485BPOS

                                                      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. 41                                            [X]

                                    and/or

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


Amendment No. 39                                                           [X]


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

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            6803 South Tucson Way, Centennial, Colorado 80112-3924

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             (Address of Principal Executive Offices) (Zip Code)

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                                (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
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                   (Name and Address of Agent for Service)

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


[X]   Immediately upon filing pursuant to paragraph (b)
[   ] On (date) 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.

Oppenheimer
Bond Fund



Prospectus dated February 25, 2003




                                         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
As with all mutual funds, the            the Fund and other account features.
Securities and Exchange Commission has   Please read this Prospectus carefully
not approved or disapproved the Fund's   before you invest and keep it for
securities nor has it determined that    future reference about your account.
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 Checkwriting
                  By Mail
                  By Telephone



                  How to Exchange Shares

                  Shareholder Account Rules and Policies

                  Dividends, Capital Gains and Taxes

                  Financial Highlights



ABOUT THE FUND

The Fund's Investment Objective and Strategies

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks a high level of
current income by investing mainly in debt instruments.


WHAT DOES THE FUND MAINLY INVEST IN? As a non-fundamental policy (which will
not be changed without providing 60 days notice to Fund shareholders) the
Fund invests at least 80% of its net assets (plus borrowings) in debt
securities.  Additionally, the Fund invests at least 65% of its total assets
in investment grade 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 types of
securities the Fund buys, 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. 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.

      In addition to the above, the Fund generally limits its investments in
high-yield debt securities that are below investment grade (commonly referred
to as "junk bonds") to no more than 35% of the Fund's total assets. 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 it becomes 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 certain mortgage-related securities,
including CMOs, 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.

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


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

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

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

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

     During  the  period  shown  in the  bar  chart,  the  highest  return  (not
annualized)  before taxes for a calendar quarter was 6.24% (2nd Qtr '95) and the
lowest return (not  annualized)  before taxes for a calendar  quarter was -3.16%
(1st Qtr '94).


Average Annual Total Returns                          5 Years          10 Years
for    the    periods    ended                      (or life of       (or life of
December 31, 2002                   1 Year        class, if less)   class, if less)

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Class  A   Shares   (inception
4/15/88)                            4.84%            4.28%              5.85%
  Return Before Taxes               2.58%            1.55%              3.07%
  Return After Taxes on
  Distributions                     2.86%            2.00%              3.24%
  Return    After   Taxes   on
  Distributions  and  Sale  of
  Fund Shares

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Lehman Brothers Corporate          10.52%            7.28%              7.86%1
Bond Index (reflects no
deduction for fees, expenses
or taxes)

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Class  B   Shares   (inception      4.26%            4.18%              5.46%
5/3/93)

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Class  C   Shares   (inception      8.26%            4.50%              5.30%
7/11/95)

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Class  N   Shares   (inception      8.73%            7.00%               N/A
3/1/01)

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Class  Y   Shares   (inception     10.58%            5.92%               N/A
4/27/98)

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1  From 12/31/92.

The Fund's average annual total returns include applicable sales charges:  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-year);  and for
Class C and Class N, the 1%  contingent  deferred  sales charge for the 1-year
period.  There  is no  sales  charge  for  Class  Y.  Because  Class B  shares
convert to Class A shares 72 months after  purchase,  Class B  "life-of-class"
performance  does not include any  contingent  deferred  sales charge and uses
Class A performance for the period after  conversion.  The returns measure the
performance  of a  hypothetical  account  and assume  that all  dividends  and
capital gains  distributions  have been reinvested in additional  shares.  The
performance  of the  Fund's  Class A shares is  compared  to  Lehman  Brothers
Corporate  Bond Index,  which  measures  the  performance  of  non-convertible
investment-grade  domestic  corporate debt securities.  The index  performance
includes  reinvestment of income but does not reflect  transaction  costs. The
Fund's investments vary from those in the index.

Fees and Expenses of the Fund

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

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Shareholder Fees (charges paid directly from your investment):

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

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Maximum Sales Charge         4.75%       None        None        None        None
(Load) on purchases (as
% of offering price)

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Maximum Deferred Sales       None1        5%2         1%3         1%4        None
Charge (Load) (as % of
the lower of the
original offering price
or redemption proceeds)

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

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

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

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Distribution and/or          0.25%      1.00%       1.00%      0.50%      None
Service (12b-1) Fees
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- ------------------------------   0.28%    0.28%    0.26%     0.37%     0.06%
Other Expenses

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Total Annual Operating       1.10%      1.85%       1.83%      1.44%      0.63%
Expenses

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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.
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2.    Applies to redemptions in first year after purchase. The contingent
   deferred sales charge declines to 1% in the sixth year and is eliminated
   after that.
3.    Applies to shares redeemed within 12 months of purchase.
4.    Applies to shares redeemed within 18 months of a retirement plan's
   first purchase of Class N shares.

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

Effective November 1, 2002, the limit on transfer agent fees for Class Y
shares increased to 0.35% of average daily net assets per fiscal year. Had
that limit been in effect during the Fund's entire fiscal year, the transfer
agent fees would not have exceeded the expense limitation described above.

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:


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

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Class A Shares          $582           $808          $1,052        $1,752

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Class B Shares          $688           $882          $1,201        $1,7931

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

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Class N Shares          $247           $456          $787          $1,724

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Class Y Shares          $64            $202          $351          $786

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

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Class A Shares          $582           $808          $1,052        $1,752

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Class B Shares          $188           $582          $1,001        $1,7931

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

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Class N Shares          $147           $456          $787          $1,724

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Class Y Shares          $64            $202          $351          $786

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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 72 months
after purchase.

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.  CMOs and other types of
      mortgage-related securities may be considered to be derivative
      investments.
      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 active and frequent 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 may enter into "forward rolls" (also referred to as
      "mortgage dollar rolls") transactions with respect to mortgage-related
      securities.  In this type of transaction, the Fund sells a
      mortgage-related security to a buyer and simultaneously agrees to
      repurchase a similar security at a later date at a set price.
      During the period between the sale and the purchase, the Fund will not
      be entitled to receive interest and principal payments on the
      securities that have been sold.  It is possible that the market value
      of the securities the Fund sells may decline below the price at which
      the Fund is obligated to repurchase securities, or that the
      counterparty might default in its obligation.
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.

Temporary Defensive and Interim Investments.  In times of unstable or adverse
      market, political or economic conditions, the Fund can invest up to
      100% of its assets in short-term debt securities for defensive
      purposes. Generally they would be cash or cash equivalents, such as
      U.S. Treasury Bills and other short-term U.S. government obligations or
      high-grade commercial paper. The Fund could also hold these types of
      securities pending the investment of proceeds from the sale of Fund
      shares or portfolio securities or to meet anticipated redemptions of
      Fund shares.  To the extent the Fund invests defensively in these
      securities, it might not achieve its investment objectives.

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 controlled affiliates managed more than $120
billion in assets as of December 31, 2002, including other Oppenheimer funds,
with more than 7 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, 2002 was 0.57% of average annual net assets for each class
      of shares.

ABOUT your account

How to Buy Shares

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

Buying Shares Through Your Dealer. You can buy shares through any dealer,
      broker or financial institution that has a sales agreement with the
      Distributor. Your dealer will place your order with the Distributor on
      your behalf.
Buying Shares Through the Distributor. Complete an OppenheimerFunds New
      Account Application and return it with a check payable to
      "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
      Colorado 80217. If you don't list a dealer on the application, the
      Distributor will act as your agent in buying the shares. However, we
      recommend that you discuss your investment with a financial advisor
      before you make a purchase to be sure that the Fund is appropriate for
      you.
o     Paying by Federal Funds Wire. Shares purchased through the Distributor
      may be paid for by Federal Funds wire. The minimum investment is
      $2,500. Before sending a wire, call the Distributor's Wire Department
      at 1.800.225.5677 to notify the Distributor of the wire and to receive
      further instructions.
o     Buying Shares Through OppenheimerFunds AccountLink. With AccountLink,
      you pay for shares by electronic funds transfers from your bank
      account. Shares are purchased for your account by a transfer of money
      from your bank account through the Automated Clearing House (ACH)
      system. You can provide those instructions automatically, under an
      Asset Builder Plan, described below, or by telephone instructions using
      OppenheimerFunds PhoneLink, also described below. Please refer to
      "AccountLink," below for more details.
o     Buying Shares Through Asset Builder Plans. You may purchase shares of
      the Fund automatically each month from your account at a bank or other
      financial institution under an Asset Builder Plan with AccountLink.
      Details are in the Asset Builder Application and the Statement of
      Additional Information.

WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
o     If you establish one of the many types of retirement plan accounts that
      OppenheimerFunds offers, more fully described below under "Special
      Investor Services," you can start your account with as little as $500.
o     By using an Asset Builder Plan or Automatic Exchange Plan (details are
      in the Statement of Additional Information), or government allotment
      plan, you can make subsequent investments (after making the initial
      investment of $500) for as little as $50. For any type of account
      established under one of these plans prior to November 1, 2002, the
      minimum additional investment will remain $25.
o     The minimum investment requirement does not apply to reinvesting
      dividends from the Fund or other Oppenheimer funds (a list of them
      appears in the Statement of Additional Information, or you can ask your
      dealer or call the Transfer Agent), or reinvesting distributions from
      unit investment trusts that have made arrangements with the Distributor.

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

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

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

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

The Offering Price. To receive the offering price for a particular day, in
      most cases the Distributor or its designated agent must receive your
      order by the time the Exchange closes that day. If your order is
      received on a day when the Exchange is closed or after it has closed,
      the order will receive the next offering price that is determined after
      your order is received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
      receive the order by the close of the Exchange and transmit it to the
      Distributor so that it is received before the Distributor's close of
      business on a regular business day (normally 5:00 P.M.) to receive that
      day's offering price, unless your dealer has made alternative
      arrangements with the Distributor. Otherwise, the order will receive
      the next offering price that is determined.

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

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

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

Class A Shares. If you buy Class A shares, you pay an initial sales charge
      (on investments up to $1 million for regular accounts or lesser amounts
      for certain retirement plans). The amount of that sales charge will
      vary depending on the amount you invest. The sales charge rates are
      listed in "How Can You Buy Class A Shares?" below.
- ------------------------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales charge at the
      time of purchase, but you will pay an annual asset-based sales charge.
      If you sell your shares within 6 years of buying them, you will
      normally pay a contingent deferred sales charge. That contingent
      deferred sales charge varies depending on how long you own your shares,
      as described in "How Can You Buy Class B Shares?" below.
- ------------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at the
      time of purchase, but you will pay an annual asset-based sales charge.
      If you sell your shares within 12 months of buying them, you will
      normally pay a contingent deferred sales charge of 1.0%, as described
      in "How Can You Buy Class C Shares?" below.
- ------------------------------------------------------------------------------
Class N Shares. If you buy Class N shares (available only through certain
      retirement plans), you pay no sales charge at the time of purchase, but
      you will pay an annual asset-based sales charge. If you sell your
      shares within 18 months of the retirement plan's first purchase of
      Class N shares, you may pay a contingent deferred sales charge of 1.0%,
      as described in "How Can You Buy Class N Shares?" below.
Class Y Shares. Class Y shares are offered only to certain institutional
      investors that have special agreements with the Distributor.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 Less than $50,000             4.75%             4.98%             4.00%

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 $50,000 or more but           4.50%             4.71%             3.75%
 less than $100,000

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 $100,000 or more but          3.50%             3.63%             2.75%
 less than $250,000

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

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

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

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

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

      If you redeem any of those shares within an 18-month "holding period"
      measured from the beginning of the calendar month of their purchase, a
      contingent deferred sales charge (called the "Class A contingent
      deferred sales charge") may be deducted from the redemption proceeds.
      That sales charge will be equal to 1.0% of the lesser of:
o     the aggregate net asset value of the redeemed shares at the time of
      redemption (excluding shares purchased by reinvestment of dividends or
      capital gain distributions) or
o     the original net asset value of the redeemed shares.

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

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

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

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


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Years Since Beginning of Month in       Contingent Deferred Sales Charge on
Which Purchase Order was Accepted       Redemptions in That Year
                                        (As % of Amount Subject to Charge)

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0 - 1                                   5.0%

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

1 - 2                                   4.0%

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

2 - 3                                   3.0%

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3 - 4                                   3.0%

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

4 - 5                                   2.0%

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5 - 6                                   1.0%

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More than 6                             None

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

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

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

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

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

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

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

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

DISTRIBUTION AND SERVICE (12b-1) PLANS.

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

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

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

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

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

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

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


Special Investor Services

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

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

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

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification
Number (PIN), by calling the PhoneLink number, 1.800.225.5677.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by
      phone, by calling 1.800.225.5677. You must have established AccountLink
      privileges to link your bank account with the Fund to pay for these
      purchases.
Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
      below, you can exchange shares automatically by phone from your Fund
      account to another OppenheimerFunds account you have already
      established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling
      the PhoneLink number and the Fund will send the proceeds directly to
      your AccountLink bank account. Please refer to "How to Sell Shares,"
      below for details.

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

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

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

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

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

How to Sell Shares

You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your
order is received in proper form (which means that it must comply with the
procedures described below) and is accepted by the Transfer Agent. The Fund
lets you sell your shares by writing a letter, by 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
1.800.225.5677, for assistance.

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

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

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

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 1.800.225.5677 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 $500. Checks written below the
      stated amount on the check will not be accepted. However, if you have
      existing checks indicating a $100 minimum, you may still use them for
      amounts of $100 or more.
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.
o     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 Exchange that day, which
is normally 4:00 P.M., but may be earlier on some days. You may not redeem
shares held in an OppenheimerFunds retirement plan account or under a share
certificate by telephone.
   o  To redeem shares through a service representative or automatically on
      PhoneLink, call 1.800.225.5677.
      Whichever method you use, you may have a check sent to the address on
the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

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

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

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

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

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

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

How to Exchange Shares

Shares of the Fund may be exchanged for shares of certain Oppenheimer funds
at net asset value per share at the time of exchange, without sales charge.
Shares of the Fund can be purchased by exchange of shares of other
Oppenheimer funds on the same basis. To exchange shares, you must meet
several conditions:
   o  Shares of the fund selected for exchange must be available for sale in
      your state of residence.
   o  The prospectuses of both funds must offer the exchange privilege.
   o  You must hold the shares you buy when you establish your account for at
      least seven days before you can exchange them. After the account is
      open seven days, you can exchange shares every regular business day.
   o  You must meet the minimum purchase requirements for the fund whose
      shares you purchase by exchange.
   o  Before exchanging into a fund, you must obtain and read its prospectus.
      Shares of a particular class of the Fund may be exchanged only for
shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another fund.
In some cases, sales charges may be imposed on exchange transactions. For tax
purposes, exchanges of shares involve a sale of the shares of the fund you
own and a purchase of the shares of the other fund, which may result in a
capital gain or loss. Please refer to "How to Exchange Shares" in the
Statement of Additional Information for more details.

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

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

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

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

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual fee is assessed on any account valued at less than $500. The fee
      is automatically deducted from accounts annually on or about the second
      to last business day of September. See the Statement of Additional
      Information, or visit the OppenheimerFunds website, to learn how you
      can avoid this fee and for circumstances when this fee will not be
      assessed.
The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is
      in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
      be modified, suspended or terminated by the Fund at any time. The Fund
      will provide you notice whenever it is required to do so by applicable
      law. If an account has more than one owner, the Fund and the Transfer
      Agent may rely on the instructions of any one owner. Telephone
      privileges apply to each owner of the account and the dealer
      representative of record for the account unless the Transfer Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the
      Fund will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements
      for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating
      in NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders
      of the Fund if the dealer performs any transaction erroneously or
      improperly.
The redemption price for shares will vary from day to day because the value
      of the securities in the Fund's portfolio fluctuates. The redemption
      price, which is the net asset value per share, will normally differ for
      each class of shares. The redemption value of your shares may be more
      or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink within seven days after the Transfer
      Agent receives redemption instructions in proper form. However, under
      unusual circumstances determined by the Securities and Exchange
      Commission, payment may be delayed or suspended. For accounts
      registered in the name of a broker-dealer, payment will normally be
      forwarded within three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
      described under "How to Sell Shares" for recently purchased shares, but
      only until the purchase payment has cleared. That delay may be as much
      as 10 days from the date the shares were purchased. That delay may be
      avoided if you purchase shares by Federal Funds wire or certified
      check, or arrange with your bank to provide telephone or written
      assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the
      account value has fallen below $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 1.800.225.5677. You may also notify the Transfer
      Agent in writing. Individual copies of prospectuses, reports and
      privacy notices will be sent to you commencing within 30 days after the
      Transfer Agent receives your request to stop householding.

