operation of the Master Funds that the Manager may reasonably
request in connection with reports to be made to the Board of Trustees
of the Trust, periodic information reporting regarding the Master Fund
to the Manager as the Manager may reasonably require in order to
provide information relating to the performance or holdings of the
Mercury Advisors S&P 500 Index Fund or Mercury Advisors Focus Growth
Fund, as applicable, fund to shareholders of such fund, and preparation
of reports relating to the Master Fund that the Manager may reasonably
request be made to third-party reporting services.

       In consideration for providing these services, the Manager pays
FAM an annual subadministration fee of  0.045% of average daily net
assets of the S&P 500 Master Fund and 0.0% of the average daily net
assets of the Focus Master Fund.

      ? The Subadvisory Agreement - OSM - QM Active Balanced Fund, OSM
- Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund and OSM -
Gartmore Millennium Growth Fund II. Under the Subadvisory Agreement
between the Manager and each Subadviser, the Subadviser shall regularly
provide investment advice with respect to the applicable Fund and
invest and reinvest cash, securities and the property comprising the
assets of the Fund. Under the Subadvisory Agreement, the Subadviser
agrees to provide reasonable assistance in the distribution and
marketing of the Fund.

      Under the subadvisory agreement, the Manager pays the Subadviser
an annual fee in monthly installments, based on the average daily net
assets of the Fund. The fee paid to the Subadviser under the
subadvisory agreement is paid by the Manager, not by the Funds. The
subadvisory fee paid by the Manager to each Subadviser is as follows:

                                                   Subadvisory Fee
Fund                       Subadviser              as % of average  net
----                       ----------              ---------------------
assets
------

OSM - Jennison Growth Fund Jennison Associates LLC 0.45%  of  the  first
$300 million of
                                                   average    annual    net
assets of the Fund,
                                                   and  0.40%  of   average
      annual net assets
                                                   in   excess  of  $300
million.

OSM - QM Active            Prudential              0.45%  of  the  first
$300 million of
Balanced Fund              Investment              average    annual    net
assets of the Fund,
                           Management              and 0.40% of  average
annual net
                                                   assets  in  excess of
$300 million.

OSM - Salomon Brothers     Salomon Brothers Asset  0.60%  of  the  first
$100 million of
All Cap Fund               Management Inc.         average   annual  net
assets of the Fund,
                                                   and 0.50% of  average
annual net
                                                   assets  in  excess of
$100 million.

OSM - Gartmore Millennium  Gartmore Mutual         0.70%  of  the  first
$400 million of
Growth Fund II             Fund Capital Trust      average   annual  net
assets of the Fund.
                                                   0.60%   of  the  next
$400 million, and
                                                   0.50%   of    average
annual net assets
                                                   in   excess  of  $800
million.

      The Subadvisory Agreement states that in the absence of willful
misfeasance, bad faith, negligence or reckless disregard of its duties
or obligations, the Subadviser shall not be liable for any error of
judgement or mistake of law and shall not be subject to any expenses or
liability to the Manager, the Trust or the Fund or any of the Fund's
shareholders in connection with rendering services under the
Subadvisory Agreement.

Brokerage Policies of the Funds

Transactions in Portfolio Securities - OSM - Mercury Advisors S&P 500
Index Fund and
Mercury Advisors Focus Growth Fund

      Because each Fund will invest exclusively in beneficial interests
in a Master Fund, it is expected that all transactions in portfolio
securities will be entered into by the Master Fund. Subject to policies
established by the Board of Trustees of the Master Fund, the Adviser is
primarily responsible for the execution of the Master Fund's portfolio
transactions and the allocation of brokerage. The Master Fund does not
execute transactions through any particular broker or dealer, but seeks
to obtain the best net results for the Master Fund, taking into account
such factors as price (including the applicable brokerage commissions
or dealer spread), size of order, difficulty of execution and
operational facilities of the firm and the firm's risk and skill in
positioning blocks of securities. While the Adviser generally seeks
reasonable trade execution costs, the Master Fund does not necessarily
pay the lowest spread or commission available. Subject to applicable
legal requirements, the Adviser may select a broker based partly upon
brokerage or research services provided to the Adviser and its clients,
including the Master Fund. In return for such services the Adviser may
pay a higher commission that other brokers would charge if the Adviser
determines in good faith that the commission is reasonable in relation
to the services provided.

      Section 28(e) of the Securities Exchange Act of 1934 ("Section
28(e)") permits an investment adviser, such as the Adviser, under
certain circumstances, to cause an account to pay a broker a commission
for effecting a transaction that exceeds the amount of commission
another broker would have charged for effecting the same transaction in
recognition of the value of brokerage and research services provided by
that broker. Brokerage and research services include (1) furnishing
advice as to the value of securities, the advisability of investing in,
purchasing or selling securities, and the available of securities or
purchasers or sellers of securities; (2) furnishing analyses and
reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and the performance of accounts; and
(3) effecting securities transactions and performing functions
incidental to securities transactions (such as clearance, settlement,
and custody). The Adviser believes that access to independent
investment research is beneficial to its investment decision-making
processes and, therefore, to the Master Fund and the Fund.

      To the extent research services may be a factor in selecting
brokers, such services may be in written form or through direct contact
with individuals and may include information as to particular companies
and securities as well as market, economic, or institutional areas and
information that assists in the valuation of investments. Examples of
research-oriented services for which the Adviser might use Master Fund
commissions include research reports and other information on the
economy, industries, groups of securities, individual companies,
statistical information, political developments, technical market
action, pricing and appraisal services, credit analysis, risk
measurement analysis, performance and other analysis. Except as noted
immediately below, research services furnished by brokers may be used
in servicing some or all client accounts and not all services may be
used in connection with the account that paid commissions to the broker
providing such services. In some cases, research information received
from brokers by mutual fund management personnel or personnel
principally responsible for the Advisor's individually managed
portfolios is not necessarily shared by and between such personnel. Any
investment advisory or other fees paid by the Master Fund to the
Adviser are not reduced as a result of the Adviser's receipt of
research services.

      In some cases the Adviser may receive a service from a broker
that has both a "research" and a "non-research" use. When this occurs
the Adviser makes a good faith allocation under all the circumstances
between the research and non-research uses of the service. The
percentage of the service that is used for research purposes may be
paid for with client commissions, while the Adviser will use its own
funds to pay for the percentage of the service that is used for
non-research purposes. In making this good faith allocation, the
Adviser faces a potential conflict of interest, but the Adviser
believes that its allocation procedures are reasonably designed to
ensure that it appropriately allocates the anticipated use of such
services to their research and non-research uses.

      From time to time, the Master Fund may purchase new issues of
securities in a fixed price offering. In these situations, the broker
may be a member of the selling group that will, in addition to selling
securities, provide the Adviser with research services. The NASD has
adopted rules expressly permitting these types of arrangements under
certain circumstances. Generally, the broker will provide research
"credits" in these situations at a rate that is higher than that which
is available for typical secondary market transactions. These
arrangements may not fall within the safe harbor of Section 28(e).

      In addition, consistent with the Conduct Rules of the NASD and
policies established by the Boards of Trustees of the Master Funds and
subject to best execution, the Adviser may consider sales of shares of
feeder funds as a factor in the selection of brokers and dealers to
execute portfolio transactions for the Master Fund, however, whether or
not a particular broker or dealer sells shares of a feeder fund neither
fund neither qualifies nor disqualifies such broker or dealer to
execute transactions for the Master Fund.

      The Master Fund anticipates that its brokerage transactions
involving securities of issuers domiciled in countries other than the
United States generally will be conducted primarily on the principal
stock exchanges of such countries. Brokerage commissions and other
transaction costs on foreign stock exchange transactions generally are
higher than in the United States, although the Master Fund will
endeavor to achieve the best net results in effecting its portfolio
transactions. There generally is less governmental supervision and
regulation of foreign stock exchanges and brokers than in the United
States.

      Foreign equity securities may be held by the Master Fund in the
form of Depository Receipts, or other securities convertible into
foreign equity securities. Depository Receipts may be listed on stock
exchanges or traded in over-the-counter markets in the United States or
Europe, as the case may be. American Depository Receipts, like other
securities traded in the United States, will be subject to negotiated
commission rates. Because the shares of each feeder fund are redeemable
on a daily basis in U.S. dollars, the Master Fund intends to manage its
portfolio so as to give reasonable assurance that it will be able to
obtain U.S. dollars to the extent necessary to meet anticipated
redemptions. Under present conditions, it is not believed that these
considerations will have significant effect on the Master Fund's
portfolio strategies.

      Information about the brokerage commissions paid by the Master
Fund of OSM- Mercury Advisors Focus Growth Fund including commissions
paid to Merrill Lynch, is set forth in the following table:

                                      Aggregate Brokerage
Commissions Paid
                                      Commissions Paid        To
                                      ----------------        ---
Merrill Lynch
-------------

Fiscal period ended November 30, 2001     $1,695,995
$75,819
Fiscal year ended November 30, 2002       $2,421,919
$161,190

      For the fiscal period ended November 30, 2002 the brokerage
commissions paid to Merrill Lynch represented 6.66% of the aggregate
brokerage commissions paid by the Master Fund and involved 6.92% of the
Master Fund's dollar amount of transactions involving payment of
commissions.

      Information about the brokerage commissions paid by the Master
Fund of OSM- Mercury Advisors S&P 500 Index Fund including commissions
paid to Merrill Lynch, is set forth in the following table:

                                      Aggregate Brokerage
Commissions Paid
                                      Commissions Paid        To
                                      ----------------        ---
Merrill Lynch
-------------

Fiscal period ended December 31, 2001     $90,754                 $0
Fiscal year ended December 31, 2002       $165,899                $862

      For the fiscal period ended December 31, 2002 the brokerage
commissions paid to Merrill Lynch represented 0.52% of the aggregate
brokerage commissions paid by the Trust and involved 0.29% of the
Trust's dollar amount of transactions involving payment of commissions.

      Because of the affiliation of Merrill Lynch with Mercury
Advisors, the Master Funds are prohibited from engaging in certain
transactions involving Merrill Lynch, or its affiliates except for
brokerage transactions permitted under the Investment Company Act
involving only usual and customary commissions or transactions pursuant
to an exemptive order under the Investment Company Act. Each Master
Fund may invest in certain securities traded in the OTC market and
intends to deal directly with the dealers who make a market in
securities involved, except in those circumstances in which better
prices and execution are available elsewhere. Under the Investment
Company Act, persons affiliated with the Master Fund and persons who
are affiliated with such affiliated persons are prohibited from dealing
with the Master Fund as principal in the purchase and sale of
securities unless a permissive order allowing such transactions is
obtained from the Commission. Since transactions in the OTC market
usually involve transactions with the dealers acting as principal for
their own accounts, the Master Fund will not deal with affiliated
persons, including Merrill Lynch and its affiliates, in connection with
such transactions. However, an affiliated person of the Master Fund may
serve as its broker in OTC transactions conducted on an agency basis
provided that, among other things, the fee or commission received by
such affiliated broker is reasonable and fair compared to the fee or
commission received by non-affiliated brokers in connection with
comparable transactions. In addition, the Master Fund may not purchase
securities during the existence of any underwriting syndicate for such
securities of which Merrill Lynch is a member or in a private placement
in which Merrill Lynch serves as placement agent except pursuant to
procedures approved by the Board of Trustees of the Master Fund that
either comply with rules adopted by the Commission or with
interpretations of the Commission staff. The Master Fund(s) have
received an exemptive order from the Commission permitting them to lend
portfolio securities to Merrill Lynch or its affiliates. Pursuant to
that order, the Master Funds also have retained an affiliated entity of
the Adviser as the securities lending agent for a fee, including a fee
based on a share of the returns on investment of cash collateral. For
the fiscal period ended November 30, 2001 and for the fiscal year ended
November 30, 2002, that affiliated entity received $1,260 and $44,826,
respectively in securities lending agent fees from the respective
Master Fund. That entity may, on behalf of a Master Fund, invest cash
collateral received by that Master Fund for such loans, among other
things, in a private investment company managed by that entity or in
registered money market funds advised by the Adviser or its affiliates.

      Section 11(a) of the Exchange Act generally prohibits members of
the U.S. national securities exchanges from executing exchange
transactions for their affiliates and institutional accounts that they
manage unless the member (i) has obtained prior express authorization
from the account to effect such transactions, (ii) at least annually
furnishes the account with a statement setting forth the aggregate
compensation received by the member in effecting such transactions, and
(iii) complies with any rules the Commission has prescribed with
respect to the requirements of clauses (i) and (ii). To the extent
Section 11(a) would apply to Merrill Lynch acting as a broker for the
Master Fund in any of its portfolio transactions executed on any such
securities exchange of which it is a member, appropriate consents have
been obtained from the Master Fund and annual statements as to
aggregate compensation will be provided to the Master Fund. Securities
may be held by, or be appropriate investments for, the Master Fund as
well as other funds or investment advisory clients of the Adviser or
its affiliates.

      The Board of Trustees of each Master Fund has considered the
possibility of seeking to recapture for the benefit of the Master Fund
brokerage commissions and other expenses of possible portfolio
transactions by conducting portfolio transactions through affiliated
entities. For example, brokerage commissions received by affiliated
brokers could be offset against the advisory fee paid by the Master
Fund to the Adviser. After considering all factors deemed relevant, the
Board of Trustees of the Master Fund made a determination not to seek
such recapture. The Board of Trustees of the Master Fund will
reconsider this matter from time to time.

      Because of different objectives or other factors, a particular
security may be bought for one or more clients of the Adviser or its
affiliates when one or more clients of the Adviser or its affiliates
are selling the same security. If purchases or sales of securities
arise for consideration at or about the same time that would involve a
Master Fund or other clients or funds for which the Adviser or an
affiliate act as investment adviser, transactions in such securities
will be made, insofar as feasible, for the respective funds and clients
in a manner deemed equitable to all. To the extent that transactions on
behalf of more than one client of the Adviser or its affiliates during
the same period may increase the demand for securities being purchased
or the supply of securities being sold, there may be an adverse effect
on price.

Brokerage Provisions of the Investment Advisory Agreements and the
Subadvisory Agreements - OSM - Jennison Growth Fund, OSM - QM Active
Balanced Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore
Millennium Growth Fund II.

    One of the duties of the Subadviser under the Subadvisory Agreement
is to arrange the portfolio transactions for the Funds. Each Fund's
investment advisory agreement with the Manager and the Subadvisory
Agreement contain provisions relating to the selection of
broker-dealers to effect each Fund's portfolio transactions. The
Manager and the Subadviser are authorized to select broker-dealers,
including "affiliated" brokers, as that term is defined in the
Investment Company Act. They may employ broker-dealers that the Manager
or the Subadviser thinks, in its best judgment based on all relevant
factors, will implement the policy of the Funds to obtain, at
reasonable expense, the "best execution" of each of the Fund's
portfolio transactions. "Best execution" means prompt and reliable
execution at the most favorable price obtainable.

    The Manager and the Subadviser need not seek competitive commission
bidding. However, they are 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 Funds as established
by their Board of Trustees.

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

    The Subadvisory Agreement permits the Subadviser to enter into
"soft-dollar" arrangements through the agency of third parties to
obtain services for the Funds. Pursuant to these arrangements, the
Subadviser will undertake to place brokerage business with
broker-dealers who pay third parties that provide services. Any such
"soft-dollar" arrangements will be made in compliance with applicable
law.

Brokerage Practices. Brokerage for the Funds is allocated subject to
the provisions of the Investment Advisory Agreement and the Subadvisory
Agreement and the procedures and rules described above. Generally, the
Subadviser's portfolio traders allocate brokerage based upon
recommendations from the Fund's portfolio manager. In certain
instances, portfolio managers may directly place trades and allocate
brokerage. In either case, the Subadviser'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 Funds 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.

     Each Subadviser serves as investment manager to a number of
clients, including other investment companies, and may in the future
act as investment manager or advisor to others. It is the practice of
the Subadviser to allocate purchase or sale transactions among the Fund
it manages and other clients whose assets it manages in a manner it
deems equitable. In making those allocations, the Subadviser considers
several main factors, including the respective investment objectives,
the relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment, the size of
investment commitments generally held and the opinions of the persons
responsible for managing the portfolios of the Fund and each other
client's accounts.

     When orders to purchase or sell the same security on identical
terms are placed by more than one of the funds and/or other advisory
accounts managed by the Subadviser or its affiliates, the transactions
are generally executed as received, although a fund or advisory account
that does not direct trades to a specific broker (these are called
"free trades") usually will have its order executed first. Orders
placed by accounts that direct trades to a specific broker will
generally be executed after the free trades. All orders placed on
behalf of a Fund are considered free trades. However, having an order
placed first in the market does not necessarily guarantee the most
favorable price. Purchases are combined where possible for the purpose
of negotiating brokerage commissions. In some cases that practice might
have a detrimental effect on the price or volume of the security in a
particular transaction for the Fund.

    Most purchases of debt obligations are principal transactions at
net prices. Instead of using a broker for those transactions, a Fund
will normally deal directly with the selling or purchasing principal or
market maker unless the Subadviser 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 Funds
seek to obtain prompt execution of these orders at the most favorable
net price.

    The Investment Advisory Agreement and the Subadvisory Agreement
permit the Manager and the Subadviser 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 Subadviser and its affiliates. The investment research received for
the commissions of those other accounts may be useful both to the
respective Fund and one or more of the Subadviser's other accounts.
Investment research may be supplied to the Subadviser 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
Subadviser in a non-research capacity (such as bookkeeping or other
administrative functions), then only the percentage or component that
provides assistance to the Subadviser in the investment decision-making
process may be paid in commission dollars.

    The research services provided by brokers broadens the scope and
supplements the research activities of the Subadviser. That research
provides additional views and comparisons for consideration, and helps
the Subadviser 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 Subadviser provides information to the
Manager and the Board about the commissions paid to brokers furnishing
such services, together with the Subadviser's representation that the
amount of such commissions was reasonably related to the value or
benefit of such services.

--------------------------------------------------------------
       Total Brokerage Commissions Paid by the Funds1
--------------------------------------------------------------
--------------------------------------------------------------
                                Fiscal Period   Fiscal Year
Fund                            Ended 11/30/01     Ended
                                                 11/30/022
--------------------------------------------------------------
--------------------------------------------------------------
QM Active Balanced Fund             $1,475         $5,454
--------------------------------------------------------------
--------------------------------------------------------------
Jennison Growth Fund                $5,832        $22,425
--------------------------------------------------------------
--------------------------------------------------------------
Salomon Brothers All Cap Fund      $19,495        $356,961
--------------------------------------------------------------
--------------------------------------------------------------
Gartmore Millennium Growth         $11,810        $57,264
Fund II
--------------------------------------------------------------
1. Amounts do not include spreads or commissions on principal
transactions on a net trade basis.
2. In the fiscal year ended 11/30/02, the amount of transactions
directed to brokers for research services and the amount of the
commissions paid to broker-dealers for those services were as follows:
----------------------------------------------------
                              Amount of  Amount of
Fund                          TransactionCommissions
----------------------------------------------------
----------------------------------------------------
QM Active Balanced Fund           $0         $0
----------------------------------------------------
----------------------------------------------------
Jennison Growth Fund           $120,448     $249
----------------------------------------------------
----------------------------------------------------
Salomon Brothers All Cap Fund  $699,824    $1,594
----------------------------------------------------
----------------------------------------------------
Gartmore Millennium Growth     $141,908     $293
Fund II
----------------------------------------------------


Distribution and Service Plans

The Distributor.  Under its General Distributor's Agreement with each of
   the Funds, the
Distributor acts as each Fund's principal  underwriter in the continuous
   public offering of
each  Fund's  different  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 charges and concessions paid to, or retained by, the
Distributor from the sale of shares during the Funds' most recent
fiscal year, and the contingent deferred sales charges retained by the
Distributor on the redemption of shares for the most recent fiscal year
are shown in the tables below.

--------------------------------------------------------------
                                      Aggregate   Class A
                               Fiscal Front-End   Front-End
                               Year   Sales       Sales
                               Ended  Charges     Charges
Fund                           11/30  on Class A  Retained by
                                      Shares      Distributor*
--------------------------------------------------------------
--------------------------------------------------------------
Mercury Advisors S&P 500       2002*  $71,413     $23,220
Index Fund
--------------------------------------------------------------
--------------------------------------------------------------
Mercury Advisors Focus Growth  2002   $7,624      $4,188
Fund
--------------------------------------------------------------
--------------------------------------------------------------
QM Active Balanced Fund        2002   $6,890      $1,094
--------------------------------------------------------------
--------------------------------------------------------------
Jennison Growth Fund           2002   $34,373     $10,966
--------------------------------------------------------------
--------------------------------------------------------------
Salomon Brothers All Cap Fund  2002   $62,590     $21,424
--------------------------------------------------------------
--------------------------------------------------------------
Gartmore Millennium Growth     2002   $2,876      $1,899
Fund II
--------------------------------------------------------------
Includes amounts retained by a broker-dealer that is an affiliate or a
parent of the distributor.
*For fiscal year ended 12/31.

---------------------------------------------------------------------------------
                                      ConcessionsConcessionConcessions Concessions
                               Fiscal on Class A on Class  on Class C  on Class
                               Year   Shares     B Shares  Shares      N
                               Ended  Advanced   Advance   Advance by  Shares
Fund                           11/30  by         by        Distributor1Advance
                                      DistributorDistributor1          by
                                                                       Distributor1
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mercury Advisors S&P 500       2002*  $11,364    $130,765  $48,663     $130,233
Index Fund
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mercury Advisors Focus Growth  2002   $93        $9,049    $5,678      $1,055
Fund
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
QM Active Balanced Fund        2002   $121       $14,392   $3,011      $2,750
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennison Growth Fund           2002   $1,016     $38,831   $15,462     $12,938
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Salomon Brothers All Cap Fund  2002   $7,615     $91,244   $48,537     $49,699
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gartmore Millennium Growth     2002   $7         $4,524    $926        $279
Fund II
---------------------------------------------------------------------------------
*For fiscal year ended 12/31.
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 ContingentContingent  Contingent
                                      Deferred   Deferred  Deferred    Deferred
                               Fiscal Sales      Sales     Sales       Sales
                               Year   Charges    Charges   Charges     Charges
                               Ended  Retained   Retained  Retained by Retained
Fund                           11/30  by         by        Distributor by
                                      DistributorDistributor           Distributor
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mercury Advisors S&P 500       2002*  $0         $4,358    $2,608      $27,006
Index Fund
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Mercury Advisors Focus Growth  2002   $0         $2,930    $118        $3
Fund
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
QM Active Balanced Fund        2002   $0         $2,303    $168        $27
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Jennison Growth Fund           2002   $0         $3,447    $546        $530
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Salomon Brothers All Cap Fund  2002   $0         $8,641    $2,017      $3,541
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Gartmore Millennium Growth     2002   $0         $2,142    $8          $4
Fund II
---------------------------------------------------------------------------------
*For fiscal year ended 12/31.

Distribution and Service Plans. Each 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 a Fund pays the Distributor for all or a portion
of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.

      Each plan has been approved by a vote of the Board of Trustees,
including a majority of the Independent Trustees1, cast in person at a
meeting called for the purpose of voting on that plan. The shareholder
votes for the plans were cast by the Manager as the sole initial holder
of the shares of each class of shares of each Fund.

      Under the plans, OppenheimerFunds, Inc. 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 each 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 each 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 each of the Funds automatically convert into Class A shares
72 months after purchase, each 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 each Fund shall
provide separate written reports on the plans to the Board of Trustees
at least quarterly for its review. The Reports shall detail the amount
of all payments made under a plan and the purpose for which the
payments were made. Those reports are subject to the review and
approval of the Independent Trustees.

      Each plan states that while it is in effect, the selection and
nomination of those Trustees of each Fund who are not "interested
persons" of a 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.

      |X| Class A Service Plan Fees. Under the Class A service plan,
the Distributor currently uses the fees it receives from the Fund to
pay brokers, dealers and other financial institutions (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 Funds, assisting in establishing and maintaining
accounts in the Funds, making the Funds' investment plans available and
providing other services at the request of the Funds 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 except in the case of the special arrangement
described below. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual
net assets consisting of Class A shares held in the accounts of the
recipients or their customers. 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.

      During the first year the shares are sold, the Distributor
retains the service fee to reimburse itself for the cost of
distributing the shares. For the fiscal year ended November 30, 2002
(December 31, 2002 for the Mercury Advisors S&P 500 Index Fund),
payments under the Class A Plan paid by the Distributor to recipients
and to an affiliate of the Distributor were as follows:

--------------------------------------------------------------------------
                                     Payments   Retained by    Payments
Fund                                    to      Distributor     to an
                                    Recipients                Affiliate
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Mercury Advisors S&P 500 Index        $12,489       $191         $540
Fund
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Mercury Advisors Focus Growth Fund    $3,383        $0           $282
--------------------------------------------------------------------------
--------------------------------------------------------------------------
QM Active Balanced Fund               $281          $0           $60
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Jennison Growth Fund                  $2,332        $2           $349
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Salomon Brothers All Cap Fund         $12,376       $10          $814
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Gartmore Millennium Growth Fund II    $593          $0           $167
--------------------------------------------------------------------------

      Any unreimbursed expenses the Distributor incurs with respect to
Class A shares in any fiscal year cannot be recovered in subsequent
years. The Distributor may not use payments received under the Class A
Plan to pay any of its interest expenses, carrying charges, or other
financial costs, or allocation of overhead.

      |X| Class B, Class C and Class N 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 B, Class C and Class N plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the
Funds 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 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 advance service fee
payment. If Class B, Class C or Class N shares are redeemed during the
first year after their purchase, the recipient of the service fees on
those shares will be obligated to repay the Distributor a pro rata
portion of the advance payment of the service fee made on those shares.

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

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

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

      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.

-------------------------------------------------------------------------------------
    Distribution Fees Paid to the Distributor in the Fiscal Year Ended 11/30/02*
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                                                           Distributor'sDistributor's
                                        Total    Amount    Aggregate    Unreimbursed
                                        Payments Retained  Unreimbursed Expenses as
                                        Under    By        Expenses     %
Fund                         Class Plan Plan     DistributoUnder Plan   of Net
                                                                        Assets
                                                                        of Class
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Mercury Advisors S&P 500     Class B    $29,212  $26,9021  $181,893     4.35%
Index Fund                   Plan

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class C    $35,829  $30,5782  $106,844     2.16%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class N    $49,775  $48,1893  $392,192     3.00%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Mercury Advisors Focus       Class B    $8,635   $6,8844   $60,326      7.65%
Growth Fund                  Plan

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class C    $4,529   $3,156    $81,033      12.31%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class N    $257     $230      $48,561      67.66%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
QM Active Balanced Fund      Class B    $2,536   $2,3345   $40,973      9.00%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class C    $4,667   $3,858    $26,366      5.06%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class N    $731     $561      $14,271      4.44%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Jennison Growth Fund         Class B    $6,176   $5,5966   $64,956      5.01%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class C    $15,244  $12,2587  $315,521     14.38%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class N    $5,143   $4,763    $111,848     8.52%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Salomon   Brothers  All  Cap Class B    $34,095  $30,7158  $163,386     3.78%
Fund                         Plan

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class C    $57,794  $38,4659  $121,309     1.77%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class N    $15,207  $5,77010  $99,503      1.75%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Gartmore Millennium Growth   Class B    $1,479   $1,33911  $41,203      21.29%
Fund II                      Plan

-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class C    $1,309   $1,025    $41,624      26.67%
                             Plan
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                             Class N    $251     $23612    $5,037       7.40%
                             Plan
-------------------------------------------------------------------------------------
*For Mercury Advisors S&P 500 Index Fund this information is for the
fiscal year ended 12/31/02.
1.  Includes $49 paid to an affiliate of the Distributor's parent
company.
2.:  Includes$130 paid to an affiliate of the Distributor's parent
company.
3.  Includes $35 paid to an affiliate of the Distributor's parent
company.
4.  Includes $9 paid to an affiliate of the Distributor's parent
company.
5.  Includes $4 paid to an affiliate of the Distributor's parent
company.
6.  Includes $4 paid to an affiliate of the Distributor's parent
company.
7.  Includes $170 paid to an affiliate of the Distributor's parent
company.
8.  Includes $208 paid to an affiliate of the Distributor's parent
company.
9.  Includes $120 paid to an affiliate of the Distributor's parent
company.
10. Includes $1 paid to an affiliate of the Distributor's parent
company.
11. Includes $2 paid to an affiliate of the Distributor's parent
company.
12. Includes $1 paid to an affiliate of the Distributor's parent
company.

Performance of the Funds

Explanation of Performance Terminology. Each 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. You can obtain current performance information by calling
the Funds' Transfer Agent at 1.800.525.7048 or by visiting the
OppenheimerFunds Internet web site at www.oppenheimerfunds.com.

      Each 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 a 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 a Fund's performance to the performance of other funds for
the same periods. However, a number of factors should be considered
before using a Fund's performance information as a basis for comparison
with other investments:

      |_| Total returns measure the performance of a hypothetical
account in a 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.

      |_| A Fund's performance returns do no reflect the effect of
taxes on dividends and capital gains distributions.

      |_| An investment in a Fund is not insured by the FDIC or any
other government agency.

      |_| The principal value of a 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 a 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 a Fund's performance. Total return is the change in
value of a hypothetical investment in a 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 (10) 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. A 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. Class N total returns may also be calculated for the
periods prior to 3/1/01 (the inception of Class N shares), based on the
Fund's Class A returns, adjusted to reflect the higher Class N 12b-1
fees. There is no sales charge on Class Y shares.

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


ERV        - 1 = Average Annual Total Return
---
l/n
   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

      |_| 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 = Average Annual Total Return (After Taxes on
----
/n          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=  Average Annual Total Return (After Taxes on
-----
1/n         Distributions and Redemptions)
  P

            |_| Total Returns at Net Asset Value. From time to time a
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 Funds' Total Returns for the Periods Ended 11/30/02*
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
               Class       Cumulative          Average Annual Total Returns



                 of       Total Returns
               Shares   (10 years or Life
Fund                        of Class)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                                1-Year             5-Year
                                                             (or life-of-class)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                         After    Without   After   Without   After    Without
                         Sales     Sales    Sales    Sales    Sales     Sales
                        Charge    Charge    Charge   Charge   Charge   Charge
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mercury       Class A  -35.95%1  -32.04%1  -27.62%  -23.21%  -21.15%1 -18.61%1
Advisors
S&P 500 Index
Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class B  -35.58%1  -32.90%1  -27.56%  -23.75%  -20.91%1 -19.17%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class C  -33.00%1  -33.00%1  -24.54%  -23.78%  -19.23%1 -19.23%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class N  -29.12%2  -29.12%2  -24.10%  -23.33%  -17.12%2 -17.12%2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class Y  -31.52%1  -31.52%1  -23.06%  -23.06%  -18.29%1 -18.29%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Mercury       Class A  -76.25%1  -74.80%1  -39.87%  -36.20%  -55.23%1 -53.72%1
Advisors
Focus Growth
Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class B  -76.10%1  -75.10%1  -39.66%  -36.48%  -55.07%1 -54.03%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class C  -75.10%1  -75.10%1  -37.12%  -36.48%  -54.03%1 -54.03%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class N  -69.57%2  -69.57%2  -36.68%  -36.04%  -49.38%2 -49.38%2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class Y  -74.70%1  -74.70%1  -36.11%  -36.11%  -53.62%1 -53.62%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
QM Active     Class A  -18.58%1  -13.61%1  -13.75%   -8.49%  -10.85%1  -7.85%1
Balanced
Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class B  -18.21%1  -14.83%1  -13.61%   -9.11%  -10.63%1  -8.58%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class C  -14.76%1  -14.76%1  -10.02%   -9.12%  -8.54%1   -8.54%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class N  -11.79%2  -11.79%2   -9.51%   -8.60%  -6.93%2   -6.93%2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class Y  -13.22%1  -13.22%1   -8.27%   -8.27%  -7.62%1   -7.62%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Jennison      Class A  -38.83%1  -35.10%1  -28.54%  -24.18%  -24.03%1 -21.47%1
Growth Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class B  -38.56%1  -36.00%1  -28.47%  -24.71%  -23.84%1 -22.08%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class C  -36.00%1  -36.00%1  -25.37%  -24.62%  -22.08%  -22.08%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class N  -31.75%2  -31.75%2  -25.05%  -24.30%  -19.64%2 -19.64%2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class Y  -34.90%1  -34.90%1  -24.04%  -24.04%  -21.33%1 -21.33%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Salomon       Class A  -23.43%1  -18.75%1  -17.22%  -12.17%  -13.86%1 -10.96%1
Brothers
All Cap Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class B  -23.08%1  -19.90%1  -17.08%  -12.75%  -13.65%1 -11.67%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class C  -19.93%1  -19.93%1  -13.65%  -12.78%  -11.69%1 -11.69%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class N  -17.91%2  -17.91%2  -13.17%  -12.30%  -10.68%2 -10.68%2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class Y  -18.06%1  -18.06%1  -11.52%  -11.52%  -10.54%1 -10.54%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gartmore      Class A  -45.62%1  -42.30%1  -28.07%  -23.68%  -28.86%1 -26.46%1
Millennium
Growth Fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class B  -45.38%1  -43.10%1  -28.02%  -24.23%  -28.68%1 -27.04%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class C  -43.10%1  -43.10%1  -24.99%  -24.23%  -27.04%1 -27.04%1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class N  -36.76%2  -36.76%2  -24.67%  -23.90%  -23.07%2 -23.07%2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              Class Y  -42.10%1  -42.10%1  -23.51%  -23.51%  -26.32%1 -26.32%1
--------------------------------------------------------------------------------
*For Mercury  Advisors S&P 500 Index Fund,  this is  information  is for
the periods ended 12/31/02.
1. Inception of Class A, Class B, Class C and Class Y shares:  2/16/01
2. Inception of Class N shares:  3/1/01

----------------------------------------------------------------------------------
  Average Annual Total Returns for Class A Shares (After Sales Charge) For the
                             Periods Ended 11/30/02*
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Fund                                   After Taxes on         After Taxes on
                                                          Distributions and Sale
                                       Distributions          of Fund Shares
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
                                     1 Year     5 Years     1 Year     5 Years
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Mercury Advisors S&P Index Fund      -27.73%    -21.21%1   -16.82%     -16.57%1
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Mercury Advisors Focus Growth Fund   -39.87%    -55.23%1   -24.28%     -40.92%1
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
QM Active Balanced Fund              -14.10%    -11.05%1    -8.35%     -8.69%1
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Jennison Growth Fund                 -28.54%    -24.03%1   -17.38%     -18.78%1
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Salomon Brothers All Cap Fund        -17.51%    -14.03%1   -10.46%     -11.02%1
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Gartmore Millennium Growth Fund      -28.07%    -28.86%1   -17.09%     -22.42%1
----------------------------------------------------------------------------------
*For Mercury  Advisors S&P 500 Index Fund,  this is  information  is for
the periods ended 12/31/02.
1. Inception of Class A shares:  2/16/01

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

      |X| Lipper Rankings. From time to time a 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 Funds, and ranks their performance
for various periods based on categories relating to investment
objectives. Lipper currently ranks (i) the performance of the OSM -
Jennison Growth Fund and the OSM - Mercury Advisors Focus Growth Fund
against all other large cap growth funds, (ii) the performance of the
OSM - Mercury Advisors S&P 500 Index Fund against all other S&P 500
Index objective funds, (iii) the performance of the OSM - QM Active
Balanced Fund against all other balanced funds, (iv) the performance of
the OSM - Salomon Brothers All Cap Fund against all other multi-cap
value funds, and (v) the performance of the OSM - Gartmore Millennium
Growth Fund II against all other mid cap core 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.

      |X| Morningstar Ratings. From time to time a Fund may publish the
star rating of the performance of its classes of shares by Morningstar,
Inc., an independent mutual fund monitoring service. Morningstar rates
mutual funds in their specialized market sector. Each Fund is rated
among domestic stock funds.

      Morningstar proprietary star ratings reflect historical
risk-adjusted total investment return. For each fund with at least a
three-year history, Morningstar calculates a Morningstar Rating(TM)based
on a Morningstar Risk-Adjusted Return measure that accounts for
variation in a fund's monthly performance (including the effects of
sales charges, loads, and redemption fees), placing more emphasis on
downward variations and rewarding consistent performance.  The top 10%
of funds in each category receive 5 stars, the next 22.5% receive 4
stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars,
and the bottom 10% receive 1 star. (Each share class is counted as a
fraction of one fund within this scale and rated separately, which may
cause slight variations in the distribution percentages.) The Overall
Morningstar Rating for a fund is derived from a weighted average of the
performance figures associated with its three-, five-and ten-year (if
applicable) Morningstar Rating metrics.

      |X| Performance Rankings and Comparisons by Other Entities and
Publications. From time to time a 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 a 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.

      From time to time, a 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 a Fund. Appendix C contains more information
about the special sales charge arrangements offered by a Fund, and the
circumstances in which sales charges may be reduced or waived for
certain classes of investors.

AccountLink. When shares are purchased through AccountLink, each
purchase must be at least $50 and shareholders must invest at least
                              ---
$500 before an Asset Builder Plan (described below) can be established
on a new account. Accounts established prior to November 1, 2002 will
remain at $25 for additional purchases. Shares will be purchased on the
regular business day the Distributor is instructed to initiate the
Automated Clearing House ("ACH") transfer to buy the shares. Dividends
will begin to accrue on shares purchased with the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for the
purchase through the ACH system before the close of The New York Stock
Exchange ("the Exchange"). The Exchange normally closes at 4:00 P.M.,
but may close earlier on certain days. If Federal Funds are received on
a business day after the close of the Exchange, the shares will be
purchased and dividends will begin to accrue on the next regular
business day. The proceeds of ACH transfers are normally received by
the Fund three days after the transfers are initiated. If the proceeds
of the ACH transfer are not received on a timely basis, the Distributor
reserves the right to cancel the purchase order. The Distributor and
the Funds are not responsible for any delays in purchasing shares
resulting from delays in ACH transmissions.

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

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

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 and Oppenheimer Senior Floating Rate Fund. 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 a 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 a 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 a 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 a 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 a 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 a 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. As explained in the Prospectus, you must initially
establish your account with $500. Subsequently, you can establish an
Asset Builder Plan to automatically purchase additional shares directly
from a bank account for as little as $50. For those accounts
established prior to November 1, 2002 and which have previously
established Asset Builder Plans, additional purchases will remain at
$25. Shares purchased by Asset Builder Plan payments from bank accounts
are subject to the redemption restrictions for recent purchases
described in the Prospectus. Asset Builder Plans are available only if
your bank is an ACH member. Asset Builder Plans may not be used to buy
shares for OppenheimerFunds employer-sponsored qualified retirement
accounts. Asset Builder Plans also enable shareholders of Oppenheimer
Cash Reserves to use their fund account to make monthly automatic
purchases of shares of up to four other Oppenheimer funds.

      If you make payments from your bank account to purchase shares of
a 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. A 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 a Fund without sales charge or at reduced sales
charge rates, as described in Appendix C to this Statement of
Additional Information. Certain special sales charge arrangements
described in that Appendix apply to retirement plans whose records are
maintained on a daily valuation basis by Merrill Lynch Pierce Fenner &
Smith, Inc. ("Merrill Lynch") or an independent record keeper that has
a contract or special arrangement with Merrill Lynch. If on the date
the plan sponsor signed the Merrill Lynch record keeping service
agreement the plan has less than $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 a 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 a
Fund's shares (for example, when a purchase check is returned to a Fund
unpaid) causes a loss to be incurred when the net asset values of that
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 a Fund represents an
interest in the same portfolio of investments of a 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 a 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. Class Y shares have no sales charges.

      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 a Fund.

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

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

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

      The sales concession and the advance of the service fee, as
described in the Prospectus, will not be paid to dealers of record on
sales of Class N shares on:
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. A 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 each 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, a $12 annual fee is assessed
on any account valued at less than $500. This fee will not be assessed
on the following accounts:
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 automatically deducted from qualifying accounts
annually on or about the second to last business day of September. This
annual fee is 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 a Fund are determined as of the close
of business of the Exchange on each day that the Exchange is open. The
calculation is done by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that class that are
outstanding. The Exchange normally closes at 4:00 P.M., Eastern time,
but may close earlier on some other days (for example, in case of
weather emergencies or on days falling before a U.S. holiday). All
references to time in this Statement of Additional Information mean
"Eastern time." The Exchange's most recent annual announcement (which
is subject to change) states that it will close on New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
It may also close on other days.

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

      Changes in the values of securities traded on foreign exchanges
or markets as a result of events that occur after the prices of those
securities are determined, but before the close of the Exchange, will
not be reflected in the Fund's calculation of its net asset values that
day unless the Manager or the Adviser determines that the event is
likely to effect a material change in the value of the security. For
all of the Funds, except the OSM - Mercury Advisors S&P 500 Index Fund
and the OSM - Mercury Advisors Focus Growth Fund, if such determination
is made, 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. For the OSM -
Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors
Focus Growth Fund, securities may be valued at their fair value as
determined in good faith by the Board of Trustees of the applicable
Master Fund or by the Adviser using procedures approved by the Board of
Trustees of that Master Fund.

      |X| Securities Valuation. Each of the Fund's Board of Trustees
and theBoard of Trustees of the Master Fund (in the case of the OSM -
Mercury Advisors S&P 500 Index Fund or the OSM - Mercury Advisors Focus
Growth Fund) has established procedures for the valuation of each
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 or Adviser 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 each
Fund's Board of Trustees or the Board of Trustees of the Master Fund 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 each
Fund's Board of Trustees or the Board of Trustees of the Master Fund or
obtained by the Manager or Adviser, as the case may be, 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.

      However, for the OSM - Mercury Advisors S&P 500 Index Fund and
the OSM - Mercury Advisors Focus Growth Fund, obligations with
remaining maturities of 60 days or less will not be valued at amortized
cost if the Adviser believes that the method no longer produces fair
valuations.

      |_| For the OSM - Mercury Advisors S&P 500 Index Fund and the OSM
- Mercury Advisors Focus Growth Fund, repurchase agreements will be
valued at cost plus accrued interest.

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 or
Adviser, as the case may be, may use pricing services approved by the
applicable 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 or Adviser, as the case may be, 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 or Adviser, as
the case may be, by a bank, dealer or pricing service that the Manager
or Adviser 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
applicable Board of Trustees or by the Manager or Adviser. 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 or
Adviser 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 a 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 a 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 a Fund expires, the Fund has a gain in the amount of the
premium. If a 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 a Fund exercises a
put it holds, the amount the Fund receives on its sale of the
underlying investment is reduced by the amount of premium paid by the
Fund.

How to Sell Shares

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

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

Reinvestment Privilege. Within six months of a redemption, a
shareholder may reinvest all or part of the redemption proceeds of:
o     Class A shares purchased subject to an initial sales charge or
         Class A shares on which a contingent deferred sales charge was
         paid, or
o     Class B shares that were subject to the Class B contingent
         deferred sales charge when redeemed.

      The reinvestment may be made without sales charge only in Class A
shares of a Fund or any of the other Oppenheimer funds into which
shares of a 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. A 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 a Fund or
another of the Oppenheimer funds within 90 days of payment of the sales
charge, the shareholder's basis in the shares of a 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 a Fund may determine
that it would be detrimental to the best interests of the remaining
shareholders of that 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 a Fund, in lieu of cash.

      Each Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act. Under that rule, each 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. Each 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. Each Fund's Board of Trustees has the right to
cause the involuntary redemption of the shares held in any account if
the aggregate net asset value of those shares is less than $500 or such
lesser amount as the Board may fix. The Board will not cause the
involuntary redemption of shares in an account if the aggregate net
asset value of such shares has fallen below the stated minimum solely
as a result of market fluctuations. If the Board exercises this right,
it may also fix the requirements for any notice to be given to the
shareholders in question (not less than 30 days). The Board may
alternatively set requirements for the shareholder to increase the
investment, or set other terms and conditions so that the shares would
not be involuntarily redeemed.

Transfers of Shares. A transfer of shares to a different registration
is not an event that triggers the payment of sales charges. Therefore,
shares are not subject to the payment of a contingent deferred sales
charge of any class at the time of transfer to the name of another
person or entity. It does not matter whether the transfer occurs by
absolute assignment, gift or bequest, as long as it does not involve,
directly or indirectly, a public sale of the shares. When shares
subject to a contingent deferred sales charge are transferred, the
transferred shares will remain subject to the contingent deferred sales
charge. It will be calculated as if the transferee shareholder had
acquired the transferred shares in the same manner and at the same time
as the transferring shareholder.

