LITIGATION

         Six complaints have been filed as putative derivative and class actions
in the U.S. District Court for the Southern District of New York against
OppenheimerFunds, Inc. ("OFI"), OppenheimerFunds Services and OppenheimerFunds
Distributor, Inc. (collectively, the "Oppenheimer defendants"), as well as 51 of
the Oppenheimer funds (as "Nominal Defendants") including the Fund and nine
directors/trustees of certain of the Oppenheimer funds. The Complaints in these
actions, ALEXANDER V. OPPENHEIMERFUNDS, INC., ET AL.; GROBLER V.
OPPENHEIMERFUNDS, INC., ET AL.; HENDON, ET AL . V. OPPENHEIMERFUNDS, INC. ET
AL.; LESHYN V. OPPENHEIMERFUNDS, INC., ET AL.; ERICKSON, ET AL. V.
OPPENHEIMERFUNDS, INC., ET AL.; and CROSS, ET AL. V. OPPENHEIMERFUNDS, INC., ET
AL., were filed on August 31, 2004, September 3, 2004, September 14, 2004,
September 14, 2004, September 21, 2004 and September 22, 2004, respectively
(collectively, the "Complaints"). The Complaints allege violations by the
Oppenheimer defendants of Sections 34(b), 36(b) and 48(a) of the Investment
Company Act of 1940 and Sections 206 and 215 of the Investment Advisers Act of
1940, as well as breaches of fiduciary duty and unjust enrichment relating to
fund brokerage and distribution expenses. The relief sought includes
compensatory and punitive damages, restitution, rescission of investment
advisory contracts, and an order for an accounting, plus costs and attorneys
fees. The Oppenheimer defendants believe that the allegations contained in the
Complaints are without merit and that they, the named Oppenheimer funds named as
Nominal Defendants, and the directors/trustees of the Oppenheimer funds who are
named as Defendants have meritorious defenses against the claims asserted. The
Oppenheimer defendants intend to defend these lawsuits vigorously and to contest
any claimed liability, and they have retained legal counsel to defend such
suits. The Oppenheimer defendants believe that it is premature to render any
opinion as to the likelihood of an outcome unfavorable to them and that no
estimate can yet be made with any degree of certainty as to the amount or range
of any potential loss.