Dividends, Capital Gains and Taxes

Dividends. The Fund intends to declare dividends separately for each class of
shares from net investment income 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,            2002      2001     2000
1999      1998
- --------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period         $ 9.74    $ 9.79   $ 9.97
$10.86   $ 10.97
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                           .54       .73      .73
..71       .71
Net realized and unrealized gain (loss)         .40      (.05)    (.18)
(.89)     (.11)

- -----------------------------------------------
Total from investment operations                .94       .68      .55
(.18)      .60
- --------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income           (.54)     (.73)    (.73)
(.71)     (.71)

- -----------------------------------------------
Total dividends and/or distributions
to shareholders                                (.54)     (.73)    (.73)
(.71)     (.71)
- --------------------------------------------------------------------------------------------
Net asset value, end of period               $10.14     $9.74    $9.79
$9.97    $10.86

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

- --------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1            10.06%     7.05%    5.80%
(1.65)%    5.61%

- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)   $356,480  $280,132 $202,833
$220,502  $246,668
- --------------------------------------------------------------------------------------------
Average net assets (in thousands)          $316,279  $237,232 $205,883
$251,190  $217,944
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                          5.47%     7.31%    7.48%
6.88%     6.46%
Expenses                                       1.10%     1.23%    1.31%
1.24%     1.22%3
- --------------------------------------------------------------------------------------------
Portfolio turnover rate                         151%      162%     255%
238%       67%



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



See accompanying Notes to Financial Statements.


                           27 | OPPENHEIMER BOND FUND



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


Class B     Year Ended December 31,            2002      2001     2000
1999      1998
- --------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period         $ 9.73    $ 9.79   $ 9.96
$10.86   $ 10.97
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                           .47       .65      .66
..63       .62
Net realized and unrealized gain (loss)         .40      (.05)    (.17)
(.90)     (.10)

- -----------------------------------------------
Total from investment operations                .87       .60      .49
(.27)      .52
- --------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income           (.47)     (.66)    (.66)
(.63)     (.63)

- -----------------------------------------------
Total dividends and/or distributions
to shareholders                                (.47)     (.66)    (.66)
(.63)     (.63)
- --------------------------------------------------------------------------------------------
Net asset value, end of period               $10.13     $9.73    $9.79    $
9.96    $10.86

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

- --------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1             9.26%     6.14%    5.11%
(2.48)%    4.81%

- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)   $217,789  $161,998  $83,637
$94,845   $88,061
- --------------------------------------------------------------------------------------------
Average net assets (in thousands)          $187,343  $118,521  $83,394
$95,285   $64,330
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                          4.68%     6.60%    6.71%
6.13%     5.68%
Expenses                                       1.85%     1.99%    2.07%
1.99%     1.97%3
- --------------------------------------------------------------------------------------------
Portfolio turnover rate                         151%      162%     255%
238%       67%



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

See accompanying Notes to Financial Statements.




                           28 | OPPENHEIMER BOND FUND



Class C     Year Ended December 31,            2002      2001     2000
1999      1998
- --------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period         $ 9.74    $ 9.80   $ 9.97
$10.87   $ 10.98
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                           .47       .65      .66
..63       .62
Net realized and unrealized gain (loss)         .40      (.05)    (.17)
(.90)     (.10)

- -----------------------------------------------
Total from investment operations                .87       .60      .49
(.27)      .52
- --------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income           (.47)     (.66)    (.66)
(.63)     (.63)

- -----------------------------------------------
Total dividends and/or distributions
to shareholders                                (.47)     (.66)    (.66)
(.63)     (.63)
- --------------------------------------------------------------------------------------------
Net asset value, end of period               $10.14     $9.74    $9.80    $
9.97    $10.87

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

- --------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 1             9.26%     6.14%    5.11%
(2.47)%    4.81%

- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)    $90,800   $57,049  $24,303
$24,143   $21,796
- --------------------------------------------------------------------------------------------
Average net assets (in thousands)           $75,531   $36,886  $22,605
$24,218   $15,198
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income                          4.61%     6.65%    6.71%
6.13%     5.66%
Expenses                                       1.83%     1.98%    2.07%
1.99%     1.96% 3
- --------------------------------------------------------------------------------------------
Portfolio turnover rate                         151%      162%     255%
238%       67%



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





                           29 | OPPENHEIMER BOND FUND

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



Class N        Year Ended December 31,                     2002     2001 1
- -----------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period                      $ 9.73    $10.02
- -----------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                        .51       .61
Net realized and unrealized gain (loss)                      .40      (.29)
                                                          -------------------
Total from investment operations                             .91       .32
- -----------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                        (.51)     (.61)
                                                          -------------------
Total dividends and/or distributions
to shareholders                                             (.51)     (.61)
- -----------------------------------------------------------------------------
Net asset value, end of period                            $10.13    $ 9.73
                                                          ===================

- -----------------------------------------------------------------------------
Total Return, at Net Asset Value 2                          9.73%     3.18%

- -----------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)                 $11,302    $2,176
- -----------------------------------------------------------------------------
Average net assets (in thousands)                        $ 7,071    $  768
- -----------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                       4.76%     7.87%
Expenses                                                    1.44%     1.37%
- -----------------------------------------------------------------------------
Portfolio turnover rate                                      151%      162%



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

See accompanying Notes to Financial Statements.


                           30 | OPPENHEIMER BOND FUND





Class Y     Year Ended December 31,            2002      2001     2000
1999    1998 1
- --------------------------------------------------------------------------------------------
Per Share Operating Data

Net asset value, beginning of period         $ 9.72    $ 9.78   $ 9.95
$10.86   $ 10.88
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                           .59       .76      .85
..76       .49
Net realized and unrealized gain (loss)         .40      (.05)    (.18)
(.91)     (.02)

- -----------------------------------------------
Total from investment operations                .99       .71      .67
(.15)      .47
- --------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income           (.59)     (.77)    (.84)
(.76)     (.49)
- --------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders                                (.59)     (.77)    (.84)
(.76)     (.49)
- --------------------------------------------------------------------------------------------
Net asset value, end of period               $10.12     $9.72    $9.78    $
9.95    $10.86

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

- --------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2            10.58%     7.30%    7.13%
(1.37)%    4.40%

- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)    $24,358    $4,067     $877
$186        $1
- --------------------------------------------------------------------------------------------
Average net assets (in thousands)           $10,243    $2,286     $340      $
31        $1
- --------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                          5.53%     7.85%    7.92%
7.94%     6.84%
Expenses                                       0.63%     0.94%    0.83%
0.83%     0.74% 4
Expenses, net of reduction to custodian expenses,
voluntary reimbursement of expenses and/or
voluntary waiver of transfer agent fees        0.63%     0.92%    0.83%
0.83%     0.74%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate                         151%      162%     255%
238%       67%


1. For the period from April 27, 1998 (inception of offering) to December 31,
1998.
2. Assumes an  investment on the business day before the first day of the fiscal
period  (or  inception  of  offering),  with  all  dividends  and  distributions
reinvested in additional shares on the reinvestment  date, and redemption at the
net asset value calculated on the last business day of the fiscal period.  Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.

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.CALL.OPP (225.5677)

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

By Mail:                      Write to:
                              OppenheimerFunds Services
                              P.O. Box 5270
                              Denver, Colorado 80217-5270

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

On the Internet:              You can send us a request by e-mail or read or
                              down-load documents on the OppenheimerFunds
                              website: www.oppenheimerfunds.com
                                       ------------------------

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


Information about the Fund including the Statement of Additional Information
can be reviewed and copied at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 1.202.942.8090.  Reports and other information
about the Fund are available on the EDGAR database on the SEC's Internet
website at www.sec.gov. Copies may be obtained after payment of a duplicating
           -----------
fee by electronic request at the SEC's e-mail address: publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Fund or to
make any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any
state or other jurisdiction where it is unlawful to make such an offer.

The Fund's shares are distributed by:                [logo]   OppenheimerFunds
Distributor, Inc.
The Fund's SEC File No. 811-3420
PR0285.001.0203
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

      12/31/93      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%
      12/31/02      10.06%


PRE>
Oppenheimer Bond Fund


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

Statement of Additional Information dated February 25, 2003

      This  Statement of  Additional  Information  is not a  Prospectus.  This
document  contains  additional  information  about  the Fund  and  supplements
information  in the  Prospectus  dated  February 25,  2003.  It should be read
together with the Prospectus.  You can obtain the Prospectus by writing to the
Fund's Transfer Agent,  OppenheimerFunds  Services,  at P.O. Box 5270, Denver,
Colorado  80217,  or by calling the  Transfer  Agent at the  toll-free  number
shown above, or by downloading it from the  OppenheimerFunds  Internet website
at www.oppenheimerfunds.com.


Contents
                                                                        Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks......
    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 Credit  Derivatives.  The Fund may enter into credit default swaps,
both  directly  ("unfunded  swaps")  and  indirectly  in  the  form  of a swap
embedded  within a structured  note ("funded  swaps"),  to protect against the
risk that a security  will default.  Unfunded and funded credit  default swaps
may be on a single  security,  or on a basket of  securities.  The Fund pays a
fee to enter  into the swap and  receives a fixed  payment  during the life of
the  swap.  The Fund may take a short  position  in the  credit  default  swap
(also known as "buying  credit  protection"),  or may take a long  position in
the credit default swap note (also known as "selling credit protection").

      The Fund  would  take a short  position  in a credit  default  swap (the
"unfunded  swap")  against a long portfolio  position to decrease  exposure to
specific  high yield  issuers.  If the short credit  default swap is against a
corporate  issue,  the Fund must own that  corporate  issue.  However,  if the
short credit default swap is against  sovereign debt, the Fund may own either:
(i) the  reference  obligation,  (ii)  any  sovereign  debt  of  that  foreign
country,  or (iii)  sovereign debt of any country that the Manager  determines
is closely correlated as an inexact bona fide hedge.

      If the Fund takes a short  position  in the  credit  default  swap,  and
there is a credit event (including bankruptcy,  failure to timely pay interest
or principal,  or a restructuring),  the Fund will deliver the defaulted bonds
and  the  swap  counterparty  will  pay  the  par  amount  of  the  bonds.  An
associated  risk is adverse  pricing  when  purchasing  bonds to  satisfy  the
delivery  obligation.  If the swap is on a basket of securities,  the notional
amount of the swap is  reduced by the par amount of the  defaulted  bond,  and
the fixed payments are then made on the reduced notional amount.

      Taking  a  long  position  in  the  credit   default  swap  note  (i.e.,
purchasing the "funded  swap") would increase the Fund's  exposure to specific
high yield  corporate  issuers.  The goal would be to  increase  liquidity  in
that  market  sector  via the swap  note and its  associated  increase  in the
number of trading  instruments,  the  number and type of market  participants,
and market capitalization.

      If the Fund takes a long position in the credit  default swap note,  and
there is a credit  event,  the Fund  will pay the par  amount of the bonds and
the swap  counterparty  will deliver the bonds.  If the swap is on a basket of
securities,  the  notional  amount of the swap is reduced by the par amount of
the  defaulted  bond,  and the fixed  payments  are then  made on the  reduced
notional amount.

      The Fund will invest no more than 25% of its total assets in  "unfunded"
   credit default
swaps.

      The Fund will limit its  investments  in "funded"  credit  default  swap
notes to no more than 10% of its total assets.

      Other  risks of credit  default  swaps  include  the cost of paying  for
credit  protection if there are no credit events,  pricing  transparency  when
assessing the cost of a credit default swap,  counterparty  risk, and the need
to  fund  the  delivery  obligation  (either  cash  or  the  defaulted  bonds,
depending on whether the Fund is long or short the swap, respectively).


         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 response 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.


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


      |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  (also  referred to as "mortgage
dollar   rolls").   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 may 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.

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

      The Board of Trustees has an Audit Committee and a Review Committee.
The Audit Committee is comprised solely of Independent Trustees. The members
of the Audit Committee are Edward L. Cameron (Chairman), William L.
Armstrong, George C. Bowen and Robert J. Malone.  The Audit Committee held 7
meetings during the fiscal year ended December 31, 2002.  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, nominees for election as Trustees, and selecting and
nominating Independent Trustees for election.  The Audit Committee may, but
need not, consider the advice and recommendation of the Manager and its
affiliates in selecting nominees. The full Board elects new trustees except
for those instances when a shareholder vote is required.


      To date, the Committee has been able to identify from its own resources
an ample number of qualified candidates.  Nonetheless, shareholders may
submit names of individuals, accompanied by complete and properly supported
resumes, for the Audit Committee's consideration by mailing such information
to the Committee in care of the 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 when it meets for the purpose
considering potential nominees.


      The members of the Review Committee are Jon S. Fossel (Chairman),
Robert G. Avis, Sam Freedman, Beverly Hamilton and F. William Marshall, Jr.
The Review Committee held 7 meetings during the fiscal year ended December
31, 2002.  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 Investment Company
Act and other applicable law.

Trustees and Officers of the Fund. Except Mr. Murphy, each of the Trustees is
an "Independent Trustee," as defined in the Investment Company Act. Mr.
Murphy is an "Interested Trustee," because he is affiliated with the Manager
by virtue of his positions as an officer and director of the Manager, and as
a shareholder of its parent company. Mr. Murphy was elected as a Trustee of
the 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 (defined below) for which he is a trustee or
director.

      The Fund's Trustees and officers and their positions held with the Fund
and length of service in such position(s) and their principal occupations and
business affiliations during the past five years are listed in the chart
below. The information for the Trustees also includes the dollar range of
shares of the Fund as well as the aggregate dollar range of shares
beneficially owned in any of the Oppenheimer funds overseen by the Trustees.
All of the Trustees are also trustees or directors of the following
Oppenheimer funds (except for Ms. Hamilton and Mr. Malone, who are not
Trustees of Oppenheimer Senior Floating Rate Fund and Mr. Murphy is not a
Trustee or Managing General Partner of any of the Centennial trusts)
(referred to as "Board II Funds"):


Oppenheimer Cash Reserves                Oppenheimer Select Managers
Oppenheimer Champion Income Fund         Oppenheimer Senior Floating Rate Fund
Oppenheimer Capital Income Fund          Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund              Oppenheimer Total Return Fund, Inc.
Oppenheimer International Bond Fund      Oppenheimer Variable Account Funds
Oppenheimer Integrity Funds              Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund Centennial America Fund, L. P.
Oppenheimer Main Street Funds, Inc.      Centennial California Tax Exempt Trust
Oppenheimer   Main  Street   Opportunity
Fund                                     Centennial Government Trust
Oppenheimer Main Street Small Cap Fund   Centennial Money Market Trust
Oppenheimer Municipal Fund               Centennial New York Tax Exempt Trust
Oppenheimer Real Asset Fund              Centennial Tax Exempt Trust


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

      Messrs. Murphy, Manioudakis, Masterson, Molleur, Vottiero, Wixted and
Zack, and Mses. Bechtolt, 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 January 30, 2003, 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.

      |X| Affiliated Transactions and Material Business Relationships.  In
2001, Mr. Swain surrendered for cancellation 60,000 options of Oppenheimer
Acquisition Company ("OAC") (the Manager's parent holding company) to
MassMutual for a cash payment of $2,700,600.


      Mr. Swain has reported that he sold a residential property to Mr.
Freedman on October 23, 2001 for $1.2 million.  An independent appraisal of
the property supported the sale price.


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

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

   Independent
     Trustees

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

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

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

                                                                As of December 31,
                                                                       2002

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

James C. Swain,    Formerly,    Chief   Executive   Officer Over      Over
Chairman and       (until  August 27, 2002) of the Board II
Trustee since 1990 Funds,  Vice Chairman  (until January 2,
Age: 69            2002) of the Manager and  President  and
                   a director  (until  1997) of  Centennial
                   Asset    Management    Corporation    (a $100,000  $100,000
                   wholly-owned     investment     advisory
                   subsidiary of the Manager).  Oversees 41
                   portfolios   in   the   OppenheimerFunds
                   complex.