      If less than all shares held in an account are transferred, and
some but not all shares in the account would be subject to a contingent
deferred sales charge if redeemed at the time of transfer, the
priorities described in the Prospectus under "How to Buy Shares" for
the imposition of the Class B, Class C and Class N contingent deferred
sales charge will be followed in determining the order in which shares
are transferred.

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

      Participants (other than self-employed plan sponsors) in
OppenheimerFunds-sponsored pension or profit-sharing plans with shares
of a 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. Each 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 each Fund's agent to repurchase its shares from
authorized dealers or brokers on behalf of their customers.
Shareholders should contact their broker or dealer to arrange this type
of redemption. The repurchase price per share will be the net asset
value next computed after the Distributor receives an order placed by
the dealer or broker. However, if the Distributor receives a repurchase
order from a dealer or broker after the close of The Exchange on a
regular business day, it will be processed at that day's net asset
value if the order was received by the dealer or broker from its
customers prior to the time the Exchange closes. Normally, the Exchange
closes at 4:00 P.M., but may do so earlier on some days. Additionally,
the order must have been transmitted to and received by the Distributor
prior to its close of business that day (normally 5:00 P.M.).

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

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

      By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions that apply to such
plans, as stated below. These provisions may be amended from time to
time by the Funds 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 a Fund
for shares (of the same class) of other Oppenheimer funds automatically
on a monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to each other
fund account is $50. Instructions should be provided on the
OppenheimerFunds Application or signature-guaranteed instructions.
Exchanges made under these plans are subject to the restrictions that
apply to exchanges as set forth in "How to Exchange Shares" in the
Prospectus and below in this Statement of Additional Information.

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

      The Transfer Agent will administer the investor's Automatic
Withdrawal Plan as agent for the shareholder(s) (the "Planholder") who
executed the Plan authorization and application submitted to the
Transfer Agent. Neither a 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 a 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 a 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 Funds. 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. A 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 a 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 a 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      Centennial Tax Exempt Trust
      Trust
      Centennial Government Trust           Oppenheimer Money Market Fund, Inc.
      Centennial Money Market Trust

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

      The following funds do not offer Class Y shares:
      Oppenheimer AMT-Free New York           Oppenheimer Limited Term Municipal
      Municipals                              Fund
      Oppenheimer California Municipal Fund   Oppenheimer Multiple Strategies Fund
      Oppenheimer Capital Income Fund         Oppenheimer New Jersey Municipal Fund
      Oppenheimer Cash Reserves               Oppenheimer Pennsylvania Municipal
                                              Fund
      Oppenheimer Champion Income Fund        Oppenheimer Quest Capital Value
                                              Fund, Inc.
      Oppenheimer Convertible Securities Fund Oppenheimer Quest Global Value Fund,
                                              Inc.
      Oppenheimer Disciplined Allocation Fund Oppenheimer Rochester National
                                              Municipals
      Oppenheimer Developing Markets Fund     Oppenheimer Senior Floating Rate Fund
      Oppenheimer Gold & Special Minerals     Oppenheimer Small Cap Value Fund
      Fund
      Oppenheimer International Bond Fund     Oppenheimer Total Return Bond Fund
      Oppenheimer International Growth Fund   Limited Term New York Municipal Fund
      Oppenheimer International Small
      Company 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 500
      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:

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

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

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

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

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

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

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

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

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

      |X| Limits on Multiple Exchange Orders. Each Fund reserves the
right to reject telephone or written exchange requests submitted in
bulk by anyone on behalf of more than one account. Each 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.  Each 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. Each 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. Each 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 each Fund's portfolio, and expenses
borne by a 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 each
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 each
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 Funds' Dividends, Distributions and Redemptions of
Shares. The federal tax treatment of the Funds' dividends and capital
gains distributions is briefly highlighted in the Prospectus. The
following is only a summary of certain additional tax considerations
generally affecting each 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. Each 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 a 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 a Fund might not meet in a particular
year. If it did not qualify as a regulated investment company, a 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, a 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. A Fund must
also satisfy certain other requirements of the Internal Revenue Code,
some of which are described below. Distributions by a 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, a 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, a
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 a Fund's taxable year, at least 50% of the value of a 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, a Fund must not have invested more than 5% of the value of a
Fund's total assets in securities of each such issuer and a 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, a 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, a Fund must pay an excise tax on the
amounts not distributed. It is presently anticipated that the Funds
will meet those requirements. To meet this requirement, in certain
circumstances a 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 a 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. A 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 a 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 a Fund
that may qualify for the deduction is limited to the aggregate amount
of qualifying dividends that a 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 a
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 Funds,
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
these Funds on the same basis.

Additional Information About the Fund

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

The Custodian. Citibank, N.A. is the custodian of each Fund's assets.
The custodian's responsibilities include safeguarding and controlling
each Fund's portfolio securities and handling the delivery of such
securities to and from each Fund. It is the practice of each Fund to
deal with the custodian in a manner uninfluenced by any banking
relationship the custodian may have with the Manager and its
affiliates. Each 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. Deloitte & Touche, LLP are the independent
auditors of each Fund. They audit each Fund's financial statements and
perform other related audit services. They also act as auditors for
[the Manager and for certain other funds advised by the Manager and its
affiliates.

License Agreement. Under a separate agreement, Merrill Lynch affiliates
have granted the Trust, on behalf of the OSM - Mercury Advisors S&P 500
Index Fund and the OSM - Mercury Advisors Focus Growth Fund, the right
to use the "Mercury" name and has reserved the right to withdraw its
consent to the use of such name by either Fund under certain
circumstances or to grant the use of such name to any other company.

Financial Statements. The audited financial statements for the Master
Focus Twenty Trust are incorporated in this Statement of Additional
Information by reference to the 2002 annual report to shareholders of
Mercury Focus Twenty Fund, Inc. You may request a copy of that annual
report at no charge by calling 888.763.2260 between 8:00 a.m. and 8:00
p.m. Eastern time on any business day. The audited financial statements
for the Quantitative Master Series Trust - Master S&P 500 Index Series
are incorporated in this Statement of Additional Information by
reference to the 2002 annual report to shareholders of the Quantitative
Master Series Trust - Master S&P 500 Index Series, and the unaudited
financial statements for the Quantitative Master Series Trust - Master
S&P 500 Index Series are incorporated in this Statement of Additional
Information by reference to the June 30, 2002 semi-annual report to
shareholders of the Quantitative Master Series Trust - Master S&P 500
Index Series. You may request a copy of that annual and semi-annual
report at no charge by calling 888.763.2260 between 8:00 a.m. and 8:00
p.m. Eastern time on any business day.
INDEPENDENT AUDITORS' REPORT --------------------------------------------------------------------------------

To the Board of Trustees and Shareholders of Oppenheimer Select Managers Salomon Brothers All Cap Fund:

We have audited the accompanying statement of assets and liabilities of Oppenheimer Select Managers Salomon Brothers All Cap Fund, which is a series of Oppenheimer Select Managers, which operated under the name of Oppenheimer Select Managers Salomon Brothers Capital Fund through April 30, 2002, including the statement of investments, as of November 30, 2002, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for the periods indicated. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of November 30, 2002, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Select Managers Salomon Brothers All Cap Fund as of November 30, 2002, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP ------------------------- Deloitte & Touche LLP Denver, Colorado December 20, 2002 STATEMENT OF INVESTMENTS November 30, 2002 Market Value Shares See Note 1 -------------------------------------------------------------------------------- Common Stocks--89.3% -------------------------------------------------------------------------------- Consumer Discretionary--21.8% -------------------------------------------------------------------------------- Hotels, Restaurants & Leisure--1.9% Extended Stay America, Inc. 1 8,500 $ 118,915 -------------------------------------------------------------------------------- McDonald's Corp. 17,100 316,350 ------------ 435,265 -------------------------------------------------------------------------------- Household Durables--0.7% Clayton Homes, Inc. 6,000 80,880 -------------------------------------------------------------------------------- Fleetwood Enterprises, Inc. 1 11,300 93,112 ------------ 173,992 -------------------------------------------------------------------------------- Leisure Equipment & Products--2.1% Eastman Kodak Co. 7,500 276,900 -------------------------------------------------------------------------------- Hasbro, Inc. 17,500 224,350 ------------ 501,250 -------------------------------------------------------------------------------- Media--12.7% AOL Time Warner, Inc. 1 30,000 491,100 -------------------------------------------------------------------------------- Cablevision Systems New York Group, Cl. A 1 17,107 289,279 -------------------------------------------------------------------------------- Comcast Corp., Cl. A Special, Non-Vtg. 1 16,500 376,200 -------------------------------------------------------------------------------- Disney (Walt) Co. 18,500 366,670 -------------------------------------------------------------------------------- Liberty Media Corp., Cl. A 1 51,000 538,560 -------------------------------------------------------------------------------- Metro-Goldwyn-Mayer, Inc. 1 20,000 285,000 -------------------------------------------------------------------------------- News Corp. Ltd. (The), Sponsored ADR 9,700 272,570 -------------------------------------------------------------------------------- News Corp. Ltd. (The), Sponsored ADR, Preference 15,700 373,817 ------------ 2,993,196 -------------------------------------------------------------------------------- Multiline Retail--3.5% Costco Wholesale Corp. 1 15,900 513,570 -------------------------------------------------------------------------------- Federated Department Stores, Inc. 1 9,800 320,264 ------------ 833,834 -------------------------------------------------------------------------------- Specialty Retail--0.9% Home Depot, Inc. 8,300 219,286 -------------------------------------------------------------------------------- Consumer Staples--0.5% -------------------------------------------------------------------------------- Food Products--0.5% Archer-Daniels-Midland Co. 9,700 129,301 -------------------------------------------------------------------------------- Energy--4.8% -------------------------------------------------------------------------------- Energy Equipment & Services--1.6% GlobalSantaFe Corp. 7,700 197,274 -------------------------------------------------------------------------------- Schlumberger Ltd. 4,100 181,425 ------------ 378,699 9 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENT OF INVESTMENTS CONTINUED Market Value Shares See Note 1 -------------------------------------------------------------------------------- Oil & Gas--3.2% Amerada Hess Corp. 1,600 $ 89,600 -------------------------------------------------------------------------------- Anadarko Petroleum Corp. 5,500 259,600 -------------------------------------------------------------------------------- ChevronTexaco Corp. 6,000 402,180 ------------ 751,380 -------------------------------------------------------------------------------- Financials--12.9% -------------------------------------------------------------------------------- Banks--1.0% Bank One Corp. 5,900 232,991 -------------------------------------------------------------------------------- Diversified Financials--3.4% American Express Co. 10,600 412,658 -------------------------------------------------------------------------------- Countrywide Financial Corp. 8,200 404,260 ------------ 816,918 -------------------------------------------------------------------------------- Insurance--8.5% AMBAC Financial Group, Inc. 5,000 312,550 -------------------------------------------------------------------------------- Chubb Corp. 6,000 351,600 -------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. 5,000 245,300 -------------------------------------------------------------------------------- MBIA, Inc. 5,100 231,948 -------------------------------------------------------------------------------- MGIC Investment Corp. 5,000 233,350 -------------------------------------------------------------------------------- Radian Group, Inc. 4,100 167,690 -------------------------------------------------------------------------------- St. Paul Cos., Inc. 12,500 465,500 ------------ 2,007,938 -------------------------------------------------------------------------------- Health Care--13.3% -------------------------------------------------------------------------------- Biotechnology--1.7% Aphton Corp. 1 8,600 23,048 -------------------------------------------------------------------------------- Enzo Biochem, Inc. 11,500 166,750 -------------------------------------------------------------------------------- Wyeth 5,500 211,365 ------------ 401,163 -------------------------------------------------------------------------------- Pharmaceuticals--11.6% Abbott Laboratories 11,000 481,580 -------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 15,300 405,450 -------------------------------------------------------------------------------- Elan Corp. plc, ADR 1 55,000 134,200 -------------------------------------------------------------------------------- ICN Pharmaceuticals, Inc. 8,300 97,525 -------------------------------------------------------------------------------- Johnson & Johnson 5,400 307,908 -------------------------------------------------------------------------------- Merck & Co., Inc. 3,900 231,699 -------------------------------------------------------------------------------- Novartis AG, ADR 12,700 482,600 -------------------------------------------------------------------------------- Pfizer, Inc. 8,300 261,782 -------------------------------------------------------------------------------- Schering-Plough Corp. 15,700 355,762 ------------ 2,758,506 10 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND Market Value Shares See Note 1 -------------------------------------------------------------------------------- Industrials--4.8% -------------------------------------------------------------------------------- Aerospace & Defense--1.8% Honeywell International, Inc. 7,700 $ 199,199 -------------------------------------------------------------------------------- Raytheon Co. 7,700 224,609 ------------ 423,808 -------------------------------------------------------------------------------- Commercial Services & Supplies--1.8% Waste Management, Inc. 17,100 426,132 -------------------------------------------------------------------------------- Machinery--1.2% Deere & Co. 2,800 143,220 -------------------------------------------------------------------------------- Ingersoll-Rand Co., Cl. A 3,100 143,220 ------------ 286,440 -------------------------------------------------------------------------------- Information Technology--20.0% -------------------------------------------------------------------------------- Communications Equipment--7.0% 3Com Corp. 1 84,000 432,600 -------------------------------------------------------------------------------- Lucent Technologies, Inc. 1 131,300 229,775 -------------------------------------------------------------------------------- Motorola, Inc. 29,700 337,986 -------------------------------------------------------------------------------- Nokia Corp., Sponsored ADR, A Shares 20,900 401,489 -------------------------------------------------------------------------------- Telefonaktiebolaget Ericsson (L.M.), Sponsored ADR 1 26,760 263,051 ------------ 1,664,901 -------------------------------------------------------------------------------- Computers & Peripherals--2.9% Electronics for Imaging, Inc. 1 8,000 141,520 -------------------------------------------------------------------------------- Hewlett-Packard Co. 16,300 317,524 -------------------------------------------------------------------------------- Maxtor Corp. 1 40,000 216,800 ------------ 675,844 -------------------------------------------------------------------------------- Electronic Equipment & Instruments--2.8% Agilent Technologies, Inc. 1 13,800 267,858 -------------------------------------------------------------------------------- Solectron Corp. 1 85,000 392,700 ------------ 660,558 -------------------------------------------------------------------------------- Internet Software & Services--0.8% RealNetworks, Inc. 1 40,000 154,400 -------------------------------------------------------------------------------- Register.com, Inc. 1 10,900 46,652 ------------ 201,052 -------------------------------------------------------------------------------- IT Consulting & Services--1.7% Unisys Corp. 1 35,000 392,000 -------------------------------------------------------------------------------- Semiconductor Equipment & Products--4.3% Intel Corp. 14,000 292,320 -------------------------------------------------------------------------------- Lattice Semiconductor Corp. 1 22,000 220,000 -------------------------------------------------------------------------------- LSI Logic Corp. 1 33,500 277,715 11 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENT OF INVESTMENTS Continued Market Value Shares See Note 1 -------------------------------------------------------------------------------- Semiconductor Equipment & Products Continued Taiwan Semiconductor Manufacturing Co. Ltd., ADR 25,400 $ 233,680 ------------ 1,023,715 -------------------------------------------------------------------------------- Software--0.5% Micromuse, Inc. 1 26,000 116,740 -------------------------------------------------------------------------------- Materials--5.6% -------------------------------------------------------------------------------- Chemicals--2.2% Cabot Corp. 6,500 164,645 -------------------------------------------------------------------------------- Dow Chemical Co. 7,600 242,440 -------------------------------------------------------------------------------- Engelhard Corp. 4,700 113,928 ------------ 521,013 -------------------------------------------------------------------------------- Metals & Mining--1.8% Alcoa, Inc. 15,000 383,250 -------------------------------------------------------------------------------- Brush Wellman, Inc. 1 5,300 32,065 ------------ 415,315 -------------------------------------------------------------------------------- Paper & Forest Products--1.6% Weyerhaeuser Co. 7,300 383,980 -------------------------------------------------------------------------------- Telecommunication Services--4.7% -------------------------------------------------------------------------------- Diversified Telecommunication Services--3.0% Nippon Telegraph & Telephone Corp., ADR 13,000 254,150 -------------------------------------------------------------------------------- SBC Communications, Inc. 16,000 456,000 ------------ 710,150 -------------------------------------------------------------------------------- Wireless Telecommunication Services--1.7% Vodafone Group plc, Sponsored ADR 20,900 391,875 -------------------------------------------------------------------------------- Utilities--0.9% -------------------------------------------------------------------------------- Gas Utilities--0.9% El Paso Corp. 25,000 213,000 ------------ Total Common Stocks (Cost $23,046,816) 21,140,242 12 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND Principal Market Value Amount See Note 1 -------------------------------------------------------------------------------- Convertible Corporate Bonds and Notes--1.6% American Tower Corp., 2.25% Cv. Nts., 10/15/09 (Cost $355,783) $ 500,000 $ 372,500 -------------------------------------------------------------------------------- Joint Repurchase Agreements--8.8% Undivided interest of 0.46% in joint repurchase agreement (Market Value $453,323,000) with Banc One Capital Markets, Inc., 1.29%, dated 11/29/02, to be repurchased at $2,080,224 on 12/2/02, collateralized by U.S. Treasury Nts., 1.875%--7%, 3/31/03--8/15/11, witH a value of $408,234,710 and U.S. Treasury Bonds, 6.25%--10.625%, 8/15/15--8/15/23, with a value of $55,304,803 (Cost $2,080,000) 2,080,000 2,080,000 -------------------------------------------------------------------------------- Total Investments, at Value (Cost $25,482,599) 99.7% 23,592,742 -------------------------------------------------------------------------------- Other Assets Net of Liabilities 0.3 77,725 ----------------------------- Net Assets 100.0% $23,670,467 ============================= Footnotes to Statement of Investments 1. Non-income producing security. See accompanying Notes to Financial Statements. 13 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENT OF ASSETS AND LIABILITIES November 30, 2002 --------------------------------------------------------------------- Assets Investments, at value (cost $25,482,599)-- see accompanying statement $ 23,592,742 --------------------------------------------------------------------- Cash 7,016 --------------------------------------------------------------------- Receivables and other assets: Investments sold 59,061 Interest and dividends 32,420 Shares of beneficial interest sold 20,326 Other 1,912 ------------- Total assets 23,713,477 ---------------------------------------------------------------------

Liabilities Payables and other liabilities:

Shareholder reports 10,170 Transfer and shareholder servicing agent fees 9,147 Legal, auditing and other professional fees 7,746 Distribution and service plan fees 6,312 Investments purchased 4,806 Shares of beneficial interest redeemed 2,046 Trustees' compensation 326 Other 2,457 ------------- Total liabilities 43,010 --------------------------------------------------------------------- Net Assets $ 23,670,467 ============= --------------------------------------------------------------------- Composition of Net Assets Paid-in capital $ 28,029,517 --------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (2,469,193) --------------------------------------------------------------------- Net unrealized depreciation on investments and translation of asset and liabilities denominated in foreign currencies (1,889,857) ------------- Net Assets $ 23,670,467 ============= 14 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND ---------------------------------------------------------------------- Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $6,774,546 and 841,303 shares of beneficial interest outstanding) $8.05 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $8.54 ---------------------------------------------------------------------- Class B Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $4,325,199 and 543,668 shares of beneficial interest outstanding) $7.96 ----------------------------------------------------------------------

Class C Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $6,872,361 and 864,608 shares of beneficial interest outstanding) $7.95 ----------------------------------------------------------------------

Class N Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $5,697,551 and 712,389 shares of beneficial interest outstanding) $8.00 ----------------------------------------------------------------------

Class Y Shares:

Net asset value, redemption price and offering price per share (based on net assets of $810 and 100 shares of beneficial interest outstanding)

$8.10 See accompanying Notes to Financial Statements. 15 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENT OF OPERATIONS For the Year Ended November 30, 2002 -------------------------------------------------------------------------------- Investment Income Dividends (net of foreign withholding taxes of $2,919) $ 192,958 -------------------------------------------------------------------------------- Interest 60,190 ------------- Total investment income 253,148 -------------------------------------------------------------------------------- Expenses Management fees 238,043 --------------------------------------------------------------------------------

Distribution and service plan fees:

Class A 12,376 Class B 34,095 Class C 57,794 Class N 15,207 --------------------------------------------------------------------------------

Transfer and shareholder servicing agent fees:

Class A 40,614 Class B 15,879 Class C 24,684 Class N 13,454 Class Y 863 -------------------------------------------------------------------------------- Shareholder reports 22,805 -------------------------------------------------------------------------------- Trustees' compensation 4,126 -------------------------------------------------------------------------------- Custodian fees and expenses 236 -------------------------------------------------------------------------------- Other 14,996 -------------

Total expenses 495,172 Less voluntary reimbursement of expenses (44,330) Less voluntary waiver of transfer and shareholder servicing agent fees--Classes A, B, C and N (16,433) Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y (863) ------------- Net expenses 433,546 -------------------------------------------------------------------------------- Net Investment Loss (180,398)

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

Realized and Unrealized Gain (Loss) Net realized gain (loss) on:

Investments (2,085,922) Foreign currency transactions 729 ------------- Net realized loss (2,085,193) --------------------------------------------------------------------------------

Net change in unrealized depreciation on:

Investments (1,552,018) Translation of assets and liabilities denominated in foreign currencies (253) Net change (1,552,271) ------------- Net realized and unrealized loss (3,637,464) -------------------------------------------------------------------------------- Net Decrease in Net Assets Resulting from Operations $(3,817,862) ============= See accompanying Notes to Financial Statements. 16 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENTS OF CHANGES IN NET ASSETS Year Ended November 30, 2002 2001 1 -------------------------------------------------------------------------------- Operations Net investment income (loss) $ (180,398) $ 103,450 -------------------------------------------------------------------------------- Net realized loss (2,085,193) (384,050) -------------------------------------------------------------------------------- Net change in unrealized depreciation (1,552,271) (337,586) --------------------------- Net decrease in net assets resulting from operations (3,817,862) (618,186) --------------------------------------------------------------------------------

Dividends and/or Distributions to Shareholders Dividends from net investment income:

Class A (82,700) -- Class B (14,442) -- Class C (28,229) -- Class N (8,740) -- Class Y (11) -- --------------------------------------------------------------------------------

Beneficial Interest Transactions Net increase in net assets resulting from beneficial interest transactions:

Class A 143,096 9,139,908 Class B 2,802,559 2,154,215 Class C 4,079,221 3,823,011 Class N 5,419,588 662,039 Class Y -- -- -------------------------------------------------------------------------------- Net Assets Total increase 8,492,480 15,160,987 -------------------------------------------------------------------------------- Beginning of period 15,177,987 17,000 2 --------------------------- End of period [including accumulated net investment income of $105,757 for the period ended November 30, 2001] $23,670,467 $15,177,987 =========================== 1. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 2. Reflects the value of the Manager's initial seed money investment at December 22, 2000. See accompanying Notes to Financial Statements. 17 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND FINANCIAL HIGHLIGHTS 

                                                         Class A           Class B           Class C
                                                            Year              Year              Year
                                                           Ended             Ended             Ended
                                                        Nov. 30,          Nov. 30,          Nov. 30,
                                                  2002    2001 1    2002    2001 1    2002    2001 1
-----------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period           $  9.25   $10.00   $ 9.18   $10.00  $  9.18   $10.00
-----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                     (.06)      .08     (.07)     .04     (.07)     .03
Net realized and unrealized loss                (1.05)     (.83)   (1.09)    (.86)   (1.09)    (.85)
                                               ------------------------------------------------------
Total from investment operations                (1.11)     (.75)   (1.16)    (.82)   (1.16)    (.82)
-----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income             (.09)       --     (.06)      --     (.07)      --
-----------------------------------------------------------------------------------------------------
Net asset value, end of period                  $8.05     $9.25    $7.96    $9.18    $7.95    $9.18
                                               ======================================================

-----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2             (12.17)%   (7.50)% (12.75)%  (8.20)% (12.78)%  (8.20)%

-----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)       $6,775    $8,717   $4,325   $2,071   $6,872   $3,729
-----------------------------------------------------------------------------------------------------
Average net assets (in thousands)              $9,404    $6,384   $3,416   $1,075   $5,788   $1,427
-----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                    (0.52)%    1.57%   (1.21)%   1.06%   (1.21)%   1.17%
Expenses                                         1.85%     1.59%    2.75%    2.54%    2.72%    2.55%
Expenses, net of voluntary reimbursement
of expenses and/or voluntary waiver of
transfer agent fees                              1.59%     1.59%    2.44%    2.39%    2.41%    2.38%
-----------------------------------------------------------------------------------------------------
Portfolio turnover rate                           139%       55%     139%      55%     139%      55%
1. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 2. 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. 3. Annualized for periods of less than one full year. See accompanying Notes to Financial Statements. 18 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND 

                                                                       Class N            Class Y
                                                                          Year               Year
                                                                         Ended              Ended
                                                                      Nov. 30,           Nov. 30,
                                                                2002    2001 1     2002    2001 2
---------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                          $ 9.21    $ 9.84   $ 9.26    $10.00
---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                            .02       .03      .01       .12
Net realized and unrealized loss                               (1.14)     (.66)   (1.06)     (.86)
                                                              -------------------------------------
Total from investment operations                               (1.12)     (.63)   (1.05)     (.74)
---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                            (.09)       --     (.11)       --
---------------------------------------------------------------------------------------------------
Net asset value, end of period                                 $8.00     $9.21    $8.10    $ 9.26
                                                              =====================================

---------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 3                            (12.30)%   (6.40)% (11.52)%   (7.40)%

---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)                      $5,698      $660       $1        $1
---------------------------------------------------------------------------------------------------
Average net assets (in thousands)                             $3,055      $158       $1        $1
---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                                   (0.66)%    2.08%    0.10%     1.52%
Expenses                                                        2.23%     2.07%   87.59%   501.53%
Expenses, net of voluntary reimbursement of expenses
and/or voluntary waiver of transfer agent fees                  1.98%     1.89%    1.12%     1.30%
---------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          139%       55%     139%       55%
1. For the period from March 1, 2001 (inception of offering) to November 30, 2001. 2. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 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. See accompanying Notes to Financial Statements. 19 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. Significant Accounting Policies

Oppenheimer Select Managers Salomon Brothers All Cap Fund (the Fund), a series of Oppenheimer Select Managers, which operated under the name of Oppenheimer Select Managers Salomon Brothers Capital Fund through April 30, 2002, is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund’s investment objective is to seek capital appreciation. The Fund’s investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager has entered into a sub-advisory agreement with Salomon Brothers Asset Management, Inc. (the Sub-Advisor).

        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 prevailing exchange rates on the valuation date. Amounts related to the purchase and sale of foreign securities and investment income are translated at the prevailing exchange rates 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

20 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

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 to shareholders. Therefore, no federal income or excise tax provision is required.

        During the fiscal year ended November 30, 2002, the Fund did not utilize any capital loss carryforward.

As of November 30, 2002, the Fund had available for federal income tax purposes unused capital loss carryforwards as follows:

Expiring
2009 $ 167,424 2010 2,019,897 Total $2,187,321 ==========

As of November 30, 2002, the Fund had approximately $282,000 of post-October losses available to offset future capital gains, if any. Such losses, if unutilized, will expire in 2011.

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

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 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

21 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued 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 November 30, 2002, amounts have been reclassified to reflect a decrease in paid-in capital of $208,799, a decrease in overdistributed net investment income of $208,763, and a decrease in accumulated net realized loss on investments of $36. Net assets of the Fund were unaffected by the reclassifications.

The tax character of distributions paid during the year ended November 30, 2002 and the period ended November 30, 2001 was as follows:

Year Ended Period Ended November 30, 2002 November 30, 2001 Distributions paid from: Ordinary income $134,122 $-- Long-term capital gain -- -- Return of capital -- -- --------------------------- Total $134,122 $-- ===========================

As of November 30, 2002, the components of distributable earnings on a tax basis were as follows:

Accumulated net realized loss $(2,469,193) Net unrealized depreciation (1,889,857)
Total $(4,359,050) ============ --------------------------------------------------------------------------------

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. 22 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAPFUND -------------------------------------------------------------------------------- 2. Shares of Beneficial Interest

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


                                           Year Ended November 30, 2002  Period Ended November 30, 2001 1
                                               Shares            Amount           Shares           Amount
-----------------------------------------------------------------------------------------------------------

Class A
Sold                                          629,798       $ 5,376,405          957,273       $9,291,205
Dividends and/or
distributions reinvested                        4,288            39,537               --               --
Redeemed                                     (735,506)       (5,272,846)         (15,950)        (151,297)
                                             --------------------------------------------------------------
Net increase (decrease)                      (101,420)       $  143,096          941,323       $9,139,908
                                             ==============================================================

-----------------------------------------------------------------------------------------------------------
Class B
Sold                                          412,196       $ 3,515,598          241,090       $2,298,825
Dividends and/or
distributions reinvested                        1,486            13,648               --               --
Redeemed                                      (95,522)         (726,687)         (15,682)        (144,610)
                                             --------------------------------------------------------------
Net increase                                  318,160        $2,802,559          225,408       $2,154,215
                                             ==============================================================

-----------------------------------------------------------------------------------------------------------
Class C
Sold                                          680,933       $ 5,766,521          408,168       $3,842,581
Dividends and/or  distributions reinvested      2,928            26,858               --               --
Redeemed                                     (225,394)       (1,714,158)          (2,127)         (19,570)
                                             --------------------------------------------------------------
Net increase                                  458,467        $4,079,221          406,041       $3,823,011
                                             ==============================================================

-----------------------------------------------------------------------------------------------------------
Class N
Sold                                          781,100       $ 6,523,549           72,245       $  667,732
Dividends and/or  distributions reinvested        951             8,731               --               --
Redeemed                                     (141,274)       (1,112,692)            (633)          (5,693)
                                             --------------------------------------------------------------
Net increase                                  640,777        $5,419,588           71,612       $  662,039
                                             ==============================================================

-----------------------------------------------------------------------------------------------------------
Class Y
Sold                                               --       $        --               --       $       --
Dividends and/or
 distributions reinvested                          --                --               --               --
Redeemed                                           --                --               --               --
                                             --------------------------------------------------------------
Net increase (decrease)                            --       $        --               --       $       --
                                             ==============================================================
1. For the period from February 16, 2001 (inception of offering) to November 30, 2001, for Class A, B, C and Y shares and for the period from March 1, 2001 (inception of offering) to November 30, 2001, for Class N shares. -------------------------------------------------------------------------------- 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 November 30, 2002, were $36,483,792 and $24,209,558, respectively.

23 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- 3. Purchases and Sales of Securities Continued

As of November 30, 2002, unrealized appreciation (depreciation) based on cost of securities for federal income tax purposes of $25,482,599 was composed of:

Gross unrealized appreciation $ 1,405,691 Gross unrealized depreciation (3,295,548) ------------ Net unrealized depreciation $(1,889,857) ============

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 1.10% of the first $100 million of average annual net assets of the Fund and 1.00% of average annual net assets in excess of $100 million. The Manager has voluntarily undertaken to assume certain Fund expenses. The Manager reserves the right to amend or terminate that expense assumption at any time. -------------------------------------------------------------------------------- Sub-Advisor Fees. The Manager has retained Salomon Brothers Asset Management, Inc. as the Sub-Advisor to provide the day-to-day portfolio management of the Fund. For the year ended November 30, 2002, the Manager paid $125,900 to the Sub-Advisor. -------------------------------------------------------------------------------- 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 0.35% for all classes. Effective November 1, 2002, Class Y shares were changed from 0.25% to 0.35%. 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. 24 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP 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
-------------------------------------------------------------------------------------------------------------------

November 30, 2002         $62,590        $21,424          $7,615          $91,244        $48,537            $49,699
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 -------------------------------------------------------------------------------- November 30, 2002 $-- $8,641 $2,017 $3,541 --------------------------------------------------------------------------------

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 November 30, 2002, payments under the Class A Plan totaled $12,376, all of which were paid by the Distributor to recipients, and included $814 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.

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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 November 30, 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 $34,095 $30,715 $163,386 3.78% Class C Plan 57,794 38,465 121,309 1.77 Class N Plan 15,207 5,770 99,503 1.75 -------------------------------------------------------------------------------- 5. Foreign Currency Contracts

A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to

25 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- 5. Foreign Currency Contracts Continued

settle specific purchases or sales of securities denominated in a foreign currency and to seek to protect against adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract.

        The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation.

        The Fund may realize a gain or loss upon the closing or settlement of the forward transaction. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations.

-------------------------------------------------------------------------------- 6. Borrowing and Lending Arrangements

Bank Borrowings. Until November 12, 2002, the Fund had the ability to borrow from a bank for temporary or emergency purposes provided asset coverage for borrowings exceeded 300%. The Fund and other Oppenheimer funds participated in a $400 million unsecured line of credit with a bank. Under that unsecured line of credit, interest was charged to each fund, based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Under that credit facility, the Fund paid 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.

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Interfund Borrowing and Lending Arrangements. Effective November 12, 2002, the following interfund borrowing and lending arrangements went into effect. Consistent with its fundamental policies and pursuant to an exemptive order issued by the Securities and Exchange Commission (“SEC”), the Fund may engage in borrowing and lending activities with other funds in the OppenheimerFunds complex. Borrowing money from affiliated funds may afford the Fund the flexibility to use the most cost-effective alternative to satisfy its borrowing requirements. Lending money to an affiliated fund may allow the Fund to obtain a higher rate of return than it could from interest rates on alternative short-term investments. Implementation of interfund lending will be accomplished consistent with applicable regulatory requirements, including the provisions of the SEC order. There is a risk that a borrowing fund could have a loan called on one day’s notice. In that circumstance, the Fund might have to borrow from a bank at a higher interest cost if money to lend were not available from another Oppenheimer fund. When the Fund lends assets to another affiliated fund, the Fund is subject to the risk that the borrowing fund fails to repay the loan.

        The Fund had no borrowing or lending arrangements outstanding during the year ended or at November 30, 2002.

