N1A 485B 2002 Bond Fund

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FAMciSZap0sMNE55LclqBNWy5KjLKsQMBzpoHBANH75QI4Z5trw5jbEmZdRo5m0N VkXst1y/XaJ7V0Ki9baHWw== 0000728889-02-000364.txt : 20020430 0000728889-02-000364.hdr.sgml : 20020430 ACCESSION NUMBER: 0000728889-02-000364 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20020429 EFFECTIVENESS DATE: 20020429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTEGRITY FUNDS CENTRAL INDEX KEY: 0000701265 IRS NUMBER: 042912220 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03420 FILM NUMBER: 02624310 BUSINESS ADDRESS: STREET 1: 6803 S TUCSON WAY CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 1: 3410 SOUTH GALENA STREET 3RD FL STREET 2: 3410 SOUTH GALENA STREET 3RD FL CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL INTEGRITY FUNDS DATE OF NAME CHANGE: 19910329 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL LIQUID ASSETS TRUST DATE OF NAME CHANGE: 19880403 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTEGRITY FUNDS CENTRAL INDEX KEY: 0000701265 IRS NUMBER: 042912220 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-76547 FILM NUMBER: 02624311 BUSINESS ADDRESS: STREET 1: 6803 S TUCSON WAY CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 1: 3410 SOUTH GALENA STREET 3RD FL STREET 2: 3410 SOUTH GALENA STREET 3RD FL CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL INTEGRITY FUNDS DATE OF NAME CHANGE: 19910329 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL LIQUID ASSETS TRUST DATE OF NAME CHANGE: 19880403 485BPOS 1 n1a485b28502.htm N1A FORM 485B BOND FUND N1A 485B 2002 Bond Fund

                                                                                           Registration No. 2-76547
                                                                                                  File No. 811-3420

                                        SECURITIES AND EXCHANGE COMMISSION
                                               WASHINGTON, DC 20549

                                                     FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                                                        [X]

Pre-Effective Amendment No. __                                                                                [   ]


Post-Effective Amendment No. 40                                                                                 [X]

                                                      and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940                                                                                                     [X]


Amendment No. 38                                                                                                [X]


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                                            OPPENHEIMER INTEGRITY FUNDS
- -------------------------------------------------------------------------------------------------------------------
                                (Exact Name of Registrant as Specified in Charter)

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

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

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                                               Robert G. Zack, Esq.

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

- -------------------------------------------------------------------------------------------------------------------
                                      (Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box):


[   ]    Immediately upon filing pursuant to paragraph (b)
[X]      On April 30, 2002 pursuant to paragraph (b)
[   ]    60 days after filing pursuant to paragraph (a)(1)
[   ]    On _________________ pursuant to paragraph (a)(1)
[   ]    75 days after filing pursuant to paragraph (a)(2)
[   ]    On _______________ pursuant to paragraph (a)(2) of Rule 485


If appropriate, check the following box:

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

EX-99 4 repltr485b28502.htm REP LETTER - 485B BOND FUND Written Rep Letter 485B 2002 Bond Fund

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




April 29, 2002



Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

Re:               Oppenheimer Integrity Funds, on behalf of
                           Oppenheimer Bond Fund
                  Reg. No. 2-76547; File No. 811-3420
                  Written Representation of Counsel

To the Securities and Exchange Commission:

On behalf of Oppenheimer  Integrity Funds, on behalf of its series  Oppenheimer Bond Fund (the "Fund") and pursuant to Paragraph (b)(4)
of Rule 485 under the Securities Act of 1933, as amended (the "1933 Act"),  and in connection  with the Amendment on Form N-1A which is
Post-Effective  Amendment No. 40 to the 1933 Act Registration  Statement of the Fund and Amendment No. 38 to its Registration Statement
under the  Investment  Company Act of 1940,  as amended,  the  undersigned  counsel,  who prepared or reviewed such  Amendment,  hereby
represents to the Commission,  for filing with such Amendment,  that said Amendment does not contain  disclosures which would render it
ineligible to become effective pursuant to paragraph (b) of Rule 485.

                                                              Sincerely,

                                                              /s/Merryl Hoffman
                                                              -------------------------------------
                                                              Merryl Hoffman
                                                              Vice President and Senior Counsel
                                                              (212) 323-0248

EX-99 5 psp485b28502.htm PSP - 485B BOND FUND PSP 485B 2002 Bond Fund

Oppenheimer
Bond Fund

Prospectus dated April 30, 2002

Oppenheimer Bond Fund is a mutual fund that seeks a
high level of current income. It invests primarily in
investment-grade debt securities and U.S. government
securities.
This Prospectus contains important information
about the Fund's objective, and its investment
policies, strategies and risks. It also contains
important information about how to buy and sell shares
of the Fund and other account features. Please read
this Prospectus carefully before you invest and keep it
for future reference about your account.
As with all mutual funds, the Securities and Exchange
Commission has not approved or disapproved the Fund's
securities nor has it determined that this Prospectus is
accurate or complete. It is a criminal offense to
represent otherwise.

[logo] OppenheimerFunds(R)
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 Mail
By Telephone
By Checkwriting

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 a high level of current income by investing mainly in
debt instruments.

WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests at least 65% of its total assets in investment-grade debt
securities, U.S. government securities and money market instruments, under normal market conditions. Those
investment-grade debt securities can include:

o domestic and foreign corporate debt obligations,
o domestic and foreign government bonds,
o mortgage-related securities (including collateralized mortgage obligations ("CMOs")) issued by private
issuers, and
o other debt obligations.

In general, these debt securities are referred to as "bonds." The Fund's investments in U.S. government
securities include securities issued or guaranteed by the U.S. government or its agencies or federally-chartered
corporate entities referred to as "instrumentalities." These include mortgage-related U.S. government securities
and CMOs.

There is no set allocation of the Fund's assets among the classes of securities the Fund buys to meet
the 65% investment-grade securities requirement, but currently the Fund focuses mainly on U.S. government
securities and investment-grade debt securities. However, if market conditions change, the Fund's portfolio
managers might change the relative allocation of the Fund's assets. Effective July 31, 2002, the Fund will
invest at least 80% of its net assets (plus borrowings) in debt securities.

The Fund has no limitations on the range of maturities of the debt securities in which it can invest and
therefore may hold bonds with short-, medium- or long-term maturities. The Fund can invest up to 35% of its total
assets in high-yield debt securities that are below investment grade (commonly referred to as "junk bonds").
These investments are more fully explained in "About the Fund's Investments," below.

HOW DO THE PORTFOLIO MANAGERS DECIDE WHAT SECURITIES TO BUY OR SELL? In selecting securities for the Fund, the
Fund's portfolio managers analyze the overall investment opportunities and risks in different sectors of the debt
securities markets by focusing on business cycle analysis and relative values between the corporate and
government sectors. The portfolio managers' overall strategy is to build a broadly diversified portfolio of
corporate and government bonds. The portfolio managers currently focus on the factors below (which may vary in
particular cases and may change over time), looking for:

o Debt securities in market sectors that offer attractive relative value,
o Investment-grade securities that offer more income than U.S. treasury obligations with a good balance of
risk and return,
o High income potential from different types of corporate and government securities, and
o Broad portfolio diversification to help reduce the volatility of the Fund's share prices.

WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors seeking high current income from a fund that
invests primarily in investment-grade debt securities but which can also hold high-yield debt securities below
investment grade to seek higher income. Those investors should be willing to assume the credit risks of a fund
that typically invests a significant amount of its assets in corporate-debt securities, and the changes in share
prices that can occur when interest rates change. The Fund is intended as a long-term investment, not a
short-term trading vehicle, and may be appropriate for a part of an investor's retirement plan portfolio. 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. They include changes in general bond market movements in the U.S. and abroad (this is
referred to as "market risk"). 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.

Credit Risk. Debt securities are subject to credit risk. Credit risk is the risk that the issuer of a debt
security might not make interest and principal payments on the security as they become due. A downgrade in an
issuer's credit rating or other adverse news about an issuer can reduce the value of that issuer's securities.
Securities directly issued by the U.S. Treasury and certain agencies that are backed by the full faith and credit
of the U.S. government have little credit risk, and securities issued by other agencies of the U.S. government
generally have low credit risks. Securities issued by private issuers have greater credit risks. If an issuer
fails to pay interest, the Fund's income may be reduced. If an issuer fails to repay principal, the value of that
security and of the Fund's shares may be reduced.

o Special Risks of Lower-Grade Securities. Because the Fund can invest up to 35% of its total assets in
securities (including convertible securities) below investment grade to seek higher income, the Fund's
credit risks are greater than those of funds that buy only investment-grade securities. 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. Securities that are (or that have fallen) below
investment grade are exposed to a greater risk that the issuers of those securities might not meet their
debt obligations. Those risks can reduce the Fund's share prices and the income it earns. The market for
lower-grade securities may be less liquid, especially during times of economic distress, and therefore
they may be harder to value or to sell at an acceptable price.

Interest Rate Risks. Debt securities are subject to changes in value when prevailing interest rates change. When
interest rates fall, the values of outstanding debt securities generally rise. When interest rates rise, the
values of outstanding debt securities generally fall, and those securities may sell at a discount from their face
amount. The magnitude of these fluctuations is generally greater for securities having longer maturities than for
short-term securities. However, interest rate changes may have different effects on the values of
mortgage-related securities because of prepayment risks, discussed below.

At times, the Fund may buy longer-term debt securities to seek higher income. When the average maturity
of the Fund's portfolio is longer, its share prices may fluctuate more when interest rates change. The Fund can
buy zero-coupon or "stripped" securities, which are particularly sensitive to interest rate changes and the rate
of principal payments (and prepayments). These are derivative securities that have prices that may go up or down
more than other types of debt securities in response to interest rate changes. The Fund's share prices can go up
or down when interest rates change, because of the effect of the change on the value of the Fund's investments.
Also, if interest rates fall, the Fund's investments in new securities at lower yields will reduce the Fund's
income.

Prepayment Risk. Mortgage-related securities are subject to the risks of unanticipated prepayment. The risk is
that when interest rates fall, borrowers under the mortgages that underlie these securities will prepay their
mortgages more quickly than expected, causing the issuer of the security to pay the principal to the Fund prior
to the security's expected maturity. The Fund may be required to reinvest the proceeds at a lower interest rate,
reducing its income. Mortgage-related securities subject to prepayment risk generally offer less potential for
gains when prevailing interest rates fall and have greater potential for loss when prevailing interest rates
rise. The impact of prepayments on the price of a security may be difficult to predict and may increase the
volatility of the price. If the Fund buys mortgage-related securities at a premium, accelerated prepayments on
those securities could cause the Fund to lose a portion of its principal investment represented by the premium.

If interest rates rise rapidly, prepayments of mortgages may occur at a slower rate than expected, and
the expected maturity of short- or medium-term mortgage-related securities could lengthen as a result. That could
cause their values to fluctuate more, and the prices of the Fund's shares, to fluctuate more and to fall.

risks of Using Derivative Investments. The Fund can use derivatives to seek increased returns or to try to hedge
investment risks. 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, interest-only and
principal-only securities, structured notes, interest-rate swap agreements and mortgage-related securities 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 Manager expected it to perform. If that happens, the Fund's share prices could fall and the
Fund could get less income than expected, or its hedge might be unsuccessful. Some derivatives may be illiquid,
making it difficult to value or to sell them at an acceptable price. The Fund has limits on the amount of certain
types of derivatives it can hold. However, using derivatives can cause the Fund to lose money on its investments
and/or increase the volatility of its share prices.

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 price of the Fund will change daily based on changes in interest rates, 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.

Debt securities are subject to market, credit and interest rate risks that can affect their values and
the share prices of the Fund. Prepayment risks of mortgage-backed securities can cause the Fund to reinvest
proceeds of its investments in lower-yielding securities. In the OppenheimerFunds spectrum, the Fund generally
has more risks than bond funds that focus primarily on U. S. government securities, but the Fund's emphasis on
investment-grade securities may make its share prices less volatile than high-yield bond funds or funds that
focus on foreign 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 changes in the
Fund's performance (for its Class A shares) from year to year for the last 10 calendar years and by showing how
the average annual total returns of the Fund's shares, both before and after taxes, compare to those of a
broad-based market index. The after-tax returns are shown for Class A shares only and are calculated using the
historical highest individual federal marginal income tax rates in effect during the periods shown, and do not
reflect the impact of state or local taxes. The after-tax returns for the other classes of shares will vary. 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]

For the period from 1/1/2002 through 3/31/2002, the cumulative return (not annualized) of Class A shares
was -0.42%.
Sales charges and taxes are not included in the calculations of return in this bar chart, and if those charges
were included, the returns would be less than those shown.
During the period shown in the bar chart, the highest return (not annualized) for a calendar quarter was 6.24%
(2Qtr '95) and the lowest return (not annualized) for a calendar quarter was -3.16% (1Qtr '94).

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

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

Class A Shares (inception 4/15/88)
Return Before Taxes
Return After Taxes on Distributions 1.96% 4.29% 5.53%
Return After Taxes on Distributions and Sale of -0.92% 1.43% 2.76%
Fund Shares 1.16% 1.98% 3.03%

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

Lehman Brothers Corporate Bond Index 10.40% 7.22% 7.68%1
(reflects no deduction for fees, expenses
or taxes)

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

Class B Shares (inception 5/3/93) 1.17% 4.21% 4.94%

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

Class C Shares (inception 7/11/95) 5.15% 4.52% 4.70%

Class N Shares (inception 3/1/01) 2.21%2 N/A N/A

Class Y Shares (inception 4/27/98) 7.30% 4.69% N/A

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

1. From 12/31/91.
2. Total returns for Class N shares are cumulative and are not annualized.
The Fund's average annual total returns include the applicable sales charge: for Class A, the current maximum
initial sales charge of 4.75%; 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 for Class C shares and
life-of-class period for Class N shares. Because Class B shares convert to Class A shares 72 months after
purchase, Class B "life-of-class" performance does not include any contingent deferred sales charge and uses
Class A performance for the period after conversion. 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 Lehman Brothers Corporate Bond Index, which measures the performance of non-convertible investment-grade
domestic corporate debt securities. The index performance includes 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 Fund pays a variety of expenses directly for management of its assets, administration, distribution of its
shares and other services. Those expenses are subtracted from the Fund's assets to calculate the Fund's net asset
values per share. All shareholders therefore pay those expenses indirectly. Shareholders pay other expenses
directly, such as sales charges and account transaction charges. The following tables are provided to help you
understand the fees and expenses you may pay if you buy and hold shares of the Fund. The numbers below are based
on the Fund's expenses during its fiscal year ended December 31, 2001, as restated to reflect the reduction in
Management Fees and the change in Distribution and/or Service (12b-1) Fees for Class N.

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 4.75% None None None None
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 twelve (12) months of purchase.
4. Applies to shares redeemed within eighteen (18) months of retirement plan's first purchase.
Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

Management Fees 0.58% 0.58% 0.58% 0.58% 0.58%

Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50% None

Other Expenses 0.25% 0.26% 0.25% 0.27% 0.21%

Total Annual Operating Expenses 1.08% 1.84% 1.83% 1.35% 0.79%

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

Effective January 1, 2002, the Management Fee rate has been reduced as described in "How the Fund is Managed -
The Manager - Advisory Fees." Prior to such change, Management Fees were 0.73% of average annual net assets for
each Class. Accordingly, the Management Fees and Total Annual Operating Expenses set forth above have been
restated to reflect the reduced fees. Effective November 1, 2001, the Distribution and/or Service (12b-1) Fees
for Class N shares increased from 0.25% to 0.50%. For the period from March 1, 2001 when Class N shares were
first offered until the Fund's fiscal year-end of December 31, 2001, the Class N shares "Distribution and/or
Service (12b-1) Fees" and "Total Annual Operating Expenses" were 0.37% and 1.37%, respectively.

"Other Expenses" include transfer agent fees, custodial expenses, and accounting and legal expenses the Fund pays.
The "Other Expenses" in the table are based on, among other things, the fees the Fund would have paid if the
transfer agent had not waived a portion of its fee under a voluntary undertaking to the Fund to limit these fees
to 0.25% per annum for Class Y shares and 0.35% per annum for all other classes. After the waiver, the actual
"Other Expenses" and "Total Annual Operating Expenses" as percentages of average daily net assets were 0.19% and
0.77%, respectively, for Class Y shares. Expenses may vary in future years.

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 Years1
- ---------------------------------- --------------------- -------------------- ------------------- -------------------
- ---------------------------------- --------------------- -------------------- ------------------- -------------------

Class A Shares $580 $802 $1,042 $1,730

Class B Shares $687 $879 $1,196 $1,777

Class C Shares $286 $576 $990 $2,148

Class N Shares $237 $428 $739 $1,624

Class Y Shares $81 $252 $439 $978

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

- ---------------------------------- --------------------- -------------------- ------------------- -------------------
If shares are not redeemed: 1 Year 3 Years 5 Years 10 Years1
- ---------------------------------- --------------------- -------------------- ------------------- -------------------
- ---------------------------------- --------------------- -------------------- ------------------- -------------------

Class A Shares $580 $802 $1,042 $1,730

Class B Shares $187 $579 $996 $1,777

Class C Shares $186 $576 $990 $2,148

Class N Shares $137 $428 $739 $1,624

Class Y Shares $81 $252 $439 $978

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

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 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 after 6 years.

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. The Fund's portfolio
might not always include all of the different types of investments described below. The Statement of Additional
Information contains more detailed information about the Fund's investment policies and risks.

The Manager tries to reduce risks by carefully researching securities before they are purchased. The
Fund attempts to reduce its exposure to market risks by diversifying its investments, that is, by not holding a
substantial amount of 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 investments 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 share price and yield of the Fund will change daily based on changes in market prices of securities and
market conditions, and in response to other economic events.

In selecting debt securities and evaluating their yield potential and credit risk, the Manager does not
rely solely on ratings by rating organizations but evaluates business and economic factors affecting an issuer as
well. The debt securities the Fund buys may be rated by nationally recognized rating organizations such as
Moody's Investors Service or Standard & Poor's Rating Services, or they may be unrated securities assigned an
equivalent rating by the Manager. "Investment-grade" rated securities are those in the four highest rating
categories of national ratings organizations. A description of those ratings definitions is included in Appendix
A to the Statement of Additional Information.

U.S. Government Securities. Not all of the U.S. government securities the Fund buys are backed by the full faith
and credit of the U.S. government as to payment of interest and repayment of principal. Some are backed
by the right of the entity to borrow from the U.S. Treasury. Others are backed only by the credit of the
instrumentality. All of these different types of securities described below are generally referred to as
"U.S. government securities" in this Prospectus.
o U.S. Treasury Obligations. These include Treasury bills (having maturities of one year or less when
issued), Treasury notes (having maturities of more than one year and up to ten years when issued), and
Treasury bonds (having maturities of more than ten 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. The Fund can buy U. S. Treasury securities that have been "stripped" of their coupons and
zero-coupon securities described below.
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 U.S.
government. Some are supported by the full faith and credit of the U.S. government, such as Government
National Mortgage Association ("Ginnie Mae") pass-through mortgage certificates. 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 ("Fannie Mae") bonds. Others are supported only by the credit of the
entity that issued them, such as Federal Home Loan Mortgage Corporation ("Freddie Mac") obligations.
o Mortgage-Related U.S. Government Securities. These include interests in pools of residential or
commercial mortgages, in the form of CMOs and other "pass-through" mortgage securities. CMOs that are
U.S. government securities have collateral to secure payment of interest and principal. They may be
issued in different series with different interest rates and maturities. The collateral is either in the
form of mortgage pass-through certificates issued or guaranteed by a U.S. agency or instrumentality or
mortgage loans insured by a U.S. government agency. The Fund can have substantial amounts of its assets
invested in mortgage-related U.S. government securities.
The prices and yields of CMOs are determined, in part, by assumptions about the cash flows from the rate
of payments of the underlying mortgages. Changes in interest rates may cause the rate of expected
prepayments of those mortgages to change. These prepayment risks can make the prices of CMOs very
volatile when interest rates change. That volatility will affect the Fund's share prices.
Other Debt Securities. While the Fund invests primarily in investment-grade debt securities, it is not required
to dispose of debt securities that fall below investment grade after the Fund buys them. However, the
portfolio managers will monitor those holdings to determine whether the Fund should sell them. While
securities rated "Baa" by Moody's or "BBB" by S&P are considered "investment grade," they have some
speculative characteristics.
While investment-grade securities are subject to risks of non-payment of interest and principal, in
general, higher-yielding lower-grade bonds, whether rated or unrated, have greater risks than
investment-grade securities. There may be less of a market for them and therefore they may be harder to
value and sell at an acceptable price. These risks can reduce the Fund's share prices and the income it
earns.
o Private-Issuer Securities. The Fund can invest in securities issued by private issuers that do not offer
the credit backing of the U.S. government. These include multi-class debt or pass-through certificates
secured by mortgage loans. They may be issued by banks, savings and loans, mortgage bankers or special
trusts. The Fund can buy other types of asset-backed securities collateralized by loans or other assets
or receivables. Private-issuer mortgage-backed securities are subject to the credit risks of the issuers
(as well as the interest rate risks and prepayment risks discussed above). There is the risk that
private issuers may not make timely payment of interest or repay principal when due, although in some
cases those payment obligations may be supported by insurance or guarantees.
Foreign Securities. The Fund typically invests a portion of its assets in foreign debt securities, and it has no
limit on the amount of its assets that can be invested in foreign securities that are investment grade.
The Fund can buy debt securities issued by foreign governments or companies. The Fund can buy securities
of governments and companies in both developed markets and emerging markets. Debt securities issued or
guaranteed by a foreign government or its agencies might not be backed by the "full faith and credit" of
the government.
The Fund's foreign debt investments can be denominated in U.S. dollars or in foreign currencies. The
Fund will buy foreign currency only in connection with the purchase and sale of foreign securities and
not for speculation.
o Risks of Foreign Investing. While foreign securities offer special investment opportunities, there are
also 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 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 Fund
makes from the income it receives from foreign securities as foreign currency values change against the
U.S. dollar. 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.

Portfolio Turnover. The Fund can engage in short-term trading to try to achieve its objective, and will likely
have a high portfolio turnover rate. Portfolio turnover increases the Fund's brokerage and transaction
costs (and reduces the Fund's performance). However, most of the Fund's portfolio transactions are
principal trades that do not entail brokerage fees. 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 recent fiscal years.

CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Fund's Board of Trustees can change non-fundamental
investment policies without shareholder approval, although significant changes will be described in amendments to
this Prospectus. Fundamental policies cannot be changed without the approval of a majority of the Fund's
outstanding voting shares. The Fund's investment objective is a fundamental policy. 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. The Fund's policy
to invest at least 80% of its net assets (plus borrowings) in debt securities is not a fundamental policy;
however, it cannot be changed without 60 days prior notice to shareholders.

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

Forward Rolls. The Fund can enter into "forward roll" 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 repurchase, 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.

Zero-Coupon and "Stripped" Securities. Some of the debt securities the Fund buys are zero-coupon bonds that pay
no interest. They are issued at a substantial discount from their face value. They may be securities
issued by the U.S. government or private issuers. "Stripped" securities are the separate income or
principal components of a debt security. Some CMOs or other mortgage-related securities may be stripped,
with each component having a different proportion of principal or interest payments. One class might
receive all the interest and the other all the principal payments.
Zero-coupon and stripped securities are subject to greater fluctuations in price from interest rate
changes than typical debt securities that pay interest on a regular basis. The Fund may have to pay out
the imputed income on zero-coupon securities without receiving the cash currently. Stripped securities
are particularly sensitive to changes in interest rates.

The values of interest-only and principal-only mortgage-related securities are very sensitive to changes
in interest rates and prepayments of underlying mortgages. The market for these securities may be
limited, making it difficult for the Fund to value or to sell its holdings at an acceptable price.

Preferred Stock. Unlike common stock, preferred stock typically has a stated dividend rate. Preferred stock
dividends may be cumulative (they remain a liability of the company until they are paid) or
non-cumulative. When interest rates rise, the value of preferred stock having a fixed dividend rate
tends to fall. The right to payment of dividends on preferred stock is generally subordinate to the
rights of a corporation's debt securities.
Asset-Backed Securities. The Fund can buy asset-backed securities, which are fractional interests in pools of
loans collateralized by the loans or other assets or receivables. They are typically issued by trusts
and special purpose corporations that pass the income from the underlying pool to the buyer of the
interest. These securities are subject to prepayment risks and the risk of default by the issuer as well
as by the borrowers of the underlying loans in the pool.
Illiquid and Restricted Securities. Investments may be illiquid because they do not have an active trading
market, making it difficult to value them or sell them 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 (the Fund's Board of Trustees can increase that limit to 15%). Certain
restricted securities that are eligible for resale to qualified institutional purchasers may not be
subject to that limit. The Manager monitors holdings of illiquid securities on an ongoing basis to
determine whether to sell any holdings to maintain adequate liquidity.
"Structured" Notes. The Fund can buy "structured" notes, which are specially-designed derivative debt investments
whose payments of principal or interest payments are linked to the value of an index (such as a currency
or securities index) or commodity. The terms of the instrument may be "structured" by the purchaser (the
Fund) and the borrower issuing the note.
The principal and/or interest payments depend on the performance of one or more other securities or
indices, and the values of these notes will therefore fall or rise in response to the changes in the
values of the underlying security or index. They are subject to both credit and interest rate risks and
therefore the Fund could receive more or less than it originally invested when the notes mature, or it
might receive less interest than the stated coupon payment if the underlying investment or index does
not perform as anticipated. Their values may be very volatile and they may have a limited trading
market, making it difficult for the Fund to sell its investment at an acceptable price.
Hedging. The Fund can buy and sell certain kinds of futures contracts, put and call options, interest rate swaps
and forward contracts to hedge investment risks. The Fund is not required to use hedging instruments to
seek its objective and does not currently use them to a significant degree.
There are special risks in particular hedging strategies. If the Manager used a hedging instrument at
the wrong time or judged market conditions incorrectly, 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.
Short-Term Debt Securities. The Fund can buy high-quality, short-term money market instruments, including
obligations of the U.S. Government and its agencies, short-term corporate debt obligations, bank
certificates of deposit and bankers' acceptances, and commercial paper, which are short-term, negotiable
promissory notes of companies. Because these instruments tend to offer lower yields than other debt
securities, the Fund ordinarily does not invest in them to seek high current income, and uses them more
for liquidity and cash management purposes or for defensive purposes when market conditions are unstable.

How the Fund Is Managed

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

The Manager has been an investment advisor since January 1960. The Manager and its subsidiaries and
affiliates managed more than $130 billion in assets as of March 31, 2002, including other Oppenheimer funds, with
more than 6.3 million shareholder accounts. The Manager is located at 498 Seventh Avenue, 10th Floor, New York,
New York 10018.

Portfolio Managers. Since April 23, 2002, the Fund has been managed by a portfolio management team comprised of
Angelo Manioudakis and other investment professionals selected from the Manager's high-grade team in its
fixed-income department. This portfolio management team is primarily responsible for the day-to-day
management of the Fund's portfolio. Mr. Manioudakis is a Vice President of the Fund and Senior Vice
President of the Manager. He is also an officer and portfolio manager of other Oppenheimer funds.
Certain members of the Fund's portfolio management team have portfolio management responsibilities for
other Oppenheimer funds. Prior to joining the Manager in April 2002, Mr. Manioudakis was a portfolio
manager at Morgan Stanley Investment Management (since August 1993).

Advisory Fees. Under the Investment Advisory Agreement, effective January 1, 2002, the Fund pays the Manager an
advisory fee at an annual rate that declines on additional assets as the Fund grows: 0.60% of the first
$200 million of average annual net assets of the Fund, 0.57% of the next $200 million, 0.54% of the next
$200 million, 0.51% of the next $200 million, 0.45% of the next $200 million and 0.35% of average annual
net assets in excess of $1 billion. Prior to January 1, 2002 the annual advisory fee was: 0.75% of the
first $200 million of average annual net assets of the Fund, 0.72% of the next $200 million, 0.69% of
the next $200 million, 0.66% of the next $200 million, 0.60% of the next $200 million and 0.50% of
average annual net assets in excess of $1 billion. The Fund's management fee for its last fiscal year
ended December 31, 2001 was 0.73% of average annual net assets for each class of shares.

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

How to Buy Shares

HOW DO YOU BUY SHARES? You can buy shares several ways, as described below. The Fund's Distributor,
OppenheimerFunds Distributor, Inc., may appoint servicing agents to accept purchase (and redemption) orders. The
Distributor, in its sole discretion, may reject any purchase order for the Fund's shares.
Buying Shares Through Your Dealer. You can buy shares through any dealer, broker or financial institution that

has a sales agreement with the Distributor. Your dealer will place your order with the Distributor on
your behalf.
Buying Shares Through the Distributor. Complete an OppenheimerFunds New Account Application and return it with a
check payable to "OppenheimerFunds Distributor, Inc."

Mail it to P.O. Box 5270, Denver, Colorado 80217. If you don't list a dealer on the application, the
Distributor will act as your agent in buying the shares. However, we recommend that you discuss your
investment with a financial advisor before you make a purchase to be sure that the Fund is appropriate
for you.
Paying by Federal Funds Wire. Shares purchased through the Distributor may be paid for by Federal Funds
wire. The minimum investment is $2,500. Before sending a wire, call the Distributor's Wire Department at
1.800.525.7048 to notify the Distributor of the wire and to receive further instructions.
Buying Shares Through OppenheimerFunds AccountLink. With AccountLink, you pay for shares by electronic funds
transfers from your bank account. Shares are purchased for your account by a transfer of money from your
bank account through the Automated Clearing House (ACH) system. You can provide those instructions
automatically, under an Asset Builder Plan, described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. Please refer to "AccountLink," below for more details.
Buying Shares Through Asset Builder Plans. You may purchase shares of the Fund (and up to four other
Oppenheimer funds) automatically each month from your account at a bank or other financial institution
under an Asset Builder Plan with AccountLink. Details are in the Asset Builder Application and the
Statement of Additional Information.

HOW MUCH MUST YOU INVEST? You can buy Fund shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $25. There are reduced minimum investments under special investment
plans.

With Asset Builder Plans, 403(b) plans, Automatic Exchange Plans and military allotment plans, you can make
initial and subsequent investments for as little as $25. You can make additional purchases of at least
$25 through AccountLink.
Under retirement plans, such as IRAs, pension and profit-sharing plans and 401(k) plans, you can start your
account with as little as $250. If your IRA is started as an Asset Builder Plan, the $25 minimum
applies. Additional purchases may be for as little as $25.
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 and sends it to
the Distributor.
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., New York time, but may close earlier
on some days. All references to time in this Prospectus mean "New York time."
The net asset value per share is determined by dividing the value of the Fund's net assets attributable
to a class by the number of shares of that class that are outstanding. To determine net asset value, the
Fund's Board of Trustees has established procedures to value the Fund's securities, in general, based on
market value. The Board has adopted special procedures for valuing illiquid and restricted securities
and obligations for which market values cannot be readily obtained. Because some foreign securities
trade in markets and on exchanges that operate on weekends and U.S. holidays, the values of some of the
Fund's foreign investments may change on days when investors cannot buy or redeem Fund shares.
If, after the close of the principal market on which a security held by the Fund is traded, and before
the time the Fund's securities are priced that day, an event occurs that the Manager deems likely to
cause a material change in the value of such security, the Fund's Board of Trustees has authorized the
Manager, subject to the Board's review, to ascertain a fair value for such security.
The Offering Price. To receive the offering price for a particular day, in most cases the Distributor or its
designated agent must receive your order by the time of day The New York Stock Exchange closes that day.
If your order is received on a day when the Exchange is closed or after it has closed, the order will
receive the next offering price that is determined after your order is received.

Buying Through a Dealer. If you buy shares through a dealer, your dealer must receive the order by the close of
The New York Stock Exchange and transmit it to the Distributor so that it is received before the
Distributor's close of business on a regular business day (normally 5:00 P.M.) to receive that day's
offering price. 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). The
amount of that sales charge will vary depending on the amount you invest. The sales charge rates are
listed in "How Can You Buy Class A Shares?" below.
- -------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

o Investing for the Shorter Term. While the Fund is meant to be a long-term investment, if you have a
relatively short-term investment horizon (that is, you plan to hold your shares for not more than six
years), you should probably consider purchasing Class A or Class C shares rather than Class B shares.
That is because of the effect of the Class B contingent deferred sales charge if you redeem within six
years, as well as the effect of the Class B asset-based sales charge on the investment return for that
class in the short-term. Class C shares might be the appropriate choice (especially for investments of
less than $100,000), because there is no initial sales charge on Class C shares, and the contingent
deferred sales charge does not apply to amounts you sell after holding them one year.
However, if you plan to invest more than $100,000 for the shorter term, then as your investment horizon
increases toward six years, Class C shares might not be as advantageous as Class A shares. That is
because the annual asset-based sales charge on Class C shares will have a greater impact on your account
over the longer term than the reduced front-end sales charge available for larger purchases of Class A
shares.
And for non-retirement plan investors who invest $1 million or more, in most cases Class A shares will
be the most advantageous choice, no matter how long you intend to hold your shares. For that reason, the
Distributor normally will not accept purchase orders of $500,000 or more of Class B shares or $1 million
or more of Class C shares from a single investor.
Investing for the Longer Term. If you are investing less than $100,000 for the longer-term, for example for
retirement, and do not expect to need access to your money for seven years or more, Class B shares may
be appropriate.