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

William L.         Chairman   of  the   following   private $0        $50,001-
Armstrong,         mortgage   banking   companies:   Cherry
Trustee since 1999 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),
                   Ambassador    Media    Corporation   and
                   Broadway   Ventures   (since  1984);   a
                   director   of   the   following   public
                   companies:       Storage      Technology
                   Corporation      (computer     equipment
                   company)   (since  1991),   Helmerich  &
                   Payne,     Inc.     (oil     and     gas
                   drilling/production    company)   (since           $100,000
                   1992),      UNUMProvident     (insurance
                   company) (since 1991).  Mr. Armstrong is
                   also  a   Director/Trustee   of   Campus
                   Crusade   for  Christ  and  the  Bradley
                   Foundation.    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  41  portfolios  in the
                   OppenheimerFunds complex.

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

Robert G. Avis,    Formerly,   Director  and  President  of $0        $1 -$10,000
Trustee since 1993 A.G.  Edwards  Capital,   Inc.  (General
Age: 71            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
                   subsidiary)    (until    March    1999);
                   Chairman of A.G.  Edwards  Trust Company
                   and A.G.E. Asset Management  (investment
                   advisor)  (until  March  1999);   and  a
                   Director  (until  March  2000)  of  A.G.
                   Edwards  & Sons and A.G.  Edwards  Trust
                   Company.  Oversees 41  portfolios in the
                   OppenheimerFunds complex.

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

George C. Bowen,   Formerly  (until  April  1999):   Senior $50,001-$1Over00
Trustee since 2001 Vice  President  (from  September  1987)
Age: 66            and  Treasurer  (from March 1985) of the
                   Manager;   Vice  President   (from  June
                   1983) and  Treasurer  (since March 1985)
                   of  OppenheimerFunds  Distributor,  Inc.
                   (a subsidiary  of the  Manager);  Senior
                   Vice President  (since  February  1992),
                   Treasurer  (since  July 1991)  Assistant
                   Secretary   and   a   director    (since
                   December   1991)  of  Centennial   Asset
                   Management  Corporation;  Vice President
                   (since   October   1989)  and  Treasurer
                   (since April 1986) of HarbourView  Asset
                   Management  Corporation  (an  investment
                   advisory  subsidiary  of  the  Manager);
                   President,   Treasurer  and  a  director
                   (June  1989-January  1990) of Centennial
                   Capital   Corporation   (an   investment
                   advisory  subsidiary  of  the  Manager);
                   Vice  President  and  Treasurer   (since
                   August 1978) and Secretary  (since April
                   1981) of Shareholder  Services,  Inc. (a
                   transfer   agent   subsidiary   of   the
                   Manager); Vice President,  Treasurer and
                   Secretary   (since   November  1989)  of           $100,000
                   Shareholder Financial Services,  Inc. (a
                   transfer   agent   subsidiary   of   the
                   Manager);   Assistant  Treasurer  (since
                   March 1998) of  Oppenheimer  Acquisition
                   Corp.     (the     Manager's      parent
                   corporation);  Treasurer (since November
                   1989)   of    Oppenheimer    Partnership
                   Holdings,   Inc.   (a  holding   company
                   subsidiary   of   the   Manager);   Vice
                   President  and  Treasurer   (since  July
                   1996)   of   Oppenheimer    Real   Asset
                   Management,    Inc.    (an    investment
                   advisory  subsidiary  of  the  Manager);
                   Chief  Executive  Officer  and  director
                   (since   March   1996)  of   MultiSource
                   Services,    Inc.    (a    broker-dealer
                   subsidiary  of the  Manager);  Treasurer
                   (since       October       1997)      of
                   OppenheimerFunds  International Ltd. and
                   Oppenheimer    Millennium    Funds   plc
                   (offshore fund  management  subsidiaries
                   of the Manager).  Oversees 41 portfolios
                   in the OppenheimerFunds complex.

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

Edward L. Cameron, A  member  of The  Life  Guard  of Mount $0        $50,001-
Trustee since 2001 Vernon,  George Washington's home (since
Age: 64            June 2000).  Formerly  (March 2001 - May
                   2002)  Director of Genetic ID, Inc.  and
                   its   subsidiaries   (a  privately  held
                   biotech   company);   a   partner   with
                   PricewaterhouseCoopers     LLP     (from
                   1974-1999)  (an  accounting   firm)  and
                   Chairman   (from    1994-1998),    Price
                   Waterhouse    LLP   Global    Investment
                   Management   Industry   Services  Group.
                   Oversees    41    portfolios    in   the
                   OppenheimerFunds complex.                          $100,000

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

Jon S. Fossel,     Chairman  and  Director  (since 1998) of $0        Over
Trustee since 1997 Rocky   Mountain   Elk   Foundation   (a           $100,000
Age: 61            not-for-profit   foundation);    and   a
                   director  (since  October  1999) of P.R.
                   Pharmaceuticals    (a   privately   held
                   company)    and     UNUMProvident    (an
                   insurance   company)   (since   June  1,
                   2002).  Formerly Chairman and a director
                   (until  October  1996) and President and
                   Chief  Executive  Officer (until October
                   1995) of the Manager;  President,  Chief
                   Executive  Officer  and  a  director  of
                   Oppenheimer      Acquisition      Corp.,
                   Shareholders     Services    Inc.    and
                   Shareholder  Financials  Services,  Inc.
                   (until   October   1995).   Oversees  41
                   portfolios   in   the   OppenheimerFunds
                   complex.

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

Sam Freedman,       Director    of    Colorado    Uplift   (a $0         Over
Trustee since 1996  non-profit   charity)  (since   September            $100,000
Age: 62             1984).  A trustee  or  director  of other
                    Oppenheimer   funds.    Formerly   (until
                    October  1994) Mr.  Freedman held several
                    positions  in  subsidiary  or  affiliated
                    companies  of the  Manager.  Oversees  41
                    portfolios   in   the    OppenheimerFunds
                    complex.

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

Beverly          L. Trustee   (since   1996)  of   MassMutual $01        $10,001 -
Hamilton,           Institutional  Funds  and of  MML  Series            $50,0001
Trustee since 2002  Investment   Fund  (open-end   investment
Age: 56             companies);   Director  of  MML  Services
                    (since  April  1987)  and  America  Funds
                    Emerging   Markets   Growth  Fund  (since
                    October   1991)   (both  are   investment
                    companies),  The California  Endowment (a
                    philanthropy  organization)  (since April
                    2002),   and   Community    Hospital   of
                    Monterey   Peninsula,   (since   February
                    2002);  a trustee  (since  February 2000)
                    of  Monterey  International  Studies  (an
                    educational    organization),    and   an
                    advisor to Unilever  (Holland)'s  pension
                    fund and to Credit Suisse First  Boston's
                    Sprout   venture   capital   unit.   Mrs.
                    Hamilton   also  is  a   member   of  the
                    investment  committees of the Rockefeller
                    Foundation,  the  University  of Michigan
                    and    Hartford    Hospital.    Formerly,
                    President   (February   1991-April  2000)
                    ARCO   Investment   Management   Company.
                    Oversees    40    portfolios    in    the
                    OppenheimerFunds complex.

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

Robert J. Malone,   Director    (since    2001)    of   Jones Over       Over
Trustee since 2002  Knowledge,   Inc.   (a   privately   held $100,0001  $100,0001
Age: 58             company), U.S. Exploration,  Inc., (since
                    1997),   Colorado  UpLIFT  (a  non-profit
                    organization)  (since 1986) and a trustee
                    of  the   Gallagher   Family   Foundation
                    (non-profit  organization)  (since 2000).
                    Formerly,   Chairman  of  U.S.   Bank  (a
                    subsidiary  of U.S.  Bancorp and formerly
                    Colorado     National     Bank,)    (July
                    1996-April  1,  1999) and a  director  of
                    Commercial   Assets,    Inc.   (a   REIT)
                    (1993-2000).  Oversees 40  portfolios  in
                    the OppenheimerFunds complex.

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

F. William          Trustee   (since   1996)  of   MassMutual $0         Over
Marshall, Jr.,      Institutional  Funds  and of  MML  Series            $100,000
Trustee since 2001  Investment   Fund  (open-end   investment
Age: 60             companies);  Trustee and Chairman  (since
                    May  1987)  of the  investment  committee
                    for  the  Worcester  Polytech  Institute;
                    President  and Treasurer  (since  January
                    1999) of the SIS Fund (a private  not for
                    profit charitable  fund);  Trustee (since
                    1995)  of  the  Springfield  Library  and
                    Museum Association;  Trustee (since 1996)
                    of  the   Community   Music   School   of
                    Springfield;  Member  of  the  investment
                    committee of the Community  Foundation of
                    Western   Massachusetts   (since   1998).
                    Formerly,   Chairman  (January  1999-July
                    1999)  of  SIS  &  Family  Bank,   F.S.B.
                    (formerly  SIS  Bank);  President,  Chief
                    Executive   Officer  and  Director   (May
                    1993-December   1998)  of  SIS  Bankcorp,
                    Inc. and SIS Bank  (formerly  Springfield
                    Institution  for Savings)  and  Executive
                    Vice President  (January  1999-July 1999)
                    of  Peoples  Heritage   Financial  Group,
                    Inc.   Oversees  41   portfolios  in  the
                    OppenheimerFunds complex.

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


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


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

                           Interested Trustee and Officer

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

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

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

                                                                As of December 31,
                                                                       2002

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

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

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


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


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

                                Officers of the Fund

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

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

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

Angelo Manioudakis,     Senior Vice President of the Manager (since April 2002); an
Vice President and      officer of 12 portfolios in the OppenheimerFunds complex;
Portfolio Manager       formerly Executive Director and portfolio manager for
since 2002              Miller, Anderson & Sherrerd, a division of Morgan Stanley
Age:  36                Investment Management (August 1993-April 2002).

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

Brian W. Wixted,        Senior Vice  President and  Treasurer  (since March 1999) of
Treasurer,    Principal the Manager;  Treasurer  (since  March 1999) of  HarbourView
Financial           and Asset Management  Corporation,  Shareholder Services,  Inc.,
Accounting      Officer Oppenheimer Real Asset Management  Corporation,  Shareholder
since 1999              Financial Services,  Inc., Oppenheimer Partnership Holdings,
Age: 43                 Inc.,  OFI Private  Investments,  Inc.  (since  March 2000),
                        OppenheimerFunds    International   Ltd.   and   Oppenheimer
                        Millennium Funds plc (since May 2000) and OFI  Institutional
                        Asset Management,  Inc. (since November 2000); Treasurer and
                        Chief  Financial  Officer  (since  May 2000) of  Oppenheimer
                        Trust Company (a trust  company  subsidiary of the Manager);
                        Assistant   Treasurer  (since  March  1999)  of  Oppenheimer
                        Acquisition  Corp.  and   OppenheimerFunds   Legacy  Program
                        (since April 2000);  formerly  Principal and Chief Operating
                        Officer    (March    1995-March    1999),    Bankers   Trust
                        Company-Mutual  Fund  Services  Division.  An  officer of 85
                        portfolios in the OppenheimerFunds complex.

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

Connie Bechtolt,        Assistant Vice President of the Manager  (since September
Assistant Treasurer     1998); formerly Manager/Fund Accounting (September
since 2002              1994-September 1998) of the Manager. An officer of 85
Age: 39                 portfolios in the OppenheimerFunds complex.

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

Philip Vottiero,        Vice  President/Fund  Accounting of the Manager (since March
Assistant Treasurer     2002;  formerly Vice  President/Corporate  Accounting of the
since 2002              Manager (July  1999-March  2002) prior to which he was Chief
Age: 39                 Financial  Officer at Sovlink  Corporation  (April 1996-June
                        1999).  An officer of 85 portfolios in the  OppenheimerFunds
                        complex.

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

Robert G. Zack,                 Senior  Vice  President   (since  May  1985)  and
Vice President & Secretary      General  Counsel  (since  February  2002)  of the
since 2001                      Manager;  General  Counsel and a director  (since
Age: 54                         November 2001) of  OppenheimerFunds  Distributor,
                                Inc.;  Senior Vice President and General  Counsel
                                (since   November  2001)  of  HarbourView   Asset
                                Management  Corporation;  Vice  President  and  a
                                director  (since  November  2000) of  Oppenheimer
                                Partnership    Holdings,    Inc.;   Senior   Vice
                                President,  General Counsel and a director (since
                                November  2001) of  Shareholder  Services,  Inc.,
                                Shareholder   Financial   Services,   Inc.,   OFI
                                Private  Investments,   Inc.,  Oppenheimer  Trust
                                Company and OFI  Institutional  Asset Management,
                                Inc.;  General  Counsel (since  November 2001) of
                                Centennial   Asset  Management   Corporation;   a
                                director  (since  November  2001) of  Oppenheimer
                                Real Asset Management,  Inc.; Assistant Secretary
                                and  a   director   (since   November   2001)  of
                                OppenheimerFunds    International    Ltd.;   Vice
                                President     (since     November     2001)    of
                                OppenheimerFunds   Legacy   Program;    Secretary
                                (since November 2001) of Oppenheimer  Acquisition
                                Corp.;  formerly Acting General Counsel (November
                                2001-February   2002)   and   Associate   General
                                Counsel (May  1981-October  2001) of the Manager;
                                Assistant  Secretary  of  Shareholder   Services,
                                Inc.  (May   1985-November   2001),   Shareholder
                                Financial Services,  Inc. (November 1989-November
                                2001);  OppenheimerFunds  International  Ltd. And
                                Oppenheimer   Millennium   Funds   plc   (October
                                1997-November  2001). An officer of 85 portfolios
                                in the OppenheimerFunds complex.

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

Katherine P. Feld,      Vice  President and Senior  Counsel (since July 1999) of the
Assistant Secretary     Manager;    Vice    President    (since    June   1990)   of
since 2001              OppenheimerFunds    Distributor,    Inc.;   Director,   Vice
Age: 44                 President  and  Assistant  Secretary  (since  June  1999) of
                        Centennial  Asset  Management  Corporation;  Vice  President
                        (since 1997) of  Oppenheimer  Real Asset  Management,  Inc.;
                        formerly  Vice  President  and  Associate   Counsel  of  the
                        Manager (June  1990-July  1999). An officer of 85 portfolios
                        in the OppenheimerFunds complex.

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

Kathleen T. Ives,       Vice  President and Assistant  Counsel  (since June 1998) of
Assistant Secretary     the    Manager;    Vice    President    (since    1999)   of
since 2001              OppenheimerFunds  Distributor,   Inc.;  Vice  President  and
Age: 37                 Assistant  Secretary  (since 1999) of Shareholder  Services,
                        Inc.;   Assistant   Secretary   (since   December  2001)  of
                        OppenheimerFunds  Legacy Program and  Shareholder  Financial
                        Services,   Inc.;  formerly  Assistant  Vice  President  and
                        Assistant  Counsel of the Manager (August  1997-June  1998);
                        Assistant Counsel of the Manager (August  1994-August 1997).
                        An officer of 85 portfolios in the OppenheimerFunds complex.

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

Philip T. Masterson,    Vice President and Assistant Counsel of the Manager (since
Assistant Secretary     July 1998); formerly, an associate with Davis, Graham, &
since 2002              Stubbs LLP (January 1997-June 1998). An officer of 85
Age: 38                 portfolios in the OppenheimerFunds complex.

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

Denis R. Molleur,       Vice  President  and Senior  Counsel of the  Manager  (since
Assistant Secretary     July 1999);  formerly a Vice President and Associate Counsel
since 2001              of the Manager (September  1995-July 1999). An officer of 82
Age: 45                 portfolios in the OppenheimerFunds complex.

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


     |X|  Remuneration 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 from the Fund with respect to the Fund's fiscal year ended  December
31, 2002. Mr. Swain was affiliated with the Manager until 2002. The compensation
from all of the  Board II Funds  (including  the Fund)  represents  compensation
received  as a  director,  trustee,  managing  general  partner  or  member of a
committee of the Board during the calendar year 2002.