26 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND A-6 Appendix A Ratings Definitions Below are summaries of the rating definitions used by the nationally-recognized rating agencies listed below. Those ratings represent the opinion of the agency as to the credit quality of issues that they rate. The summaries below are based upon publicly-available information provided by the rating organizations. Moody's Investors Service, Inc. ("Moody's") LONG-TERM (TAXABLE) BOND RATINGS Aaa: Bonds rated "Aaa" are judged to be the best quality. They carry the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, the changes that can be expected are most unlikely to impair the fundamentally strong position of such issues. Aa: Bonds rated "Aa" are judged to be of high quality by all standards. Together with the "Aaa" group, they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as with "Aaa" securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than that of "Aaa" securities. A: Bonds rated "A" possess many favorable investment attributes and are to be considered as upper-medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment some time in the future. Baa: Bonds rated "Baa" are considered medium-grade obligations; that is, they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and have speculative characteristics as well. Ba: Bonds rated "Ba" are judged to have speculative elements. Their future cannot be considered well-assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B: Bonds rated "B" generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa: Bonds rated "Caa" are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca: Bonds rated "Ca" represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C: Bonds rated "C" are the lowest class of rated bonds and can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from "Aa" through "Caa." The modifier "1" indicates that the obligation ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in the lower end of that generic rating category. Advanced refunded issues that are secured by certain assets are identified with a # symbol. SHORT-TERM RATINGS - TAXABLE DEBT These ratings apply to the ability of issuers to honor senior debt obligations having an original maturity not exceeding one year: Prime-1: Issuer has a superior ability for repayment of senior short-term debt obligations. Prime-2: Issuer has a strong ability for repayment of senior short-term debt obligations. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Prime-3: Issuer has an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained. Not Prime: Issuer does not fall within any Prime rating category. Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The McGraw-Hill Companies, Inc. LONG-TERM ISSUE CREDIT RATINGS AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. AA: Bonds rated "AA" differ from the highest rated bonds only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. A: Bonds rated "A" are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong. BBB: Bonds rated "BBB" exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. BB, B, CCC, CC, and C Obligations rated `BB', `B', `CCC', `CC', and `C' are regarded as having significant speculative characteristics. `BB' indicates the least degree of speculation and `C' the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. BB: Bonds rated "BB" are less vulnerable to nonpayment than other speculative issues. However, they face major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. B: Bonds rated "B" are more vulnerable to nonpayment than bonds rated "BB", but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation. CCC: Bonds rated "CCC" are currently vulnerable to nonpayment, and are dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. CC: Bonds rated "CC" are currently highly vulnerable to nonpayment. C: Subordinated debt or preferred stock obligations rated "C" are currently highly vulnerable to nonpayment. The "C" rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken, but payments on this obligation are being continued. A "C" also will be assigned to a preferred stock issue in arrears on dividends or sinking fund payments, but that is currently paying. D: Bonds rated "D" are in payment default. The "D" rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. The "r" symbol is attached to the ratings of instruments with significant noncredit risks. SHORT-TERM ISSUE CREDIT RATINGS A-1: A short-term bond rated "A-1" is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong. A-2: A short-term bond rated "A-2" is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. A-3: A short-term bond rated "A-3" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. B: A short-term bond rated "B" is regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. C: A short-term bond rated "C" is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. D: A short-term bond rated "D" is in payment default. The "D" rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. Fitch, Inc. INTERNATIONAL LONG-TERM CREDIT RATINGS Investment Grade: AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of credit risk. They are assigned only in the case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. AA: Very High Credit Quality. "AA" ratings denote a very low expectation of credit risk. They indicate a very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. A: High Credit Quality. "A" ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category. Speculative Grade: BB: Speculative. "BB" ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time. However, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade. B: Highly Speculative. "B" ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met. However, capacity for continued payment is contingent upon a sustained, favorable business and economic environment. CCC, CC C: High Default Risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. A "CC" rating indicates that default of some kind appears probable. "C" ratings signal imminent default. DDD, DD, and D: Default. The ratings of obligations in this category are based on their prospects for achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be estimated with any precision, the following serve as general guidelines. "DDD" obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest. "DD" indicates potential recoveries in the range of 50%-90%, and "D" the lowest recovery potential, i.e., below 50%. Entities rated in this category have defaulted on some or all of their obligations. Entities rated "DDD" have the highest prospect for resumption of performance or continued operation with or without a formal reorganization process. Entities rated "DD" and "D" are generally undergoing a formal reorganization or liquidation process; those rated "DD" are likely to satisfy a higher portion of their outstanding obligations, while entities rated "D" have a poor prospect for repaying all obligations. Plus (+) and minus (-) signs may be appended to a rating symbol to denote relative status within the major rating categories. Plus and minus signs are not added to the "AAA" category or to categories below "CCC," nor to short-term ratings other than "F1" (see below). INTERNATIONAL SHORT-TERM CREDIT RATINGS F1: Highest credit quality. Strongest capacity for timely payment of financial commitments. May have an added "+" to denote any exceptionally strong credit feature. F2: Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of higher ratings. F3: Fair credit quality. Capacity for timely payment of financial commitments is adequate. However, near-term adverse changes could result in a reduction to non-investment grade. B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions. C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment. D: Default. Denotes actual or imminent payment default. B-1 Appendix B Industry Classifications Aerospace & Defense Household Products Air Freight & Couriers Industrial Conglomerates Airlines Insurance Auto Components Internet & Catalog Retail Automobiles Internet Software & Services Banks Information Technology Consulting & Services Beverages Leisure Equipment & Products Biotechnology Machinery Building Products Marine Chemicals Media Commercial Services & Supplies Metals & Mining Communications Equipment Multiline Retail Computers & Peripherals Multi-Utilities Construction & Engineering Office Electronics Construction Materials Oil & Gas Containers & Packaging Paper & Forest Products Distributors Personal Products Diversified Financials Pharmaceuticals Diversified Telecommunication Services Real Estate Electric Utilities Road & Rail Electrical Equipment Semiconductor Equipment & Products Electronic Equipment & Instruments Software Energy Equipment & Services Specialty Retail Food & Drug Retailing Textiles & Apparel Food Products Tobacco Gas Utilities Trading Companies & Distributors Health Care Equipment & Supplies Transportation Infrastructure Health Care Providers & Services Water Utilities Hotels Restaurants & Leisure Wireless Telecommunication Services Household Durables C-11 Appendix C OppenheimerFunds Special Sales Charge Arrangements and Waivers In certain cases, the initial sales charge that applies to purchases of Class A shares1 of the Oppenheimer funds or the contingent deferred sales charge that may apply to Class A, Class B or Class C shares may be waived.2 That is because of the economies of sales efforts realized by OppenheimerFunds Distributor, Inc., (referred to in this document as the "Distributor"), or by dealers or other financial institutions that offer those shares to certain classes of investors. Not all waivers apply to all funds. For example, waivers relating to Retirement Plans do not apply to Oppenheimer municipal funds, because shares of those funds are not available for purchase by or on behalf of retirement plans. Other waivers apply only to shareholders of certain funds. For the purposes of some of the waivers described below and in the Prospectus and Statement of Additional Information of the applicable Oppenheimer funds, the term "Retirement Plan" refers to the following types of plans: 1) plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code, 2) non-qualified deferred compensation plans, 3) employee benefit plans3 4) Group Retirement Plans4 5) 403(b)(7) custodial plan accounts 6) Individual Retirement Accounts ("IRAs"), including traditional IRAs, Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans The interpretation of these provisions as to the applicability of a special arrangement or waiver in a particular case is in the sole discretion of the Distributor or the transfer agent (referred to in this document as the "Transfer Agent") of the particular Oppenheimer fund. These waivers and special arrangements may be amended or terminated at any time by a particular fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this document as the "Manager"). Waivers that apply at the time shares are redeemed must be requested by the shareholder and/or dealer in the redemption request. I. Applicability of Class A Contingent Deferred Sales Charges in Certain Cases ------------------------------------------------------------------------ Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial Sales Charge but May Be Subject to the Class A Contingent Deferred Sales Charge (unless a waiver applies). There is no initial sales charge on purchases of Class A shares of any of the Oppenheimer funds in the cases listed below. However, these purchases may be subject to the Class A contingent deferred sales charge if redeemed within 18 months (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."5 This waiver provision applies to: |_| Purchases of Class A shares aggregating $1 million or more. |_| Purchases of Class A shares by a Retirement Plan that was permitted to purchase such shares at net asset value but subject to a contingent deferred sales charge prior to March 1, 2001. That included plans (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares costing $500,000 or more, 2) had at the time of purchase 100 or more eligible employees or total plan assets of $500,000 or more, or 3) certified to the Distributor that it projects to have annual plan purchases of $200,000 or more. |_| Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases are made: 1) through a broker, dealer, bank or registered investment adviser that has made special arrangements with the Distributor for those purchases, or 2) by a direct rollover of a distribution from a qualified Retirement Plan if the administrator of that Plan has made special arrangements with the Distributor for those purchases. |_| Purchases of Class A shares by Retirement Plans that have any of the following record-keeping arrangements: 1) The record keeping is performed by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the Retirement Plan. On the date the plan sponsor signs the record-keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of its assets invested in (a) mutual funds, other than those advised or managed by Merrill Lynch Investment Management, L.P. ("MLIM"), that are made available under a Service Agreement between Merrill Lynch and the mutual fund's principal underwriter or distributor, and (b) funds advised or managed by MLIM (the funds described in (a) and (b) are referred to as "Applicable Investments"). 2) The record keeping for the Retirement Plan is performed on a daily valuation basis by a record keeper whose services are provided under a contract or arrangement between the Retirement Plan and Merrill Lynch. On the date the plan sponsor signs the record keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of its assets (excluding assets invested in money market funds) invested in Applicable Investments. 3) The record keeping for a Retirement Plan is handled under a service agreement with Merrill Lynch and on the date the plan sponsor signs that agreement, the Plan has 500 or more eligible employees (as determined by the Merrill Lynch plan conversion manager). II. Waivers of Class A Sales Charges of Oppenheimer Funds ------------------------------------------------------------------------ A. Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers. Class A shares purchased by the following investors are not subject to any Class A sales charges (and no concessions are paid by the Distributor on such purchases): |_| The Manager or its affiliates. |_| Present or former officers, directors, trustees and employees (and their "immediate families") of the Fund, the Manager and its affiliates, and retirement plans established by them for their employees. The term "immediate family" refers to one's spouse, children, grandchildren, grandparents, parents, parents-in-law, brothers and sisters, sons- and daughters-in-law, a sibling's spouse, a spouse's siblings, aunts, uncles, nieces and nephews; relatives by virtue of a remarriage (step-children, step-parents, etc.) are included. |_| Registered management investment companies, or separate accounts of insurance companies having an agreement with the Manager or the Distributor for that purpose. |_| Dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their own accounts or for retirement plans for their employees. |_| Employees and registered representatives (and their spouses) of dealers or brokers described above or financial institutions that have entered into sales arrangements with such dealers or brokers (and which are identified as such to the Distributor) or with the Distributor. The purchaser must certify to the Distributor at the time of purchase that the purchase is for the purchaser's own account (or for the benefit of such employee's spouse or minor children). |_| Dealers, brokers, banks or registered investment advisors that have entered into an agreement with the Distributor providing specifically for the use of shares of the Fund in particular investment products made available to their clients. Those clients may be charged a transaction fee by their dealer, broker, bank or advisor for the purchase or sale of Fund shares. |_| Investment advisors and financial planners who have entered into an agreement for this purpose with the Distributor and who charge an advisory, consulting or other fee for their services and buy shares for their own accounts or the accounts of their clients. |_| "Rabbi trusts" that buy shares for their own accounts, if the purchases are made through a broker or agent or other financial intermediary that has made special arrangements with the Distributor for those purchases. |_| Clients of investment advisors or financial planners (that have entered into an agreement for this purpose with the Distributor) who buy shares for their own accounts may also purchase shares without sales charge but only if their accounts are linked to a master account of their investment advisor or financial planner on the books and records of the broker, agent or financial intermediary with which the Distributor has made such special arrangements . Each of these investors may be charged a fee by the broker, agent or financial intermediary for purchasing shares. |_| Directors, trustees, officers or full-time employees of OpCap Advisors or its affiliates, their relatives or any trust, pension, profit sharing or other benefit plan which beneficially owns shares for those persons. |_| Accounts for which Oppenheimer Capital (or its successor) is the investment advisor (the Distributor must be advised of this arrangement) and persons who are directors or trustees of the company or trust which is the beneficial owner of such accounts. |_| A unit investment trust that has entered into an appropriate agreement with the Distributor. |_| Dealers, brokers, banks, or registered investment advisers that have entered into an agreement with the Distributor to sell shares to defined contribution employee retirement plans for which the dealer, broker or investment adviser provides administration services. |_| Retirement Plans and deferred compensation plans and trusts used to fund those plans (including, for example, plans qualified or created under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code), in each case if those purchases are made through a broker, agent or other financial intermediary that has made special arrangements with the Distributor for those purchases. |_| A TRAC-2000 401(k) plan (sponsored by the former Quest for Value Advisors) whose Class B or Class C shares of a Former Quest for Value Fund were exchanged for Class A shares of that Fund due to the termination of the Class B and Class C TRAC-2000 program on November 24, 1995. |_| A qualified Retirement Plan that had agreed with the former Quest for Value Advisors to purchase shares of any of the Former Quest for Value Funds at net asset value, with such shares to be held through DCXchange, a sub-transfer agency mutual fund clearinghouse, if that arrangement was consummated and share purchases commenced by December 31, 1996. B. Waivers of Initial and Contingent Deferred Sales Charges in Certain Transactions. Class A shares issued or purchased in the following transactions are not subject to sales charges (and no concessions are paid by the Distributor on such purchases): |_| Shares issued in plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the Fund is a party. |_| Shares purchased by the reinvestment of dividends or other distributions reinvested from the Fund or other Oppenheimer funds (other than Oppenheimer Cash Reserves) or unit investment trusts for which reinvestment arrangements have been made with the Distributor. |_| Shares purchased through a broker-dealer that has entered into a special agreement with the Distributor to allow the broker's customers to purchase and pay for shares of Oppenheimer funds using the proceeds of shares redeemed in the prior 30 days from a mutual fund (other than a fund managed by the Manager or any of its subsidiaries) on which an initial sales charge or contingent deferred sales charge was paid. This waiver also applies to shares purchased by exchange of shares of Oppenheimer Money Market Fund, Inc. that were purchased and paid for in this manner. This waiver must be requested when the purchase order is placed for shares of the Fund, and the Distributor may require evidence of qualification for this waiver. |_| Shares purchased with the proceeds of maturing principal units of any Qualified Unit Investment Liquid Trust Series. |_| Shares purchased by the reinvestment of loan repayments by a participant in a Retirement Plan for which the Manager or an affiliate acts as sponsor. C. Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions. The Class A contingent deferred sales charge is also waived if shares that would otherwise be subject to the contingent deferred sales charge are redeemed in the following cases: |_| To make Automatic Withdrawal Plan payments that are limited annually to no more than 12% of the account value adjusted annually. |_| Involuntary redemptions of shares by operation of law or involuntary redemptions of small accounts (please refer to "Shareholder Account Rules and Policies," in the applicable fund Prospectus). |_| For distributions from Retirement Plans, deferred compensation plans or other employee benefit plans for any of the following purposes: 1) Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The death or disability must occur after the participant's account was established. 2) To return excess contributions. 3) To return contributions made due to a mistake of fact. 4) Hardship withdrawals, as defined in the plan.6 5) Under a Qualified Domestic Relations Order, as defined in the Internal Revenue Code, or, in the case of an IRA, a divorce or separation agreement described in Section 71(b) of the Internal Revenue Code. 6) To meet the minimum distribution requirements of the Internal Revenue Code. 7) To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code. 8) For loans to participants or beneficiaries. 9) Separation from service.7 10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a subsidiary of the Manager) if the plan has made special arrangements with the Distributor. 11) Plan termination or "in-service distributions," if the redemption proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA. |_| For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special agreement with the Distributor allowing this waiver. |_| 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. |_| Distributions8 from Retirement Plans or other employee benefit plans for any of the following purposes: 1) Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The death or disability must occur after the participant's account was established in an Oppenheimer fund. 2) To return excess contributions made to a participant's account. 3) To return contributions made due to a mistake of fact. 4) To make hardship withdrawals, as defined in the plan.9 5) To make distributions required under a Qualified Domestic Relations Order or, in the case of an IRA, a divorce or separation agreement described in Section 71(b) of the Internal Revenue Code. 6) To meet the minimum distribution requirements of the Internal Revenue Code. 7) To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code. 8) For loans to participants or beneficiaries.10 9) On account of the participant's separation from service.11 10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a subsidiary of the Manager) offered as an investment option in a Retirement Plan if the plan has made special arrangements with the Distributor. 11) Distributions made on account of a plan termination or "in-service" distributions, if the redemption proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA. 12) For distributions from a participant's account under an Automatic Withdrawal Plan after the participant reaches age 59 1/2, as long as the aggregate value of the distributions does not exceed 10% of the account's value, adjusted annually. 13) Redemptions of Class B shares under an Automatic Withdrawal Plan for an account other than a Retirement Plan, if the aggregate value of the redeemed shares does not exceed 10% of the account's value, adjusted annually. 14) For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special arrangement with the Distributor allowing this waiver. |_| Redemptions of Class B shares or Class C shares under an Automatic Withdrawal Plan from an account other than a Retirement Plan if the aggregate value of the redeemed shares does not exceed 10% of the account's value annually. B. Waivers for Shares Sold or Issued in Certain Transactions. The contingent deferred sales charge is also waived on Class B and Class C shares sold or issued in the following cases: |_| Shares sold to the Manager or its affiliates. |_| Shares sold to registered management investment companies or separate accounts of insurance companies having an agreement with the Manager or the Distributor for that purpose. |_| Shares issued in plans of reorganization to which the Fund is a party. |_| Shares sold to present or former officers, directors, trustees or employees (and their "immediate families" as defined above in Section I.A.) of the Fund, the Manager and its affiliates and retirement plans established by them for their employees. IV. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of Former Quest for Value Funds ------------------------------------------------------------------------ The initial and contingent deferred sales charge rates and waivers for Class A, Class B and Class C shares described in the Prospectus or Statement of Additional Information of the Oppenheimer funds are modified as described below for certain persons who were shareholders of the former Quest for Value Funds. To be eligible, those persons must have been shareholders on November 24, 1995, when OppenheimerFunds, Inc. became the investment advisor to those former Quest for Value Funds. Those funds include: Oppenheimer Quest Value Fund, Inc. Oppenheimer Small Cap Value Fund Oppenheimer Quest Balanced Value Fund Oppenheimer Quest Global Value Fund, Inc. Oppenheimer Quest Opportunity Value Fund These arrangements also apply to shareholders of the following funds when they merged (were reorganized) into various Oppenheimer funds on November 24, 1995: Quest for Value U.S. Government Income Fund Quest for Value New York Tax-Exempt Fund Quest for Value Investment Quality Income Fund Quest for Value National Tax-Exempt Fund Quest for Value Global Income Fund Quest for Value California Tax-Exempt Fund All of the funds listed above are referred to in this Appendix as the "Former Quest for Value Funds." The waivers of initial and contingent deferred sales charges described in this Appendix apply to shares of an Oppenheimer fund that are either: |_| acquired by such shareholder pursuant to an exchange of shares of an Oppenheimer fund that was one of the Former Quest for Value Funds, or |_| purchased by such shareholder by exchange of shares of another Oppenheimer fund that were acquired pursuant to the merger of any of the Former Quest for Value Funds into that other Oppenheimer fund on November 24, 1995. A. Reductions or Waivers of Class A Sales Charges. |X| Reduced Class A Initial Sales Charge Rates for Certain Former Quest for Value Funds Shareholders. Purchases by Groups and Associations. The following table sets forth the initial sales charge rates for Class A shares purchased by members of "Associations" formed for any purpose other than the purchase of securities. The rates in the table apply if that Association purchased shares of any of the Former Quest for Value Funds or received a proposal to purchase such shares from OCC Distributors prior to November 24, 1995. -------------------------------------------------------------------------------- Initial Sales Initial Sales Charge Concession as Number of Eligible Charge as a % of as a % of Net Amount % of Offering Employees or Members Offering Price Invested Price -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 9 or Fewer 2.50% 2.56% 2.00% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- At least 10 but not 2.00% 2.04% 1.60% more than 49 -------------------------------------------------------------------------------- ------------------------------------------------------------------------ For purchases by Associations having 50 or more eligible employees or members, there is no initial sales charge on purchases of Class A shares, but those shares are subject to the Class A contingent deferred sales charge described in the applicable fund's Prospectus. Purchases made under this arrangement qualify for the lower of either the sales charge rate in the table based on the number of members of an Association, or the sales charge rate that applies under the Right of Accumulation described in the applicable fund's Prospectus and Statement of Additional Information. Individuals who qualify under this arrangement for reduced sales charge rates as members of Associations also may purchase shares for their individual or custodial accounts at these reduced sales charge rates, upon request to the Distributor. |X| Waiver of Class A Sales Charges for Certain Shareholders. Class A shares purchased by the following investors are not subject to any Class A initial or contingent deferred sales charges: o Shareholders who were shareholders of the AMA Family of Funds on February 28, 1991 and who acquired shares of any of the Former Quest for Value Funds by merger of a portfolio of the AMA Family of Funds. o Shareholders who acquired shares of any Former Quest for Value Fund by merger of any of the portfolios of the Unified Funds. |X| Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions. The Class A contingent deferred sales charge will not apply to redemptions of Class A shares purchased by the following investors who were shareholders of any Former Quest for Value Fund: Investors who purchased Class A shares from a dealer that is or was not permitted to receive a sales load or redemption fee imposed on a shareholder with whom that dealer has a fiduciary relationship, under the Employee Retirement Income Security Act of 1974 and regulations adopted under that law. B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers. |X| Waivers for Redemptions of Shares Purchased Prior to March 6, 1995. In the following cases, the contingent deferred sales charge will be waived for redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The shares must have been acquired by the merger of a Former Quest for Value Fund into the fund or by exchange from an Oppenheimer fund that was a Former Quest for Value Fund or into which such fund merged. Those shares must have been purchased prior to March 6, 1995 in connection with: o withdrawals under an automatic withdrawal plan holding only either Class B or Class C shares if the annual withdrawal does not exceed 10% of the initial value of the account value, adjusted annually, and o liquidation of a shareholder's account if the aggregate net asset value of shares held in the account is less than the required minimum value of such accounts. |X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but Prior to November 24, 1995. In the following cases, the contingent deferred sales charge will be waived for redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The shares must have been acquired by the merger of a Former Quest for Value Fund into the fund or by exchange from an Oppenheimer fund that was a Former Quest For Value Fund or into which such Former Quest for Value Fund merged. Those shares must have been purchased on or after March 6, 1995, but prior to November 24, 1995: o redemptions following the death or disability of the shareholder(s) (as evidenced by a determination of total disability by the U.S. Social Security Administration); o withdrawals under an automatic withdrawal plan (but only for Class B or Class C shares) where the annual withdrawals do not exceed 10% of the initial value of the account value; adjusted annually, and o liquidation of a shareholder's account if the aggregate net asset value of shares held in the account is less than the required minimum account value. A shareholder's account will be credited with the amount of any contingent deferred sales charge paid on the redemption of any Class A, Class B or Class C shares of the Oppenheimer fund described in this section if the proceeds are invested in the same Class of shares in that fund or another Oppenheimer fund within 90 days after redemption. V. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of Connecticut Mutual Investment Accounts, Inc. --------------------------------------------------------------------- The initial and contingent deferred sale charge rates and waivers for Class A and Class B shares described in the respective Prospectus (or this Appendix) of the following Oppenheimer funds (each is referred to as a "Fund" in this section): Oppenheimer U. S. Government Trust, Oppenheimer Bond Fund, Oppenheimer Value Fund and Oppenheimer Disciplined Allocation Fund are modified as described below for those Fund shareholders who were shareholders of the following funds (referred to as the "Former Connecticut Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the investment adviser to the Former Connecticut Mutual Funds: Connecticut Mutual Liquid Account Connecticut Mutual Total Return Account Connecticut Mutual Government Securities Account CMIA LifeSpan Capital Appreciation Account Connecticut Mutual Income Account CMIA LifeSpan Balanced Account Connecticut Mutual Growth Account CMIA Diversified Income Account A. Prior Class A CDSC and Class A Sales Charge Waivers. |X| Class A Contingent Deferred Sales Charge. Certain shareholders of a Fund and the other Former Connecticut Mutual Funds are entitled to continue to make additional purchases of Class A shares at net asset value without a Class A initial sales charge, but subject to the Class A contingent deferred sales charge that was in effect prior to March 18, 1996 (the "prior Class A CDSC"). Under the prior Class A CDSC, if any of those shares are redeemed within one year of purchase, they will be assessed a 1% contingent deferred sales charge on an amount equal to the current market value or the original purchase price of the shares sold, whichever is smaller (in such redemptions, any shares not subject to the prior Class A CDSC will be redeemed first). Those shareholders who are eligible for the prior Class A CDSC are: 1) persons whose purchases of Class A shares of a Fund and other Former Connecticut Mutual Funds were $500,000 prior to March 18, 1996, as a result of direct purchases or purchases pursuant to the Fund's policies on Combined Purchases or Rights of Accumulation, who still hold those shares in that Fund or other Former Connecticut Mutual Funds, and 2) persons whose intended purchases under a Statement of Intention entered into prior to March 18, 1996, with the former general distributor of the Former Connecticut Mutual Funds to purchase shares valued at $500,000 or more over a 13-month period entitled those persons to purchase shares at net asset value without being subject to the Class A initial sales charge Any of the Class A shares of a Fund and the other Former Connecticut Mutual Funds that were purchased at net asset value prior to March 18, 1996, remain subject to the prior Class A CDSC, or if any additional shares are purchased by those shareholders at net asset value pursuant to this arrangement they will be subject to the prior Class A CDSC. |X| Class A Sales Charge Waivers. Additional Class A shares of a Fund may be purchased without a sales charge, by a person who was in one (or more) of the categories below and acquired Class A shares prior to March 18, 1996, and still holds Class A shares: 1) any purchaser, provided the total initial amount invested in the Fund or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more, including investments made pursuant to the Combined Purchases, Statement of Intention and Rights of Accumulation features available at the time of the initial purchase and such investment is still held in one or more of the Former Connecticut Mutual Funds or a Fund into which such Fund merged; 2) any participant in a qualified plan, provided that the total initial amount invested by the plan in the Fund or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more; 3) Directors of the Fund or any one or more of the Former Connecticut Mutual Funds and members of their immediate families; 4) employee benefit plans sponsored by Connecticut Mutual Financial Services, L.L.C. ("CMFS"), the prior distributor of the Former Connecticut Mutual Funds, and its affiliated companies; 5) one or more members of a group of at least 1,000 persons (and persons who are retirees from such group) engaged in a common business, profession, civic or charitable endeavor or other activity, and the spouses and minor dependent children of such persons, pursuant to a marketing program between CMFS and such group; and 6) an institution acting as a fiduciary on behalf of an individual or individuals, if such institution was directly compensated by the individual(s) for recommending the purchase of the shares of the Fund or any one or more of the Former Connecticut Mutual Funds, provided the institution had an agreement with CMFS. Purchases of Class A shares made pursuant to (1) and (2) above may be subject to the Class A CDSC of the Former Connecticut Mutual Funds described above. Additionally, Class A shares of a Fund may be purchased without a sales charge by any holder of a variable annuity contract issued in New York State by Connecticut Mutual Life Insurance Company through the Panorama Separate Account which is beyond the applicable surrender charge period and which was used to fund a qualified plan, if that holder exchanges the variable annuity contract proceeds to buy Class A shares of the Fund. B. Class A and Class B Contingent Deferred Sales Charge Waivers. In addition to the waivers set forth in the Prospectus and in this Appendix, above, the contingent deferred sales charge will be waived for redemptions of Class A and Class B shares of a Fund and exchanges of Class A or Class B shares of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund provided that the Class A or Class B shares of the Fund to be redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund. Additionally, the shares of such Former Connecticut Mutual Fund must have been purchased prior to March 18, 1996: 1) by the estate of a deceased shareholder; 2) upon the disability of a shareholder, as defined in Section 72(m)(7) of the Internal Revenue Code; 3) for retirement distributions (or loans) to participants or beneficiaries from retirement plans qualified under Sections 401(a) or 403(b)(7)of the Code, or from IRAs, deferred compensation plans created under Section 457 of the Code, or other employee benefit plans; 4) as tax-free returns of excess contributions to such retirement or employee benefit plans; 5) in whole or in part, in connection with shares sold to any state, county, or city, or any instrumentality, department, authority, or agency thereof, that is prohibited by applicable investment laws from paying a sales charge or concession in connection with the purchase of shares of any registered investment management company; 6) in connection with the redemption of shares of the Fund due to a combination with another investment company by virtue of a merger, acquisition or similar reorganization transaction; 7) in connection with the Fund's right to involuntarily redeem or liquidate the Fund; 8) in connection with automatic redemptions of Class A shares and Class B shares in certain retirement plan accounts pursuant to an Automatic Withdrawal Plan but limited to no more than 12% of the original value annually; or 9) as involuntary redemptions of shares by operation of law, or under procedures set forth in the Fund's Articles of Incorporation, or as adopted by the Board of Directors of the Fund. VI. Special Reduced Sales Charge for Former Shareholders of Advance America Funds, Inc. ------------------------------------------------------------------------ Shareholders of Oppenheimer 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 Select Managers Internet Web Site: www.oppenheimerfunds.com ------------------------ Investment Adviser for OSM - Mercury Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth Fund Mercury Advisors 800 Scudders Mill Road Plainsboro, New Jersey 08536 Investment Adviser for OSM - QM Active Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore Millennium Growth Fund II 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 for the Funds Citibank, N.A. 111 Wall Street New York, New York 10005 Custodian Bank for Master Focus Twenty Trust The Bank of New York 23 William Street New York, New York 10286 Custodian Bank for the S&P 500 Index Series of the Quantitative Master Series Trust Merrill Lynch Trust Company 800 Scudders Mill Road Plainsboro, New Jersey 08536 Independent Auditors Deloitte & Touche LLP 555 Seventeenth Street Denver, Colorado 80202 Counsel to the Funds Counsel to the Independent Trustees Myer, Swanson, Adams & Wolf, P.C. Mayer, Brown, Rowe & Maw 1600 Broadway 1675 Broadway Denver, Colorado 80202 New York, New York 10019 1234 PX0000.0303 -------- 1. In accordance with Rule 12b-1 of the Investment Company Act, the term "Independent Trustees" in this Statement of Additional Information refers to those Trustees who are not "interested persons" of the Fund and who do not have any direct or indirect financial interest in the operation of the distribution plan or any agreement under the plan. 1 Certain waivers also apply to Class M shares of Oppenheimer Convertible Securities Fund. 2 In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered closed-end fund, references to contingent deferred sales charges mean the Fund's Early Withdrawal Charges and references to "redemptions" mean "repurchases" of shares. 3 An "employee benefit plan" means any plan or arrangement, whether or not it is "qualified" under the Internal Revenue Code, under which Class N shares of an Oppenheimer fund or funds are purchased by a fiduciary or other administrator for the account of participants who are employees of a single employer or of affiliated employers. These may include, for example, medical savings accounts, payroll deduction plans or similar plans. The fund accounts must be registered in the name of the fiduciary or administrator purchasing the shares for the benefit of participants in the plan. 4 The term "Group Retirement Plan" means any qualified or non-qualified retirement plan for employees of a corporation or sole proprietorship, members and employees of a partnership or association or other organized group of persons (the members of which may include other groups), if the group has made special arrangements with the Distributor and all members of the group participating in (or who are eligible to participate in) the plan purchase shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial institution designated by the group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans other than plans for public school employees. The term "Group Retirement Plan" also includes qualified retirement plans and non-qualified deferred compensation plans and IRAs that purchase shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial institution that has made special arrangements with the Distributor. 5 However, that concession will not be paid on purchases of shares in amounts of $1 million or more (including any right of accumulation) by a Retirement Plan that pays for the purchase with the redemption proceeds of Class C shares of one or more Oppenheimer funds held by the Plan for more than one year. 6 This provision does not apply to IRAs. 7 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs. 8 The distribution must be requested prior to Plan termination or the elimination of the Oppenheimer funds as an investment option under the Plan. 9 This provision does not apply to IRAs. 10 This provision does not apply to loans from 403(b)(7) custodial plans and loans from the OppenheimerFunds-sponsored Single K retirement plan. 11 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs. 
Oppenheimer
Value Fund


Prospectus dated December 23, 2002



















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.






Oppenheimer Value Fund is a mutual fund. It seeks long-term growth of capital
by investing mainly in common stocks that the portfolio manager believes to
be undervalued.

      This Prospectus contains important information about the Fund's
objective, its investment policies, strategies and risks. It also contains
important information about how to buy and sell shares of the Fund and other
account features. Please read this Prospectus carefully before you invest and
keep it for future reference about your account.








(logo) OppenheimerFunds
The Right Way to Invest
Contents

            About the Fund
------------------------------------------------------------------------------

            The Fund's Investment Objective and Strategies

            Main Risks of Investing in the Fund

            The Fund's Past Performance

            Fees and Expenses of the Fund

            About the Fund's Investments

            How the Fund is Managed


            About Your Account
------------------------------------------------------------------------------

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

            Special Investor Services
            AccountLink
            PhoneLink
            OppenheimerFunds Internet Website
            Retirement Plans

            How to Sell Shares
            By Wire
            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 long-term growth of
capital  by  investing  primarily  in common  stocks  with low  price-earnings
ratios and better-than-anticipated  earnings. Realization of current income is
a secondary consideration.

WHAT DOES THE FUND  MAINLY  INVEST IN?  The Fund may  invest  mainly in common
stocks  of  different  capitalization  ranges.  The Fund  also  can buy  other
investments, including:
o     Preferred  stocks,  rights and warrants and convertible debt securities,
      and
o     Securities of U.S. and foreign  companies,  although there are limits on
      the Fund's investments in foreign securities.

HOW DOES THE  PORTFOLIO  MANAGER  DECIDE WHAT  SECURITIES  TO BUY OR SELL?  In
selecting  securities for purchase or sale by the Fund,  the Fund's  portfolio
manager  selects  securities  one at a  time.  This is  called  a  "bottom  up
approach."  The  portfolio  manager  uses a  fundamental  analysis  to  select
securities for the Fund that he believes are  undervalued.  While this process
and the  inter-relationship  of the factors  used may change over time and its
implementation  may vary in particular  cases, the portfolio manager currently
considers the following factors when assessing a company's business prospects:
o     Future supply/demand conditions for its key products,
o     Product cycles,
o     Quality of management,
o     Competitive position in the market place,
o     Reinvestment plans for cash generated, and
o     Better-than-expected earnings reports.
      Not all factors are relevant for every individual security.

The  portfolio  manager  may  consider  selling a stock for one or more of the
following reasons:
o     The stock price has reached its target,
o     The company's fundamentals appear to be deteriorating, or
o     Better stock selections are believed to have been identified.

WHO IS THE FUND DESIGNED FOR? The Fund is designed primarily for investors
seeking capital growth in their investment over the long term. Because the
Fund currently focuses its investments in stocks, those investors should be
willing to assume the risks of short-term share price fluctuations that are
typical for a fund that can have substantial stock investments. Since the
Fund's income level will fluctuate and will likely be small, it is not
designed for investors needing an assured level of current income. Because of
its focus on long-term total growth of capital, the Fund may be appropriate
for a portion of a retirement plan investment. However, 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 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 similar objectives.

Risks of Investing in Stocks.  Stocks fluctuate in price, and their short-term
volatility  at times may be great.  Because  the Fund  currently  focuses  its
investments in stocks,  the value of the Fund's  portfolio will be affected by
changes in the stock  markets.  Market  risk will  affect the Fund's per share
prices,  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. In particular, because the Fund currently emphasizes
investments in stocks of U.S. issuers, it will be affected primarily by
changes in U.S. stock markets.

      Additionally, stocks of issuers in a particular industry may be
affected by changes in economic conditions that affect that industry more
than others, or by changes in government regulations, availability of basic
resources or supplies, or other events affecting that industry. At times, the
Fund may increase the relative emphasis of its investments in a particular
industry. To the extent that the Fund is emphasizing investments in a
particular industry, its share values may fluctuate in response to events
affecting that industry.

      Other factors can affect a particular stock's price, such as poor
earnings reports by the issuer, loss of major customers, major litigation
against the issuer, or changes in government regulations affecting the issuer
or its industry. The Fund currently emphasizes securities of larger companies
but it can also buy stocks of small- and medium-size companies, which may
have more volatile stock prices than stocks of larger companies.

Risks of Value Investing. Value investing seeks stocks having prices that are
      low in relation to what is believed to be their real worth or
      prospects. The Fund expects to realize appreciation in the value of its
      holdings when other investors realize the intrinsic value of those
      stocks. In using a value investing style, there is the risk that the
      market will not recognize that the securities are undervalued and they
      might not appreciate in value as the Manager anticipates.

RISKS OF FOREIGN INVESTING. While foreign securities offer special investment
opportunities, there are also special risks. The change in value of a foreign
currency against the U.S. dollar will result in a change in the U.S. dollar
value of securities denominated in that foreign currency. Foreign issuers are
not subject to the same accounting and disclosure requirements that U.S.
companies are subject to.

      The value of foreign investments may be affected by exchange control
regulations, expropriation or nationalization of a company's assets, foreign
taxes, delays in settlement of transactions, changes in governmental economic
or monetary policy in the U.S. or abroad, or other political and economic
factors.
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 the prices of its shares.
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. 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.
There is no assurance that the Fund will achieve its investment objective.

      The Fund focuses its investments on stocks for long-term growth. Stock
markets can be volatile, and the prices of the Fund's shares will go up and
down. 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 conservative than
aggressive growth stock funds, but more aggressive than funds that invest in
stocks and bonds.





The Fund's Past Performance

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

      The after-tax returns are shown for Class A shares only and are
calculated using the historical highest individual federal marginal income
tax rates in effect during the periods shown, and do not reflect the impact
of state or local taxes. 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
would be less than those shown.
For the period from 1/1/02 through 9/30/02, the cumulative return (not
annualized) before taxes of Class A shares was -22.49%.
During the period shown in the bar chart,  the highest return (not annualized)
before taxes for a calendar  quarter was 18.26% (4Qtr98) and the lowest return
(not annualized) before taxes for a calendar quarter was -16.69% (3Qtr01).

-------------------------------------------------------------------------------------
                                                                       10 Years
Average     Annual     Total                                      ------------------
Returns   for  the   periods                                         (or life of
ended December 31, 2001            1 Year            5 Years       class, if less)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  A  Shares  (inception
9/16/85)                           -2.94%             4.15%             10.29%
  Return Before Taxes              -2.97%             2.34%             7.72%
  Return After Taxes on            -1.79%             2.92%             7.56%
  Distributions
  Return   After   Taxes  on
  Distributions  and Sale of
  Fund Shares
-------------------------------------------------------------------------------------
S & P 500 Index (reflects
no deduction for fees,
expenses or taxes)                -11.88%            10.70%            12.93%1
-------------------------------------------------------------------------------------
Class  B  Shares  (inception       -2.80%             4.29%             7.67%
10/02/95)
-------------------------------------------------------------------------------------
Class  C  Shares  (inception       1.17%              4.60%             6.11%
5/01/96)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  N  Shares  (inception        N/A2               N/A               N/A
3/01/01)
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Class  Y  Shares  (inception       3.46%              5.70%             6.23%
12/16/96)
-------------------------------------------------------------------------------------
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 any contingent deferred
sales charge and uses Class A performance for the period after conversion.
There is no sales charge for Class Y shares. The Fund's returns measure the
performance of a hypothetical account and assume that all dividends and
capital gains distributions have been reinvested in additional shares.  The
performance of the Fund's Class A shares is compared to the S & P 500 Index,
an unmanaged index of common stocks.  The index performance reflects the
reinvestment of income but does not reflect transaction costs.  The Fund's
investments vary from the securities in the index.

Fees and Expenses of the Fund

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

Shareholder Fees (charges paid directly from your investment):

-----------------------------------------------------------------------------------
                            Class A   Class B    Class C    Class N      Class Y
                            Shares      Shares     Shares     Shares     Shares
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maximum Sales Charge         5.75%       None       None       None       None
(Load) on purchases
(as % of offering price)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Maximum Deferred Sales
Charge (Load) (as % of
the lower of the             None1       5%2        1%3        1%4        None
original offering price
or 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 a 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             0.625%      0.625%      0.625%      0.625%      0.625%
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Distribution       and/or    0.24%       1.00%       1.00%       0.50%       None
Service (12b-1) Fees
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Other Expenses               0.35%       0.38%       0.37%       0.36%       3.14%
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Total  Annual   Operating    1.22%       2.01%       2.00%       1.49%       3.77%
Expenses
--------------------------------------------------------------------------------------
Expenses may vary in future years. "Other expenses" include transfer agent
fees, custodial fees, and accounting and legal expenses that the Fund pays.
The 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 for Class Y shares was effective January 1,
2001 through October 31, 2002 and all undertakings may be amended or
withdrawn at any time. After the waiver, the actual "Other Expenses" and
"Total Annual Operating Expenses" as percentages of average daily net assets
were 0.60% and 1.23%, respectively, for Class Y shares.  For the Fund's
fiscal year ended October 31, 2002, the transfer agent fees exceeded the
expense limitation described above for the others classes of shares by less
than 0.01% for each class.

Effective November 1, 2002, the limit on transfer agent fees for Class Y
shares increased to 0.35% of average daily net assets per fiscal year. Had
that limit been in effect during the Fund's prior fiscal year, the Class Y
"Other Expenses" and "Total Annual Operating Expenses" as percentages of
average daily net assets would have been 0.70% and 1.33%, respectively.

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                    $704          $930        $1,283      $1,9471
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares                    $303          $627        $1,078       $2,327
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares                    $252          $471          $813       $1,779
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares                    $379        $1,152        $1,944       $4,010
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
If shares are not           1 Year        3 Years       5 Years      10 Years
redeemed:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A Shares                    $692          $940        $1,207       $1,967
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Shares                    $204          $630        $1,083      $1,9471
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Shares                    $203          $627        $1,078       $2,327
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Shares                    $152          $471          $813       $1,779
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y Shares                    $379        $1,152        $1,944       $4,010
--------------------------------------------------------------------------------
 In the first example,  expenses  include the initial sales charge for Class A
 and the  applicable  Class B, Class C and Class N contingent  deferred  sales
 charges.  In the  second  example,  the Class A  expenses  include  the sales
 charge,  but Class B, Class C and Class N expenses do not include  contingent
 deferred sales charges. There is no sales charge on Class Y shares.
 1.  Class B  expenses  for years 7 through  10 are based on Class A  expenses
 because  Class B shares  automatically  convert  to  Class A shares  after 72
 months.

About the Fund's Investments

THE FUND'S PRINCIPAL INVESTMENT POLICIES. The allocation of the Fund's
portfolio among the different types of investments will vary over time based
upon the evaluation of economic and market trends by the Manager. 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, and in some cases by using hedging techniques. The
Fund attempts to reduce its exposure to market risks by diversifying its
investments, that is, by not holding a substantial amount of securities of
any one issuer 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 total assets in any one industry.

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

Stock Investments. The Fund invests primarily in a diversified portfolio of
      common stocks of issuers that may be of small, medium or large
      capitalization, to seek capital growth. The Fund can invest in other
      equity securities, including preferred stocks, rights and warrants, and
      securities convertible into common stock. The Fund can buy securities
      issued by domestic or foreign companies.

      While many convertible securities are debt securities, the Manager
      considers some of them to be "equity equivalents" because of their
      conversion feature. In these cases, their credit rating has less impact
      on the investment decision than in the case of other debt securities.
      Convertible securities are subject to credit risk and interest rate
      risk, discussed below.

      The Fund can buy convertible securities rated as low as "B" by Moody's
      Investor Services, Inc. or Standard & Poor's Rating Service or having
      comparable ratings by other nationally recognized rating organizations
      (or, if they are unrated, having a comparable rating assigned by the
      Manager). Those ratings are below "investment grade" and the securities
      (commonly referred to as "junk bonds") are subject to greater risk of
      default by the issuer than investment-grade securities. These
      investments are subject to the Fund's policy of not investing more than
      10% of its net assets in debt securities.
Foreign Securities. The Fund can invest up to 25% of its total assets in
      securities of companies or governments in any country, developed or
      underdeveloped. These include equity and debt securities of companies
      organized under the laws of countries other than the United States and
      debt securities of foreign governments and their agencies and
      instrumentalities. See the Main Risks section above for a description
      of some of the risks associated with foreign investing. The Statement
      of Additional Information includes more detailed information regarding
      the risks of foreign investing, including the risks associated with
      investments in emerging market countries.

Can the Fund's Investment Objective and Policies Change?  The Fund's Board of
Directors 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 not a fundamental policy. 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 use the
investment techniques and strategies described below. The Fund might not
always use all of them and is not required to use them to achieve its
objective. These techniques have risks, although some are designed to help
reduce overall investment or market risks.

Cash and Cash Equivalents. Under normal market conditions the Fund can invest
      up to 15% of its net assets in cash and cash equivalents such as
      commercial paper, repurchase agreements, Treasury bills and other
      short-term U.S. government securities. This strategy would be used
      primarily for cash management or liquidity purposes. To the extent that
      the Fund uses this strategy, it might reduce its opportunities to seek
      its objective of long-term growth of capital.

Debt Securities.  Under normal market conditions,  the Fund can invest in debt
      securities,  such  as  securities  issued  or  guaranteed  by  the  U.S.
      government  or its agencies and  instrumentalities,  foreign  government
      securities,  and foreign and domestic  corporate  bonds and  debentures.
      Normally  these  investments  are  limited  to not more  than 10% of the
      Fund's net assets, including convertible debt securities.

      The debt securities the Fund buys may be rated by nationally recognized
      rating organizations or they may be unrated securities assigned an
      equivalent rating by the Manager. The Fund's debt investments may be
      "investment grade" (that is, rated in the four highest rating
      categories of a nationally recognized rating organization) or may be
      lower-grade securities rated as low as "B," as described above.

o     Credit Risk.  Debt securities are subject to credit risk.  Credit risk
      relates to the ability of the issuer of a security to make interest and
      principal payments on the security as they become due. If the issuer
      fails to pay interest, the Fund's income might be reduced, and if the
      issuer fails to repay principal, the value of that security and of the
      Fund's shares might be reduced. A downgrade in an issuer's credit
      rating or other adverse news about an issuer can reduce the value of
      that issuer's securities. While the Fund's investments in U.S.
      government securities are subject to little credit risk, the Fund's
      other investments in debt securities, particularly high-yield,
      lower-grade debt securities are subject to risks of default.
      Lower-grade debt securities may be subject to greater market
      fluctuations and greater risks of loss of income and principal than
      investment-grade debt securities.

o     Interest Rate Risk. The values of debt securities, including U.S.
      government securities, are subject to change when prevailing interest
      rates change.  When interest rates fall, the values of already-issued
      debt securities generally rise.  When interest rates rise, the values
      of already-issued debt securities generally fall, and they may sell at
      a discount from their face amount. The magnitude of these fluctuations
      will often be greater for longer-term debt securities than shorter-term
      debt securities.  The Fund's share prices can go up or down when
      interest rates change because of the effect of the changes on the value
      of the Fund's investments in debt securities.

Derivative Investments. In general terms, a derivative investment is an
      investment contract whose value depends on (or is derived from) the
      value of an underlying asset, interest rate or index. Options, futures,
      mortgage-related securities and "stripped" securities are examples of
      derivatives the Fund can use. Currently, the Fund does not use
      derivative investments to a significant degree.

o     There Are Special Risks In Using Derivative Investments. If the issuer
      of the derivative does not pay the amount due, the Fund can lose money
      on the investment. Also, the underlying security or investment on which
      the derivative is based, and the derivative itself, might not perform
      the way the Manager expected it to perform. If that happens, the Fund's
      share prices could decline or the Fund could get less income than
      expected. Interest rate and stock market changes in the U.S. and abroad
      may also influence the performance of derivatives. Some derivative
      investments held by the Fund may be illiquid. The Fund has limits on
      the amount of particular types of derivatives it can hold. However,
      using derivatives can cause the Fund to lose money on its investment
      and/or increase the volatility of its share prices.

Hedging.  The Fund can buy and sell futures contracts, put and call options,
      swaps, and forward contracts.  These are all referred to as "hedging
      instruments."  The Fund does not use hedging instruments for
      speculative purposes. The Fund has limits on its use of hedging
      instruments and is not required to use them in seeking its investment
      objective.

      The Fund can buy and sell options, swaps, futures and forward contracts
      for a number of purposes. 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. The Fund may also try to
      manage its exposure to changing interest rates.

      There are special risks in particular hedging strategies. For example,
      options trading involves the payment of premiums and can increase
      portfolio turnover. 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 and will not be able to
      realize any profit if the investment has increased in value above the
      call price.

      If the Manager used a hedging instrument at the wrong time or judged
      market conditions incorrectly, the hedge might fail and the strategy
      could reduce the Fund's return. The Fund could also experience losses
      if the prices of its futures and options positions were not correlated
      with its other investments or if it could not close out a position
      because of an illiquid market.
Illiquid and Restricted Securities. Investments may be illiquid because they
      do not have an active trading market, making it difficult to value them
      or dispose of them promptly at an acceptable price. A restricted
      security is one that has a contractual restriction on its resale or
      which cannot be sold publicly until it is registered under the
      Securities Act of 1933. The Fund will not invest more than 10% of its
      net assets in illiquid or restricted securities. Certain restricted
      securities that are eligible for resale to qualified institutional
      purchasers may not be subject to that limit. The Manager monitors
      holdings of illiquid securities on an ongoing basis to determine
      whether to sell any holdings to maintain adequate liquidity.

Temporary Defensive and Interim Investments. In times of adverse or unstable
      market, economic or political conditions, the Fund can invest up to
      100% of its assets in defensive securities.  Generally, they would be
      short-term U.S. government securities, high-grade commercial paper,
      bank obligations or repurchase agreements. The Fund can also hold these
      types of securities pending the investment of proceeds from the sale of
      Fund shares or portfolio securities or to meet anticipated redemptions
      of Fund shares. To the extent the Fund invests in these securities, it
      might not achieve its investment objective.

Portfolio Turnover. The Fund may engage in active or frequent trading to try
      to achieve its objective. The Fund's portfolio turnover rate will
      fluctuate from year to year, depending on market conditions. Portfolio
      turnover increases the Fund's brokerage costs which reduces its
      performance. If the Fund realizes capital gains when it sells its
      portfolio investments, it must generally pay those gains out to
      shareholders, increasing their taxable distributions. The Financial
      Highlights table at the end of this Prospectus shows the Fund's
      portfolio turnover rates during prior fiscal years.

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 Directors, under an investment
advisory agreement that states the Manager's responsibilities.  The agreement
sets the fees the Fund pays to the Manager and describes the expenses that
the Fund is responsible to pay to conduct its business.

      The Manager has been an investment  advisor since 1960.  The Manager and
its subsidiaries and controlled  affiliates  managed more than $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 Fund is managed by Christopher Leavy. Mr. Leavy
      is a Senior Vice President of the Manager, Vice President of the
      Fund and serves as an officer and portfolio manager of other
      Oppenheimer funds.

      Prior to joining the Manager in September 2000, he was a portfolio
      manager of Morgan Stanley Dean Witter Investment Management (from 1997)
      prior to which he was a portfolio manager and equity analyst of Crestar
      Asset Management (from 1995).

Advisory Fees. Under the Investment Advisory Agreement, the Fund pays the
      Manager an advisory fee at an annual rate that declines on additional
      assets as the Fund grows: 0.625% of the first $300 million of average
      annual net assets of the Fund, 0.500% of the next $100 million, and
      0.450% of average annual net assets in excess of $400 million.  The
      Fund's management fee for the fiscal year ended October 31, 2002, was
      0.625% of average annual net assets for each class of shares.

ABOUT your account

How to Buy Shares

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

Buying Shares Through Your Dealer. You can buy shares through any dealer,
      broker or financial institution that has a sales agreement with the
      Distributor. Your dealer will place your order with the Distributor on
      your behalf.
Buying Shares Through the Distributor. Complete an OppenheimerFunds New
      Account Application and return it with a check payable to
      "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
      Colorado 80217. If you don't list a dealer on the application, the
      Distributor will act as your agent in buying the shares. However, we
      recommend that you discuss your investment with a financial advisor
      before you make a purchase to be sure that the Fund is appropriate for
      you.
o     Paying by Federal Funds Wire. Shares purchased through the Distributor
      may be paid for by Federal Funds wire. The minimum investment is
      $2,500. Before sending a wire, call the Distributor's Wire Department
      at 1.800.225.5677 to notify the Distributor of the wire and to receive
      further instructions.
o     Buying Shares Through OppenheimerFunds AccountLink. With AccountLink,
      you pay for shares by electronic funds transfers from your bank
      account. Shares are purchased for your account by a transfer of money
      from your bank account through the Automated Clearing House (ACH)
      system. You can provide those instructions automatically, under an
      Asset Builder Plan, described below, or by telephone instructions using
      OppenheimerFunds PhoneLink, also described below. Please refer to
      "AccountLink," below for more details.
o     Buying Shares Through Asset Builder Plans. You may purchase shares of
      the Fund automatically each month from your account at a bank or other
      financial institution under an Asset Builder Plan with AccountLink.
      Details are in the Asset Builder Application and the Statement of
      Additional Information.

HOW MUCH MUST YOU INVEST? In most cases, you can buy Fund shares with a
minimum initial investment of $1,000 and make additional investments at any
time with as little as $50. There are reduced minimums available under the
following special investment plans:
o     If you establish one of the many types of retirement plan accounts that
      OppenheimerFunds offers, more fully described below under "Special
      Investor Services," you can start your account with as little as $500.
o     By using an Asset Builder Plan or Automatic Exchange Plan (details are
      in the Statement of Additional Information), or government allotment
      plan, you can make subsequent investments (after making the initial
      investment of $500) for as little as $50. For any type of account
      established under one of these plans prior to November 1, 2002, the
      minimum additional investment will remain $25.
o     The minimum investment requirement does not apply to reinvesting
      dividends from the Fund or other Oppenheimer funds (a list of them
      appears in the Statement of Additional Information, or you can ask your
      dealer or call the Transfer Agent), or reinvesting distributions from
      unit investment trusts that have made arrangements with the Distributor.

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

Net Asset Value. The Fund calculates the net asset value of each class of
      shares as of the close of The New York Stock Exchange, 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 Directors has established procedures to value the
      Fund's securities, in general, based on market value. Because some
      foreign securities trade in markets and on exchanges that operate on
      weekends and U.S. holidays, the values of some of the Fund's foreign
      investments may change on days when investors cannot buy or redeem Fund
      shares. The Board has adopted special procedures for valuing illiquid
      and restricted securities and obligations for which market values
      cannot be readily obtained.

      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
      Directors 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 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.

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

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

      Additionally, the dividends payable to Class B, Class C and Class N
      shareholders will be reduced by the additional expenses borne by those
      classes that are not borne by Class A or Class Y shares, such as the
      Class B, Class C and Class N asset-based sales charge described below
      and in the Statement of Additional Information. 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 C to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified
retirement plan arrangements or in other special types of transactions. To
receive a waiver or special sales charge rate, you must advise the
Distributor when purchasing shares or the Transfer Agent when redeeming
shares that a special condition applies.