Are There Differences in Account Features That Matter to You? Some account features may not be available to Class
B, Class C and Class N shareholders. Other features may not be advisable (because of the effect of the
contingent deferred sales charge) for Class B, Class C and Class N shareholders. Therefore, you should
carefully review how you plan to use your investment account before deciding which class of shares to
buy.
Additionally, the dividends payable to Class B, Class C and Class N shareholders will be reduced by the
additional expenses borne by those classes that are not borne by Class A or Class Y shares, such as the
Class B, Class C and Class N asset-based sales charge described below and in the Statement of Additional
Information. Share certificates are only available on 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 the special conditions apply.

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

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

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

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 $50,000 4.75% 4.98% 4.00%
------------------------------------ ------------------------ ------------------------- -------------------------
------------------------------------ ------------------------ ------------------------- -------------------------
$50,000 or more but less than 4.50% 4.71% 3.75%
$100,000
------------------------------------ ------------------------ ------------------------- -------------------------
------------------------------------ ------------------------ ------------------------- -------------------------
$100,000 or more but less than 3.50% 3.63% 2.75%
$250,000
------------------------------------ ------------------------ ------------------------- -------------------------
------------------------------------ ------------------------ ------------------------- -------------------------
$250,000 or more but less than 2.50% 2.56% 2.00%
$500,000
------------------------------------ ------------------------ ------------------------- -------------------------
------------------------------------ ------------------------ ------------------------- -------------------------
$500,000 or more but less than $1 2.00% 2.04% 1.60%
million
------------------------------------ ------------------------ ------------------------- -------------------------

Can You Reduce Class A Sales Charges? You may be eligible to buy Class A shares at reduced sales charge rates
under the Fund's "Right of Accumulation" or a Letter of Intent, as described in "Reduced Sales Charges"
in the Statement of Additional Information.
Class A Contingent Deferred Sales Charge. There is no initial sales charge on purchases of Class A shares of any
one or more of the Oppenheimer funds aggregating $1 million or more, or for certain purchases by
particular types of retirement plans that were permitted to purchase such shares prior to March 1, 2001
("grandfathered retirement accounts"). Retirement plans are not permitted to make initial purchases of
Class A shares subject to a contingent deferred sales charge. The Distributor pays dealers of record
concessions in an amount equal to 1.0% of purchases of $1 million or more other than by grandfathered
retirement accounts. For grandfathered retirement accounts, the concession is 1.0% of the first $2.5
million, plus 0.50% of the next $2.5 million, plus 0.25% of purchases over $5 million, calculated on a
calendar year basis. In either case, the concession will not be paid on purchases of shares by exchange
or that were previously subject to a front-end sales charge and dealer concession.
If you redeem any of those shares within an 18-month "holding period" measured from the beginning of the
calendar month of their purchase, a contingent deferred sales charge (called the "Class A contingent
deferred sales charge") may be deducted from the redemption proceeds. That sales charge will be equal to
1.0% of the lesser of:

o the aggregate net asset value of the redeemed shares at the time of redemption (excluding shares
purchased by reinvestment of dividends or capital gain distributions) or
o the original net asset value of the redeemed shares.
The Class A contingent deferred sales charge will not exceed the aggregate amount of the concessions the
Distributor paid to your dealer on all purchases of Class A shares of all Oppenheimer funds you made
that were subject to the Class A contingent deferred sales charge.

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

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

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

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

Years Since Beginning of Month in Which Purchase Contingent Deferred Sales Charge on Redemptions in That Year
Order was Accepted (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%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
6 and following 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 only through 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 through 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. For example, Massachusetts
Mutual Life Insurance Company ("MassMutual"), an affiliate of the Manager, may purchase Class Y shares of the
Fund and other Oppenheimer funds (as well as Class Y shares of funds advised by MassMutual) for asset allocation
programs, investment companies or separate investment accounts it sponsors and offers to its customers.
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.

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 1.800.852.8457. 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 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 special
PhoneLink number, 1.800.533.3310.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by phone, by calling 1.800.533.3310. 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 1.800.525.7048 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 1.800.525.7048. 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 using the Fund's checkwriting privilege, 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 1.800.525.7048, 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.

Checkwriting. To write checks against your Fund account, request that privilege on your account application, or
contact the Transfer Agent for signature cards. They must be signed (with a signature guarantee) by all owners of
the account and returned to the Transfer Agent so that checks can be sent to you to use. Shareholders with joint
accounts can elect in writing to have checks paid over the signature of one owner. If you previously signed a
signature card to establish checkwriting in another Oppenheimer fund, simply call 1.800.525.7048 to request
checkwriting for an account in this Fund with the same registration as the other account.
o Checks can be written to the order of whomever you wish, but may not be cashed at the bank the checks
are payable through or the Fund's custodian bank.
o Checkwriting privileges are not available for accounts holding shares that are subject to a contingent
deferred sales charge.
o Checks must be written for at least $100.
o Checks cannot be paid if they are written for more than your account value. Remember, your shares
fluctuate in value and you should not write a check close to the total account value.
o You may not write a check that would require the Fund to redeem shares that were purchased by check or
Asset Builder Plan payments within the prior 10 days.
Don't use your checks if you changed your Fund account number, until you receive new checks.

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, call 1.800.852.8457
o To redeem shares automatically on PhoneLink, call 1.800.533.3310
Whichever method you use, you may have a check sent to the address on the account statement, or, if you
have linked your Fund account to your bank account on AccountLink, you may have the proceeds sent to that bank
account.

Are There Limits on Amounts Redeemed by Telephone?

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

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

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

HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase shares subject to a Class A, Class B,
Class C or Class N contingent deferred sales charge and redeem any of those shares during the applicable holding
period for the class of shares, the contingent deferred sales charge will be deducted from the redemption
proceeds (unless you are eligible for a waiver of that sales charge based on the categories listed in Appendix 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:
the amount of your account value represented by an increase in net asset value over the initial purchase
price,
shares purchased by the reinvestment of dividends or capital gains distributions, or
shares redeemed in the special circumstances described in Appendix 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 1.800.525.7048. 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
at 1.800.852.8457, or by using PhoneLink for automated exchanges by calling 1.800.533.3310. Telephone
exchanges may be made only between accounts that are registered with the same name(s) and address.
Shares held under certificates may not be exchanged by telephone.

ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you should be aware of:
Shares are normally redeemed from one fund and purchased from the other fund in the exchange transaction on

the same regular business day on which the Transfer Agent receives an exchange request that conforms to
the policies described above. It must be received by the close of The New York Stock Exchange that day,
which is normally 4:00 P.M. but may be earlier on some days. However, either fund may delay the purchase
of shares of the fund you are exchanging into up to seven days if it determines it would be
disadvantaged by the same day exchange.
The interests of the Fund's long-term shareholders and its ability to manage its investments may be
adversely affected when its shares are repeatedly bought and sold in response to short-term market
fluctuations--also known as "market timing." When large dollar amounts are involved, the Fund may have
difficulty implementing long-term investment strategies, because it cannot predict how much cash it will
have to invest. Market timing also may force the Fund to sell portfolio securities at disadvantageous
times to raise the cash needed to buy a market timer's Fund shares. These factors may hurt the Fund's
performance and its shareholders. When the Manager believes frequent trading would have a disruptive
effect on the Fund's ability to manage its investments, the Manager and the Fund may reject purchase
orders and exchanges into the Fund by any person, group or account that the Manager believes to be a
market timer.
o The Fund may amend, suspend or terminate the exchange privilege at any time. The Fund will provide you
notice whenever it is required to do so by applicable law, but it may impose changes at any time for
emergency purposes.

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

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling and exchanging shares is contained
in the Statement of Additional Information.
The offering of shares may be suspended during any period in which the determination of net asset value is
suspended, and the offering may be suspended by the Board of Trustees at any time the Board believes it
is in the Fund's best interest to do so.

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

The Transfer Agent will record any telephone calls to verify data concerning transactions and has adopted other
procedures to confirm that telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by confirming such transactions in
writing. The Transfer Agent and the Fund will not be liable for losses or expenses arising out of
telephone instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent receives all required documents in
proper form. From time to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating in NETWORKING through the National
Securities Clearing Corporation are responsible for obtaining their clients' permission to perform those
transactions, and are responsible to their clients who are shareholders of the Fund if the dealer
performs any transaction erroneously or improperly.
The redemption price for shares will vary from day to day because the value of the securities in the Fund's
portfolio fluctuates. The redemption price, which is the net asset value per share, will normally differ
for each class of shares. The redemption value of your shares may be more or less than their original
cost.

Payment for redeemed shares ordinarily is made in cash. It is forwarded by check, or through AccountLink (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 forwarding a check or processing a payment via AccountLink for recently purchased
shares, but only until the purchase payment has cleared. That delay may be as much as 10 days from the
date the shares were purchased. That delay may be avoided if you purchase shares by Federal Funds wire
or certified check, or arrange with your bank to provide telephone or written assurance to the Transfer
Agent that your purchase payment has cleared

Involuntary redemptions of small accounts may be made by the Fund if the account value has fallen below $1,000
for reasons other than the fact that the market value of shares has dropped. In some cases, involuntary
redemptions may be made to repay the Distributor for losses from the cancellation of share purchase
orders.

Shares may be "redeemed in kind" under unusual circumstances (such as a lack of liquidity in the Fund's portfolio
to meet redemptions). This means that the redemption proceeds will be paid with liquid securities from
the Fund's portfolio.
"Backup withholding" of federal income tax may be applied against taxable dividends, distributions and redemption
proceeds (including exchanges) if you fail to furnish the Fund your correct, certified Social Security
or Employer Identification Number when you sign your application, or if you under-report your income to
the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will mail only one copy of each
prospectus, annual and semi-annual report and annual notice of the Fund's privacy policy to shareholders
having the same last name and address on the Fund's records. The consolidation of these mailings, called
householding, benefits the Fund through reduced mailing expense.
If you want to receive multiple copies of these materials, you may call the Transfer Agent at
1.800.525.7048. 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
each regular business day and pay those dividends to shareholders monthly on a date selected by the Board of
Trustees. Daily dividends will not be declared or paid on newly purchased shares until Federal Funds are
available to the Fund from the purchase payment for shares. 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 capital gains distribution,
you will pay the full price for the shares and then receive a portion of the price back as a taxable
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 Deloitte & Touche 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 December 31,                      2001         2000         1999         1998         1997
- ------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period                     $9.79        $9.97       $10.86       $10.97       $10.70
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .73/1/       .73          .71          .71          .77
Net realized and unrealized gain (loss)                   (.05)/1/     (.18)        (.89)        (.11)         .27
                                                         ---------------------------------------------------------
Total income (loss)
from investment operations                                 .68          .55         (.18)         .60         1.04
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.73)        (.73)        (.71)        (.71)
(.77)
                                                         ---------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.73)        (.73)        (.71)        (.71)
(.77)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                           $9.74        $9.79        $9.97       $10.86       $10.97
                                                         =========================================================

- ------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value/2/                       7.05%        5.80%       (1.65)%       5.61%
10.13%

- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands)              $280,132     $202,833     $220,502     $246,668     $190,706
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                     $237,232     $205,883     $251,190     $217,944     $187,458
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income   7.31%/1/ 7.48%        6.88%        6.46%        7.20%
Expenses                1.23%    1.31%        1.24%        1.22%/4/     1.27%/4/
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162%     255%         238%          67%          51%


1. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income                      $ .74
Net realized and unrealized gain (loss)    $(.06)
Net investment income ratio                 7.43%

2. Assumes a $1,000 hypothetical initial 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 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.



                           | OPPENHEIMER BOND FUND


FINANCIAL HIGHLIGHTS Continued




Class B      Year Ended December 31,                      2001         2000         1999         1998         1997
- ------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period                     $9.79        $9.96       $10.86       $10.97       $10.69
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .65/1/       .66          .63          .62          .69
Net realized and unrealized gain (loss)                   (.05)/1/     (.17)        (.90)        (.10)         .28
                                                         ---------------------------------------------------------
Total income (loss)
from investment operations                                 .60          .49         (.27)         .52          .97
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.66)        (.66)        (.63)        (.63)
(.69)
                                                         ---------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.66)        (.66)        (.63)        (.63)
(.69)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                           $9.73        $9.79        $9.96       $10.86       $10.97
                                                         =========================================================

- ------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value/2/                       6.14%        5.11%       (2.48)%       4.81%
9.41%

- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands)              $161,998      $83,637      $94,845      $88,061      $48,255
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                     $118,521      $83,394      $95,285      $64,330      $41,439
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income                                     6.60%/1/     6.71%        6.13%        5.68%
6.42%
Expenses                                                  1.99%        2.07%        1.99%        1.97%/4/
2.02%/4/
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    162%         255%         238%          67%
51%


1. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income                      $ .66
Net realized and unrealized gain (loss)    $(.06)
Net investment income ratio                 6.72%

2. Assumes a $1,000 hypothetical initial 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 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.



                           | OPPENHEIMER BOND FUND





Class C      Year Ended December 31,                      2001         2000         1999         1998         1997
- ------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period                     $9.80        $9.97       $10.87       $10.98       $10.70
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                      .65/1/       .66          .63          .62          .69
Net realized and unrealized gain (loss)                   (.05)/1/     (.17)        (.90)        (.10)         .28
                                                         ---------------------------------------------------------
Total income (loss)
from investment operations                                 .60          .49         (.27)         .52          .97
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.66)        (.66)        (.63)        (.63)
(.69)
                                                         ---------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.66)        (.66)        (.63)        (.63)
(.69)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                           $9.74        $9.80        $9.97       $10.87       $10.98
                                                         =========================================================

- ------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value/2/                       6.14%        5.11%       (2.47)%       4.81%
9.39%

- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands)               $57,049      $24,303      $24,143      $21,796       $9,188
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                      $36,886      $22,605      $24,218      $15,198       $6,134
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income                                     6.65%/1/     6.71%        6.13%        5.66%
6.36%
Expenses                                                  1.98%        2.07%        1.99%        1.96%/4/
2.02%/4/
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    162%         255%         238%          67%
51%


1. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income                      $ .66
Net realized and unrealized gain (loss)    $(.06)
Net investment income ratio                 6.77%

2. Assumes a $1,000 hypothetical initial 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 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.



                           | OPPENHEIMER BOND FUND


FINANCIAL HIGHLIGHTS Continued



                                                       Class N                                             Class Y
                                                        Period                                                Year
                                                         Ended                                               Ended
                                                      Dec. 31,                                            Dec. 31,
                                                          2001/1/      2001         2000         1999
1998/2/
- ------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period                    $10.02        $9.78        $9.95       $10.86       $10.88
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .61/3/       .76/4/        .85          .76          .49
Net realized and unrealized gain (loss)                   (.29)/3/     (.05)/4/     (.18)        (.91)
(.02)

- ----------------------------------------------------------
Total income (loss) from
investment operations                                      .32          .71          .67         (.15)         .47
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                      (.61)        (.77)        (.84)        (.76)
(.49)

- ----------------------------------------------------------
Total dividends and/or distributions
to shareholders                                           (.61)        (.77)        (.84)        (.76)
(.49)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                          $ 9.73       $ 9.72        $9.78       $ 9.95       $10.86

==========================================================

- ------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value5                         3.18%        7.30%        7.13%       (1.37)%
4.40%

- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands)                $2,176       $4,067         $877         $186           $1
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                       $  768       $2,286         $340          $31           $1
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:6
Net investment income                                     7.87%/3/     7.85%/4/     7.92%        7.94%
6.84%
Expenses                                                  1.37%        0.94%        0.83%        0.83%
0.74%/7/
Expenses, net of reduction to custodian
expenses and/or voluntary waiver
of transfer agent fees                                     N/A         0.92%         N/A          N/A          N/A
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    162%         162%         255%         238%
67%


1. For the period from March 1, 2001 (inception of offering) to December 31,
2001.
2. For the period from April 27,1998 (inception of offering) to December 31,
1998.
3. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income                      Change less than $0.005 per share
Net realized and unrealized gain (loss)    Change less than $0.005 per share
Net investment income ratio 7.99%

4. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income                      $ .77
Net realized and unrealized gain (loss)    $(.06)
Net investment income ratio                 7.97%

5. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends 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.
6. Annualized for periods of less than one full year.
7. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.



                           | OPPENHEIMER BOND FUND

INFORMATION AND SERVICES

For More Information on Oppenheimer Bond 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:
                                            1.800.525.7048
- ------------------------------------------- ------------------------------------------------------------------
- ------------------------------------------- ------------------------------------------------------------------
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 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 SEC File No.: 811-3420   The Fund's shares are distributed by:
PR0285.001.0402                                               [logo] OppenheimerFunds Distributor, Inc.
Printed on recycled paper.


                                             Appendix to Prospectus of
                                               Oppenheimer Bond Fund

         Graphic material included in the Prospectus of Oppenheimer Bond 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 last ten calendar years, without deducting
sales charges. Set forth below are the relevant data points that will appear in the bar chart:

         Calendar             Annual
         Year                 Total
         Ended                Returns


         12/31/92               6.77%
         12/31/93               10.30%
         12/31/94               -3.87%
         12/31/95               16.94%
         12/31/96               4.87%
         12/31/97               10.13%
         12/31/98               5.61%
         12/31/99               -1.65%
         12/31/00               5.80%
         12/31/01              7.05%

EX-99 6 sai485b2002285.htm SAI 485B BOND FUND SAI 485b BOND FUND 2002

Oppenheimer Bond Fund

6803 South Tucson Way, Englewood, Colorado 80112
1-800-525-7048

Statement of Additional Information dated April 30, 2002

This Statement of Additional Information is not a Prospectus. This document contains additional information about the Fund
and supplements information in the Prospectus dated April 30, 2002. It should be read together with the Prospectus. You can obtain
the Prospectus by writing to the Fund's Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217, or by
calling the Transfer Agent at the toll-free number shown above, or by downloading it from the OppenheimerFunds Internet web site at
www.oppenheimerfunds.com.

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

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

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

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

A B O U T T H E F U N D

Additional Information About the Fund's Investment Policies and Risks

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

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 all of the investment techniques and strategies
described below in seeking its goal. It may use some of the special investment techniques and strategies at some times or not at all.

In selecting securities for the Fund's portfolio, the Manager evaluates the merits of particular securities primarily
through the exercise of its own investment analysis. In the case of non-governmental issues, that process may include, among other
things, evaluation of the issuer's historical operations, prospects for the industry of which the issuer is part, the issuer's
financial condition, its pending product developments and business (and those of competitors), the effect of general market and
economic conditions on the issuer's business, and legislative proposals that might affect the issuer. In the case of foreign issuers,
the Manager may consider general economic conditions, the conditions of a particular country's economy in relation to the U.S.
economy or other foreign economies, general political conditions in a country or region, the effect of taxes, the efficiencies and
costs of particular markets (as well as their liquidity) and other factors.

|X| Debt Securities. The Fund can invest in a variety of debt securities to seek its objective. Foreign debt securities are

subject to the risks of foreign securities described below. In general, debt securities are also subject to two additional types of
risk: credit risk and interest rate risk.

o Credit Risk. Credit risk relates to the ability of the issuer to meet interest or principal payments or both as they

become due. In general, lower-grade, higher-yield bonds are subject to credit risk to a greater extent than lower-yield,
higher-quality bonds.

The Fund's investments primarily are investment-grade debt securities and U.S. government securities. U.S. government
securities, although unrated, are generally considered to be equivalent to securities in the highest rating categories.
Investment-grade bonds are bonds rated at least "Baa" by Moody's Investors Service, Inc., or at least "BBB" by Standard & Poor's
Rating Service or Fitch, Inc., or that have comparable ratings by another nationally-recognized rating organization. The Fund can
also buy non-investment-grade debt securities (commonly referred to as "junk bonds").

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 securities 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 Interest Rate Risk. Interest rate risk refers to the fluctuations in value of debt 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 debt securities, and a decline in general interest rates will tend to increase their value. In addition, debt
securities having longer maturities tend to offer higher yields, but are subject to potentially greater fluctuations in value from
changes in interest rates than obligations having shorter maturities.

Fluctuations in the market value of debt 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.

o Special Risks of Lower-Grade Securities. The Fund can invest in lower-grade debt securities. Because lower-grade

securities tend to offer higher yields than investment-grade securities, the Fund might invest in lower-grade securities if the
Manager is trying to achieve higher income.

"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 Standard & Poor's or Fitch, or similar ratings by other 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 considered part
of the Fund's portfolio of lower-grade securities.

Some of the special credit risks of lower-grade securities are discussed below. 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.

To the extent they can be converted into stock, convertible securities may be less subject to some of the risks of
volatility 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 Standard & Poor's or Fitch are investment grade and are not regarded as
junk bonds, those securities may be subject to special risks and have some speculative characteristics. Definitions of the debt
security ratings categories of Moody's, Standard & Poor's, and Fitch are included in Appendix A to this Statement of Additional
Information.

|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 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 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 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 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. Collateralized mortgage obligations or "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 Government National Mortgage Association (Ginnie Mae), Federal National
Mortgage Association (Fannie Mae), or Federal Home Loan Mortgage Corporation (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.

|X| U.S. Government Securities. 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 Fund can 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.

o U.S. Treasury Obligations. These include Treasury bills (which have maturities of one year or less when issued),
Treasury notes (which have maturities of more than one year and up to ten years when issued), and Treasury bonds (which have
maturities of more than ten 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. Other U.S. Treasury obligations the Fund can buy 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 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. Others are supported only by the credit of the entity that issued them, such as Federal
Home Loan Mortgage Corporation obligations.

o Mortgage-Related U.S. Government Securities. These include interests in pools of residential or commercial mortgages,
in the form of collateralized mortgage obligations and other "pass-through" mortgage securities. CMOs that are U.S. government
securities have collateral to secure payment of interest and principal. They may be issued in different series with different
interest rates and maturities. The collateral is either in the form of mortgage pass-through certificates issued or guaranteed by a
U.S. agency or instrumentality or mortgage loans insured by a U.S. government agency. The Fund can have significant amounts of its
assets invested in mortgage-related U.S. government securities.

The prices and yields of CMOs are determined, in part, by assumptions about the cash flows from the rate of payments of the
underlying mortgages. Changes in interest rates may cause the rate of expected prepayments of those mortgages to change. In general,
prepayments increase when general interest rates fall and decrease when interest rates rise.

If prepayments of mortgages underlying a CMO occur faster than expected when interest rates fall, the market value and yield
of the CMO will be reduced. Additionally, the Fund may have to reinvest the prepayment proceeds in other securities paying interest
at lower rates, which could reduce the Fund's yield.

When interest rates rise rapidly, if prepayments occur more slowly than expected, a short- or medium-term CMO can in effect
become a long-term security, subject to greater fluctuations in value. These are the prepayment risks described above and can make
the prices of CMOs very volatile when interest rates change. The prices of longer-term debt securities tend to fluctuate more than
those of shorter-term debt securities. That volatility will affect the Fund's share prices.

o Commercial (Privately-Issued) Mortgage Related Securities. The Fund can invest in commercial mortgage-related
securities issued by private entities. Generally these are multi-class debt or pass-through certificates secured by mortgage loans on
commercial properties. They are subject to the credit risk of the issuer. These securities typically are structured to provide
protection to investors in senior classes from possible losses on the underlying loans. They do so by having holders of subordinated
classes take the first loss if there are defaults on the underlying loans. They may also be protected to some extent by guarantees,
reserve funds or additional collateralization mechanisms.

|X| Asset-Backed Securities. Asset-backed securities are fractional interests in pools of assets, typically accounts
receivable or consumer loans. They are issued by trusts or special-purpose corporations. These securities are subject to prepayment
risks and the risk of default by the issuer as well as by the borrowers of the underlying loans in the pool. They are similar to
mortgage-backed securities, described above, and are backed by a pool of assets that consist of obligations of individual borrowers.
The income from the pool is passed through to the holders of participation interest in the pools. The pools may offer a credit
enhancement, such as a bank letter of credit, to try to reduce the risks that the underlying debtors will not pay their obligations
when due.

The value of an asset-backed security is affected by changes in the market's perception of the asset backing the security,
the creditworthiness of the servicing agent for the loan pool, the originator of the loans, or the financial institution providing
any credit enhancement, and is also affected if any credit enhancement has been exhausted. The risks of investing in asset-backed
securities are ultimately related to payment of consumer loans by the individual borrowers. As a purchaser of an asset-backed
security, the Fund would generally have no recourse to the entity that originated the loans in the event of default by a borrower.
The underlying loans are subject to prepayments, which may shorten the weighted average life of asset-backed securities and may lower
their return, in the same manner as in the case of mortgage-backed securities and CMOs, described above.

|X| Participation Interests. The Fund can invest in participation interests, subject to the Fund's limitation on investments
in illiquid investments. A participation interest is an undivided interest in a loan made by the issuing financial institution in the
proportion that the buyer's participation interest bears to the total principal amount of the loan. Not more than 5% of the Fund's
net assets can be invested in participation interests of the same borrower. The issuing financial institution may have no obligation
to the Fund other than to pay the Fund the proportionate amount of the principal and interest payments it receives.

Participation interests are primarily dependent upon the creditworthiness of the borrowing corporation, which is obligated
to make payments of principal and interest on the loan. There is a risk that a borrower may have difficulty making payments. If a
borrower fails to pay scheduled interest or principal payments, the Fund could experience a reduction in its income. The value of
that participation interest might also decline, which could affect the net asset value of the Fund's shares. If the issuing financial
institution fails to perform its obligations under the participation agreement, the Fund might incur costs and delays in realizing
payment and suffer a loss of principal and/or interest.

|X| Foreign Securities. "Foreign securities" include equity and debt securities issued or guaranteed by companies organized
under the laws of countries other than the United States and debt securities issued or guaranteed by governments other than the U.S.
government or by foreign supra-national entities, such as the World Bank. Those securities may be traded on foreign securities
exchanges or in the foreign over-the-counter markets. Securities denominated in foreign currencies issued by U.S. companies are also
considered to be "foreign securities." The Fund expects to have investments in foreign securities as part of its normal investment
strategy.

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, because they are not subject to many of the special considerations and risks, discussed below, that apply to
foreign securities traded and held abroad.

Investing in foreign securities offers potential benefits not available from investing solely in securities of domestic
issuers. They include the opportunity to invest in foreign issuers that appear to offer income 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 securities 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 Foreign Debt Obligations. The debt obligations of a foreign government and its agencies and instrumentalities may or
may not be supported by the full faith and credit of the foreign government. The Fund can buy securities issued by certain
"supra-national" entities, which include entities designated or supported by governments to promote economic reconstruction or
development, international banking organizations and related government agencies. Examples are the International Bank for
Reconstruction and Development (commonly called the "World Bank"), the Asian Development bank and the Inter-American Development
Bank.

The governmental members of these supra-national entities are "stockholders" that typically make capital contributions and
may be committed to make additional capital contributions if the entity is unable to repay its borrowings. A supra-national entity's
lending activities may be limited to a percentage of its total capital, reserves and net income. There can be no assurance that the
constituent foreign governments will continue to be able or willing to honor their capitalization commitments for those entities.

The Fund can invest in U.S. dollar-denominated "Brady Bonds." These foreign debt obligations may be fixed-rate par bonds or
floating-rate discount bonds. They are generally collateralized in full as to repayment of principal at maturity by U.S. Treasury
zero-coupon obligations that have the same maturity as the Brady Bonds. Brady Bonds can be viewed as having three or four valuation
components: (i) the collateralized repayment of principal at final maturity; (ii) the collateralized interest payments; (iii) the
uncollateralized interest payments; and (iv) any uncollateralized repayment of principal at maturity. Those uncollateralized amounts
constitute what is called the "residual risk."

If there is a default on collateralized Brady Bonds resulting in acceleration of the payment obligations of the issuer, the
zero-coupon U.S. Treasury securities held as collateral for the payment of principal will not be distributed to investors, nor will
those obligations be sold to distribute the proceeds. The collateral will be held by the collateral agent to the scheduled maturity
of the defaulted Brady Bonds. The defaulted bonds will continue to remain outstanding, and the face amount of the collateral will
equal the principal payments which would have then been due on the Brady Bonds in the normal course. Because of the residual risk of
Brady Bonds and the history of defaults with respect to commercial bank loans by public and private entities of countries issuing
Brady Bonds, Brady Bonds are considered speculative investments.

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.

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 devaluation, or currency control
regulations (for example, currency blockage);
o transaction charges for currency exchange;
o lack of public information about foreign issuers;
o lack of uniform accounting, auditing and financial reporting standards in foreign countries comparable to those applicable
to domestic issuers;
o less volume on foreign exchanges than on U.S. exchanges;
o greater volatility and less liquidity on foreign markets than in the U.S.;
o less governmental regulation of foreign issuers, securities 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.

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, and the Fund currently does not expect to invest a substantial portion of its
assets in emerging markets.

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| Zero-Coupon Securities. The Fund can buy zero-coupon and delayed-interest securities, and "stripped" securities.

Stripped securities are debt securities whose interest coupons are separated from the security and sold separately. The Fund can buy
different types of zero-coupon or stripped securities, including, among others, foreign debt securities and U.S. Treasury notes or
bonds that have been stripped of their interest coupons, U.S. Treasury bills issued without interest coupons, and certificates
representing interests in stripped securities.

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

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

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 can 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.

|X| Floating Rate and Variable Rate Obligations. Variable rate obligations may 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 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. 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
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.

Step-coupon bonds have a coupon interest rate that changes periodically during the life of the security on predetermined
dates that are set when the security is issued.

|X| "When-Issued" and "Delayed-Delivery" Transactions. The Fund may invest in securities on a "when-issued" basis and may

purchase or sell securities on a "delayed-delivery" basis. When-issued and delayed-delivery are terms that refer 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, no payment is made by the Fund to the
issuer and no interest accrues to the Fund from the investment until it receives the security at settlement.

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 or for delivery pursuant to options contracts it has entered into,
and not for the purpose of investment leverage. Although the Fund will enter into delayed-delivery or when-issued purchase
transactions to acquire securities, it 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 delivery 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 temporary 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 limits on holding
illiquid investments. The Fund will not enter into a repurchase agreement that causes more than 10% of its net assets to be subject
to repurchase agreements having a maturity beyond seven days. There is no limit on the amount of the Fund's net assets that may be
subject to repurchase agreements having maturities of seven days or less for defensive purposes.

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

|X| Illiquid and Restricted Securities. Under the policies and procedures established by the Fund's Board of Trustees, the
Manager determines the liquidity of certain of the Fund's investments. To enable the Fund to sell its holdings of a restricted
security not registered under the Securities Act of 1933, the Fund may have to cause those securities to be registered. The expenses
of registering restricted securities may be negotiated by the Fund with the issuer at the time the Fund buys the securities. When the
Fund must arrange registration because the Fund wishes to sell the security, a considerable period may elapse between the time the
decision is made to sell the security and the time the security is registered so that the Fund could sell it. The Fund would bear the
risks of any downward price fluctuation during that period.

The Fund may also acquire restricted securities through private placements. Those securities have contractual restrictions
on their public resale. Those restrictions may make it more difficult to value them, and 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| Forward Rolls. The Fund can enter into "forward roll" 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
(the same type of security, and having the same coupon and maturity) at a later date at a set price. The securities that are
repurchased will have the same interest rate as the securities that are sold, but typically will be collateralized by different pools
of mortgages (with different prepayment histories) than the securities that have been sold. Proceeds from the sale are invested in
short-term instruments, such as repurchase agreements. The income from those investments, plus the fees from the forward roll
transaction, are expected to generate income to the Fund in excess of the yield on the securities that have been sold.

The Fund will only enter into "covered" rolls. To assure its future payment of the purchase price, the Fund will identify on
its books liquid assets in an amount equal to the payment obligation under the roll.

These transactions have risks. During the period between the sale and the repurchase, 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 might decline below the price at which the Fund is obligated to repurchase securities.

|X| Investments in Equity Securities. Under normal market conditions the Fund can invest a portion of assets in common
stocks, preferred stocks, warrants (which might be acquired as part of a "unit" of securities that includes debt securities) and
convertible debt securities, which in some cases are considered "equity equivalents." However, it does not currently anticipate
investing significant amounts of its assets in equity securities as part of its normal investment strategy. Certain equity securities
may be selected because they may provide dividend income.

o Risks of Investing in Stocks. Stocks fluctuate in price, and their short-term volatility at times may be great. To
the extent that the Fund invests in equity securities, the value of the Fund's portfolio will be affected by changes in the stock
markets. Market risk can affect the Fund's net asset value 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.

The Fund can invest in securities of large companies and mid-size companies, but may also buy stocks of small companies,
which may have more volatile stock prices than large companies.

o Convertible Securities. While some convertible securities are a form of debt security, in certain cases their
conversion feature (allowing conversion into equity securities) causes them to be regarded by the Manager more as "equity
equivalents." As a result, the rating assigned to the security might have less impact on the Manager's investment decision with
respect to convertible securities than in the case of non-convertible fixed-income securities. Convertible debt securities are
subject to the credit risks and interest rate risks described above in "Debt Securities."