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

Trustee Name and Other Fund                Aggregate       Total Compensation
                                                           From Fund and Fund
                                            nsation from     Complex Paid to
Position(s) (as applicable)            Compe Fund1              Trustees*

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

James C. Swain                            $3,903                $177,996
Chairman of the Board of Trustees

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

William L. Armstrong                      $2,109                $92,076
Audit Committee Member

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

Robert G. Avis                            $2,021                $92,199
Review Committee Member

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

George C. Bowen                           $1,998                $91,124
Audit Committee Member

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

Edward L. Cameron                         $2,187                $99,743
Audit Committee Chairman

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

Jon S. Fossel                             $2,074                $94,590
Review Committee Chairman

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

Sam Freedman                              $2,021                $92,199
Review Committee Member

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

Beverly Hamilton2                         $1,2793              $113,6594
Review Committee Member

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

Robert J. Malone2                         $1,2795               $58,326
Audit Committee Member

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

F. William Marshall, Jr.                  $1,998               $138,1246
Review Committee Member

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

Effective  July 1, 2002,  C.  Howard  Kast and Robert M.  Kirchner  retired as
Trustees  from the Board II Funds.  For the  fiscal  year ended  December  31,
2002,  Mr.  Kast  received  $909  and Mr.  Kirchner  received  $833  aggregate
compensation  from the Fund.  For the calendar  year ended  December 31, 2002,
Mr.  Kast  received   $41,451  and  Mr.   Kirchner   received   $38,001  total
compensation  from all of the  Oppenheimer  funds  for  which  they  served as
Trustee.
1. Aggregate  Compensation From Fund includes fees and deferred  compensation,
if any, for a Trustee.
2. Mrs.  Hamilton  and Mr.  Malone  were  elected as  Trustees of the Board II
Funds effective June 1, 2002.  Compensation  for Mrs.  Hamilton and Mr. Malone
was paid by all the Board II Funds,  with the exception of Oppenheimer  Senior
Floating  Rate Fund for which they  currently do not serve as Trustees  (total
of 40 Oppenheimer funds).
3. Includes $636 deferred under Deferred Compensation Plan described below.
4. Includes $55,333  compensation (of which 100% was deferred under a deferred
compensation  plan)  paid to Mrs.  Hamilton  for  serving  as a trustee by two
open-end investment companies  (MassMutual  Institutional Funds and MML Series
Investment  Fund) the  investment  adviser  for which is the  indirect  parent
company of the Fund's  Manager.  The Manager also serves as the Sub-Advisor to
the   MassMutual   International   Equity   Fund,   a  series  of   MassMutual
Institutional Funds.
5. Includes $1,279 deferred under Deferred Compensation Plan described below.
6.  Includes  $47,000 of  compensation  paid to Mr.  Marshall for serving as a
trustee by two open-end investment companies  (MassMutual  Institutional Funds
and MML  Series  Investment  Fund)  the  investment  adviser  for which is the
indirect parent company of the Fund's Manager.  The Manager also serves as the
Sub-Advisor  to  the  MassMutual   International  Equity  Fund,  a  series  of
MassMutual Institutional Funds.
* For purposes of this section only, "Fund Complex" includes the Oppenheimer
funds, MassMutual Institutional Funds and MML Series Investment Fund in
accordance with the instructions for Form N-1A.  The Manager does not
consider MassMutual Institutional Funds and MML Series Investment Fund to be
part of the OppenheimerFunds "Fund Complex" as that term may be otherwise
interpreted.

      |X| Deferred  Compensation Plan for Trustees.  The Board of Trustees has
adopted a Deferred  Compensation  Plan for  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 January 30,  2003,  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:

     RPSS TR Road Scholar  Transport,  401(k) Plan,  Attn.:  Matthew Sullivan.
     P.O.  Box  599,  Clarks  Summit,   Pennsylvania  18411-0599  which  owned
     84,173,.113  Class N shares  (representing  6.81%  of the  Class N shares
     then outstanding);

     Oppenheimer  Capital  Preservation  Fund,  Attn.:  Brian Wixted,  6803 S.
     Tucson Way,  Englewood,  Colorado  80112-3924  which owned  2,562,941.741
     Class  Y  shares   (representing  96.48%  of  the  Class  Y  shares  then
     outstanding).

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

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

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

      |X| The Investment Advisory  Agreement.  The Manager provides investment
advisory  and  management  services to the Fund under an  investment  advisory
agreement  between the Manager and the Fund.  The Manager  selects  securities
for the Fund's  portfolio and handles its day-to-day  business.  The portfolio
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.

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

            2000                                 $2,308,545

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

            2001                                 $2,896,294

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

            2002                                 $3,389,414

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


      The investment  advisory agreement states that in the absence of willful
misfeasance,  bad faith or gross  negligence in the  performance of its duties
or reckless  disregard  of its  obligations  and duties  under the  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
   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 and
Counsel to the Independent Trustees who assisted the Board in its
deliberations.  The Fund's Counsel and Counsel to the Independent Trustees is
independent of the Manager within the meaning and intent of the SEC Rules
regarding the independence of counsel.

      After careful  deliberation,  the Board of concluded  that it was in the
best interest of  shareholders to continue the investment  advisory  agreement
for another year. In arriving at a decision,  the Board did not single out any
one factor or group of factors as being  more  important  than other  factors,
but  considered  all  factors  together.   The  Board  judged  the  terms  and
conditions of the  investment  advisory  agreement,  including the  investment
advisory fee, in light of all of the surrounding circumstances.

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 commissions on
fixed-price  offerings to obtain research,  in the same manner as is permitted
for agency transactions.

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


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

  Fiscal Year Ended 12/31:     Total Brokerage Commissions Paid by the Fund1

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

            2000                                 $145,105

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

            2001                                 $480,160

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

            2002                                 $275,4092

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

1. Amounts do not include spreads or concessions on principal  transactions on
a net trade basis.
2. During the fiscal year ended 12/31/02,  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       Aggregate         Class A
                              Front-End
Year      Front-End Sales   Sales Charges
Ended        Charges on      Retained by
 12/31:    Class A Shares    Distributor

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

  2000        $392,363        $114,454

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

  2001       $1,391,486       $501,793

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

  2002       $1,617,689       $560,9601

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

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


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

Fiscal     Concessions on   Concessions on   Concessions on   Concessions on
Year       Class A Shares   Class B Shares   Class C Shares   Class N Shares
Ended       Advanced by      Advanced by      Advanced by      Advanced by
 12/31:     Distributor1     Distributor1     Distributor1     Distributor1

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

  2000        $77,167          $621,176         $64,587            N/A

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

  2001        $156,331        $2,403,539        $286,901         $20,421

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

  2002        $160,349        $2,110,998        $306,867         $85,2932

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

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 B          Class C          Class N
Fiscal       Contingent       Contingent       Contingent       Contingent
Year       Deferred Sales   Deferred Sales   Deferred Sales   Deferred Sales
Ended     Charges Retained Charges Retained Charges Retained Charges Retained
  12/31    By Distributor   By Distributor   By Distributor   By Distributor

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

  2000         $5,711          $353,390          $8,040            N/A

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

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

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

  2002        $15,578          $903,519         $37,637          $29,346

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

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 Trustees2,   cast  in   person   at  a
meeting called for the purpose of voting on that plan.

      Under the plans,  the Manager and the  Distributor  may make payments to
affiliates and in their sole discretion,  from time to time, may use their own

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

                                    Fund)  to  make   payments   to   brokers,
dealers or other financial  institutions  for  distribution  and  administrative
services  they  perform.  The Manager may use its profits  from the advisory fee
it receives from the Fund.
- --------------------------------------------------------------------------------

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


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

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

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

      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,
except in the case of the special  arrangement  described below. The Distributor
makes  payments  to plan  recipients  quarterly  at an annual rate not to exceed
0.25% of the average annual net assets  consisting of Class A shares held in the
accounts of the recipients or their customers.

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

      For the fiscal year ended  December 31, 2002,  payments  under the Class A
Plan totaled  $776,718,  of which $753 was retained by the Distributor under the
arrangement  described above, and included  $127,114 paid to an affiliate of the
Distributor's parent company.  Any unreimbursed  expenses the Distributor incurs
with  respect  to Class A shares  in any  fiscal  year  cannot be  recovered  in
subsequent  years. The Distributor may not use payments received under the Class
A Plan  to pay  any  of  its  interest  expenses,  carrying  charges,  or  other
financial costs, or allocation of overhead.

      |X| Class B,  Class C and  Class N Service  and  Distribution  Plan  Fees.
Under 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 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 12/31/02

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

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

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

Class B Plan   $1,871,911     $1,555,3111       $5,560,765           2.55%

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

Class C Plan    $754,382       $349,8942        $1,229,865           1.35%

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

Class N Plan     $35,228       $33,8353          $192,084            1.70%

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

1. Includes $16,749 paid to an affiliate of the Distributor's parent company.
2. Includes $12,743 paid to an affiliate of the Distributor's parent company.
3. Includes $554 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  1.800.225.5677  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:


                        STANDARD 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 12/31/02

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

  Class of          Standardized Yield                 Dividend Yield
  Shares

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

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

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

  Class A         3.78%            3.59%           3.91%            3.72%

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

  Class B         3.01%             N/A            3.14%             N/A

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

  Class C         3.04%             N/A            3.17%             N/A

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

  Class N         3.36%             N/A            3.52%             N/A

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

  Class Y         4.16%             N/A            4.32%             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 one year  period.  Class N total  returns may also be  calculated  for the
periods prior to 3/1/01 (the inception date for Class N shares),  based on the
Fund's  Class A returns,  adjusted to reflect  the higher  Class N 12b-1 fees.
There is no sales charge 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:


|_|   Average Annual Total Return (After Taxes on Distributions). The
"average annual total return (after taxes on distributions)" of Class A
shares is an average annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of federal taxes
(calculated using the highest individual marginal federal income tax rates in
effect on any reinvestment date) on any distributions made by the Fund during
the specified period. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n" in the formula) to achieve an ending value
("ATVD" in the formula) of that investment, after taking into account the
effect of taxes on Fund distributions, but not on the redemption of Fund
shares, according to the following formula:


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


|_|   Average Annual Total Return (After Taxes on Distributions and
Redemptions).  The "average annual total return (after taxes on distributions
and redemptions)" of Class A shares is an average annual compounded rate of
return for each year in a specified number of years, adjusted to show the
effect of federal taxes (calculated using the highest individual marginal
federal income tax rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period and the effect of
capital gains taxes or capital loss tax benefits (each calculated using the
highest federal individual capital gains tax rate in effect on the redemption
date) resulting from the redemption of the shares at the end of the period.
It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVDR" in the
formula) of that investment, after taking into account the effect of taxes on
fund distributions and on the redemption of Fund shares, according to the
following formula:


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



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

  Average Annual Total Returns for Class A Shares (After Sales Charge)
                     For the Periods Ended 12/31/02

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

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

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

After Taxes on Distributions     2.58%          1.55%          3.07%1

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

After Taxes on                   2.86%          2.00%          3.24%1
Distributions and
Redemption of Fund Shares

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

   1. Inception date of Class A: 4/15/88

         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 12/31/02

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

Class of    Cumulative Total            Average Annual Total Returns
           Returns (10 Years
                   or
           Life-of-Class, if
Shares           Less)

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

                                  1-Year           5-Year           10-Year
                                                     (or              (or
                                               Life-of-Class,   Life-of-Class,
                                                  if Less)         if Less)

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

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

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

Class A     76.60%1   85.41%   4.84%  10.06%   4.28%    5.30%    5.85%   6.37%

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

Class B     67.12%2   67.12%   4.26%   9.26%   4.18%    4.49%    5.46%   5.46%

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

Class C     47.09%3   47.09%   8.26%   9.26%   4.50%    4.50%    5.30%   5.30%

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

Class N     13.21%4   13.21%   8.73%   9.73%   7.00%    7.00%     N/A     N/A

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

Class Y     30.88%5   30.88%  10.58%  10.58%   5.92%    5.92%     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.  From time to time the Fund may  publish the
rating of the  performance of its classes of shares by  Morningstar,  Inc., an
independent  mutual fund monitoring  service.  Morningstar  rates mutual funds
in   their   specialized    market   sector.   The   Fund   is   rated   among
intermediate-term bond funds.

      Morningstar  proprietary star ratings reflect  historical  risk-adjusted
total  investment  return.  For each fund with at least a three-year  history,
Morningstar   calculates  a   Morningstar   Rating(TM)based  on  a  Morningstar
Risk-Adjusted  Return  measure that accounts for variation in a fund's monthly
performance  (including  the effects of sales charges,  loads,  and redemption
fees),  placing more emphasis on downward variations and rewarding  consistent
performance.  The top 10% of  funds in each  category  receive  5  stars,  the
next  22.5%  receive 4 stars,  the next 35%  receive 3 stars,  the next  22.5%
receive 2 stars,  and the  bottom 10%  receive 1 star.  (Each  share  class is
counted  as a fraction  of one fund  within  this scale and rated  separately,
which  may cause  slight  variations  in the  distribution  percentages.)  The
Overall  Morningstar  Rating for a fund is derived from a weighted  average of
the  performance  figures  associated with its three-,  five-and  ten-year (if
applicable) Morningstar Rating metrics.

      |X|   Performance   Rankings  and  Comparisons  by  Other  Entities  and
Publications.  From time to time the Fund may  include  in its  advertisements
and  sales  literature  performance   information  about  the  Fund  cited  in
newspapers and other  periodicals  such as The New York Times, The Wall Street
Journal,  Barron's,  or similar  publications.  That  information  may include
performance  quotations from other sources,  including Lipper and Morningstar.
The   performance  of  the  Fund's  classes  of  shares  may  be  compared  in
publications   to  the   performance   of  various  market  indices  or  other
investments,  and averages,  performance rankings or other benchmarks prepared
by recognized mutual fund statistical services.

      Investors  may also wish to compare  the  returns  on the  Fund's  share
classes to the return on  fixed-income  investments  available  from banks and
thrift  institutions.   Those  include   certificates  of  deposit,   ordinary
interest-paying  checking  and savings  accounts,  and other forms of fixed or
variable time deposits,  and various other instruments such as Treasury bills.
However,  the Fund's  returns and share price are not guaranteed or insured by
the FDIC or any other agency and will fluctuate  daily,  while bank depository
obligations  may be insured by the FDIC and may provide fixed rates of return.
Repayment  of  principal  and payment of interest  on Treasury  securities  is
backed by the full faith and credit of the U.S. government.

      From time to time,  the Fund may  publish  rankings  or  ratings  of the
Manager or Transfer Agent,  and of the investor  services  provided by them to
shareholders of the Oppenheimer funds, other than performance  rankings of the
Oppenheimer  funds  themselves.  Those ratings or rankings of shareholder  and
investor  services by third parties may include  comparisons of their services
to those  provided  by other  mutual fund  families  selected by the rating or
ranking  services.  They  may be based  upon the  opinions  of the  rating  or
ranking service itself, using its research or judgment,  or based upon surveys
of investors, brokers, shareholders or others.

      From time to time, the Fund may include in its  advertisements and sales
literature the total return  performance of a hypothetical  investment account
that includes  shares of the fund and other  Oppenheimer  funds.  The combined
account  may be  part of an  illustration  of an  asset  allocation  model  or
similar  presentation.  The  account  performance  may  combine  total  return
performance of the fund and the total return  performance of other Oppenheimer
funds  included in the account.  Additionally,  from time to time,  the Fund's
advertisements   and  sales  literature  may  include,   for  illustrative  or
comparative  purposes,  statistical data or other information about general or
specific market and economic conditions. That may include, for example,

o     information  about the performance of certain  securities or commodities
         markets or segments of those markets,
o     information  about  the  performance  of  the  economies  of  particular
         countries or regions,
o     the   earnings  of   companies   included  in  segments  of   particular
         industries, sectors, securities markets, countries or regions,
o     the  availability  of  different  types of  securities  or  offerings of
         securities,
o     information  relating to the gross national or gross domestic product of
         the United States or other countries or regions,
o     comparisons   of  various  market  sectors  or  indices  to  demonstrate
         performance, risk, or other characteristics of the Fund.


ABOUT your account

How to Buy Shares

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

AccountLink.  When shares are purchased through AccountLink, each purchase
must be at least $50 and shareholders must invest at least $500 before an
                     ---
Asset Builder Plan (described below) can be established on a new account.
Accounts established prior to November 1, 2002 will remain at $25 for
additional purchases. Shares will be purchased on the regular business day
the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares.  Dividends will begin to accrue on shares
purchased with the proceeds of ACH transfers on the business day the Fund
receives Federal Funds for the purchase through the ACH system before the
close of The New York Stock Exchange ("the Exchange"). The Exchange normally
closes at 4:00 P.M., but may close earlier on certain days.  If Federal Funds
are received on a business day after the close of the Exchange, the shares
will be purchased and dividends will begin to accrue on the next regular
business day.  The proceeds of ACH transfers are normally received by the
Fund three days after the transfers are initiated. If the proceeds of the ACH
transfer are not received on a timely basis, the Distributor reserves the
right to cancel the purchase order. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays in ACH
transmissions.