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

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







 ------------------------------------------------------------------------------
 Amount of Purchase       Front-End Sales  Front-End Sales   Concession As
                                           Charge As a
                          Charge As a      Percentage of
                          Percentage of    Net               Percentage of
                          Offering Price   Amount Invested   Offering Price
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Less than $25,000             5.75%             6.10%             4.75%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $25,000 or more but           5.50%             5.82%             4.75%
 less than $50,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $50,000 or more but           4.75%             4.99%             4.00%
 less than $100,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $100,000 or more but          3.75%             3.90%             3.00%
 less than $250,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $250,000 or more but          2.50%             2.56%             2.00%
 less than $500,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $500,000 or more but          2.00%             2.04%             1.60%
 less than $1 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       Contingent Deferred Sales Charge on
Which Purchase Order was Accepted       Redemptions in That Year
                                        (As % of Amount Subject to Charge)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
0 - 1                                   5.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1 - 2                                   4.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2 - 3                                   3.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3 - 4                                   3.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4 - 5                                   2.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
5 - 6                                   1.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
More than 6                             None
--------------------------------------------------------------------------------
In the table,  a "year" is a  12-month  period.  In  applying  the  contingent
deferred  sales charge,  all purchases are considered to have been made on the
first regular business day of the month in which the purchase was made.

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

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

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

      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. During the first year the shares are sold, the Distributor
      retains the service fee. 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, by wire or by telephone. You
can also set up Automatic Withdrawal Plans to redeem shares on a regular
basis. If you have questions about any of these procedures, and especially if
you are redeeming shares in a special situation, such as due to the death of
the owner or from a retirement plan account, please call the Transfer Agent
first, at 1.800.225.5677, for assistance.

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

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

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

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

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

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

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of The 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 or by Wire. There are no dollar
      limits on telephone redemption proceeds sent to a bank account
      designated when you establish AccountLink. Normally the ACH transfer to
      your bank is initiated on the business day after the redemption. You do
      not receive dividends on the proceeds of the shares you redeemed while
      they are waiting to be transferred.

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

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

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

      A  contingent  deferred  sales charge will be based on the lesser of the
net  asset  value of the  redeemed  shares  at the time of  redemption  or the
original net asset value.  A contingent  deferred  sales charge is not imposed
on:
o     the amount of your  account  value  represented  by an  increase  in net
      asset value over the initial purchase price,
o     shares  purchased by the  reinvestment  of  dividends  or capital  gains
      distributions, or
o     shares redeemed in the special circumstances  described in Appendix C to
      the Statement of Additional Information.
      To determine whether a contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order:
   1. shares acquired by reinvestment of dividends and capital gains
      distributions,
   2. shares held for the holding period that applies to the class, and
   3. shares held the longest during the holding period.

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

How to Exchange Shares

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:
o     Shares are 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.
o     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.
A $12 annual fee is assessed on any account valued at less than $500. The fee
      is automatically deducted from accounts annually on or about the second
      to last business day of September. See the Statement of Additional
      Information, or visit the OppenheimerFunds website, to learn how you
      can avoid this fee and for circumstances when this fee will not be
      assessed.
The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Directors at any time the Board believes it
      is in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
      be modified, suspended or terminated by the Fund at any time. The Fund
      will provide you notice whenever it is required to do so by applicable
      law. If an account has more than one owner, the Fund and the Transfer
      Agent may rely on the instructions of any one owner. Telephone
      privileges apply to each owner of the account and the dealer
      representative of record for the account unless the Transfer Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the
      Fund will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements
      for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating
      in NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders
      of the Fund if the dealer performs any transaction erroneously or
      improperly.
The redemption price for shares will vary from day to day because the value
      of the securities in the Fund's portfolio fluctuates. The redemption
      price, which is the net asset value per share, will normally differ for
      each class of shares. The redemption value of your shares may be more
      or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink or by Federal Funds wire (as elected by
      the shareholder) within seven days after the Transfer Agent receives
      redemption instructions in proper form. However, under unusual
      circumstances determined by the Securities and Exchange Commission,
      payment may be delayed or suspended. For accounts registered in the
      name of a broker-dealer, payment will normally be forwarded within
      three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
      described under "How to Sell Shares" for recently purchased shares, but
      only until the purchase payment has cleared. That delay may be as much
      as 10 days from the date the shares were purchased. That delay may be
      avoided if you purchase shares by Federal Funds wire or certified
      check, or arrange with your bank to provide telephone or written
      assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the
      account has fewer than 100 shares. 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 Directors.
Dividends and distributions paid to Class A and Class Y shares will generally
be higher than dividends for Class B, Class C and Class N shares, which
normally have higher expenses than Class A and Class Y shares. The Fund has
no fixed dividend rate and cannot guarantee that it will pay any dividends or
distributions.

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

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

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

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

Avoid "Buying a Dividend."  If you buy shares on or just before the Fund
      declares a dividend or 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 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 October 31,           2002      2001      2000      1999      1998
===========================================================================================
Per Share Operating Data

Net asset value, beginning of period      $ 15.93   $ 17.06   $ 20.69   $ 20.91   $ 23.31
-------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                         .07       .03       .16       .17       .16
Net realized and unrealized gain (loss)     (1.21)     (.98)     (.65)      .64       .32
                                          -------------------------------------------------
Total from investment operations            (1.14)     (.95)     (.49)      .81       .48
-------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income         (.01)     (.18)     (.16)     (.17)     (.12)
Distributions from net realized gain           --        --     (2.98)     (.86)    (2.76)
                                          -------------------------------------------------
Total dividends and/or distributions
to shareholders                              (.01)     (.18)    (3.14)    (1.03)    (2.88)
-------------------------------------------------------------------------------------------
Net asset value, end of period             $14.78    $15.93    $17.06    $20.69    $20.91
                                          =================================================

===========================================================================================
Total Return, at Net Asset Value 1          (7.15)%   (5.60)%   (2.60)%    3.60%     2.24%

===========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $141,563  $166,285  $181,566  $392,483  $456,264
-------------------------------------------------------------------------------------------
Average net assets (in thousands)        $166,319  $181,631  $234,840  $448,884  $442,138
-------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                        0.38%     0.19%     0.66%     0.68%     0.84%
Expenses                                     1.22%     1.26%     1.17%     1.02%     0.98% 3
-------------------------------------------------------------------------------------------
Portfolio turnover rate                       150%      336%       86%      135%      106%
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. 19 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued 

Class B     Year Ended October 31,           2002      2001      2000      1999      1998
===========================================================================================
Per Share Operating Data

Net asset value, beginning of period      $ 15.89   $ 16.99   $ 20.58   $ 20.83   $ 23.32
-------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                 (.10)     (.11)     (.05)     (.03)      .02
Net realized and unrealized gain (loss)     (1.15)     (.97)     (.56)      .66       .30
                                          -------------------------------------------------
Total from investment operations            (1.25)    (1.08)     (.61)      .63       .32
-------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income           --      (.02)       --      (.02)     (.05)
Distributions from net realized gain           --        --     (2.98)     (.86)    (2.76)
                                          -------------------------------------------------
Total dividends and/or distributions
to shareholders                                --      (.02)    (2.98)     (.88)    (2.81)
-------------------------------------------------------------------------------------------
Net asset value, end of period             $14.64    $15.89    $16.99    $20.58    $20.83
                                          =================================================

===========================================================================================
Total Return, at Net Asset Value 1          (7.87)%   (6.34)%  (3.28)%    2.79%     1.47%

===========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands)  $47,323   $57,584   $64,287  $102,736  $123,260
-------------------------------------------------------------------------------------------
Average net assets (in thousands)         $56,200   $65,115   $79,239  $123,616  $110,240
-------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)                (0.40)%   (0.57)%   (0.14)%   (0.08)%    0.08%
Expenses                                     2.01%     2.01%     1.93%     1.77%     1.73% 3
-------------------------------------------------------------------------------------------
Portfolio turnover rate                       150%      336%       86%      135%      106%
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. 20 | OPPENHEIMER VALUE FUND 

Class C     Year Ended October 31,           2002      2001      2000      1999      1998
===========================================================================================
Per Share Operating Data

Net asset value, beginning of period      $ 15.67   $ 16.77   $ 20.35   $ 20.60   $ 23.07
-------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                 (.01)     (.08)     (.04)     (.02)      .01
Net realized and unrealized gain (loss)     (1.22)     (.99)     (.56)      .65       .31
                                          -------------------------------------------------
Total from investment operations            (1.23)    (1.07)     (.60)      .63       .32
-------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income           --      (.03)       --      (.02)     (.03)
Distributions from net realized gain           --        --     (2.98)     (.86)    (2.76)
                                          -------------------------------------------------
Total dividends and/or distributions
to shareholders                                --      (.03)    (2.98)     (.88)    (2.79)
-------------------------------------------------------------------------------------------
Net asset value, end of period             $14.44    $15.67    $16.77    $20.35    $20.60
                                          =================================================

===========================================================================================
Total Return, at Net Asset Value 1          (7.85)%   (6.38)%   (3.27)%    2.82%     1.47%

===========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands)  $13,466   $10,494   $ 9,849   $14,582   $18,204
-------------------------------------------------------------------------------------------
Average net assets (in thousands)         $12,977   $11,088   $11,975   $17,746   $15,355
-------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)                (0.41)%   (0.56)%   (0.14)%   (0.07)%    0.06%
Expenses                                     2.00%     2.01%     1.93%     1.77%     1.73% 3
-------------------------------------------------------------------------------------------
Portfolio turnover rate                       150%      336%       86%      135%      106%
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. 21 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued Class N Year Ended October 31, 2002 2001 1 ================================================================================ Per Share Operating Data Net asset value, beginning of period $ 15.90 $ 18.08 --------------------------------------------------------------------------------

Income (loss) from investment operations:

Net investment income (loss) .05 (.02) Net realized and unrealized loss (1.22) (2.16) -------------------- Total from investment operations (1.17) (2.18) --------------------------------------------------------------------------------

Dividends and/or distributions to shareholders:

Dividends from net investment income (.05) -- Distributions from net realized gain -- -- -------------------- Total dividends and/or distributions to shareholders (.05) -- -------------------------------------------------------------------------------- Net asset value, end of period $14.68 $15.90 ==================== ================================================================================ Total Return, at Net Asset Value 2 (7.41)% (12.06)% ================================================================================ Ratios/Supplemental Data Net assets, end of period (in thousands) $1,201 $12 -------------------------------------------------------------------------------- Average net assets (in thousands) $ 508 $ 5 -------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) 0.00% (0.45)% Expenses 1.49% 1.61% -------------------------------------------------------------------------------- Portfolio turnover rate 150% 336% 1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period (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. 3. Annualized for periods of less than one full year. INFORMATION AND SERVICES For More Information on Oppenheimer Value Fund The following additional information about the Fund is available without charge upon request: STATEMENT OF ADDITIONAL INFORMATION. This document includes additional information about the Fund's investment policies, risks, and operations. It is incorporated by reference into this Prospectus (which means it is legally part of this Prospectus). ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's investments and performance is available in the Fund's Annual and Semi-Annual Reports to shareholders. The Annual Report includes a discussion of market conditions and investment strategies that significantly affected the Fund's performance during its last fiscal year. How to Get More Information You can request the Statement of Additional Information, the Annual and Semi-Annual Reports, the notice explaining the Fund's privacy policy and other information about the Fund or your account: ------------------------------------------------------------------------------ By Telephone: Call OppenheimerFunds Services toll-free: 1.800.CALL.OPP (225.5677) ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ By Mail: Write to: OppenheimerFunds Services P.O. Box 5270 Denver, Colorado 80217-5270 ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ On the Internet: You can send us a request 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: The Fund's SEC File No. 811-3346 PR0375.001.1202 Printed on recycled paper. [logo] OppenheimerFunds Distributor, Inc. Appendix to Prospectus of Oppenheimer Value Fund Graphic material included in the Prospectus of Oppenheimer Value Fund (the "Fund") under the heading "Annual Total Returns (Class A)(as of 12/31 each year)": A bar chart will be included in the Prospectus of the Fund depicting the annual total returns of a hypothetical investment in Class A shares of the Fund for each of the ten most recent calendar years, without reflecting sales charges or taxes. Set forth below are the relevant data points that will appear in the bar chart: Calendar Annual Year Total Ended Returns 1992 11.99% 1993 20.91% 1994 -0.65% 1995 36.40% 1996 18.38% 1997 24.00% 1998 8.54% 1999 -4.71% 2000 -1.54% 2001 2.98% 
                             OPPENHEIMER VALUE FUND
                    Supplement dated March 31, 2003 to the
 Statement of Additional Information dated December 23, 2002, Revised January
                                   15, 2003

The Statement of Additional Information is changed as follows:

1.    The Supplement dated February 19, 2003 is hereby withdrawn.

2.    The  subheading  titled  "Futures"  on  pages  18 and 19 is  changed  by
   replacing  the  first  three   paragraphs  of  with  the  following   three
   paragraphs.

o     Futures. The Fund can buy and sell exchange-traded futures contracts
            that relate to (1) broadly-based stock indices ("stock
            index futures") (2) an individual stock ("single stock
            futures") (3) debt securities (these are referred to as
            "interest rate futures"), (4) other broadly- based
            securities indices (these are referred to as "financial
            futures"), (5) foreign currencies (these are referred to as
            "forward contracts"), (6) securities or (7) commodities
            (these are referred to as "commodity futures").

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

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

3.    The section  captioned "Board of Directors and Oversight  Committees" on
   page 36 is hereby deleted and replaced as follows:

      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, a Governance Committee, and a Proxy Committee.  The
      Audit Committee is comprised solely of Independent Trustees.  The
      members of the Audit Committee are Edward Regan (Chairman),
      Kenneth Randall and Russell Reynolds. The Audit Committee held
      five meetings during the Fund's fiscal year ended October 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 Robert Galli
      (Chairman), Joel Motley and Phillip Griffiths. The Study
      Committee held eight meetings during the Fund's fiscal year ended
      October 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 Governance Committee are Elizabeth
      Moynihan (Chairman), Joel Motley, Phillip Griffiths and Kenneth
      Randall. The Governance Committee did not hold a meeting during
      the Fund's fiscal year ended October 31, 2002. The Governance
      Committee reviews the Fund's governance guidelines, the adequacy
      of the Fund's Codes of Ethics, and develops qualification
      criteria for Board members consistent with the Fund's governance
      guidelines, among other duties set forth in the Committee's
      charter.

            The members of the Proxy Committee are Edward Regan
      (Chairman), Russell Reynolds and John Murphy.  The Proxy
      Committee held one meeting during the Fund's fiscal year ended
      October 31, 2002.  The Proxy Committee provides the Board with
      recommendations for proxy voting and monitors proxy voting by the
      Fund.

4.    Effective March 31, 2003, Mr. Benjamin Lipstein retired as a Director.
   Therefore, the Statement of Additional Information is revised by deleting
   the biography for Mr. Lipstein on page 35.

5.    In the Director compensation table on page 39, the following footnote
   is added following Messrs. Yeutter, Levy and Lipstein:

3.    Effective January 1, 2003, Clayton Yeutter became Chairman of the Board
      of Trustees/Directors of the Board I Funds upon the retirement of Leon
      Levy.  Effective March 31, 2003, Mr. Lipstein retired as a Director.


March 31, 2003                                                      PX0375.008


Oppenheimer
Value Fund
(A series of Oppenheimer Series fund, Inc.)

680 S. Tucson Way, Centennial, CO 80122
1.800.225.5677

Statement of Additional  Information dated December 23, 2002,  Revised January
15, 2003


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 23, 2002.  It should be read together with the
Prospectus, which may be obtained by writing to the Fund's Transfer Agent,
OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217, by calling
the Transfer Agent at the toll-free number shown above, or by downloading it
from the OppenheimerFunds Internet website at www.oppenheimerfunds.com.


Contents                                                                Page

About the Fund
Additional Information about the Fund's Investment Policies and Risks...  2
   The Fund's Investment Policies.......................................  2
   Other Investment Techniques and Strategies...........................  6
   Other Investment Restrictions........................................  29
How the Fund is Managed.................................................  31
   Organization and History.............................................  31
   Board of Directors and Oversight Committees..........................  32
   Directors and Officers of the Fund...................................  33
   The Manager..........................................................  40
Brokerage Policies of the Fund..........................................  43
Distribution and Service Plans..........................................  45
Performance of the Fund.................................................  49

About Your Account
How To Buy Shares.......................................................  54
How To Sell Shares......................................................  64
How To Exchange Shares..................................................  68
Dividends, Capital Gains and Taxes......................................  72
Additional Information About the Fund...................................  76

Financial Information About the Fund
Independent Auditors' Report............................................  78
Financial Statements ...................................................  79

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







ABOUT The FUnd


Additional Information About the Fund's Investment Policies and Risks

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

The Fund's Investment Policies. The composition of the Fund's portfolio and
the techniques and strategies that the Manager may use in selecting portfolio
securities will vary over time. The Fund is not required to use 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.

      |X|   Value Investing. In selecting equity investments for the Fund's
portfolio, the portfolio manager currently uses a value investing style
coupled with fundamental analysis of issuers. In using a value approach, the
manager looks for stocks and other equity securities that appear to be
temporarily undervalued, by various measures, such as price/earnings ratios.
Value investing seeks stocks having prices that are low in relation to their
real worth or future prospects, with the expectation that the Fund will
realize appreciation in the value of its holdings when other investors
realize the intrinsic value of the stock.

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

      |X|   Investments in Equity Securities. The Fund does not limit its
investments in equity securities to issuers having a market capitalization of
a specified size or range, and therefore may invest in securities of small-,
mid- and large-capitalization issuers. At times, the Fund may have
substantial amounts of its assets invested in securities of issuers in one or
more capitalization ranges, based upon the Manager's use of its investment
strategies and its judgment of where the best market opportunities are to
seek the Fund's objective.

      At times, the market may favor or disfavor securities of issuers of a
particular capitalization range. Securities of small capitalization issuers
may be subject to greater price
volatility in general than securities of larger companies. Therefore, if the
Fund has substantial investments in smaller capitalization companies at times
of market volatility, the Fund's share price may fluctuate more than that of
funds focusing on larger capitalization issuers.

      |X|   Rights and Warrants. The Fund can invest up to 5% of its total
assets in warrants or rights. That limit does not apply to warrants and
rights that the Fund has acquired as part of units of securities or that are
attached to other securities that the Fund buys. No more than 2% of the
Fund's total assets may be invested in warrants that are not listed on either
The New York Stock Exchange or The American Stock Exchange.

      Warrants basically are options to purchase equity securities at
specific prices valid for a specific period of time. Their prices do not
necessarily move parallel to the prices of the underlying securities. Rights
are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and warrants
have no voting rights, receive no dividends and have no rights with respect
to the assets of the issuer.

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

      The value of a convertible security is a function of its "investment
value" and its "conversion value."  If the investment value exceeds the
conversion value, the security will behave more like a debt security, and the
security's price will likely increase when interest rates fall and decrease
when interest rates rise.  If the conversion value exceeds the investment
value, the security will behave more like an equity security: it will likely
sell at a premium over its conversion value, and its price will tend to
fluctuate directly with the price of the underlying security.

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

      |X|         Preferred Stocks. Preferred stocks are equity securities
but have certain attributes of debt securities. Preferred stock, unlike
common stock, has a stated dividend rate payable from the corporation's
earnings. Preferred stock dividends may be cumulative or non-cumulative,
participating, or auction rate. "Cumulative" dividend provisions require all
or a portion of prior unpaid dividends to be paid before the issuer can pay
dividends on common shares.
      If interest rates rise, the fixed dividend on preferred stocks may be
less attractive, causing the price of preferred stocks to decline. Preferred
stock may have mandatory sinking fund provisions, as well as provisions for
their call or redemption prior to maturity which can have a negative effect
on their prices when interest prior to maturity rates decline. Preferred
stock may be "participating" stock, which means that it may be entitled to a
dividend exceeding the stated dividend in certain cases.

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

|X|   Foreign Securities.  The Fund can purchase up to 25% of its total assets
in  foreign   securities.   "Foreign   securities"  include  equity  and  debt
securities of companies  organized  under the laws of countries other than the
United States and debt  securities of foreign  governments  and their agencies
and  instrumentalities.  Those securities may be traded on foreign  securities
exchanges or in the foreign over-the-counter markets.

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

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

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

o     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     foreign exchange contracts;
o     greater difficulties in commencing lawsuits;
o     higher brokerage commission rates than in the U.S.;
o     increased risks of delays in settlement of portfolio transactions or
                  loss of certificates for portfolio securities;
o     foreign withholding taxes on interest and dividends;
o     possibilities in some countries of expropriation, nationalization,
                  confiscatory taxation, political, financial or social
                  instability or adverse diplomatic developments; and
o     unfavorable differences between the U.S. economy and foreign economies.

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

o     Special Risks of Emerging Markets. Emerging and developing markets
abroad may also offer special opportunities for investing but have greater
risks than more developed foreign markets, such as those in Europe, Canada,
Australia, New Zealand and Japan. There may be even less liquidity in their
securities markets, and settlements of purchases and sales of securities may
be subject to additional delays. They are subject to greater risks of
limitations on the repatriation of income and profits because of currency
restrictions imposed by local governments. Those countries may also be
subject to the risk of greater political and economic instability, which can
greatly affect the volatility of prices of securities in those countries. The
Manager will consider these factors when evaluating securities in these
markets, because the selection of those securities must be consistent with
the Fund's investment objective. The Fund currently expects that it will not
invest significantly in emerging market countries.

      |X|   Portfolio Turnover. "Portfolio turnover" describes the rate at
which the Fund traded its portfolio securities during its last fiscal year.
For example, if a fund sold all of its securities during the year, its
portfolio turnover rate would have been 100%. The Fund's portfolio turnover
rate will fluctuate from year to year, depending on market conditions, and
the Fund may have a portfolio turnover of more than 100% annually. Increased
portfolio turnover creates higher brokerage and transaction costs for the
Fund, which may reduce its overall performance. Additionally, the realization
of capital gains from selling portfolio securities may result in
distributions of taxable long-term capital gains to shareholders, since the
Fund will normally distribute all of its capital gains realized each year, to
avoid excise taxes under the Internal Revenue Code.






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

      |X|   Investments in Bonds and Other Debt Securities. The Fund can
invest in bonds, debentures and other debt securities under normal market
conditions. Because the Fund currently emphasizes investments in equity
securities, such as stocks, it is not anticipated that significant amounts of
the Fund's assets will be invested in debt securities. However, if market
conditions suggest that debt securities may offer better growth opportunities
than stocks, or if the Manager determines to seek a higher income for
liquidity purposes, the Manager may shift up to 10% of the Fund's net assets
into debt securities.

      The Fund's debt investments can include investment-grade and
non-investment-grade bonds (commonly referred to as "junk bonds").
Investment-grade bonds are bonds rated at least "Baa" by Moody's Investors
Service, Inc., ("Moody's") or at least "BBB" by Standard & Poor's Rating
Services ("S&P") or Fitch, Inc. ("Fitch") or that have comparable ratings by
another nationally recognized rating organization. In making investments in
debt securities, the Manager may rely to some extent on the ratings of
ratings organizations or it may use its own research to evaluate a security's
credit-worthiness. If the securities that the Fund buys are unrated, to be
considered part of the Fund's holdings of investment-grade securities, they
must be judged by the Manager to be of comparable quality to bonds rated as
investment grade by a rating organization.

o     Special Risks of Lower-Grade Securities.  It is not anticipated that the
Fund will  invest a  substantial  portion  of its assets in  lower-grade  debt
securities.  Because  lower-grade  securities tend to offer higher yields than
investment-grade  securities, the Fund may invest in lower grade securities if
the Manager is trying to achieve  greater  income  (and,  in some  cases,  the
appreciation  possibilities  of lower-grade  securities might be a reason they
are  selected  for  the  Fund's   portfolio).   High-yield   convertible  debt
securities  might be selected as "equity  substitutes," as described above but
are subject to the Fund's  limitation on its investment in debt  securities as
stated in the Prospectus.

      As mentioned above, "lower-grade" debt securities are those rated below
"investment grade," which means they have a rating lower than "Baa" by
Moody's or lower than "BBB" by S&P or Fitch or similar ratings by other
nationally recognized rating organizations. If they are unrated, and are
determined by the Manager to be of comparable quality to debt securities
rated below investment grade, they are included in the limitation on the
percentage of the Fund's assets that can be invested in lower-grade
securities. The Fund can invest in securities rated as low as "B" at the time
the Fund buys them.

      While securities rated "Baa" by Moody's or "BBB" by S&P or Fitch are
investment grade and are not regarded as junk bonds, those securities may be
subject to greater risks than other investment-grade securities, and have
some speculative characteristics. Definitions of the debt security ratings
categories of Moody's, S&P and Fitch are included in Appendix A to this
Statement of Additional Information.

o     Credit Risk. Some of the special credit risks of lower-grade securities
are discussed in the Prospectus. There is a greater risk that the issuer may
default on its obligation to pay interest or to repay principal than in the
case of investment grade securities. The issuer's low creditworthiness may
increase the potential for its insolvency. An overall decline in values in the
high yield bond market is also more likely during a period of a general
economic downturn. An economic downturn or an increase in interest rates
could severely disrupt the market for high yield bonds, adversely affecting
the values of outstanding bonds as well as the ability of issuers to pay
interest or repay principal. In the case of foreign high yield bonds, these
risks are in addition to the special risks of foreign investing discussed in
the Prospectus and in this Statement of Additional Information.

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

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

      |X|   Floating Rate and Variable Rate Obligations.  Some securities the
Fund can purchase have variable or floating interest rates.  Variable rates
are adjusted at stated periodic intervals.  Variable rate obligations can
have a demand feature that allows the Fund to tender the obligation to the
issuer or a third party prior to its maturity. The tender may be at par value
plus accrued interest, according to the terms of the obligations.

      The interest rate on a floating rate demand note is adjusted
automatically according to a stated prevailing market rate, such as a bank's
prime rate, the 91-day U.S. Treasury Bill rate, or some other standard.  The
instrument's rate is adjusted automatically each time the base rate is
adjusted. The interest rate on a variable rate note is also based on a stated
prevailing market rate but is adjusted automatically at specified intervals
of not less than one year.  Generally, the changes in the interest rate on
such securities reduce the fluctuation in their market value.  As interest
rates decrease or increase, the potential for capital appreciation or
depreciation is less than that for fixed-rate obligations of the same
maturity. The Manager may determine that an unrated floating rate or variable
rate demand obligation meets the Fund's quality standards by reason of being
backed by a letter of credit or guarantee issued by a bank that meets those
quality standards.

      Floating rate and variable rate demand notes that have a stated
maturity in excess of one year may have features that permit the holder to
recover the principal amount of the underlying security at specified
intervals not exceeding one year and upon no more than 30 days' notice.  The
issuer of that type of note normally has a corresponding right in its
discretion, after a given period, to prepay the outstanding principal amount
of the note plus accrued interest. Generally, the issuer must provide a
specified number of days' notice to the holder.

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

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

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

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

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

      During periods of rapidly rising interest rates, prepayments of
mortgage-related securities may occur at slower than expected rates. Slower
prepayments effectively may lengthen a mortgage-related security's expected
maturity. Generally, that would cause the value of the security to fluctuate
more widely in responses to changes in interest rates. If the prepayments on
the Fund's mortgage-related securities were to decrease broadly, the Fund's
effective duration, and therefore its sensitivity to interest rate changes,
would increase.

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

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

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

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

o     U.S. Treasury Obligations. These include Treasury bills (maturities of
one year or less when issued), Treasury notes (maturities of one to 10
years), and Treasury bonds (maturities of more than 10 years). Treasury
securities are backed by the full faith and credit of the United States as to
timely payments of interest and repayments of principal. They also can
include U. S. Treasury securities that have been "stripped" by a Federal
Reserve Bank, zero-coupon U.S. Treasury securities described below, and
Treasury Inflation-Protection Securities ("TIPS").

o     Treasury Inflation-Protection Securities. The Fund can buy these TIPS,
which are designed to provide an investment vehicle that is not vulnerable to
inflation. The interest rate paid by TIPS is fixed. The principal value rises
or falls semi-annually based on changes in the published Consumer Price
Index. If inflation occurs, the principal and interest payments on TIPS are
adjusted to protect investors from inflationary loss. If deflation occurs,
the principal and interest payments will be adjusted downward, although the
principal will not fall below its face amount at maturity.

o     Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. These include direct obligations and mortgage-related
securities that have different levels of credit support from the government.
Some are supported by the full faith and credit of the U.S. government, such
as Government National Mortgage Association ("GNMA") pass-through mortgage
certificates (called "Ginnie Maes"). Some are supported by the right of the
issuer to borrow from the U.S. Treasury under certain circumstances, such as
Federal National Mortgage Association bonds ("Fannie Maes"). Others are
supported only by the credit of the entity that issued them, such as Federal
Home Loan Mortgage Corporation obligations ("Freddie Macs").
|X|   U.S. Government Mortgage-Related Securities. The Fund can invest in a
variety of mortgage-related securities that are issued by U.S. government
agencies or instrumentalities, some of which are described below.

o     GNMA Certificates.  The Government National Mortgage Association is a
wholly-owned corporate instrumentality of the United States within the U.S.
Department of Housing and Urban Development.  GNMA's principal programs
involve its guarantees of privately-issued securities backed by pools of
mortgages.  Ginnie Maes are debt securities representing an interest in one
mortgage or a pool of mortgages that are insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by the
Veterans Administration

      The Ginnie Maes in which the Fund invests are of the "fully modified
pass-through" type. They provide that the registered holders of the Ginnie
Maes will receive timely monthly payments of the pro-rata share of the
scheduled principal payments on the underlying mortgages, whether or not
those amounts are collected by the issuers.  Amounts paid include, on a pro
rata basis, any prepayment of principal of such mortgages and interest (net
of servicing and other charges) on the aggregate unpaid principal balance of
the Ginnie Maes, whether or not the interest on the underlying mortgages has
been collected by the issuers.

      The Ginnie Maes purchased by the Fund are guaranteed as to timely
payment of principal and interest by GNMA.  In giving that guaranty, GNMA
expects that payments received by the issuers of Ginnie Maes on account of
the mortgages backing the Ginnie Maes will be sufficient to make the required
payments of principal of and interest on those Ginnie Maes. However, if those
payments are insufficient, the guaranty agreements between the issuers of the
Ginnie Maes and GNMA require the issuers to make advances sufficient for the
payments.  If the issuers fail to make those payments, GNMA will do so.

      Under federal law, the full faith and credit of the United States is
pledged to the payment of all amounts that may be required to be paid under
any guaranty issued by GNMA as to such mortgage pools.  An opinion of an
Assistant Attorney General of the United States, dated December 9, 1969,
states that such guaranties "constitute general obligations of the United
States backed by its full faith and credit."  GNMA is empowered to borrow
from the United States Treasury to the extent necessary to make any payments
of principal and interest required under those guaranties.

      Ginnie Maes are backed by the aggregate indebtedness secured by the
underlying FHA-insured, FMHA-insured or VA-guaranteed mortgages. Except to
the extent of payments received by the issuers on account of such mortgages,
Ginnie Maes do not constitute a liability of those issuers, nor do they
evidence any recourse against those issuers. Recourse is solely against
GNMA.  Holders of Ginnie Maes (such as the Fund) have no security interest in
or lien on the underlying mortgages.

      Monthly payments of principal will be made, and additional prepayments
of principal may be made, to the Fund with respect to the mortgages
underlying the Ginnie Maes owned by the Fund. All of the mortgages in the
pools relating to the Ginnie Maes in the Fund are subject to prepayment
without any significant premium or penalty, at the option of the mortgagors.
While the mortgages on one-to-four family dwellings underlying certain Ginnie
Maes have a stated maturity of up to 30 years, it has been the experience of
the mortgage industry that the average life of comparable mortgages, as a
result of prepayments, refinancing and payments from foreclosures, is
considerably less.
o     Federal Home Loan Mortgage Corporation ("FHLMC") Certificates. FHLMC, a
corporate instrumentality of the United States, issues FHLMC Certificates
representing interests in mortgage loans.  FHLMC guarantees to each
registered holder of a FHLMC Certificate timely payment of the amounts
representing a holder's proportionate share in:
(i)   interest payments less servicing and guarantee fees,
(ii)  principal prepayments, and
(iii) the ultimate collection of amounts representing the holder's
                    proportionate interest in principal payments on the
                    mortgage loans in the pool represented by the FHLMC
                    Certificate, in each case whether or not such amounts are
                    actually received.
      The obligations of FHLMC under its guarantees are obligations solely of
FHLMC and are not backed by the full faith and credit of the United States.

o     Federal National Mortgage Association (Fannie Mae) Certificates.
Fannie Mae, a federally-chartered and privately-owned corporation, issues
Fannie Mae Certificates which are backed by a pool of mortgage loans.  Fannie
Mae guarantees to each registered holder of a Fannie Mae Certificate that the
holder will receive amounts representing the holder's proportionate interest
in scheduled principal and interest payments, and any principal prepayments,
on the mortgage loans in the pool represented by such Certificate, less
servicing and guarantee fees, and the holder's proportionate interest in the
full principal amount of any foreclosed or other liquidated mortgage loan. In
each case the guarantee applies whether or not those amounts are actually
received.  The obligations of Fannie Mae under its guarantees are obligations
solely of Fannie Mae and are not backed by the full faith and credit of the
United States or any of its agencies or instrumentalities other than Fannie
Mae.

|X|   Zero-Coupon U.S. Government Securities.  The Fund may buy zero-coupon
U.S. government securities. These will typically be U.S. Treasury Notes and
Bonds that have been stripped of their unmatured interest coupons, the
coupons themselves, or certificates representing interests in those stripped
debt obligations and coupons.

      Zero-coupon securities do not make periodic interest payments and are
sold at a deep discount from their face value at maturity.  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.  The discount typically decreases as the maturity date approaches.

      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 that pay
interest.  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.

      The Fund's investment in zero-coupon securities may 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 may 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.






      |X|  "Stripped" Mortgage-Related Securities. The Fund may invest in
stripped mortgage-related securities that are created by segregating the cash
flows from underlying mortgage loans or mortgage securities to create two or
more new securities. Each has a specified percentage of the underlying
security's principal or interest payments. These are a form of derivative
investment.

      Mortgage securities may be partially stripped so that each class
receives some interest and some principal. However, they may be completely
stripped. In that case all of the interest is distributed to holders of one
type of security, known as an "interest-only" security, or "I/O," and all of
the principal is distributed to holders of another type of security, known as
a "principal-only" security or "P/O." Strips can be created for pass-through
certificates or CMOs.

      The yields to maturity of I/Os and P/Os are very sensitive to principal
repayments (including prepayments) on the underlying mortgages. If the
underlying mortgages experience greater than anticipated prepayments of
principal, the Fund might not fully recoup its investment in an I/O based on
those assets. If underlying mortgages experience less than anticipated
prepayments of principal, the yield on the P/Os based on them could decline
substantially. The market for some of these securities may be limited, making
it difficult for the Fund to dispose of its holdings at an acceptable price.

      |X|   Money Market Instruments and Short-Term Debt Obligations. The
Fund can invest in a variety of high quality money market instruments and
short-term debt obligations, both under normal market conditions and for
defensive purposes. The following is a brief description of the types of
money market securities and short-term debt obligations the Fund can invest
in. Those money market securities are high-quality, short-term debt
instruments that are issued by the U.S. government, corporations, banks or
other entities. They may have fixed, variable or floating interest rates. The
Fund's investments in foreign money market instruments and short-term debt
obligations are subject to its limits on investing in foreign securities and
the risks of foreign investing, described above.

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

o     Bank Obligations. The Fund can buy time deposits, certificates of
deposit and bankers' acceptances. They must be :
o     obligations issued or guaranteed by a domestic or foreign bank
                  (including a foreign branch of a domestic bank) having
                  total assets of at least $1 billion,
o     banker's acceptances (which may or may not be supported by letters of
                  credit) only if guaranteed by a U.S. commercial bank with
                  total assets of at least U.S. $1 billion.

      The Fund can make time deposits. These are non-negotiable deposits in a
bank for a specified period of time. They may be subject to early withdrawal
penalties. Time deposits that are subject to early withdrawal penalties are
subject to the Fund's limits on illiquid investments, as described below.
"Banks" include commercial banks, savings banks and savings and loan
associations.

o





            Commercial Paper. The Fund can invest in commercial paper if it
is rated within the top two rating categories of S&P and Moody's. If the
paper is not rated, it may be purchased if issued by a company having a
credit rating of at least "AA" by S&P or "Aa" by Moody's.

      The Fund can buy commercial paper, including U.S. dollar-denominated
securities of foreign branches of U.S. banks, issued by other entities if the
commercial paper is guaranteed as to principal and interest by a bank,
government or corporation whose certificates of deposit or commercial paper
may otherwise be purchased by the Fund.

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

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

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

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

      When such transactions are negotiated, the price (which is generally
expressed in yield terms) is fixed at the time the commitment is made.
Delivery and payment for the securities take place at a later date.  The
securities are subject to change in value from market fluctuations during the
period until settlement.  The value at delivery may be less than the purchase
price.  For example, changes in interest rates in a direction other than that
expected by the Manager before settlement will affect the value of such
securities and may cause a loss to the Fund. During the period between
purchase and settlement, the Fund makes no payment to the issuer and no
interest accrues to the Fund from the investment until it receives the
security at settlement. There is a risk of loss to the Fund if the value of
the security changes prior to the settlement date, and there is the risk that
the other party may not perform.







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

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

      At the time the Fund makes the commitment to purchase or sell a
security on a when-issued or delayed-delivery basis, it records the
transaction on its books and reflects the value of the security purchased in
determining the Fund's net asset value.  In a sale transaction, it records
the proceeds to be received.  The Fund will identify on its books liquid
assets at least equal in value to the value of the Fund's purchase
commitments until the Fund pays for the investment.

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

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

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

      The majority of these transactions run from day to day, and delivery
pursuant to the resale typically occurs within one to five days of the
purchase. Repurchase agreements having a maturity beyond seven days are
subject to the Fund's policy limits on holding illiquid investments,
described below. The Fund cannot 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 of 1940 (the "Investment Company Act"), are collateralized by the
underlying security. The Fund's repurchase agreements require that at all
times while the repurchase agreement is in effect, the value of the
collateral must equal or exceed the repurchase price to fully collateralize
the repayment obligation. However, if the vendor fails to pay the resale
price on the delivery date, the Fund may incur costs in disposing of the
collateral and may experience losses if there is any delay in its ability to
do so. The Manager will monitor the vendor's creditworthiness to confirm that
the vendor is financially sound and will continuously monitor the
collateral's value.

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

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

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

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

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

      The Fund has limitations that apply to purchases of restricted
securities, as stated in the Prospectus. Those percentage restrictions do not
limit purchases of restricted securities that are eligible for sale to
qualified institutional purchasers under Rule 144A of the Securities Act of
1933, if those securities have been determined to be liquid by the Manager
under Board-






approved guidelines. Those guidelines take into account the trading activity
for such securities and the availability of reliable pricing information,
among other factors.  If there is a lack of trading interest in a particular
Rule 144A security, the Fund's holdings of that security may be considered to
be illiquid.

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

|X|   Borrowing.  From time to time, the Fund may borrow from banks or
affiliated investment companies. Such borrowing may be used to fund
shareholder redemptions or for other purposes. Currently, under the
Investment Company Act, absent exemptive relief, a mutual fund may borrow
only from banks and the maximum amount it may borrow is up to one-third of
its total assets (including the amount borrowed) less all liabilities and
indebtedness other than borrowing. The Fund may also borrow up to 5% of its
total assets for temporary purposes from any person. Under the Investment
Company Act, there is a rebuttable presumption that a loan is temporary if it
is repaid within 60 days and not extended or renewed. In addition, as
discussed below, the Fund can borrow from affiliated mutual funds. If the
value of the Fund's assets so computed should fail to meet the 300% asset
coverage requirement, the Fund is required within three days to reduce its
bank debt to the extent necessary to meet such requirement. To do so, it
might have to sell a portion of its investments at a time when independent
investment judgment would not dictate such sale.

      Since substantially all of the Fund's assets fluctuate in value, but
borrowing obligations are fixed, when the Fund has outstanding borrowings, its
net asset value per share correspondingly will tend to increase and decrease
more when portfolio assets fluctuate in value than otherwise would be the
case.  While the Fund may borrow a greater amount, as discussed in the
immediately preceding paragraph, the Fund currently does not expect its
borrowings to exceed 5% of its total assets.

      The Fund will pay interest on its borrowings, and that interest expense
will raise the overall expenses of the Fund and reduce its returns. Borrowing
may subject the Fund to greater risks and costs than funds that do not
borrow.  These risks may include the possible reduction of income and
increased fluctuation or volatility in the Fund's net asset values per share.

|X|   Loans of Portfolio Securities.  To attempt to generate income, the Fund
may lend its portfolio securities to brokers, dealers, and other financial
institutions. The Fund presently does not intend to lend its portfolio
securities, but if it does, these loans are limited to not more than
one-third of the Fund's net assets and are subject to other conditions
described below.

      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. Each type of interest may be shared with the borrower.  The Fund
may also pay reasonable finders', custodian and administrative fees in
connection with these loans.  The terms of the Fund's loans must meet
applicable tests under the Internal Revenue Code and must permit the Fund to
reacquire loaned securities on five days' notice or in time to vote on any
important matter.

|X|   Interfund Borrowing and Lending Arrangements. Consistent with its
fundamental policies and pursuant to an exemptive order issued by the
Securities and Exchange Commission ("SEC"), the Fund may engage in borrowing
and lending activities with other funds in the OppenheimerFunds complex.
Borrowing money from affiliated funds may afford the Fund the flexibility to
use the most cost-effective alternative to satisfy its borrowing
requirements. Lending money to an affiliated fund may allow the Fund to
obtain a higher rate of return than it could from interest rates on
alternative short-term investments.  Implementation of interfund lending will
be accomplished consistent with applicable regulatory requirements, including
the provisions of the SEC order.

o     Interfund Borrowing. The Fund will not borrow from affiliated funds
unless the terms of the borrowing arrangement are at least as favorable as
the terms the Fund could otherwise negotiate with a third party.  To assure
that the Fund will not be disadvantaged by borrowing from an affiliated fund,
certain safeguards may be implemented.  Examples of these safeguards include
the following:
o     the Fund will not borrow money from affiliated funds unless the
               interest rate is more favorable than available bank loan
               rates;
o     the Fund's borrowing from affiliated funds must be consistent with its
               investment objective and investment policies;
o     the loan rates will be the average of the overnight repurchase
               agreement rate available through the OppenheimerFunds joint
               repurchase agreement account and  a pre-established formula
               based on quotations from independent banks to approximate the
               lowest interest rate at which bank loans would be available to
               the Fund;
o     if the Fund has outstanding borrowings from all sources greater than
               10% of its total assets, then the Fund must secure each
               additional outstanding interfund loan by segregating liquid
               assets of the Fund as collateral;
o     the Fund cannot borrow from an affiliated fund in excess of 125% of its
               total redemptions for the preceding seven days;
o     each interfund loan may be repaid on any day by the Fund; and
o     the Trustees will be provided with a report of all interfund loans and
               the Trustees will monitor all such borrowings to ensure that
               the Fund's participation is appropriate.

      There is a risk that the Fund could have an interfund loan called on
one day's notice. In that circumstance, the Fund might have to borrow from a
bank at a higher interest cost if money to lend were not available from
another Oppenheimer fund.

o     Interfund Lending. To assure that the Fund will not be disadvantaged by
making loans to affiliated funds, certain safeguards will be implemented.
Examples of these safeguards include the following:

o     the Fund will not lend money to affiliated funds unless the interest
               rate on such loan is determined to be reasonable under the
               circumstances;
o     the Fund may not make interfund loans in excess of 15% of its net
               assets;
o     an interfund loan to any one affiliated fund shall not exceed 5% of the
               Fund's net assets;
o     an interfund loan may not be outstanding for more than seven days;
o     each interfund loan may be called on one business day's notice; and
o     the Manager will provide the Trustees reports on all interfund loans
               demonstrating that the Fund's participation is appropriate and
               that the loan is consistent with its investment objectives and
               policies.

      When the Fund  lends  assets to  another  affiliated  fund,  the Fund is
subject to the risk that the borrowing fund fails to repay the loan.

      |X|  Hedging. The Fund can use hedging 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. To
do so, the Fund could:
o     sell futures contracts,
o     buy puts on futures or on securities, or
o     write covered calls on securities or futures.  Covered calls can also
            be used to increase the Fund's income, but the Manager does not
            expect to engage extensively in that practice.