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

To determine whether convertible securities should be regarded as "equity equivalents," the Manager examines the following
factors:

(1) whether, at the option of the investor, the convertible security can be exchanged for a fixed number of shares of common
stock of the issuer,
(2) whether the issuer of the convertible securities has restated its earnings per share of common stock on a fully diluted
basis (considering the effect of conversion of the convertible securities), and
(3) the extent to which the convertible security may be a defensive "equity substitute," providing the ability to participate in
any appreciation in the price of the issuer's common stock.

|_| Rights and Warrants. 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.

|_| Preferred Stocks. Preferred stock, unlike common stock, has a stated dividend rate payable from the corporation's
earnings. Preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. "Cumulative" dividend
provisions require all or a portion of prior unpaid dividends to be paid before dividends can be paid 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 also have a negative impact on prices when interest rates decline. 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. 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.

|X| Loans of Portfolio Securities. To raise cash for income or liquidity purposes, the Fund can lend its portfolio
securities to brokers, dealers and other types of financial institutions approved by the Fund's Board of Trustees.

These loans are limited to not more than 25% of the value of the Fund's total assets. The Fund currently does not intend to
engage in loans of securities, but if it does so, such loans will not likely exceed 5% of the Fund's total assets.

There are some risks in connection with securities lending. The Fund might experience a delay in receiving additional
collateral to secure a loan, or a delay in recovery of the loaned securities if the borrower defaults. The Fund must receive
collateral for a loan. Under current applicable regulatory requirements (which are subject to change), on each business day the loan
collateral must be at least equal to the value of the loaned securities. It must consist of cash, bank letters of credit or
securities of the U.S. government or its agencies or instrumentalities, or other cash equivalents in which the Fund is permitted to
invest. To be acceptable as collateral, letters of credit must obligate a bank to pay amounts demanded by the Fund if the demand
meets the terms of the letter. The terms of the letter of credit and the issuing bank both must be satisfactory to the Fund.

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

|X| Money Market Instruments. The following is a brief description of the types of the U.S. dollar denominated money market
securities the Fund can invest in. Money market securities are high-quality, short-term debt instruments that may be issued by the
U.S. government, corporations, banks or other entities. They may have fixed, variable or floating interest rates.

o U.S. Government Securities. These include obligations issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities, described above.

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 bank (including a foreign branch of a domestic bank) having total
assets of at least U.S. $1 billion, or
o obligations of a foreign bank with total assets of at least U.S. $1 billion.

"Banks" include commercial banks, savings banks and savings and loan associations, which may or may not be members of the
Federal Deposit Insurance Corporation.

o Commercial Paper. The Fund can invest in commercial paper if it is rated within the top three rating categories of
Standard & Poor's and Moody's or other rating organizations.

If the paper is not rated, it may be purchased if the Manager determines that it is comparable to rated commercial paper in
the top three rating categories of national rating organizations.
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 in the Prospectus. Currently, the Fund does not intend that its investments in variable amount master demand notes will
exceed 5% of its total assets.

|X| Derivatives. The Fund can invest in a variety of derivative investments to seek income or for hedging purposes. Some
derivative investments the Fund can use are the hedging instruments described below in this Statement of Additional Information.

Among the derivative investments the Fund can invest in are "index-linked" or "currency-linked" notes. Principal and/or
interest payments on index-linked notes depend on the performance of an underlying index. Currency-indexed securities are typically
short-term or intermediate-term debt securities. Their value at maturity or the rates at which they pay income are determined by the
change in value of the U.S. dollar against one or more foreign currencies or an index. In some cases, these securities may pay an
amount at maturity based on a multiple of the amount of the relative currency movements. This type of index security offers the
potential for increased income or principal payments but at a greater risk of loss than a typical debt security of the same maturity
and credit quality.

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

|X| Hedging. The Fund can use hedging instruments although it is not obligated to use them in seeking its objective. To
attempt to protect against declines in the market value of the Fund's portfolio, to permit the Fund to retain unrealized gains in the
value of portfolio securities which have appreciated, or to facilitate selling securities for investment reasons, the Fund could:

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

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

o buy futures, or
o buy calls on 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 futures contracts that relate to (1) broadly-based bond or other security
indices (these are referred to as "financial futures"), (2) commodities (these are referred to as "commodity futures"), (3) debt
securities (these are referred to as "interest rate futures"), and (4) foreign currencies (these are referred to as "forward
contracts").

A broadly-based stock index is used as the basis for trading stock index futures. In some cases, these futures may be based
on stocks of issuers in a particular industry or group of industries. A stock index assigns relative values to the securities
included in the index and its value fluctuates in response to the changes in value of the underlying securities. A stock index cannot
be purchased or sold directly. Bond index 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) covered calls. If the Fund sells a call
option, it must be covered. That means the Fund must own the security subject to the call while the call is outstanding, or, for
calls on futures and indices, the call may be covered by segregating liquid assets to enable the Fund to satisfy its obligations if
the call is exercised. Up to 50% of the Fund's total assets may be subject to calls.

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

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

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

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

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

The Fund may also write calls on a futures contract without owning the futures contract or securities deliverable under the
contract. To do so, at the time the call is written, the Fund must cover the call by identifying on it books an equivalent dollar
amount of liquid assets. The Fund will identify additional liquid assets on its books to cover the call if the value of the
identified assets drops below 100% of the current value of the future. Because of this asset coverage 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 on securities, broadly-based securities indices, foreign

currencies and futures. 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 deposit
in escrow liquid assets with a value equal to or greater than the exercise price of the underlying securities. The Fund therefore
forgoes the opportunity of investing the segregated assets or writing calls against those assets.

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

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

o Purchasing Calls and Puts. The Fund can purchase calls on securities, broadly-based securities indices, foreign
currencies and futures. It may do so 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 on securities, broadly-based securities indices, foreign currencies and futures, whether or not it
owns the underlying investment. 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 Options on Foreign Currencies. The Fund can buy and sell calls and puts on foreign currencies.
They include puts and calls that trade on a securities or commodities exchange or in the over-the-counter markets or are quoted by
major recognized dealers in such options.

The Fund could use these calls and puts to try to protect against declines in the dollar value of foreign securities and increases
in the dollar cost of foreign securities the Fund wants to acquire.

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

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

The Fund could write a call on a foreign currency to provide a hedge against a decline in the U.S. dollar value of a
security which the Fund owns or has the right to acquire and which is denominated in the currency underlying the option. That decline
might be one that occurs due to an expected adverse change in the exchange rate. This is known as a "cross-hedging" strategy. In
those circumstances, the Fund covers the option by identifying liquid assets on its books having a value equal to its obligation
under 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 value being more sensitive to changes in the value of the underlying
investment.

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

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

There is a risk in using short hedging by selling futures or purchasing puts on broadly-based indices or futures to attempt
to protect against declines in the value of the Fund's portfolio securities. The risk is that the prices of the futures or the
applicable index will correlate imperfectly with the behavior of the cash prices of the Fund's securities. For example, it is
possible that while the Fund has used hedging instruments in a short hedge, the market 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 to its custodian bank assets having a value equal to
the aggregate amount of the Fund's commitment under forward contracts. The Fund will not enter into forward contracts or maintain a
net exposure to such contracts if the consummation of the contracts would obligate the Fund to deliver an amount of foreign currency
in excess of the value of the Fund's portfolio securities or other assets denominated in that currency or another currency that is
the subject of the hedge.

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

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

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

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

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

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

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

Transactions in options by the Fund are subject to limitations established by the option exchanges. The exchanges limit the
maximum number of options that may be written or held by a single investor or group of investors acting in concert. Those limits
apply regardless of whether the options were written or purchased on the same or different exchanges or are held in one or more
accounts or through one or more different exchanges or through one or more brokers. Thus, the number of options that the Fund may
write or hold may be affected by options written or held by other entities, including other investment companies having the same
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 the Investment Company Act, when the Fund purchases a future, it must maintain liquid assets 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.

|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, and the Fund expects to have a portfolio turnover rate of
more than 100% annually.

Increased portfolio turnover may result in 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.

|X| Temporary Defensive and Interim Investments. In times of unstable or adverse market or economic conditions, the Fund
can invest up to 100% 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, or repurchase agreements. They could include other investment-grade debt securities. The
Fund might also hold these types of securities pending the investment of proceeds from the sale of Fund shares or portfolio
securities or to meet anticipated redemptions of Fund shares. To the extent the Fund invests defensively in these securities, it
might not achieve its investment objective of seeking a high level of current income.

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.

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

|X| Does the Fund Have Additional Fundamental Policies? The following investment restrictions are fundamental policies of
the Fund.

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

o The Fund cannot concentrate its investments (that means it cannot invest 25% or more of its total assets) in any one
industry. Gas, water, electric and telephone utilities are considered to be separate industries for this purpose.

o The Fund cannot make loans except (a) through lending of securities, (b) through the purchase of debt instruments or
similar evidences of indebtedness, (c) through an inter-fund lending program with other affiliated funds, and (d) through repurchase
agreements.

o The Fund cannot invest in real estate or real estate mortgage loans. However, the Fund can purchase and sell
securities issued or secured by companies that invest in or deal in real estate or interests in real estate.

o The Fund cannot underwrite securities. 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.

o 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 of 1940.

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

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

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

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

The Fund has an additional operating policy that is not "fundamental," and which can be changed by the Board of Trustees
without shareholder approval:

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

How the Fund is Managed

Organization and History. The Fund is a series of Oppenheimer Integrity Funds (referred to as the Fund's parent Trust in this
document). The Fund's parent Trust was established in 1982 as MassMutual Liquid Assets Trust, an open-end diversified management
investment company, with an unlimited number of authorized shares of beneficial interest. The Fund was reorganized from a closed-end
investment company called MassMutual Income Investors, Inc. into a series of the Trust on April 15, 1988. The Fund and the Trust were
originally managed by Massachusetts Mutual Life Insurance Company, the Manager's indirect parent company. On March 29, 1991, the
Manager became the Fund's investment advisor, and the Trust changed its name to Oppenheimer Integrity Funds. The Fund was then called
Oppenheimer Investment Grade Bond Fund and changed its name to Oppenheimer Bond Fund on July 10, 1995.

The Fund is governed by the Board of Trustees of its parent Trust. The Board 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.

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

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

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

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

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

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

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

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

Board of Trustees

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 and a Review Committee. The members of the Audit Committee are Edward L.
Cameron (Chairman), C. Howard Kast and F. William Marshall, Jr. The Audit Committee held six meetings during the fiscal year ended
December 31, 2001. The Audit Committee furnishes the Board with recommendations regarding the selection of the Fund'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 Fund's independent auditors regarding the Fund's internal accounting
procedures and controls; and (iii) establishing a separate line of communication between the Fund's independent auditors and its
independent Trustees.

The Audit Committee's functions include selecting and nominating to the full Board, Independent nominees for election as
Independent Trustees. 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 Audit 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 Fund. 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 and when it meets for the purpose of considering potential nominees.

The members of the Review Committee are Jon S. Fossel (Chairman), Sam Freedman, William L. Armstrong, Robert G. Avis and
George C. Bowen. The Review Committee held six meetings during the fiscal year ended December 31, 2001. Among other functions, the
Review Committee reviews reports and makes recommendations to the Board concerning the fees paid to the Fund's transfer agent and the
services provided to the Fund by the transfer agent. The Review Committee also reviews the Fund's investment performance and policies
and procedures adopted by the Fund to comply with the Investment Company Act of 1940 and other applicable law.

Trustees and Officers of the Fund. The Fund's Trustees and officers and their positions held with the Fund and length of service in
such position(s) and their principal occupations and business affiliations during the past five years are listed below. Each of the
Trustees, except Mr. Murphy, 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 Fund with the understanding that in the event he ceases
to be the chief executive officer of the Manager, he will resign as a trustee of the Fund and the other Board II Funds for which he
is a trustee or director. The information for the Trustees also includes the dollar range of shares of the Fund as well as the
aggregate dollar range of shares of the Board II Funds beneficially owned by the Trustee. All information is as of December 31, 2001.
All of the Trustees are also trustees or directors of the following Oppenheimer funds1 (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

Messrs. Murphy, Farrar, Molleur, Wixted, Zack, and Negri, and Mses. Feld and Ives who are officers of the Fund, respectively
hold the same offices with one or more of the other Board II Funds as with the Fund. As of April 1, 2002, the Trustees and officers
of the Fund as a group owned of record or beneficially less than 1% of each class of shares of the Fund. The foregoing statement does
not reflect ownership of shares held of record by an employee benefit plan for employees of the Manager, other than the shares
beneficially owned under that plan by the officers of the Fund listed above. In addition, 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.

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.

Independent Trustees and Officer

- --------------------------- ----------------------------------------------------------- -------------- ----------------
Aggregate
Dollar Range
Name, Address, 2 Age, Dollar Range of Shares
Position(s) Held with Principal Occupation(s) During Past 5 Years / Other of Shares Owned in any
Fund and Length of Time Trusteeships Held by Trustee / Number of Portfolios in Owned in the of the Board
Served3 Fund Complex Overseen by Trustee Fund II Funds

James C. Swain, Chairman, Formerly Vice Chairman of the Manager (until January 2, $0 Over $100,000
Chief Executive Officer 2002) and President and a director of Centennial Asset
and Trustee, since 1991 Management Corporation (the Fund's Distributor) (until
Age: 68 1997). Oversees 41 portfolios in the OppenheimerFunds
complex.
- --------------------------- ----------------------------------------------------------- -------------- ----------------
- --------------------------- ----------------------------------------------------------- -------------- ----------------

William L. Armstrong, Chairman of the following private mortgage banking
Trustee since 1999 companies: Cherry Creek Mortgage Company (since 1991),
Age: 65 Centennial State Mortgage Company (since 1994), The El
Paso Mortgage Company (since 1993), Transland Financial
Services, Inc. (since 1997); Chairman of the following
private companies: Great Frontier Insurance (insurance
agency) (since 1995) and Ambassador Media Corporation
(since 1984); a director of the following public
companies: Storage Technology Corporation (computer
equipment company) (since 1991), Helmerich & Payne, Inc. $50,001-
(oil and gas drilling/production company) (since 1992), $0 $100,000
UNUMProvident (insurance company) (since 1991). Formerly
Director of International Family Entertainment
(television channel) (1992 - 1997) and Natec Resources,
Inc. (air pollution control equipment and services
company) (1991-1995), Frontier Real Estate, Inc.
(residential real estate brokerage) (1994-1999), and
Frontier Title (title insurance agency) (1995-June 1999);
a U.S. Senator (January 1979-January 1991). Oversees 40
portfolios in the OppenheimerFunds complex.

Robert G. Avis, Trustee Formerly Mr. Avis held the following positions: Director
since 1993 and President of A.G. Edwards Capital, Inc. (General
Age: 70 Partner 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 $0 $1 - $10,000
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
of A.G. Edwards & Sons and A.G. Edwards Trust Company
(until - March 2000). Oversees 41 portfolios in the
OppenheimerFunds complex.

George C. Bowen, Trustee Formerly (until April 1999) Mr. Bowen held the following
since 2001 positions: Senior Vice President (from September 1987)
Age: 65 and Treasurer (from March 1985) of the Manager; Vice
President (from June 1983) and Treasurer (since March
1985) of OppenheimerFunds Distributor, Inc., the Fund's
Sub-Distributor; Senior Vice President (since February
1992), Treasurer (since July 1991) Assistant Secretary
and a director (since December 1991) of the Manager; 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 of Centennial Capital
Corporation (June 1989 - January 1990), 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 $10,001 - Over $100,000
Secretary of Shareholder Financial Services, Inc. (since $50,000
November 1989), a transfer agent subsidiary of the
Manager; Assistant Treasurer of Oppenheimer Acquisition
Corp. (since March 1998), the Manager's parent
corporation; Treasurer of Oppenheimer Partnership
Holdings, Inc. (since November 1989), a holding company
subsidiary of the Manager; Vice President and Treasurer
of Oppenheimer Real Asset Management, Inc. (since July
1996), an investment advisory subsidiary of the Manager;
Chief Executive Officer and director of MultiSource
Services, Inc., a broker-dealer subsidiary of the Manager
(since March 1996); Treasurer of OppenheimerFunds
International Ltd. and Oppenheimer Millennium Funds plc
(since October 1997), offshore fund management
subsidiaries of the Manager. Oversees 36 portfolios in
the OppenheimerFunds complex.

Edward L. Cameron, Director of Genetic ID, Inc. and its subsidiaries, a
Trustee since 2001 privately held biotech company (since March 2001); a
Age: 63 member of The Life Guard of Mount Vernon, George
Washington's home (since June 2000). Formerly a partner
with PricewaterhouseCoopers LLP (an accounting firm) $0 Over $100,000
(from 1974-1999) and Chairman, Price Waterhouse LLP
Global Investment Management Industry Services Group
(from 1994-1998). Oversees 36 portfolios in the
OppenheimerFunds complex.

Jon S. Fossel, Chairman and Director of Rocky Mountain Elk Foundation, a
Trustee since 1997 not-for-profit foundation (since 1998); and a director of
Age: 60 P.R. Pharmaceuticals, a privately held company (since
October 1999). Formerly Mr. Fossel held the following
positions: Chairman and a director (until October 1996)
and President and Chief Executive Officer (until October $0 Over $100,000
1995) of the Manager; President, Chief Executive Officer
and a director of Oppenheimer Acquisition Corp.,
Shareholder Services, Inc. and Shareholder Financial
Services, Inc. (until October 1995). Oversees 40
portfolios in the OppenheimerFunds complex.

Sam Freedman, Formerly (until October 1994) Mr. Freedman held the
Trustee since 1996 following positions: Chairman and Chief Executive Officer
Age: 61 of OppenheimerFunds Services (from August 1980);
Chairman, Chief Executive Officer and a director of
Shareholder Services, Inc. (from August 1980); Chairman,
Chief Executive Officer and director of Shareholder $0 Over $100,000
Financial Services, Inc. (from November 1989); Vice
President and director of Oppenheimer Acquisition Corp.
(from October 1990) and a director of the Manager (from
October 1990). Oversees 41 portfolios in the
OppenheimerFunds complex.

C. Howard Kast, Formerly (until June 1984) Managing Partner of Deloitte,
Trustee since 1991 Haskins & Sells (an accounting firm). Oversees 41 $0 Over $100,000
Age: 80 portfolios in the OppenheimerFunds complex.

Robert M. Kirchner, President (since 1977) of The Kirchner Company
Trustee since 1991 (management consultants); Director of Andrisen Marten Co
Age: 80 (a privately held men's clothing company). Oversees 41 $0 Over $100,000
portfolios in the OppenheimerFunds complex.

F. William Marshall, Jr., Trustee (since 1996) of MassMutual Institutional Funds $0 Over $100,000
Trustee since 2001 and of MML Series Investment Fund (open-end investment
Age: 59 companies). Formerly Chairman of SIS & Family Bank,
F.S.B. (formerly SIS Bank) (January 1999 - July 1999);
President, Chief Executive Officer and Director of SIS
Bankcorp., Inc. and SIS Bank (formerly Springfield
Institution for Savings) (May 1993 - December 1998);
Executive Vice President of Peoples Heritage Financial
Group, Inc. (January 1999 - July 1999); Chairman and
Chief Executive Office of Bank of Ireland First Holdings,
Inc. and First New Hampshire Banks (June 1990 - May
1993). Oversees 36 portfolios in the OppenheimerFunds
complex.

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

Interested Trustee and Officer

- -------------------------- ------------------------------------------------------------- ------------- ----------------
Name, Address,4 Age, Principal Occupation(s) During Past 5 Years / Other Dollar Aggregate
Dollar Range
of Shares
Range of Owned in any
Position(s) Held with Shares of the
Fund and Length of Time Trusteeships Held by Trustee / Number of Portfolios in Fund Owned in Oppenheimer
Served5 Complex Overseen by Trustee the Fund Funds6
- -------------------------- ------------------------------------------------------------- ------------- ----------------
- -------------------------- ------------------------------------------------------------- ------------- ----------------

John V. Murphy, Chairman, Chief Executive Officer and director (since June
President and Trustee 2001) and President (since September 2000) of the Manager;
Trustee since October President and a director or trustee of other Oppenheimer $0 Over $100,000
2001 funds; President and a director (since July 2001) of
Age: 52 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 OFI: OAM Institutional, Inc. and Centennial
Asset Management Corporation (since November 2001),
HarbourView Asset Management Corporation and OFI Private
Investments, Inc. (since July 2001); President (since
November 1, 2001) and a director (since July 2001) of
Oppenheimer Real Asset Management, Inc.; a director (since
November 2001) of Trinity Investment Management Corp. and
Tremont Advisers, Inc., investment advisory affiliates of
the Manager; Executive Vice President (since February 1997)
of Massachusetts Mutual Life Insurance Company, the
Manager's parent company; a director (since June 1995) of
DBL Acquisition Corporation; formerly, Chief Operating
Officer (from September 2000 to June 2001) of the Manager;
President and trustee (from November 1999 to November 2001)
of MML Series Investment Fund and MassMutual Institutional
Funds, open-end investment companies; a director (from
September 1999 to August 2000) of C.M. Life Insurance
Company; President, Chief Executive Officer and director
(from September 1999 to August 2000) of MML Bay State Life
Insurance Company; a director (from June 1989 to June 1998)
of Emerald Isle Bancorp and Hibernia Savings Bank, a
wholly-owned subsidiary of Emerald Isle Bancorp. Oversees
63 portfolios in the OppenheimerFunds complex.

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

Officers of the Fund

- ----------------------------------------------- -----------------------------------------------------------------------
Name, Address,7 Age, Position(s) Held with Principal Occupation(s) During Past 5 Years
Fund and Length of Time Served8
- ----------------------------------------------- -----------------------------------------------------------------------
- ----------------------------------------------- -----------------------------------------------------------------------
Angelo Manioudakis, Vice President and Senior Vice President of the Manager (since April 2002); an officer
Portfolio Manager (since April 2002) and portfolio manager of other Oppenheimer funds; formerly Executive
Age: 35 Director and portfolio manager for Miller, Anderson & Sherrerd, a
division of Morgan Stanley Investment Management (August 1993-April
2002).
- ----------------------------------------------- -----------------------------------------------------------------------
- ----------------------------------------------- -----------------------------------------------------------------------
Brian W. Wixted, Treasurer, Principal Senior Vice President and Treasurer (since March 1999) of the
Financial and Accounting Officer (since April Manager; Treasurer (since March 1999) of HarbourView Asset Management
1999) Corporation, Shareholder Services, Inc., Oppenheimer Real Asset
Age: 42 Management Corporation, Shareholder Financial Services, Inc.,
Oppenheimer Partnership Holdings, Inc., OFI Private Investments, Inc.
(since March 2000), OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since May 2000), offshore fund
management subsidiaries of the Manager, and OAM Institutional, Inc.
(since November 2000), an investment advisory subsidiary 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); an
officer of other Oppenheimer funds; formerly Principal and Chief
Operating Officer, Bankers Trust Company - Mutual Fund Services
Division (March 1995 - March 1999).
- ----------------------------------------------- -----------------------------------------------------------------------
- ----------------------------------------------- -----------------------------------------------------------------------
Robert G. Zack, Senior Vice President (since May 1985) and General Counsel (since
Vice President and Secretary (since November February 2002) of the Manager; Assistant Secretary of Shareholder
1, 2001) Services, Inc. (since May 1985), Shareholder Financial Services, Inc.
Age: 53 (since November 1989); OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since October 1997); an officer of
other Oppenheimer funds; formerly, Acting General Counsel (November
2001-February 2002) and Associate General Counsel (1984 - October
2001)
- ----------------------------------------------- -----------------------------------------------------------------------
- ----------------------------------------------- -----------------------------------------------------------------------
Denis R. Molleur, Assistant Secretary (since Vice President and Senior Counsel of the Manager (since July 1999);
November 1, 2001) an officer of other Oppenheimer funds; formerly a Vice President and
Age: 44 Associate Counsel of the Manager (September 1995 - July 1999).
- ----------------------------------------------- -----------------------------------------------------------------------
- ----------------------------------------------- -----------------------------------------------------------------------
Katherine P. Feld, Assistant Secretary (since Vice President and Senior Counsel of the Manager (since July 1999);
November 1, 2001) an officer of other Oppenheimer funds; formerly a Vice President and
Age: 43 Associate Counsel of the Manager (June 1990 - July 1999).
- ----------------------------------------------- -----------------------------------------------------------------------
- ----------------------------------------------- -----------------------------------------------------------------------
Kathleen T. Ives, Assistant Secretary (since Vice President and Assistant Counsel of the Manager (since June
November 1, 2001) 1998); an officer of other Oppenheimer funds; formerly an Assistant
Age: 36 Vice President and Assistant Counsel of the Manager (August 1997 -
June 1998); and Assistant Counsel of the Manager (August 1994-August
1997).
- ----------------------------------------------- -----------------------------------------------------------------------

Renumeration of Trustees. The officers of the Fund and one Trustee of the Fund (Mr. Murphy) are affiliated with the Manager and
receive no salary or fee from the Fund. The remaining Trustees of the Fund received the compensation shown below. The compensation
from the Fund was paid during its fiscal year ended December 31, 2001. The compensation from all of the Board II funds includes the
compensation from the Fund and represents compensation received as a director, trustee, managing general partner or member of a
committee of the Board during the calendar year 2001. Mr. Swain was affiliated with the Manager until January 2, 2002.

- --------------------------------------------------------- -------------------------- -------------------------------
Aggregate Compensation Total Compensation
Trustee Name and From All Board II Funds
Other Fund Positions from Fund1 (41 Funds)2
- --------------------------------------------------------- -------------------------- -------------------------------
- --------------------------------------------------------- -------------------------- -------------------------------
William L. Armstrong $1,500 $78,865
Review Committee Member
- --------------------------------------------------------- -------------------------- -------------------------------
- --------------------------------------------------------- -------------------------- -------------------------------
Robert G. Avis $1,511 $79,452
Review Committee Member
- --------------------------------------------------------- -------------------------- -------------------------------
- --------------------------------------------------------- -------------------------- -------------------------------
George Bowen $1,444 $75,936
Review Committee Member
- --------------------------------------------------------- -------------------------- -------------------------------
- --------------------------------------------------------- -------------------------- -------------------------------
Edward L. Cameron $1,441 $75,794
Audit Committee Chairman
- --------------------------------------------------------- -------------------------- -------------------------------
- --------------------------------------------------------- -------------------------- -------------------------------
Jon. S. Fossel $1,601 $84,177
Review Committee Chairman
- --------------------------------------------------------- -------------------------- -------------------------------
- --------------------------------------------------------- -------------------------- -------------------------------
Sam Freedman $1,586 $83,402
Review Committee Member
- --------------------------------------------------------- -------------------------- -------------------------------
- --------------------------------------------------------- -------------------------- -------------------------------
C. Howard Kast $1,663 $87,452
Audit Committee Member
- --------------------------------------------------------- -------------------------- -------------------------------
-------------------------------------------------------- -------------------------- --------------------------------
Robert M. Kirchner $1,511 $79,452
-------------------------------------------------------- -------------------------- --------------------------------
- --------------------------------------------------------- -------------------------- -------------------------------
F. William Marshall, Jr. $1,330 $69,922
Audit Committee Member
- --------------------------------------------------------- -------------------------- -------------------------------
1. For the Fund's fiscal year ended December 31, 2001. Aggregate compensation includes fees and deferred compensation, if any,
accrued for a Trustee.
2. For the 2001 calendar year.

|X| Deferred Compensation Plan for Trustees. The Board of Trustees has adopted a Deferred Compensation Plan for Independent
Trustees that enables them to elect to defer receipt of all or a portion of the annual fees they are entitled to receive from the
Fund. Under the plan, the compensation deferred by a Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under the plan will be
determined based upon the performance of the selected funds. As of the December 31, 2001 none of the Independent Trustees has
elected to participate in the plan.

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

|X| Major Shareholders. As of April 1, 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 securities were:

Merrill Lynch Pierce Fenner & Smith, Attn: Fund Admin./#97BJ1, 4800 Deer Lake Drive East, Floor 3, Jacksonville, Florida
32246-6484 which owned for the sole benefit of its customers 1,231,716.967 Class B shares (representing 7.01% of the Class B
shares then outstanding);

Merrill Lynch Pierce Fenner & Smith, Attn: Fund Admin./#97G56, 4800 Deer Lake Drive East, Floor 3, Jacksonville, Florida
32246-6484 which owned for the benefit of its customers 620,394.388 Class C shares (representing 9.37% of the Class C shares
then outstanding);

RPSS TR Dick Broadcasting Co. Inc., 401k Plan, Attn.: Cindy Evans, 192 East Lewis Street, Greensboro, North Carolina 27406-1459
which owned 43,088.441 Class N shares (representing 8.56% of the Class N shares then outstanding);

Sterling Trust Co Tr., Plasmon IDE 401k PSP, 1380 Lawrence Street, Suite 1400, Denver, Colorado 80204-2060 which owned
33,207.720 Class N shares (representing 6.59% of the Class N shares then outstanding);

Alexander C. Shafer Tr., Shafer Insurance Agency Inc., Profit Sharing 401k plan, 1100 Marion Street, Suite 100, Knoxville,
Tennessee 37921-6869 which owned 26,722.519 Class N shares (representing 5.31% of the Class N shares then outstanding);

Oppenheimer Capital Preservation Fund, Attn.: Brian Wixted, 6803 S. Tucson Way, Englewood, Colorado 80112-3924 which owned
590,670.212 Class Y shares (representing 90.96% of the Class Y shares then outstanding);

Persumma Financial Services, Massachusetts Mutual Financial Group, 1295 State Street #N328, Springfield, Massachusetts 01111
which owned 58,602.904 (representing 9.02% of the Class Y shares outstanding).

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

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

The Code of Ethics is an exhibit to the Fund's registration statement filed with the Securities and Exchange Commission and
can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. You can obtain information about the hours of
operation of the Public Reference Room by calling the SEC at 1-202-942-8090. The Code of Ethics can also be viewed as part of the
Fund's registration statement on the SEC's EDGAR database at the SEC's Internet web site at 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 managers of the Fund are employed by the Manager and are the persons who are principally
responsible for the day-to-day management of the Fund's portfolio. Other members of the Manager's Fixed-Income Portfolio Team provide
the portfolio managers with counsel and support in managing the Fund's portfolio.

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

The advisory agreement lists examples of expenses paid by the Fund. The major categories relate to interest, taxes,
brokerage commissions, fees to certain Trustees, legal and audit expenses, custodian and transfer agent expenses, share issuance
costs, certain printing and registration costs and non-recurring expenses, including litigation costs. The management fees paid by
the Fund to the Manager are calculated at the rates described in the Prospectus, which are applied to the assets of the Fund as a
whole. The fees are allocated to each class of shares based upon the relative proportion of the Fund's net assets represented by that
class.

- ------------------------------------------- -----------------------------------------------------------------------
Fiscal Year ended 12/31: Management Fees Paid to OppenheimerFunds, Inc.
- ------------------------------------------- -----------------------------------------------------------------------
- ------------------------------------------- -----------------------------------------------------------------------
1999 $2,729,532
- ------------------------------------------- -----------------------------------------------------------------------
- ------------------------------------------- -----------------------------------------------------------------------
2000 $2,308,545
- ------------------------------------------- -----------------------------------------------------------------------
- ------------------------------------------- -----------------------------------------------------------------------
2001 $2,896,294
- ------------------------------------------- -----------------------------------------------------------------------

The investment advisory agreement states that in the absence of willful misfeasance, bad faith, gross negligence in the
performance of its duties or reckless disregard of its obligations and duties under the investment advisory agreement, the Manager is
not liable for any loss the Fund sustains by reason of good faith errors or omissions 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 to use the name
"Oppenheimer" as part of its name.

Until March 1991, Massachusetts Mutual Life Insurance Company was the Fund's investment advisor. The Manager became the
Fund's investment advisor March 28, 1991, and the Manager engaged MassMutual as sub-advisor from March 28, 1991 until July 10, 1995.

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

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

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

The Board considered that the Manager must be able to pay and retain high quality personnel at competitive rates to provide
services to the Fund. The Board also considered that maintaining the financial viability of the Manager is important so that the
Manager will be able to continue to provide quality services to the Fund and its shareholders in adverse times. The Board also
considered the investment performance of other mutual funds advised by the Manager. The Board is aware that there are alternatives to
the use of the Manager.

These matters were also considered by the Independent Trustees, meeting separately from the full Board with experienced
Counsel to the Fund who assisted the Board in its deliberations. The Fund's Counsel is independent of the Manager within the meaning
and intent of the SEC Rules regarding the independence of counsel.

In arriving at a decision, the Board did not single out any one factor or group of factors as being more important than
other factors, but considered all factors together. The Board judged the terms and conditions of the Agreement, including the
investment advisory fee, in light of all of the surrounding circumstances. After deliberating the Board approved a reduction in the
annual management fee rate as described in the Prospectus.

Brokerage Policies of the Fund

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

Under the investment advisory agreement, the Manager may select brokers (other than affiliates) that provide brokerage
and/or research services for the Fund and/or the other accounts over which the Manager or its affiliates have investment discretion.
The 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, portfolio managers may directly place trades and
allocate brokerage. In either case, the Manager's executive officers supervise the allocation of brokerage.