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

      |X|   Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and your spouse
can add together:
o     Class A and Class B shares you purchase for your individual accounts
   (including IRAs and 403(b) plans), or for your joint accounts, or for
   trust or custodial accounts on behalf of your children who are minors, and
o     Current purchases of Class A and Class B shares of the Fund and other
   Oppenheimer funds to reduce the sales charge rate that applies to current
   purchases of Class A shares, and
o     Class A and Class B shares of Oppenheimer funds you previously
   purchased subject to an initial or contingent deferred sales charge to
   reduce the sales charge rate for current purchases of Class A shares,
   provided that you still hold your investment in one of the Oppenheimer
   funds.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Asset Builder Plans. As explained in the Prospectus, you must initially
establish your account with $500. Subsequently, you can establish an Asset
Builder Plan to automatically purchase additional shares directly from a bank
account for as little as $50. For those accounts established prior to
November 1, 2002 and which have previously established Asset Builder Plans,
additional purchases will remain at $25. Shares purchased by Asset Builder
Plan payments from bank accounts are subject to the redemption restrictions
for recent purchases described in the Prospectus.  Asset Builder Plans are
available only if your bank is an ACH member.  Asset Builder Plans may not be
used to buy shares for OppenheimerFunds employer-sponsored qualified
retirement accounts. Asset Builder Plans also enable shareholders of
Oppenheimer Cash Reserves to use their fund account to make monthly automatic
purchases of shares of up to four other Oppenheimer funds.

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

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

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

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

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

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

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

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

      |X|   Class B Conversion. Under current interpretations of applicable
federal income tax law by the Internal Revenue Service, the conversion of
Class B shares to Class A shares 72 months after purchase is not treated as a
taxable event for the shareholder. If those laws or the IRS interpretation of
those laws should change, the automatic conversion feature may be suspended.
In that event, no further conversions of Class B shares would occur while
that suspension remained in effect.  Although Class B shares could then be
exchanged for Class A shares on the basis of relative net asset value of the
two classes, without the imposition of a sales charge or fee, such exchange
could constitute a taxable event for the shareholder, and absent such
exchange, Class B shares might continue to be subject to the asset-based
sales charge for longer than six years.

      |X|   Availability of Class N Shares.  In addition to the description
of the types of retirement plans which may purchase Class N shares contained
in the prospectus, Class N shares also are offered to the following:
o     to all rollover IRAs (including SEP IRAs and SIMPLE IRAs),
o     to all rollover contributions made to Individual 401(k) plans,
            Profit-Sharing Plans and Money Purchase Pension Plans,
o     to all direct rollovers from OppenheimerFunds-sponsored Pinnacle and
            Ascender retirement plans,
o     to all trustee-to-trustee IRA transfers,
o     to all 90-24 type 403(b) transfers,
o     to Group Retirement Plans (as defined in Appendix C to this Statement
            of Additional Information) which have entered into a special
            agreement with the Distributor for that purpose,
o     to Retirement Plans qualified under Sections 401(a) or 401(k) of the
            Internal Revenue Code, the recordkeeper or the plan sponsor for
            which has entered into a special agreement with the Distributor,
o     to Retirement Plans of a plan sponsor where the aggregate assets of all
            such plans invested in the Oppenheimer funds is $500,000 or more,
o     to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
            purchase with the redemption proceeds of Class A shares of one or
            more Oppenheimer funds, and
o     to certain customers of broker-dealers and financial advisors that are
            identified in a special agreement between the broker-dealer or
            financial advisor and the Distributor for that purpose.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How to Sell Shares

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

Checkwriting.  When a check is presented to United Missouri Bank (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 and Class N contingent deferred sales charge will be followed in
determining the order in which shares are transferred.

Distributions From Retirement Plans.  Requests for distributions from
OppenheimerFunds-sponsored IRAs, SEP-IRAs, SIMPLE IRAs, 403(b)(7) custodial
plans, 401(k) plans or pension or profit-sharing plans should be addressed to
"Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its
address listed in "How To Sell Shares" in the Prospectus or on the back cover
of this Statement of Additional Information.  The request must:
(1)   state the reason for the distribution;
(2)   state the owner's awareness of tax penalties if the distribution is
         premature; and
(3)   conform to the requirements of the plan and the Fund's other redemption
         requirements.

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

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

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

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

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

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

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

      By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions that apply to such plans, as stated
below.  These provisions may be amended from time to time by the Fund and/or
the Distributor.  When adopted, any amendments will automatically apply to
existing Plans.

      |X|   Automatic Exchange Plans.  Shareholders can authorize the
Transfer Agent to exchange a pre-determined amount of shares of the Fund for
shares (of the same class) of other Oppenheimer funds automatically on a
monthly, quarterly, semi-annual or annual basis under an Automatic Exchange
Plan. The minimum amount that may be exchanged to each other fund account is
$50. Instructions should be provided on the OppenheimerFunds Application or
signature-guaranteed instructions. Exchanges made under these plans are
subject to the restrictions that apply to exchanges as set forth in "How to
Exchange Shares" in the Prospectus and below in this Statement of Additional
Information.

      |X|         Automatic  Withdrawal  Plans.  Fund  shares will be redeemed
as necessary to meet  withdrawal  payments.  Shares  acquired  without a sales
charge will be redeemed first.  Shares acquired with reinvested  dividends and
capital  gains  distributions  will  be  redeemed  next,  followed  by  shares
acquired  with a sales  charge,  to the extent  necessary  to make  withdrawal
payments.  Depending upon the amount withdrawn,  the investor's  principal may
be depleted.  Payments  made under these plans should not be  considered  as a
yield or income on your investment.

      The Transfer Agent will administer the investor's Automatic Withdrawal
Plan as agent for the shareholder(s) (the "Planholder") who executed the Plan
authorization and application submitted to the Transfer Agent.  Neither the
Fund nor the Transfer Agent shall incur any liability to the Planholder for
any action taken or not taken by the Transfer Agent in good faith to
administer the Plan. Share certificates will not be issued for shares of the
Fund purchased for and held under the Plan, but the Transfer Agent will
credit all such shares to the account of the Planholder on the records of the
Fund. Any share certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that the shares
represented by the certificate may be held under the Plan.

      For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done at
net asset value without a sales charge. Dividends on shares held in the
account may be paid in cash or reinvested.

      Shares will be redeemed to make withdrawal payments at the net asset
value per share determined on the redemption date.  Checks or AccountLink
payments representing the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the
payment, according to the choice specified in writing by the Planholder.
Receipt of payment on the date selected cannot be guaranteed.

      The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent.  The
Planholder should allow at least two weeks' time after mailing such
notification for the requested change to be put in effect.  The Planholder
may, at any time, instruct the Transfer Agent by written notice to redeem
all, or any part of, the shares held under the Plan. That notice must be in
proper form in accordance with the requirements of the then-current
Prospectus of the Fund. In that case, the Transfer Agent will redeem the
number of shares requested at the net asset value per share in effect and
will mail a check for the proceeds to the Planholder.

      The Planholder may terminate a Plan at any time by writing to the
Transfer Agent.  The Fund may also give directions to the Transfer Agent to
terminate a Plan. The Transfer Agent will also terminate a Plan upon its
receipt of evidence satisfactory to it that the Planholder has died or is
legally incapacitated. Upon termination of a Plan by the Transfer Agent or
the Fund, shares that have not been redeemed will be held in uncertificated
form in the name of the Planholder. The account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder, his or her executor or
guardian, or another authorized person.

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

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

How to Exchange Shares

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

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

      The following funds only offer Class A shares:

      Centennial America Fund, L.P.         Centennial New York Tax Exempt
                                            Trust
      Centennial California Tax Exempt      Centennial Tax Exempt Trust
      Trust
                      ----------------------------------------------------------

Centennial Government Trust             Oppenheimer Money Market Fund, Inc.

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

      Centennial Money Market Trust


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

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

      The following funds do not offer Class Y shares:
      Oppenheimer AMT-Free New York           Oppenheimer International Small
      Municipals                              Company Fund
      Oppenheimer California Municipal Fund   Oppenheimer Limited Term Municipal
                                              Fund
      Oppenheimer Capital Income Fund         Oppenheimer Multiple Strategies Fund
      Oppenheimer Cash Reserves               Oppenheimer New Jersey Municipal Fund
      Oppenheimer Champion Income Fund        Oppenheimer Pennsylvania Municipal
                                              Fund
      Oppenheimer Convertible Securities Fund Oppenheimer Quest Capital Value
                                              Fund, Inc.
      Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Global Value Fund,
                                              Inc.
      Oppenheimer Developing Markets Fund     Oppenheimer Rochester National
                                              Municipals
      Oppenheimer Gold & Special Minerals     Oppenheimer Senior Floating Rate Fund
      Fund
      Oppenheimer International Bond Fund     Oppenheimer Small Cap Value Fund
      Oppenheimer International Growth Fund   Limited Term New York Municipal Fund

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

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

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

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

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

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

o     When Class A shares of Oppenheimer Cash Reserves and Oppenheimer Money
Market Fund, Inc. acquired by exchange of Class A shares of any Oppenheimer
fund purchased subject to a Class A contingent deferred sales charge are
redeemed within the Class A holding period of the fund from which the shares
were exchanged, the Class A contingent deferred sales charge of the fund from
which the shares were exchanged is imposed on the redeemed shares.

o     With respect to Class B shares, the Class B contingent deferred sales
charge is imposed on Class B shares acquired by exchange if they are redeemed
within six years of the initial purchase of the exchanged Class B shares.

o     With respect to Class C shares, the Class C contingent deferred sales
charge is imposed on Class C shares acquired by exchange if they are redeemed
within 12 months of the initial purchase of the exchanged Class C shares.

o     With respect to Class N shares, a 1% contingent deferred sales charge
will be imposed if the retirement plan (not including IRAs and 403(b) plans)
is terminated or Class N shares of all Oppenheimer funds are terminated as an
investment option of the plan and Class N shares are redeemed within 18
months after the plan's first purchase of Class N shares of any Oppenheimer
fund or with respect to an individual retirement plan or 403(b) plan, Class N
shares are redeemed within 18 months of the plan's first purchase of Class N
shares of any Oppenheimer fund.

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

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

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

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

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

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

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

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

Dividends, Capital Gains and Taxes

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

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

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

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

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

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

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

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

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

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

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

      Special provisions of the Internal Revenue Code govern the eligibility
of the Fund's dividends for the dividends-received deduction for corporate
shareholders.  Long-term capital gains distributions are not eligible for the
deduction.  The amount of dividends paid by the Fund that may qualify for the
deduction is limited to the aggregate amount of qualifying dividends that the
Fund derives from portfolio investments that the Fund has held for a minimum
period, usually 46 days. A corporate shareholder will not be eligible for the
deduction on dividends paid on Fund shares held for 45 days or less.  To the
extent the Fund's dividends are derived from gross income from option
premiums, interest income or short-term gains from the sale of securities or
dividends from foreign corporations, those dividends will not qualify for the
deduction.

      The Fund may either retain or distribute to shareholders its net
capital gain for each taxable year.  The Fund currently intends to distribute
any such amounts.  If net long term capital gains are distributed and
designated as a capital gain distribution, it will be taxable to shareholders
as a long-term capital gain and will be properly identified in reports sent
to shareholders in January of each year.  Such treatment will apply no matter
how long the shareholder has held his or her shares or whether that gain was
recognized by the Fund before the shareholder acquired his or her shares.

      If the Fund elects to retain its net capital gain, the Fund will be
subject to tax on it at the 35% corporate tax rate. If the Fund elects to
retain its net capital gain, the Fund will provide to shareholders of record
on the last day of its taxable year information regarding their pro rata
share of the gain and tax paid. As a result, each shareholder will be
required to report his or her pro rata share of such gain on their tax return
as long-term capital gain, will receive a refundable tax credit for his/her
pro rata share of tax paid by the Fund on the gain, and will increase the tax
basis for his/her shares by an amount equal to the deemed distribution less
the tax credit.

      Investment income that may be received by the Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source.
The United States has entered into tax treaties with many foreign countries
which entitle the Fund to a reduced rate of, or exemption from, taxes on such
income.

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

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

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

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

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

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

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

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

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

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

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

Additional Information About the Fund

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

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

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

Independent Auditors.  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 for
certain other funds advised by the Manager and its affiliates.

INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
Oppenheimer Bond Fund:

     We have audited the  accompanying  statement of assets and  liabilities  of
Oppenheimer  Bond  Fund,  which  is a series  of  Oppenheimer  Integrity  Funds,
including the statement of investments, as of December 31, 2002, and the related
statement of operations  for the year then ended,  the  statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for 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, 2002, by  correspondence  with the custodian
and brokers;  where replies were not received from brokers,  we performed  other
auditing procedures.  An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement presentation.

     We believe that our audits provide a reasonable  basis for our opinion.  In
our opinion, the financial statements and financial highlights referred to above
present fairly, in all material respects,  the financial position of Oppenheimer
Bond Fund as of December 31, 2002,  the results of its  operations  for the year
then  ended,  the  changes  in its net  assets  for each of the two years in the
period then ended, and the financial  highlights for 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, 2003



- --------------------------------------------------------------------------------
                                                            Financial
Statements
                                                                     Pages
13-41


                           12 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS  December 31, 2002
- --------------------------------------------------------------------------------

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
Asset-Backed Securities--12.3%
AQ Finance NIM Trust, Home Equity Collateralized Mtg. Obligations:
Series 2001-3A, Cl. Note, 8.835%, 2/25/32 1      $   1,486,819      $
1,497,666
Series 2002-1, Cl. Note, 9.50%, 6/25/32 2            1,612,342
1,607,303
- --------------------------------------------------------------------------------
Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed
Nts., Series 2002-4, Cl. A2B, 1.74%, 1/17/05 2       6,400,000
6,409,516
- --------------------------------------------------------------------------------
CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized Mtg.
Obligations, Series 2002-1, Cl. AF1,
2.474%, 9/25/32 2                                    3,050,620
3,059,152
- --------------------------------------------------------------------------------
Daimler Chrysler Auto Trust, Automobile Loan Pass-Through Certificates,
Series 2002-B, Cl. A2, 2.20%, 4/6/05                 3,430,000
3,444,280
- --------------------------------------------------------------------------------
Ford Credit Auto Owner Trust, Automobile Loan Certificates,
Series 2002-D, Cl. A2A, 2.10%, 3/15/05               6,280,000
6,304,977
- --------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.,
Series 2002-2, Cl. A1, 1.91%, 4/16/07                3,204,268
3,213,567
- --------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Mtg. Obligations,
Series 2002-3, Cl. A2, 2.26%, 12/18/04               4,340,000
4,361,256
- --------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Receivables
Obligations, Series 2002-4, Cl. A2, 1.66%, 6/15/05   3,590,000
3,593,023
- --------------------------------------------------------------------------------
Household Automotive Trust, Automobile Loan Certificates,
Series 2002-2, Cl. A2, 2.15%, 12/19/05               3,140,000
3,155,077
- --------------------------------------------------------------------------------
Lease Investment Flight Trust, Collateralized Plane Obligations,
Series 1A, Cl. D2, 8%, 7/15/31 2                     3,098,479
681,665
- --------------------------------------------------------------------------------
Liberte American Loan Master Trust, Collateralized Loan Obligations,
Series 1999-1A, Cl. D2, 6.424%, 11/25/06 2,3         6,000,000
4,151,250
- --------------------------------------------------------------------------------
Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31 2             2,732,668
2,879,685
- --------------------------------------------------------------------------------
Long Beach Asset Holdings Corp. NIM Trust, Home Equity Asset-Backed
Pass-Through Certificates, Series 2001-3, 7.87%,
9/25/31 2                                              762,063
762,778
- --------------------------------------------------------------------------------
M&I Auto Loan Trust, Automobile Loan Certificates, Series 2002-1,
Cl. A2, 1.95%, 7/20/05                               2,300,000
2,307,309
- --------------------------------------------------------------------------------
MMCA Auto Lease Trust, Auto Retail Installment Contracts,
Series 2002-A, Cl. A2, 1.59%, 5/16/05 2,3            3,280,000
3,283,217
- --------------------------------------------------------------------------------
MSF Funding LLC, Collateralized Mtg. Obligations, Series 2000-1,
Cl. C, 8.77%, 7/25/07 2,3                              579,492
559,615
- --------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations:
Series 1999-I, Cl. ECFD, 8.75%, 12/25/28 2           2,224,931
978,970
Series 2002-I, Cl. ECFD, 9.25%, 3/25/32 1            2,411,722
2,381,575
- --------------------------------------------------------------------------------
Nissan Auto Lease Trust, Auto Lease Obligations, Series 2002-A,
Cl. A2, 1.86%, 11/15/04 2                            6,750,000
6,750,000
- --------------------------------------------------------------------------------
Nissan Auto Receivables Owner Trust, Auto Receivable Nts.,
Series 2002-C, Cl. A2, 1.94%, 9/15/04 2              4,550,000
4,561,794
- --------------------------------------------------------------------------------
ONYX Acceptance Auto Trust, Automobile Asset-Backed Certificates,
Series 2002, Cl. A, 13.60%, 2/20/32                  1,135,218
1,123,866
- --------------------------------------------------------------------------------
Option One Mortgage Securities Corp., Home Equity
Collateralized Mtg. Obligations:
Series 1999-1, Cl. CTFS, 10.06%, 3/26/29 2             155,253
149,309
Series 1999-3, Cl. CTFS, 10.80%, 12/15/29              175,948
172,539