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

      The Fund is not obligated to use hedging instruments, even though it is
permitted to use them in the Manager's discretion, as described below.  The
Fund's strategy of hedging with futures and options on futures will be
incidental to the Fund's activities in the underlying cash market.  The
particular hedging instruments the Fund can use are described below.  The
Fund may employ new hedging instruments and strategies when they are
developed, if those investment methods are consistent with the Fund's
investment objective and are permissible under applicable regulations
governing the Fund.

o     Futures. The Fund can buy and sell exchange-traded futures contracts
that relate to (1) broadly-based stock indices ("stock index futures") (2)
debt securities (these are referred to as "interest rate futures"), (3) other
broadly-based securities indices (these are referred to as "financial
futures"), (4) foreign currencies (these are referred to as "forward
contracts"), (5) securities or (6) commodities (these are referred to as
"commodity futures").

      A broadly-based stock index is used as the basis for trading stock
index futures. An index 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.


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

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

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

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

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

      If the Fund writes an over-the-counter ("OTC") option, it will enter
into an arrangement with a primary U.S. government securities dealer which
will establish a formula price at which the Fund will have the absolute right
to repurchase that OTC option.  The formula price will generally be based on
a multiple of the premium received for the option, plus the amount by which
the option is exercisable below the market price of the underlying security
(that is, the option is "in the money"). 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 identifying on
its books an equivalent dollar amount of liquid assets.  The Fund will
segregate additional liquid assets if the value of the segregated assets
drops below 100% of the current value of the future.  Because of this
segregation requirement, in no circumstances would the Fund's receipt of an
exercise notice as to that future require the Fund to
deliver a futures contract. It would simply put the Fund in a short futures
position, which is permitted by the Fund's hedging policies.

o     Writing Put Options. The Fund can sell put options. A put option on
securities gives the purchaser the right to sell, and the writer the
obligation to buy, the underlying investment at the exercise price during the
option period.  The Fund will not write puts if, as a result, more than 50%
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 liquid assets
identified on the Fund's books.  The premium the Fund receives from writing a
put represents a profit, as long as the price of the underlying investment
remains equal to or above the exercise price of the put.  However, the Fund
also assumes the obligation during the option period to buy the underlying
investment from the buyer of the put at the exercise price, even if the value
of the investment falls below the exercise price.  If a put the Fund has
written expires unexercised, the Fund realizes a gain in the amount of the
premium less the transaction costs incurred.  If the put is exercised, the
Fund must fulfill its obligation to purchase the underlying investment at the
exercise price. That price will usually exceed the market value of the
investment at that time.  In that case, the Fund may incur a loss if it sells
the underlying investment. That loss will be equal to the sum of the sale
price of the underlying investment and the premium received minus the sum of
the exercise price and any transaction costs the Fund incurred.

      When  writing a put option on a security,  to secure its  obligation  to
pay for the  underlying  security  the Fund will  identify on its books 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 identified assets or writing calls against those assets.

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

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

o     Purchasing 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 either to resell the put or to buy the underlying
investment and sell it at the exercise price. The resale price will vary
inversely to the price of the underlying investment.  If the market price of
the underlying investment is above the exercise price and, as a result, the
put is not exercised, the put will become worthless on its expiration date.

      When the Fund purchases a 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.

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

      If the Manager anticipates a rise in the dollar value of a foreign
currency in which securities to be acquired are denominated, the increased
cost of those securities may be partially offset by purchasing calls or
writing puts on that foreign currency.  If the Manager anticipates a decline
in the dollar value of a foreign currency, the decline in the dollar value of
portfolio securities denominated in that currency might be partially offset
by writing calls or purchasing puts on that foreign currency. However, the
currency rates could fluctuate in a direction adverse to the Fund's position.
The Fund will then have incurred option premium payments and transaction
costs without a corresponding benefit.
      A call the Fund writes on a foreign currency is "covered" if the Fund
owns the underlying foreign currency covered by the call or has an absolute
and immediate right to acquire that foreign currency without additional cash
consideration (or it can do so for additional cash consideration identified
on its books) upon conversion or exchange of other foreign currency held in
its portfolio.

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

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

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

      The Fund could pay a brokerage commission each time it buys a call or
put, sells a call or put, or buys or sells an underlying investment in
connection with the exercise of a call or put.  Those commissions could be
higher on a relative basis than the commissions for direct purchases or sales
of the underlying investments.  Premiums paid for options are small in
relation to the market value of the underlying investments. Consequently, put
and call options offer large amounts of leverage. The leverage offered by
trading in options could result in the Fund's net asset values  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 might
advance and the value of the securities held in the Fund's portfolio might
decline. If that occurred, the Fund would lose money on the hedging
instruments and also experience a decline in the value of its portfolio
securities. However, while this could occur for a very brief period or to a
very small degree, over time the value of a diversified portfolio of
securities will tend to move in the same direction as the indices upon which
the hedging instruments are based.

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

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

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

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

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

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

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

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

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

      However, to avoid excess transactions and transaction costs, the Fund
may maintain a net exposure to forward contracts in excess of the value of
the Fund's portfolio securities or other assets denominated in foreign
currencies if the excess amount is "covered" by liquid securities denominated
in any currency. The cover must be at least equal at all times to the amount
of that excess.

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

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

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

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

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

o     Total Return Swap Transactions. The Fund may enter into total return
swaps. The Fund will only enter into total return swaps if consistent with
its fundamental investment objectives or policies and not invest in swaps
with respect to more than 30% of the Fund's total assets. A swap contract is
essentially like a portfolio of forward contracts, under which one party
agrees to exchange an asset (for example, bushels of wheat) for another asset
(cash) at specified dates in the future.  A one-period swap contract operates
in a manner similar to a forward or futures contract because there is an
agreement to swap a commodity for cash at only one forward date. The Fund may
engage in swap transactions that have more than one period and therefore more
than one exchange of assets.

      The Fund may invest in total return swaps to gain exposure to the
overall commodity markets.  In a total return commodity swap the Fund will
receive the price appreciation of a commodity index, a portion of the index,
or a single commodity in exchange for paying an agreed-upon fee.  If the
commodity swap is for one period, the Fund will pay a fixed fee, established
at the outset of the swap.  However, if the term of the commodity swap is
more than one period, with interim swap payments, the Fund will pay an
adjustable or floating fee.  With a "floating" rate, the fee is pegged to a
base rate such as the London Interbank Offered Rate ("LIBOR"), and is
adjusted each period.  Therefore, if interest rates increase over the term of
the swap contract, the Fund may be required to pay a higher fee at each swap
reset date. The Fund does not currently anticipate investing in total return
swaps.

o     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 may be affected by options written or held by other entities, including
other investment companies having the same advisor as the Fund (or an advisor
that is an affiliate of the Fund's advisor).  The exchanges also impose
position limits on futures transactions.  An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.

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

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

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

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

      Currency  gains and losses are offset against market gains and losses on
each  trade  before  determining  a net  "Section  988" gain or loss under the
Internal  Revenue  Code for that trade,  which may  increase  or decrease  the
amount of the Fund's  investment  income  available  for  distribution  to its
shareholders.
Investment in Other Investment Companies. The Fund can also invest in the
securities of other investment companies, which can include open-end funds,
closed-end funds and unit investment trusts, subject to the limits set forth
in the Investment Company Act that apply to those types of investments.  For
example, the Fund can invest in Exchange-Traded Funds, which are typically
open-end funds or unit investment trusts, listed on a stock exchange.  The
Fund might do so as a way of gaining exposure to the segments of the equity
or fixed-income markets represented by the Exchange-Traded Funds' portfolio,
at times when the Fund may not be able to buy those portfolio securities
directly.

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

Other Investment Restrictions

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

      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 Directors can change non-fundamental policies without shareholder
approval. However, significant changes to investment policies will be
described in supplements or updates to the Prospectus or this Statement of
Additional Information, as appropriate. The Fund's principal investment
policies are described in the Prospectus.

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

o     The Fund cannot issue senior securities. However, it can make payments
or deposits of margin in connection with options or futures transactions,
lend its portfolio securities, enter into repurchase agreements, borrow money
and pledge its assets as permitted by its other fundamental policies. For
purposes of this restriction, the issuance of shares of common stock in
multiple classes or series, the purchase or sale of options, futures
contracts and options on futures contracts, forward commitments, and
repurchase agreements entered into in accordance with the Fund's investment
policies, and the pledge, mortgage or hypothecation of the Fund's assets are
not deemed to be senior securities.

o





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

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

o     The Fund cannot invest in physical commodities or commodities
contracts.  However, the Fund can invest in hedging instruments permitted by
any of its other investment policies, and can buy or sell options, futures,
securities or other instruments backed by, or the investment return from
which is linked to, changes in the price of physical commodities, commodity
contracts or currencies.

o     The Fund cannot invest in real estate or in interests in real estate.
However, the Fund can purchase securities of issuers holding real estate or
interests in real estate (including securities of real estate investment
trusts) if permitted by its other investment policies.

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

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

o     The Fund 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. 1

|X|   Does the Fund Have Additional Restrictions That Are Not "Fundamental"
Policies? The Fund has additional operating policies which are stated below,
that are not "fundamental," and which can be changed by the Board of
Directors without shareholder approval.

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

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


How the Fund is Managed

Organization and History. The Fund is one of two investment portfolios, or
"series," of Oppenheimer Series Fund, Inc. That corporation is an open-end,
management investment company organized as a Maryland corporation in 1981,
and was called Connecticut Mutual Investment Accounts, Inc. until March 18,
1996, when the Manager became the Fund's investment advisor. The Fund is a
diversified mutual fund. On March 18, 1996 the Fund changed its name from
Connecticut Mutual Growth Account to Oppenheimer Disciplined Value Fund and
effective March 1, 2001 subsequently changed its name to Oppenheimer Value
Fund.

|X|   Classes of Shares. The Directors are authorized, without shareholder
approval, to create new series and classes of shares.  The Directors may
reclassify unissued shares of the Fund into additional series or classes of
shares.  The Directors 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.

      |X|   Meetings of Shareholders. Although the Fund is not required by
Maryland law to hold annual meetings, it may hold shareholder meetings from
time to time on important matters. The shareholders of the Fund's parent
corporation have the right to call a meeting to remove a






Director or to take certain other action described in the Articles of
Incorporation or under Maryland law.

      The Fund will hold meetings when required to do so by the Investment
Company Act or other applicable law. The Fund will hold a meeting when the
Directors call a meeting or upon proper request of shareholders. If the
Fund's parent corporation receives a written request of the record holders of
at least 25% of the outstanding shares eligible to be voted at a meeting to
call a meeting for a specified purpose (which might include the removal of a
Director), the Directors will call a meeting of shareholders for that
specified purpose. The Fund's parent corporation has undertaken that it will
then either give the applicants access to the Fund's shareholder list or mail
the applicants' communication to all other shareholders at the applicants'
expense.

      Shareholders of the Fund and of its parent corporation's other series
vote together in the aggregate on certain matters at shareholders' meetings.
Those matters include the election of Directors and ratification of
appointment of the independent auditors. Shareholders of a particular series
or class vote separately on proposals that affect that series or class.
Shareholders of a series or class that is not affected by a proposal are not
entitled to vote on the proposal. For example, only shareholders of a
particular series vote on any material amendment to the investment advisory
agreement for that series. Only shareholders of a particular class of a
series vote on certain amendments to the Distribution and/or Service Plans if
the amendments affect only that class.

Board of Directors and Oversight Committees. The Fund's parent corporation is
governed by a Board of Directors, which is responsible for protecting the
interests of shareholders under Maryland law. The Directors 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 Director or to take other action described in the
Fund's Articles of Incorporation.

      The Board of Directors has an Audit Committee, a Study Committee and a
Proxy Committee. The Audit Committee is comprised solely of Independent
Directors. 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 October 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 October 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
fiscal year ended






October 31, 2002.The Proxy Committee provides the Board with recommendations
for proxy voting and monitors proxy voting by the Fund.

Directors and Officers of the Fund. Except for Mr. Murphy, each of the
Directors is an independent director of the Fund ("Independent Director").
Mr. Murphy is an "Interested Director," because he is affiliated with the
Manager by virtue of his positions as an officer and director of the Manager,
and as a shareholder of its parent company.

      The Fund's Directors 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 Directors 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
Directors. All of the Directors are also trustees or directors of the
following publicly offered Oppenheimer funds (referred to as "Board I Funds"):

Oppenheimer AMT-Free New York Municipals  Oppenheimer Growth Fund
Oppenheimer California Municipal Fund     Oppenheimer International Growth Fund
                                          Oppenheimer  International  Small Company
Oppenheimer Capital Appreciation Fund     Fund
Oppenheimer Capital Preservation Fund     Oppenheimer Money Market Fund, Inc.
Oppenheimer Developing Markets Fund       Oppenheimer Multiple Strategies Fund
Oppenheimer Discovery Fund                Oppenheimer Multi-Sector Income Trust
Oppenheimer Emerging Growth Fund          Oppenheimer Multi-State Municipal Trust
Oppenheimer Emerging Technologies Fund    Oppenheimer Municipal Bond Fund
Oppenheimer Enterprise Fund               Oppenheimer Series Fund, Inc.
Oppenheimer Europe Fund                   Oppenheimer Trinity Core Fund
Oppenheimer Global Fund                   Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Global Growth & Income Fund   Oppenheimer Trinity Value Fund
Oppenheimer Gold & Special Minerals 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, Leavy, Molleur, Wixted and Zack and Mses. Bechtolt,
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 12, 2002, the Directors
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 Director, and his 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 Investment Company 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 Director in the chart below is 6803 S. Tucson Way,
Centennial, CO 80112-3924. Each Director serves for an indefinite term, until
his or her resignation, retirement, death or removal.

-------------------------------------------------------------------------------------
                               Independent Directors
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Position(s)  Principal   Occupation(s)   During  Past  5 Dollar     Aggregate
                                                                          Dollar
                                                                          Range of
                                                                          Shares
                                                                          Beneficially
                                                                          Owned in
                                                                          any of
                                                                          the
                                                               Range of   Oppenheimer
                                                               Shares     Funds
Held with Fund,    Years  /  Other  Trusteeships/Directorships BeneficiallOverseen
Length of          Held by Director / Number of  Portfolios in Owned in   by
Service, Age       Fund Complex Currently Overseen by Director  the Fund   Director
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                                                                As of December 31,
                                                                       2001
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Clayton K.         Of Counsel (since 1993), Hogan & Hartson       $0     $50,001-$100,000
Yeutter, Chairman
of the Board of
Directors,         (a law firm). Other directorships:
Director since     Caterpillar, Inc. (since 1993) and
1996               Weyerhaeuser Co. (since 1999). Oversees 31
Age: 71            portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Galli,   A trustee or director of other Oppenheimer  $50,001-     Over
Director since     funds. Formerly Vice Chairman (October
1996               1995-December 1997) of the Manager.
Age: 69            Oversees 41 portfolios in the
                   OppenheimerFunds complex.                   $100,000   $100,000
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Phillip A.         The Director (since 1991) of the Institute     $0        Over
Griffiths,         for Advanced Study, Princeton, N.J.,
Director since     director (since 2001) of GSI Lumonics and
1999               a member of the National Academy of
Age: 63            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                    $100,000
                   University. Oversees 31 portfolios in the
                   OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Benjamin           Professor Emeritus of Marketing, Stern         $0        Over
Lipstein,          Graduate School of Business
Director since     Administration, New York University.
1996               Oversees 31 portfolios in the
Age: 79            OppenheimerFunds complex.                              $100,000
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Joel W. Motley,    Director (January 2002-present), Columbia   $02           $03
Director since     Equity Financial Corp. (privately-held
2002               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 & Co.
                   (privately-held financial adviser).
                   Oversees 31 portfolios in the
                   OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Elizabeth B.       Author and architectural historian; a                             ,000
Moynihan,          trustee of the Freer Gallery of Art and
Director since     Arthur M. Sackler Gallery (Smithsonian
1996               Institute), Trustees Council of the
Age: 72            National Building Museum; a member of the      $0     $50,001-$100
                   Trustees Council, Preservation League of
                   New York State. Oversees 31 portfolios in
                   the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Kenneth A.         A director of Dominion Resources, Inc.      $1-          Over
Randall, Director  (electric utility holding company) and
since 1996         Prime Retail, Inc. (real estate investment
Age: 75            trust); formerly a director of Dominion
                   Energy, Inc. (electric power and oil & 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     $10,000   $100,000
                   Manufacturers Mutual Insurance Company.
                   Oversees 31 portfolios in the
                   OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Edward V. Regan,   President, Baruch College, CUNY; a          $1-       $50,001-$100,000
Director since     director of RBAsset (real estate manager);
1996               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.        $10,000
                   Oversees 31 investment companies in the
                   OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Russell S.         Chairman (since 1993) of The Directorship      $0     $10,001-$50,000
Reynolds, Jr.,     Search Group, Inc. (corporate governance
Director since     consulting and executive recruiting); a
1996               life trustee of International House
Age: 70            (non-profit educational organization), and
                   a trustee (since 1996) of the Greenwich
                   Historical Society. Oversees 31 portfolios
                   in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Donald W. Spiro,   Chairman Emeritus (since January 1991) of      $0        Over
Vice Chairman of
the Board of
Directors,         the Manager. Formerly a director (January
Director since     1969-August 1999) of the Manager. Oversees
1996               31 portfolios in the OppenheimerFunds                  $100,000
Age: 76            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 Director and Officer
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name,           Principal  Occupation(s) During Past 5 Years Dollar      Aggregate
                                                                           Dollar
                                                                          Range of
                                                                        y  Shares
                                                             Range of   Beneficially
Position(s)                                                  Shares       Owned in
Held with Fund, / Other  Trusteeships/Directorships  Held by Beneficiall any of the
Length of       Director  /  Number  of  Portfolios  in Fund Owned in   Oppenheimer
Service, Age    Complex Currently Overseen by Director        the Fund     Funds
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                                                             As of December 31, 2001
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
John V.         Chairman,   Chief   Executive   Officer  and
Murphy,         director  (since  June  2001) and  President     $0         Over
President and   (since   September  2000)  of  the  Manager;              $100,000
Trustee,        President  and  a  director  or  trustee  of
Trustee since   other  Oppenheimer  funds;  President  and a
2001            director  (since  July 2001) of  Oppenheimer
Age: 53         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
                DLB   Acquisition   Corporation  (a  holding
                company  that  owns the  shares  of David L.
                Babson &  Company,  Inc.);  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.
Leavy, Molleur and Zack and Ms. Feld, 498 Seventh Avenue, New York, NY 10018,
for Messrs. Masterson, Vottiero and Wixted and Mses. Bechtolt and Ives, 6803
S. Tucson Way, Centennial, CO 80112-3924. Each Officer serves for an annual
term or until his or her earlier resignation, death or removal.







-------------------------------------------------------------------------------------
                                Officers of the Fund
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Name, Position(s) Held   Principal Occupation(s) During Past 5 Years
with Fund, Length of
Service, Age
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Christopher  Leavy, Vice Senior Vice President (since September 2000) of the
President  and Portfolio Manager; prior to joining the Manager in September 2000,
Manager (since  November he was a portfolio manager of Morgan Stanley Dean Witter
2000)                    Investment Management (from 1997) prior to which he was a
Age: 30                  portfolio manager and equity analyst of Crestar Asset
                         Management (from 1995).
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Brian W. Wixted,         Senior Vice  President and Treasurer  (since March 1999) of
Treasurer, Principal     the Manager;  Treasurer  (since March 1999) of  HarbourView
Financial and            Asset Management Corporation,  Shareholder Services,  Inc.,
Accounting Officer       Oppenheimer Real Asset Management Corporation,  Shareholder
since 1999               Financial   Services,    Inc.,   Oppenheimer    Partnership
Age: 43                  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
Assistant Treasurer      1998); formerly Manager/Fund Accounting (September
since 2002               1994-September 1998) of the Manager. An officer of 85
Age: 39                  portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
                         Vice President/Fund  Accounting of the Manager (since March
Philip Vottiero,         2002; formerly Vice  President/Corporate  Accounting of the
Assistant Treasurer      Manager (July  1999-March 2002) prior to which he was Chief
since 2002               Financial Officer at Sovlink  Corporation  (April 1996-June
Age: 39                  1999). An officer of 85 portfolios in the  OppenheimerFunds
                         complex.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Robert G. Zack,          Senior Vice President  (since May 1985) and General Counsel
Secretary since 2001     (since  February 2002) of the Manager;  General Counsel and
Age: 54                  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.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Katherine P. Feld,       Vice  President and Senior Counsel (since July 1999) of the
Assistant Secretary      Manager;    Vice    President    (since   June   1990)   of
since 2001               OppenheimerFunds   Distributor,    Inc.;   Director,   Vice
Age: 44                  President  and  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
Assistant Secretary      the    Manager;    Vice    President    (since   1999)   of
since 2001               OppenheimerFunds  Distributor,  Inc.;  Vice  President  and
Age: 36                  Assistant  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.
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Philip T. Masterson,     Vice President and Assistant Counsel of the Manager (since
Assistant Secretary      July 1998); formerly, an associate with Davis, Graham, &
since 2002               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
Assistant Secretary      July  1999);   formerly  a  Vice  President  and  Associate
since 2001               Counsel  of the  Manager  (September  1995-July  1999).  An
Age: 45                  officer of 82 portfolios in the OppenheimerFunds complex.
-------------------------------------------------------------------------------------

      |X|   Remuneration of Directors. The officers of the Fund and one of
the Directors of the Fund (Mr. Murphy) who are affiliated with the Manager
receive no salary or fee from the Fund. The remaining Directors of the Fund
received the compensation shown below from the Fund with respect to the
Fund's fiscal year ended October 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 boards of those funds
during the calendar year 2001.











----------------------------------------------------------------------------------
 Director Name and    Aggregate     Retirement     Estimated          Total
                                                                  Compensation
                                                     Annual         From All
                                                   Retirement      Oppenheimer
                                                 Benefits Paid   Funds For Which
                                     Benefits    at Retirement     Individual
    Other Fund                      Accrued as      from all        Serves As
    Position(s)      Compensation  Part of Fund  Board I Funds  Trustee/Director
  (as applicable)     from Fund1     Expenses     (33 Funds) 2     (33 Funds)
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Clayton K. Yeutter3     $6524          $711         $36,372          $71,792
Chairman  and
Proxy Committee
Member
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Robert G. Galli          $960         $1,074        $55,6782        $202,8865
Study Committee
Member
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Phillip Griffiths       $4986          $256         $10,256          $54,889
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Leon Levy3              $1,577          $0          $133,352        $173,700
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Benjamin Lipstein       $1,363         $345         $115,270        $150,152
Study Committee
Chairman, Audit
Committee Member
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Joel W. Motley7           $0            $0             $0              $0
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Elizabeth        B.      $960         $1,304        $57,086         $105,760
Moynihan
Study Committee
Member
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Kenneth A. Randall       $881          $274         $74,471          $97,012
Audit Committee
Chairman
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Edward V. Regan          $871          $687         $46,313          $95,960
Proxy Committee
Chairman, Audit
Committee Member
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Russell S.               $652          $761         $48,991          $71,792
Reynolds, Jr.
Proxy Committee
Member
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
Donald Spiro             $582          $315          $9,396          $64,080
----------------------------------------------------------------------------------
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
   $24,989  for serving as a trustee or  director  of 10  Oppenheimer  funds that
   are not Board I Funds.
3.    Effective January 1, 2002,  Clayton Yeutter became Chairman of the Board
   of Trustees of the Board I Fund upon the retirement of Leon Levy.
4.    Aggregate  compensation  from  the Fund  includes  $163  deferred  under
   Deferred Compensation Plan described below.
5.    Includes  $97,126 for Mr. Galli for serving as trustee or director of 10
   Oppenheimer funds that are not Board I Funds.
6.    Aggregate  compensation  from  the Fund  includes  $498  deferred  under
   Deferred Compensation Plan described below.
7.    Appointed  to the  Board  on  October  10,  2002 and  therefore  did not
   receive any compensation.

|X|   Retirement Plan for Directors. The Fund and its parent corporation have
adopted a retirement plan that provides for payments to retired Directors.
Payments are up to 80% of the average compensation paid during a Director's
five years of service in which the highest
compensation was received. A Director must serve as director or trustee for
any of the Board I Oppenheimer funds for at least 15 years to be eligible for
the maximum payment. Each Director's retirement benefits will depend on the
amount of the Director's future compensation and length of service.

      |X|   Deferred Compensation Plan. The Board of Directors has adopted a
Deferred Compensation Plan for disinterested directors 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 Director is periodically adjusted as though an equivalent amount had
been invested in shares of one or more Oppenheimer funds selected by the
Director. The amount paid to the Director under the plan will be determined
based upon the performance of the selected funds.

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

      |X|   Major Shareholders. As of December 12, 2002, the only persons who
owned of record or were known by the Fund to own beneficially 5% or more of
any class of the Fund's outstanding shares were:
         RPSS TR  united  staffing  & assoc  Inc.,  401K  Plan,  Attn:  Robert
         Bilnoski,  1400  Woodloch  Forest Dr. Ste.  200,  The  Woodlands,  TX
         77380-1179  which  owned  13,433.600  Class N shares  (15.36%  of the
         Class N shares then outstanding).

         RPSS TR Gussco  Manufacturing  Inc., 401K Plan,  Attn:  Robert Sharp,
         5112 2nd Ave., Brooklyn,  NY 11232-4309,  which owned 6,988.616 Class
         N shares (7.99% of the Class N shares then outstanding).

         RPSS TR IRA FBO Donald  Sinclair,  1816 N. Fremont St.,  Chicago,  IL
         60614-5005,  which owned 5,470.319 Class N shares (6.25% of the Class
         N shares then outstanding).

         RPSS TR IRA FBO Garry J  Kroeger,  8104  Melody  Ln.,  Dickinson,  TX
         77539-7404,  which owned 5,349.914 Class N shares (6.11% of the Class
         N shares then outstanding).

         RPSS TR SEP IRA BRUCE E HARRISON PLUMBING FBO Bruce E Harrison,  1904
         Pleasant  Ridge Rd.,  Virginia  Beach,  VA  23457-1507,  which  owned
         5,139.495   Class  N  shares  (5.87%  of  the  Class  N  shares  then
         outstanding).

         IBT & CO, CUST  OPPENHEIMERFUNDS  CAP ACCUM PLAN, Attn:  MML037,  200
         Clarendon St. Fl 16, Boston,  MA 12116-5021,  which owned  73,017.771
         Class Y shares (99.92% 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 website at www.sec.gov. Copies may be obtained, after paying a
duplicating fee, by electronic request at the following E-mail address:
publicinfo@sec.gov., or by writing to the SEC's Public Reference Section,
-------------------
Washington, D.C. 20549-0102.

|X|   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 persons who are
principally responsible for the day-to-day management of the Fund's
portfolio. Other members of the Manager's Equity Portfolio Department provide
the portfolio manager with counsel and support in managing the Fund's
portfolio.

      The investment advisory 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 Directors, legal and audit expenses, custodian
and transfer agent expenses, share issuance costs, certain printing and
registration costs and non-recurring expenses, including litigation costs.
The management fees paid by the Fund to the Manager are calculated at the
rates described in the Prospectus, which are applied to the assets of the
Fund as a whole. The fees are allocated to each class of shares based upon
the relative proportion of the Fund's net assets represented by that class.
The management fees paid by the Fund to the Manager during its last three
fiscal years are listed below.

      The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the investment
advisory agreement, the Manager is not liable for any loss resulting from a
good faith error or omission on its part with respect to any of its duties
under the agreement.

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

o     Accounting Services. The Manager provides accounting and record-keeping
services to the Fund pursuant to an Accounting Agreement. Under that
agreement, the Manager maintains the general ledger accounts and records
relating to the Fund's business and calculates the daily net asset values of
the Fund's shares. The accounting service fees paid by the Fund to the
Manager during its last three fiscal years are listed below.

-------------------------------------------------------------------------------
Fiscal Year        Management Fee Paid to       Accounting Services Fee Paid
Ended 10/31        OppenheimerFunds, Inc.         to OppenheimerFunds, Inc.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
    2000                 $2,235,663                        $15,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
    2001                 $1,612,092                        $15,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
    2002                 $1,481,518                        $15,000
-------------------------------------------------------------------------------

         |X|      Annual Approval of Investment Advisory Agreement. Each
year, the Board of Directors, including a majority of the Independent
Directors, is required to approve the renewal of the investment advisory
agreement. The Investment Company Act requires that the Board request and
evaluate and the Manager provide such information as may be reasonably
necessary to evaluate the terms of the investment advisory 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 Directors,
meeting separately from the full Board with experienced Counsel to the Fund
who assisted the Board in its deliberations.  The Fund's Counsel is
independent of the Manager within the meaning and intent of the SEC Rules
regarding the independence of counsel.

      After careful deliberation, the Board of concluded that it was in the
best interest of shareholders to continue the investment advisory agreement
for another year. In arriving at a decision, the Board did not single out any
one factor or group of factors as being more important than other factors,
but considered all factors together.  The Board judged the terms and
conditions of the investment advisory agreement, including the investment
advisory fee, in light of all of the surrounding circumstances.


Brokerage Policies of the Fund

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

      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 commissions paid to such brokers may be
higher than another qualified broker would charge, if the Manager makes a
good faith determination that the commission is fair and reasonable in
relation to the services provided. 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 advisor.

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, a portfolio manager may
directly place trades and allocate brokerage. In either case, the Manager's
executive officers supervise the allocation of brokerage.







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

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

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

      The investment advisory agreement permits the Manager to allocate
brokerage for research services. The investment 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 Directors 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 Directors 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 10/31:     Total Brokerage Commissions Paid by the Fund1
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
           2000                                $1,148,957
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
           2001                                $2,329,407
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
           2002                                $1,590,3212
 ------------------------------------------------------------------------------
1.    Amounts do not include spreads or commissions on principal  transactions
   on a net trade basis.
2.    In the fiscal year ended 10/31/02,  the amount of transactions  directed
   to brokers for research  services was  $177,759,262  and the amount of the
   commissions paid to broker-dealers for those services was $426,915.


Distribution and Service Plans

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

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

-------------------------------------------
Fiscal    Aggregate        Class A
                           Front-End
Year      Front-End Sales  Sales Charges
Ended     Charges on       Retained by
10/31:    Class A Shares   Distributor1
-------------------------------------------
-------------------------------------------
  2000        $370,966        $174,293
-------------------------------------------
-------------------------------------------
  2001        $317,775        $140,878
-------------------------------------------
-------------------------------------------
  2002        $328,773        $140,953
-------------------------------------------
1.    Includes amounts  retained by a broker-dealer  that is an affiliate or a
    parent of the Distributor.

------------------------------------------------------------------------------
Fiscal    Concessions on   Concessions on   Concessions on   Concessions on
Year      Class A Shares   Class B Shares   Class C Shares   Class N Shares
Ended     Advanced by      Advanced by      Advanced by      Advanced by
10/31:    Distributor1     Distributor1     Distributor1     Distributor1
------------------------------------------------------------------------------
------------------------------------------------------------------------------
  2000        $54,817          $372,763         $28,351            N/A
------------------------------------------------------------------------------
------------------------------------------------------------------------------
  2001        $46,553          $289,729         $26,187           $1182
------------------------------------------------------------------------------
------------------------------------------------------------------------------
  2002        $24,890          $321,368         $55,902          $13,817
------------------------------------------------------------------------------
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.
2.    The inception date of Class N shares was March 1, 2001.








------------------------------------------------------------------------------
Fiscal    Class A          Class B          Class C          Class N
          Contingent       Contingent       Contingent       Contingent
Year      Deferred Sales   Deferred Sales   Deferred Sales   Deferred Sales
Ended     Charges          Charges          Charges          Charges
10/31     Retained by      Retained by      Retained by      Retained by
          Distributor      Distributor      Distributor      Distributor
------------------------------------------------------------------------------
------------------------------------------------------------------------------
  2002         $5,940          $147,720          $2,050            $782
------------------------------------------------------------------------------

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

      Each plan has been approved by a vote of the Board of Directors,
including a majority of the Independent Directors3, cast in person at a
meeting called for the purpose of voting on that plan.

      Under the plans, the Manager and the Distributor, 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 Directors and its
Independent Directors 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 Directors 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 Directors and the Independent Directors 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 Directors at least
quarterly for its review. The reports shall detail the amount of all payments
made under a plan and the purpose for which the payments were made. Those
reports are subject to the review and approval of the Independent Directors.

      Each plan states that while it is in effect, the selection and
nomination of those Directors of the Fund's parent corporation who are not
"interested persons" of the corporation (or the Fund) is committed to the
discretion of the Independent Directors. 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 Directors.

      Under the plan for a class, no payment will be made to any recipient in
any quarter in which the aggregate net asset values 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 Directors. The Board of Directors has set no minimum amount
of assets to qualify for payments under the plans.

      |X|   Class A Service Plan Fees. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions (they are referred to as
"recipients") for personal services and account maintenance services they
provide for their customers who hold Class A shares. The services include,
among others, answering customer inquiries about the Fund, assisting in
establishing and maintaining accounts in the Fund, making the Fund's
investment plans available and providing other services at the request of the
Fund or the Distributor. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares. The Board has set the rate at that level. While the plan
permits the Board to authorize payments to the Distributor to reimburse
itself for services under the plan, the Board has not yet done so, except in
the case of the special arrangement described below. The Distributor makes
payments to plan recipients quarterly at an annual rate not to exceed 0.25%
of the average annual net assets consisting of Class A shares held in the
accounts of the recipients or their customers.

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

      For the fiscal year ended October 31, 2002 payments under the Class A
Plan totaled $405,280, of which $37 was retained by the Distributor under the
arrangement described above, and included $119,416 paid to an affiliate of
the Distributor's parent company. Any unreimbursed expenses the Distributor
incurs with respect to Class A shares in any fiscal year cannot be recovered
in subsequent years. The Distributor may not use payments received under the
Class A Plan to pay any of its interest expenses, carrying charges, or other
financial costs, or allocation of overhead.

|X|   Class B, Class C and Class N 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. Each plan provides for
the Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the amounts paid by
the Fund under the plan during the period for which the fee is paid. The
types of services that recipients provide are similar to the services
provided under the Class A service plan, described above.

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

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

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

      The  asset-based  sales  charges  on Class B, Class C and Class N shares
allow  investors to buy shares without a front-end sales charge while allowing
the  Distributor to compensate  dealers that sell those shares.  The Fund pays
the asset-based  sales charges to the Distributor for its services rendered in
distributing  Class B, Class C and Class N shares.  The  payments  are made to
the Distributor in recognition that the Distributor:
o     pays sales concessions to authorized  brokers and dealers at the time of
         sale and pays service fees as described above,
o     may  finance  payment of sales  concessions  and/or  the  advance of the
         service fee  payment to  recipients  under the plans,  or may provide
         such  financing  from its own  resources or from the  resources of an
         affiliate,
o     employs personnel to support  distribution of Class B, Class C and Class
         N shares,
o     bears  the  costs  of sales  literature,  advertising  and  prospectuses
         (other than those furnished to current  shareholders) and state "blue
         sky" registration fees and certain other distribution expenses,
o     may not be able to adequately compensate dealers that sell Class B,
         Class C and Class N shares without receiving payment under the plans
         and therefore may not be able to offer such Classes for sale absent
         the plans,
o     receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that
         charge 12b-1 fees,
o





      may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund
         shares,
o     may experience increased difficulty selling the Fund's shares if
         payments under the plan are discontinued because most competitor
         funds have plans that pay dealers for rendering distribution
         services as much or more than the amounts currently being paid by
         the Fund, and
o     may not be able to continue providing, at the same or at a lesser cost,
         the same quality distribution sales efforts and services, or to
         obtain such services from brokers and dealers, if the plan payments
         were to be discontinued.

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

--------------------------------------------------------------------------------
     Distribution Fees Paid to the Distributor for the Year Ended 10/31/02
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class:        Total Payments   Amount          Distributor's    Distributor's
                                               Aggregate        Unreimbursed
                                               Unreimbursed     Expenses as %
                               Retained by     Expenses Under   of Net Assets
              Under Plan       Distributor     Plan             of Class
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B Plan      $562,278        $439,4481       $2,197,410         4.64%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C Plan      $129,685        $34,0482         $374,036          2.78%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N Plan       $2,521          $2,218          $20,528           1.71%
--------------------------------------------------------------------------------
1.    Includes  $18,642  paid  to an  affiliate  of the  Distributor's  parent
    company.
2.    Includes  $5,714  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 1.800.225.5567 or by visiting the OppenheimerFunds Internet website at
www.oppenheimerfunds.com.

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

      The performance of each class of shares is shown separately, because
the performance of each class of shares will usually be different. That is
because of the different kinds of expenses each class bears. The total
returns of each class of shares of the Fund are affected by market
conditions, the quality of the Fund's investments, the maturity of 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, 10
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 1.0% contingent deferred
sales charge is deducted for returns for the one-year period. For Class N
shares, the 1% contingent deferred sales charge is deducted for returns for
the one year period.






Class N total returns may also be calculated for the periods prior to 3/1/01
(the inception date for Class N shares), based on the Fund's Class A returns,
adjusted to reflect the higher Class N 12b-1 fees. There is no sales charge
on Class Y shares.

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

o     Average Annual Total Return (After Taxes on Distributions). The
"average annual total return (after taxes on distributions)" of Class A
shares is an average annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of federal taxes
(calculated using the highest individual marginal federal income tax rates in
effect on any reinvestment date) on any distributions made by the Fund during
the specified period. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n" in the formula) to achieve an ending value
("ATVD" in the formula) of that investment, after taking into account the
effect of taxes on Fund distributions, but not on the redemption of Fund
shares, according to the following formula:

           - 1 = Average Annual Total Return (After Taxes on
ATVD   l/n     Distributions)
---
  P

o     Average Annual Total Return (After Taxes on Distributions and
Redemptions).  The "average annual total return (after taxes on distributions
and redemptions)" of Class A shares is an average annual compounded rate of
return for each year in a specified number of years, adjusted to show the
effect of federal taxes (calculated using the highest individual marginal
federal income tax rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period and the effect of
capital gains taxes or capital loss tax benefits (each calculated using the
highest federal individual capital gains tax rate in effect on the redemption
date) resulting from the redemption of the shares at the end of the period.
It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVDR" in the
formula) of that investment, after taking into account the effect of taxes on
fund distributions and on the redemption of Fund shares, according to the
following formula:

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

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

 ERV - P   = Total Return
-----------
    P
o     Total Returns at Net Asset Value. From time to time the Fund may also
quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for Class A, Class B, Class C and Class N
shares. Each is based on the difference in net asset value per share at the
beginning and the end of the period for a hypothetical investment in that
class of shares (without considering front-end or contingent deferred sales
charges) and takes into consideration the reinvestment of dividends and
capital gains distributions.

--------------------------------------------------------------------------------
            The Fund's Total Returns for the Periods Ended 10/31/02
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class of  Cumulative                   Average Annual Total Returns
          Total
          Returns (10
Shares    years
          or life of
          Class)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                1-Year            5-Year           10-Year
                                                (or life of      (or life of
                                                  class)            class)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
          After    Without After    Without  After    Without  After    Without
          Sales    Sales   Sales    Sales    Sales    Sales    Sales    Sales
          Charge   Charge  Charge   Charge   Charge   Charge   Charge   Charge
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class A1   113.08% 126.09%  -12.49%   -7.15%   -3.15%   -1.99%    7.86%   8.50%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class B    32.49%2 32.49%2  -12.47%   -7.87%   -3.02%   -2.74%   4.05%2  4.05%2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class C    16.16%3 16.16%3   -8.77%   -7.85%   -2.73%   -2.73%   2.33%3  2.33%3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class N   -18.57%4 -18.57%4  -8.33%   -7.41% -11.60%4 -11.60%4      N/A     N/A
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Class Y        N/A 13.21%5      N/A   -7.18%      N/A   -1.74%      N/A  2.13%5
--------------------------------------------------------------------------------
1. Inception of Class A:      9/16/85.
2. Inception of Class B:      10/2/95.
3. Inception of Class C:      5/1/96.
4. Inception of Class N:      3/1/01.
5. Inception of Class Y:      12/16/96.

--------------------------------------------------------------------------
  Average Annual Total Returns for Class A Shares (After Sales Charges)
                     For the Periods Ended 10/31/02
--------------------------------------------------------------------------
--------------------------------------------------------------------------
                                 1-Year         5-Year        10-Year
--------------------------------------------------------------------------
--------------------------------------------------------------------------
After Taxes on Distributions    -12.51%         -4.83%         5.39%1
--------------------------------------------------------------------------
--------------------------------------------------------------------------
After Taxes on                   -7.60%         -2.71%         5.65%1
Distributions and
Redemption of Fund Shares
--------------------------------------------------------------------------
   1. Inception date of Class A: 9/16/85

Other Performance Comparisons. The Fund compares its performance annually to
that of an appropriate broadly-based market index in its Annual Report to
shareholders. You can obtain that information by contacting the Transfer
Agent at the addresses or telephone numbers shown on the cover of this
Statement of Additional Information. The Fund may also compare its
performance to that of other investments, including other mutual funds, or
use rankings of its performance by independent ranking entities. Examples of
these performance comparisons are set forth below.

      |X|   Lipper Rankings. From time to time the Fund may publish the
ranking of the performance of its classes of shares by Lipper, Inc.
("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring
service. Lipper monitors the performance of regulated investment companies,
including the Fund, and ranks their performance for various periods in






categories based on investment styles. The Lipper performance rankings are
based on total returns that include the reinvestment of capital gain
distributions and income dividends but do not take sales charges or taxes
into consideration. Lipper also publishes "peer-group" indices of the
performance of all mutual funds in a category that it monitors and averages
of the performance of the funds in particular categories.

|X|   Morningstar Ratings. From time to time the Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., an
independent mutual fund monitoring service.  Morningstar rates mutual funds
in their specialized market sector.  The Fund is rated among the domestic
stock funds category.

      Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. For each fund with at least a three-year history,
Morningstar calculates a Morningstar Rating(TM)based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in a fund's monthly
performance (including the effects of sales charges, loads, and redemption
fees), placing more emphasis on downward variations and rewarding consistent
performance.   The top 10% of funds in each category receive 5 stars, the
next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5%
receive 2 stars, and the bottom 10% receive 1 star.  (Each share class is
counted as a fraction of one fund within this scale and rated separately,
which may cause slight variations in the distribution percentages.) The
Overall Morningstar Rating for a fund is derived from a weighted average of
the performance figures associated with its three-, five-and ten-year (if
applicable) Morningstar Rating metrics.

      |X|   Performance Rankings and Comparisons by Other Entities and
Publications. From time to time the Fund may include in its advertisements
and sales literature performance information about the Fund cited in
newspapers and other periodicals such as The New York Times, The Wall Street
Journal, Barron's, or similar publications. That information may include
performance quotations from other sources, including Lipper and Morningstar.
The performance of the Fund's classes of shares may be compared in
publications to the performance
of various market indices or other investments, and averages, performance
rankings or other benchmarks prepared by recognized mutual fund statistical
services.

      Investors may also wish to compare the returns on the Fund's share
classes to the return on fixed-income investments available from banks and
thrift institutions. Those include certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of fixed or
variable time deposits, and various other instruments such as Treasury bills.
However, the Fund's returns and share price are not guaranteed or insured by
the FDIC or any other agency and will fluctuate daily, while bank depository
obligations may be insured by the FDIC and may provide fixed rates of return.
Repayment of principal and payment of interest on Treasury securities is
backed by the full faith and credit of the U.S. government.

      From time to time, the Fund may publish rankings or ratings of the
Manager or Transfer Agent, and of the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves.  Those ratings or rankings of shareholder and
investor services by third parties may include comparisons of their services
to those provided by other mutual fund families selected by the rating or
ranking services. They may be based upon the opinions of the rating or
ranking service itself, using its research or judgment, or based upon surveys
of investors, brokers, shareholders or others.







      From time to time the Fund may include in its advertisements and sales
literature the total return performance of a hypothetical investment account
that includes shares of the Fund and other Oppenheimer funds. The combined
account may be part of an illustration of an asset allocation model or
similar presentation. The account performance may combine total return
performance of the Fund and the total return performance of other Oppenheimer
funds included in the account. Additionally, from time to time, the Fund's
advertisements and sales literature may include, for illustrative or
comparative purposes, statistical data or other information about general or
specific market and economic conditions. That may include, for example,
o     information about the performance of certain securities or commodities
         markets or segments of those markets,
o     information about the performance of the economies of particular
         countries or regions,
o     the earnings of companies included in segments of particular
         industries, sectors, securities markets, countries or regions,
o     the availability of different types of securities or offerings of
         securities,
o     information relating to the gross national or gross domestic product of
         the United States or other countries or regions,
o     comparisons of various market sectors or indices to demonstrate
         performance, risk, or other characteristics of the Fund.