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

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

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

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

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

The Board of Trustees permits the Manager to use stated commissions on secondary fixed-income agency trades to obtain
research if the broker represents to the Manager that: (i) the trade is not from or for the broker's own inventory, (ii) the trade
was executed by the broker on an agency basis at the stated commission, and (iii) the trade is not a riskless principal transaction.
The Board of Trustees permits the Manager to use concessions 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 12/31: Total Brokerage Commissions Paid by the Fund1
- ------------------------------------------- ----------------------------------------------------------------------
- ------------------------------------------- ----------------------------------------------------------------------
1999 $165,966
- ------------------------------------------- ----------------------------------------------------------------------
- ------------------------------------------- ----------------------------------------------------------------------
2000 $145,105
- ------------------------------------------- ----------------------------------------------------------------------
- ------------------------------------------- ----------------------------------------------------------------------
2001 $480,1602
- ------------------------------------------- ----------------------------------------------------------------------
1. Amounts do not include spreads or concessions on principal transactions on a net trade basis.
2. During the fiscal year ended 12/31/01, the amount of transactions directed to brokers for research services was $0 and the amount
of the commissions paid to broker-dealers for those services was $0.

Distribution and Service Plans

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

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 Year Aggregate Front-End Class A Front-End
Sales Charges
Ended 12/31: Sales Charges on Retained by
Class A Shares Distributor
- --------------- ----------------------- -----------------------
- --------------- ----------------------- -----------------------
1999 $782,752 $223,0351
- --------------- ----------------------- -----------------------
- --------------- ----------------------- -----------------------
2000 $392,363 $114,4541
- --------------- ----------------------- -----------------------
- --------------- ----------------------- -----------------------
2001 $1,391,486 $501,7931
- --------------- ----------------------- -----------------------
1. Includes amounts retained by a broker-dealer that is an affiliate or a parent of the Distributor.

- --------------- ----------------------- ----------------------- ------------------------- -----------------------
Fiscal Year Concessions on Class Concessions on Class Concessions on Class C Concessions on Class
Ended 12/31: A Shares Advanced by B Shares Advanced by Shares Advanced by N Shares Advanced by
Distributor1 Distributor1 Distributor1 Distributor1
- --------------- ----------------------- ----------------------- ------------------------- -----------------------
- --------------- ----------------------- ----------------------- ------------------------- -----------------------
1999 $184,997 $1,411,106 $114,046 N/A
- --------------- ----------------------- ----------------------- ------------------------- -----------------------
- --------------- ----------------------- ----------------------- ------------------------- -----------------------
2000 $77,167 $621,176 $64,587 N/A
- --------------- ----------------------- ----------------------- ------------------------- -----------------------
- --------------- ----------------------- ----------------------- ------------------------- -----------------------
2001 $156,331 $2,403,539 $286,901 $20,4212
- --------------- ----------------------- ----------------------- ------------------------- -----------------------
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.

- --------------- ----------------------- ------------------------ ------------------------ -----------------------
Class A Class A Class A Class A
Fiscal Year Contingent Contingent Contingent Contingent
Ended 12/31 Deferred Sales Deferred Sales Deferred Sales Deferred Sales
Charges Retained Charges Retained Charges Retained Charges Retained
By Distributor By Distributor By Distributor By Distributor
- --------------- ----------------------- ------------------------ ------------------------ -----------------------
- --------------- ----------------------- ------------------------ ------------------------ -----------------------
2001 $26,759 $285,551 $13,163 $45
- --------------- ----------------------- ------------------------ ------------------------ -----------------------

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

Each plan has been approved by a vote of the Board of Trustees, including a majority of the Independent Trustees9, cast in
person at a meeting called for the purpose of voting on that plan.

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

In their sole discretion, the Distributor and the Manager may increase or decrease the amount of payments they make from
their own resources to plan recipients.

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

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

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

The reports on the Class B Plan, Class C Plan and Class N Plan shall also include the Distributor's distribution costs for
that quarter. Those reports are subject to the review and approval of the Independent Trustees.

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

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

|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. While the plan permits the Board to authorize
payments to the Distributor to reimburse itself for services under the plan, the Board has not yet done so. The Distributor makes
payments to plan recipients quarterly at an annual rate not to exceed 0.25% of the average annual net assets consisting of Class A
shares held in the accounts of the recipients or their customers.

For the fiscal year ended December 31, 2001, payments under the Class A Plan totaled $582,277 all of which was paid by the
Distributor to recipients. An affiliate of the Distributor received $110,787. 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 the Class B, Class C and Class N plans, 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 for the service fee 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 asset-based sales charge and service fees increase Class B and Class C expenses by 1.00% and effective November 1, 2001
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
commission to the recipient on Class C shares outstanding for a year or more. If a dealer has a special agreement with the
Distributor, the Distributor will pay the Class B, Class C, or Class N service fee and the asset-based sales charge on Class C shares
to the dealer quarterly in lieu of paying the sales commissions and service fee in advance at the time of purchase.

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

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

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

The Distributor's actual expenses in selling Class B, Class C and Class N shares may be more than the payments it receives
from the contingent deferred sales charges collected on redeemed shares and from the Fund under the plans. If either the Class B,
Class C or Class N plan is terminated by the Fund, the Board of Trustees may allow the Fund to continue payments of the asset-based
sales charge to the Distributor to compensate it for its expenses incurred for distributing shares before the plan was terminated.
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 12/31/01
- ----------------------------------------------------------------------------------------------------------------------
- ------------------- -------------------- ----------------------- --------------------------- -------------------------
Class: Total Payments Amount Retained by Distributor's Aggregate Distributor's
Unreimbursed Expenses
Unreimbursed Expenses as % of
Under Plan Distributor Under Plan Net Assets of Class
- ------------------- -------------------- ----------------------- --------------------------- -------------------------
- ------------------- -------------------- ----------------------- --------------------------- -------------------------
Class B Plan $1,183,059 $965,7051 $5,048,135 3.12%
- ------------------- -------------------- ----------------------- --------------------------- -------------------------
- ------------------- -------------------- ----------------------- --------------------------- -------------------------
Class C Plan $367,964 $135,9952 $939,972 1.65%
- ------------------- -------------------- ----------------------- --------------------------- -------------------------
- ------------------- -------------------- ----------------------- --------------------------- -------------------------
Class N Plan $2,413 $2,413 $44,095 2.03%
- ------------------- -------------------- ----------------------- --------------------------- -------------------------
1. Includes $11,630 paid to an affiliate of the Distributor's parent company.
2. Includes $8,022 paid to an affiliate of the Distributor's parent company.

Performance of the Fund

Explanation of Performance Terminology. The Fund uses a variety of terms to illustrate its performance. These terms include
"standardized yield," "dividend yield," "average annual total return," "cumulative total return," "average annual total return at net
asset value" and "total return at net asset value." An explanation of how yields and total returns are calculated is set forth below.
The charts below show the Fund's performance as of the Fund's most recent fiscal year end. You can obtain current performance
information by calling the Fund's Transfer Agent at 1-800-525-7048 or by visiting the OppenheimerFunds Internet web site at
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). Certain types of
yields may also be shown, provided that they are accompanied by standardized average annual total returns.

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 Yields and total returns measure the performance of a hypothetical account in the Fund over various periods and do not
show the performance of each shareholder's account. Your account's performance will vary from the model performance data if your
dividends are received in cash, or you buy or sell shares during the period, or you bought your shares at a different time 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 its yields 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 Yields and total returns for any given past period represent historical performance information and are not, and should
not be considered, a prediction of future yields or returns.

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 yields and total returns of each class of shares of the Fund are affected by market conditions, the quality of the Fund's
investments, the maturity of those investments, the types of investments the Fund holds, and its operating expenses that are
allocated to the particular class.

|X| Yields. The Fund uses a variety of different yields to illustrate its current returns. Each class of shares calculates
its yield separately because of the different expenses that affect each class.

o Standardized Yield. The "standardized yield" (sometimes referred to just as "yield") is shown for a class of shares
for a stated 30-day period. It is not based on actual distributions paid by the Fund to shareholders in the 30-day period, but is a
hypothetical yield based upon the net investment income from the Fund's portfolio investments for that period. It may therefore
differ from the "dividend yield" for the same class of shares, described below.

Standardized yield is calculated using the following formula set forth in rules adopted by the Securities and Exchange
Commission, designed to assure uniformity in the way that all funds calculate their yields:

STANDARDIZED YIELD =2 (A - B + 1)- 1
-------
CD

The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense assumptions).
c = the average daily number of shares of that class outstanding during the 30-day period that were entitled to receive
dividends.
d = the maximum offering price per share of that class on the last day of the period, adjusted for undistributed net
investment income.

The standardized yield for a particular 30-day period may differ from the yield for other periods. The SEC formula assumes
that the standardized yield for a 30-day period occurs at a constant rate for a six-month period and is annualized at the end of the
six-month period. Additionally, because each class of shares is subject to different expenses, it is likely that the standardized
yields of the Fund's classes of shares will differ for any 30-day period.

o Dividend Yield. The Fund may quote a "dividend yield" for each class of its shares. Dividend yield is based on the
dividends paid on a class of shares during the actual dividend period. To calculate dividend yield, the dividends of a class declared
during a stated period are added together, and the sum is multiplied by 12 (to annualize the yield) and divided by the maximum
offering price on the last day of the dividend period. The formula is shown below:

Dividend Yield=dividends paid x 12/maximum offering price (payment date)

The maximum offering price for Class A shares includes the current maximum initial sales charge. The maximum offering price
for Class B, Class C and Class N shares is the net asset value per share, without considering the effect of contingent deferred sales
charges. There is no sales charge on Class Y shares. The Class A dividend yield may also be quoted without deducting the maximum
initial sales charge.

-----------------------------------------------------------------------------------------------------------------
The Fund's Yields for the 30-Day Periods Ended 12/31/01
-----------------------------------------------------------------------------------------------------------------
---------------- ----------------------------------------------- ------------------------------------------------
Class of Shares Standardized Yield Dividend Yield
---------------- ----------------------------------------------- ------------------------------------------------
---------------- ----------------------- ----------------------- ----------------------- ------------------------
Without After Without After
Sales Sales Sales Sales
Charge Charge Charge Charge
---------------- ----------------------- ----------------------- ----------------------- ------------------------
---------------- ----------------------- ----------------------- ----------------------- ------------------------
Class A 9.16% 8.71% 9.17% 8.73%
---------------- ----------------------- ----------------------- ----------------------- ------------------------
---------------- ----------------------- ----------------------- ----------------------- ------------------------
Class B 8.39% N/A 8.45% N/A
---------------- ----------------------- ----------------------- ----------------------- ------------------------
---------------- ----------------------- ----------------------- ----------------------- ------------------------
Class C 8.40% N/A 8.44% N/A
---------------- ----------------------- ----------------------- ----------------------- ------------------------
---------------- ----------------------- ----------------------- ----------------------- ------------------------
Class N 8.92% N/A 8.96% N/A
---------------- ----------------------- ----------------------- ----------------------- ------------------------
---------------- ----------------------- ----------------------- ----------------------- ------------------------
Class Y 9.48% N/A 9.51% N/A
---------------- ----------------------- ----------------------- ----------------------- ------------------------

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

In calculating total returns for Class A shares, the current maximum sales charge of 4.75% (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 life-of-class periods as applicable.
There is no sales charge for Class Y shares.

ERV - 1 = AVERAGE ANNUAL TOTAL RETURN
------
P

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:

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 or Class N shares. There is no sales
charge on Class Y shares. Each is based on the difference in net asset value per share at the beginning and the end of the period for
a hypothetical investment in that class of shares (without considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.

- ---------------------------------------------------------------------------------------------------------------------
The Fund's Total Returns for the Periods Ended 12/31/01
- ---------------------------------------------------------------------------------------------------------------------
- ---------------- -------------------------- -------------------------------------------------------------------------
Class of Cumulative Total Returns Average Annual Total Returns
(10 Years or
Shares Life-of-Class, if Less)
- ---------------- -------------------------- -------------------------------------------------------------------------
- ---------------- -------------------------- ----------------------- ------------------------- -----------------------
1-Year 5-Year 10-Year
(or Life-of-Class, (or Life-of-Class,
if Less) if Less)
- ---------------- -------------------------- ----------------------- ------------------------- -----------------------
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
After Without After Without After Without After Without
Sales Sales Sales Sales Sales Sales
Charge Sales Charge Charge Charge Charge Sales Charge Charge Charge
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
Class A1 71.33% 79.87% 1.96% 7.05% 4.29% 5.31% 5.53% 6.05%
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
Class B 51.84%2 51.84%2 1.17% 6.14% 4.21% 4.52% 4.94%2 4.94%2
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
Class C 34.62%3 34.62%3 5.15% 6.14% 4.52%3 4.52%3 4.70%3 4.70%3
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
Class N 2.21%4 3.18%4 N/A N/A N/A N/A N/A N/A
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
Class Y N/A5 18.36%5 N/A 7.30% N/A5 4.69%5 N/A N/A
- ---------------- ------------ ------------- ----------- ----------- ----------- ------------- ---------- ------------
1. Inception of Class A: 4/15/88.
2. Inception of Class B: 5/3/93. Because Class B shares convert to Class A shares 72 months after purchase, the "life-of-class"
return for Class B shares uses Class A performance for the period after conversion.
3. Inception of Class C: 7/11/95.
4. Inception of Class N: 3/1/01.
5. Inception of Class Y: 4/27/98.

|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.

o Morningstar Ratings and Rankings. From time to time the Fund may publish the ranking and/or star rating of the
performance of its classes of shares by Morningstar, Inc., an independent mutual fund monitoring service. Morningstar rates and ranks
mutual funds in broad investment categories: domestic stock funds, international stock funds, taxable bond funds and municipal bond
funds. The Fund is included in the taxable bond funds category.

Morningstar proprietary star rankings reflect historical risk-adjusted total investment return. For each fund with at least
a three-year history, Morningstar calculates a Morningstar RatingTM metric each month by subtracting the return on a 90-day U.S.
Treasury Bill from the fund's load-adjusted return for the same period, and then adjusting this excess return for risk. The top 10%
of funds in each broad asset class 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. 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 Ratings metrics.

The Fund may also compare its total return ranking to that of other funds in its Morningstar category, in addition to its
star rating. Those total return rankings are percentages from one percent to one hundred percent and are not risk-adjusted. For
example, if a fund is in the 94th percentile, that means that 94% of the funds in the same category performed better than it did.

|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.

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

How to Buy Shares

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

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

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.

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

Oppenheimer Bond Fund Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund Oppenheimer New York Municipal Fund
Oppenheimer Capital Appreciation Fund Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Preservation Fund Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund Oppenheimer Quest Balanced Value Fund
Oppenheimer Champion Income Fund Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Concentrated Growth Fund Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Convertible Securities Fund Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund Oppenheimer Quest Value Fund, Inc.
Oppenheimer Disciplined Allocation Fund Oppenheimer Real Asset Fund
Oppenheimer Discovery Fund Oppenheimer Real Estate Fund
Oppenheimer Emerging Growth Fund Oppenheimer Rochester National Municipals
Oppenheimer Emerging Technologies Fund Oppenheimer Senior Floating Rate Fund
Oppenheimer Enterprise Fund Oppenheimer Small Cap Value Fund
Oppenheimer Europe Fund Oppenheimer Special Value Fund
Oppenheimer Global Fund Oppenheimer Strategic Income Fund
Oppenheimer Global Growth & Income Fund Oppenheimer Total Return Fund, Inc.
Oppenheimer Gold & Special Minerals Fund Oppenheimer Trinity Core Fund
Oppenheimer Growth Fund Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer High Yield Fund Oppenheimer Trinity Value Fund
Oppenheimer Intermediate Municipal 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 Main Street Growth & Income Fund OSM1 - Jennison Growth Fund
Oppenheimer Main Street Opportunity Fund OSM1 - Mercury Advisors S&P 500 Index
Oppenheimer Main Street Small Cap Fund OSM1 - Mercury Advisors Focus Growth Fund
Oppenheimer MidCap Fund OSM1 - QM Active Balanced Fund
Oppenheimer Multiple Strategies Fund OSM1 - Salomon Brothers Capital 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 except the money market
funds. Under certain circumstances described in this Statement of Additional Information, redemption proceeds of certain money market
fund shares may be subject to a contingent deferred sales charge.

Letters of Intent. Under a Letter of Intent, if you purchase Class A shares or Class A and Class B shares of the Fund and other
Oppenheimer funds during a 13-month period, you can reduce the sales charge rate that applies to your purchases of Class A shares.
The total amount of your intended purchases of both Class A and Class B shares will determine the reduced sales charge rate for the
Class A shares purchased during that period. You can include purchases made up to 90 days before the date of the Letter.

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 commissions 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 commissions allowed or paid to the dealer over the amount of commissions that
apply to the actual amount of purchases. The excess commissions 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 commissions 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
public 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 thirteen-month Letter of Intent
period, the escrowed shares will be promptly released to the investor.

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

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

5. The shares eligible for purchase under the Letter (or the holding of which may be counted toward completion of a
Letter) include:

(a) Class A shares sold with a front-end sales charge or subject to a Class A contingent deferred sales charge,
(b) Class B shares of other Oppenheimer funds acquired subject to a contingent deferred sales charge, and
(c) Class A or Class B shares acquired by exchange of either (1) Class A shares of one of the other Oppenheimer funds that were
acquired subject to a Class A initial or contingent deferred sales charge or (2) Class B shares of one of the
other Oppenheimer funds that were acquired subject to a contingent deferred sales charge.

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

Asset Builder Plans. To establish an Asset Builder Plan to buy shares directly from a bank account, you must enclose a check (the
minimum is $25) for the initial purchase with your application. 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.

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

|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,
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.

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

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

Other expenses that are directly attributable to a particular class are allocated equally to each outstanding share within
that class. Examples of such expenses include distribution and service plan (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).

Determination of Net Asset Values Per Share. The net asset values per share of each class of shares of the Fund are determined as of
the close of business of The New York Stock Exchange 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., New York time, but may close earlier on some other days (for example, in case of weather emergencies or
on days falling before a holiday). The Exchange's most recent annual announcement (which is subject to change) states that it will
close on New Year's Day, 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 U.S. holidays) or after 4:00 P.M. on a regular business day. Because the Fund's net asset values will not be
calculated on those days, the Fund's net asset values per share may be significantly affected on such days when shareholders may not
purchase or redeem shares. Additionally, trading on European and Asian stock exchanges and over-the-counter markets normally is
completed before the close of The New York Stock Exchange.

Changes in the values of securities traded on foreign exchanges or markets as a result of events that occur after the prices
of those securities are determined, but before the close of The New York Stock Exchange, will not be reflected in the Fund's
calculation of its net asset values that day unless the Manager determines that the event is likely to effect a material change in
the value of the security. If such determination is made, the Manager, acting through an internal valuation committee, will establish
a valuation for such security. Some of the securities the Fund buys may not have readily available market quotations. For these
securities, the Board of Trustees has authorized the Manager's valuation committee to establish values for them. All valuation
determinations by the valuation committee are subject to the approval, ratification and confirmation by the Board at its next ensuing
meeting.

|X| Securities Valuation. The Fund's Board of Trustees has established procedures for the valuation of the Fund's
securities. In general those procedures are as follows:

o Equity securities traded on a U.S. securities exchange or on Nasdaq are valued as follows:

(1) if last sale information is regularly reported, they are valued at the last reported sale price on the principal exchange on
which they are traded or on Nasdaq, as applicable, on that day, or
(2) if last sale information is not available on a valuation date, they are valued at the last reported sale price preceding the
valuation date if it is within the spread of the closing "bid" and "asked" prices on the valuation date or, if
not, at the closing "bid" price on the valuation date.

o Equity securities traded on a foreign securities exchange generally are valued in one of the following ways:

(1) at the last sale price available to the pricing service approved by the Board of Trustees, or
(2) at the last sale price obtained by the Manager from the report of the principal exchange on which the security is traded at
its last trading session on or immediately before the valuation date, or
(3) at the mean between the "bid" and "asked" prices obtained from the principal exchange on which the security is traded or, on
the basis of reasonable inquiry, from two market makers in the security.

o Long-term debt securities having a remaining maturity in excess of 60 days are valued based on the mean between the
"bid" and "asked" prices determined by a portfolio pricing service approved by the Fund's Board of Trustees or obtained by the Manager
from two active market makers in the security on the basis of reasonable inquiry.

o The following securities are valued at the mean between the "bid" and "asked" prices determined by a pricing service
approved by the Fund's Board of Trustees or obtained by the Manager from two active market makers in the security on the basis of
reasonable inquiry:

(1) debt instruments that have a maturity of more than 397 days when issued,
(2) debt instruments that had a maturity of 397 days or less when issued and have a remaining maturity of more than 60 days, and
(3) non-money market debt instruments that had a maturity of 397 days or less when issued and which have a remaining maturity of
60 days or less.

o The following securities are valued at cost, adjusted for amortization of premiums and accretion of discounts:

(1) money market debt securities held by a non-money market fund that had a maturity of less than 397 days when issued that have
a remaining maturity of 60 days or less, and
(2) debt instruments held by a money market fund that have a remaining maturity of 397 days or less.

o If the Manager is unable to locate two market makers willing to give quotes, a security may be priced at the mean
between the "bid" and "asked" prices provided by a single active market maker (which in certain cases may be the "bid" price if no
"asked" price is available).

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

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

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

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

If the Fund exercises a put it holds, the amount the Fund receives on its sale of the underlying investment is reduced by
the amount of premium paid by the Fund.

How to Sell Shares

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

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

In choosing to take advantage of the Checkwriting privilege, by signing the Account Application or by completing a
Checkwriting card, each individual who signs:

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

Reinvestment Privilege. Within six months of a redemption, a shareholder may reinvest all or part of the redemption proceeds of:

o Class A shares purchased subject to an initial sales charge or Class A shares on which a contingent deferred sales charge
was paid, or

o Class B shares that were subject to the Class B contingent deferred sales charge when redeemed.

The reinvestment may be made without sales charge only in Class A shares of the Fund or any of the other Oppenheimer funds
into which shares of the Fund are exchangeable as described in "How to Exchange Shares" below. Reinvestment will be at the net asset
value next computed after the Transfer Agent receives the reinvestment order. The shareholder must ask the Transfer Agent for that
privilege at the time of reinvestment. This privilege does not apply to Class C, Class N or Class Y shares. The Fund may amend,
suspend or cease offering this reinvestment privilege at any time as to shares redeemed after the date of such amendment, suspension
or cessation.

Any capital gain that was realized when the shares were redeemed is taxable, and reinvestment will not alter any capital
gains tax payable on that gain. If there has been a capital loss on the redemption, some or all of the loss may not be tax
deductible, depending on the timing and amount of the reinvestment. Under the Internal Revenue Code, if the redemption proceeds of
Fund shares on which a sales charge was paid are reinvested in shares of the Fund or another of the Oppenheimer funds within 90 days
of payment of the sales charge, the shareholder's basis in the shares of the Fund that were redeemed may not include the amount of
the sales charge paid. That would reduce the loss or increase the gain recognized from the redemption. However, in that case the
sales charge would be added to the basis of the shares acquired by the reinvestment of the redemption proceeds.

Payments "In Kind." The Prospectus states that payment for shares tendered for redemption is ordinarily made in cash. However, under
certain circumstances, the Board of Trustees of the Fund may determine that it would be detrimental to the best interests of the
remaining shareholders of the Fund to make payment of a redemption order wholly or partly in cash. In that case, the Fund may pay the
redemption proceeds in whole or in part by a distribution "in kind" of liquid securities from the portfolio of the Fund, in lieu of
cash.

The Fund has elected to be governed by Rule 18f-1 under the Investment Company Act. Under that rule, the Fund is obligated
to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any one
shareholder. If shares are redeemed in kind, the redeeming shareholder might incur brokerage or other costs in selling the securities
for cash. The Fund will value securities used to pay redemptions in kind using the same method the Fund uses to value its portfolio
securities described above under "Determination of Net Asset Values Per Share." That valuation will be made as of the time the
redemption price is determined.

Involuntary Redemptions. The Fund's Board of Trustees has the right to cause the involuntary redemption of the shares held in any
account if the aggregate net asset value of those shares is less than $1,000 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 or 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, 403(b)(7) custodial plans,
401(k) plans or pension or profit-sharing plans should be addressed to "Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer
Agent at its address listed in "How To Sell Shares" in the Prospectus or on the back cover of this Statement of Additional
Information. The request must

(1) state the reason for the distribution;
(2) state the owner's awareness of tax penalties if the distribution is premature; and
(3) conform to the requirements of the plan and the Fund's other redemption requirements.

Participants (other than self-employed persons) in OppenheimerFunds-sponsored pension or profit-sharing plans with shares of
the Fund held in the name of the plan or its fiduciary may not directly request redemption of their accounts. The plan administrator
or fiduciary must sign the request.

Distributions from pension and profit sharing plans are subject to special requirements under the Internal Revenue Code and
certain documents (available from the Transfer Agent) must be completed and submitted to the Transfer Agent before the distribution
may be made. Distributions from retirement plans are subject to withholding requirements under the Internal Revenue Code, and IRS
Form W-4P (available from the Transfer Agent) must be submitted to the Transfer Agent with the distribution request, or the
distribution may be delayed. Unless the shareholder has provided the Transfer Agent with a certified tax identification number, the
Internal Revenue Code requires that tax be withheld from any distribution even if the shareholder elects not to have tax withheld.
The Fund, the Manager, the Distributor, and the Transfer Agent assume no responsibility to determine whether a distribution satisfies
the conditions of applicable tax laws and will not be responsible for any tax penalties assessed in connection with a distribution.

Special Arrangements for Repurchase of Shares from Dealers and Brokers. The Distributor is the Fund's agent to repurchase its shares
from authorized dealers or brokers on behalf of their customers. Shareholders should contact their broker or dealer to arrange this
type of redemption. The repurchase price per share will be the net asset value next computed after the Distributor receives an order
placed by the dealer or broker. However, if the Distributor receives a repurchase order from a dealer or broker after the close of
The New York Stock Exchange on a regular business day, it will be processed at that day's net asset value if the order was received
by the dealer or broker from its customers prior to the time the Exchange closes. Normally, the Exchange closes at 4:00 P.M., but may
do so earlier on some days. Additionally, the order must have been transmitted to and received by the Distributor prior to its close
of business that day (normally 5:00 P.M.).

Ordinarily, for accounts redeemed by a broker-dealer under this procedure, payment will be made within three business days
after the shares have been redeemed upon the Distributor's receipt of the required redemption documents in proper form. The
signature(s) of the registered owners on the redemption documents must be guaranteed as described in the Prospectus.

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

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

The Fund cannot guarantee receipt of a payment on the date requested. The Fund reserves the right to amend, suspend or
discontinue offering these plans at any time without prior notice. Because of the sales charge assessed on Class A share purchases,
shareholders should not make regular additional Class A share purchases while participating in an Automatic Withdrawal Plan. Class B,
Class C and Class N shareholders should not establish automatic withdrawal plans, because of the potential imposition of the
contingent deferred sales charge on such withdrawals (except where the Class B, Class C and 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 $25. 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 by
calling the Distributor at 1.800.525.7048.

o All of the Oppenheimer funds currently offer Class A, B and C shares except Oppenheimer Money Market Fund, Inc., Centennial
Money Market Trust, Centennial Tax Exempt Trust, Centennial Government Trust, Centennial New York Tax Exempt Trust, Centennial
California Tax Exempt Trust, and Centennial America Fund, L.P., which only offer Class A shares.
o Class B, Class C and Class N shares of Oppenheimer Cash Reserves are generally available only by exchange from the same
class of shares of other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k) plans.
o Only certain Oppenheimer funds currently offer Class Y shares. Class Y shares of Oppenheimer Real Asset Fund may not be
exchanged for shares of any other fund.
o Only certain Oppenheimer funds currently offer Class N shares, which are only offered to retirement plans as described in
the Prospectus. Class N shares can be exchanged only for Class N shares of other Oppenheimer funds.
o Class M shares of Oppenheimer Convertible Securities Fund may be exchanged only for Class A shares of other Oppenheimer
funds. They may not be acquired by exchange of shares of any class of any other Oppenheimer funds except Class A shares of
Oppenheimer Money Market Fund or Oppenheimer Cash Reserves acquired by exchange of Class M shares.
o Class X shares of Limited Term New York Municipal Fund can be exchanged only for Class B shares of other Oppenheimer funds
and no exchanges may be made to Class X shares.
o Shares of Oppenheimer Capital Preservation Fund may not be exchanged for shares of Oppenheimer Money Market Fund, Inc.,
Oppenheimer Cash Reserves or Oppenheimer Limited-Term Government Fund. Only participants in certain retirement plans may purchase
shares of Oppenheimer Capital Preservation Fund, and only those participants may exchange shares of other Oppenheimer funds for
shares of Oppenheimer Capital Preservation Fund.
o Class A shares of Oppenheimer Senior Floating Rate Fund are not available by exchange of shares of Oppenheimer Money Market
Fund or Class A shares of Oppenheimer Cash Reserves. Shares of Oppenheimer Senior Floating Rate Fund may only be sold or
exchanged in a quarterly repurchase offer. 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 Class A, Class B, Class C, Class N and Class Y Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund and
Oppenheimer Select Managers QM Active Balanced Fund are only available to retirement plans and are available only by exchange
from the same class of shares of other Oppenheimer funds held by retirement plans.

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

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

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

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

|X| How Exchanges Affect Contingent Deferred Sales Charges. No contingent deferred sales charge is imposed on exchanges of
shares of any class purchased subject to a contingent deferred sales charge. However, when Class A shares acquired by exchange of
Class A shares of other Oppenheimer funds purchased subject to a Class A contingent deferred sales charge are redeemed within 18
months of the end of the calendar month of the initial purchase of the exchanged Class A shares, the Class A contingent deferred
sales charge is imposed on the redeemed shares. The Class B contingent deferred sales charge is imposed on Class B shares acquired by
exchange if they are redeemed within 6 years of the initial purchase of the exchanged Class B shares. The Class C contingent deferred
sales charge is imposed on Class C shares acquired by exchange if they are redeemed within 12 months of the initial purchase of the
exchanged Class C shares. The Class N contingent deferred sales charge is imposed on Class N shares acquired by exchange if they are
redeemed within eighteen (18) months of the initial purchase of the exchanged Class N shares.

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 the 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. Dividends will be payable on shares held of record at the time of the previous determination of net
asset value, or as otherwise described in "How to Buy Shares." Daily dividends will not be declared or paid on newly purchased
shares until such time as federal funds (funds credited to a member bank's account at the Federal Reserve Bank) are available from
the purchase payment for such shares. Normally, purchase checks received from investors are converted to federal funds on the next
business day. Shares purchased through dealers or brokers normally are paid for by the third business day following the placement of
the purchase order.

Shares redeemed through the regular redemption procedure will be paid dividends through and including the day on which the
redemption request is received by the Transfer Agent in proper form. Dividends will be declared on shares repurchased by a dealer or
broker for three business days following the trade date (that is, up to and including the day prior to settlement of the repurchase).
If all shares in an account are redeemed, all dividends accrued on shares of the same class in the account will be paid together with
the redemption proceeds.

The Fund has no fixed dividend rate for Class B, Class C, Class N or Class Y shares, and the rate can change for Class A
shares. 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 investment company taxable income (that is, taxable interest, dividends, and other taxable
ordinary income net of expenses, and net short-term capital gain in excess of long-term capital loss) 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 twelve 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, U.S. government securities, securities of other regulated
investment companies, and securities of other issuers. As to each of those issuers, the Fund must not have invested more than 5% of
the value of the Fund's total assets in securities of each such issuer and the Fund must not hold more than 10% of the outstanding
voting securities of each such issuer. No more than 25% of the value of its total assets may be invested in the securities of any one
issuer (other than U.S. government securities and securities of other regulated investment companies), or in two or more issuers
which the Fund controls and which are engaged in the same or similar trades or businesses. For purposes of this test, obligations
issued or guaranteed by certain agencies or instrumentalities of the U.S. government are treated as U.S. government securities.

|X| Excise Tax on Regulated Investment Companies. Under the Internal Revenue Code, by December 31 each year, the Fund must
distribute 98% of its taxable investment income earned from January 1 through December 31 of that year and 98% of its capital gains
realized in the period from November 1 of the prior year through October 31 of the current year. If it does not, the Fund must pay an
excise tax on the amounts not distributed. It is presently anticipated that the Fund will meet those requirements. To meet this
requirement, in certain circumstances the Fund might be required to liquidate portfolio investments to make sufficient distributions
to avoid excise tax liability. However, the Board of Trustees and the Manager might determine in a particular year that it would be
in the best interests of shareholders for the Fund not to make such distributions at the required levels and to pay the excise tax on
the undistributed amounts. That would reduce the amount of income or capital gains available for distribution to shareholders.

|X| Taxation of Fund Distributions. The Fund anticipates distributing substantially all of its investment company taxable
income for each taxable year. Those distributions will be taxable to shareholders as ordinary income and treated as dividends for
federal income tax purposes.