                           13 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS  Continued
- --------------------------------------------------------------------------------

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
Asset-Backed Securities Continued
Salomon Smith Barney Auto Loan Trust, Asset-Backed
Auto Loan Obligations, Series 2002-1, Cl. A2,
1.83%, 9/15/05 2                                   $ 5,060,000       $
5,041,025
- --------------------------------------------------------------------------------
Tobacco Settlement Authority, Asset-Backed Securities,
Series 2001-A, 6.79%, 6/1/10                         1,400,000
1,486,786
- --------------------------------------------------------------------------------
USAA Auto Owner Trust, Automobile Loan Asset-Backed
Certificates, Series 2002-1, Cl. A2, 1.95%, 3/15/05  1,410,000
1,414,183
- --------------------------------------------------------------------------------
Volkswagen Auto Lease Trust, Automobile Lease Asset-Backed
Securities, Series 2002-A, Cl. A2, 1.77%, 2/20/05    6,560,000
6,565,904
- --------------------------------------------------------------------------------
Whole Auto Loan Trust, Auto Loans Receivables, Series 2002-1,
Cl. A2, 1.88%, 6/15/05                               4,310,000
4,316,061

- -----------
Total Asset-Backed Securities (Cost $89,812,235)
86,213,348

- --------------------------------------------------------------------------------
Corporate Loans--0.1%
Ferrell Cos., Inc., Sr. Sec. Credit Facilities Term Loan,
Tranche B, 5.47%, 6/17/06 2,3 (Cost $704,901)          712,021
696,891

- --------------------------------------------------------------------------------
Mortgage-Backed Obligations--24.6%
- --------------------------------------------------------------------------------
Government Agency--16.8%
- --------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored--16.5%
Asset Securitization Corp., Interest-Only Stripped Mtg.-Backed Security
Collateralized Mtg. Obligations, Series 1997-D4, Cl. PS1,
1.097%, 4/14/29 4                                   50,303,179
2,562,318
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
12.50%, 4/1/14                                           5,520
6,578
13.50%, 11/1/10                                         12,624
15,021
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Mtg. Pass-Through
Participation Certificates:
8%, 4/1/16                                           4,181,562
4,527,657
9%, 3/1/17-5/1/25                                    1,008,483
1,122,796
Series 151, Cl. F, 9%, 5/15/21                         193,144
200,201
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Participation
Certificates, Series 1843, Cl. VB, 7%, 4/15/03          12,795
12,861
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 1711, Cl. EA, 7%, 3/15/24                       200,000
202,757
Series 2054, Cl. TE, 6.25%, 4/15/24                    850,000
865,972
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Home Equity Loan Structured
Pass-Through Certificates, Series HOO2, Cl. A2,
1.861%, 12/15/06                                     5,590,000
5,564,234
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only
Stripped Mtg.-Backed Security:
Series 206, Cl. IO, 7.50%, 12/15/29 4                4,570,850
602,067
Series 303, Cl. IO, 7.50%, 11/1/29 4                 1,736,971
235,305
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.:
6.50%, 1/25/33 5                                    28,850,000
30,040,062
7%, 1/1/09-11/1/25                                     208,025
221,334
7%, 1/25/33 5                                       65,963,000
69,384,831
7.50%, 2/1/08-3/1/08                                    89,157
94,418



                           14 | OPPENHEIMER BOND FUND

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored Continued
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                $   209,462       $
226,543
- --------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Mtg.
Pass-Through Certificates, 8%, 8/1/17                   62,816
67,409

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

115,952,364

- --------------------------------------------------------------------------------
GNMA/Guaranteed--0.3%
Government National Mortgage Assn.:
5.75%, 7/20/25-7/20/27                                 123,217
126,952
7%, 7/15/09                                             65,623
70,550
8%, 6/15/05-10/15/06                                   227,335
240,024
8.50%, 8/15/17-12/15/17                              1,167,982
1,292,221
9%, 2/15/09-6/15/09                                     88,328
96,506
10%, 11/15/09                                           31,727
35,479
10.50%, 12/15/17-5/15/21                                94,230
109,856
11%, 10/20/19                                          164,263
190,712
12%, 5/15/14                                               800
948

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

2,163,248

- --------------------------------------------------------------------------------
Private--7.8%
- --------------------------------------------------------------------------------
Commercial--4.5%
Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates:
Series 1996-D2, Cl. A3, 7.499%, 2/14/29 3                  127
133
Series 1996-MD6, Cl. A3, 7.089%, 11/13/29 3            800,000
891,809
- --------------------------------------------------------------------------------
Asset Securitization Corp., Interest-Only Stripped Mtg.-Backed
Security Commercial Mtg. Pass-Through Certificates,
Series 1997-D5, Cl. PS1, 8.338%, 2/14/41 4           5,741,276
416,355
- --------------------------------------------------------------------------------
Capital Lease Funding Securitization LP, Interest-Only
Corporate-Backed Pass-Through Certificates,
Series 1997-CTL1, 9.305%, 6/22/24 2,4               11,720,674
389,163
- --------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Commercial Mtg. Obligations,
Series 1996-C1, Cl. D, 7.50%, 12/25/20 2,3             594,241
597,212
- --------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 1996-C1, Cl. X-2,
99.999%, 12/25/20 2,4                                6,447,120
2,015
- --------------------------------------------------------------------------------
DLJ Commercial Mortgage Corp., Commercial Mtg. Pass-Through
Certificates, Series 1999-STF1, Cl. B6, 5.01%,
7/5/08 2,9                                          21,426,669
21,427
- --------------------------------------------------------------------------------
DLJ Mortgage Acceptance Corp., Commercial Mtg. Obligations,
Series 1996-CF1, Cl. A3, 7.848%, 3/13/28 3           2,000,000
2,266,644
- --------------------------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates:
Series 1994-C1, Cl.2D, 8.70%, 9/25/25 2                254,649
247,647
Series 1994-C1, Cl.2E, 8.70%, 9/25/25 2              1,000,000
971,719
- --------------------------------------------------------------------------------
First Union-Chase Commercial Mortgage Trust,
Interest-Only Commercial Mtg. Pass-Through Certificates,
Series 1999-C2, Cl. IO, 10.117%, 6/15/31 4          88,332,038
3,153,454
- --------------------------------------------------------------------------------
First Union-Lehman Brothers Commercial Mortgage Trust,
Interest-Only Stripped Mtg.-Backed Security,
Series 1998-C2, 10.195%, 5/18/28 4                   9,609,006
279,449



                           15 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS  Continued
- --------------------------------------------------------------------------------

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
Commercial Continued
GMAC Commercial Mortgage Securities, Inc., Interest-Only Stripped
Mtg.-Backed Security Pass-Through Certificates,
Series 1997-C1, Cl. X, 11.692%, 7/15/27 4         $  7,312,584       $
430,757
- --------------------------------------------------------------------------------
J.P. Morgan Commercial Mortgage Finance Corp., Commercial
Mtg. Obligations, Series 2000-C9, Cl. A2, 7.77%,
10/15/32                                             5,000,000
5,951,330
- --------------------------------------------------------------------------------
Lehman Brothers Commercial Conduit Mortgage Trust, Interest-Only
Stripped Mtg.-Backed Security, Series 1998-C1, Cl. IO,
11.541%, 2/18/28 4                                  16,352,897
693,720
- --------------------------------------------------------------------------------
Lehman Structured Securities Corp., Collateralized Mtg. Obligations,
Series 2002-GE1, Cl. A, 6%, 7/26/24 2                2,675,636
2,607,909
- --------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1996-WF1, Cl. A2, 7.339%,
11/15/28 1,3                                         3,863,237
3,974,818
- --------------------------------------------------------------------------------
NationsBank Trust, Lease Pass-Through Certificates,
Series 1997A-1, 7.442%, 1/10/11 3                      410,351
458,654
- --------------------------------------------------------------------------------
PNC Mortgage Securities Corp., Collateralized Mtg. Obligations
Pass-Through Certificates, Series 1998-12, Cl. 1A2,
5.75%, 1/25/29                                       6,000,000
6,042,215
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc.,
Interest-Only Commercial Mtg. Pass-Through
Certificates, Series 1999-C1, Cl. X, 11.594%,
5/18/32 4                                          278,644,633
2,176,911

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

31,573,341
- --------------------------------------------------------------------------------
Other--0.0%
Salomon Brothers Mortgage Securities VI, Inc., Interest-Only Stripped
Mtg.-Backed Security, Series 1987-3, Cl. B, (25.42)%,
10/23/17 2,4                                            27,601
6,055
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VI, Inc., Principal-Only Stripped
Mtg.-Backed Security, Series 1987-3, Cl. A, (1.539)%,
10/23/17 2,7                                            39,474
32,887

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

38,942

- --------------------------------------------------------------------------------
Residential--3.3%
ARC Net Interest Margin Trust, Collateralized Mtg. Obligations,
Series 2001-6A, Cl. A, 7.25%, 10/27/31 2             2,145,425
2,123,971
- --------------------------------------------------------------------------------
Granite Mortgages plc, Mtg.-Backed Obligations, Series 2002-2,
Cl. 1A1, 1.929%, 1/21/17 3                           3,140,000
3,140,000
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Inc., Commercial
Mtg. Pass-Through Certificates:
Series 1996-B, Cl. 1, 6.957%, 4/25/26 2,3            1,081,371
879,290
Series 1999-NC2, Cl. M3, 4.67%, 4/25/29 3              563,720
557,378
- --------------------------------------------------------------------------------
Structured Asset Securities Corp., Collateralized Mtg. Obligations,
Mtg. Pass-Through Certificates:
Series 1998-8, Cl. B, 2.72%, 8/25/28 3               1,313,225
1,272,628
Series 2002-AL1, Cl. B2, 3.45%, 2/25/32              3,167,058
2,737,114
- --------------------------------------------------------------------------------
Washington Mutual Mortgage Securities Corp., Collateralized
Mtg. Obligations Pass-Through Certificates:
Series 2002-AR10, Cl. A1, 2.359%, 10/25/32 2,3       1,901,379
1,904,456
Series 2002-AR15, Cl. A1, 2.26%, 11/25/32 2          3,670,629
3,680,729
Series 2002-AR19, Cl. A-1, 1.771%, 1/25/33           6,720,000
6,720,000

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

23,015,566

- -----------
Total Mortgage-Backed Obligations (Cost $169,672,747)
172,743,461



                           16 | OPPENHEIMER BOND FUND

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
U.S. Government Obligations--25.0%
Federal Home Loan Mortgage Corp. Unsec. Nts.:
3%, 7/15/04                                       $ 24,100,000      $
24,633,887
6.25%, 7/15/32                                       9,500,000
10,800,493
- --------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.:
5.25%, 6/15/06                                      15,000,000
16,359,150
6%, 5/15/11                                          5,200,000
5,887,710
6.375%, 6/15/09                                     21,500,000
24,911,298
- --------------------------------------------------------------------------------
U.S. Treasury Bonds, 5.375%, 2/15/31                40,198,000
43,834,673
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
2.875%, 6/30/04                                     11,965,000
12,233,279
3%, 11/15/07                                         4,848,000
4,907,844
3.625%, 3/31/04                                      4,600,000
4,733,690
4%, 11/15/12                                        20,898,000
21,200,060
6.50%, 2/15/10                                       4,550,000
5,440,098

- -----------
Total U.S. Government Obligations (Cost $167,520,854)
174,942,182

- --------------------------------------------------------------------------------
Foreign Government Obligations--0.4%
United Mexican States Nts., 7.50%, 1/14/12
(Cost $2,395,972)                                    2,370,000
2,541,825

- --------------------------------------------------------------------------------
Corporate Bonds and Notes--41.4%
- --------------------------------------------------------------------------------
Consumer Discretionary--8.7%
Auto Components--0.4%
Delphi Corp., 6.55% Nts., 6/15/06                    2,945,000
3,107,555
- --------------------------------------------------------------------------------
Automobiles--2.9%
Ford Motor Co., 7.45% Bonds, 7/16/31                 4,100,000
3,576,057
- --------------------------------------------------------------------------------
General Motors Acceptance Corp.:
6.875% Unsec. Unsub. Nts., 8/28/12                   3,505,000
3,461,058
7% Auto Loan Nts., 2/1/12                            5,530,000
5,562,655
- --------------------------------------------------------------------------------
Hertz Corp. (The), 7.625% Sr. Nts., 6/1/12           7,890,000
7,543,605

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

20,143,375

- --------------------------------------------------------------------------------
Household Durables--0.6%
Pulte Corp., 8.125% Sr. Unsec. Nts., 3/1/11          3,570,000
4,002,566
- --------------------------------------------------------------------------------
Media--3.6%
AOL Time Warner, Inc., 6.875% Nts., 5/1/12           5,400,000
5,714,777
- --------------------------------------------------------------------------------
Cox Communications, Inc., 7.125% Nts., 10/1/12       3,240,000
3,605,206
- --------------------------------------------------------------------------------
News America Holdings, Inc., 7.75% Sr. Unsec.
Debs., 12/1/45                                       5,500,000
5,421,878
- --------------------------------------------------------------------------------
Reed Elsevier Capital, Inc., 6.75% Bonds, 8/1/11     2,565,000
2,899,776
- --------------------------------------------------------------------------------
Viacom, Inc., 7.70% Sr. Unsec. Nts., 7/30/10         3,060,000
3,640,779
- --------------------------------------------------------------------------------
Walt Disney Co., 6.75% Sr. Nts., 3/30/06             3,430,000
3,748,469

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

25,030,885



                           17 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS  Continued
- --------------------------------------------------------------------------------

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
Multiline Retail--1.2%
Federated Department Stores, Inc., 6.30% Sr.
Nts., 4/1/09                                       $ 4,970,000    $
5,309,943
- --------------------------------------------------------------------------------
May Department Stores Co., 10.625% Debs., 11/1/10      405,000
537,867
- --------------------------------------------------------------------------------
Sears Roebuck Acceptance Corp.:
6% Unsec. Bonds, 3/20/03                             1,740,000
1,741,032
6.90% Nts., 8/1/03                                   1,210,000
1,220,891

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

8,809,733

- --------------------------------------------------------------------------------
Consumer Staples--2.5%
- --------------------------------------------------------------------------------
Food & Drug Retailing--1.3%
Albertson's, Inc., 7.45% Unsec. Debs., 8/1/29        2,485,000
2,752,878
- --------------------------------------------------------------------------------
Kroger Co. (The), 6.75% Nts., 4/15/12                2,500,000
2,771,348
- --------------------------------------------------------------------------------
Real Time Data Co., 13% Disc. Nts., 5/31/09 2,8,9,10   476,601
85,788
- --------------------------------------------------------------------------------
Safeway, Inc., 4.80% Sr. Unsec. Nts., 7/16/07        3,490,000
3,604,371