ABOUT your account

How to Buy Shares

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

AccountLink.  When shares are purchased through AccountLink, each purchase
must be at least $50 and shareholders must invest at least $500 before an
                     ---
Asset Builder Plan can be established on a new account. Accounts established
prior to November 1, 2002 will remain at $25 for additional purchases. Shares
will be purchased on the regular business day the Distributor is instructed
to initiate the Automated Clearing House ("ACH") transfer to buy the shares.
Dividends will begin to accrue on shares purchased with the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for the
purchase through the ACH system before the close of The New York Stock
Exchange ("the Exchange"). The Exchange normally closes at 4:00 P.M., but may
close earlier on certain days.  If Federal Funds are received on a business
day after the close of the Exchange, the shares will be purchased and
dividends will begin to accrue on the next regular business day.  The
proceeds of ACH transfers are normally received by the Fund three days after
the transfers are initiated. If the proceeds of the ACH transfer are not
received on a timely basis, the Distributor reserves the right to cancel the
purchase order. The Distributor and the Fund are not responsible for any
delays in purchasing shares resulting from delays in ACH transmissions.

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






in Appendix C to this Statement of Additional Information because the
Distributor or dealer or broker incurs little or no selling expenses.

      |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 AMT-Free New York Municipals  Oppenheimer MidCap Fund
Oppenheimer Bond Fund                     Oppenheimer Multiple Strategies Fund
Oppenheimer California Municipal Fund     Oppenheimer Municipal Bond Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Preservation Fund     Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund           Oppenheimer Quest Balanced Value Fund
                                          Oppenheimer  Quest  Capital  Value Fund,
Oppenheimer Champion Income Fund          Inc.
                                          Oppenheimer  Quest  Global  Value  Fund,
Oppenheimer Convertible Securities 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      Rochester      National
Oppenheimer Emerging Growth Fund          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 & Income Fund   Oppenheimer Trinity Core Fund
                                          Oppenheimer  Trinity  Large  Cap  Growth
Oppenheimer Gold & Special Minerals Fund  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 & Income OSM1 -  Mercury  Advisors  S&P 500 Index
Fund                                      Fund
                                          OSM1 -  Mercury  Advisors  Focus  Growth
Oppenheimer Main Street Opportunity Fund  Fund
Oppenheimer Main Street Small Cap Fund    OSM1 - QM Active Balanced Fund
                                          OSM1 - Salomon Brothers All Cap 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
and Oppenheimer Senior Floating Rate Fund. 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. As explained in the Prospectus, you must initially
establish your account with $500. Subsequently, you can establish an Asset
Builder Plan to automatically purchase additional shares directly from a bank
account for as little as $50. For those accounts established prior to
November 1, 2002 and which have previously established Asset Builder Plans,
additional purchases will remain at $25. Shares purchased by Asset Builder
Plan payments from bank accounts are subject to the redemption restrictions
for recent purchases described in the Prospectus.  Asset Builder Plans are
available only if your bank is an ACH member.  Asset Builder Plans may not be
used to buy shares for OppenheimerFunds employer-sponsored qualified
retirement accounts. Asset Builder Plans also enable shareholders of
Oppenheimer Cash Reserves to use their fund account to make monthly automatic
purchases of shares of up to four other Oppenheimer funds.

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

      Before you establish Asset Builder payments, you should obtain a
prospectus of the selected fund(s) from your financial advisor (or the
Distributor) and request an application from the Distributor.  Complete the
application and return it.  You may change the amount of your Asset Builder
payment or you can terminate these automatic investments at any time by
writing to the Transfer Agent.  The Transfer Agent requires a reasonable
period (approximately 10 days)






after receipt of your instructions to implement them.  The Fund reserves the
right to amend, suspend or discontinue offering Asset Builder plans at any
time without prior notice.

Retirement Plans. Certain types of retirement plans are entitled to purchase
shares of the Fund without sales charge or at reduced sales charge rates, as
described in Appendix C to this Statement of Additional Information. Certain
special sales charge arrangements described in that Appendix apply to
retirement plans whose records are maintained on a daily valuation basis by
Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an independent
record keeper that has a contract or special arrangement with Merrill Lynch.
If on the date the plan sponsor signed the Merrill Lynch record keeping
service agreement the plan has less than $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.

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

      |X|   Class B Conversion. Under current interpretations of applicable
federal income tax law by the Internal Revenue Service, the conversion of
Class B shares to Class A shares 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 C to this Statement
            of Additional Information) which have entered into a special
            agreement with the Distributor for that purpose,
o     to Retirement Plans qualified under Sections 401(a) or 401(k) of the
            Internal Revenue Code, the recordkeeper or the plan sponsor for
            which has entered into a special agreement with the Distributor,
o     to Retirement Plans of a plan sponsor where the aggregate assets of all
            such plans invested in the Oppenheimer funds is $500,000 or more,
o     to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
            purchase with the redemption proceeds of Class A shares of one or
            more Oppenheimer funds.
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, a $12 annual fee is assessed on
any account valued at less than $500. This fee will not be assessed on the
following accounts:
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 automatically deducted from qualifying accounts annually on
or about the second to last business day of September.  This annual fee is
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 Value Per Share.  The net asset value per share of
each class of shares of the Fund are determined as of the close of business
of the Exchange on each day that the Exchange is open. The calculation is
done by dividing the value of the Fund's net assets attributable to a class
by the number of shares of that class that are outstanding.  The Exchange
normally closes at 4:00 P.M., Eastern time, but may close earlier on some
other days (for example, in case of weather emergencies or on days falling
before a U.S. holiday).  All references to time in this Statement of
Additional Information mean "Eastern time." The Exchange's most recent annual
announcement (which is subject to change) states that it will close on New
Year's Day, 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 Exchange.

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

      |X|   Securities Valuation.  The Fund's Board of Directors 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 Directors, 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
Directors 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 Directors 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 Directors. 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 Directors 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.

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

Reinvestment Privilege.  Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of:
o     Class A shares purchased subject to an initial sales charge or Class A
         shares on which a contingent deferred sales charge was paid, or
o     Class B shares that were subject to the Class B contingent deferred
         sales charge when redeemed.

      The reinvestment may be made without sales charge only in Class A
shares of the Fund or any of the other Oppenheimer funds into which shares of
the Fund are exchangeable as described in "How to Exchange Shares" below.
Reinvestment will be at the net asset value next computed after the Transfer
Agent receives the reinvestment order.  The shareholder must ask the Transfer
Agent for that privilege at the time of reinvestment. This privilege does not
apply to Class C, Class N or Class Y shares. The Fund may amend, suspend or
cease offering this reinvestment privilege at any time as to shares redeemed
after the date of such amendment, suspension or cessation.

      Any capital gain that was realized when the shares were redeemed is
taxable, and reinvestment will not alter any capital gains tax payable on
that gain.  If there has been a capital loss on the redemption, some or all
of the loss may not be tax deductible, depending on the timing and amount of
the reinvestment.  Under the Internal Revenue Code, if the redemption
proceeds of Fund shares on which a sales charge was paid are reinvested in
shares of the Fund or another of the Oppenheimer funds within 90 days of
payment of the sales charge, the shareholder's basis in the shares of the
Fund that were redeemed may not include the amount of the sales charge paid.
That would reduce the loss or increase the gain recognized from the
redemption.  However, in that case the sales charge would be added to the
basis of the shares acquired by the reinvestment of the redemption proceeds.

Payments "In Kind". The Prospectus states that payment for shares tendered
for redemption is ordinarily made in cash. However, under certain
circumstances, the Board of Directors of the Fund may determine that it would
be detrimental to the best interests of the remaining shareholders of the
Fund to make payment of a redemption order wholly or partly in cash. In that
case, the Fund may pay the redemption proceeds in whole or in part by a
distribution "in kind" of liquid securities from the portfolio of the Fund,
in lieu of cash.

      The Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act. Under that rule, the Fund is obligated to redeem shares solely
in cash up to the lesser of $250,000 or 1% of the net assets of the Fund
during any 90-day period for any one shareholder. If shares are redeemed in
kind, the redeeming shareholder might incur brokerage or other costs in
selling the securities for cash. The Fund will value securities used to pay
redemptions in kind using the same method the Fund uses to value its
portfolio securities described above under "Determination of Net Asset Values
Per Share." That valuation will be made as of the time the redemption price
is determined.

Involuntary Redemptions. The Fund's Board of Directors has the right to cause
the involuntary redemption of the shares held in any account if the account
holds fewer than 100 shares. If the Board exercises this right, it may also
fix the requirements for any notice to be given to the shareholders in
question (not less than 30 days). The Board may alternatively set
requirements for the shareholder to increase the investment, or set other
terms and conditions so that the shares would not be involuntarily redeemed.

Transfers of Shares.  A transfer of shares to a different registration is not
an event that triggers the payment of sales charges. Therefore, shares are
not subject to the payment of a contingent deferred sales charge of any class
at the time of transfer to the name of another person or entity. It does not
matter whether the transfer occurs by absolute assignment, gift or bequest,
as long as it does not involve, directly or indirectly, a public sale of the
shares.  When shares subject to a contingent deferred sales charge are
transferred, the transferred shares will remain subject to the contingent
deferred sales charge. It will be calculated as if the transferee shareholder
had acquired the transferred shares in the same manner and at the same time
as the transferring shareholder.







      If less than all shares held in an account are transferred, and some
but not all shares in the account would be subject to a contingent deferred
sales charge if redeemed at the time of transfer, the priorities described in
the Prospectus under "How to Buy Shares" for the imposition of the Class B,
Class C and Class N contingent deferred sales charge will be followed in
determining the order in which shares are transferred.

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

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

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

Special Arrangements for Repurchase of Shares from Dealers and Brokers.  The
Distributor is the Fund's agent to repurchase its shares from authorized
dealers or brokers on behalf of their customers.  Shareholders should contact
their broker or dealer to arrange this type of redemption. The repurchase
price per share will be the net asset value next computed after the
Distributor receives an order placed by the dealer or broker. However, if the
Distributor receives a repurchase order from a dealer or broker after the
close of The Exchange on a regular business day, it will be processed at that
day's net asset value if the order was received by the dealer or broker from
its customers prior to the time the Exchange closes. Normally, the Exchange
closes at 4:00 P.M., but may do so earlier on some days. Additionally, the
order must have been transmitted to and received by the Distributor prior to
its close of business that day (normally 5:00 P.M.).

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

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

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

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

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

      |X|   Automatic Exchange Plans.  Shareholders can authorize the
Transfer Agent to exchange a pre-determined amount of shares of the Fund for
shares (of the same class) of other Oppenheimer funds automatically on a
monthly, quarterly, semi-annual or annual basis under an Automatic Exchange
Plan. The minimum amount that may be exchanged to each other fund account is
$50. Instructions should be provided on the OppenheimerFunds Application or
signature-guaranteed instructions. Exchanges made under these plans are
subject to the restrictions that apply to exchanges as set forth in "How to
Exchange Shares" in the Prospectus and below in this Statement of Additional
Information.

|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 AMT-Free New York           Oppenheimer Pennsylvania Municipal
      Municipals                              Fund
      Oppenheimer California Municipal Fund   Oppenheimer Rochester National
                                              Municipals
      Oppenheimer Limited Term Municipal Fund Oppenheimer Senior Floating Rate
                                              Fund
      Oppenheimer Municipal Bond Fund         Limited Term New York Municipal
                                              Fund
      Oppenheimer New Jersey Municipal Fund   Rochester Fund Municipals

      The following funds do not offer Class Y shares:
      Oppenheimer AMT-Free New York          Oppenheimer International Small
      Municipals                             Company Fund
      Oppenheimer California Municipal Fund  Oppenheimer Limited Term Municipal
                                             Fund
      Oppenheimer Capital Income Fund        Oppenheimer Multiple Strategies Fund
      Oppenheimer Cash Reserves              Oppenheimer New Jersey Municipal Fund
      Oppenheimer Champion Income Fund       Oppenheimer Pennsylvania Municipal
                                             Fund
      Oppenheimer Convertible Securities     Oppenheimer Quest Capital Value Fund,
      Fund                                   Inc.
      Oppenheimer Disciplined Allocation     Oppenheimer Quest Global Value Fund,
      Fund                                   Inc.
      Oppenheimer Developing Markets Fund    Oppenheimer Rochester National
                                             Municipals
      Oppenheimer Gold & Special Minerals    Oppenheimer Senior Floating Rate Fund
      Fund
      Oppenheimer International Bond Fund    Oppenheimer Small Cap Value Fund
      Oppenheimer International Growth 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:

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

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

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

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

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

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

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

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

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

      |X|   Limits on Multiple Exchange Orders. The Fund reserves the right
to reject telephone or written exchange requests submitted in bulk by anyone
on behalf of more than one account.  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 Directors 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. Citibank, N.A. is the custodian of the Fund's assets. The
custodian's responsibilities include safeguarding and controlling the Fund's
portfolio securities and handling the delivery of such securities to and from
the Fund.  It is the practice of the Fund to deal with the custodian in a
manner uninfluenced by any banking relationship the custodian may have with






the Manager and its affiliates.  The Fund's cash balances with the custodian
in excess of $100,000 are not protected by federal deposit insurance.  Those
uninsured balances at times may be substantial.

Independent Auditors. KPMG LLP 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.

INDEPENDENT AUDITORS' REPORT



================================================================================
The Board of Directors and Shareholders of
Oppenheimer Value Fund:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Value Fund, including the statement of investments, as of October
31, 2002, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
   We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2002, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
   In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Oppenheimer Value Fund as of October 31, 2002, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.


/s/ KPMG LLP
KPMG LLP

Denver, Colorado
November 21, 2002
STATEMENT OF INVESTMENTS October 31, 2002 Market Value Shares See Note 1 ==================================================== Common Stocks--92.7% ---------------------------------------------------- Consumer Discretionary--8.5% ---------------------------------------------------- Auto Components--0.7% Delphi Corp. 214,500 $ 1,492,920 ---------------------------------------------------- Leisure Equipment & Products--1.0% Mattel, Inc. 110,800 2,034,288 ---------------------------------------------------- Media--3.3% News Corp. Ltd. (The), Sponsored ADR, Preference 336,300 6,648,651 ---------------------------------------------------- Textiles & Apparel--3.5% Nike, Inc., Cl. B 151,000 7,125,690 ---------------------------------------------------- Consumer Staples--1.2% ---------------------------------------------------- Tobacco--1.2% Philip Morris Cos., Inc. 59,600 2,428,700 ---------------------------------------------------- Energy--6.7% ---------------------------------------------------- Energy Equipment & Services--0.5% Noble Corp. 1 30,800 995,456 ---------------------------------------------------- Oil & Gas--6.2% Ashland, Inc. 70,200 1,842,750 ---------------------------------------------------- BP plc, ADR 258,200 9,927,790 ChevronTexaco Corp. 14,000 946,820
12,717,360 ---------------------------------------------------- Financials--31.8% ---------------------------------------------------- Banks--7.6% Bank of America Corp. 163,600 11,419,280 ---------------------------------------------------- Wachovia Corp. 119,800 4,167,842
15,587,122 ---------------------------------------------------- Diversified Financials--14.3% Capital One Financial Corp. 71,000 2,163,370 ---------------------------------------------------- Citigroup, Inc. 39,966 1,476,744 ---------------------------------------------------- Franklin Resources, Inc. 176,100 5,809,539 ---------------------------------------------------- Freddie Mac 127,200 7,832,976 ---------------------------------------------------- Merrill Lynch & Co., Inc. 35,400 1,343,430 ---------------------------------------------------- SLM Corp. 102,600 10,541,124
29,167,183 ---------------------------------------------------- Insurance--9.9% Allstate Corp. 76,500 3,043,170 ---------------------------------------------------- American International Group, Inc. 175,200 10,958,760 Market Value Shares See Note 1 ---------------------------------------------------- Insurance Continued Hartford Financial Services Group, Inc. 36,200 $ 1,429,900 ---------------------------------------------------- Prudential Financial, Inc. 1 162,600 4,747,920 ---------------------------------------------------- Travelers Property Casualty Corp., Cl. A 1 3,368 44,963 ---------------------------------------------------- Travelers Property Casualty Corp., Cl. B 1 6,920 93,558
20,318,271 ---------------------------------------------------- Health Care--5.4% ---------------------------------------------------- Health Care Providers & Services--3.7% Aetna, Inc. 171,800 6,923,540 ---------------------------------------------------- Service Corp. International 1 224,200 706,230
7,629,770 ---------------------------------------------------- Pharmaceuticals--1.7% Pharmacia Corp. 62,600 2,691,800 ---------------------------------------------------- Schering-Plough Corp. 39,100 834,785
3,526,585 ---------------------------------------------------- Industrials--10.0% ---------------------------------------------------- Aerospace & Defense--8.0% Boeing Co. 310,500 9,237,375 ---------------------------------------------------- Lockheed Martin Corp. 124,400 7,202,760
16,440,135 ---------------------------------------------------- Industrial Conglomerates--1.7% Tyco International Ltd. 235,000 3,398,100 ---------------------------------------------------- Machinery--0.3% Navistar International Corp. 1 125,800 578,436 ---------------------------------------------------- Information Technology--11.6% ---------------------------------------------------- Communications Equipment--4.6% JDS Uniphase Corp. 1,2 1,458,800 3,283,759 ---------------------------------------------------- QUALCOMM, Inc 1 177,900 6,141,108
9,424,867 ---------------------------------------------------- Computers & Peripherals--3.9% Hewlett-Packard Co. 371,800 5,874,440 ---------------------------------------------------- Lexmark International, Inc., Cl. A 1 26,800 1,592,456 13 | OPPENHEIMER VALUE FUND STATEMENT OF INVESTMENTS Continued Market Value Shares See Note 1 ---------------------------------------------------- Computers & Peripherals Continued Pinnacle Systems, Inc. 1 40,600 $ 482,734
7,949,630 ---------------------------------------------------- Electronic Equipment & Instruments--3.1% Thermo Electron Corp. 1 343,700 6,320,643 ---------------------------------------------------- Materials--5.8% ---------------------------------------------------- Chemicals--0.9% FMC Corp. 1 53,700 1,642,683 ---------------------------------------------------- Monsanto Co. 13,357 220,791
1,863,474 ---------------------------------------------------- Metals & Mining--0.4% Alcoa, Inc. 42,000 926,520 ---------------------------------------------------- Paper & Forest Products--4.5% Sappi Ltd., Sponsored ADR 743,300 9,112,858 ---------------------------------------------------- Telecommunication Services--8.8% ---------------------------------------------------- Diversified Telecommunication Services--2.2% Verizon Communications, Inc. 121,600 4,591,616 ---------------------------------------------------- Wireless Telecommunication Services--6.6% AT&T Corp. 1,033,200 13,472,928 ---------------------------------------------------- Utilities--2.9% ---------------------------------------------------- Electric Utilities--2.9% Dominion Resources, Inc. 125,200 6,009,600
Total Common Stocks (Cost $186,306,877) 189,760,803 Principal Market Value Amount See Note 1 ==================================================== Short-Term Notes--2.1% Federal Home Loan Bank, 1.65%, 11/1/02 (Cost $4,200,000) $4,200,000 $ 4,200,000 ====================================================

Joint Repurchase Agreements--4.5% Undivided interest of 49.65% in joint repurchase agreement (Market Value $18,754,000) with Zion Bank/Capital Markets Group, 1.85%, dated 10/31/02, to be repurchased at $9,311,478 on 11/1/02, collateralized by U.S. Treasury Bonds, 2.125%, 10/31/04, with a value of $19,178,339 (Cost $9,311,000) 9,311,000 9,311,000

---------------------------------------------------- Total Investments, at Value (Cost $199,817,877) 99.3% 203,271,803 ---------------------------------------------------- Other Assets Net of Liabilities 0.7 1,355,812
Net Assets 100.0% $204,627,615 ===================== Footnotes to Statement of Investments 1. Non-income producing security. 2. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows: 

                                  Contracts Expiration  Exercise   Premium Market Value
                            Subject to Call       Date     Price  Received   See Note 1
---------------------------------------------------------------------------------------

JDS Uniphase Corp.                       14    3/24/03     $2.50      $742         $700
See accompanying Notes to Financial Statements. 14 | OPPENHEIMER VALUE FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 2002 

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

Investments, at value (cost $199,817,877)--see accompanying statement $203,271,803
-----------------------------------------------------------------------------------
Cash                                                                        56,772
-----------------------------------------------------------------------------------
Receivables and other assets:
Investments sold                                                         5,466,226
Shares of capital stock sold                                               124,254
Interest and dividends                                                     115,849
Other                                                                        1,660
                                                                      -------------
Total assets                                                           209,036,564

===================================================================================
Liabilities
Options written, at value (premiums received $742)--see accompanying statement 700
-----------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased                                                    3,976,112
Shares of capital stock redeemed                                           148,740
Shareholder reports                                                         87,054
Transfer and shareholder servicing agent fees                               69,827
Directors' compensation                                                     47,526
Distribution and service plan fees                                          41,070
Other                                                                       37,920
                                                                      -------------
Total liabilities                                                        4,408,949

===================================================================================
Net Assets                                                            $204,627,615
                                                                      =============

===================================================================================
Composition of Net Assets
Par value of shares of capital stock                                  $     13,895
-----------------------------------------------------------------------------------
Additional paid-in capital                                             245,650,297
-----------------------------------------------------------------------------------
Undistributed net investment income                                        177,268
-----------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions               (44,667,813)
-----------------------------------------------------------------------------------
Net unrealized appreciation on investments                               3,453,968
                                                                      -------------
Net Assets                                                            $204,627,615
                                                                      =============
15 | OPPENHEIMER VALUE FUND STATEMENT OF ASSETS AND LIABILITIES Continued ================================================================================ Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $141,562,779 and 9,576,254 shares of capital stock outstanding) $14.78 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $15.68 -------------------------------------------------------------------------------- Class B Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $47,323,320 and 3,232,435 shares of capital stock outstanding) $14.64 --------------------------------------------------------------------------------

Class C Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $13,466,078 and 932,473 shares of capital stock outstanding) $14.44 --------------------------------------------------------------------------------

Class N Shares:

Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $1,201,397 and 81,857 shares of capital stock outstanding) $14.68 --------------------------------------------------------------------------------

Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $1,074,041 and 71,781 shares of capital stock outstanding) $14.96 See accompanying Notes to Financial Statements. 16 | OPPENHEIMER VALUE FUND STATEMENT OF OPERATIONS For the Year Ended October 31, 2002 

===================================================================================
Investment Income

Dividends (net of foreign withholding taxes of $21,725)               $  3,535,454
-----------------------------------------------------------------------------------
Interest                                                                   240,249
                                                                      -------------
Total investment income                                                  3,775,703

===================================================================================
Expenses
Management fees                                                          1,481,518
-----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                                    405,280
Class B                                                                    562,278
Class C                                                                    129,685
Class N                                                                      2,521
-----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                                    497,606
Class B                                                                    184,551
Class C                                                                     41,558
Class N                                                                      1,600
Class Y                                                                     29,516
-----------------------------------------------------------------------------------
Shareholder reports                                                         75,031
-----------------------------------------------------------------------------------
Accounting service fees                                                     15,000
-----------------------------------------------------------------------------------
Directors' compensation                                                     14,722
-----------------------------------------------------------------------------------
Custodian fees and expenses                                                  2,227
-----------------------------------------------------------------------------------
Other                                                                       15,310
                                                                      -------------
Total expenses                                                           3,458,403
Less reduction to custodian expenses                                          (485)
Less voluntary waiver of transfer and shareholder servicing agent
fees--Classes A, B, C and N                                                (19,021)
Less voluntary waiver of transfer and shareholder servicing agent
fees--Class Y                                                              (24,241)
                                                                      -------------
Net expenses                                                             3,414,656

===================================================================================
Net Investment Income                                                      361,047


===================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised)                  (28,016,793)
Closing and expiration of option contracts written                         875,186
                                                                      -------------
Net realized loss                                                      (27,141,607)
-----------------------------------------------------------------------------------
Net change in unrealized appreciation on investments                    10,745,185
                                                                      -------------
Net realized and unrealized loss                                       (16,396,422)


===================================================================================
Net Decrease in Net Assets Resulting from Operations                  $(16,035,375)
                                                                      =============
See accompanying Notes to Financial Statements. 17 | OPPENHEIMER VALUE FUND STATEMENTS OF CHANGES IN NET ASSETS 

Year Ended October 31,                                          2002          2001
===================================================================================
Operations

Net investment income (loss)                            $    361,047  $    (91,479)
-----------------------------------------------------------------------------------
Net realized loss                                        (27,141,607)   (7,841,920)
-----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)      10,745,185    (7,812,172)
                                                        ---------------------------
Net decrease in net assets resulting from operations     (16,035,375)  (15,745,571)

===================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A                                                     (135,466)   (1,847,746)
Class B                                                           --       (87,334)
Class C                                                           --       (18,346)
Class N                                                          (43)           --
Class Y                                                       (3,575)           --

===================================================================================
Capital Stock Transactions
Net increase (decrease) in net assets resulting from capital stock transactions:
Class A                                                  (14,210,177)   (3,267,773)
Class B                                                   (6,150,602)   (2,239,487)
Class C                                                    4,299,663     1,787,816
Class N                                                    1,286,579        13,360
Class Y                                                      563,632       716,127

===================================================================================
Net Assets
Total decrease                                           (30,385,364)  (20,688,954)
-----------------------------------------------------------------------------------
Beginning of period                                      235,012,979   255,701,933
                                                        ---------------------------
End of period [including undistributed (overdistributed)
net investment income of $177,268 and $(44,695),
respectively]                                           $204,627,615  $235,012,979
                                                        ===========================
See accompanying Notes to Financial Statements. 18 | OPPENHEIMER VALUE FUND FINANCIAL highlights 

Class A     Year Ended October 31,           2002      2001      2000      1999      1998
===========================================================================================
Per Share Operating Data

Net asset value, beginning of period      $ 15.93   $ 17.06   $ 20.69   $ 20.91   $ 23.31
-------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                         .07       .03       .16       .17       .16
Net realized and unrealized gain (loss)     (1.21)     (.98)     (.65)      .64       .32
                                          -------------------------------------------------
Total from investment operations            (1.14)     (.95)     (.49)      .81       .48
-------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income         (.01)     (.18)     (.16)     (.17)     (.12)
Distributions from net realized gain           --        --     (2.98)     (.86)    (2.76)
                                          -------------------------------------------------
Total dividends and/or distributions
to shareholders                              (.01)     (.18)    (3.14)    (1.03)    (2.88)
-------------------------------------------------------------------------------------------
Net asset value, end of period             $14.78    $15.93    $17.06    $20.69    $20.91
                                          =================================================

===========================================================================================
Total Return, at Net Asset Value 1          (7.15)%   (5.60)%   (2.60)%    3.60%     2.24%

===========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $141,563  $166,285  $181,566  $392,483  $456,264
-------------------------------------------------------------------------------------------
Average net assets (in thousands)        $166,319  $181,631  $234,840  $448,884  $442,138
-------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                        0.38%     0.19%     0.66%     0.68%     0.84%
Expenses                                     1.22%     1.26%     1.17%     1.02%     0.98% 3
-------------------------------------------------------------------------------------------
Portfolio turnover rate                       150%      336%       86%      135%      106%
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. 19 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued 

Class B     Year Ended October 31,           2002      2001      2000      1999      1998
===========================================================================================
Per Share Operating Data

Net asset value, beginning of period      $ 15.89   $ 16.99   $ 20.58   $ 20.83   $ 23.32
-------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                 (.10)     (.11)     (.05)     (.03)      .02
Net realized and unrealized gain (loss)     (1.15)     (.97)     (.56)      .66       .30
                                          -------------------------------------------------
Total from investment operations            (1.25)    (1.08)     (.61)      .63       .32
-------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income           --      (.02)       --      (.02)     (.05)
Distributions from net realized gain           --        --     (2.98)     (.86)    (2.76)
                                          -------------------------------------------------
Total dividends and/or distributions
to shareholders                                --      (.02)    (2.98)     (.88)    (2.81)
-------------------------------------------------------------------------------------------
Net asset value, end of period             $14.64    $15.89    $16.99    $20.58    $20.83
                                          =================================================

===========================================================================================
Total Return, at Net Asset Value 1          (7.87)%   (6.34)%  (3.28)%    2.79%     1.47%

===========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands)  $47,323   $57,584   $64,287  $102,736  $123,260
-------------------------------------------------------------------------------------------
Average net assets (in thousands)         $56,200   $65,115   $79,239  $123,616  $110,240
-------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)                (0.40)%   (0.57)%   (0.14)%   (0.08)%    0.08%
Expenses                                     2.01%     2.01%     1.93%     1.77%     1.73% 3
-------------------------------------------------------------------------------------------
Portfolio turnover rate                       150%      336%       86%      135%      106%
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. 20 | OPPENHEIMER VALUE FUND 

Class C     Year Ended October 31,           2002      2001      2000      1999      1998
===========================================================================================
Per Share Operating Data

Net asset value, beginning of period      $ 15.67   $ 16.77   $ 20.35   $ 20.60   $ 23.07
-------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                 (.01)     (.08)     (.04)     (.02)      .01
Net realized and unrealized gain (loss)     (1.22)     (.99)     (.56)      .65       .31
                                          -------------------------------------------------
Total from investment operations            (1.23)    (1.07)     (.60)      .63       .32
-------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income           --      (.03)       --      (.02)     (.03)
Distributions from net realized gain           --        --     (2.98)     (.86)    (2.76)
                                          -------------------------------------------------
Total dividends and/or distributions
to shareholders                                --      (.03)    (2.98)     (.88)    (2.79)
-------------------------------------------------------------------------------------------
Net asset value, end of period             $14.44    $15.67    $16.77    $20.35    $20.60
                                          =================================================

===========================================================================================
Total Return, at Net Asset Value 1          (7.85)%   (6.38)%   (3.27)%    2.82%     1.47%

===========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands)  $13,466   $10,494   $ 9,849   $14,582   $18,204
-------------------------------------------------------------------------------------------
Average net assets (in thousands)         $12,977   $11,088   $11,975   $17,746   $15,355
-------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss)                (0.41)%   (0.56)%   (0.14)%   (0.07)%    0.06%
Expenses                                     2.00%     2.01%     1.93%     1.77%     1.73% 3
-------------------------------------------------------------------------------------------
Portfolio turnover rate                       150%      336%       86%      135%      106%
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 VALUE FUND FINANCIAL HIGHLIGHTS Continued Class N Year Ended October 31, 2002 2001 1 ================================================================================ Per Share Operating Data Net asset value, beginning of period $ 15.90 $ 18.08 --------------------------------------------------------------------------------

Income (loss) from investment operations:

Net investment income (loss) .05 (.02) Net realized and unrealized loss (1.22) (2.16) -------------------- Total from investment operations (1.17) (2.18) --------------------------------------------------------------------------------

Dividends and/or distributions to shareholders:

Dividends from net investment income (.05) -- Distributions from net realized gain -- -- -------------------- Total dividends and/or distributions to shareholders (.05) -- -------------------------------------------------------------------------------- Net asset value, end of period $14.68 $15.90 ==================== ================================================================================ Total Return, at Net Asset Value 2 (7.41)% (12.06)% ================================================================================ Ratios/Supplemental Data Net assets, end of period (in thousands) $1,201 $12 -------------------------------------------------------------------------------- Average net assets (in thousands) $ 508 $ 5 -------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) 0.00% (0.45)% Expenses 1.49% 1.61% -------------------------------------------------------------------------------- Portfolio turnover rate 150% 336% 1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period (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. 3. Annualized for periods of less than one full year. See accompanying Notes to Financial Statements. 22 | OPPENHEIMER VALUE FUND 

Class Y     Year Ended October 31,           2002      2001      2000      1999      1998
===========================================================================================
Per Share Operating Data

Net asset value, beginning of period      $ 16.20   $ 17.07   $ 20.72   $ 20.97   $ 23.34
-------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                  .06 1     .10 1     .17 1     .22       .22
Net realized and unrealized gain (loss)     (1.21) 1   (.97) 1   (.63) 1    .64       .34
                                          -------------------------------------------------
Total from investment operations            (1.15)     (.87)     (.46)      .86       .56
-------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income         (.09)       --      (.21)     (.25)     (.17)
Distributions from net realized gain           --        --     (2.98)     (.86)    (2.76)
                                          -------------------------------------------------
Total dividends and/or distributions
to shareholders                              (.09)       --     (3.19)    (1.11)    (2.93)
-------------------------------------------------------------------------------------------
Net asset value, end of period             $14.96    $16.20    $17.07    $20.72    $20.97
                                          =================================================

===========================================================================================
Total Return, at Net Asset Value 2          (7.18)%   (5.10)%   (2.42)%    3.81%     2.63%

===========================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands)   $1,074      $638   $     1   $76,571  $136,729
-------------------------------------------------------------------------------------------
Average net assets (in thousands)          $  955      $155   $48,714   $95,765  $118,010
-------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                        0.33%     0.62%     1.06%     0.90%     1.19%
Expenses                                     3.77%     1.20%     0.97%     0.76%     0.62% 4
Expenses, net of voluntary waiver
of transfer agent fees and/or
reduction to custodian expenses              1.23%     0.83%     0.97%     0.76%     0.62%
-------------------------------------------------------------------------------------------
Portfolio turnover rate                       150%      336%       86%      135%      106%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 3. Annualized for periods of less than one full year. 4. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 23 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. Significant Accounting Policies

Oppenheimer Value Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), 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 long-term growth of capital by investing primarily in common stocks with low price-earnings ratios and better-than-anticipated earnings. 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 Directors, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Directors. 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 prevailing exchange rates on the valuation date. Amounts related to the purchase and sale of foreign securities and investment income are translated at the prevailing exchange rates on the respective dates of such transactions. 24 | OPPENHEIMER VALUE FUND

        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.

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

Directors’ Compensation. The Fund has adopted a nonfunded retirement plan for the Fund’s independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the year ended October 31, 2002, the Fund’s projected benefit obligations were increased by $5,725 and payments of $3,821 were made to retired directors, resulting in an accumulated liability of $46,599 as of October 31, 2002.

        The Board of Directors has adopted a deferred compensation plan for independent directors that enables directors 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 invested for the Board of Directors in shares of one or more Oppenheimer funds selected by the director. The amount paid to the Board of Directors under the plan will be determined based upon the performance of the selected funds. Deferral of directors’ 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.

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

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.

        During the fiscal year ended October 31, 2002, the Fund did not utilize any capital loss carryforward.

25 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued As of October 31, 2002, the Fund had available for federal income tax purposes unused capital loss carryforwards as follows: Expiring
2008 $ 9,239,162 2009 5,386,519 2010 27,168,039
Total $41,793,720 =========== --------------------------------------------------------------------------------

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 tax character of distributions paid during the year ended October 31, 2002 and year ended October 31, 2001 was as follows:

Year Ended Year Ended October 31, 2002 October 31, 2001 ------------------------------------------------------ Distributions paid from: Ordinary income $139,084 $1,953,426 Long-term capital gain -- -- Return of capital -- -- -------------------------- Total $139,084 $1,953,426 ==========================

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

Undistributed net investment income $ 177,268 Accumulated net realized loss (44,667,813) Net unrealized appreciation 3,453,968 ------------ Total $(41,036,577) ============ --------------------------------------------------------------------------------

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. 26 | OPPENHEIMER VALUE FUND -------------------------------------------------------------------------------- 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 Capital Stock

The Fund has authorized 600 million shares of $0.001 par value capital stock. Transactions in shares of capital stock were as follows: 


                         Year Ended October 31, 2002   Year Ended October 31, 2001 1
                                Shares        Amount         Shares         Amount
-----------------------------------------------------------------------------------
Class A

Sold                         1,908,060  $ 31,560,410      2,495,305    $43,546,414
Dividends and/or
distributions reinvested         7,395       129,115        110,601      1,770,750
Redeemed                    (2,777,138)  (45,899,702)    (2,809,551)   (48,584,937)
                            -------------------------------------------------------
Net decrease                  (861,683) $(14,210,177)      (203,645)   $(3,267,773)
                            =======================================================

-----------------------------------------------------------------------------------
Class B
Sold                           849,996  $ 13,980,805      1,321,460    $23,155,557
Dividends and/or
distributions reinvested            --            --          5,009         80,552
Redeemed                    (1,241,241)  (20,131,407)    (1,487,290)   (25,475,596)
                            -------------------------------------------------------
Net decrease                  (391,245) $ (6,150,602)      (160,821)   $(2,239,487)
                            =======================================================

-----------------------------------------------------------------------------------
Class C
Sold                           508,463  $  8,150,546        535,330    $ 9,404,405
Dividends and/or
distributions reinvested            --            --          1,085         17,218
Redeemed                      (245,484)   (3,850,883)      (454,363)    (7,633,807)
                            -------------------------------------------------------
Net increase                   262,979  $  4,299,663         82,052    $ 1,787,816
                            =======================================================

-----------------------------------------------------------------------------------
Class N
Sold                            91,314  $  1,447,129            763    $    13,364
Dividends and/or
distributions reinvested             2            40             --             --
Redeemed                       (10,222)     (160,590)            --             (4)
                            -------------------------------------------------------
Net increase                    81,094  $  1,286,579            763    $    13,360
                            =======================================================

-----------------------------------------------------------------------------------
Class Y
Sold                            46,172  $    771,487         42,200    $   765,652
Dividends and/or
distributions reinvested           201         3,570             --             --
Redeemed                       (13,958)     (211,425)        (2,892)       (49,525)
                            -------------------------------------------------------
Net increase                    32,415  $    563,632         39,308    $   716,127
                            =======================================================
1. For the year ended October 31, 2001, for Class A, B, C and Y shares and for the period from March 1, 2001 (inception of offering) to October 31, 2001, for Class N shares. 27 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued -------------------------------------------------------------------------------- 3. Purchases and Sales of Securities

The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended October 31, 2002, were $334,479,987 and $333,369,595, respectively.

As of October 31, 2002, unrealized appreciation (depreciation) based on cost of securities for federal income tax purposes of $202,691,968 was composed of:

Gross unrealized appreciation $ 16,413,941 Gross unrealized depreciation (15,834,106) ------------ Net unrealized appreciation $ 579,835 ============

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 0.625% of the first $300 million of average annual net assets of the Fund, 0.50% of the next $100 million, and 0.45% of average annual net assets in excess of $400 million. -------------------------------------------------------------------------------- Accounting Fees. The Manager acts as the accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably incurred. -------------------------------------------------------------------------------- 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. Beginning November 1, 2002, transfer agent fees for Class Y shares are limited to 0.35% of the Fund’s average daily net assets. 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. 28 | OPPENHEIMER VALUE 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
---------------------------------------------------------------------------------------------------------

 October 31, 2002  $328,773        $140,953        $24,890       $321,368        $55,902         $13,817
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 ------------------------------------------------------------------------------ October 31, 2002 $5,940 $147,720 $2,050 $782 --------------------------------------------------------------------------------

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 October 31, 2002, payments under the Class A Plan totaled $405,280, all of which were paid by the Distributor to recipients, and included $119,416 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 October 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 $562,278 $439,448 $2,197,410 4.64% Class C Plan 129,685 34,048 374,036 2.78 Class N Plan 2,521 2,218 20,528 1.71 29 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued ================================================================================ 5. Option Activity

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

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

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

        Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities.

Realized gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity

for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist.

Written option activity for the year ended October 31, 2002 was as follows:

Call Options ------------------------ Number of Amount of Contracts Premiums ------------------------------------------------------------------- Options outstanding as of October 31, 2001 2,600 $ 267,991 Options written 9,176 1,216,250 Options closed or expired (11,312) (1,373,347) Options exercised (450) (110,152) ------------------------ Options outstanding as of October 31, 2002 14 $ 742 ======================== ================================================================================ 6. Bank Borrowings

Effective November 13, 2001 the Fund no longer participated in an agreement with other Oppenheimer funds in an unsecured line of credit with a bank. The Fund may borrow from a bank for temporary or emergency purposes, provided asset coverage for borrowings exceeds 300%.

        The Fund had no borrowings outstanding during the year ended October 31, 2002.