Special provisions of the Internal Revenue Code govern the eligibility of the Fund's dividends for the dividends-received
deduction for corporate shareholders. Long-term capital gains distributions are not eligible for the deduction. The amount of
dividends paid by the Fund that may qualify for the deduction is limited to the aggregate amount of qualifying dividends that the
Fund derives from portfolio investments that the Fund has held for a minimum period, usually 46 days. A corporate shareholder will
not be eligible for the deduction on dividends paid on Fund shares held for 45 days or less. To the extent the Fund's dividends are
derived from gross income from option premiums, interest income or short-term gains from the sale of securities or dividends from
foreign corporations, those dividends will not qualify for the deduction. Since it is anticipated that most of the Fund's income will
be derived from interest it receives on its investments, the Fund does not anticipate that its distributions will qualify for this
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 long-term capital gain. It does not 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, it is expected that the Fund also will elect to have shareholders of record on the
last day of its taxable year treated as if each received a distribution of their pro rata share of such gain. 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 and remit to the U.S. Treasury 31% of ordinary income dividends and
capital gains distributions and the proceeds of the redemption of shares, paid to any shareholder (1) who has failed to provide a
correct, certified taxpayer identification number, (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).

|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. Taxation of a shareholder who under United States law is a nonresident alien individual, foreign
trust or estate, foreign corporation, or foreign partnership depends on whether the shareholder's income from the Fund is effectively
connected with a U.S. trade or business carried on by such shareholder.

If the income from the Fund is not effectively connected with a U.S. trade or business carried on by a foreign shareholder,
ordinary income dividends paid to such foreign shareholder will be subject to U.S. withholding tax. The rate of the tax depends on a
number of factors. If the income from the Fund is effectively connected with a U.S. trade or business carried on by a foreign
shareholder, then ordinary income dividends, capital gain dividends, and any gains realized upon the sale of shares of the Fund will
be subject to U.S. federal income tax at the rates applicable to U.S. citizens or domestic corporations.

In the case of a foreign non-corporate shareholder, the Fund may be required to withhold U.S. federal income tax at a rate
of 31% on distributions that are otherwise exempt from withholding tax (or taxable at a reduced treaty rate) unless the shareholder
furnishes the Fund with proper notification of their foreign status.

The tax consequences to a foreign shareholder 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 advisers with respect to the particular tax
consequences to them of an investment in the Fund, including the applicability of foreign taxes.

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. The Bank of New York is the custodian of the Fund's assets. The custodian bank's responsibilities include safeguarding
and controlling the Fund's portfolio securities and handling the delivery of such securities to and from the Fund. It will be the
practice of the Fund to deal with the custodian bank in a manner uninfluenced by any banking relationship the custodian bank may have
with the Manager and its affiliates. The Fund's cash balances with the custodian bank in excess of $100,000 are not protected by
federal deposit insurance. Those uninsured balances at times may be substantial.

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

INDEPENDENT AUDITORS' REPORT

- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Bond Fund:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Bond Fund, including the statement of investments, as of December
31, 2001, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for the periods indicated. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2001, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Bond Fund as of December 31, 2001, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for the periods indicated,
in conformity with accounting principles generally accepted in the United States
of America.

/s/Deloitte & Touche LLP
- ---------------------------
Deloitte & Touche LLP

Denver, Colorado
January 23, 2002

STATEMENT OF INVESTMENTS December 31, 2001

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Asset-Backed Securities--5.6%
AQ Finance NIM Trust, Home Equity Collateralized Mtg. Obligations,
Series 2001-3A, 8.835%, 2/25/32/1/ $ 4,000,000 $
4,000,000
- ------------------------------------------------------------------------------------------------------------------------
LBFTC I, Home Equity Collateralized Mtg. Obligations,
Series 2000-1A, Cl. D, 10%, 2/25/30/2/ 901,468
886,538
- ------------------------------------------------------------------------------------------------------------------------
Lease Investment Flight Trust, Collateralized Plane Obligations,
Series 1A, Cl. D2, 8%, 7/15/31/1/ 3,150,000
1,260,000
- ------------------------------------------------------------------------------------------------------------------------
Liberte American Loan Master Trust, Collateralized Loan Obligations,
Series 1999-1A, Cl. D2, 7.162%, 11/25/06/1/,/3/ 6,000,000
4,800,000
- ------------------------------------------------------------------------------------------------------------------------
Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31/1/ 2,971,896
3,057,339
- ------------------------------------------------------------------------------------------------------------------------
Long Beach Asset Holdings Corp. NIM Trust, Home Equity Asset-Backed
Pass-Through Certificates, Series 2001-3, 7.87%, 9/25/31 4,275,535
4,251,486
- ------------------------------------------------------------------------------------------------------------------------
MSF Funding LLC, Collateralized Mtg. Obligations,
Series 2000-1, Cl. C, 9.45%, 7/25/07/1/,/3/ 905,261
901,866
- ------------------------------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations,
Series 1999-I, Cl. ECFD, 8.75%, 12/25/28 2,838,124
2,613,735
- ------------------------------------------------------------------------------------------------------------------------
Option One Mortgage Securities Corp., Home Equity
Collateralized Mtg. Obligations:
Series 1999-1, Cl. CTFS, 10.06%, 3/26/29/1/ 1,537,621
1,459,539
Series 1999-3, Cl. CTFS, 10.80%, 12/26/29 860,818
834,053
- ------------------------------------------------------------------------------------------------------------------------
Seneca Funding I Ltd., Commercial Bond Obligations,
Cl. A, 4.843%, 5/31/29/3/ 4,060,000
2,966,845
- ------------------------------------------------------------------------------------------------------------------------
Tobacco Settlement Authority, Asset-Backed Securities,
Series 2001-A, 6.79%, 6/1/10 1,400,000
1,376,375

- -----------
Total Asset-Backed Securities (Cost $30,111,379)
28,407,776

- ------------------------------------------------------------------------------------------------------------------------
Corporate Loans--0.2%
Ferrell Cos., Inc., Sr. Sec. Credit Facilities Term Loan,
Tranche B, 5.924%, 6/17/06/1/,/3/ (Cost $880,594) 889,488
867,252

- ------------------------------------------------------------------------------------------------------------------------
Mortgage-Backed Obligations--88.5%
- ------------------------------------------------------------------------------------------------------------------------
Government Agency--69.6%
- ------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored--69.3%
Federal Home Loan Mortgage Corp.:
9%, 3/1/17 130,901
141,235
12.50%, 4/1/14 8,292
9,648
13.50%, 11/1/10 17,838
21,212
- ------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Participation
Certificates:
Series 151, Cl. F, 9%, 5/15/21 302,840
319,497
Series 1843, Cl. VB, 7%, 4/15/03 56,886
57,989
Series 1849, Cl. VA, 6%, 12/15/10 52,060
52,581
- ------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates, Series 2054, Cl. TE, 6.25%, 4/15/24 850,000
863,541
- ------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-
Backed Security:
Series 192, Cl. IO, 9.768%, 2/1/28/4/ 32,400,591
7,619,202

12 | OPPENHEIMER BOND FUND

Principal Market
Value
Amount See
Note 1
- -------------------------------------------------------------------------------------------------------------------------

FHLMC/FNMA/Sponsored Continued
Series 194, Cl. IO, 9.265%, 4/1/28/4/ $ 24,207,052 $
5,968,551
Series 197, Cl. IO, 6.765%, 4/1/28/4/ 6,192,009
1,598,312
Series 202, Cl. IO, 7.264%, 4/1/29/4/ 20,318,854
5,181,308
Series 203, Cl. IO, 10.022%, 6/15/29/4/ 9,912,410
2,598,910
Series 204, Cl. IO, 12.517%, 5/15/29/4/ 32,379,076
8,469,152
Series 205, Cl. IO, 7.277%, 9/15/29/4/ 8,392,447
1,964,357
Series 206, Cl. IO, 20.217%, 12/15/29/4/ 10,871,150
2,252,366
Series 207, Cl. IO, 8.765%, 4/15/30/4/ 8,881,103
1,826,177
Series 214, Cl. IO, 25.176%, 6/1/31/4/ 41,951,967
11,595,786
Series 303, Cl. IO, 15.082%, 11/1/29/4/ 3,565,214
741,453
- ------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Real Estate Mtg. Investment
Conduit Multiclass Certificates:
Series 1711, Cl. EA, 7%, 3/15/24 200,000
205,936
Series 2351, Cl. EF, 6.50%, 12/15/24 10,000,000
10,312,500
Series 2355, Cl. CQ, 6.50%, 7/15/26 7,200,000
7,398,000
- ------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 2/25/30/5/ 127,000,000
124,181,870
6.50%, 1/25/28/5/ 149,450,000
149,450,000
7%, 1/1/09--11/1/25 336,792
348,798
7.50%, 2/1/08--3/1/08 129,591
136,675
- ------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd
Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust
1992-34, Cl. G, 8%, 3/25/22/6/ 363,389
386,781
- ------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Mtg. Pass-Through Certificates,
8%, 8/1/17 83,466
87,921
- ------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates, Interest-Only Stripped Mtg.-Backed
Security, Trust 311, Cl. 2, 9.321%, 6/1/304 6,211,118
1,626,537
- ------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security:
Trust 299, Cl. 2, 18.035%, 5/1/28/4/ 2,921,507
698,879
Trust 313, Cl. 2, 13.31%, 6/25/31/4/ 14,718,473
4,029,182

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

350,144,356

- ------------------------------------------------------------------------------------------------------------------------
GNMA/Guaranteed--0.3%
Government National Mortgage Assn.:
6.75%, 7/20/25 173,934
178,555
7%, 7/15/09 114,725
119,987
7.75%, 7/20/27 34,588
35,502
8%, 6/15/05--10/15/06 403,097
425,484
9%, 2/15/09--6/15/09 150,512
162,993
10%, 11/15/09 47,121
51,564
10.50%, 12/15/17--5/15/21 151,174
172,009
11%, 10/20/19 240,991
276,902
12%, 5/15/14 832
965
13%, 12/15/14 11,326
13,485

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

1,437,446

- ------------------------------------------------------------------------------------------------------------------------
Private--18.9%
- ------------------------------------------------------------------------------------------------------------------------
Commercial--14.0%
AMRESCO Commercial Mortgage Funding I Corp., Multiclass Mtg
Pass-Through Certificates, Series 1997-C1, Cl. G, 7%, 6/17/29/1/ 150,000
133,348

13 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS Continued

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Commercial Continued
Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates:
Series 1996-D2, Cl. A3, 7.38%, 2/14/29/3/ $ 6,067,127 $
5,915,449
Series 1996-MD6, Cl. A3, 7.09%, 11/13/29/3/ 800,000
816,875
Series 1997-D4, Cl. B1, 7.525%, 4/14/29/3/ 115,000
93,132
Series 1997-D4, Cl. B2, 7.525%, 4/14/29/3/ 115,000
89,700
Series 1997-D4, Cl. B3, 7.525%, 4/14/29/3/ 115,000
81,398
Series 1997-D5, Cl. B1, 6.93%, 2/14/41 2,000,000
1,090,000
- ------------------------------------------------------------------------------------------------------------------------
Asset Securitization Corp., Interest-Only Stripped Mtg.-Backed Security,
Series 1997-D5, Cl. PS1, 8.05%, 2/14/41/4/ 5,895,639
427,434
- ------------------------------------------------------------------------------------------------------------------------
Capital Lease Funding Securitization LP, Interest-Only Corporate-
Backed Pass-Through Certificates, Series 1997-CTL1, 10.015%, 6/22/24/1/,/4/ 12,174,381
369,036
- ------------------------------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Commercial Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. E, 6.72%, 12/25/03/1/,/3/ 250,000
247,998
- ------------------------------------------------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Commercial Mtg. Obligations:
Series 1996-C1, Cl. D, 7.35%, 12/25/20/1/,/3/ 875,000
873,359
Series 2000-FL2A, Cl. J-NS, 4.20%, 7/15/02/3/ 1,400,000
1,379,219
- ------------------------------------------------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Interest-Only Stripped Mtg.-
Backed Security, Series 1996-C1, Cl. X-2, 164.795%, 12/25/20/1/,/4/ 9,061,582
2,832
- ------------------------------------------------------------------------------------------------------------------------
Commercial Mortgage Asset Trust, Commercial Mtg. Pass-Through
Certificates, Series 1999-C1, Cl. C, 7.35%, 8/17/13 362,600
371,552
- ------------------------------------------------------------------------------------------------------------------------
CRIIMI MAE Commercial Mortgage Trust I, Collateralized Mtg.
Obligations, Series 1998-C1, Cl. A2, 7%, 3/2/11/2/ 7,250,000
7,173,195
- ------------------------------------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp., Mtg. Pass-Through
Certificates, Series 1998-C1, Cl. F, 6%, 5/17/40/2/ 2,500,000
1,532,638
- ------------------------------------------------------------------------------------------------------------------------
DLJ Commercial Mortgage Corp., Commercial Mtg.
Pass-Through Certificates:
Series 1999-STF1, Cl. B6, 6.511%, 7/5/08/1/,/3/ 1,143,219
1,080,080
Series 1999-STF1, Cl. B6, 6.511%, 7/5/08/1/,/3/
21,426,668 --
- ------------------------------------------------------------------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates:
Series 1994-C1, Cl. 2D, 8.70%, 9/25/25 1,000,000
978,906
Series 1994-C1, Cl. 2E, 8.70%, 9/25/25 1,000,000
978,906
- ------------------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg.
Pass-Through Certificates:
Series 1997-CHL1, Cl. C, 8.111%, 7/25/06/1/,/3/ 1,478,000
1,444,976
Series 1997-CHL1, Cl. D, 8.111%, 5/25/08/1/,/3/ 750,000
686,016
Series 1997-CHL1, Cl. E, 8.111%, 2/25/11/1/,/3/ 750,000
583,125
- ------------------------------------------------------------------------------------------------------------------------
First Union National Bank Commercial Mortgage Trust, Commercial
Mtg. Pass-Through Certificates, Series 2001-C2, Cl. E, 7.003%, 1/12/43 3,200,000
3,249,000
- ------------------------------------------------------------------------------------------------------------------------
First Union-Lehman Brothers Commercial Mortgage Trust, Interest-Only
Stripped Mtg.-Backed Security, Series 1998-C2, 10.106%, 5/18/28/4/ 9,988,150
306,082
- ------------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., Collateralized Mtg. Obligations,
Series 1998-C1, Cl. E, 7.096%, 3/15/11/3/ 1,500,000
1,488,750
- ------------------------------------------------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc., Interest-Only Stripped
Mtg.-Backed Security Pass-Through Certificates, Series 1997-C1, Cl. X,
8.203%, 7/15/27/4/ 7,647,538
514,416
- ------------------------------------------------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities, Inc., Mtg. Pass-Through
Certificates, Series 1997-C2, Cl. F, 6.75%, 4/16/29 1,000,000
574,648

14 | OPPENHEIMER BOND FUND

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Commercial Continued
GS Mortgage Securities Corp. II, Commercial Mtg. Obligations:
Series 2001-Rock, Cl. C, 6.878%, 5/3/18/2/ $ 3,200,000 $
3,155,750
Series 2001-Rock, Cl. E, 6.878%, 5/3/18/2/ 2,200,000
2,093,436
- ------------------------------------------------------------------------------------------------------------------------
Hotel First Mortgage Trust, Commercial Mtg. Obligations,
Series 1993-A, Cl. A, 8.52%, 8/5/08/1/ 1,144,124
1,192,750
- ------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Chase Commercial Mortgage Securities, Commercial Mtg.
Pass-Through Obligations, Series 2001-FL1A, Series G, 3.895%, 7/13/13/1/,/3/ 3,020,085
2,963,341
- ------------------------------------------------------------------------------------------------------------------------
LB-UBS Securities Commercial Mortgage Trust, Commercial Mtg
Pass-Through Certificates, Series 2000-C3, Cl. C, 7.95%, 2/15/10 3,137,400
3,372,705
- ------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Commercial Conduit Mortgage Trust, Interest-Only
Stripped Mtg.-Backed Security, Series 1998-C1, Cl. IO, 8.017%, 2/18/28/4/ 16,895,837
725,993
- ------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 1996-C1, Cl. E, 7.377%, 3/15/06/1/,/3/ 385,000
366,479
Series 1997-HF1, Cl. F, 6.86%, 2/15/10/2/ 225,000
198,422
Series 1997-RR, Cl. D, 7.751%, 4/30/39/2/,/3/ 1,720,092
1,487,998
Series 1997-RR, Cl. E, 7.751%, 4/30/39/2/,/3/ 400,021
292,827
Series 1997-RR, Cl. F, 7.751%, 4/30/39/2/,/3/ 400,021
245,227
Series 1998-WF1, Cl. F, 7.30%, 3/15/30/1/ 2,000,000
1,786,250
- ------------------------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07/2/ 254,890
224,622
- ------------------------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Multifamily Mtg. Pass-Through
Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06/2/ 875,000
793,840
- ------------------------------------------------------------------------------------------------------------------------
NationsBank Trust, Lease Pass-Through Certificates, Series 1997A-1,
7.442%, 1/10/11/3/ 446,562
471,333
- ------------------------------------------------------------------------------------------------------------------------
Nomura Asset Securities Corp., Commercial Mtg. Obligations,
Series 1996-MD5, Cl. A3, 7.638%, 4/13/39/3/ 5,600,000
5,910,688
- ------------------------------------------------------------------------------------------------------------------------
PNC Mortgage Securities Corp., Collateralized Mtg. Obligations Pass-
Through Certificates, Series 1998-12, Cl. 1A2, 5.75%, 1/25/29 6,000,000
5,439,360
- ------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg. Pass-
Through Certificates, Series 2001-CDCA, Cl. GSA, 3.896%, 2/15/13/2/,/3/ 3,261,200
3,265,277
- ------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Sub. Multiclass Pass-Through
Certificates, Series 1996-CFL, Cl. G, 7.75%, 2/25/28 4,500,000
4,517,578

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

70,985,946

- ------------------------------------------------------------------------------------------------------------------------
Other--0.0%
Salomon Brothers Mortgage Securities VI, Inc., Principal-Only Stripped
Mtg.-Backed Security, Series 1987-3, Cl. A, 12.945%, 10/23/17/1/,/7/ 53,878
44,315
- ------------------------------------------------------------------------------------------------------------------------
Residential--4.9%
ARC Net Interest Margin Trust, Collateralized Mtg. Obligations,
Series 2001-6A, Cl. A, 7.25%, 10/27/31/1/ 4,893,386
4,836,807
- ------------------------------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations, Series 2001-1,
Cl. ECFD, 7.25%, 10/22/02 2,303,485
2,303,486
- ------------------------------------------------------------------------------------------------------------------------
Residential Funding Mortgage Securities I, Inc., Mtg. Pass-Through
Certificates, Series 1993-S10, Cl. A9, 8.50%, 2/25/23 16,775
16,729
- ------------------------------------------------------------------------------------------------------------------------
Ryland Mortgage Securities Corp. III, Sub. Bonds, Series 1992-A,
Cl. 1A, 8.25%, 3/29/30/3/ 66,975
68,063

15 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS Continued

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Residential Continued
Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 1996-B, Cl. 1, 7.11%, 4/25/26/1/,/3/ $ 1,688,737 $
1,207,447
Series 1999-NC2, Cl. M3, 5.35%, 4/25/29/3/ 1,654,000
1,661,236
- ------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Collateralized Mtg. Obligations, Mtg.
Pass-Through Certificates, Series 1998-8, Cl. B, 3.40%, 8/25/28/3/ 1,853,067
1,827,877
- ------------------------------------------------------------------------------------------------------------------------
Washington Mutual Finance Corp., Collateralized Mtg. Obligations,
Series 2000-1, Cl. B1, 5.93%, 1/25/40/3/ 2,800,000
2,775,938
- ------------------------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Loan Trust, Commercial Mtg. Obligations,
Series 2001-S9, Cl. A12, 6.75%, 9/25/31 9,711,174
9,847,738

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

24,545,321

- ------------
Total Mortgage-Backed Obligations (Cost $443,105,554)
447,157,384

- ------------------------------------------------------------------------------------------------------------------------
U.S. Government Obligations--2.1%

U.S. Treasury Bonds, 5.375%, 2/15/31 6,500,000
6,410,632
- ------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 5%, 8/15/11 4,400,000
4,390,377

- ------------
Total U.S. Government Obligations (Cost $10,844,312)
10,801,009

- ------------------------------------------------------------------------------------------------------------------------
Loan Participations--0.1%
Shoshone Partners Loan Trust Sr. Nts., 4.03%, 4/28/02 (representing a
basket of reference loans and a total return swap between Chase
Manhattan Bank and the Trust)1,3 (Cost $750,000) 750,000
331,302
- ------------------------------------------------------------------------------------------------------------------------
Corporate Bonds and Notes--48.7%
- ------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--0.1%
Alliant Techsystems, Inc., 8.50% Sr. Unsec. Sub. Nts., 5/15/11 200,000
209,000
- ------------------------------------------------------------------------------------------------------------------------
SC International Services, Inc., 9.25% Sr. Sub. Nts., Series B, 9/1/07 100,000
70,000

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

279,000

- ------------------------------------------------------------------------------------------------------------------------
Chemicals--0.4%
Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09 200,000
192,000
- ------------------------------------------------------------------------------------------------------------------------
ISP Chemco, Inc., 10.25% Sr. Sub. Nts., 7/1/11/2/ 300,000
315,000
- ------------------------------------------------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.50% Sec. Nts., 12/15/08/2/ 200,000
199,000
9.625% Sr. Sec. Nts., Series A, 5/1/07 300,000
303,750
- ------------------------------------------------------------------------------------------------------------------------
Morton International, Inc., 9.25% Credit Sensitive Nts., 6/1/20 85,000
99,441
- ------------------------------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 383,000
381,085
- ------------------------------------------------------------------------------------------------------------------------
OM Group, Inc., 9.25% Sr. Sub. Nts., 12/15/11/2/ 250,000
256,250
- ------------------------------------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07/8/,/9/ 100,000
28,625
- ------------------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 7/1/07/8/ 150,000
44,250
- ------------------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc., 12.375% Sr. Sec. Nts., Series B, 7/15/06/8/ 200,000
167,000

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

1,986,401

- ------------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--0.1%
Pennzoil-Quaker State Co., 10% Sr. Nts., 11/1/08/2/ 200,000
210,000

16 | OPPENHEIMER BOND FUND

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Consumer Non-Durables Continued
Playtex Products, Inc., 9.375% Sr. Unsec. Sub. Nts., 6/1/11 $ 250,000 $
265,000
- ------------------------------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp., 12% Sr. Sec. Nts., 12/1/05/2/ 250,000
249,687
- ------------------------------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08/1/,/8/,/9/
145,000 --

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

724,687

- ------------------------------------------------------------------------------------------------------------------------
Energy--3.7%
Devon Financing Corp., 7.875% Debs., 9/30/31/2/ 6,400,000
6,496,314
- ------------------------------------------------------------------------------------------------------------------------
El Paso Energy Partners LP, 8.50% Sr. Unsec. Sub. Nts., Series B, 6/1/11 650,000
659,750
- ------------------------------------------------------------------------------------------------------------------------
Hornbeck-Leevac Marine Services, Inc., 10.625% Sr. Nts., 8/1/08/2/ 500,000
510,000
- ------------------------------------------------------------------------------------------------------------------------
Kinder Morgan Energy Partners LP, 6.75% Sr. Unsec. Nts., 3/15/11 4,500,000
4,507,119
- ------------------------------------------------------------------------------------------------------------------------
McDermott, Inc., 9.375% Nts., 3/15/02 100,000
90,500
- ------------------------------------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 200,000
175,000
- ------------------------------------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 242,000
260,755
- ------------------------------------------------------------------------------------------------------------------------
PanCanadian Energy Corp., 7.20% Bonds, 11/1/31 5,000,000
4,884,290
- ------------------------------------------------------------------------------------------------------------------------
SESI LLC, 8.875% Sr. Unsec. Nts., 5/15/11 250,000
236,250
- ------------------------------------------------------------------------------------------------------------------------
Stone Energy Corp.:
8.25% Sr. Sub. Nts., 12/15/11/2/ 200,000
204,000
8.75% Sr. Sub. Nts., 9/15/07 300,000
307,500
- ------------------------------------------------------------------------------------------------------------------------
Westport Resources Corp., 8.25% Sr. Unsec. Sub. Nts., 11/1/11/2/ 500,000
507,500

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

18,838,978

- ------------------------------------------------------------------------------------------------------------------------
Financial--15.7%
Brascan Corp., 8.125% Nts., 12/15/08 6,025,000
6,020,764
- ------------------------------------------------------------------------------------------------------------------------
BT Institutional Cap Trust A, 8.09% Bonds, 12/1/26/2/ 5,200,000
5,209,360
- ------------------------------------------------------------------------------------------------------------------------
Colonial Bank, 9.375% Sub. Nts., 6/1/11 4,600,000
4,847,655
- ------------------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston (USA), Inc., 6.125% Nts., 11/15/11 4,000,000
3,911,292
- ------------------------------------------------------------------------------------------------------------------------
Dime Capital Trust I, 9.33% Capital Securities, Series A, 5/6/27 6,300,000
6,694,040
- ------------------------------------------------------------------------------------------------------------------------
Lion Connecticut Holdings, Inc., 8% Debs., 1/15/17 553,000
561,569
- ------------------------------------------------------------------------------------------------------------------------
Nationwide CSN Trust, 9.875% Sec. Nts., 2/15/25/2/ 8,000,000
8,321,768
- ------------------------------------------------------------------------------------------------------------------------
Ocwen Capital Trust I, 10.875% Capital Nts., 8/1/27/1/ 300,000
241,500
- ------------------------------------------------------------------------------------------------------------------------
Ohio National Financial Services, Inc., 7% Nts., 7/15/11/2/ 10,600,000
10,740,280
- ------------------------------------------------------------------------------------------------------------------------
Osprey Trust/Osprey I, Inc., 8.31% Sr. Sec. Nts., 1/15/03/2/,/8/ 26,200,000
5,371,000
- ------------------------------------------------------------------------------------------------------------------------
Oversea-Chinese Banking Corp. Ltd., 7.75% Unsec. Sub. Nts., 9/6/11 5,300,000
5,544,097
- ------------------------------------------------------------------------------------------------------------------------
Popular North America, Inc. 6.80% Medium-Term Nts., Series C, 12/21/05 3,100,000
3,138,052
- ------------------------------------------------------------------------------------------------------------------------
Sears Roebuck Acceptance Corp., 6.75% Nts., 8/15/11 6,000,000
5,995,476
- ------------------------------------------------------------------------------------------------------------------------
Stilwell Financial, Inc., 7% Nts., 11/1/06 8,000,000
7,838,944
- ------------------------------------------------------------------------------------------------------------------------
Unicredito Italiano Capital Trust, 9.20% Non-Cum. Trust Preferred
Securities, 10/5/49/2,3/ 4,400,000
4,902,150

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

79,337,947

- ------------------------------------------------------------------------------------------------------------------------
Food/Tobacco--0.7%
Canandaigua Brands, Inc., 8.625% Sr. Unsec. Nts., 8/1/06 300,000
310,500
- ------------------------------------------------------------------------------------------------------------------------
Great Atlantic & Pacific Tea Co., Inc. (The), 9.125% Sr. Nts., 12/15/11 250,000
251,875
- ------------------------------------------------------------------------------------------------------------------------
Kraft Foods, Inc., 6.50% Bonds, 11/1/31 2,400,000
2,356,723

17 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS Continued

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Food/Tobacco Continued
Smithfield Foods, Inc., 7.625% Sr. Unsec. Sub. Nts., 2/15/08/1/ $ 250,000 $
246,250
- ------------------------------------------------------------------------------------------------------------------------
Winn-Dixie Stores, Inc., 8.875% Sr. Nts., 4/1/08 200,000
192,000

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

3,357,348

- ------------------------------------------------------------------------------------------------------------------------
Forest Products/Containers--2.0%
Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 200,000
211,000
- ------------------------------------------------------------------------------------------------------------------------
Scotia Pacific Co. LLC, 7.71% Sec. Nts., Series B, Cl. A-3, 1/20/14 11,811,000
9,711,240
- ------------------------------------------------------------------------------------------------------------------------
Stone Container Corp., 9.75% Sr. Unsec. Nts., 2/1/11 200,000
213,500

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

10,135,740

- ------------------------------------------------------------------------------------------------------------------------
Gaming/Leisure--0.8%
Aztar Corp., 9% Sr. Sub. Nts., 8/15/11/2/ 400,000
414,000
- ------------------------------------------------------------------------------------------------------------------------
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 150,000
126,375
- ------------------------------------------------------------------------------------------------------------------------
Felcor Lodging LP, 8.50% Sr. Nts., 6/1/11 184,000
177,560
- ------------------------------------------------------------------------------------------------------------------------
HMH Properties, Inc., 8.45% Sr. Nts., Series C, 12/1/08 300,000
286,500
- ------------------------------------------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 100,000
106,625
- ------------------------------------------------------------------------------------------------------------------------
Host Marriott LP, 9.50% Sr. Nts., 1/15/07/2/ 400,000
402,500
- ------------------------------------------------------------------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Nts., 8/15/08 250,000
245,000
- ------------------------------------------------------------------------------------------------------------------------
Meristar Hospitality Corp.:
8.75% Sr. Unsec. Sub. Nts., 8/15/07 700,000
589,750
9.125% Sr. Nts., 1/15/11 200,000
189,000
- ------------------------------------------------------------------------------------------------------------------------
Meristar Hospitality Operating Partnership/Finance Corp. II,
10.50% Sr. Nts., 6/15/09/2/ 350,000
352,187
- ------------------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc., 8.375% Sr. Unsec. Sub. Nts., 2/1/11 400,000
397,000
- ------------------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
8.125% Sr. Nts., 1/1/06/1/ 200,000
206,500
8.375% Sr. Sub. Nts., 7/1/11 300,000
310,500
8.75% Sr. Unsec. Sub. Nts., 1/1/09 100,000
104,000
- ------------------------------------------------------------------------------------------------------------------------
Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07 200,000
209,750
- ------------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc., 9.75% Sr. Sub. Nts., 4/15/07 150,000
153,375

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

4,270,622

- ------------------------------------------------------------------------------------------------------------------------
Healthcare--0.4%
Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 150,000
150,750
- ------------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust IV, 7.875% Trust Preferred Nts., 6/15/11 400,000
400,000
- ------------------------------------------------------------------------------------------------------------------------
ICN Pharmaceuticals, Inc.:
8.75% Sr. Nts., 11/15/08/1/ 125,000
140,625
9.75% Sr. Nts., 11/15/08/2/ 140,000
157,500
- ------------------------------------------------------------------------------------------------------------------------
Magellan Health Services, Inc., 9.375% Sr. Nts., 11/15/07/2/ 200,000
204,000
- ------------------------------------------------------------------------------------------------------------------------
Mallinckroot, Inc., 6% Nts., 10/15/03 500,000
520,288
- ------------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 8.125% Sr. Unsec. Sub. Nts., Series B, 12/1/08/1/ 400,000
424,000

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

1,997,163

- ------------------------------------------------------------------------------------------------------------------------
Housing--3.7%
CB Richard Ellis Services, Inc., 11.25% Sr. Unsec. Sub. Nts., 6/15/11 200,000
172,000

18 | OPPENHEIMER BOND FUND

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Housing Continued
CPG Partners LP, 8.25% Unsec. Unsub. Nts., 2/1/11 $ 4,200,000 $
4,258,460
- ------------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc.:
7.875% Sr. Nts., 8/15/11 300,000
294,000
9.75% Sr. Sub. Nts., 9/15/10 300,000
310,500
- ------------------------------------------------------------------------------------------------------------------------
KB Home:
8.65% Sr. Sub. Nts., 12/15/08 400,000
404,000
9.50% Sr. Unsec. Sub. Nts., 2/15/11 200,000
205,000
- ------------------------------------------------------------------------------------------------------------------------
Nortek, Inc.:
9.125% Sr. Unsec. Nts., Series B, 9/1/07 250,000
255,000
9.25% Sr. Nts., Series B, 3/15/07 450,000
461,250
- ------------------------------------------------------------------------------------------------------------------------
Pulte Corp., 8.125% Sr. Unsec. Nts., 3/1/11 1,900,000
1,880,253
- ------------------------------------------------------------------------------------------------------------------------
Socgen Real Estate LLC, 7.64% Bonds, 12/29/49/2/ 9,000,000
9,291,501
- ------------------------------------------------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 1,000,000
995,000

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

18,526,964

- ------------------------------------------------------------------------------------------------------------------------
Information Technology--0.2%
Amkor Technology, Inc., 9.25% Sr. Unsec. Sub. Nts., 2/15/08 200,000
190,000
- ------------------------------------------------------------------------------------------------------------------------
Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05/1/ 500,000
237,500
- ------------------------------------------------------------------------------------------------------------------------
Fairchild Semiconductor Corp., 10.50% Sr. Unsec. Sub. Nts., 2/1/09 200,000
213,500
- ------------------------------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc.:
9% Sr. Unsec. Sub. Nts., 2/1/08 175,000
180,250
9% Sr. Unsec. Sub. Nts., 2/1/08 50,000
51,500

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

872,750

- ------------------------------------------------------------------------------------------------------------------------
Manufacturing--0.1%
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08/1/,/8/,/9/ 100,000
2,500
- ------------------------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07/1/ 150,000
108,750
- ------------------------------------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts., Series B, 6/15/07/1/ 300,000
264,000
- ------------------------------------------------------------------------------------------------------------------------
Terex Corp.:
8.875% Sr. Unsec. Sub. Nts., Series C, 4/1/08 150,000
148,500
9.25% Sr. Sub. Nts., 7/15/112 250,000
251,250
- ------------------------------------------------------------------------------------------------------------------------