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

9,214,385

- --------------------------------------------------------------------------------
Household Products--0.0%
Styling Technology Corp., 10.875% Sr. Unsec.
Sub. Nts., 7/1/08 2,8,9                                145,000
- --
- --------------------------------------------------------------------------------
Tobacco--1.2%
Philip Morris Cos., Inc., 7.25% Nts., 1/15/03        8,520,000
8,529,193
- --------------------------------------------------------------------------------
Energy--0.3%
- --------------------------------------------------------------------------------
Energy Equipment & Services--0.0%
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08      200,000
181,000
- --------------------------------------------------------------------------------
Oil & Gas--0.3%
Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27    1,570,000
1,762,325
- --------------------------------------------------------------------------------
Financials--12.6%
- --------------------------------------------------------------------------------
Banks--2.2%
ABN Amro NA Holding Capital NV, 6.473% Bonds,
12/29/49 1                                           2,520,000
2,589,464
- --------------------------------------------------------------------------------
Credit Suisse First Boston (USA), Inc., 6.125%
Nts., 11/15/11                                       5,175,000
5,408,765
- --------------------------------------------------------------------------------
Dime Capital Trust I, 9.33% Capital Securities,
Series A, 5/6/27                                     2,990,000
3,409,949
- --------------------------------------------------------------------------------
Socgen Real Estate LLC, 7.64% Bonds, 12/29/49 1      3,600,000
3,964,046

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

15,372,224

- --------------------------------------------------------------------------------
Diversified Financials--3.1%
CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts.,
4/2/12                                               2,880,000
3,240,127
- --------------------------------------------------------------------------------
Citigroup, Inc., 6.625% Unsec. Sub. Nts., 6/15/32    1,790,000
1,960,823
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The), 6.60% Sr. Unsec.
Nts., 1/15/12                                        2,190,000
2,424,107
- --------------------------------------------------------------------------------
Household Finance Corp., 7% Nts., 5/15/12            4,570,000
5,014,167
- --------------------------------------------------------------------------------
J.P. Morgan Chase & Co., 6.625% Sub. Nts., 3/15/12   2,430,000
2,638,248
- --------------------------------------------------------------------------------
MBNA America Bank NA, 6.625% Sub. Nts., 6/15/12      3,010,000
3,069,207
- --------------------------------------------------------------------------------
Morgan Stanley, 6.60% Nts., 4/1/12                   2,850,000
3,164,247

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

21,510,926


                           18 | OPPENHEIMER BOND FUND

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
Insurance--5.8%
American International Group, Inc./SunAmerica Global Financing VI,
6.30% Sr. Sec. Nts., 5/10/11 1                    $  3,500,000      $
3,864,108
- --------------------------------------------------------------------------------
AXA Group, 8.60% Unsec. Sub. Nts., 12/15/30          4,440,000
5,089,585
- --------------------------------------------------------------------------------
Farmers Insurance Exchange, 8.625% Nts., 5/1/24 1    1,500,000
1,126,602
- --------------------------------------------------------------------------------
John Hancock Global Funding II:
5% Nts., 7/27/07 1                                   3,650,000
3,828,653
7.90% Nts., 7/2/10 1                                 2,265,000
2,660,922
- --------------------------------------------------------------------------------
Metropolitan Life Global Funding I, 4.75% Nts.,
6/20/07                                              4,370,000
4,600,286
- --------------------------------------------------------------------------------
Nationwide CSN Trust, 9.875% Sec. Nts., 2/15/25 1    7,000,000
7,612,031
- --------------------------------------------------------------------------------
Nationwide Financial Services, Inc., 5.90%
Nts., 7/1/12                                         2,985,000
3,049,070
- --------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds,
Series C, 12/18/23 1                                 3,420,000
3,969,580
- --------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30%
Nts., 7/1/25 1                                       4,270,000
4,785,193

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

40,586,030

- --------------------------------------------------------------------------------
Real Estate--1.5%
EOP Operating LP, 7.75% Unsec. Nts., 11/15/07        3,363,000
3,818,105
- --------------------------------------------------------------------------------
Simon DeBartolo Group LP, 6.875% Unsec.
Nts., 11/15/06                                       3,355,000
3,653,719
- --------------------------------------------------------------------------------
Vornado Realty LP, 5.625% Sr. Unsec. Unsub.
Nts., 6/15/07                                        2,970,000
3,029,186

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

10,501,010

- --------------------------------------------------------------------------------
Health Care--2.9%
- --------------------------------------------------------------------------------
Health Care Providers & Services--1.4%
Anthem, Inc., 6.80% Unsec. Unsub. Bonds, 8/1/12      3,680,000
4,011,333
- --------------------------------------------------------------------------------
Cardinal Health, Inc., 4.45% Nts., 6/30/05           2,980,000
3,129,805
- --------------------------------------------------------------------------------
WellPoint Health Networks, Inc., 6.375% Nts.,
1/15/12                                              2,440,000
2,652,631

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

9,793,769

- --------------------------------------------------------------------------------
Pharmaceuticals--1.5%
Bristol-Myers Squibb Co., 5.75% Nts., 10/1/11 6      4,810,000
5,130,783
- --------------------------------------------------------------------------------
Pharmacia Corp., 6.60% Sr. Unsec. Nts., 12/1/28      1,570,000
1,779,680
- --------------------------------------------------------------------------------
Wyeth, 5.875% Nts., 3/15/04                          3,580,000
3,722,656

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

10,633,119

- --------------------------------------------------------------------------------
Industrials--5.2%
- --------------------------------------------------------------------------------
Aerospace & Defense--2.1%
Boeing Capital Corp., 5.65% Sr. Unsec. Nts., 5/15/06 4,430,000
4,645,382
- --------------------------------------------------------------------------------
Lockheed Martin Corp., 8.20% Nts., 12/1/09           3,240,000
4,009,490
- --------------------------------------------------------------------------------
Raytheon Co., 5.70% Sr. Unsec. Nts., 11/1/03         5,980,000
6,098,913

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

14,753,785

- --------------------------------------------------------------------------------
Commercial Services & Supplies--1.0%
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub.
Nts., 8/1/07 2                                         150,000
113,438
- --------------------------------------------------------------------------------
PHH Corp., 8.125% Nts., 2/3/03 2                     2,450,000
2,456,189



                           19 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS  Continued
- --------------------------------------------------------------------------------

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
Commercial Services & Supplies Continued
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 2,8,9                                    500,000
20,000
- --------------------------------------------------------------------------------
Waste Management, Inc.:
7% Sr. Nts., 7/15/28                                 3,450,000
3,423,552
7.75% Bonds, 5/15/32 1                                 555,000
598,096

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

6,693,775

- --------------------------------------------------------------------------------
Industrial Conglomerates--1.5%
General Electric Capital Corp.:
6% Nts., 6/15/12                                     5,000,000
5,408,180
6.75% Nts., Series A, 3/15/32                          800,000
887,448
- --------------------------------------------------------------------------------
Mallinckrodt, Inc., 6% Nts., 10/15/03                  500,000
480,431
- --------------------------------------------------------------------------------
MMCaps Funding I Ltd., Inc., 8.03% Sr. Nts.,
6/15/31 1                                            3,850,000
4,042,354

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

10,818,413
- --------------------------------------------------------------------------------
Marine--0.0%
Navigator Gas Transport plc, 10.50% First Priority Ship
Mtg. Nts., 6/30/07 1,8                                 300,000
92,250
- --------------------------------------------------------------------------------
Road & Rail--0.6%
Burlington Northern Santa Fe Corp., 5.90% Sr.
Nts., 7/1/12                                         3,655,000
3,971,526
- --------------------------------------------------------------------------------
Information Technology--0.0%
- --------------------------------------------------------------------------------
Communications Equipment--0.0%
Orion Network Systems, Inc., 12.50% Sr.
Disc. Nts., 1/15/07 2                                  200,000
52,500
- --------------------------------------------------------------------------------
Materials--0.3%
- --------------------------------------------------------------------------------
Chemicals--0.3%
Morton International, Inc., 9.25% Credit
Sensitive Nts., 6/1/20                                  85,000
108,458
- --------------------------------------------------------------------------------
PCI Chemicals Canada, 10% Sr. Sec. Nts., 12/31/08       21,859
15,411
- --------------------------------------------------------------------------------
Pioneer Cos., Inc., 4.90% Sr. Sec. Nts., 12/31/06 3      7,287
5,074
- --------------------------------------------------------------------------------
Union Carbide Corp., 6.25% Nts., 6/15/03             1,850,000
1,868,152

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

1,997,095
- --------------------------------------------------------------------------------
Metals & Mining--0.0%
National Steel Corp., 9.875% First Mtg. Bonds,
Series D, 3/1/09 8,9                                   200,000
78,750
- --------------------------------------------------------------------------------
Telecommunication Services--5.1%
- --------------------------------------------------------------------------------
Diversified Telecommunication Services--3.5%
- --------------------------------------------------------------------------------
Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 1,785,000
2,129,810
- --------------------------------------------------------------------------------
Deutsche Telekom International BV, 8.25% Unsec.
Unsub. Nts., 6/15/05 3                               4,550,000
4,978,319
- --------------------------------------------------------------------------------
France Telecom SA, 8.70% Sr. Unsec. Nts., 3/1/06 3   3,025,000
3,314,716
- --------------------------------------------------------------------------------
GTE North, Inc., 6.73% Debs., Series G, 2/15/28      3,050,000
3,248,616
- --------------------------------------------------------------------------------
New England Telephone & Telegraph Co., 7.875%
Debs., 11/15/29                                      2,180,000
2,633,507
- --------------------------------------------------------------------------------
Sprint Capital Corp., 8.75% Nts., 3/15/32            3,040,000
2,896,795
- --------------------------------------------------------------------------------
TCI Communications, Inc., 9.80% Sr. Unsec.
Debs., 2/1/12                                        4,460,000
5,369,439

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

24,571,202



                           20 | OPPENHEIMER BOND FUND

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
Wireless Telecommunication Services--1.6%
AT&T Corp.:
6.375% Nts., 3/15/04 3                            $  2,750,000     $
2,819,757
8.50% Sr. Nts., 11/15/31 3                           1,220,000
1,349,343
- --------------------------------------------------------------------------------
AT&T Wireless Services, Inc., 7.50% Sr. Unsec.
Nts., 5/1/07                                         6,955,000
7,171,516

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

11,340,616

- --------------------------------------------------------------------------------
Utilities--3.8%
- --------------------------------------------------------------------------------
Electric Utilities--2.9%
Dominion Resources, Inc., 8.125% Sr.
Unsub. Nts., 6/15/10                                 3,175,000
3,700,139
- --------------------------------------------------------------------------------
Duke Energy Corp., 5.625% Nts., 11/30/12             1,235,000
1,234,831
- --------------------------------------------------------------------------------
FirstEnergy Corp., 7.375% Sr. Unsub. Nts.,
Series C, 11/15/31                                   4,460,000
4,338,621
- --------------------------------------------------------------------------------
MidAmerican Energy Holdings Co., 5.875% Sr.
Nts., 10/1/12 1                                      6,540,000
6,642,011
- --------------------------------------------------------------------------------
Progress Energy, Inc., 7.10% Nts., 3/1/11            3,610,000
3,986,039
- --------------------------------------------------------------------------------
South Carolina Electric & Gas Co., 9% Mtg.
Bonds, 7/15/06                                         500,000
549,435

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

20,451,076

- --------------------------------------------------------------------------------
Gas Utilities--0.9%
Kinder Morgan, Inc., 6.50% Nts., 9/1/12 1            1,880,000
1,968,257
- --------------------------------------------------------------------------------
NiSource Finance Corp., 7.875% Sr. Unsec.
Nts., 11/15/10                                       3,580,000
3,940,345

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

5,908,602

- -------------
Total Corporate Bonds and Notes (Cost $279,063,559)
289,907,685

                                                       Shares
- --------------------------------------------------------------------------------
Preferred Stocks--0.0%
Criimi Mae, Inc., 10.875% Cum. Cv., Series B, Non-Vtg.
(Cost $325,000)                                         13,000
273,000
- --------------------------------------------------------------------------------
Common Stocks--0.0%
Geotek Communications, Inc., Series B (Escrowed)2,9
(Cost $100)                                                 25
- --

                                                         Units
- --------------------------------------------------------------------------------
Rights, Warrants and Certificates--0.0%
Chesapeake Energy Corp. Wts.:
Exp. 1/23/03 2,9                                         1,668
- --
Exp. 1/23/03 2,9                                           953
- --
Exp. 9/1/04 9                                              534
- --
- --------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/15/07 2,9            50
- --
- --------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/1/05 2,9        300
3
- --------------------------------------------------------------------------------
HF Holdings, Inc. Wts., Exp. 9/27/09 2,9                 1,063
106
- --------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05 2,9          1,980
20
- --------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08 2,9   150
- --
- --------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07 2,9
200                 2
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts., Exp. 9/19/10 9               2,028
1,562
- --------------------------------------------------------------------------------
Real Time Data Co. Wts., Exp. 5/31/04 2,9              121,440
- --

- -------------
Total Rights, Warrants and Certificates (Cost $26,228)
1,693



                           21 | OPPENHEIMER BOND FUND

STATEMENT OF INVESTMENTS  Continued
- --------------------------------------------------------------------------------

                                                     Principal      Market
Value
                                                        Amount        See
Note 1
- --------------------------------------------------------------------------------
Structured Notes--6.1%
JPMorgan Chase Bank, High Yield Index Credit-Linked Trust Nts.,
7.55%, 11/15/07                                  $  27,580,000     $
28,062,650
- --------------------------------------------------------------------------------
UBS AG, High Grade Credit-Linked Nts.,
3.065%, 12/10/04 3                                  14,500,000
14,485,500

- -------------
Total Structured Notes (Cost $42,080,000)
42,548,150

- --------------------------------------------------------------------------------
Joint Repurchase Agreements--3.3%
Undivided interest of 3.39% in joint repurchase agreement
(Market Value $694,610,000) with Banc One Capital Markets,
Inc., 1.07%, dated 12/31/02, to be repurchased at
$23,530,399 on 1/2/03, collateralized by U.S. Treasury Nts.,
3%--6.50%, 2/15/03--2/15/12, with a value of $311,989,144
and U.S. Treasury Bonds, 1.75%--9.375%, 4/30/04--2/15/23,
with a value of $397,082,690 (Cost $23,529,000)     23,529,000
23,529,000
- --------------------------------------------------------------------------------
Total Investments, at Value (Cost $775,130,596)          113.2%
793,397,235
- --------------------------------------------------------------------------------
Liabilities in Excess of Other Assets                    (13.2)
(92,668,276)

- ----------------------------
Net Assets                                               100.0%    $
700,728,959

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

Footnotes to Statement of Investments

1. 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 $55,597,626 or 7.93% of the Fund's net
assets as of December 31, 2002.
2. Identifies issues considered to be illiquid or restricted--See Note 7 of
Notes to Financial Statements.
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. These securities amount to $10,947,569 or 1.56% of the Fund's net
assets
as of December 31, 2002.
5. When-issued security to be delivered and settled after December 31, 2002.
6. Securities with an aggregate market value of $2,344,076 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 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.

See accompanying Notes to Financial Statements.


                           22 | OPPENHEIMER BOND FUND



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




- -------------------------------------------------------------------------------------
Assets

Investments, at value (cost $775,130,596)--see accompanying statement
$793,397,235
- -------------------------------------------------------------------------------------
Cash
438,491
- -------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns
6,796,142
Shares of beneficial interest sold
1,984,536
Investments sold on a when-issued basis
1,433,613
Daily variation on futures contracts
169,189
Other
7,668

- -------------
Total assets
804,226,874

- -------------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Investments purchased (including $100,576,009 purchased on a
when-issued basis)
100,576,605
Shares of beneficial interest redeemed
2,296,136
Distribution and service plan fees
412,432
Shareholder reports
110,694
Transfer and shareholder servicing agent fees
62,650
Trustees' compensation
                        2,185
Other
37,213

- -------------
Total liabilities
103,497,915

- -------------------------------------------------------------------------------------
Net Assets
$700,728,959

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

- -------------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of beneficial interest                              $
69,130
- -------------------------------------------------------------------------------------
Additional paid-in capital
718,406,752
- -------------------------------------------------------------------------------------
Undistributed net investment income
19,856
- -------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions
(34,772,683)
- -------------------------------------------------------------------------------------
Net unrealized appreciation on investments
17,005,904

- -------------
Net Assets
$700,728,959

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

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
$356,479,893 and 35,163,226 shares of beneficial interest outstanding)
$10.14
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price)
$10.65
- -------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$217,789,021 and 21,493,427 shares of beneficial interest outstanding)
$10.13
- -------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$90,800,333 and 8,951,489 shares of beneficial interest outstanding)
$10.14
- -------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$11,302,087 and 1,115,348 shares of beneficial interest outstanding)
$10.13
- -------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $24,357,625 and 2,406,545 shares of beneficial interest
outstanding)
$10.12




See accompanying Notes to Financial Statements.