30 | OPPENHEIMER VALUE FUND A-5 Appendix A RATINGS DEFINITIONS ------------------- Below are summaries of the rating definitions used by the nationally-recognized rating agencies listed below. Those ratings represent the opinion of the agency as to the credit quality of issues that they rate. The summaries below are based upon publicly-available information provided by the rating organizations. Moody's Investors Service, Inc. ------------------------------------------------------------------------------ Long-Term (Taxable) Bond Ratings Aaa: Bonds rated "Aaa" are judged to be the best quality. They carry the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, the changes that can be expected are most unlikely to impair the fundamentally strong position of such issues. Aa: Bonds rated "Aa" are judged to be of high quality by all standards. Together with the "Aaa" group, they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as with "Aaa" securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than that of "Aaa" securities. A: Bonds rated "A" possess many favorable investment attributes and are to be considered as upper-medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment some time in the future. Baa: Bonds rated "Baa" are considered medium-grade obligations; that is, they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and have speculative characteristics as well. Ba: Bonds rated "Ba" are judged to have speculative elements. Their future cannot be considered well-assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B: Bonds rated "B" generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa: Bonds rated "Caa" are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca: Bonds rated "Ca" represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C: Bonds rated "C" are the lowest class of rated bonds and can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from "Aa" through "Caa." The modifier "1" indicates that the obligation ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in the lower end of that generic rating category. Advanced refunded issues that are secured by certain assets are identified with a # symbol. Short-Term Ratings - Taxable Debt These ratings apply to the ability of issuers to honor senior debt obligations having an original maturity not exceeding one year: Prime-1: Issuer has a superior ability for repayment of senior short-term debt obligations. Prime-2: Issuer has a strong ability for repayment of senior short-term debt obligations. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Prime-3: Issuer has an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained. Not Prime: Issuer does not fall within any Prime rating category. Standard & Poor's Rating Services ------------------------------------------------------------------------------ Long-Term Issue Credit Ratings AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. AA: Bonds rated "AA" differ from the highest rated obligations only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. A: Bonds rated "A" are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong. BBB: Bonds rated "BBB" exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. BB, B, CCC, CC, and C Bonds rated "BB", "B", "CCC", "CC" and "C" are regarded as having significant speculative characteristics. "BB" indicates the least degree of speculation, and "C" the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. BB: Bonds rated "BB" are less vulnerable to nonpayment than other speculative issues. However, these face major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. B: Bonds rated "B" are more vulnerable to nonpayment than obligations rated "BB", but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation. CCC: Bonds rated "CCC" are currently vulnerable to nonpayment, and are dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. CC: Bonds rated "CC" are currently highly vulnerable to nonpayment. C: A subordinated debt or preferred stock obligation rated "C" is currently highly vulnerable to nonpayment. The "C" rating may be used to cover a situation where a bankruptcy petition has been filed or similar action has been taken, but payments on this obligation are being continued. A "C" also will be assigned to a preferred stock issue in arrears on dividends or sinking fund payments, but that is currently paying. D: Bonds rated "D" are in default. Payments on the obligation are not being made on the date due even if the applicable grace period has not expired, unless Standard and Poor's believes that such payments will be made during such grace period. The "D" rating will also be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. The "r" symbol is attached to the ratings of instruments with significant noncredit risks. Short-Term Issue Credit Ratings A-1: Obligation is rated in the highest category. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, a plus (+) sign designation indicates the obligor's capacity to meet its financial obligation is extremely strong. A-2: Obligation is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. A-3: Obligation exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. B: Obligation is regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation. However, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. C: Obligation is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. D: Obligation is in payment default. Payments on the obligation have not been made on the due date even if the applicable grace period has not expired, unless Standard and Poor's believes that such payments will be made during such grace period. The "D" rating will also be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. Fitch, Inc. ------------------------------------------------------------------------------ International Long-Term Credit Ratings Investment Grade: AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of credit risk. They are assigned only in the case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. AA: Very High Credit Quality. "AA" ratings denote a very low expectation of credit risk. They indicate a very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. A: High Credit Quality. "A" ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category. Speculative Grade: BB: Speculative. "BB" ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time. However, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade. B: Highly Speculative. "B" ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met. However, capacity for continued payment is contingent upon a sustained, favorable business and economic environment. CCC, CC C: High Default Risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. A "CC" rating indicates that default of some kind appears probable. "C" ratings signal imminent default. DDD, DD, and D: Default. The ratings of obligations in this category are based on their prospects for achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be estimated with any precision, the following serve as general guidelines. "DDD" obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest. "DD" indicates potential recoveries in the range of 50%-90%, and "D" the lowest recovery potential, i.e., below 50%. Entities rated in this category have defaulted on some or all of their obligations. Entities rated "DDD" have the highest prospect for resumption of performance or continued operation with or without a formal reorganization process. Entities rated "DD" and "D" are generally undergoing a formal reorganization or liquidation process; those rated "DD" are likely to satisfy a higher portion of their outstanding obligations, while entities rated "D" have a poor prospect for repaying all obligations. Plus (+) and minus (-) signs may be appended to a rating symbol to denote relative status within the major rating categories. Plus and minus signs are not added to the "AAA" category or to categories below "CCC," nor to short-term ratings other than "F1" (see below). International Short-Term Credit Ratings F1: Highest credit quality. Strongest capacity for timely payment of financial commitments. May have an added "+" to denote any exceptionally strong credit feature. F2: Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of higher ratings. F3: Fair credit quality. Capacity for timely payment of financial commitments is adequate. However, near-term adverse changes could result in a reduction to non-investment grade. B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions. C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment. D: Default. Denotes actual or imminent payment default. (i) B-1 Appendix B Industry Classification ----------------------- Aerospace & Defense Household Durables Air Freight & Couriers Household Products Airlines Industrial Conglomerates Auto Components Insurance Automobiles Internet & Catalog Retail Banks Internet Software & Services Beverages Information Technology Consulting & Services Biotechnology Leisure Equipment & Products Building Products Machinery Chemicals Marine Commercial Services & Supplies Media Communications Equipment Metals & Mining Computers & Peripherals Multiline Retail Construction & Engineering Multi-Utilities Construction Materials Office Electronics Containers & Packaging Oil & Gas Distributors Paper & Forest Products Diversified Financials Personal Products Diversified Telecommunication Pharmaceuticals Services Electric Utilities Real Estate Electrical Equipment Road & Rail Electronic Equipment & Instruments Semiconductor Equipment & Products Energy Equipment & Services Software Food & Drug Retailing Specialty Retail Food Products Textiles & Apparel Gas Utilities Tobacco Health Care Equipment & Supplies Trading Companies & Distributors Health Care Providers & Services Transportation Infrastructure Hotels Restaurants & Leisure Water Utilities Wireless Telecommunication Services C-11 Appendix C OppenheimerFunds Special Sales Charge Arrangements and Waivers -------------------------------------------------------------- In certain cases, the initial sales charge that applies to purchases of Class A shares4 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.5 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 plans6 4) Group Retirement Plans7 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."8 This waiver provision applies to: |_| Purchases of Class A shares aggregating $1 million or more. |_| Purchases of Class A shares by a Retirement Plan that was permitted to purchase such shares at net asset value but subject to a contingent deferred sales charge prior to March 1, 2001. That included plans (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares costing $500,000 or more, 2) had at the time of purchase 100 or more eligible employees or total plan assets of $500,000 or more, or 3) certified to the Distributor that it projects to have annual plan purchases of $200,000 or more. |_| Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the purchases are made: 1) through a broker, dealer, bank or registered investment adviser that has made special arrangements with the Distributor for those purchases, or 2) by a direct rollover of a distribution from a qualified Retirement Plan if the administrator of that Plan has made special arrangements with the Distributor for those purchases. |_| Purchases of Class A shares by Retirement Plans that have any of the following record-keeping arrangements: 1) The record keeping is performed by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the Retirement Plan. On the date the plan sponsor signs the record-keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of its assets invested in (a) mutual funds, other than those advised or managed by Merrill Lynch Investment Management, L.P. ("MLIM"), that are made available under a Service Agreement between Merrill Lynch and the mutual fund's principal underwriter or distributor, and (b) funds advised or managed by MLIM (the funds described in (a) and (b) are referred to as "Applicable Investments"). 2) The record keeping for the Retirement Plan is performed on a daily valuation basis by a record keeper whose services are provided under a contract or arrangement between the Retirement Plan and Merrill Lynch. On the date the plan sponsor signs the record keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of its assets (excluding assets invested in money market funds) invested in Applicable Investments. 3) The record keeping for a Retirement Plan is handled under a service agreement with Merrill Lynch and on the date the plan sponsor signs that agreement, the Plan has 500 or more eligible employees (as determined by the Merrill Lynch plan conversion manager). II. Waivers of Class A Sales Charges of Oppenheimer Funds ------------------------------------------------------------------------------ A. Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers. Class A shares purchased by the following investors are not subject to any Class A sales charges (and no concessions are paid by the Distributor on such purchases): |_| The Manager or its affiliates. |_| Present or former officers, directors, trustees and employees (and their "immediate families") of the Fund, the Manager and its affiliates, and retirement plans established by them for their employees. The term "immediate family" refers to one's spouse, children, grandchildren, grandparents, parents, parents-in-law, brothers and sisters, sons- and daughters-in-law, a sibling's spouse, a spouse's siblings, aunts, uncles, nieces and nephews; relatives by virtue of a remarriage (step-children, step-parents, etc.) are included. |_| Registered management investment companies, or separate accounts of insurance companies having an agreement with the Manager or the Distributor for that purpose. |_| Dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their own accounts or for retirement plans for their employees. |_| Employees and registered representatives (and their spouses) of dealers or brokers described above or financial institutions that have entered into sales arrangements with such dealers or brokers (and which are identified as such to the Distributor) or with the Distributor. The purchaser must certify to the Distributor at the time of purchase that the purchase is for the purchaser's own account (or for the benefit of such employee's spouse or minor children). |_| Dealers, brokers, banks or registered investment advisors that have entered into an agreement with the Distributor providing specifically for the use of shares of the Fund in particular investment products made available to their clients. Those clients may be charged a transaction fee by their dealer, broker, bank or advisor for the purchase or sale of Fund shares. |_| Investment advisors and financial planners who have entered into an agreement for this purpose with the Distributor and who charge an advisory, consulting or other fee for their services and buy shares for their own accounts or the accounts of their clients. |_| "Rabbi trusts" that buy shares for their own accounts, if the purchases are made through a broker or agent or other financial intermediary that has made special arrangements with the Distributor for those purchases. |_| Clients of investment advisors or financial planners (that have entered into an agreement for this purpose with the Distributor) who buy shares for their own accounts may also purchase shares without sales charge but only if their accounts are linked to a master account of their investment advisor or financial planner on the books and records of the broker, agent or financial intermediary with which the Distributor has made such special arrangements . Each of these investors may be charged a fee by the broker, agent or financial intermediary for purchasing shares. |_| Directors, trustees, officers or full-time employees of OpCap Advisors or its affiliates, their relatives or any trust, pension, profit sharing or other benefit plan which beneficially owns shares for those persons. |_| Accounts for which Oppenheimer Capital (or its successor) is the investment advisor (the Distributor must be advised of this arrangement) and persons who are directors or trustees of the company or trust which is the beneficial owner of such accounts. |_| A unit investment trust that has entered into an appropriate agreement with the Distributor. |_| Dealers, brokers, banks, or registered investment advisers that have entered into an agreement with the Distributor to sell shares to defined contribution employee retirement plans for which the dealer, broker or investment adviser provides administration services. |-| Retirement Plans and deferred compensation plans and trusts used to fund those plans (including, for example, plans qualified or created under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code), in each case if those purchases are made through a broker, agent or other financial intermediary that has made special arrangements with the Distributor for those purchases. |_| A TRAC-2000 401(k) plan (sponsored by the former Quest for Value Advisors) whose Class B or Class C shares of a Former Quest for Value Fund were exchanged for Class A shares of that Fund due to the termination of the Class B and Class C TRAC-2000 program on November 24, 1995. |_| A qualified Retirement Plan that had agreed with the former Quest for Value Advisors to purchase shares of any of the Former Quest for Value Funds at net asset value, with such shares to be held through DCXchange, a sub-transfer agency mutual fund clearinghouse, if that arrangement was consummated and share purchases commenced by December 31, 1996. B. Waivers of Initial and Contingent Deferred Sales Charges in Certain Transactions. Class A shares issued or purchased in the following transactions are not subject to sales charges (and no concessions are paid by the Distributor on such purchases): |_| Shares issued in plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the Fund is a party. |_| Shares purchased by the reinvestment of dividends or other distributions reinvested from the Fund or other Oppenheimer funds (other than Oppenheimer Cash Reserves) or unit investment trusts for which reinvestment arrangements have been made with the Distributor. |_| Shares purchased 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.9 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.10 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. |_| Distributions11 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.12 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.13 9) On account of the participant's separation from service.14 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. -------------------------------------------------------------------------------- Initial Sales Initial Sales Charge Concession as Number of Eligible Charge as a % of as a % of Net Amount % of Offering Employees or Members Offering Price Invested Price -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 9 or Fewer 2.50% 2.56% 2.00% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- At least 10 but not 2.00% 2.04% 1.60% more than 49 -------------------------------------------------------------------------------- ------------------------------------------------------------------------------ For purchases by Associations having 50 or more eligible employees or members, there is no initial sales charge on purchases of Class A shares, but those shares are subject to the Class A contingent deferred sales charge described in the applicable fund's Prospectus. Purchases made under this arrangement qualify for the lower of either the sales charge rate in the table based on the number of members of an Association, or the sales charge rate that applies under the Right of Accumulation described in the applicable fund's Prospectus and Statement of Additional Information. Individuals who qualify under this arrangement for reduced sales charge rates as members of Associations also may purchase shares for their individual or custodial accounts at these reduced sales charge rates, upon request to the Distributor. |X| Waiver of Class A Sales Charges for Certain Shareholders. Class A shares purchased by the following investors are not subject to any Class A initial or contingent deferred sales charges: o Shareholders who were shareholders of the AMA Family of Funds on February 28, 1991 and who acquired shares of any of the Former Quest for Value Funds by merger of a portfolio of the AMA Family of Funds. o Shareholders who acquired shares of any Former Quest for Value Fund by merger of any of the portfolios of the Unified Funds. |X| Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions. The Class A contingent deferred sales charge will not apply to redemptions of Class A shares purchased by the following investors who were shareholders of any Former Quest for Value Fund: Investors who purchased Class A shares from a dealer that is or was not permitted to receive a sales load or redemption fee imposed on a shareholder with whom that dealer has a fiduciary relationship, under the Employee Retirement Income Security Act of 1974 and regulations adopted under that law. B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers. |X| Waivers for Redemptions of Shares Purchased Prior to March 6, 1995. In the following cases, the contingent deferred sales charge will be waived for redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The shares must have been acquired by the merger of a Former Quest for Value Fund into the fund or by exchange from an Oppenheimer fund that was a Former Quest for Value Fund or into which such fund merged. Those shares must have been purchased prior to March 6, 1995 in connection with: o withdrawals under an automatic withdrawal plan holding only either Class B or Class C shares if the annual withdrawal does not exceed 10% of the initial value of the account value, adjusted annually, and o liquidation of a shareholder's account if the aggregate net asset value of shares held in the account is less than the required minimum value of such accounts. |X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but Prior to November 24, 1995. In the following cases, the contingent deferred sales charge will be waived for redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The shares must have been acquired by the merger of a Former Quest for Value Fund into the fund or by exchange from an Oppenheimer fund that was a Former Quest For Value Fund or into which such Former Quest for Value Fund merged. Those shares must have been purchased on or after March 6, 1995, but prior to November 24, 1995: o redemptions following the death or disability of the shareholder(s) (as evidenced by a determination of total disability by the U.S. Social Security Administration); o withdrawals under an automatic withdrawal plan (but only for Class B or Class C shares) where the annual withdrawals do not exceed 10% of the initial value of the account value; adjusted annually, and o liquidation of a shareholder's account if the aggregate net asset value of shares held in the account is less than the required minimum account value. A shareholder's account will be credited with the amount of any contingent deferred sales charge paid on the redemption of any Class A, Class B or Class C shares of the Oppenheimer fund described in this section if the proceeds are invested in the same Class of shares in that fund or another Oppenheimer fund within 90 days after redemption. V. Special Sales Charge Arrangements for Shareholders of Certain Oppenheimer Funds Who Were Shareholders of Connecticut Mutual Investment Accounts, Inc. --------------------------------------------------------------------------- The initial and contingent deferred sale charge rates and waivers for Class A and Class B shares described in the respective Prospectus (or this Appendix) of the following Oppenheimer funds (each is referred to as a "Fund" in this section): Oppenheimer U. S. Government Trust, Oppenheimer Bond Fund, Oppenheimer Value Fund and Oppenheimer Disciplined Allocation Fund are modified as described below for those Fund shareholders who were shareholders of the following funds (referred to as the "Former Connecticut Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the investment adviser to the Former Connecticut Mutual Funds: Connecticut Mutual Liquid Account Connecticut Mutual Total Return Account Connecticut Mutual Government Securities Account CMIA LifeSpan Capital Appreciation Account Connecticut Mutual Income Account CMIA LifeSpan Balanced Account Connecticut Mutual Growth Account CMIA Diversified Income Account A. Prior Class A CDSC and Class A Sales Charge Waivers. |X| Class A Contingent Deferred Sales Charge. Certain shareholders of a Fund and the other Former Connecticut Mutual Funds are entitled to continue to make additional purchases of Class A shares at net asset value without a Class A initial sales charge, but subject to the Class A contingent deferred sales charge that was in effect prior to March 18, 1996 (the "prior Class A CDSC"). Under the prior Class A CDSC, if any of those shares are redeemed within one year of purchase, they will be assessed a 1% contingent deferred sales charge on an amount equal to the current market value or the original purchase price of the shares sold, whichever is smaller (in such redemptions, any shares not subject to the prior Class A CDSC will be redeemed first). Those shareholders who are eligible for the prior Class A CDSC are: 1) persons whose purchases of Class A shares of a Fund and other Former Connecticut Mutual Funds were $500,000 prior to March 18, 1996, as a result of direct purchases or purchases pursuant to the Fund's policies on Combined Purchases or Rights of Accumulation, who still hold those shares in that Fund or other Former Connecticut Mutual Funds, and 2) persons whose intended purchases under a Statement of Intention entered into prior to March 18, 1996, with the former general distributor of the Former Connecticut Mutual Funds to purchase shares valued at $500,000 or more over a 13-month period entitled those persons to purchase shares at net asset value without being subject to the Class A initial sales charge Any of the Class A shares of a Fund and the other Former Connecticut Mutual Funds that were purchased at net asset value prior to March 18, 1996, remain subject to the prior Class A CDSC, or if any additional shares are purchased by those shareholders at net asset value pursuant to this arrangement they will be subject to the prior Class A CDSC. |X| Class A Sales Charge Waivers. Additional Class A shares of a Fund may be purchased without a sales charge, by a person who was in one (or more) of the categories below and acquired Class A shares prior to March 18, 1996, and still holds Class A shares: 1) any purchaser, provided the total initial amount invested in the Fund or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more, including investments made pursuant to the Combined Purchases, Statement of Intention and Rights of Accumulation features available at the time of the initial purchase and such investment is still held in one or more of the Former Connecticut Mutual Funds or a Fund into which such Fund merged; 2) any participant in a qualified plan, provided that the total initial amount invested by the plan in the Fund or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more; 3) Directors of the Fund or any one or more of the Former Connecticut Mutual Funds and members of their immediate families; 4) employee benefit plans sponsored by Connecticut Mutual Financial Services, L.L.C. ("CMFS"), the prior distributor of the Former Connecticut Mutual Funds, and its affiliated companies; 5) one or more members of a group of at least 1,000 persons (and persons who are retirees from such group) engaged in a common business, profession, civic or charitable endeavor or other activity, and the spouses and minor dependent children of such persons, pursuant to a marketing program between CMFS and such group; and 6) an institution acting as a fiduciary on behalf of an individual or individuals, if such institution was directly compensated by the individual(s) for recommending the purchase of the shares of the Fund or any one or more of the Former Connecticut Mutual Funds, provided the institution had an agreement with CMFS. Purchases of Class A shares made pursuant to (1) and (2) above may be subject to the Class A CDSC of the Former Connecticut Mutual Funds described above. Additionally, Class A shares of a Fund may be purchased without a sales charge by any holder of a variable annuity contract issued in New York State by Connecticut Mutual Life Insurance Company through the Panorama Separate Account which is beyond the applicable surrender charge period and which was used to fund a qualified plan, if that holder exchanges the variable annuity contract proceeds to buy Class A shares of the Fund. B. Class A and Class B Contingent Deferred Sales Charge Waivers. In addition to the waivers set forth in the Prospectus and in this Appendix, above, the contingent deferred sales charge will be waived for redemptions of Class A and Class B shares of a Fund and exchanges of Class A or Class B shares of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund provided that the Class A or Class B shares of the Fund to be redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund. Additionally, the shares of such Former Connecticut Mutual Fund must have been purchased prior to March 18, 1996: 1) by the estate of a deceased shareholder; 2) upon the disability of a shareholder, as defined in Section 72(m)(7) of the Internal Revenue Code; 3) for retirement distributions (or loans) to participants or beneficiaries from retirement plans qualified under Sections 401(a) or 403(b)(7)of the Code, or from IRAs, deferred compensation plans created under Section 457 of the Code, or other employee benefit plans; 4) as tax-free returns of excess contributions to such retirement or employee benefit plans; 5) in whole or in part, in connection with shares sold to any state, county, or city, or any instrumentality, department, authority, or agency thereof, that is prohibited by applicable investment laws from paying a sales charge or concession in connection with the purchase of shares of any registered investment management company; 6) in connection with the redemption of shares of the Fund due to a combination with another investment company by virtue of a merger, acquisition or similar reorganization transaction; 7) in connection with the Fund's right to involuntarily redeem or liquidate the Fund; 8) in connection with automatic redemptions of Class A shares and Class B shares in certain retirement plan accounts pursuant to an Automatic Withdrawal Plan but limited to no more than 12% of the original value annually; or 9) as involuntary redemptions of shares by operation of law, or under procedures set forth in the Fund's Articles of Incorporation, or as adopted by the Board of Directors of the Fund. VI. Special Reduced Sales Charge for Former Shareholders of Advance America Funds, Inc. ------------------------------------------------------------------------------ Shareholders of Oppenheimer 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. |X| Oppenheimer Value Fund Internet Website: www.oppenheimerfunds.com ------------------------ Investment Advisor 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 Citibank, N.A. 111 Wall Street New York, New York 10005 Independent Auditors KPMG LLP 707 Seventeenth Street Denver, Colorado 80202 Legal Counsel Mayer, Brown, Rowe & Maw 1675 Broadway New York, New York 10019 1234 PX375.002.1202 (Revised 01.03) -------- 1 Currently, under the 1940 Act, a mutual fund may borrow only from banks and the maximum amount it may borrow is up to one-third of its total assets (including the amount borrowed). In addition, the Fund may borrow from affiliated funds as described above. A fund may borrow up to 5% of its total assets for temporary purposes from any person. Under the 1940 Act, there is a rebuttable presumption that a loan is temporary if it is repaid within 60 days and not extended or renewed. 2 Mr. Motley was elected as Trustee to the Board I Funds effective October 10, 2002. 3. In accordance with Rule 12b-1 of the Investment Company Act, the term "Independent Directors" in this Statement of Additional Information refers to those Directors who are not "interested persons" of the Fund (or its parent corporation) and who do not have any direct or indirect financial interest in the operation of the distribution plan or any agreement under the plan. 4 Certain waivers also apply to Class M shares of Oppenheimer Convertible Securities Fund. 5 In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered closed-end fund, references to contingent deferred sales charges mean the Fund's Early Withdrawal Charges and references to "redemptions" mean "repurchases" of shares. 6 An "employee benefit plan" means any plan or arrangement, whether or not it is "qualified" under the Internal Revenue Code, under which Class N shares of an Oppenheimer fund or funds are purchased by a fiduciary or other administrator for the account of participants who are employees of a single employer or of affiliated employers. These may include, for example, medical savings accounts, payroll deduction plans or similar plans. The fund accounts must be registered in the name of the fiduciary or administrator purchasing the shares for the benefit of participants in the plan. 7 The term "Group Retirement Plan" means any qualified or non-qualified retirement plan for employees of a corporation or sole proprietorship, members and employees of a partnership or association or other organized group of persons (the members of which may include other groups), if the group has made special arrangements with the Distributor and all members of the group participating in (or who are eligible to participate in) the plan purchase shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial institution designated by the group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans other than plans for public school employees. The term "Group Retirement Plan" also includes qualified retirement plans and non-qualified deferred compensation plans and IRAs that purchase shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial institution that has made special arrangements with the Distributor. 8 However, that concession will not be paid on purchases of shares in amounts of $1 million or more (including any right of accumulation) by a Retirement Plan that pays for the purchase with the redemption proceeds of Class C shares of one or more Oppenheimer funds held by the Plan for more than one year. 9 This provision does not apply to IRAs. 10 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs. 11 The distribution must be requested prior to Plan termination or the elimination of the Oppenheimer funds as an investment option under the Plan. 12 This provision does not apply to IRAs. 13 This provision does not apply to loans from 403(b)(7) custodial plans and loans from the OppenheimerFunds-sponsored Single K retirement plan. 14 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs. STATEMENT OF INVESTMENTS May 31, 2003 / Unaudited Market Value Shares See Note 1 -------------------------------------------------------------------------------- Common Stocks--92.8% -------------------------------------------------------------------------------- Consumer Discretionary--21.1% -------------------------------------------------------------------------------- Hotels, Restaurants & Leisure--1.7% Extended Stay America, Inc. 1 8,500 $ 104,550 -------------------------------------------------------------------------------- McDonald's Corp. 1 17,100 320,283 ----------- 424,833 -------------------------------------------------------------------------------- Household Durables--0.6% Fleetwood Enterprises, Inc. 1 11,300 86,106 -------------------------------------------------------------------------------- Sony Corp. 2,200 58,492 ----------- 144,598 -------------------------------------------------------------------------------- Leisure Equipment & Products--2.6% Eastman Kodak Co. 7,500 229,800 -------------------------------------------------------------------------------- Hasbro, Inc. 25,900 414,659 ----------- 644,459 -------------------------------------------------------------------------------- Media--12.2% AOL Time Warner, Inc. 1 32,400 493,128 -------------------------------------------------------------------------------- Comcast Corp., Cl. A Special, Non-Vtg. 1 20,400 587,928 -------------------------------------------------------------------------------- Disney (Walt) Co. 18,500 363,525 -------------------------------------------------------------------------------- Liberty Media Corp., Cl. A 1 51,000 596,701 -------------------------------------------------------------------------------- Metro-Goldwyn- Mayer, Inc. 1 21,400 267,072 -------------------------------------------------------------------------------- News Corp. Ltd. (The), Sponsored ADR 9,700 298,469 -------------------------------------------------------------------------------- News Corp. Ltd. (The), Sponsored ADR, Preference 15,700 400,507 ----------- 3,007,330 -------------------------------------------------------------------------------- Multiline Retail--2.4% Costco Wholesale Corp. 1 15,900 589,095 -------------------------------------------------------------------------------- Specialty Retail--1.6% Gap, Inc. (The) 6,800 115,600 -------------------------------------------------------------------------------- Home Depot, Inc. 8,300 269,667 ----------- 385,267 Market Value Shares See Note 1 -------------------------------------------------------------------------------- Consumer Staples--1.2% -------------------------------------------------------------------------------- Food & Staples Retailing--0.7% Safeway, Inc. 1 9,800 $184,632 -------------------------------------------------------------------------------- Food Products--0.5% Archer-Daniels- Midland Co. 9,700 116,109 -------------------------------------------------------------------------------- Energy--4.7% -------------------------------------------------------------------------------- Energy Equipment & Services--1.6% GlobalSantaFe Corp. 7,700 191,576 -------------------------------------------------------------------------------- Schlumberger Ltd. 4,100 199,342 ----------- 390,918 -------------------------------------------------------------------------------- Oil & Gas--3.1% Amerada Hess Corp. 1,600 78,400 -------------------------------------------------------------------------------- Anadarko Petroleum Corp. 5,500 271,040 -------------------------------------------------------------------------------- ChevronTexaco Corp. 6,000 425,640 ----------- 775,080 -------------------------------------------------------------------------------- Financials--13.7% -------------------------------------------------------------------------------- Commercial Banks--0.9% Bank One Corp. 5,900 220,424 -------------------------------------------------------------------------------- Diversified Financial Services--5.1% American Express Co. 10,600 441,596 -------------------------------------------------------------------------------- Countrywide Financial Corp. 8,200 603,930 -------------------------------------------------------------------------------- State Street Corp. 5,700 218,367 ----------- 1,263,893 -------------------------------------------------------------------------------- Insurance--7.7% AMBAC Financial Group, Inc. 5,400 360,234 -------------------------------------------------------------------------------- Chubb Corp. 6,000 384,180 -------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. 5,000 233,200 -------------------------------------------------------------------------------- MBIA, Inc. 4,600 230,230 -------------------------------------------------------------------------------- MGIC Investment Corp. 6,000 324,120 -------------------------------------------------------------------------------- Radian Group, Inc. 6,500 261,755 -------------------------------------------------------------------------------- UnumProvident Corp. 8,000 103,200 ----------- 1,896,919 4 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND Market Value Shares See Note 1 -------------------------------------------------------------------------------- Health Care--13.9% -------------------------------------------------------------------------------- Biotechnology--2.7% Aphton Corp. 1 8,600 $60,200 -------------------------------------------------------------------------------- Enzo Biochem, Inc. 1 13,000 330,460 -------------------------------------------------------------------------------- Wyeth 6,500 285,025 ----------- 675,685 -------------------------------------------------------------------------------- Health Care Providers & Services--0.7% IMS Health, Inc. 4,800 85,632 -------------------------------------------------------------------------------- McKesson Corp. 1,500 45,480 -------------------------------------------------------------------------------- NDCHealth Corp. 1,900 38,912 ----------- 170,024 -------------------------------------------------------------------------------- Pharmaceuticals--10.5% Abbott Laboratories 11,000 490,050 -------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 17,000 435,200 -------------------------------------------------------------------------------- Elan Corp. plc, ADR 1 55,000 336,600 -------------------------------------------------------------------------------- Johnson & Johnson 5,400 293,490 -------------------------------------------------------------------------------- Merck & Co., Inc. 3,900 216,762 -------------------------------------------------------------------------------- Novartis AG, ADR 12,700 508,000 -------------------------------------------------------------------------------- Pfizer, Inc. 9,500 294,690 ----------- 2,574,792 -------------------------------------------------------------------------------- Industrials--6.5% -------------------------------------------------------------------------------- Aerospace & Defense--2.5% Goodrich Corp. 5,700 104,139 -------------------------------------------------------------------------------- Honeywell International, Inc. 10,000 262,000 -------------------------------------------------------------------------------- Raytheon Co. 7,700 246,708 ----------- 612,847 -------------------------------------------------------------------------------- Commercial Services & Supplies--2.4% Sabre Holdings Corp. 6,800 168,164 -------------------------------------------------------------------------------- Waste Management, Inc. 1 17,100 435,537 ----------- 603,701 -------------------------------------------------------------------------------- Machinery--1.6% Caterpillar, Inc. 2,400 125,160 -------------------------------------------------------------------------------- Deere & Co. 2,800 122,276 -------------------------------------------------------------------------------- Ingersoll-Rand Co., Cl. A 3,100 135,780 ----------- 383,216 Market Value Shares See Note 1 -------------------------------------------------------------------------------- Information Technology--21.0% -------------------------------------------------------------------------------- Communications Equipment--6.7% 3Com Corp. 1 84,000 $411,600 -------------------------------------------------------------------------------- Lucent Technologies, Inc. 1 131,300 290,173 -------------------------------------------------------------------------------- Motorola, Inc. 35,000 298,200 -------------------------------------------------------------------------------- Nokia Corp., Sponsored ADR, A Shares 20,900 377,036 -------------------------------------------------------------------------------- Telefonaktiebolaget LM Ericsson, Sponsored ADR 1 26,760 278,304 ----------- 1,655,313 -------------------------------------------------------------------------------- Computers & Peripherals--3.2% Electronics for Imaging, Inc. 1 8,000 158,960 -------------------------------------------------------------------------------- Hewlett-Packard Co. 16,300 317,850 -------------------------------------------------------------------------------- Maxtor Corp. 1 40,000 300,800 ----------- 777,610 -------------------------------------------------------------------------------- Electronic Equipment & Instruments--2.8% Agilent Technologies, Inc. 1 15,900 288,267 -------------------------------------------------------------------------------- Solectron Corp. 1 100,000 400,000 ----------- 688,267 -------------------------------------------------------------------------------- Internet Software & Services--1.3% RealNetworks, Inc. 1 40,000 318,000 -------------------------------------------------------------------------------- IT Services--1.6% Unisys Corp. 1 35,000 395,150 -------------------------------------------------------------------------------- Office Electronics--0.1% Ikon Office Solutions, Inc. 2,900 25,462 -------------------------------------------------------------------------------- Semiconductors & Semiconductor Equipment--3.6% Intel Corp. 14,000 291,760 -------------------------------------------------------------------------------- Lattice Semiconductor Corp. 1 22,000 200,200 -------------------------------------------------------------------------------- LSI Logic Corp. 1 23,500 150,400 -------------------------------------------------------------------------------- Taiwan Semiconductor Manufacturing Co. Ltd., ADR 1 25,400 257,556 ----------- 899,916 5 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENT OF INVESTMENTS Unaudited / Continued Market Value Shares See Note 1 -------------------------------------------------------------------------------- Software--1.7% Micromuse, Inc. 1 26,000 $246,740 -------------------------------------------------------------------------------- Transaction Systems Architects, Inc., Cl. A 1 20,000 179,800 ----------- 426,540 -------------------------------------------------------------------------------- Materials--6.3% -------------------------------------------------------------------------------- Chemicals--2.8% Cabot Corp. 9,700 284,986 -------------------------------------------------------------------------------- Dow Chemical Co. 7,600 241,680 -------------------------------------------------------------------------------- Engelhard Corp. 4,700 118,205 -------------------------------------------------------------------------------- IMC Global, Inc. 5,900 51,566 ----------- 696,437 -------------------------------------------------------------------------------- Metals & Mining--2.0% Alcoa, Inc. 15,000 369,150 -------------------------------------------------------------------------------- Allegheny Technologies, Inc. 7,000 46,060 -------------------------------------------------------------------------------- Brush Engineered Materials, Inc. 1 5,300 42,718 -------------------------------------------------------------------------------- Newmont Mining Corp. (Holding Co.) 800 23,728 ----------- 481,656 -------------------------------------------------------------------------------- Paper & Forest Products--1.5% Weyerhaeuser Co. 7,300 367,774 -------------------------------------------------------------------------------- Telecommunication Services--4.4% -------------------------------------------------------------------------------- Diversified Telecommunication Services--2.6% Nippon Telegraph & Telephone Corp., ADR 13,000 234,780 -------------------------------------------------------------------------------- SBC Communications, Inc. 16,000 407,360 ----------- 642,140 Market Value Shares See Note 1 -------------------------------------------------------------------------------- Wireless Telecommunication Services--1.8% Vodafone Group plc, Sponsored ADR 1 20,900 $457,919 ----------- Total Common Stocks (Cost $23,033,052) 22,896,006 Principal Amount -------------------------------------------------------------------------------- Joint Repurchase Agreements--7.1% Undivided interest of 0.50% in joint repurchase agreement (Market Value $348,378,000) with Banc One Capital Markets, Inc., 1.23%, dated 5/30/03, to be repurchased at $1,738,178 on 6/2/03, collateralized by U.S. Treasury Bonds, 3.375%, 4/30/04, with a value of $355,526,284 (Cost $1,738,000) $1,738,000 1,738,000 -------------------------------------------------------------------------------- Total Investments, at Value (Cost $24,771,052) 99.9% 24,634,006 -------------------------------------------------------------------------------- Other Assets Net of Liabilities 0.1 30,725 --------------------- Net Assets 100.0% $24,664,731 ===================== Footnotes to Statement of Investments 1. Non-income producing security. See accompanying Notes to Financial Statements. 6 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited May 31, 2003 -------------------------------------------------------------------------------- Assets Investments, at value (cost $24,771,052)-- see accompanying statement $ 24,634,006 -------------------------------------------------------------------------------- Receivables and other assets: Investments sold 164,918 Interest and dividends 34,555 Shares of beneficial interest sold 29,468 Other 986 --------------- Total assets 24,863,933 -------------------------------------------------------------------------------- Liabilities Payables and other liabilities: Investments purchased 143,031 Shares of beneficial interest redeemed 29,218 Legal, auditing and other professional fees 9,215 Distribution and service plan fees 7,544 Transfer and shareholder servicing agent fees 6,490 Shareholder reports 2,141 Trustees' compensation 117 Other 1,446 --------------- Total liabilities 199,202 -------------------------------------------------------------------------------- Net Assets $24,664,731 =============== -------------------------------------------------------------------------------- Composition of Net Assets Paid-in capital $ 27,788,077 -------------------------------------------------------------------------------- Accumulated net investment loss (50,929) -------------------------------------------------------------------------------- Accumulated net realized loss on investment transactions (2,935,371) -------------------------------------------------------------------------------- Net unrealized depreciation on investments (137,046) --------------- Net Assets $24,664,731 =============== 7 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued -------------------------------------------------------------------------------- Net Asset Value Per Share Class A Shares:
  Net asset value and redemption price per share (based on net assets of $6,055,618 and 712,420 shares of beneficial interest outstanding) $8.50 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $9.02

-------------------------------------------------------------------------------- Class B Shares:
  Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $4,369,530 and 522,468 shares of beneficial interest outstanding) $8.36

-------------------------------------------------------------------------------- Class C Shares:
  Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $7,138,785 and 854,311 shares of beneficial interest outstanding) $8.36

-------------------------------------------------------------------------------- Class N Shares:
  Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $7,099,943 and 842,340 shares of beneficial interest outstanding) $8.43

-------------------------------------------------------------------------------- Class Y Shares:
  Net asset value, redemption price and offering price per share (based on net assets of $855 and 100 shares of beneficial interest outstanding) $8.55

See accompanying Notes to Financial Statements. 8 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENT OF OPERATIONS Unaudited For the Six Months Ended May 31, 2003 -------------------------------------------------------------------------------- Investment Income Dividends (net of foreign withholding taxes of $2,779) $ 147,906 -------------------------------------------------------------------------------- Interest 22,245 ----------- Total investment income 170,151 -------------------------------------------------------------------------------- Expenses Management fees 118,487 --------------------------------------------------------------------------------

        Distribution and service plan fees:

Class A 6,925 Class B 18,949 Class C 31,327 Class N 14,726 --------------------------------------------------------------------------------

        Transfer and shareholder servicing agent fees:

Class A 25,677 Class B 13,638 Class C 17,226 Class N 13,270 Class Y 9 -------------------------------------------------------------------------------- Shareholder reports 6,672 -------------------------------------------------------------------------------- Trustees' compensation 2,573 -------------------------------------------------------------------------------- Custodian fees and expenses 917 -------------------------------------------------------------------------------- Other 10,039 -----------
  Total expenses 280,435 Less voluntary reimbursement of expenses (24,006) Less voluntary waiver of transfer and shareholder servicing agent fees--Class A (17,051) Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (8,223) Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (6,627) Less voluntary waiver of transfer and shareholder servicing agent fees--Class N (3,443) Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y (5)

----------- Net expenses 221,080 -------------------------------------------------------------------------------- Net Investment Loss (50,929) -------------------------------------------------------------------------------- Realized and Unrealized Gain (Loss) Net realized loss on investments (466,178) -------------------------------------------------------------------------------- Net change in unrealized appreciation on investments 1,752,811 ----------- Net realized and unrealized gain 1,286,633 -------------------------------------------------------------------------------- Net Increase in Net Assets Resulting from Operations $1,235,704 =========== See accompanying Notes to Financial Statements. 9 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND STATEMENTS OF CHANGES IN NET ASSETS Six Months Year Ended Ended May 31, 2003 November 30, (Unaudited) 2002 -------------------------------------------------------------------------------- Operations Net investment loss $ (50,929) $ (180,398) -------------------------------------------------------------------------------- Net realized loss (466,178) (2,085,193) -------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 1,752,811 (1,552,271) -------------------------- Net increase (decrease) in net assets resulting from operations 1,235,704 (3,817,862) -------------------------------------------------------------------------------- Dividends and/or Distributions to Shareholders

        Dividends from net investment income:

Class A -- (82,700) Class B -- (14,442) Class C -- (28,229) Class N -- (8,740) Class Y -- (11) -------------------------------------------------------------------------------- Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A (970,582) 143,096 Class B (152,738) 2,802,559 Class C (69,501) 4,079,221 Class N 951,381 5,419,588 Class Y -- -- -------------------------------------------------------------------------------- Net Assets Total increase 994,264 8,492,480 -------------------------------------------------------------------------------- Beginning of period 23,670,467 15,177,987 -------------------------- End of period [including accumulated net investment loss of $50,929 for the six months ended May 31, 2003] $24,664,731 $23,670,467 ========================== See accompanying Notes to Financial Statements. 10 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND FINANCIAL HIGHLIGHTS 

                                                          Six Months                    Year
                                                               Ended                   Ended
                                                        May 31, 2003                Nov. 30,
Class A                                                  (Unaudited)        2002      2001 1
-----------------------------------------------------------------------------------------------

 Per Share Operating Data

 Net asset value, beginning of period                         $ 8.05      $ 9.25      $10.00
-----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                     -- 2      (.06)        .08
 Net realized and unrealized gain (loss)                         .45       (1.05)       (.83)
                                                        ---------------------------------------
 Total from investment operations                                .45       (1.11)       (.75)
-----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                             --        (.09)         --
-----------------------------------------------------------------------------------------------
 Net asset value, end of period                                $8.50       $8.05       $9.25
                                                        =======================================

-----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 3                             5.59%     (12.17)%     (7.50)%

-----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)                     $6,056      $6,775      $8,717
-----------------------------------------------------------------------------------------------
 Average net assets (in thousands)                            $5,608      $9,404      $6,384
-----------------------------------------------------------------------------------------------
 Ratios to average net assets: 4
 Net investment income (loss)                                  (0.01)%     (0.52)%      1.57%
 Expenses, gross                                                2.46%       1.85%       1.59%
 Expenses, net                                                  1.63% 5,6   1.59% 5,6   1.59% 7
-----------------------------------------------------------------------------------------------
 Portfolio turnover rate                                          12%        139%         55%
1. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 2. Less than $0.005 per share. 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. Net of voluntary waiver of transfer agent fees. 6. Net of voluntary reimbursement of expenses. 7. Voluntary reimbursement of expenses less than 0.01%. See accompanying Notes to Financial Statements. 11 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND FINANCIAL HIGHLIGHTS Continued 

                                                          Six Months                    Year
                                                               Ended                   Ended
                                                        May 31, 2003                Nov. 30,
Class B                                                  (Unaudited)        2002      2001 1
------------------------------------------------------------------------------------------------

 Per Share Operating Data

 Net asset value, beginning of period                         $ 7.96      $ 9.18      $10.00
------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                   (.03)       (.07)        .04
 Net realized and unrealized gain (loss)                         .43       (1.09)       (.86)
                                                        ---------------------------------------
 Total from investment operations                                .40       (1.16)       (.82)
------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                             --        (.06)         --
------------------------------------------------------------------------------------------------
 Net asset value, end of period                                $8.36       $7.96       $9.18
                                                        =======================================

------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                             5.03%      12.75%      (8.20)%

------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)                     $4,370      $4,325      $2,071
------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                            $3,800      $3,416      $1,075
------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                                  (0.82)%     (1.21)%      1.06%
 Expenses, gross                                                3.01%       2.75%       2.54%
 Expenses, net                                                  2.36% 4,5   2.44% 4,5   2.39% 5
------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                          12%        139%         55%
1. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 2. 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. 3. Annualized for periods of less than one full year. 4. Net of voluntary waiver of transfer agent fees. 5. Net of voluntary reimbursement of expenses. See accompanying Notes to Financial Statements. 12 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND 

                                                          Six Months                    Year
                                                               Ended                   Ended
                                                        May 31, 2003                Nov. 30,
Class C                                                  (Unaudited)        2002      2001 1
-----------------------------------------------------------------------------------------------

 Per Share Operating Data

 Net asset value, beginning of period                         $ 7.95      $ 9.18      $10.00
-----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                   (.03)       (.07)        .03
 Net realized and unrealized gain (loss)                         .44       (1.09)       (.85)
                                                        ---------------------------------------
 Total from investment operations                                .41       (1.16)       (.82)
-----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                             --        (.07)         --
-----------------------------------------------------------------------------------------------
 Net asset value, end of period                                $8.36       $7.95       $9.18
                                                        =======================================

-----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                             5.16%     (12.78)%     (8.20)%

-----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)                     $7,139      $6,872      $3,729
-----------------------------------------------------------------------------------------------
 Average net assets (in thousands)                            $6,284      $5,788      $1,427
-----------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                                  (0.82)%     (1.21)%      1.17%
 Expenses, gross                                                2.84%       2.72%       2.55%
 Expenses, net                                                  2.41% 4,5   2.41% 4,5   2.38% 5
-----------------------------------------------------------------------------------------------
 Portfolio turnover rate                                          12%        139%         55%
1. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 2. 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. 3. Annualized for periods of less than one full year. 4. Net of voluntary waiver of transfer agent fees. 5. Net of voluntary reimbursement of expenses. See accompanying Notes to Financial Statements. 13 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND FINANCIAL HIGHLIGHTS Continued 

                                                          Six Months                    Year
                                                               Ended                   Ended
                                                        May 31, 2003                Nov. 30,
Class N                                                   (Unaudited)       2002      2001 1
-----------------------------------------------------------------------------------------------

 Per Share Operating Data

 Net asset value, beginning of period                         $ 8.00       $9.21       $9.84
-----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                                   (.02)        .02         .03
 Net realized and unrealized gain (loss)                         .45       (1.14)       (.66)
                                                        ---------------------------------------
 Total from investment operations                                .43       (1.12)       (.63)
-----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                             --        (.09)         --
-----------------------------------------------------------------------------------------------
 Net asset value, end of period                                $8.43       $8.00       $9.21
                                                        =======================================

-----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                             5.38%     (12.30)%     (6.40)%

-----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)                     $7,100      $5,698        $660
-----------------------------------------------------------------------------------------------
 Average net assets (in thousands)                            $5,914      $3,055        $158
-----------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                                  (0.32)%     (0.66)%      2.08%
 Expenses, gross                                                2.24%       2.23%       2.07%
 Expenses, net                                                  1.90% 4,5   1.98% 4,5   1.89% 5
-----------------------------------------------------------------------------------------------
 Portfolio turnover rate                                          12%        139%         55%
1. For the period from March 1, 2001 (inception of offering) to November 30, 2001. 2. 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. 3. Annualized for periods of less than one full year. 4. Net of voluntary waiver of transfer agent fees. 5. Net of voluntary reimbursement of expenses. See accompanying Notes to Financial Statements. 14 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND 

                                                          Six Months                    Year
                                                               Ended                   Ended
                                                        May 31, 2003                Nov. 30,
Class Y                                                  (Unaudited)        2002      2001 1
-------------------------------------------------------------------------------------------------

 Per Share Operating Data

 Net asset value, beginning of period                         $ 8.10      $ 9.26      $10.00
-------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                            -- 2       .01         .12
 Net realized and unrealized gain (loss)                         .45       (1.06)       (.86)
                                                        -----------------------------------------
 Total from investment operations                                .45       (1.05)       (.74)
-------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                             --        (.11)         --
-------------------------------------------------------------------------------------------------
 Net asset value, end of period                                $8.55       $8.10       $9.26
                                                        =========================================

-------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 3                             5.56%     (11.52)%     (7.40)%

-------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)                         $1          $1          $1
-------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                $1          $1          $1
 Ratios to average net assets: 4
 Net investment income                                          0.00%       0.10%       1.52%
 Expenses, gross                                                3.09%      87.59%     501.53%
 Expenses, net                                                  1.87% 5,6   1.12% 5,6   1.30% 5,6
-------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                          12%        139%         55%
1. For the period from February 16, 2001 (inception of offering) to November 30, 2001. 2. Less than $0.005 per share. 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. Net of voluntary waiver of transfer agent fees. 6. Net of voluntary reimbursement of expenses. See accompanying Notes to Financial Statements. 15 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND NOTES TO FINANCIAL STATEMENTS Unaudited -------------------------------------------------------------------------------- 1. Significant Accounting Policies
  Oppenheimer Select Managers Salomon Brothers All Cap Fund (the Fund), a series of Oppenheimer Select Managers, is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund’s investment objective is to seek capital appreciation. The Fund’s investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager has entered into a sub-advisory agreement with Salomon Brothers Asset Management, Inc. (the Sub-Advisor).

  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.