775,000

- ------------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Broadcasting--0.4%
AMFM Operating, Inc., 12.625% Sr. Sub. Debs., Series E, 10/31/06/1/,/10/ 24,000
25,650
- ------------------------------------------------------------------------------------------------------------------------
Chancellor Media Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 1,200,000
1,254,000
- ------------------------------------------------------------------------------------------------------------------------
Emmis Communications Corp., 8.125% Sr. Unsec. Sub. Nts., Series B, 3/15/09 300,000
288,750
- ------------------------------------------------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11 150,000
155,625
- ------------------------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 8.50% Sr. Unsec. Nts., 12/15/08/2/ 400,000
404,000

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

2,128,025

- ------------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Cable/Wireless Video--1.1%
Adelphia Communications Corp.:
8.375% Sr. Nts., Series B, 2/1/08 700,000
651,875
9.25% Sr. Nts., 10/1/02 150,000
151,687

19 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS Continued

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Media/Entertainment: Cable/Wireless Video Continued
Charter Communications Holdings LLC/Charter Communications
Holdings Capital Corp.:
8.25% Sr. Unsec. Nts., 4/1/07 $ 1,500,000 $
1,449,375
10% Sr. Unsec. Sub. Nts., 5/15/11 400,000
409,000
10.75% Sr. Unsec. Nts., 10/1/09 400,000
424,000
- ------------------------------------------------------------------------------------------------------------------------
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08 100,000
71,500
- ------------------------------------------------------------------------------------------------------------------------
EchoStar Broadband Corp., 10.375% Sr. Unsec. Nts., 10/1/07 600,000
631,500
- ------------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 750,000
776,250
- ------------------------------------------------------------------------------------------------------------------------
Insight Midwest LP/Insight Capital, Inc., 9.75% Sr. Nts., 10/1/09 300,000
318,000
- ------------------------------------------------------------------------------------------------------------------------
Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13 400,000
417,000
- ------------------------------------------------------------------------------------------------------------------------
NTL Communications Corp., 11.50% Sr. Unsec. Nts., Series B, 10/1/08 400,000
142,000
- ------------------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 8.75% Sr. Sub. Nts., 12/15/11/2/ 250,000
251,250

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

5,693,437

- ------------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Diversified Media--0.4%
Adelphia Communications Corp., 10.25% Sr. Unsec. Nts., 11/1/06 300,000
307,500
- ------------------------------------------------------------------------------------------------------------------------
AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 150,000
146,438
- ------------------------------------------------------------------------------------------------------------------------
Imax Corp., 7.875% Sr. Nts., 12/1/05 400,000
153,000
- ------------------------------------------------------------------------------------------------------------------------
Key3Media Group, Inc., 11.25% Sr. Sub. Nts., 6/15/11 600,000
507,000
- ------------------------------------------------------------------------------------------------------------------------
Lamar Advertising Co.:
8.625% Sr. Sub. Nts., 9/15/07 400,000
419,000
9.625% Sr. Unsec. Sub. Nts., 12/1/06 150,000
157,313
- ------------------------------------------------------------------------------------------------------------------------
Mail-Well I Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 12/15/08 100,000
78,500
- ------------------------------------------------------------------------------------------------------------------------
Penton Media, Inc., 10.375% Sr. Unsec. Sub. Nts., 6/15/11 400,000
230,000

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

1,998,751

- ------------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications--5.4%
Cable & Wire Optus Ltd., 8.125% Nts., 6/15/09/2/ 4,750,000
5,213,353
- ------------------------------------------------------------------------------------------------------------------------
Calpoint Receivable Strip Trust 2001, 7.44% Bonds, 12/10/06/2/ 8,000,000
7,859,704
- ------------------------------------------------------------------------------------------------------------------------
COLT Telecom Group plc, 12% Sr. Unsec. Disc. Nts., 12/15/06/1/ 350,000
309,750
- ------------------------------------------------------------------------------------------------------------------------
Global Crossing Holdings Ltd., 8.70% Sr. Unsec. Nts., 8/1/07/8/ 100,000
9,500
- ------------------------------------------------------------------------------------------------------------------------
International CableTel, Inc., 11.50% Sr. Deferred Coupon
Nts., Series B, 2/1/06 750,000
266,250
- ------------------------------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc., 10% Sr. Unsec. Nts., Series B, 11/15/08 300,000
88,500
- ------------------------------------------------------------------------------------------------------------------------
Qwest Capital Funding, Inc., 7.625% Bonds, 8/3/21/2/ 1,500,000
1,434,344
- ------------------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc., 7.50% Sr. Unsec. Nts.,
Series B, 11/1/08 6,710,000
6,793,741
- ------------------------------------------------------------------------------------------------------------------------
Teleglobe, Inc., 7.70% Unsec. Debs., 7/20/29 4,275,000
3,597,430
- ------------------------------------------------------------------------------------------------------------------------
Triton PCS, Inc., 8.75% Sr. Sub. Nts., 11/15/11/2/ 400,000
402,000
- ------------------------------------------------------------------------------------------------------------------------
WorldCom, Inc., 8.25% Bonds, 5/15/31 1,280,000
1,356,900
- ------------------------------------------------------------------------------------------------------------------------
XO Communications, Inc.:
9% Sr. Unsec. Nts., 3/15/08/8/ 150,000
18,750
9.625% Sr. Nts., 10/1/078 500,000
62,500

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

27,412,722

20 | OPPENHEIMER BOND FUND

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Media/Entertainment: Wireless Communications--1.8%
American Cellular Corp., 9.50% Sr. Sub. Nts., 10/15/09 $ 600,000 $
585,000
- ------------------------------------------------------------------------------------------------------------------------
American Tower Corp., 9.375% Sr. Nts., 2/1/09 600,000
486,000
- ------------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06 100,000
55,500
- ------------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 9.375% Sr. Unsec. Nts., 11/15/09 900,000
713,250
- ------------------------------------------------------------------------------------------------------------------------
Omnipoint Corp., 11.50% Sr. Nts., 9/15/09/2/ 350,000
406,000
- ------------------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07/11/ 200,000
98,000
- ------------------------------------------------------------------------------------------------------------------------
Price Communications Wireless, Inc., 9.125% Sr. Sec. Nts., Series B, 12/15/06/1/ 500,000
532,500
- ------------------------------------------------------------------------------------------------------------------------
Real Time Data Co., 13% Disc. Nts., 5/31/09/1/,/10/ 476,601
491,628
- ------------------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 500,000
517,500
- ------------------------------------------------------------------------------------------------------------------------
SBA Communications Corp.:
0%/12% Sr. Unsec. Disc. Nts., 3/1/08/11/ 800,000
604,000
10.25% Sr. Unsec. Nts., 2/1/09 100,000
86,000
- ------------------------------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08/11/ 300,000
94,500
- ------------------------------------------------------------------------------------------------------------------------
Triton PCS, Inc., 9.375% Sr. Unsec. Sub. Nts., 2/1/11 250,000
260,000
- ------------------------------------------------------------------------------------------------------------------------
VoiceStream Wireless Corp., 10.375% Sr. Unsec. Nts., 11/15/09 3,795,000
4,326,300

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

9,256,178

- ------------------------------------------------------------------------------------------------------------------------
Metals/Minerals--1.4%
AK Steel Corp.:
7.875% Sr. Unsec. Nts., 2/15/09 500,000
492,500
9.125% Sr. Nts., 12/15/06 300,000
308,250
- ------------------------------------------------------------------------------------------------------------------------
Alcoa, Inc., 6% Bonds, 1/15/12 5,750,000
5,718,939
- ------------------------------------------------------------------------------------------------------------------------
Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08 264,687
160,136
- ------------------------------------------------------------------------------------------------------------------------
National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09 200,000
71,000
- ------------------------------------------------------------------------------------------------------------------------
United States Steel LLC, 10.75% Sr. Nts., 8/1/08 200,000
192,000

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

6,942,825

- ------------------------------------------------------------------------------------------------------------------------
Retail--0.3%
Amazon.com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08/11/ 200,000
149,000
- ------------------------------------------------------------------------------------------------------------------------
CSK Auto, Inc., 12% Sr. Nts., 6/15/06/2/ 200,000
202,500
- ------------------------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs., 5/1/08 100,000
89,500
- ------------------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08/1/ 200,000
180,000
- ------------------------------------------------------------------------------------------------------------------------
Ingram Micro, Inc., 9.875% Sr. Unsec. Sub. Nts., 8/15/08/1/ 200,000
203,500
- ------------------------------------------------------------------------------------------------------------------------
May Department Stores Co., 10.625% Debs., 11/1/10 405,000
508,740

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

1,333,240

- ------------------------------------------------------------------------------------------------------------------------
Service--1.8%
Allied Waste North America, Inc.:
8.50% Sr. Nts., 12/1/08/2/ 300,000
304,500
8.875% Sr. Nts., Series B, 4/1/08 600,000
621,000
10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 600,000
621,000
- ------------------------------------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 250,000
256,250
- ------------------------------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts., 8/15/08 150,000
153,938
- ------------------------------------------------------------------------------------------------------------------------
Integrated Electrical Services, Inc., 9.375% Sr. Sub. Nts., Series C, 2/1/09 300,000
267,000

21 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS Continued

Principal Market
Value
Amount See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Service Continued
MMCaps Funding I Ltd., Inc., 8.03% Sr. Nts., 6/15/31/2/ $ 3,850,000 $
3,743,297
- ------------------------------------------------------------------------------------------------------------------------
PHH Corp., 8.125% Nts., 2/3/03 2,450,000
2,450,039
- ------------------------------------------------------------------------------------------------------------------------
Protection One, Inc./Protection One Alarm Monitoring, Inc.,
7.375% Sr. Unsec. Nts., 8/15/05 100,000
82,500
- ------------------------------------------------------------------------------------------------------------------------
Safety-Kleen Corp., 9.25% Sr. Unsec. Nts., 5/15/09/1/,/8/,/9/
500,000 50
- ------------------------------------------------------------------------------------------------------------------------
URS Corp., 12.25% Sr. Sub. Nts., Series B, 5/1/09 500,000
514,375

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

9,013,949

- ------------------------------------------------------------------------------------------------------------------------
Transportation--0.4%
Amtran, Inc., 9.625% Nts., 12/15/05 200,000
140,500
- ------------------------------------------------------------------------------------------------------------------------
Atlas Air, Inc.:
8.01% Pass-Through Certificates, Series 1998-1C, 1/2/10 786,421
762,844
9.375% Sr. Unsec. Nts., 11/15/06 500,000
417,500
- ------------------------------------------------------------------------------------------------------------------------
Dura Operating Corp., 9% Sr. Unsec. Sub. Nts., Series D, 5/1/09 300,000
283,500
- ------------------------------------------------------------------------------------------------------------------------
Federal-Mogul Corp., 7.375% Nts., 1/15/06/8/ 375,000
52,500
- ------------------------------------------------------------------------------------------------------------------------
Hayes Lemmerz International, Inc., 11.875% Sr. Nts., 6/15/06/2/,/8/,/9/ 200,000
96,000
- ------------------------------------------------------------------------------------------------------------------------
Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07/2/ 300,000
148,875

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

1,901,719

- ------------------------------------------------------------------------------------------------------------------------
Utility--7.8%
AES Corp. (The):
8.75% Sr. Unsec. Unsub. Nts., 6/15/08 500,000
442,500
8.875% Sr. Unsec. Nts., 2/15/11 300,000
265,500
9.375% Sr. Unsec. Nts., 9/15/10 400,000
362,000
- ------------------------------------------------------------------------------------------------------------------------
AGL Capital Corp., 7.125% Sr. Unsec. Nts., 1/14/116 3,750,000
3,710,438
- ------------------------------------------------------------------------------------------------------------------------
Alliant Energy Resources, Inc., 7% Nts., 12/1/11 10,000,000
9,560,980
- ------------------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 8.375% Sr. Nts., 11/1/082 600,000
595,500
- ------------------------------------------------------------------------------------------------------------------------
CMS Energy Corp., 9.875% Sr. Unsec. Nts., 10/15/07 400,000
424,875
- ------------------------------------------------------------------------------------------------------------------------
Kansas City Power & Light Co., 6.50% Sr. Nts., 11/15/11 5,000,000
4,838,105
- ------------------------------------------------------------------------------------------------------------------------
PSEG Energy Holdings, Inc., 8.625% Sr. Unsec. Nts., 2/15/08 3,000,000
3,052,683
- ------------------------------------------------------------------------------------------------------------------------
PSEG Power LLC, 8.625% Sr. Unsec. Nts., 4/15/31 3,500,000
3,897,768
- ------------------------------------------------------------------------------------------------------------------------
Qwest Corp., 6.875% Unsec. Debs., 9/15/33 4,800,000
4,039,070
- ------------------------------------------------------------------------------------------------------------------------
South Carolina Electric & Gas Co., 9% Mtg. Bonds, 7/15/06 500,000
526,261
- ------------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc. (The), 7.50% Sr. Unsec. Unsub. Debs., Cl. A, 1/15/31 2,100,000
2,051,776
- ------------------------------------------------------------------------------------------------------------------------
Xcel Energy, Inc., 7% Sr. Unsec. Sub. Nts., 12/1/10 5,600,000
5,665,458

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

39,432,914

- -------------
Total Corporate Bonds and Notes (Cost $266,330,180)
246,216,360

Shares
- ------------------------------------------------------------------------------------------------------------------------
Preferred Stocks--0.9%
CRIIMI MAE, Inc., 10.875% Cum. Cv., Series B, Non-Vtg 13,000
176,800
- ------------------------------------------------------------------------------------------------------------------------
Pacific Gas & Electric Co., $14.75 Cum./9/ 112,000
2,289,000
- ------------------------------------------------------------------------------------------------------------------------
Southern California Edison Co., 6.45% Cum., Non-Vtg./9/ 20,000
1,899,376

- -------------
Total Preferred Stocks (Cost $4,377,000)
4,365,176

22 | OPPENHEIMER BOND FUND

Market
Value
Shares See
Note 1
- ------------------------------------------------------------------------------------------------------------------------

Common Stocks--0.0%
COLT Telecom Group plc, ADR 2,730 $
18,728
- ------------------------------------------------------------------------------------------------------------------------
CRIIMI MAE, Inc./9/ 15,232
61,385
- ------------------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., Series B (Escrowed)/1/,/9/
25 --
- ------------------------------------------------------------------------------------------------------------------------
OpTel, Inc., Non-Vtg./1/,/9/
100 1
- ------------------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc./9/ 2,867
70,700
- ------------------------------------------------------------------------------------------------------------------------
Price Communications Corp./9/ 1,657
31,632
- ------------------------------------------------------------------------------------------------------------------------
Star Gas Partners LP 330
6,735

- ------------
Total Common Stocks (Cost $248,622)
189,181

Units
- ------------------------------------------------------------------------------------------------------------------------
Rights, Warrants and Certificates--0.0%

Chesapeake Energy Corp. Wts.:
Exp. 1/23/03/1/,/9/
1,668 --
Exp. 1/23/03/1/,/9/
953 --
Exp. 9/1/04/1/,/9/
2,800 --
- ------------------------------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/15/07/1/,/9/
50 1
- ------------------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/1/05/1/,/9/
300 6
- ------------------------------------------------------------------------------------------------------------------------
HF Holdings, Inc. Wts., Exp. 9/27/09/1/,/9/ 1,062
106
- ------------------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05/1/,/9/
1,980 20
- ------------------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08/1/,/9/
150 --
- ------------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07/1/,/9/
200 2
- ------------------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts., Exp. 9/19/10/9/ 2,028
18,455
- ------------------------------------------------------------------------------------------------------------------------
Real Time Data Co. Wts., Exp. 5/31/04/1/,/9/ 121,440
1,214
- ------------------------------------------------------------------------------------------------------------------------
Signature Brands USA, Inc. Wts., Exp. 8/15/02/1/,/9/
50 --

- ------------
Total Rights, Warrants and Certificates (Cost $26,229)
19,804

Date Strike Contracts
- ------------------------------------------------------------------------------------------------------------------------
Options Purchased--0.3%
U.S. Treasury Bonds, 5.375%, 2/15/31 Call/1/,/9/ 1/31/02 100% 80,000
890,625
- ------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts. Futures, 10 yr., 3/19/02 Call/9/ 1/25/02 105% 720
821,250

- ------------
Total Options Purchased (Cost $1,164,850)
1,711,875

Principal
Amount
- ------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements--6.1%
Repurchase agreement with Banc One Capital Markets, Inc., 1.45%,
dated 12/31/01, to be repurchased at $30,941,492 on 1/2/02,
collateralized by U.S. Treasury Nts., 4.75%--7.875%, 2/28/02--11/15/08,
with a value of $15,007,569 and U.S. Treasury Bonds, 7.25%--11.125%,
8/15/03--5/15/16, with a value of $16,589,750 (Cost $30,939,000) $30,939,000
30,939,000
- ------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $788,777,720) 152.5%
771,006,119
- ------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (52.5)
(265,583,838)

- ---------------------------------
Net Assets 100.0%
$505,422,281

=================================

23 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments

1. Identifies issues considered to be illiquid or restricted. See Note 8 of
Notes to Financial Statements.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $96,976,340 or 19.19% of the Fund's net
assets as of December 31, 2001.
3. Represents the current interest rate for a variable or increasing rate
security.
4. Interest-Only Strips represent the right to receive the monthly
interest payments on an underlying pool of mortgage loans. These securities
typically decline in price as interest rates decline. Most other fixed income
securities increase in price when interest rates decline. The principal amount
of the underlying pool represents the notional amount on which current interest
is calculated. The price of these securities is typically more sensitive to
changes in prepayment rates than traditional mortgage-backed securities (for
example, GNMA pass-throughs). Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing and amount of future cash
flows.
5. When-issued security to be delivered and settled after December 31, 2001.
6. Securities with an aggregate market value of $3,885,478 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
7. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
8. Issuer is in default.
9. Non-income-producing security.
10. Interest or dividend is paid in kind.
11. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.

See accompanying Notes to Financial Statements.

24 | OPPENHEIMER BOND FUND

STATEMENT OF ASSETS AND LIABILITIES December 31, 2001

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

Assets

Investments, at value (cost $788,777,720)--see accompanying statement $ 771,006,119
- --------------------------------------------------------------------------------------------------
Cash 490,490
- --------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold on a when-issued basis 35,443,251
Interest, dividends and principal paydowns 7,777,558
Shares of beneficial interest sold 2,072,226
Daily variation on futures contracts 1,253,734
Other 5,134
-------------
Total assets 818,048,512

- --------------------------------------------------------------------------------------------------
Liabilities

Payables and other liabilities:
Investments purchased (including $308,927,724 purchased on a 311,090,272
when-issued basis)
Shares of beneficial interest redeemed 1,127,432
Distribution and service plan fees 303,454
Shareholder reports 69,762
Trustees' compensation 1,028
Transfer and shareholder servicing agent fees 562
Other 33,721
-------------
Total liabilities 312,626,231

- --------------------------------------------------------------------------------------------------
Net Assets $ 505,422,281
=============

- --------------------------------------------------------------------------------------------------
Composition of Net Assets

Paid-in capital $ 550,241,393
- --------------------------------------------------------------------------------------------------
Undistributed (overdistributed) net investment income (87,221)
- --------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments and
foreign currency transactions (27,050,280)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments and
translation of assets and liabilities denominated in foreign currencies (17,681,611)
-------------
Net Assets $ 505,422,281
=============

25 | OPPENHEIMER BOND 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
$280,131,741 and 28,771,379 shares of beneficial interest outstanding) $9.74
Maximum offering price per share (net asset value plus sales charge
of 4.75%of offering price) $10.23
- --------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value,redemption price (excludes applicable contingent deferred
sales charge)and offering price per share (based on net assets of $161,998,462
and 16,646,774 shares of beneficial interest outstanding) $9.73
- --------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value,redemption price (excludes applicable contingent deferred
sales charge)and offering price per share (based on net assets of $57,049,290
and 5,856,213 shares of beneficial interest outstanding) $9.74
- --------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value,redemption price (excludes applicable contingent deferred
sales charge)and offering price per share (based on net assets of $2,175,645
and 223,548 shares of beneficial interest outstanding) $9.73
- --------------------------------------------------------------------------------------------------
Class Y hares:
Net asset value,redemption price and offering price per share (based on
net assets of $4,067,143 and 418,469 shares of beneficial interest outstanding) $9.72

See accompanying Notes to Financial Statements.

26 | OPPENHEIMER BOND FUND

STATEMENT OF OPERATIONS For the Year Ended December 31, 2001

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

Investment Income

Interest $ 33,387,137
- --------------------------------------------------------------------------------------------------
Dividends 464,705
------------
Total income 33,851,842

- --------------------------------------------------------------------------------------------------
Expenses

Management fees 2,896,294
- --------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 582,277
Class B 1,183,059
Class C 367,964
Class N 2,413
- --------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 438,127
Class B 222,200
Class C 68,220
Class N 1,293
Class Y 3,171
- --------------------------------------------------------------------------------------------------
Shareholder reports 158,718
- --------------------------------------------------------------------------------------------------
Custodian fees and expenses 48,088
- --------------------------------------------------------------------------------------------------
Trustees' compensation 16,266
- --------------------------------------------------------------------------------------------------
Other 40,041
------------
Total expenses 6,028,131
Less reduction to custodian expenses (18,965)
Less voluntary waiver of transfer and shareholder servicing agent
fees--Class Y (537)
------------
Net expenses 6,008,629

- --------------------------------------------------------------------------------------------------
Net Investment Income 27,843,213

- --------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:
Investments (including premiums on options exercised) 6,330,904
Closing of futures contracts (4,592,493)
Closing and expiration of option contracts written 2,008,237
Foreign currency transactions (48,805)
------------
Net realized gain (loss) 3,697,843

- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:

Investments (11,624,911)
Translation of assets and liabilities denominated in foreign currencies 25,999
------------
Net change (11,598,912)
------------
Net realized and unrealized gain (loss) (7,901,069)

- --------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 19,942,144
============

See accompanying Notes to Financial Statements.

27 | OPPENHEIMER BOND FUND

STATEMENTS OF CHANGES IN NET ASSETS

Year Ended December 31, 2001 2000
- ---------------------------------------------------------------------------------------------------------------

Operations
Net investment income (loss) $ 27,843,213 $ 22,539,614
- ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 3,697,843 (16,099,577)
- ---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (11,598,912) 10,311,300
-------------------------------
Net increase (decrease) in net assets resulting from operations 19,942,144 16,751,337

- ---------------------------------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders

Dividends from net investment income:
Class A (17,585,602) (15,456,296)
Class B (7,889,070) (5,548,538)
Class C (2,470,735) (1,505,221)
Class N (50,649) --
Class Y (180,125) (31,117)

- ---------------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions

Net increase (decrease) in net assets resulting from
beneficial interest transactions:

Class A 81,188,197 (13,836,138)
Class B 81,353,784 (9,643,604)
Class C 33,926,102 548,199
Class N 2,250,053 --
Class Y 3,288,451 694,579

- ---------------------------------------------------------------------------------------------------------------
Net Assets

Total increase (decrease) 193,772,550 (28,026,799)
- ---------------------------------------------------------------------------------------------------------------
Beginning of period 311,649,731 339,676,530
-------------------------------
End of period [including undistributed (overdistributed) net
investment income of $(87,221) and $(35,046), respectively] $ 505,422,281 $ 311,649,731
===============================

See accompanying Notes to Financial Statements.

28 | OPPENHEIMER BOND FUND

FINANCIAL HIGHLIGHTS

Class A Year Ended December 31, 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $9.79 $9.97 $10.86 $10.97 $10.70
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .73/1/ .73 .71 .71 .77
Net realized and unrealized gain (loss) (.05)/1/ (.18) (.89) (.11) .27
---------------------------------------------------------
Total income (loss)
from investment operations .68 .55 (.18) .60 1.04
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.73) (.73) (.71) (.71) (.77)
---------------------------------------------------------
Total dividends and/or distributions
to shareholders (.73) (.73) (.71) (.71) (.77)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.74 $9.79 $9.97 $10.86 $10.97
=========================================================

- ------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value/2/ 7.05% 5.80% (1.65)% 5.61% 10.13%

- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $280,132 $202,833 $220,502 $246,668 $190,706
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $237,232 $205,883 $251,190 $217,944 $187,458
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income 7.31%/1/ 7.48% 6.88% 6.46% 7.20%
Expenses 1.23% 1.31% 1.24% 1.22%/4/
1.27%/4/
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 255% 238% 67% 51%

1. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income $ .74
Net realized and unrealized gain (loss) $(.06)
Net investment income ratio 7.43%

2. Assumes a $1,000 hypothetical initial 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 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.

29 | OPPENHEIMER BOND FUND

FINANCIAL HIGHLIGHTS Continued

Class B Year Ended December 31, 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $9.79 $9.96 $10.86 $10.97 $10.69
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .65/1/ .66 .63 .62 .69
Net realized and unrealized gain (loss) (.05)/1/ (.17) (.90) (.10) .28
---------------------------------------------------------
Total income (loss)
from investment operations .60 .49 (.27) .52 .97
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.66) (.66) (.63) (.63) (.69)
---------------------------------------------------------
Total dividends and/or distributions
to shareholders (.66) (.66) (.63) (.63) (.69)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.73 $9.79 $9.96 $10.86 $10.97
=========================================================

- ------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value/2/ 6.14% 5.11% (2.48)% 4.81% 9.41%

- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $161,998 $83,637 $94,845 $88,061 $48,255
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $118,521 $83,394 $95,285 $64,330 $41,439
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income 6.60%/1/ 6.71% 6.13% 5.68% 6.42%
Expenses 1.99% 2.07% 1.99% 1.97%/4/
2.02%/4/
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 255% 238% 67% 51%

1. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income $ .66
Net realized and unrealized gain (loss) $(.06)
Net investment income ratio 6.72%

See accompanying Notes to Financial Statements.

30 | OPPENHEIMER BOND FUND

Class C Year Ended December 31, 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $9.80 $9.97 $10.87 $10.98 $10.70
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .65/1/ .66 .63 .62 .69
Net realized and unrealized gain (loss) (.05)/1/ (.17) (.90) (.10) .28
---------------------------------------------------------
Total income (loss)
from investment operations .60 .49 (.27) .52 .97
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.66) (.66) (.63) (.63) (.69)
---------------------------------------------------------
Total dividends and/or distributions
to shareholders (.66) (.66) (.63) (.63) (.69)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.74 $9.80 $9.97 $10.87 $10.98
=========================================================

- ------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value/2/ 6.14% 5.11% (2.47)% 4.81% 9.39%

- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $57,049 $24,303 $24,143 $21,796 $9,188
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $36,886 $22,605 $24,218 $15,198 $6,134
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income 6.65%/1/ 6.71% 6.13% 5.66% 6.36%
Expenses 1.98% 2.07% 1.99% 1.96%/4/
2.02%/4/
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 255% 238% 67% 51%

1. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income $ .66
Net realized and unrealized gain (loss) $(.06)
Net investment income ratio 6.77%

See accompanying Notes to Financial Statements.

31 | OPPENHEIMER BOND FUND

FINANCIAL HIGHLIGHTS Continued

Class N Class Y
Period Year
Ended Ended
Dec. 31, Dec. 31,
2001/1/ 2001 2000 1999 1998/2/
- ------------------------------------------------------------------------------------------------------------------

Per Share Operating Data

Net asset value, beginning of period $10.02 $9.78 $9.95 $10.86 $10.88
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .61/3/ .76/4/ .85 .76 .49
Net realized and unrealized gain (loss) (.29)/3/ (.05)/4/ (.18) (.91) (.02)
----------------------------------------------------------
Total income (loss) from
investment operations .32 .71 .67 (.15) .47
- ------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.61) (.77) (.84) (.76) (.49)
----------------------------------------------------------
Total dividends and/or distributions
to shareholders (.61) (.77) (.84) (.76) (.49)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.73 $ 9.72 $9.78 $ 9.95 $10.86
==========================================================

- ------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value5 3.18% 7.30% 7.13% (1.37)% 4.40%

- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands) $2,176 $4,067 $877 $186 $1
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 768 $2,286 $340 $31 $1
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:6
Net investment income 7.87%/3/ 7.85%/4/ 7.92% 7.94% 6.84%
Expenses 1.37% 0.94% 0.83% 0.83%
0.74%/7/
Expenses, net of reduction to custodian
expenses and/or voluntary waiver
of transfer agent fees N/A 0.92% N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 162% 255% 238% 67%

1. For the period from March 1, 2001 (inception of offering) to December 31,
2001.
2. For the period from April 27,1998 (inception of offering) to December 31,
1998.
3. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income Change less than $0.005 per share
Net realized and unrealized gain (loss) Change less than $0.005 per share
Net investment income ratio 7.99%

4. Without the adoption of the change in amortization method as discussed in
Note 1 in the Notes to Financial Statements, these amounts would have been:

Net investment income $ .77
Net realized and unrealized gain (loss) $(.06)
Net investment income ratio 7.97%

5. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends 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.
6. Annualized for periods of less than one full year.
7. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.

32 | OPPENHEIMER BOND FUND

NOTES TO FINANCIAL STATEMENTS

- -------------------------------------------------------------------------------
1.Significant Accounting Policies

Oppenheimer Bond Fund (the Fund) is a separate fund of Oppenheimer Integrity
Funds, an open-end management investment company registered under the Investment
Company Act of 1940, as amended. The Fund's investment objective is to seek a
high level of current income by investing mainly in debt instruments. 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 to
earnings, assets and voting privileges, except that each class has its own
expenses directly attributable to that class and exclusive voting rights with
respect to matters affecting that class. Classes A, B, C and N have separate
distribution and/or service plans. 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).

Securities Purchased on a When-Issued Basis. Delivery and payment for securities
that have been purchased by the Fund on a when-issued basis can take place a
month or more after the trade date. Normally the settlement date occurs within
six months after the trade date; however, the Fund may, from time to time,
purchase securities whose settlement date extends beyond six months or more
beyond trade date. During this period, such securities do not earn interest, are
subject to market fluctuation and may increase or decrease in value prior to
their delivery. The Fund maintains segregated assets with a market value equal
to or greater than the amount of its purchase commitments. The purchase of
securities on a when-issued basis may increase the volatility of the Fund's net
asset value to the extent the Fund makes such purchases while remaining
substantially

33 | OPPENHEIMER BOND FUND

NOTES TO FINANCIAL STATEMENTS Continued

- -------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
fully invested. As of December 31, 2001, the Fund had entered into net
outstanding when-issued commitments of $273,484,473.

In connection with its ability to purchase securities on a when-issued basis,
the Fund may enter into forward roll transactions with respect to mortgage-
related securities. Forward roll transactions require the sale of securities for
delivery in the current month, and a simultaneous agreement with the same
counterparty to repurchase similar (same type, coupon and maturity) but not
identical securities on a specified future date. The forward roll may not extend
for a period of greater than one year. The Fund generally records the
incremental difference between the forward purchase and sell of each forward
roll as interest income.

Risks to the Fund of entering into forward roll transactions include the
potential inability of the counterparty to meet the terms of the agreement; the
potential of the Fund to receive inferior securities to what was sold to the
counterparty at redelivery; counterparty credit risk; and the potential pay down
speed variance between the mortgage-related pools.

- -------------------------------------------------------------------------------
Security Credit Risk. The Fund invests in high-yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. As of December 31, 2001, securities with an
aggregate market value of $5,852,675, representing 1.16% of the Fund's net
assets, were in default.

- -------------------------------------------------------------------------------
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.

- -------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires its custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.

34 | OPPENHEIMER BOND FUND

- --------------------------------------------------------------------------------
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 loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.

As of December 31, 2001, the Fund had available for federal income tax purposes
unused capital loss carryovers as follows:

Expiring
- ----------------------------------
2003 $ 748,553
2004 1,106,500
2007 10,208,297
2008 13,887,954
------------
Total $25,951,304
============

During the fiscal year ended December 31, 2001, the Fund utilized $4,380,862 of
capital loss carryover to offset capital gains realized in the current fiscal
year.
- --------------------------------------------------------------------------------
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 paydown gains and losses and 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 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 December 31, 2001, amounts have been reclassified to reflect an
increase in paid-in capital of $2,663,544, a decrease in undistributed net
investment income of $280,793 and an increase in accumulated net realized loss
on investments of $2,944,337. Net assets of the Fund were unaffected by the
reclassifications.

35 | OPPENHEIMER BOND FUND

NOTES TO FINANCIAL STATEMENTS Continued

- --------------------------------------------------------------------------------
1.Significant Accounting Policies Continued

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. Noncash 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 accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
Other. The Fund adopted the provisions of the AICPA Audit and Accounting Guide
for Investment Companies, as revised, effective for fiscal years beginning
after December 15, 2000. The Fund elected to begin amortizing premiums on debt
securities effective January 1, 2001. Prior to this date, the Fund did not
amortize premiums on debt securities. The cumulative effect of this accounting
change had no impact on the total net assets of the Fund, but resulted in a
$331,883 decrease to cost of securities and a corresponding $331,883 decrease
in net unrealized depreciation, based on securities held as of December 31,
2000. For the year ended December 31, 2001, interest income decreased by
$489,625, net realized gain on investments decreased by $220,994, and the
change in net unrealized depreciation on investments decreased by $710,619.

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.