16 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND --------------------------------------------------------------------------------
  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 May 31, 2003, the Fund had available for federal income tax purposes an estimated unused capital loss carryforward of $2,935,370. This estimated capital loss carryforward represents the carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules for the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended May 31, 2003, the Fund did not use carryforward to offset capital gains realized. During the year ended November 30, 2002, the Fund did not use carryforward to offset capital gains realized.

  As of November 30, 2002, the Fund had available for federal income tax purposes an unused capital loss carryforward as follows:

Expiring
2009 $ 167,424 2010 2,019,897
Total $2,187,321 ========== --------------------------------------------------------------------------------
  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

17 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued
  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 tax character of distributions paid during the six months ended May 31, 2003 and the year ended November 30, 2002 was as follows:

Six Months Ended Year Ended May 31, 2003 November 30, 2002 ---------------------------------------------------------- Distributions paid from: Ordinary income $-- $134,122 --------------------------------------------------------------------------------
  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 of each class. Transactions in shares of beneficial interest were as follows: 


                       Six Months Ended May 31, 2003  Year Ended November 30, 2002
                                Shares        Amount         Shares         Amount
---------------------------------------------------------------------------------------

 Class A
 Sold                          124,858   $   924,205        629,798    $ 5,376,405
 Dividends and/or
 distributions reinvested           --            --          4,288         39,537
 Redeemed                     (253,741)   (1,894,787)      (735,506)    (5,272,846)
                            -----------------------------------------------------------
 Net increase (decrease)      (128,883)  $  (970,582)      (101,420)   $   143,096
                            ===========================================================

---------------------------------------------------------------------------------------
 Class B
 Sold                           89,342   $   653,373        412,196    $ 3,515,598
 Dividends and/or
 distributions reinvested           --            --          1,486         13,648
 Redeemed                     (110,542)     (806,111)       (95,522)      (726,687)
                            -----------------------------------------------------------
 Net increase (decrease)       (21,200)  $  (152,738)       318,160    $ 2,802,559
                            ===========================================================
18 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND 

                       Six Months Ended May 31, 2003  Year Ended November 30, 2002
                                Shares        Amount         Shares         Amount
---------------------------------------------------------------------------------------

 Class C
 Sold                          164,708   $ 1,203,281        680,933    $ 5,766,521
 Dividends and/or
 distributions reinvested           --            --          2,928         26,858
 Redeemed                     (175,005)   (1,272,782)      (225,394)    (1,714,158)
                            -----------------------------------------------------------
 Net increase (decrease)       (10,297)  $   (69,501)       458,467    $ 4,079,221
                            ===========================================================

---------------------------------------------------------------------------------------
 Class N
 Sold                          280,050   $ 2,063,298        781,100    $ 6,523,549
 Dividends and/or
 distributions reinvested           --            --            951          8,731
 Redeemed                     (150,099)   (1,111,917)      (141,274)    (1,112,692)
                            -----------------------------------------------------------
 Net increase                  129,951   $   951,381        640,777    $ 5,419,588
                            ===========================================================

---------------------------------------------------------------------------------------
 Class Y
 Sold                               --   $        --             --    $        --
 Dividends and/or
 distributions reinvested           --            --             --             --
 Redeemed                           --            --             --             --
                            -----------------------------------------------------------
 Net increase (decrease)            --   $        --             --    $        --
                            ===========================================================
-------------------------------------------------------------------------------- 3. Purchases and Sales of Securities
  The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended May 31, 2003 were $2,463,872 and $2,374,266, respectively.

-------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates
  Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at an annual rate of 1.10% of the first $100 million of average annual net assets of the Fund and 1.00% of average annual net assets in excess of $100 million. The Manager has voluntarily undertaken to assume certain Fund expenses. The Manager reserves the right to amend or terminate that expense assumption at any time.

-------------------------------------------------------------------------------- Sub-Advisor Fees. The Manager retains Salomon Brothers Asset Management, Inc. (the Sub-Advisor) to provide the day-to-day portfolio management of the Fund. For the six months ended May 31, 2003, the Manager paid $63,386 to the Sub-Advisor for services to the Fund. -------------------------------------------------------------------------------- Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a $19.75 per account fee. 19 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates Continued 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 0.35% of average annual net assets for all classes. 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
 Six Months    on Class A    Retained by   Advanced by   Advanced by   Advanced by   Advanced by
 Ended             Shares    Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
------------------------------------------------------------------------------------------------

 May 31, 2003     $15,637       $284,034        $2,504       $19,184        $9,819       $14,037
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 Six Months Retained by Retained by Retained by Retained by Ended Distributor Distributor Distributor Distributor -------------------------------------------------------------------------------- May 31, 2003 $-- $6,611 $1,431 $5,350 --------------------------------------------------------------------------------
  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 six months ended May 31, 2003, payments under the Class A Plan totaled $6,925, all of which were paid by the Distributor to recipients, and included $560 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.

20 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND
  Distribution fees paid to the Distributor for the six months ended May 31, 2003, 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 $18,949 $16,317 $179,677 4.11% Class C Plan 31,327 17,317 134,135 1.88 Class N Plan 14,726 5,568 192,222 2.71 -------------------------------------------------------------------------------- 5. Borrowing and Lending Arrangements
  Interfund Borrowing and Lending Arrangements. Commencing November 12, 2002, the Fund entered into an “interfund borrowing and lending arrangement” with other funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity purposes. The arrangement was initiated pursuant to exemptive relief granted by the Securities and Exchange Commission to allow these affiliated funds to lend money to, and borrow money from, each other, in an attempt to reduce borrowing costs below those of bank loan facilities. Under the arrangement the Fund may lend money to other Oppenheimer funds and may borrow from other Oppenheimer funds at a rate set by the Fund’s Board of Trustees, based upon a recommendation by the investment manager. The Fund’s borrowings, if any, are subject to asset coverage requirements under the Investment Company Act and the provisions of the SEC order and other applicable regulations. If the Fund borrows money, there is a risk that the loan could be called on one day’s notice, in which case the Fund might have to borrow from a bank at higher rates if a loan were not available from another Oppenheimer fund. If the Fund lends money to another fund, it will be subject to the risk that the other fund might not repay the loan in a timely manner, or at all.

  The Fund had no interfund borrowings or loans outstanding during the six months ended or at May 31, 2003.

-------------------------------------------------------------------------------- 6. Fund Reorganization
  In April, 2003, the Board of Trustees approved the reorganization of Oppenheimer Select Managers Salomon Brothers All Cap Fund with and into Oppenheimer Value Fund. Shareholders of Oppenheimer Select Managers Salomon Brothers All Cap Fund will be asked to approve a reorganization whereby shareholders would receive shares of Oppenheimer Value Fund. If shareholder approval is received, it is expected that the reorganization will occur during the fourth quarter of calendar 2003.

STATEMENT OF INVESTMENTS April 30, 2003 / Unaudited Market Value Shares See Note 1 ------------------------------------------------------ Common Stocks--92.8% -------------------------------------------------------- Consumer Discretionary--19.3% -------------------------------------------------------- Hotels, Restaurants & Leisure--1.0% McDonald's Corp. 138,000 $ 2,359,800 -------------------------------------------------------- Leisure Equipment & Products--0.5% Mattel, Inc. 49,100 1,067,434 -------------------------------------------------------- Media--13.0% EchoStar Communications Corp., Cl. A 1 302,600 9,065,896 -------------------------------------------------------- General Motors Corp., Cl. H 1 731,500 8,631,700 -------------------------------------------------------- Liberty Media Corp., Cl. A 1 1,105,600 12,161,600
29,859,196 -------------------------------------------------------- Specialty Retail--1.0% OfficeMax, Inc. 1 420,700 2,376,955 -------------------------------------------------------- Textiles & Apparel--3.8% Nike, Inc., Cl. B 160,600 8,596,918 -------------------------------------------------------- Consumer Staples--0.8% -------------------------------------------------------- Tobacco--0.8% Altria Group, Inc. 61,500 1,891,740 -------------------------------------------------------- Energy--6.6% -------------------------------------------------------- Energy Equipment & Services--1.1% Noble Corp. 1 700 21,665 -------------------------------------------------------- Schlumberger Ltd. 59,000 2,473,870
2,495,535 -------------------------------------------------------- Oil & Gas--5.5% BP plc, ADR 325,000 12,525,500 -------------------------------------------------------- Financials--26.4% -------------------------------------------------------- Banks--8.7% Bank of New York Co., Inc. (The) 201,200 5,321,740 -------------------------------------------------------- Wachovia Corp. 191,400 7,313,394 -------------------------------------------------------- Wells Fargo Co. 150,000 7,239,000
19,874,134 -------------------------------------------------------- Diversified Financials--8.1% Citigroup, Inc. 186,866 7,334,490 -------------------------------------------------------- Franklin Resources, Inc. 163,200 5,692,416 -------------------------------------------------------- Freddie Mac 57,600 3,335,040 -------------------------------------------------------- Merrill Lynch & Co., Inc. 55,000 2,257,750
18,619,696 Market Value Shares See Note 1 -------------------------------------------------------- Insurance--9.6% American International Group, Inc. 41,700 $ 2,416,515 -------------------------------------------------------- Chubb Corp. 132,000 6,981,480 -------------------------------------------------------- Prudential Financial, Inc. 232,700 7,439,419 -------------------------------------------------------- Travelers Property Casualty Corp., Cl. A 3,368 54,663 -------------------------------------------------------- Travelers Property Casualty Corp., Cl. B 309,320 5,026,450 ------------- 21,918,527 -------------------------------------------------------- Health Care--5.3% -------------------------------------------------------- Health Care Providers & Services--4.4% Aetna, Inc. 185,300 9,227,940 -------------------------------------------------------- Service Corp. International 1 231,500 782,470
10,010,410 -------------------------------------------------------- Pharmaceuticals--0.9% Pfizer, Inc. 69,160 2,126,670 -------------------------------------------------------- Industrials--18.5% -------------------------------------------------------- Aerospace & Defense--9.7% Boeing Co. 222,500 6,069,800 -------------------------------------------------------- Lockheed Martin Corp. 160,100 8,013,005 -------------------------------------------------------- Northrop Grumman Corp. 93,300 8,205,735
22,288,540 -------------------------------------------------------- Commercial Services & Supplies--4.4% Cendant Corp. 1 698,600 9,976,008 -------------------------------------------------------- Industrial Conglomerates--0.5% Tyco International Ltd. 73,600 1,148,160 -------------------------------------------------------- Road & Rail--3.9% CNF Transportation, Inc. 295,800 8,974,572 -------------------------------------------------------- Information Technology--6.5% -------------------------------------------------------- Computers & Peripherals--1.7% Hewlett-Packard Co. 232,000 3,781,600 -------------------------------------------------------- Electronic Equipment & Instruments--4.8% Flextronics International Ltd. 1 814,500 7,126,875 7 | OPPENHEIMER VALUE FUND STATEMENT OF INVESTMENTS Unaudited / Continued Market Value Shares See Note 1 -------------------------------------------------------- Electronic Equipment & Instruments Continued Thermo Electron Corp. 1 217,000 $ 3,942,890
11,069,765 -------------------------------------------------------- Materials--3.6% -------------------------------------------------------- Chemicals--0.5% FMC Corp. 1 53,700 973,044 -------------------------------------------------------- Monsanto Co. 13,357 232,412
1,205,456 -------------------------------------------------------- Metals & Mining--0.5% Alcoa, Inc. 43,400 995,162 -------------------------------------------------------- Paper & Forest Products--2.6% Sappi Ltd., Sponsored ADR 482,700 5,961,345 -------------------------------------------------------- Telecommunication Services--3.0% -------------------------------------------------------- Diversified Telecommunication Services--2.0% Verizon Communi- cations, Inc. 125,500 4,691,190 -------------------------------------------------------- Wireless Telecommunication Services--1.0% Vodafone Group plc, Sponsored ADR 115,400 2,280,304 -------------------------------------------------------- Utilities--2.8% -------------------------------------------------------- Electric Utilities--2.3% Dominion Resources, Inc. 76,300 4,515,434 -------------------------------------------------------- Pepco Holdings, Inc. 42,800 735,304 ------------- 5,250,738 -------------------------------------------------------- Multi-Utilities--0.5% Equitable Resources, Inc. 30,000 1,152,600 ------------- Total Common Stocks (Cost $196,791,197) 212,497,955 Principal Market Value Amount See Note 1 -------------------------------------------------------- Short-Term Notes--2.3% Federal Home Loan Bank, 1.20%, 5/1/03 (Cost $5,200,000) $ 5,200,000 $ 5,200,000 -------------------------------------------------------- Joint Repurchase Agreements--4.4% Undivided interest of 14.44% in joint repurchase agreement (Market Value $70,406,000) with Zions Bank/ Capital Markets Group, 1.26%, dated 4/30/03, to be repurchased at $10,168,356 on 5/1/03, collateralized by U.S. Treasury Nts., 4.625%, 5/15/06, with a value of $21,007,167 and U.S. Treasury Bonds, 2%, 11/30/04, with a value of $50,899,000 (Cost $10,168,000) 10,168,000 10,168,000 -------------------------------------------------------- Total Investments, at Value (Cost $212,159,197) 99.5% 227,865,955 -------------------------------------------------------- Other Assets Net of Liabilities 0.5 1,139,429
Net Assets 100.0% $229,005,384
Footnotes to Statement of Investments 1. Non-income producing security. See accompanying Notes to Financial Statements. 8 | OPPENHEIMER VALUE FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited April 30, 2003 -------------------------------------------------------------------------------- Assets Investments, at value (cost $212,159,197)-- see accompanying statement $227,865,955 -------------------------------------------------------------------------------- Cash 60,516 -------------------------------------------------------------------------------- Receivables and other assets: Investments sold 2,639,762 Shares of capital stock sold 517,752 Interest and dividends 156,557 Other 3,734 -------------- Total assets 231,244,276 -------------------------------------------------------------------------------- Liabilities Payables and other liabilities: Investments purchased 1,843,135 Shares of capital stock redeemed 159,093 Shareholder reports 86,647 Transfer and shareholder servicing agent fees 54,425 Directors' compensation 46,414 Distribution and service plan fees 44,141 Other 5,037 -------------- Total liabilities 2,238,892 -------------------------------------------------------------------------------- Net Assets $229,005,384 ============== -------------------------------------------------------------------------------- Composition of Net Assets Par value of shares of capital stock $ 14,801 -------------------------------------------------------------------------------- Additional paid-in capital 259,864,918 -------------------------------------------------------------------------------- Undistributed net investment income 101,574 -------------------------------------------------------------------------------- Accumulated net realized loss on investment transactions (46,682,667) -------------------------------------------------------------------------------- Net unrealized appreciation on investments 15,706,758 -------------- Net Assets $229,005,384 ============== 9 | OPPENHEIMER VALUE FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued -------------------------------------------------------------------------------- Net Asset Value Per Share Class A Shares:
  Net asset value and redemption price per share (based on net assets of $156,517,797 and 10,069,262 shares of capital stock outstanding) $15.54 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $16.49

-------------------------------------------------------------------------------- Class B Shares:
  Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $48,300,277 and 3,143,074 shares of capital stock

outstanding) $15.37 -------------------------------------------------------------------------------- Class C Shares:
  Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $19,901,129 and 1,312,913 shares of capital stock

outstanding) $15.16 -------------------------------------------------------------------------------- Class N Shares:
  Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $2,804,673 and 182,200 shares of capital stock

outstanding) $15.39 -------------------------------------------------------------------------------- Class Y Shares:
  Net asset value, redemption price and offering price per share (based on net assets of $1,481,508 and 93,726 shares of

capital stock outstanding) $15.81 See accompanying Notes to Financial Statements. 10 | OPPENHEIMER VALUE FUND STATEMENT OF OPERATIONS Unaudited For the Six Months Ended April 30, 2003 -------------------------------------------------------------------------------- Investment Income Dividends (net of foreign withholding taxes of $26,754) $ 1,762,460 -------------------------------------------------------------------------------- Interest 79,927 ------------- Total investment income 1,842,387 -------------------------------------------------------------------------------- Expenses Management fees 673,610 --------------------------------------------------------------------------------

        Distribution and service plan fees:

Class A 181,108 Class B 240,300 Class C 81,524 Class N 4,779 --------------------------------------------------------------------------------

        Transfer and shareholder servicing agent fees:

Class A 206,763 Class B 106,605 Class C 31,752 Class N 4,097 Class Y 7,339 -------------------------------------------------------------------------------- Accounting service fees 7,500 -------------------------------------------------------------------------------- Directors' compensation 6,722 -------------------------------------------------------------------------------- Custodian fees and expenses 1,943 -------------------------------------------------------------------------------- Other 71,499 -------------
  Total expenses 1,625,541 Less reduction to custodian expenses (237) Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (27,783) Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (3,601) Less voluntary waiver of transfer and shareholder servicing agent fees--Class N (746) Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y (9,125)

------------- Net expenses 1,584,049 -------------------------------------------------------------------------------- Net Investment Income 258,338 -------------------------------------------------------------------------------- Realized and Unrealized Gain (Loss) Net realized loss on investments (including premiums on options exercised) (2,014,854) -------------------------------------------------------------------------------- Net change in unrealized appreciation on investments 12,252,790 ------------- Net realized and unrealized gain 10,237,936 -------------------------------------------------------------------------------- Net Increase in Net Assets Resulting from Operations $10,496,274 ============= See accompanying Notes to Financial Statements. 11 | OPPENHEIMER VALUE FUND STATEMENTS OF CHANGES IN NET ASSETS Six Months Year Ended Ended April 30, 2003 October 31, (Unaudited) 2002 -------------------------------------------------------------------------------- Operations Net investment income $ 258,338 $ 361,047 -------------------------------------------------------------------------------- Net realized loss (2,014,854) (27,141,607) -------------------------------------------------------------------------------- Net change in unrealized appreciation 12,252,790 10,745,185 -------------------------- Net increase (decrease) in net assets resulting from operations 10,496,274 (16,035,375) -------------------------------------------------------------------------------- Dividends and/or Distributions to Shareholders

        Dividends from net investment income:

Class A (328,372) (135,466) Class B -- -- Class C -- -- Class N (4,026) (43) Class Y (1,634) (3,575) -------------------------------------------------------------------------------- Capital Stock Transactions
  Net increase (decrease) in net assets resulting from capital stock transactions:

Class A 7,745,871 (14,210,177) Class B (1,207,877) (6,150,602) Class C 5,830,961 4,299,663 Class N 1,514,103 1,286,579 Class Y 332,469 563,632 -------------------------------------------------------------------------------- Net Assets Total increase (decrease) 24,377,769 (30,385,364) -------------------------------------------------------------------------------- Beginning of period 204,627,615 235,012,979 --------------------------- End of period [including undistributed net investment income of $101,574 and $177,268, respectively] $229,005,384 $204,627,615 =========================== See accompanying Notes to Financial Statements. 12 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS 

                                             Six Months                                               Year
                                                  Ended                                              Ended
                                         April 30, 2003                                           Oct. 31,
Class A                                     (Unaudited)       2002      2001      2000      1999      1998
-------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period           $ 14.78    $ 15.93   $ 17.06   $ 20.69   $ 20.91   $ 23.31
-------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                              .03        .07       .03       .16       .17       .16
 Net realized and unrealized gain (loss)            .76      (1.21)     (.98)     (.65)      .64       .32
                                               --------------------------------------------------------------
 Total from investment operations                   .79      (1.14)     (.95)     (.49)      .81       .48
-------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income              (.03)      (.01)     (.18)     (.16)     (.17)     (.12)
 Distributions from net realized gain                --         --        --     (2.98)     (.86)    (2.76)
                                               --------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                   (.03)      (.01)     (.18)    (3.14)    (1.03)    (2.88)
-------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                  $15.54     $14.78    $15.93    $17.06    $20.69    $20.91
                                               ==============================================================

-------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                5.38%     (7.15)%   (5.60)%   (2.60)%    3.60%     2.24%

-------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)      $156,518   $141,563  $166,285  $181,566  $392,483  $456,264
-------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)             $149,374   $166,319  $181,631  $234,840  $448,884  $442,138
-------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income                             0.48%      0.38%     0.19%     0.66%     0.68%     0.84%
 Expenses                                          1.23%      1.22%     1.26%     1.17%     1.02%     0.98% 3
-------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                             67%       150%      336%       86%      135%      106%
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. 13 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued 

                                             Six Months                                               Year
                                                  Ended                                              Ended
                                         April 30, 2003                                           Oct. 31,
Class B                                     (Unaudited)       2002      2001      2000      1999      1998
-------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period           $ 14.64    $ 15.89   $ 16.99   $ 20.58   $ 20.83   $ 23.32
-------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                      (.03)      (.10)     (.11)     (.05)     (.03)      .02
 Net realized and unrealized gain (loss)            .76      (1.15)     (.97)     (.56)      .66       .30
                                               --------------------------------------------------------------
 Total from investment operations                   .73      (1.25)    (1.08)     (.61)      .63       .32
-------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                --         --      (.02)       --      (.02)     (.05)
 Distributions from net realized gain                --         --        --     (2.98)     (.86)    (2.76)
                                               --------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                     --         --      (.02)    (2.98)     (.88)    (2.81)
-------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                  $15.37     $14.64    $15.89    $16.99    $20.58    $20.83
                                               ==============================================================

-------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                4.99%     (7.87)%   (6.34)%   (3.28)%    2.79%     1.47%


-------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)       $48,300    $47,323   $57,584   $64,287  $102,736  $123,260
-------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)              $48,464    $56,200   $65,115   $79,239  $123,616  $110,240
-------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income (loss)                     (0.31)%    (0.40)%   (0.57)%   (0.14)%   (0.08)%    0.08%
 Expenses, gross                                   2.15%      2.01%     2.01%     1.93%     1.77%     1.73% 3
 Expenses, net                                     2.03% 4,5  2.01% 4,6 2.01% 4   1.93% 4   1.77% 4   1.73%
-------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                             67%       150%      336%       86%      135%      106%
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. 4. Reduction to custodian expenses less than 0.01%. 5. Net of voluntary waiver of transfer agent fees. 6. Voluntary waiver of transfer agent fees less than 0.01%. See accompanying Notes to Financial Statements. 14 | OPPENHEIMER VALUE FUND 

                                             Six Months                                               Year
                                                  Ended                                              Ended
                                         April 30, 2003                                           Oct. 31,
Class C                                     (Unaudited)       2002      2001      2000      1999      1998
-------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period           $ 14.44    $ 15.67   $ 16.77   $ 20.35   $ 20.60   $ 23.07
-------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                       .03       (.01)     (.08)     (.04)     (.02)      .01
 Net realized and unrealized gain (loss)            .69      (1.22)     (.99)     (.56)      .65       .31
                                               --------------------------------------------------------------
 Total from investment operations                   .72      (1.23)    (1.07)     (.60)      .63       .32
-------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                --         --      (.03)       --      (.02)     (.03)
 Distributions from net realized gain                --         --        --     (2.98)     (.86)    (2.76)
                                               --------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                     --         --      (.03)    (2.98)     (.88)    (2.79)
-------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                  $15.16     $14.44    $15.67    $16.77    $20.35    $20.60
                                               ==============================================================

-------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 1                4.99%     (7.85)%   (6.38)%   (3.27)%    2.82%     1.47%


-------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)       $19,901    $13,466   $10,494   $ 9,849   $14,582   $18,204
-------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)              $16,474    $12,977   $11,088   $11,975   $17,746   $15,355
-------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 2
 Net investment income (loss)                     (0.37)%    (0.41)%   (0.56)%   (0.14)%   (0.07)%    0.06%
 Expenses, gross                                   2.10%      2.00%     2.01%     1.93%     1.77%     1.73% 3
 Expenses, net                                     2.06% 4,5  2.00% 4,6 2.01% 4   1.93% 4   1.77% 4   1.73%
-------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                             67%       150%      336%       86%      135%      106%
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. 4. Reduction to custodian expenses less than 0.01%. 5. Net of voluntary waiver of transfer agent fees. 6. Voluntary waiver of transfer agent fees less than 0.01%. See accompanying Notes to Financial Statements. 15 | OPPENHEIMER VALUE FUND FINANCIAL HIGHLIGHTS Continued Six Months Year Ended Ended April 30, 2003 Oct. 31, Class N (Unaudited) 2002 2001 1 -------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $ 14.68 $ 15.90 $ 18.08 -------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .03 .05 (.02) Net realized and unrealized gain (loss) .73 (1.22) (2.16) ---------------------------------- Total from investment operations .76 (1.17) (2.18) -------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.05) (.05) -- Distributions from net realized gain -- -- -- ---------------------------------- Total dividends and/or distributions to shareholders (.05) (.05) -- -------------------------------------------------------------------------------- Net asset value, end of period $15.39 $14.68 $15.90 ================================== -------------------------------------------------------------------------------- Total Return, at Net Asset Value 2 5.16% (7.41)% (12.06)% -------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $2,805 $1,201 $12 -------------------------------------------------------------------------------- Average net assets (in thousands) $1,936 $ 508 $ 5 -------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) 0.04% 0.00% (0.45)% Expenses, gross 1.64% 1.49% 1.61% Expenses, net 1.56% 4,5 1.49% 4,6 1.61% 4 -------------------------------------------------------------------------------- Portfolio turnover rate 67% 150% 336% 1. For the period from March 1, 2001 (inception of offering) to October 31, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period (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. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Net of voluntary waiver of transfer agent fees. 6. Voluntary waiver of transfer agent fees less than 0.01%. See accompanying Notes to Financial Statements. 16 | OPPENHEIMER VALUE FUND 

                                             Six Months                                               Year
                                                  Ended                                              Ended
                                         April 30, 2003                                           Oct. 31,
Class Y                                     (Unaudited)       2002      2001      2000      1999      1998
-------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period           $ 14.96    $ 16.20   $ 17.07   $ 20.72   $ 20.97   $ 23.34
--------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                      (.91)       .06      1.10 1     .17 1     .22       .22
 Net realized and unrealized gain (loss)           1.78      (1.21) 1   (.97) 1   (.63) 1    .64       .34
                                               ---------------------------------------------------------------
 Total from investment operations                   .87      (1.15)     (.87)     (.46)      .86       .56
--------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income              (.02)      (.09)       --      (.21)     (.25)     (.17)
 Distributions from net realized gain                --         --        --     (2.98)     (.86)    (2.76)
                                               ---------------------------------------------------------------
 Total dividends and/or distributions
 to shareholders                                   (.02)      (.09)       --     (3.19)    (1.11)    (2.93)
--------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                  $15.81     $14.96    $16.20    $17.07    $20.72    $20.97
                                               ===============================================================

--------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                5.84%     (7.18)%   (5.10)%   (2.42)%    3.81%     2.63%


--------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data

 Net assets, end of period (in thousands)        $1,482     $1,074      $638   $     1   $76,571  $136,729
--------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)               $1,226     $  955      $155   $48,714   $95,765  $118,010
--------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                             1.27%      0.33%     0.62%     1.06%     0.90%     1.19%
 Expenses, gross                                   1.92%      3.77%     1.20%     0.97%     0.76%     0.62% 4
 Expenses, net                                     0.42% 5,6  1.23% 5,6 0.83% 5,6 0.97% 5   0.76% 5   0.62%
--------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                             67%       150%      336%       86%      135%      106%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 3. Annualized for periods of less than one full year. 4. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. 5. Reduction to custodian expenses less than 0.01%. 6. Net of voluntary waiver of transfer agent fees. See accompanying Notes to Financial Statements. 17 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Unaudited -------------------------------------------------------------------------------- 1. Significant Accounting Policies
  Oppenheimer Value Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), 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 long-term growth of capital by investing primarily in common stocks with low price-earnings ratios and better-than-anticipated earnings. 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 Directors, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Directors. 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.

18 | OPPENHEIMER VALUE FUND --------------------------------------------------------------------------------
  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 April 30, 2003, the Fund had available for federal income tax purposes an estimated unused capital loss carryforward of $43,808,574. This estimated capital loss carryforward represents the carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules for the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended April 30, 2003, the Fund did not use carryforward to offset capital gains realized. During the year ended October 31, 2002, the Fund did not use carryforward to offset capital gains realized.

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

Expiring
2008 $ 9,239,162 2009 5,386,519 2010 27,168,039
Total $41,793,720 =========== --------------------------------------------------------------------------------
  Directors’ Compensation. The Fund has adopted an unfunded retirement plan for the Fund’s independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the six months ended April 30, 2003, the Fund’s projected benefit obligations were increased by $2,745 and payments of $3,614 were made to retired directors, resulting in an accumulated liability of $45,730 as of April 30, 2003.

19 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued
  The Board of Directors has adopted a deferred compensation plan for independent directors that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. Under the plan, the compensation deferred is invested by the Fund in the fund(s) selected by the director. Deferral of directors’ 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.

--------------------------------------------------------------------------------
  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 tax character of distributions paid during the six months ended April 30, 2003 and the year ended October 31, 2002 was as follows:

Six Months Ended Year Ended April 30, 2003 October 31, 2002 -------------------------------------------------------- Distributions paid from: Ordinary income $334,032 $ 139,084 Long-term capital gain -- -- Return of capital -- -- ---------------------------- Total $334,032 $139,084 ============================ --------------------------------------------------------------------------------
  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. 20 | OPPENHEIMER VALUE FUND -------------------------------------------------------------------------------- 2. Shares of Capital Stock
  The Fund has authorized 600 million shares of $0.001 par value capital stock of each class. Transactions in shares of capital stock were as follows: 


                          Six Months Ended April 30, 2003   Year Ended October 31, 2002
                                Shares        Amount           Shares         Amount
----------------------------------------------------------------------------------------

 Class A
 Sold                        1,927,502    $ 29,318,107       1,908,060    $ 31,560,410
 Dividends and/or
 distributions reinvested       20,386         312,728           7,395         129,115
 Redeemed                   (1,454,880)    (21,884,964)     (2,777,138)    (45,899,702)
                            -----------------------------------------------------------
 Net increase (decrease)       493,008    $  7,745,871        (861,683)   $(14,210,177)
                            ===========================================================

---------------------------------------------------------------------------------------
 Class B
 Sold                          644,593    $  9,687,942         849,996    $ 13,980,805
 Dividends and/or
 distributions reinvested           --              --              --              --
 Redeemed                     (733,954)    (10,895,819)     (1,241,241)    (20,131,407)
                            -----------------------------------------------------------
 Net decrease                  (89,361)   $ (1,207,877)       (391,245)   $ (6,150,602)
                            ===========================================================

---------------------------------------------------------------------------------------
 Class C
 Sold                        1,246,278    $ 18,506,805         508,463    $  8,150,546
 Dividends and/or
 distributions reinvested           --              --              --              --
 Redeemed                     (865,838)    (12,675,844)       (245,484)     (3,850,883)
                            -----------------------------------------------------------
 Net increase                  380,440    $  5,830,961         262,979    $  4,299,663
                            ===========================================================

---------------------------------------------------------------------------------------
 Class N
 Sold                          146,555    $  2,183,264          91,314    $  1,447,129
 Dividends and/or
 distributions reinvested          264           4,022               2              40
 Redeemed                      (46,476)       (673,183)        (10,222)       (160,590)
                            -----------------------------------------------------------
 Net increase                  100,343    $  1,514,103          81,094    $  1,286,579
                            ===========================================================

---------------------------------------------------------------------------------------
 Class Y
 Sold                           28,791    $    435,926          46,172    $    771,487
 Dividends and/or
 distributions reinvested          105           1,632             201           3,570
 Redeemed                       (6,951)       (105,089)        (13,958)       (211,425)
                            -----------------------------------------------------------
 Net increase                   21,945    $    332,469          32,415    $    563,632
                            ===========================================================
-------------------------------------------------------------------------------- 3. Purchases and Sales of Securities
  The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended April 30, 2003, were $148,714,617 and $136,189,196, respectively.

21 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- 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 0.625% of the first $300 million of average annual net assets of the Fund, 0.50% of the next $100 million, and 0.45% of average annual net assets in excess of $400 million.

-------------------------------------------------------------------------------- Accounting Fees. The Manager acts as the accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably incurred. -------------------------------------------------------------------------------- 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 0.35% of average annual net assets for all classes. 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
 Six Months      on Class A   Retained by   Advanced by  Advanced by      Advanced by    Advanced by
 Ended               Shares   Distributor Distributor 1  Distributor 1  Distributor 1  Distributor 1
----------------------------------------------------------------------------------------------------

 April 30, 2003    $205,574      $85,223        $12,365       $171,522        $52,712        $13,850
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 Six Months Ended Distributor Distributor Distributor Distributor -------------------------------------------------------------------------------- April 30, 2003 $2,163 $104,265 $2,025 $2,943 --------------------------------------------------------------------------------
  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 six months ended April 30, 2003, payments under the Class A Plan totaled $181,108, all of

22 | OPPENHEIMER VALUE FUND
  which were paid by the Distributor to recipients, and included $60,917 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 six months ended April 30, 2003, 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 $240,300 $183,422 $2,253,100 4.66% Class C Plan 81,524 32,271 445,523 2.24 Class N Plan 4,779 4,326 42,030 1.50 -------------------------------------------------------------------------------- 5. Option Activity
  The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities.

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

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

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

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

23 | OPPENHEIMER VALUE FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- 5. Option Activity Continued
  and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist.

        Written option activity for the six months ended April 30, 2003 was as follows:

Call Options ------------------------- Number of Amount of Contracts Premiums ---------------------------------------------------------------- Options outstanding as of October 31, 2002 14 $ 742 Options written 1,511 72,602 Options exercised (1,525) (73,344) ----------------------- Options outstanding as of April 30, 2003 -- $ -- ======================= -------------------------------------------------------------------------------- 6. Borrowing and Lending Arrangements
  Interfund Borrowing and Lending Arrangements. Commencing November 12, 2002, the Fund entered into an “interfund borrowing and lending arrangement” with other funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity purposes. The arrangement was initiated pursuant to exemptive relief granted by the Securities and Exchange Commission to allow these affiliated funds to lend money to, and borrow money from, each other, in an attempt to reduce borrowing costs below those of bank loan facilities. Under the arrangement the Fund may lend money to other Oppenheimer funds and may borrow from other Oppenheimer funds at a rate set by the Fund’s Board of Directors, based upon a recommendation by the investment manager. The Fund’s borrowings, if any, are subject to asset coverage requirements under the Investment Company Act and the provisions of the SEC order and other applicable regulations. If the Fund borrows money, there is a risk that the loan could be called on one day’s notice, in which case the Fund might have to borrow from a bank at higher rates if a loan were not available from another Oppenheimer fund. If the Fund lends money to another fund, it will be subject to the risk that the other fund might not repay the loan in a timely manner, or at all.

  The Fund had no interfund borrowings or loans outstanding during the six months ended or at April 30, 2003. 

                  OPPENHEIMER VALUE FUND,
         A series of Oppenheimer Series Fund, Inc.

                         FORM N-14

                           PART C

                     OTHER INFORMATION


Item 15. Indemnification
------------------------

Reference  is made to the  provisions  of  paragraph  (b) of
Section 7 or Article  SEVENTH of  Registrant's  Articles  of
Incorporation  filed by cross-reference to Exhibit 16 (1) to
this   Registration   Statement,   incorporated   herein  by
reference.

      Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
Directors, 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 Director, officer or controlling person of Registrant
in the successful defense of any action, suit or
proceeding) is asserted by such Director, 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 16. Exhibits
-----------------

(1)   (i)   Amended and Restated Articles of Incorporation
      dated January 6, 1995: Previously filed with
      Registrant's Post-Effective Amendment No. 28, 3/1/96,
      and Incorporated herein by reference.

      (ii)  Articles Supplementary dated September 26,
      1995: Previously filed with Registrant's
      Post-Effective Amendment No. 28, 3/1/96, and
      incorporated herein by reference.

(iii) Articles Supplementary dated May 8, 1995: Previously
      filed with Registrant's Post-Effective Amendment No.
      28, 3/1/96, and incorporated herein by reference.

(iv)  Articles Supplementary dated November 15, 1996:
      Previously filed with Registrant's Post-Effective
      Amendment No. 31, 12/16/96, and incorporated herein
      by reference.

(v)   Articles of Amendment dated March 15, 1996, effective
      3/18/96: Previously filed with Registrant's
      Post-Effective Amendment No. 35, 2/26/99, and
      incorporated herein by reference.

(vi)  Articles Supplementary dated February 23, 2001:
      Previously filed with Registrant's Post-Effective
      Amendment No. 39, 2/28/02, and incorporated herein by
      reference.

(2)   Amended and Restated By-Laws as of 6/4/98:  Filed with
      Registrant's    Post-Effective   Amendment   No.   35,
      2/26/99, and incorporated herein by reference.

(3)   N/A.

(4)   Agreement and Plan of  Reorganization  dated April 28,
      2003:  See  Exhibit  A to Part A of this  Registration
      Statement, incorporated herein by reference.

(5)   (i)   Specimen Class A Share  Certificate:  Previously
      filed with Registrant's  Post-Effective  Amendment No.
      39, 2/28/02, and incorporated herein by reference.

      (ii)  Specimen Class B Share  Certificate:  Previously
      filed with Registrant's  Post-Effective  Amendment No.
      39, 2/28/02, and incorporated herein by reference.

      (iii) Specimen Class C Share  Certificate:  Previously
      filed with Registrant's  Post-Effective  Amendment No.
      39, 2/28/02, and incorporated herein by reference.

(iv)  Specimen Class N Share  Certificate:  Previously filed
      with  Registrant's  Post-Effective  Amendment  No. 39,
      2/28/02, and incorporated herein by reference.

(v)   Specimen Class Y Share  Certificate:  Previously filed
      with  Registrant's  Post-Effective  Amendment  No. 39,
      2/28/02, and incorporated herein by reference.

(6)         Investment   Advisory   Agreement  dated  3/1/96
      between  the  Registrant,  on  behalf  of  Connecticut
      Mutual  Total  Return  Account  and  OppenheimerFunds,
      Inc.  and  schedule of omitted  substantially  similar
      documents:    Previously   filed   with   Registrant's
      Post-Effective   Amendment   No.  29,   4/30/96,   and
      incorporated herein by reference.

(7)   (i)   General  Distributor's  Agreement  dated 3/18/96
      between  Registrant  on  behalf of  Oppenheimer  Value
      Fund,  formerly  Oppenheimer  Disciplined  Value Fund,
      and  OppenheimerFunds  Distributor,  Inc.:  Previously
      filed with Registrant's  Post-Effective  Amendment No.
      31, 12/16/96 and incorporated herein by reference.

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

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

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

(8)   (i)   Amended  and   Restated   Retirement   Plan  for
      Non-Interested  Trustees or  Directors  dated  8/9/01:
      Previously filed with Post-Effective  Amendment No. 34
      to the  Registration  Statement of Oppenheimer  Gold &
      Special  Minerals Fund (Reg. No.  2-82590),  10/25/01,
      and incorporated herein by reference.

      (ii)  Form   of   Deferred   Compensation   Plan   for
      Disinterested    Trustees/Directors:     Filed    with
      Post-Effective  Amendment No. 33, of the  Registration
      Statement  for  Oppenheimer  Gold &  Special  Minerals
      Fund (Reg. No.  2-82590),  10/28/98,  and incorporated
      herein by reference.

(9)   (i)   Amendment  dated  December 6, 2002 to the Global
      Custodial   Services   Agreement  dated  May  3,  2001
      between  Registrant  and  Citibank,  N.A.:  Previously
      filed  with  the  Initial  Registration  Statement  of
      Oppenheimer   Total   Return   Bond  Fund  (Reg.   No.
      333-101878),  12/16/02,  and  incorporated  herein  by
      reference.

(ii)  Amendment   dated   August  28,  2002  to  the  Global
      Custodial   Services   Agreement  dated  May  3,  2001
      between  Registrant  and  Citibank,  N.A.:  Previously
      filed  with  Post-Effective  Amendment  No.  29 to the
      Registration  Statement of Oppenheimer  Discovery Fund
      (Reg. No. 33-371),  11/22/02,  and incorporated herein
      by reference.

(iii) Global Custodial  Services Agreement dated May 3, 2001
      between  Registrant  and  Citibank,  N.A.:  Previously
      filed  with  Post-Effective  Amendment  No.  33 to the
      Registration  Statement  of  Centennial  Money  Market
      Trust (Reg. No. 2-65245),  10/25/01,  and incorporated
      herein by reference.

(10)  (i)   Amended and Restated  Service Plan and Agreement
      dated  4/11/02  between  Oppenheimer  Value  Fund  and
      OppenheimerFunds   Distributor,   Inc.   for  Class  A
      Shares:    Previously    filed    with    Registrant's
      Post-Effective   Amendment  No.  40,   10/24/02,   and
      incorporated herein by reference.

      (ii)  Amended and  Restated  Distribution  and Service
      Plan and Agreement between  Oppenheimer Value Fund and
      OppenheimerFunds  Distributor, Inc. for Class B shares
      dated  2/12/98:  Previously  filed  with  Registrant's
      Post-Effective   Amendment   No.  36,   2/28/00,   and
      incorporated herein by reference.

(iii) Amended and  Restated  Distribution  and Service  Plan
      and  Agreement  between  Oppenheimer  Value  Fund  and
      OppenheimerFunds  Distributor, Inc. for Class C shares
      dated  2/12/98:  Previously  filed  with  Registrant's
      Post-Effective   Amendment   No.  36,   2/28/00,   and
      incorporated herein by reference.

            (iv)  Distribution    and   Service   Plan   and
      Agreement   between   Oppenheimer   Value   Fund   and
      OppenheimerFunds  Distributor, Inc. for Class N shares
      dated  10/12/00:  Previously  filed with  Registrant's
      Post-Effective   Amendment  No.  40,   10/24/02,   and
      incorporated herein by reference.

(11)  (i)   Form  of  Opinion  and  Consent  of  Counsel  to
      Oppenheimer Select  Managers-Salomon  Brothers All Cap
      Fund:  Filed  herewith.  Final  Opinion and Consent of
      Counsel   to   Oppenheimer   Select   Managers-Salomon
      Brothers  All Cap Fund to be filed with  pre-effective
      amendment.

      (ii)  Form  of  Opinion to Oppenheimer Value Fund:
      Filed herewith.

(12)  Form of Tax Opinion  Relating  to the  Reorganization:
      Filed  herewith.  Final Tax  Opinion  Relating  to the
      Reorganization   to  be  filed   with   post-effective
      amendment.

(13)  N/A.

(14)  Form  of  Consents  of  Independent  Auditors:   Filed
      herewith.  Final Consents of  Independent  Auditors to
      be filed with pre-effective amendment.

(15)  N/A.

(16)  (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.

      (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.

Item 17. Undertakings
---------------------

(1)   N/A.

(2)   N/A.







                         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 7th day of August, 2003.

                              OPPENHEIMER   VALUE  FUND,   a
                              Series of
                              Oppenheimer Series Fund, Inc.

                              By:  /s/ John V. Murphy*

----------------------------------------------
                              John V. Murphy, President,
                              Principal Executive Officer &
Director

Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities on the dates indicated:

Signatures                    Title
----------                    -----
Date
----

/s/ Clayton K. Yeutter*       Chairman of the
----------------------------  Board of Directors
August 7, 2003
Clayton K. Yeutter

/s/ Donald W. Spiro*          Vice Chairman of the
August 7, 2003
-------------------------     Board and Director
Donald W. Spiro

/s/ John V. Murphy*           President, Principal
--------------------------    Executive Officer
August 7, 2003
John V. Murphy                & Director

/s/ Brian W. Wixted*          Treasurer, Principal
August 7, 2003
-------------------------     Financial and
Brian W. Wixted               Accounting Officer

/s/ Robert G. Galli*          Director
August 7, 2003
-----------------------
Robert G. Galli

/s/ Phillip A. Griffiths*     Director
August 7, 2003
---------------------------
Phillip A. Griffiths

/s/ Joel W. Motley*           Director
August 7, 2003
------------------------
Joel W. Motley

/s/ Elizabeth B. Moynihan*    Director
August 7, 2003
--------------------------------
Elizabeth B. Moynihan

/s/ Kenneth A. Randall*       Director
August 7, 2003
----------------------------
Kenneth A. Randall

/s/ Edward V. Regan*          Director
August 7, 2003
-------------------------
Edward V. Regan

/s/ Russell S. Reynolds, Jr.* Director
August 7, 2003
---------------------------------
Russell S. Reynolds, Jr.

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






                   OPPENHEIMER VALUE FUND

                       EXHIBIT INDEX
                       -------------


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

16 (11)(i)        Form of Opinion  and Consent of Counsel to
   Oppenheimer Select                           Managers-
   Salomon Brothers All Cap Fund

16 (11)(ii)       Form of Opinion to Oppenheimer Value Fund

16 (12)           Form  of  Tax  Opinion   Relating  to  the
   Reorganization

16 (14)           Form of Consents of Independent Auditors































525-375_ PartC_Initial_081103.doc