36 | OPPENHEIMER BOND FUND

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 December 31, 2001/1/ Year Ended December 31, 2000
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------

Class A
Sold 16,363,435 $163,919,591 5,364,030 $ 52,505,691
Dividends and/or
distributions reinvested 1,295,039 12,926,638 1,143,508 11,181,770
Redeemed (9,595,307) (95,658,032) (7,922,476) (77,523,599)
---------------------------------------------------------------------
Net increase (decrease) 8,063,167 $ 81,188,197 (1,414,938) $(13,836,138)
=====================================================================

- ----------------------------------------------------------------------------------------------------
Class B
Sold 11,714,972 $117,368,490 2,480,901 $ 24,274,682
Dividends and/or
distributions reinvested 543,150 5,415,992 393,278 3,845,596
Redeemed (4,154,269) (41,430,698) (3,851,482) (37,763,882)
---------------------------------------------------------------------
Net increase (decrease) 8,103,853 $ 81,353,784 (977,303) $ (9,643,604)
=====================================================================

- ----------------------------------------------------------------------------------------------------
Class C
Sold 4,852,582 $ 48,669,011 1,110,309 $ 10,840,387
Dividends and/or
distributions reinvested 166,771 1,663,973 102,745 1,005,571
Redeemed (1,643,106) (16,406,882) (1,154,175) (11,297,759)
---------------------------------------------------------------------
Net increase (decrease) 3,376,247 $ 33,926,102 58,879 $ 548,199
=====================================================================

- ----------------------------------------------------------------------------------------------------
Class N
Sold 232,768 $ 2,343,541 -- $ --
Dividends and/or
distributions reinvested 5,140 50,529 -- --
Redeemed (14,360) (144,017) -- --
---------------------------------------------------------------------
Net increase (decrease) 223,548 $ 2,250,053 -- $ --
=====================================================================

- ----------------------------------------------------------------------------------------------------
Class Y
Sold 376,114 $ 3,760,382 99,175 $ 970,113
Dividends and/or
distributions reinvested 1,285 12,769 -- --
Redeemed (48,603) (484,700) (28,221) (275,534)
---------------------------------------------------------------------
Net increase (decrease) 328,796 $ 3,288,451 70,954 $ 694,579
=====================================================================

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

37 | OPPENHEIMER BOND 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 December 31, 2001, were
$1,070,280,490 and $868,751,966, respectively.
As of December 31, 2001, unrealized appreciation (depreciation) based on
cost of securities for federal income tax purposes of $791,674,153 was:

Gross unrealized appreciation $13,956,275
Gross unrealized depreciation (34,624,309)
-------------
Net unrealized appreciation $(20,668,034)
=============

- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates

Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.75% of
the first $200 million of average annual net assets of the Fund, 0.72% of the
next $200 million, 0.69% of the next $200 million, 0.66% of the next $200
million, 0.60% of the next $200 million and 0.50% of average annual net assets
in excess of $1 billion. The Fund's management fee for the year ended December
31, 2001, was an annualized rate of 0.73%.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS an agreed upon per account fee. 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 fee
in the event that the per account fee does not equal or exceed the applicable
minimum fee.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees to 0.25% per annum of Class Y shares, effective January 1, 2001, and
for all other classes, 0.35% per annum, effective October 1, 2001. This
undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.

38 | OPPENHEIMER BOND 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 Sales Front-End on Class A on Class B on Class C on Class N
Charges on Sales Charges Shares Shares Shares Shares
Class A Retained by Advanced by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor/1/ Distributor/1/ Distributor/1/ Distributor/1/
- ----------------------------------------------------------------------------------------------------------------------

December
31, 2001 $1,391,486 $501,793 $156,331 $2,403,539 $286,901 $20,421

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

December
31, 2001 $26,759 $285,551 $13,163 $45

The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B, Class C and Class N shares under Rule 12b-1 of the
Investment Company Act. Under those plans the Fund pays the Distributor for all
or a portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
- --------------------------------------------------------------------------------
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to a specified percent of average annual net
assets of Class A shares purchased. The Distributor makes payments to plan
recipients quarterly at an annual rate not to exceed a specified percent of the
average annual net assets consisting of Class A shares of the Fund. For the year
ended December 31, 2001, payments under the Class A plan totaled $582,277, all
of which were paid by the Distributor to recipients, and included $110,787 paid
to an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
Class B, Class C and Class N Distribution and Service Plan Fees. Under each
plan, service fees and distribution fees are computed on the average of the net
asset value of shares in the respective class, determined as of the close of
each regular business day during the period. The Class B, Class C and Class N
plans provide for the Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the amounts paid by
the Fund under the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The Distributor retains the asset-based
sales charge on Class N shares. The asset-based sales charges on Class B, Class
C and Class N shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B, Class C and Class N
shares may be more than the payments it receives from the contingent deferred
sales charges collected

39 | OPPENHEIMER BOND FUND

NOTES TO FINANCIAL STATEMENTS Continued

- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
on redeemed shares and asset-based sales charges from the Fund under the plans.
If any plan is terminated by the Fund, the Board of Trustees may allow the Fund
to continue payments of the asset-based sales charge to the Distributor for
distributing shares before the plan was terminated. The plans allow for the
carryforward of distribution expenses, to be recovered from asset-based sales
charges in subsequent fiscal periods.

Distribution fees paid to the Distributor for the year ended December 31,
2001, were as follows:

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

Class B Plan $1,183,059 $965,705 $5,048,135 3.12%
Class C Plan 367,964 135,995 939,972 1.65
Class N Plan 2,413 2,413 44,095 2.03

- --------------------------------------------------------------------------------
5. Foreign Currency Contracts

A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts for operational purposes and to seek to protect against
adverse exchange rate fluctuations. Risks to the Fund include the potential
inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided by
a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities as a receivable or payable and in the Statement of
Operations with the change in unrealized appreciation or depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Such realized gains and losses are reported with
all other foreign currency gains and losses in the Statement of Operations.

- --------------------------------------------------------------------------------
6. Futures Contracts

A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a particular price on a stipulated future
date at a negotiated price. Futures contracts are traded on a commodity
exchange. The Fund may buy and sell futures contracts that relate to broadly
based securities indices "financial futures" or debt securities "interest rate
futures" in order to gain exposure to or to seek to protect against changes in
market value of stock and bonds or interest rates. The Fund may also buy or
write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and decreases in market value of portfolio securities. The Fund
may also purchase futures

40 | OPPENHEIMER BOND FUND

contracts to gain exposure to market changes as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
and/or payable for the daily mark to market for variation margin. Realized gains
and losses are reported on the Statement of Operations as closing and expiration
of futures contracts.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.

As of December 31, 2001, the Fund had outstanding futures contracts as
follows:

Unrealized
Expiration Number of Valuation as of Appreciation
Contract Description Dates Contracts December 31, 2001 (Depreciation)
- ------------------------------------------------------------------------------------------------

Contracts to Purchase
U.S. Long Bond 3/19/02 925 $93,916,406 $(525,978)
U.S. Treasury Nts., 5 yr. 3/19/02 400 42,331,250 293,750
U.S. Treasury Nts., 10 yr. 3/19/02 201 21,133,266 322,218
-----------
$ 89,990
===========

- --------------------------------------------------------------------------------
7. 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.

41 | OPPENHEIMER BOND FUND

NOTES TO FINANCIAL STATEMENTS Continued

- --------------------------------------------------------------------------------
7. Option Activity Continued

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 December 31, 2001, was as
follows:

Call Options Put Options
----------------------------------------------------------------------------
Principal (000s)/ Principal (000s)/
Number of Amount of Number of Amount of
Contracts Premiums Contracts Premiums
- ----------------------------------------------------------------------------------------------------------

Options outstanding as of
December 31, 2000 -- $ -- -- $ --
Options written 136,601 2,230,802 5,544 1,794,999
Options closed or expired (136,201) (2,095,302) (4,594) (1,625,843)
Options exercised (400) (135,500) (950) (169,156)
----------------------------------------------------------------------------
Options outstanding as of
December 31, 2001 -- $ -- -- $ --
============================================================================

- --------------------------------------------------------------------------------
8. Illiquid or Restricted Securities

As of December 31, 2001, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may also be
considered illiquid if it lacks a readily available market or if its valuation
has not changed for a certain period of time. The Fund intends to invest no more
than 10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of December 31, 2001, was $39,002,135,
which represents 7.72% of the Fund's net assets, of which $1,214 is considered
restricted. Information concerning restricted securities is as follows:

Unrealized
Acquisition Valuation as of Appreciation
Security Dates Cost December 31, 2001 (Depreciation)
- -----------------------------------------------------------------------------------------------------------

Stocks and/or Warrants
Geotek Communications, Inc.,
Series B (Escrowed) 1/4/01 $ 100 $ -- $(100)
Real Time Data Co. Wts., Exp. 5/31/04 6/30/99 1,214 1,214 --

42 | OPPENHEIMER BOND FUND

- --------------------------------------------------------------------------------
9. Bank Borrowings

The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.
The Fund had no borrowings outstanding during the year ended or at December
31, 2001.

43 | OPPENHEIMER BOND FUND

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.

Con. (...): Bonds for which the security depends on the completion of some act or the fulfillment of some condition are rated
conditionally. These bonds are secured by (a) earnings of projects under construction, (b) earnings of projects unseasoned in
operating experience, (c) rentals that begin when facilities are completed, or (d) payments to which some other limiting condition
attaches. The parenthetical rating denotes probable credit stature upon completion of construction or elimination of the basis of the
condition.

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

LONG-TERM 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.

- --------
1 Messrs. Bowen, Cameron, Marshall and Murphy are not Directors of Panorama Series Fund, Inc. Messrs. Armstrong, Bowen, Cameron,
Fossel and Marshall are not Managing General Partners of Centennial America Fund, L.P. Mr. Murphy is not a Trustee or Managing
General Partner of any of the Centennial trusts.
2 The address of each Trustee is 6803 S. Tucson Way, Englewood, CO 80112-3924.
3 Each Trustee serves for an indefinite term, until his resignation, death or removal.
4 The address of Mr. Murphy is 498 Seventh Avenue, New York, NY 10018.
5 Mr. Murphy serves for an indefinite term, until his resignation, death or removal.
6 Includes shares owned by Mr. Murphy in other Oppenheimer Funds for which he serves as director or trustee.
7 The address of each Officer is 498 Seventh Avenue, New York, NY 10018 except for Mr. Wixted and Ms. Ives, whose address is 6803 S.
Tucson Way, Englewood, CO 80112-3924.
8 Each Officer serves for an annual term or until his or her earlier resignation, death or removal.
9. The term "Independent Trustees" used in reference to plans adopted under Rule 12b-1 of the Investment Company Act means 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.
11 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.

Appendix B

Industry Classifications

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 Services Pharmaceuticals
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

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).
|_| Purchases by a Retirement Plan whose record keeper had a cost-allocation agreement with the Transfer Agent on or before
March 1, 2001.
II.

Waivers of Class A Sales Charges of Oppenheimer Funds
- ---------------------------------------------------------------------------------------------------------------------------------------

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

Class A shares purchased by the following investors are not subject to any Class A sales charges (and no concessions are paid by the
Distributor on such purchases):
|_| The Manager or its affiliates.
|_| Present or former officers, directors, trustees and employees (and their "immediate families") of the Fund, the Manager and
its affiliates, and retirement plans established by them for their employees. The term "immediate family" refers to
one's spouse, children, grandchildren, grandparents, parents, parents-in-law, brothers and sisters, sons- and
daughters-in-law, a sibling's spouse, a spouse's siblings, aunts, uncles, nieces and nephews; relatives by virtue of a
remarriage (step-children, step-parents, etc.) are included.
|_| Registered management investment companies, or separate accounts of insurance companies having an agreement with the Manager
or the Distributor for that purpose.
|_| Dealers or brokers that have a sales agreement with the Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees.
|_| Employees and registered representatives (and their spouses) of dealers or brokers described above or financial institutions
that have entered into sales arrangements with such dealers or brokers (and which are identified as such to the
Distributor) or with the Distributor. The purchaser must certify to the Distributor at the time of purchase that the
purchase is for the purchaser's own account (or for the benefit of such employee's spouse or minor children).
|_| Dealers, brokers, banks or registered investment advisors that have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular investment products made available to their clients. Those
clients may be charged a transaction fee by their dealer, broker, bank or advisor for the purchase or sale of Fund
shares.
|_| Investment advisors and financial planners who have entered into an agreement for this purpose with the Distributor and who
charge an advisory, consulting or other fee for their services and buy shares for their own accounts or the accounts of
their clients.
|_| "Rabbi trusts" that buy shares for their own accounts, if the purchases are made through a broker or agent or other
financial intermediary that has made special arrangements with the Distributor for those purchases.
|_| Clients of investment advisors or financial planners (that have entered into an agreement for this purpose with the
Distributor) who buy shares for their own accounts may also purchase shares without sales charge but only if their
accounts are linked to a master account of their investment advisor or financial planner on the books and records of the
broker, agent or financial intermediary with which the Distributor has made such special arrangements . Each of these
investors may be charged a fee by the broker, agent or financial intermediary for purchasing shares.
|_| Directors, trustees, officers or full-time employees of OpCap Advisors or its affiliates, their relatives or any trust,
pension, profit sharing or other benefit plan which beneficially owns shares for those persons.
|_| Accounts for which Oppenheimer Capital (or its successor) is the investment advisor (the Distributor must be advised of this
arrangement) and persons who are directors or trustees of the company or trust which is the beneficial owner of such
accounts.
|_| A unit investment trust that has entered into an appropriate agreement with the Distributor.
|_| Dealers, brokers, banks, or registered investment advisers that have entered into an agreement with the Distributor to sell
shares to defined contribution employee retirement plans for which the dealer, broker or investment adviser provides
administration services.
|-|

Retirement Plans and deferred compensation plans and trusts used to fund those plans (including, for example, plans
qualified or created under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code), in each case if those
purchases are made through a broker, agent or other financial intermediary that has made special arrangements with the
Distributor for those purchases.
|_| A TRAC-2000 401(k) plan (sponsored by the former Quest for Value Advisors) whose Class B or Class C shares of a Former Quest
for Value Fund were exchanged for Class A shares of that Fund due to the termination of the Class B and Class C
TRAC-2000 program on November 24, 1995.
|_| A qualified Retirement Plan that had agreed with the former Quest for Value Advisors to purchase shares of any of the Former
Quest for Value Funds at net asset value, with such shares to be held through DCXchange, a sub-transfer agency mutual
fund clearinghouse, if that arrangement was consummated and share purchases commenced by December 31, 1996.

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

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

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

The Class A contingent deferred sales charge is also waived if shares that would otherwise be subject to the contingent deferred
sales charge are redeemed in the following cases:
|_| To make Automatic Withdrawal Plan payments that are limited annually to no more than 12% of the account value adjusted
annually.
|_| Involuntary redemptions of shares by operation of law or involuntary redemptions of small accounts (please refer to
"Shareholder Account Rules and Policies," in the applicable fund Prospectus).
|_| For distributions from Retirement Plans, deferred compensation plans or other employee benefit plans for any of the
following purposes:
1) Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The
death or disability must occur after the participant's account was established.
2) To return excess contributions.
3) To return contributions made due to a mistake of fact.
4) Hardship withdrawals, as defined in the plan.6
5) Under a Qualified Domestic Relations Order, as defined in the Internal Revenue Code, or, in the case of an IRA, a
divorce or separation agreement described in Section 71(b) of the Internal Revenue Code.
6) To meet the minimum distribution requirements of the Internal Revenue Code.
7) To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries.
9) Separation from service.7
10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a
subsidiary of the Manager) if the plan has made special arrangements with the Distributor.
11) Plan termination or "in-service distributions," if the redemption proceeds are rolled over directly to an
OppenheimerFunds-sponsored IRA.
|_| For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special agreement with the
Distributor allowing this waiver.
|_| 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,
including a trustee of a grantor trust or revocable living trust for which the trustee is also the sole beneficiary. The
death or disability must have occurred after the account was established, and for disability you must provide evidence
of a determination of disability by the Social Security Administration.
|_| Distributions from accounts for which the broker-dealer of record has entered into a special agreement with the Distributor
allowing this waiver.
|_| Redemptions of Class B shares held by Retirement Plans whose records are maintained on a daily valuation basis by Merrill
Lynch or an independent record keeper under a contract with Merrill Lynch.
|_| Redemptions of Class C shares of Oppenheimer U.S. Government Trust from accounts of clients of financial institutions that
have entered into a special arrangement with the Distributor for this purpose.
|_| Redemptions requested in writing by a Retirement Plan sponsor of Class C shares of an Oppenheimer fund in amounts of
$500,000 or more and made more than 12 months after the Retirement Plan's first purchase of Class C shares, if the
redemption proceeds are invested in Class N shares of one or more Oppenheimer funds.
|_| Distributions8 from Retirement Plans or other employee benefit plans for any of the following purposes:
1) Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The
death or disability must occur after the participant's account was established in an Oppenheimer fund.
2) To return excess contributions made to a participant's account.
3) To return contributions made due to a mistake of fact.
4) To make hardship withdrawals, as defined in the plan.9
5) To make distributions required under a Qualified Domestic Relations Order or, in the case of an IRA, a divorce or
separation agreement described in Section 71(b) of the Internal Revenue Code.
6) To meet the minimum distribution requirements of the Internal Revenue Code.
7) To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code.
8) For loans to participants or beneficiaries.10
9) On account of the participant's separation from service.11
10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a
subsidiary of the Manager) offered as an investment option in a Retirement Plan if the plan has made special
arrangements with the Distributor.
11) Distributions made on account of a plan termination or "in-service" distributions, if the redemption proceeds are
rolled over directly to an OppenheimerFunds-sponsored IRA.
12) For distributions from a participant's account under an Automatic Withdrawal Plan after the participant reaches age
59 1/2, as long as the aggregate value of the distributions does not exceed 10% of the account's value, adjusted
annually.
13) Redemptions of Class B shares under an Automatic Withdrawal Plan for an account other than a Retirement Plan, if the
aggregate value of the redeemed shares does not exceed 10% of the account's value, adjusted annually.
14) For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special arrangement with
the Distributor allowing this waiver.
|_| Redemptions of Class B shares or Class C shares under an Automatic Withdrawal Plan from an account other than a Retirement
Plan if the aggregate value of the redeemed shares does not exceed 10% of the account's value annually.

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

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

IV.

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

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

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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

- -------------------------------- ---------------------------- --------------------------------- ---------------------
Number of Eligible Employees Initial Sales Charge as a Initial Sales Charge as a % of Concession as % of
or Members % of Offering Price Net Amount Invested Offering Price
- -------------------------------- ---------------------------- --------------------------------- ---------------------
- -------------------------------- ---------------------------- --------------------------------- ---------------------
9 or Fewer 2.50% 2.56% 2.00%
- -------------------------------- ---------------------------- --------------------------------- ---------------------
- -------------------------------- ---------------------------- --------------------------------- ---------------------
At least 10 but not more than 2.00% 2.04% 1.60%
49
- -------------------------------- ---------------------------- --------------------------------- ---------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Oppenheimer Bond Fund

Internet Web Site:
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
1-800-525-7048

Custodian Bank
The Bank of New York
23 William Street
New York, New York 10286

Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202

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

1234

PX285.0402

EX-99 7 partc485b2852002.htm PART C - 485B BOND FUND PART C 485B BOND FUND 2002

OPPENHEIMER INTEGRITY FUNDS

FORM N-1A

PART C

OTHER INFORMATION

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

(a) (i) Amended and Restated Declaration of Trust, dated April 12, 2001: Previously filed with Registrant's
Post-Effective Amendment No. 39, 4/25/01 and incorporated herein by reference.

(b) Registrant's By-Laws as amended through 10/24/00: Previously filed with Registrant's Post-Effective
Amendment No. 38, 2/12/01, and incorporated herein by reference.

(ii) Specimen Class B Share Certificate for Oppenheimer Bond Fund: Filed herewith

Specimen Class C Share Certificate for Oppenheimer Bond Fund: Filed herewith.

Specimen Class N Share Certificate for Oppenheimer Bond Fund: Filed herewith.

Specimen Class Y Share Certificate for Oppenheimer Bond Fund: Filed herewith

(d) Investment Advisory Agreement dated 7/10/95 for Oppenheimer Bond Fund: Previously filed with Registrant's
Post-Effective Amendment No. 25, 7/10/95, and incorporated herein by reference.

(e) (i) General Distributor's Agreement dated 10/13/92: Previously filed with Registrant's Post-Effective
Amendment No. 17, 2/26/93, and refiled pursuant to Item 102 of Regulation S-T with Registrant's Post-Effective
Amendment No. 23, 4/28/95, and incorporated herein by reference.

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.

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.

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.

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

Form of Trust Company 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.

(f) Form of Deferred Compensation Plan for Disinterested Trustees/Directors: Previously filed with
Post-Effective Amendment No. 40 to the Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/27/98, and incorporated herein by reference.

(g) (i) Custody Agreement dated 11/12/92, between the Registrant and The Bank of New York: Filed with
Registrant's Post-Effective Amendment No. 17, 2/26/93, and refiled with Post-Effective Amendment No. 23, 4/28/95
pursuant to Item 102 of Regulation S-T, and incorporated herein by reference.

(ii) Amended and Restated Foreign Custody Manager Agreement dated 4/3/01: Previously filed with Post-Effective
Amendment No. 34 to the Registration Statement of Oppenheimer Gold & Special Minerals Fund (Reg. No. 2-82590),
10/25/01, and incorporated herein by reference.

(iii) Amendment dated 4/3/01 to Custody Agreement dated 11/12/92: Previously filed with Post-Effective Amendment
No. 34 to the Registration Statement of Oppenheimer Gold & Special Minerals Fund (Reg. No. 2-82590), 10/25/01, and
incorporated herein by reference.

(h) Not applicable.

(i) Opinion and Consent of Counsel dated 2/11/91: Incorporated herein by reference to Registrant's Rule 24f-2
Notice filed on 2/19/91 and refiled pursuant to Item 102 of Regulation S-T with Registrant's Post-Effective
Amendment No. 23, 4/28/95, and incorporated herein by reference.

(j) Independent Auditor's Consent: Filed herewith.

(k) Not applicable.

(l) Not applicable.

(m) (i) Service Plan and Agreement for Class A shares of Oppenheimer Bond Fund dated 6/22/93: Previously
filed with Registrant's Post-Effective Amendment No. 19, 3/1/94, and incorporated herein by reference.

(ii) Amended and Restated Distribution and Service Plan and for Class B shares of Oppenheimer Bond Fund dated
2/24/98: Previously filed with Post-Effective Amendment No. 34 to Registrant's Registration Statement, 2/24/99, and
incorporated herein by reference.

Amended and Restated Distribution and Service Plan and Agreement for Class C Shares of Oppenheimer Bond Fund dated
2/24/98: Previously filed with Post-Effective Amendment No. 34 to Registrant's Registration Statement, 2/24/99, and
incorporated herein by reference.

Distribution and Service Plan and Agreement for Class N shares of Oppenheimer Bond Fund dated 2/12/01: Previously
filed with Registrant's Post-Effective Amendment No. 39, 4/25/01 and incorporated herein by reference.

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

(o) Powers of Attorney for all Trustees/Directors and Officers except for John V. Murphy (including Certified
Board Resolutions): Previously filed with Pre-Effective Amendment No. 2 to the Registration Statement of Oppenheimer
Select Managers (Reg. No. 333-49774), 2/8/01, and incorporated herein by reference.

(i) Power of Attorney for John Murphy (including Certified Board Resolution): 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.

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

Item 24. - Persons Controlled by or Under Common Control with the Fund
- ----------------------------------------------------------------------

None.

Item 25. - Indemnification
- --------------------------

Reference is made to the provisions of Article Seven of Registrant's Amended and Restated Declaration of Trust filed
as Exhibit 23(a) to this Registration Statement, and incorporated herein by reference.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees,
officers and controlling persons of Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a
trustee, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person, Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.

Item 26. - Business and Other Connections of the Investment Adviser

(a) OppenheimerFunds, Inc. is the investment adviser of the Registrant; it and certain subsidiaries and
affiliates act in the same capacity to other investment companies, including without limitation those described in
Parts A and B hereof and listed in Item 26(b) below.

(b) There is set forth below information as to any other business, profession, vocation or employment of a
substantial nature in which each officer and director of OppenheimerFunds, Inc. is, or at any time during the past
two fiscal years has been, engaged for his/her own account or in the capacity of director, officer, employee,
partner or trustee.

Name and Current Position Other Business and Connections
with OppenheimerFunds, Inc. During the Past Two Years
- --------------------------- -------------------------

Timothy L. Abbuhl,
Assistant Vice President None.

Amy B. Adamshick,
Vice President Formerly at Scudder Kemper Investments (July 1998 - May 2000)

Charles E. Albers,
Senior Vice President None.

Edward J. Amberger,
Assistant Vice President None.

Janette Aprilante,

Vice President and Secretary As of January 2002: Secretary of OppenheimerFunds, Distributor, Inc., Centennial
Asset Management Corporation, Oppenheimer Partnership Holdings, Inc., Oppenheimer Real Asset Management, Inc.,
Shareholder Financial Services, Inc., Shareholder Services, Inc.; Assistant Secretary of HarbourView Asset
Management Corporation, OFI Private Investments, Inc., Oppenheimer Trust Company and OAM Institutional, Inc.

Hany S. Ayad,
Assistant Vice President None.

Victor W. Babin,
Senior Vice President None.

Bruce L. Bartlett,
Senior Vice President None.

John Michael Banta,
Assistant Vice President None.

Lerae A. Barela,
Assistant Vice President None.

George Batejan,
Executive Vice President/
Chief Information Officer None.

Kevin Baum,
Vice President None.

Connie Bechtolt,
Assistant Vice President None.

Robert Behal
Assistant Vice President Formerly, Associate Director at MetLife (Jan 2000-May 2000).

Kathleen Beichert,

Vice President Vice President of OppenheimerFunds Distributor, Inc.

Erik S. Berg,
Assistant Vice President None.

Rajeev Bhaman,
Vice President None.

Mark Binning,
Assistant Vice President None.

Robert J. Bishop,

Vice President An officer of other Oppenheimer funds.

John R. Blomfield,
Vice President None.

Chad Boll,
Assistant Vice President None

Lowell Scott Brooks,

Vice President Vice President of OppenheimerFunds Distributor, Inc.

Richard Buckmaster,
Vice President None.

Bruce Burroughs
Vice President None.

Claudia Calich,
Assistant Vice President None.

Adele A. Campbell,
Assistant Vice President & Assistant
Treasurer: Rochester Division None.

Michael A. Carbuto,
Vice President None

Ronald G. Chibnik,
Assistant Vice President Director of technology for Sapient Corporation (July, 2000-August 2001); software
architect for Sapient Corporation (March 1997-July 2000).

H.C. Digby Clements,
Vice President: Rochester Division None.

Peter V. Cocuzza,
Vice President None.

Julie C. Cusker,
Assistant Vice President:
Rochester Division None.

John Damian,
Vice President Formerly senior analyst/director for Citigroup Asset Management (November 1999-September 2001).

O. Leonard Darling,
Vice Chairman, Executive Vice
President, Chief Investment
Officer and Director Chairman of the Board and a director (since June 1999) and Senior Managing Director
(since December 1998) of HarbourView Asset Management Corporation; a director (since July 2001) of Oppenheimer
Acquisition Corp.; a director (since March 2000) of OFI Private Investments, Inc.; Chairman of the Board, Senior
Managing Director and director (since February 2001) of OAM Institutional, Inc.; Trustee (since 1993) of Awhtolia
College - Greece.

John M. Davis,

Assistant Vice President Assistant Vice President of OppenheimerFunds Distributor, Inc.

Robert A. Densen,
Senior Vice President None.

Ruggero de'Rossi,
Vice President Formerly Chief Strategist at ING Barings (July
1998 - March 2000).

Craig P. Dinsell,
Executive Vice President None.

Randall C. Dishmon,
Assistant Vice President Associate with Booz Allen & Hamilton (1998-June 2001).

Rebecca K. Dolan
Vice President None.

Steven D. Dombrower,

Vice President Vice President of OppenheimerFunds, Inc.

Bruce C. Dunbar,
Vice President None.

Richard Edmiston,
Assistant Vice President None.

Daniel R. Engstrom,
Assistant Vice President None.

Armand B. Erpf,
Assistant Vice President None.

George R. Evans,
Vice President None.

Edward N. Everett,
Vice President None.

George Fahey,
Vice President Vice President of OppenheimerFunds Distributor, Inc.

Scott T. Farrar,
Vice President Assistant Treasurer of Oppenheimer Millennium Funds plc; an officer of other Oppenheimer funds.

Katherine P. Feld,

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

Ronald H. Fielding,
Senior Vice President;

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

Paul Fitzsimmons,
Assistant Vice President None.

P. Lyman Foster,
Senior Vice President Senior Vice President of OppenheimerFunds Distributor, Inc. Formerly Vice President of
Prudential Investments (August 1999-April 2000).

David Foxhoven,

Assistant Vice President Assistant Vice President of OppenheimerFunds Legacy Program.

Colleen M. Franca,
Assistant Vice President None.

Crystal French,
Vice President None.

Dan P. Gangemi,
Vice President None.

Dan Gagliardo,
Assistant Vice President Formerly Assistant Vice President at Mitchell Hutchins (January 2000-October 2000).

Subrata Ghose,

Assistant Vice President Formerly equity analyst at Fidelity Investments (1995 - March 2000).

Charles W. Gilbert,
Assistant Vice President None.

Alan C. Gilston,
Vice President None.

Jill E. Glazerman,
Vice President None.

Paul M. Goldenberg,
Vice President None.

Mike Goldverg,
Assistant Vice President None.

Laura Granger,

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

Jeremy H. Griffiths,
Executive Vice President,
Chief Financial Officer and

Director Chief Financial Officer, Treasurer and director of Oppenheimer Acquisition Corp.; Executive Vice President
of HarbourView Asset Management Corporation; President and director of OppenheimerFunds International Ltd.;
President. Chief Executive Officer, Chairman of the Board and director of Oppenheimer Trust Company; director of
Trinity Investment Management Corp., Secretary/Treasurer of OppenheimerFunds Legacy Program (a Colorado non-profit
corporation); Executive Vice President of OFI Private Investments, Inc.; Executive Vice President of OAM
Institutional, Inc. and a Member and Fellow of the Institute of Chartered Accountants.

Robert Grill,
Senior Vice President None.

Robert Guy,
Senior Vice President None.

David Hager,
Vice President None.

Robert Haley,
Assistant Vice President None.

Marilyn Hall,
Vice President None.

Kelly Haney,
Assistant Vice President None.

Thomas B. Hayes,
Vice President None.

Dorothy F. Hirshman,
Vice President None.

Merryl I. Hoffman,

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

Merrell I. Hora,
Vice President None.

Scott T. Huebl,

Vice President Assistant Vice President of OppenheimerFunds Legacy Program.

Margaret Hui,
Assistant Vice President None.

James G. Hyland,
Assistant Vice President None.

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

Kathleen T. Ives,

Vice President and Assistant Counsel Vice President of OppenheimerFunds Distributor, Inc.; Assistant
Secretary of Shareholder Financial Services, Inc. and OppenheimerFunds Legacy Program; Vice President and Assistant
Secretary of Shareholder Services, Inc.; an officer of other Oppenheimer funds.

William Jaume,

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

Frank V. Jennings,
Vice President None.

John Jennings,
Vice President None.

Lewis A. Kamman,
Vice President None.

Jennifer E. Kane,
Assistant Vice President None.

Lynn O. Keeshan,
Senior Vice President None.

Thomas W. Keffer,
Senior Vice President None.

Cristina J. Keller,
Vice President Vice President of OppenheimerFunds Distributor, Inc.

Michael Keogh,
Vice President None.

Michael P. Kirkpatrick,
Assistant Vice President None.

Garrett K. Kolb,
Assistant Vice President None.

Teresa Kong,
Assistant Vice President None.

Walter G. Konops,
Assistant Vice President None.

Avram D. Kornberg,
Senior Vice President None.

James Kourkoulakos,
Vice President. None.

Joseph Krist,
Assistant Vice President None.

Guy E. Leaf,
Vice President Vice President of Merrill Lynch (January 2000-September 2001.

Christopher M. Leavy,

Senior Vice President Formerly Vice President and portfolio manager at Morgan Stanley Investment Management
(1997-September 2000).

Dina C. Lee,
Assistant Vice President and
Assistant Counsel Formerly an attorney with Van Eck Global (until December 2000).

Laura Leitzinger,
Vice President Vice President of Shareholder Financial Services, Inc.

Michael S. Levine,
Vice President None.

Gang Li,
Assistant Vice President None.

Shanquan Li,
Vice President None.

Mitchell J. Lindauer,
Vice President and Assistant
General Counsel None.

Bill Linden,
Assistant Vice President None.

Malissa B. Lischin,

Assistant Vice President Assistant Vice President of OppenheimerFunds Distributor, Inc. Formerly an associate
manager with Investment Management Analyst at Prudential (1996 - March 2000).

Reed Litcher,
Vice President None.

David P. Lolli,
Assistant Vice President None.

Daniel G. Loughran
Vice President: Rochester Division None.

Patricia Lovett,
Vice President Vice President of Shareholder Financial Services, Inc. and Senior Vice President of Shareholder
Services, Inc.

David M. Mabry,

Vice President Vice President of Oppenheimer Trust Company.

Steve Macchia,
Vice President None.

Marianne Manzolillo,
Assistant Vice President Formerly Vice President for DLJ High Yield Research Department (February 1993 - July
2000).

Philip T. Masterson,
Vice President and
Assistant Counsel None.

Lisa Migan,
Assistant Vice President None.

Andrew J. Mika,
Senior Vice President None.

Joy Milan,
Vice President None.

Denis R. Molleur,
Vice President and

Senior Counsel An officer of other Oppenheimer funds.

Nikolaos D. Monoyios,
Vice President None.

John Murphy,

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

Thomas J. Murray,
Vice President None.

Kenneth Nadler,
Vice President None.

David Negri,

Senior Vice President Senior Vice President of HarbourView Asset Management Corporation.

Richard Nichols,
Vice President None.

Barbara Niederbrach,
Assistant Vice President None.

Robert A. Nowaczyk,
Vice President None.

Raymond C. Olson,

Assistant Vice President Assistant Vice President and Treasurer of OppenheimerFunds Distributor, Inc.; Treasurer
of Centennial Asset Management Corporation.

Mark Paris,

Assistant Vice President None.

Frank J. Pavlak,
Vice President None.

David P. Pellegrino,
Vice President None.

Allison C. Pells,
Assistant Vice President None.

James F. Phillips,
Vice President None.

Raghaw Prasad,
Assistant Vice President

Jane C. Putnam,
Vice President None.

Michael E. Quinn,
Vice President None.

Julie S. Radtke,
Vice President None.

Norma J. Rapini,
Assistant Vice President:
Rochester Division None.

Thomas P. Reedy,
Vice President Vice President (since April 1999) of HarbourView Asset Management Corporation.

Kristina Richardson,
Assistant Vice President None.

David Robertson,
Senior Vice President Senior Vice President of OppenheimerFunds Distributor, Inc. Formerly Director of Sales &
Marketing at Schroder Investment Management North America (March 1998-March 2000).

Rob Robis,
Assistant Vice President None.

Antoinette Rodriguez,
Assistant Vice President None.

Jeffrey S. Rosen,
Vice President None.

Richard H. Rubinstein,
Senior Vice President None.

James H. Ruff,
Executive Vice President President and director of OppenheimerFunds Distributor, Inc. and Centennial Asset
Management Corporation; Executive Vice President of OFI Private Investments, Inc.

Andrew Ruotolo

Executive Vice President President and director of Shareholder Services, Inc. and Shareholder Financial Services,
Inc.

Rohit Sah,
Assistant Vice President None.

Valerie Sanders,
Vice President None.

Jeffrey R. Schneider,
Vice President None.

Ellen P. Schoenfeld,
Vice President None.

Scott A. Schwegel,
Assistant Vice President None.

Allan P. Sedmak
Assistant Vice President None.

Jennifer L. Sexton,

Vice President Vice President of OFI Private Investments, Inc.

Martha A. Shapiro,
Vice President None.

Steven J. Sheerin,
Vice President Formerly consultant with Pricewaterhouse Coopers (November 2000-May 2001) prior to which he was a
Vice President of Merrill Lynch Pierce Fenner & Smith, Inc. (July 1998-October 2000).

Bonnie Sherman,
Assistant Vice President None.

David C. Sitgreaves,
Assistant Vice President None.

Enrique H. Smith,
Assistant Vice President Formerly a business analyst with Goldman Sachs (August 1999-August 2001).

Richard A. Soper,
Vice President None.

Louis Sortino,
Assistant Vice President:
Rochester Division None.

Keith J. Spencer,
Vice President None.

Cathleen R. Stahl,

Assistant Vice President Assistant Vice President and Manager of Women & Investing Program.

Richard A. Stein,
Vice President: Rochester Division None.

Arthur P. Steinmetz,

Senior Vice President Senior Vice President of HarbourView Asset Management Corporation.

Jayne M. Stevlingson,
Vice President None.

Gregory J. Stitt,
Vice President None.

John P. Stoma,

Senior Vice President Senior Vice President of OppenheimerFunds Distributor, Inc.

Wayne Strauss,
Assistant Vice President:
Rochester Division None.

Michael Stricker,
Vice President

Deborah A. Sullivan,
Assistant Vice President,

Assistant Counsel Since December 2001, Secretary of Oppenheimer Trust Company. Formerly, Associate General Counsel,
Chief Compliance Officer, Corporate Secretary and Vice President of Winmill & Co. Inc. (formerly Bull & Bear Group,
Inc.), CEF Advisers, Inc. (formerly Bull & Bear Advisers, Inc.), Investor Service Center, Inc. and Midas Management
Corporation (November 1997 - March 2000).

Mary Sullivan,
Assistant Vice President None.

Kevin L. Surrett,
Assistant Vice President None.

Susan B. Switzer,
Vice President None.

Anthony A. Tanner,
Vice President: Rochester Division None.

Paul Temple,
Vice President

Eamon Tubridy,
Assistant Vice President None.

James F. Turner,
Vice President Formerly portfolio manager for Technology Crossover Ventures (May 2000-March 2001); Assistant Vice
President and Associate Portfolio Manager (August 1999-May 2000) for OppenheimerFunds, Inc.

Cameron Ullyat,
Assistant Vice President None.

Mark S. Vandehey,

Vice President Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and
Shareholder Services, Inc.

Maureen Van Norstrand,
Assistant Vice President None.

Phillip F. Vottiero,
Vice President None.

Samuel Sloan Walker,

Vice President Vice President of HarbourView Asset Management Corporation.

Teresa M. Ward,

Vice President Vice President of OppenheimerFunds Distributor, Inc.

Darrin L. Watts,
Assistant Vice President None.

Jerry A. Webman,

Senior Vice President Senior Vice President of HarbourView Asset Management Corporation.

Christopher D. Weiler,
Assistant Vice President:
Rochester Division None.

Barry D. Weiss,
Vice President None.

Christine Wells,
Vice President None.

Joseph J. Welsh,
Vice President None.

Catherine M. White,

Assistant Vice President Assistant Vice President of OppenheimerFunds Distributor, Inc. Formerly, Assistant Vice
President with Gruntal & Co. LLC (September 1998 - October 2000); member of the American Society of Pension
Actuaries (ASPA) since 1995.

William L. Wilby,

Senior Vice President Senior Vice President (since May 1999) of HarbourView Asset Management Corporation.

Donna M. Winn,

Senior Vice President President, Chief Executive Officer and Director of OFI Private Investments, Inc.;
Director and President of OppenheimerFunds Legacy Program; Senior Vice President of OppenheimerFunds Distributor,
Inc.

Kenneth Winston,
Senior Vice President Principal at Richards & Tierney, Inc. (until June 2001).

Brian W. Wixted,
Senior Vice President and

Treasurer Treasurer of HarbourView Asset Management Corporation; OppenheimerFunds International Ltd.,
Oppenheimer Partnership Holdings, Inc., Oppenheimer Real Asset Management Corporation, Shareholder Services, Inc.,
Shareholder Financial Services, Inc., OFI Private Investments, Inc. and OAM Institutional, Inc.; Treasurer and Chief
Financial Officer of Oppenheimer Trust Company; Assistant Treasurer of Oppenheimer Acquisition Corp. and
OppenheimerFunds Legacy Program; an officer of other Oppenheimer funds.

Carol Wolf,
Senior Vice President An officer of certain Oppenheimer funds; serves on the Board of Chinese Children Adoption
International Parents Council, Supporters of Children, and the Advisory Board of Denver Children's Hospital Oncology
Department.

Kurt Wolfgruber,
Senior Vice President Director of Tremont Advisers, Inc. (as of January 2002).

Caleb C. Wong,
Vice President None.

Edward C. Yoensky,
Assistant Vice President None.

Robert G. Zack
Senior Vice President and
General Counsel General Counsel and Director of OppenheimerFunds Distributor, Inc.; General Counsel of Centennial
Asset Management Corporation; Senior Vice President and General Counsel of HarbourView Asset Management Corporation
and OAM Institutional, Inc.; Senior Vice President, General Counsel and Director of Shareholder Financial Services,
Inc., Shareholder Services, Inc., OFI Private Investments, Inc. and Oppenheimer Trust Company; Vice President and
Director of Oppenheimer Partnership Holdings, Inc.; Secretary of OAC Acquisition Corp.; Director and Assistant
Secretary of OppenheimerFunds International Ltd.; Director of Oppenheimer Real Asset Management, Inc.; Vice
President of OppenheimerFunds Legacy Program; an officer of other Oppenheimer funds.

Jill Zachman,
Vice President: Rochester Division None.

Neal A. Zamore,
Vice President Formerly (until May 2000) Vice President at GE Capital.

Mark D. Zavanelli,
Vice President None.

Alex Zhou,
Assistant Vice President None.

Arthur J. Zimmer,
Senior Vice President Senior Vice President (since April 1999) of HarbourView Asset Management Corporation.

Susan Zimmerman,
Vice President None.

The Oppenheimer Funds include the following:

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

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

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

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

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

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

Item 27. Principal Underwriter

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

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

Name & Principal Positions & Offices Positions & Offices
Business Address with Underwriter with Registrant
- ---------------- ---------------- ---------------

Robert Agan (1) Vice President None

Janette Aprilante (1) Secretary None

Jason R. Bach Vice President None
3264 Winthrop Circle
Marietta, GA 30067

Kathleen Beichert (1) Vice President None

Gabriella Bercze (2) Vice President None

Douglas S. Blankenship Vice President None
17011 Woodbark
Spring, TX 77379

Tracey Blinzler (1) Assistant Vice President None

Kevin Bonner (1) Vice President None

L. Scott Brooks (2) Vice President None

Kevin E. Brosmith Senior Vice President None
170 Phillip Court
Lake Bluff, IL 60044

Jeffrey W. Bryan (2) Vice President None

Susan Burton Vice President None
4127 Towne Green Circle
Addison, TX 75001

Kathleen Mary Byron Vice President None
6 Dahlia Drive
Irvine, CA 92618

Robert A. Coli Vice President None
12 White Tail Lane
Bedminster, NJ 07921

Jill E. Crockett (2) Assistant Vice President None

Jeffrey D. Damia (2) Vice President None

John Davis (2) Assistant Vice President None

Stephen J. Demetrovits (2) Vice President None

Michael W. Dickson Vice President None
21 Trinity Avenue
Glastonbury, CT 06033

Joseph A. DiMauro Vice President None
244 McKinley Avenue
Grosse Pointe Farms, MI 48236

Steven Dombrower (2) Vice President None

George P. Dougherty Vice President None
4090 Redbud Circle
Doylestown, PA 18901

Cliff H. Dunteman Vice President None
1196 Fieldstone Dr.
Crystal Lake, IL 60014-1642

John Eiler (2) Vice President None

Kent M. Elwell Vice President None
35 Crown Terrace
Yardley, PA 19067

Gregg A. Everett Vice President None
7124 Trysail Circle
Tampa, FL 33607

George R. Fahey Vice President None
9 Townview Court
Flemington, NJ 08822

Eric C. Fallon Vice President None
10 Worth Circle
Newton, MA 02458

Katherine P. Feld (2) Vice President Assistant Secretary

Mark J. Ferro (2) Vice President None

Ronald H. Fielding (3) Vice President None

Patrick W. Flynn (1) Senior Vice President None

John E. Forrest (2) Senior Vice President None

John ("J") Fortuna (2) Vice President None

P. Lyman Foster (2) Senior Vice President None

Victoria Friece (1) Assistant Vice President None

Luiggino J. Galleto Vice President None
10302 Riesling Court
Charlotte, NC 28277

Michelle M. Gans Vice President None
2700 Polk Street, Apt. #9
San Francisco, CA 94109

Lucio Giliberti Vice President None
6 Cyndi Court
Flemington, NJ 08822

Raquel Granahan (2) Vice President None

Ralph Grant (2) Senior Vice President None

Michael D. Guman Vice President None
3913 Pleasant Avenue
Allentown, PA 18103

Tonya N. Hammet Assistant Vice President None
2612 W. Grand Reserve Circle #227
Clearwater, FL 33759

Clifford W. Heidinger Vice President None
90 Gates Street
Portsmouth, NH 03801

Phillipe D. Hemery Vice President None
184 Park Avenue
Rochester, NY 14607

Elyse R. Jurman Herman Vice President None
1194 Hillsboro Mile, Villa 51
Hillsboro Beach, FL 33062

Wendy G. Hetson Vice President None
4 Craig Street
Jericho, NY 11753

Kristen L. Heyburn Vice President None
2315 Mimosa Drive #2
Houston, TX 77019

William E. Hortz (2) Vice President None

Edward Hrybenko (2) Vice President None

Brian F. Husch (2) Vice President None

Richard L. Hymes (2) Assistant Vice President None

Kathleen T. Ives (1) Vice President Assistant Secretary

Eric K. Johnson Vice President None
28 Oxford Avenue
Mill Valley, CA 94941

Mark D. Johnson Vice President None
15792 Scenic Green Court
Chesterfield, MO 63017

John S. Kavanaugh Vice President None
2 Cervantes, Apt. #301
San Francisco, CA 94123

Christina J. Keller (2) Vice President None

Brian G. Kelly Vice President None
60 Larkspur Road
Fairfield, CT 06430

Michael Keogh (2) Vice President None

Lisa Klassen (1) Assistant Vice President None

Richard Klein Senior Vice President None
4820 Fremont Avenue So.
Minneapolis, MN 55409

Richard Knott (2) Vice President None

Dean Kopperud (2) Senior Vice President None

Brent A. Krantz Senior Vice President None
P. O. Box 1313
Seahurst, WA 98062

David T. Kuzia Vice President None
9697 S. Golden Eagle Dr.
Highlands, CO 80126

Tracey Lange (2) Vice President None

Dawn Lind Vice President None
21 Meadow Lane
Rockville Centre, NY 11570

Malissa Lischin (2) Assistant Vice President None

James V. Loehle Vice President None
30 Wesley Hill Lane
Warwick, NY 10990

John J. Lynch Vice President None
5341 Ellsworth
Dallas, TX 75206

Mark Macken Vice President None
462 Lincoln Avenue
Sayville, NY 11782

Michael Magee (2) Vice President None

Steven C. Manns Vice President None
1941 W. Wolfram
Chicago, IL 60657

Todd A. Marion Vice President None
3 St. Marks Place
Cold Spring Harbor, NY 11724

David M. Martin Vice President None
10155 S. Woodrose Lane
Highlands Ranch, CO 80126

LuAnn Mascia (2) Assistant Vice President None

Theresa-Marie Maynier Vice President None
2421 Charlotte Drive
Charlotte, NC 28203

Anthony P. Mazzariello Vice President None
704 Beaver Road
Leetsdale, PA 15056

John C. McDonough Vice President None
3812 Leland Street
Chevy Chase, MD 20815

Kent C. McGowan Vice President None
18424 12th Avenue West
Lynnwood, WA 98037

John V. Murphy (2) Director President and Trustee

Wendy Jean Murray Vice President None
32 Carolin Road
Upper Montclair, NJ 07043

Christina Nasta (2) Assistant Vice President None

Kevin P. Neznek (2) Vice President None

Patrick J. Noble Vice President None
1155 Wellesley Avenue #204
Los Angeles, CA 90049

Chad V. Noel Vice President None
2408 Eagleridge Drive
Henderson, NV 89014

Raymond Olson (1) Assistant Vice President None
& Treasurer

Gayle E. Pereira Vice President None
2707 Via Arboleda
San Clemente, CA 92672

Brian C. Perkes Vice President None
8734 Shady Shore Drive
Frisco, TX 75034

Charles K. Pettit Vice President None
22 Fall Meadow Drive
Pittsford, NY 14534

William L. Presutti Vice President None
238 Kemp Avenue
Fair Haven, NJ 07704

Elaine Puleo-Carter (2) Senior Vice President None

Christopher L. Quinson Vice President None
19 Cayuga Street
Rye, NY 10580

Minnie Ra Vice President None
100 Dolores Street, #203
Carmel, CA 93923

Heather Rabinowitz (2) Assistant Vice President None

Gary D. Rakan Vice President None
25031 Woodridge Triangle
Farmington, MI 48335

Michael A. Raso Vice President None
16 N. Chatsworth Ave., Apt. 301
Larchmont, NY 10538

Douglas Rentschler Vice President None
677 Middlesex Road
Grosse Pointe Park, MI 48230

Michelle Simone Richter (2) Vice President None

Ruxandra Risko(2) Vice President None

David R. Robertson (2) Senior Vice President None

Kenneth A. Rosenson Vice President None
24753 Bantage Point Terr.
Malibu, CA 90265

James H. Ruff (2) President amp; Director None

William R. Rylander Vice President None
85 Evergreen Road
Vernon, CT 06066

Thomas Sabow (2) Vice President None

Alfredo Scalzo Vice President None
9616 Lake Chase Island Way
Tampa, FL 33626

Michael Sciortino Vice President None
785 Beau Chene Drive
Mandeville, LA 70471

Eric Sharp Vice President None
862 McNeill Circle
Woodland, CA 95695

Debbie Simon (2) Vice President None

Douglas Bruce Smith Vice President None
808 South 194th Street
Seattle,WA 98148

William A. Spetrino Vice President None
7631 Yennicook Way
Hudson, OH 44236

Bryan Stein (2) Vice President None

John Stoma (2) Senior Vice President None

Brian C. Summe Vice President None
239 N. Colony Drive
Edgewood, KY 41017

Michael Sussman(2) Assistant Vice President None

George T. Sweeney Senior Vice President None
5 Smoke House Lane
Hummelstown, PA 17036

Scott McGregor Tatum Vice President None
704 Inwood
Southlake, TX 76092

James Taylor (2) Assistant Vice President None

Martin Telles (2) Senior Vice President None

David G. Thomas Vice President None
1328 N. Cleveland Street
Arlington, VA 22201

Bryan K.Toma Vice President None
14575 S. Gallery
Olathe, KS 66062

Floyd A. Tucker Vice President None
1930 W. Barry Ave., #2
Chicago, IL 60657

Tanya Valency (2) Vice President None

Mark Vandehey (1) Vice President None

Vince Vermette Assistant Vice President None

Teresa Ward (1) Vice President None

Michael J. Weigner Vice President None
4905 W. San Nicholas Street
Tampa, FL 33629

Donn Weise Vice President None
3249 Earlmar Drive
Los Angeles, CA 90064

Catherine White (2) Assistant Vice President None

Thomas Wilson (2) Vice President None

Donna Winn (2) Senior Vice President None

Philip Witkower (2) Senior Vice President None

Cary Patrick Wozniak Vice President None
18808 Bravata Court
San Diego, CA 92128

Gregor D. Yuska Vice President None
16035 Canterbury Estates Dr.
Ellisville, MO 63021

Robert G. Zack (2) General Counsel
and Director Vice President and Secretary

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

Item 28. Location of Accounts and Records

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

Item 29. Management Services

Not applicable

Item 30. Undertakings

Not applicable.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and/or the Investment Company Act of 1940, the Registrant
certifies that it meets all the requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the County of Arapahoe and State of Colorado on the 26th day of
April, 2002.

OPPENHEIMER INTEGRITY FUNDS

By: /s/ John V. Murphy*
-----------------------------------
James V. Murphy, President and Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the
following persons in the capacities on the dates indicated:

Signatures Title Date
- ---------- ----- ----

/s/ James C. Swain* Chairman of the Board
- ----------------------- and Trustee April 26, 2002
James C. Swain

/s/ John V. Murphy*
- ------------------------------ President and Trustee April 26, 2002
John V. Murphy

/s/ Brian W. Wixted* Treasurer and Principal April 26, 2002
- ------------------------- Financial and
Brian W. Wixted Accounting Officer

/s/ William L. Armstrong* Trustee April 26, 2002
- -------------------------------
William L. Armstrong

/s/ Robert G. Avis* Trustee April 26, 2002
- ----------------------
Robert G. Avis

/s/ George C. Bowen Trustee April 26, 2002
- -------------------------
George C. Bowen

/s/ Edward L. Cameron Trustee April 26, 2002
- ----------------------------
Edward L. Cameron

/s/ Jon S. Fossel* Trustee April 26, 2002
- --------------------
Jon S. Fossel

/s/ Sam Freedman* Trustee April 26, 2002
- ----------------------
Sam Freedman

/s/ C. Howard Kast* Trustee April 26, 2002
- ------------------------
C. Howard Kast

/s/ Robert M. Kirchner* Trustee April 26, 2002
- ----------------------------
Robert M. Kirchner

/s/ F. William Marshall, Jr. Trustee April 26, 2002
- -----------------------------
F. William Marshall, Jr.

*By: /s/ Robert G. Zack April 26, 2002
- -----------------------------
Robert G. Zack, Attorney-in-Fact

OPPENHEIMER INTEGRITY FUNDS

Registration Statement No. 2-76547

Post-Effective Amendment No. 40

EXHIBIT INDEX
- -------------

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

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

23(j) Independent Auditor's Consent.

EX-99 8 certsabcny485b28502.htm CERTIFICATES A,B,C,N,Y - 485B BOND FUND CERTS A,B,C,N AND Y 485B BOND FUND 2002

                                            OPPENHEIMER INTEGRITY FUNDS
                                      Class A Share Certificate (8-1/2" x 11")
                                      ----------------------------------------

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

(upper left corner, box with heading: NUMBER [of shares]

                                            (upper right corner)  [share certificate no.] XX-000000

                                            (upper right box, CLASS A SHARES below cert. no.)

                                              (centered below boxes)
                                            OPPENHEIMER INTEGRITY FUNDS
                                           Series: Oppenheimer BOND Fund
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                              CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 683946 10 7

(at left)  is the owner of

                            (centered) FULLY PAID CLASS A SHARES OF BENEFICIAL INTEREST OF OPPENHEIMER BOND FUND,
                                                                                           -----------------------
                                      a series of OPPENHEIMER INTEGRITY FUNDS
                                      ---------------------------------------
         (hereinafter  called  the  "Fund"),  transferable  only on the books of the Fund by the  holder  hereof in
         person or by duly  authorized  attorney,  upon  surrender  of this  certificate  properly  endorsed.  This
         certificate  and the  shares  represented  hereby  are  issued  and  shall be held  subject  to all of the
         provisions  of the  Declaration  of Trust of the Fund to all of which  the  holder  by  acceptance  hereof
         assents.  This certificate is not valid until countersigned by the Transfer Agent.

        WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

        (signature                          Dated:            (signature
        at left of seal)                                      at right of seal)
        /s/ Brian W. Wixted                                   /s/ Robert G. Zack

        TREASURER                                    SECRETARY

                                               (centered at bottom)
                                    1-1/2" diameter facsimile seal with legend
                                            OPPENHEIMER INTEGRITY FUNDS
                                                       SEAL
                                                       1982
                                           COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature

II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)

Additional abbreviations may also be used though not on above list.
For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)


(Please print or type name and address of assignee)

________________________________________________Class  A Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)


                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor

                                                     by:
                                                                   Signature of
                                                                   Officer/Title

(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.


PLEASE NOTE:  This document  contains a watermark  OppenheimerFunds  when viewed at an angle. It is invalid without
this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY

                                            OPPENHEIMER INTEGRITY FUNDS
                                      Class B Share Certificate (8-1/2" x 11")
                                      ----------------------------------------

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

(upper left corner, box with heading: NUMBER [of shares]

                                            (upper right corner)  [share certificate no.] XX-000000

                                            (upper right box, CLASS B SHARES below cert. no.)

                                              (centered below boxes)
                                            OPPENHEIMER INTEGRITY FUNDS
                                           Series: Oppenheimer BOND Fund
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                              CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 683946 10 7

(at left)  is the owner of

                            (centered) FULLY PAID CLASS B SHARES OF BENEFICIAL INTEREST OF OPPENHEIMER BOND FUND,
                                                                                           -----------------------
                                      a series of OPPENHEIMER INTEGRITY FUNDS
                                      ---------------------------------------
         (hereinafter  called  the  "Fund"),  transferable  only on the books of the Fund by the  holder  hereof in
         person or by duly  authorized  attorney,  upon  surrender  of this  certificate  properly  endorsed.  This
         certificate  and the  shares  represented  hereby  are  issued  and  shall be held  subject  to all of the
         provisions  of the  Declaration  of Trust of the Fund to all of which  the  holder  by  acceptance  hereof
         assents.  This certificate is not valid until countersigned by the Transfer Agent.

        WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

        (signature                          Dated:            (signature
        at left of seal)                                      at right of seal)
        /s/ Brian W. Wixted                                   /s/ Robert G. Zack

        TREASURER                                    SECRETARY

                                               (centered at bottom)
                                    1-1/2" diameter facsimile seal with legend
                                            OPPENHEIMER INTEGRITY FUNDS
                                                       SEAL
                                                       1982
                                           COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature

II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)

Additional abbreviations may also be used though not on above list.
For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)


(Please print or type name and address of assignee)

________________________________________________Class  B Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)


                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor

                                                     by:
                                                                   Signature of
                                                                   Officer/Title

(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.


PLEASE NOTE:  This document  contains a watermark  OppenheimerFunds  when viewed at an angle. It is invalid without
this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY

                                            OPPENHEIMER INTEGRITY FUNDS
                                      Class C Share Certificate (8-1/2" x 11")
                                      ----------------------------------------

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

(upper left corner, box with heading: NUMBER [of shares]

                                            (upper right corner)  [share certificate no.] XX-000000

                                            (upper right box, CLASS C SHARES below cert. no.)

                                              (centered below boxes)
                                            OPPENHEIMER INTEGRITY FUNDS
                                           Series: Oppenheimer BOND Fund
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                              CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 683946 10 7

(at left)  is the owner of

                            (centered) FULLY PAID CLASS C SHARES OF BENEFICIAL INTEREST OF OPPENHEIMER BOND FUND,
                                                                                           -----------------------
                                      a series of OPPENHEIMER INTEGRITY FUNDS
                                      ---------------------------------------
         (hereinafter  called  the  "Fund"),  transferable  only on the books of the Fund by the  holder  hereof in
         person or by duly  authorized  attorney,  upon  surrender  of this  certificate  properly  endorsed.  This
         certificate  and the  shares  represented  hereby  are  issued  and  shall be held  subject  to all of the
         provisions  of the  Declaration  of Trust of the Fund to all of which  the  holder  by  acceptance  hereof
         assents.  This certificate is not valid until countersigned by the Transfer Agent.

        WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

        (signature                          Dated:            (signature
        at left of seal)                                      at right of seal)
        /s/ Brian W. Wixted                                   /s/ Robert G. Zack

        TREASURER                                    SECRETARY

                                               (centered at bottom)
                                    1-1/2" diameter facsimile seal with legend
                                            OPPENHEIMER INTEGRITY FUNDS
                                                       SEAL
                                                       1982
                                           COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature

II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)

Additional abbreviations may also be used though not on above list.
For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)


(Please print or type name and address of assignee)

________________________________________________Class  C Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)


                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor

                                                     by:
                                                                   Signature of
                                                                   Officer/Title

(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.


PLEASE NOTE:  This document  contains a watermark  OppenheimerFunds  when viewed at an angle. It is invalid without
this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY

                           Oppenheimer Integrity Funds, on behalf of Oppenheimer Bond Fund
                                      Class N Share Certificate (8-1/2" x 11")


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

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

                          Oppenheimer Integrity Funds, on behalf of Oppenheimer Bond Fund
                                          A MASSACHUSETTS BUSINESS TRUST

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

(at left)  is the owner of

                            (centered) FULLY PAID CLASS N SHARES OF BENEFICIAL INTEREST

                          Oppenheimer Integrity Funds, on behalf of Oppenheimer Bond Fund
                          ---------------------------------------------------------------

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

         WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

(at left of seal) Dated:                                               (at right of seal)

(signature)                                                            (signature)

/s/  Brian W. Wixted                                                   /s/ Robert G. Zack
- -----------------------                                       -------------------
TREASURER                                                              SECRETARY



                                                (centered at bottom)
                                           1-1/2" diameter facsimile seal
                                                    with legend

                          Oppenheimer Integrity Funds, on behalf of Oppenheimer Bond Fund
                                                        SEAL
                                                        1982
                                            COMMONWEALTH OF MASSACHUSETTS


(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature


II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC -       as joint tenants with
                                    rights of survivorship and not
                                    as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)
UNDER UGMA/UTMA ___________________
                                    (State)


Additional abbreviations may also be used though not on above list.

For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)





(Please print or type name and address of assignee)

________________________________________________Class  N Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)

                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor
                                                     by:         _____________________________
                                                                       Signature of
                                                                       Officer/Title


(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 with the name(s) as written upon the face of the certificate
of above paragraph)                 in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.

PLEASE NOTE: This document contains a watermark OppenheimerFunds
when viewed at an angle.  It is invalid without this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY

                                            OPPENHEIMER INTEGRITY FUNDS
                                      Class Y Share Certificate (8-1/2" x 11")
                                      ----------------------------------------

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

(upper left corner, box with heading: NUMBER [of shares]

                                            (upper right corner)  [share certificate no.] XX-000000

                                            (upper right box, CLASS Y SHARES below cert. no.)

                                              (centered below boxes)
                                            OPPENHEIMER INTEGRITY FUNDS
                                           Series: Oppenheimer BOND Fund
                                          A MASSACHUSETTS BUSINESS TRUST

(at left)  THIS IS TO CERTIFY THAT                            (at right) SEE REVERSE FOR
                                                              CERTAIN DEFINITIONS
                                                              (box with number) CUSIP 683946 10 7

(at left)  is the owner of

                            (centered) FULLY PAID CLASS Y SHARES OF BENEFICIAL INTEREST OF OPPENHEIMER BOND FUND,
                                                                                           -----------------------
                                      a series of OPPENHEIMER INTEGRITY FUNDS
                                      ---------------------------------------
         (hereinafter  called  the  "Fund"),  transferable  only on the books of the Fund by the  holder  hereof in
         person or by duly  authorized  attorney,  upon  surrender  of this  certificate  properly  endorsed.  This
         certificate  and the  shares  represented  hereby  are  issued  and  shall be held  subject  to all of the
         provisions  of the  Declaration  of Trust of the Fund to all of which  the  holder  by  acceptance  hereof
         assents.  This certificate is not valid until countersigned by the Transfer Agent.

        WITNESS the facsimile seal of the Fund and the signatures of its duly authorized officers.

        (signature                          Dated:            (signature
        at left of seal)                                      at right of seal)
        /s/ Brian W. Wixted                                   /s/ Robert G. Zack

        TREASURER                                    SECRETARY

                                               (centered at bottom)
                                    1-1/2" diameter facsimile seal with legend
                                            OPPENHEIMER INTEGRITY FUNDS
                                                       SEAL
                                                       1982
                                           COMMONWEALTH OF MASSACHUSETTS
(at lower right, printed vertically)                 Countersigned
                                                     OPPENHEIMERFUNDS SERVICES
                                                     [A DIVISION OF OPPENHEIMERFUNDS, INC.]
                                                     Denver (CO.) Transfer Agent

                                                     By ____________________________
                                                              Authorized Signature

II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

         The  following  abbreviations,  when used in the  inscription  on the face of this  certificate,  shall be
construed as though they were written out in full according to applicable laws or regulations.

TEN COM - as tenants in common
TEN ENT - as tenants by the entirety
JT TEN WROS NOT TC - as joint tenants with
rights of survivorship and not as tenants in common

UNIF GIFT/TRANSFER MIN ACT - __________________  Custodian _______________
                                                     (Cust)                             (Minor)

                                            UNDER UGMA/UTMA ___________________
                                                                                (State)

Additional abbreviations may also be used though not on above list.
For Value Received ................ hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
AND PROVIDE CERTIFICATION BY TRANSFEREE
(box for identifying number)


(Please print or type name and address of assignee)

________________________________________________Class  Y Shares of beneficial  interest  represented  by the within
certificate,  and do hereby  irrevocably  constitute and appoint  ___________________________  Attorney to transfer
the said shares on the books of the within named Fund with full power of substitution in the premises.

Dated: ______________________

                                            Signed: __________________________

                                                     -----------------------------------
                                                     (Both must sign if joint owners)


                                                     Signature(s) __________________________
                                                     guaranteed        Name of Guarantor

                                                     by:
                                                                   Signature of
                                                                   Officer/Title

(text printed                       NOTICE: The signature(s) to this assignment must correspond
vertically to right                 correspond with the name(s) as written upon the face of the
of above paragraph                  certificate in every particular without alteration or enlargement
                                    or any change whatever.

(text printed in                    Signatures must be guaranteed by a financial
box to left of                      institution of the type described in the current
signature(s))                       prospectus of the Fund.


PLEASE NOTE:  This document  contains a watermark  OppenheimerFunds  when viewed at an angle. It is invalid without
this "four hands" watermark: logotype




                                      THIS SPACE MUST NOT BE COVERED IN ANY WAY

EX-99.2N 9 consent485b28502.htm AUDITOR'S CONSENT - 485B BOND FUND auditor's consent 485b 2002 Bond Fund

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 40 to Registration Statement No. 2-76547 of
Oppenheimer Integrity Funds on Form N-1A of our report dated January 23, 2002, appearing in the Statement of
Additional Information, which is part of such Registration Statement, and to the reference to us under the
headings "Independent Auditors" in the Statement of Additional Information and "Financial Highlights" in the
Prospectus, which is also part of such Registration Statement.



/s/Deloitte & Touche LLp
- -------------------------------------
Deloitte & Touche LLP


Denver, Colorado
April 26, 2002

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