                           24 | OPPENHEIMER BOND FUND



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


- ----------------------------------------------------------------------------------
Investment Income

Interest
$38,693,433
- ----------------------------------------------------------------------------------
Dividends
223,431

- ------------
Total investment income
38,916,864

- ----------------------------------------------------------------------------------
Expenses
Management fees
3,389,414
- ----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A
776,718
Class B
1,871,911
Class C
754,382
Class N
35,228
- ----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A
686,729
Class B
420,127
Class C
152,190
Class N
22,011
- ----------------------------------------------------------------------------------
Shareholder reports
238,374
- ----------------------------------------------------------------------------------
Trustees' compensation
23,179
- ----------------------------------------------------------------------------------
Custodian fees and expenses
20,305
- ----------------------------------------------------------------------------------
Other
72,741

- ------------
Total expenses
8,463,309
Less reduction to custodian expenses
(11,437)

- ------------
Net expenses
8,451,872

- ----------------------------------------------------------------------------------
Net Investment Income
30,464,992



- ----------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments
(10,734,672)
Closing of futures contracts
3,029,690
Closing and expiration of option contracts written
92,245

- ------------
Net realized loss
(7,612,737)
- ----------------------------------------------------------------------------------
Net change in unrealized appreciation on investments
34,687,515

- ------------
Net realized and unrealized gain
27,074,778

- ----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations
$57,539,770

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





See accompanying Notes to Financial Statements.



                           25 | OPPENHEIMER BOND FUND



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


Year Ended December 31,                                    2002          2001
- ----------------------------------------------------------------------------------
Operations

Net investment income                                  $ 30,464,992  $
27,843,213
- ----------------------------------------------------------------------------------
Net realized gain (loss)                                 (7,612,737)
3,697,843
- ----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)     34,687,515
(11,598,912)

- ---------------------------
Net increase in net assets resulting from operations     57,539,770
19,942,144

- ----------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A                                                 (17,305,847)
(17,585,602)
Class B                                                  (8,774,067)
(7,889,070)
Class C                                                  (3,484,678)
(2,470,735)
Class N                                                    (336,619)
(50,649)
Class Y                                                    (566,370)
(180,125)

- ----------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase in net assets resulting from beneficial
interest transactions:
Class A                                                  62,352,666
81,188,197
Class B                                                  47,304,042
81,353,784
Class C                                                  30,141,408
33,926,102
Class N                                                   8,695,344
2,250,053
Class Y                                                  19,741,029
3,288,451

- ----------------------------------------------------------------------------------
Net Assets
Total increase                                          195,306,678
193,772,550
- ----------------------------------------------------------------------------------
Beginning of period                                     505,422,281
311,649,731

- ---------------------------
End of period [including undistributed
(overdistributed) net investment income of
$19,856 and $(87,221), respectively]                   $700,728,959
$505,422,281

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


2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:



                         Year Ended December 31, 2002    Year Ended December
31, 2001 1
                               Shares          Amount
Shares         Amount
- -----------------------------------------------------
- -------------------------------
Class A

Sold                       19,523,565   $ 190,912,803         16,363,435
$163,919,591
Dividends and/or
distributions reinvested    1,332,946      13,008,001          1,295,039
12,926,638
Redeemed                  (14,464,664)   (141,568,138)        (9,595,307)
(95,658,032)

- --------------------------------------------------------------
Net increase                6,391,847   $  62,352,666          8,063,167   $
81,188,197

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

- ----------------------------------------------------------------------------------------
Class B
Sold                       11,531,204   $ 112,485,723         11,714,972
$117,368,490
Dividends and/or
distributions reinvested      627,150       6,115,604            543,150
5,415,992
Redeemed                   (7,311,701)    (71,297,285)        (4,154,269)
(41,430,698)

- --------------------------------------------------------------
Net increase                4,846,653   $  47,304,042          8,103,853   $
81,353,784

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


- ----------------------------------------------------------------------------------------
Class C
Sold                        6,200,611   $  60,525,606          4,852,582   $
48,669,011
Dividends and/or
distributions reinvested      248,419       2,427,454            166,771
1,663,973
Redeemed                   (3,353,754)    (32,811,652)        (1,643,106)
(16,406,882)

- --------------------------------------------------------------
Net increase                3,095,276   $  30,141,408          3,376,247   $
33,926,102

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


- ----------------------------------------------------------------------------------------
Class N
Sold                        1,312,556   $  12,804,206            232,768   $
2,343,541
Dividends and/or
distributions reinvested       33,325         325,615              5,140
       50,529
Redeemed                     (454,081)     (4,434,477)
(14,360)      (144,017)

- --------------------------------------------------------------
Net increase                  891,800   $   8,695,344            223,548   $
2,250,053

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


- ----------------------------------------------------------------------------------------
Class Y
Sold                        3,708,804   $  36,157,404            376,114   $
3,760,382
Dividends and/or
distributions reinvested        3,715          36,236
1,285         12,769
Redeemed                   (1,724,443)    (16,452,611)
(48,603)      (484,700)

- --------------------------------------------------------------
Net increase                1,988,076   $  19,741,029            328,796   $
3,288,451

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


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.


- --------------------------------------------------------------------------------
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, 2002, were
$1,255,094,084 and $1,057,526,788, respectively.

As of December 31, 2002, unrealized appreciation (depreciation) based on cost
of securities for federal income tax purposes of $778,779,343 was composed of:

                    Gross unrealized appreciation  $ 25,165,255
                    Gross unrealized depreciation   (10,547,363)
                                                   ------------
                    Net unrealized appreciation    $ 14,617,892
                                                   ============

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


- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee of
0.60% 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.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund
pays
OFS a $22.50 per account fee.
   Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
   OFS has voluntarily agreed to limit transfer and shareholder servicing
agent
fees up to an annual rate of 0.35% of average annual net assets for all
classes. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the different classes of shares of the Fund.



                           37 | OPPENHEIMER BOND FUND

NOTES TO FINANCIAL STATEMENTS  CONTINUED
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.



                    Aggregate        Class A    Concessions    Concessions
Concessions    Concessions
                    Front-End      Front-End     on Class A     on Class
B     on Class C     on Class N
                Sales Charges  Sales Charges         Shares
Shares         Shares         Shares
                   on Class A    Retained by    Advanced by    Advanced by
Advanced by    Advanced by
Year Ended             Shares    Distributor  Distributor 1  Distributor 1
Distributor 1  Distributor 1
- --------------------------------------------------------------------------------------------------------


December 31, 2002  $1,617,689       $560,960       $160,349
$2,110,998       $306,867        $85,293


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

                            Class A       Class B        Class C        Class
N
                         Contingent    Contingent     Contingent
Contingent
                           Deferred      Deferred       Deferred
Deferred
                      Sales Charges Sales Charges  Sales Charges  Sales
Charges
                        Retained by   Retained by    Retained by    Retained
by
Year Ended              Distributor   Distributor    Distributor
Distributor
- -------------------------------------------------------------------------------
December 31, 2002           $15,578      $903,519        $37,637
$29,346

- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
A Shares. It reimburses the Distributor for a portion of its costs incurred
for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the year ended December 31, 2002, payments
under the Class A Plan totaled $776,718, all of which were paid by the
Distributor to recipients, and included $127,114 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to
Class
A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The
Fund has adopted Distribution and Service Plans for Class B, Class C and Class
N shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per
year under each plan.

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


Distributor's
                                                   Distributor's
Aggregate
                                                       Aggregate
Unreimbursed
                                                    Unreimbursed  Expenses as
%
                   Total Payments  Amount Retained      Expenses  of Net
Assets
                       Under Plan   by Distributor    Under Plan       of
Class
- --------------------------------------------------------------------------------
 Class B Plan          $1,871,911       $1,555,311    $5,560,765
2.55%
 Class C Plan             754,382          349,894     1,229,865
1.35
 Class N Plan              35,228           33,835       192,084
1.70




                           38 | OPPENHEIMER BOND FUND




- --------------------------------------------------------------------------------
5. 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 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, 2002, the Fund had outstanding futures contracts as
follows:




Unrealized
                           Expiration     Number of     Valuation as of
Appreciation
Contract Description            Dates     Contracts   December 31, 2002
(Depreciation)
- ---------------------------------------------------------------------------------------
Contracts to Purchase

U.S. Treasury Nts., 2 yr.     3/27/03           482        $103,720,375    $
1,146,437
U.S. Treasury Nts., 10 yr.    3/20/03           256
29,452,000        727,625

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

1,874,062

- ------------
Contracts to Sell
U.S. Long Bonds               3/20/03            89          10,029,188
(305,281)
U.S. Treasury Nts., 5 yr.     3/20/03         1,093         123,782,250
(2,829,516)

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

(3,134,797)

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

$(1,260,735)

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




                           39 | OPPENHEIMER BOND FUND


NOTES TO FINANCIAL STATEMENTS  Continued



- --------------------------------------------------------------------------------
6. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
   The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell
or
purchase the underlying security at a fixed price, upon exercise of the
option.
   Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a
written put option, or the cost of the security for a purchased put or call
option is adjusted by the amount of premium received or paid.
   Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability
in
the Statement of Assets and Liabilities. Realized gains and losses are
reported
in the Statement of Operations.
   The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Fund pays a premium whether or not the
option is exercised. The Fund also has the additional risk of not being able
to
enter into a closing transaction if a liquid secondary market does not exist.

Written option activity for the year ended December 31, 2002 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, 2001                  --    $      --                  --
$      --
Options written                42,063      278,591               1,600
445,125
Options closed or expired     (42,063)    (278,591)             (1,600)
(445,125)

- ------------------------------------------------------
Options outstanding as of
December 31, 2002                  --    $      --                  --
$      --

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



- --------------------------------------------------------------------------------
7. Illiquid or Restricted Securities
As of December 31, 2002, 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


                           40 | OPPENHEIMER BOND FUND


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, 2002
was
$57,764,696, which represents 8.24% of the Fund's net assets, of which zero is
considered restricted. Information concerning restricted securities is as
follows:



                                    Acquisition                     Valuation
as of    Unrealized
Security                                  Dates           Cost    December
31, 2002  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



- --------------------------------------------------------------------------------
8. Bank Borrowings
The Fund had the ability to borrow from a bank for temporary or emergency
purposes provided asset coverage for borrowings exceeded 300%. The Fund and
other Oppenheimer funds participated in a $400 million unsecured line of
credit
with a bank. Under that unsecured line of credit, interest was charged to each
fund, based on its borrowings, at a rate equal to the Federal Funds Rate plus
0.45%. Under that credit facility, the Fund paid a commitment fee equal to its
pro rata share of the average unutilized amount of the credit facility at a
rate of 0.08% per annum. The credit facility was terminated on November 12,
2002.

                                  Appendix A

                             RATINGS DEFINITIONS
                             -------------------

Below are summaries of the rating definitions used by the
nationally-recognized rating agencies listed below. Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate.
The summaries below are based upon publicly-available information provided by
the rating organizations.

Moody's Investors Service, Inc.
- ------------------------------------------------------------------------------

Long-Term (Taxable) Bond Ratings

Aaa: Bonds rated Aaa are judged to be the best quality. They carry the
smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, the changes that can be
expected are most unlikely to impair the fundamentally strong position of
such issues.

Aa: Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as with Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
those 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 sometime 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 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 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 and 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 and are often in default or have other marked shortcomings.

C: Bonds rated C are the lowest class of rated bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment
standing.





Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier "1" indicates that the
obligation ranks in the higher end of its category; the modifier "2"
indicates a mid-range ranking and the modifier "3" indicates a ranking in the
lower end of the category.

Short-Term Ratings - Taxable Debt

These ratings apply to the ability of issuers to repay punctually 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, while sound, may be subject to
variation. Capitalization characteristics, while appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions
may be more pronounced. Variability in earnings and profitability may result
in changes in the level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate liquidity is
maintained.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Rating Services
- ------------------------------------------------------------------------------

Long-Term Credit Ratings

AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA: Bonds rated "AA" differ from the highest rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A: Bonds rated "A" are somewhat more susceptible to 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.

Bonds rated BB, B, CCC, CC and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and
C the highest. While such obligations will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or
major exposures to adverse conditions.

BB: Bonds rated BB are less vulnerable to nonpayment than other speculative
issues. However, these face major 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: A bond rated B is more vulnerable to nonpayment than an obligation rated
BB, but the obligor currently has the capacity to meet its financial
commitment on the obligation.

CCC: A bond rated CCC 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. 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: An obligation rated CC is currently highly vulnerable to nonpayment.

C: The C rating may used where a bankruptcy petition has been filed or
similar action has been taken, but payments on this obligation are being
continued.

D: Bonds rated D are in default. Payments on the obligation are not being
made on the date due.

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: Rated in the highest category. The obligor's capacity to meet its
financial commitment on the obligation is strong. Within this category, a
plus (+) sign designation indicates the issuer's capacity to meet its
financial obligation is very strong.

A-2: Obligation is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.

A-3: 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: 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: 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: In payment default. Payments on the obligation have not been made on the
due date. The rating may also be used if a bankruptcy petition has been filed
or similar actions jeopardize payments on the obligation.



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 rates 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.

                                  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      Pharmaceuticals
Services
Electric Utilities                 Real Estate
Electrical Equipment               Road & Rail
Electronic Equipment & Instruments Semiconductor Equipment & Products
Energy Equipment & Services        Software
Food & Drug Retailing              Specialty Retail
Food Products                      Textiles & Apparel
Gas Utilities                      Tobacco
Health Care Equipment & Supplies   Trading Companies & Distributors
Health Care Providers & Services   Transportation Infrastructure
Hotels Restaurants & Leisure       Water Utilities
                                   Wireless Telecommunication Services

                                  Appendix C

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

In certain cases, the initial sales charge that applies to purchases of Class
A shares3 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.4  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 plans5
         4) Group Retirement Plans6
         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."7 This waiver provision applies to:
|_|   Purchases of Class A shares aggregating $1 million or more.
|_|   Purchases of Class A shares by a Retirement Plan that was permitted to
         purchase such shares at net asset value but subject to a contingent
         deferred sales charge prior to March 1, 2001. That included plans
         (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares
         costing $500,000 or more, 2) had at the time of purchase 100 or more
         eligible employees or total plan assets of $500,000 or more, or 3)
         certified to the Distributor that it projects to have annual plan
         purchases of $200,000 or more.
|_|   Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
         purchases are made:
         1) through a broker, dealer, bank or registered investment adviser
         that has made special arrangements with the Distributor for those
         purchases, or
         2) by a direct rollover of a distribution from a qualified
            Retirement Plan if the administrator of that Plan has made
            special arrangements with the Distributor for those purchases.
|_|   Purchases of Class A shares by Retirement Plans that have any of the
         following record-keeping arrangements:
         1) The record keeping is performed by Merrill Lynch Pierce Fenner &
            Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
            Retirement Plan. On the date the plan sponsor signs the
            record-keeping service agreement with Merrill Lynch, the Plan
            must have $3 million or more of its assets invested in (a) mutual
            funds, other than those advised or managed by Merrill Lynch
            Investment Management, L.P. ("MLIM"), that are made available
            under a Service Agreement between Merrill Lynch and the mutual
            fund's principal underwriter or distributor, and  (b)  funds
            advised or managed by MLIM (the funds described in (a) and (b)
            are referred to as "Applicable Investments").
         2) The record keeping for the Retirement Plan is performed on a
            daily valuation basis by a record keeper whose services are
            provided under a contract or arrangement between the Retirement
            Plan and Merrill Lynch. On the date the plan sponsor signs the
            record keeping service agreement with Merrill Lynch, the Plan
            must have $3 million or more of its assets (excluding assets
            invested in money market funds) invested in Applicable
            Investments.
         3) The record keeping for a Retirement Plan is handled under a
            service agreement with Merrill Lynch and on the date the plan
            sponsor signs that agreement, the Plan has 500 or more eligible
            employees (as determined by the Merrill Lynch plan conversion
            manager).





           II.Waivers of Class A Sales Charges of Oppenheimer Funds

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



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

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




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

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

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

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

The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
|_|   To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|   Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account
         Rules and Policies," in the applicable fund Prospectus).
|_|   For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
         Revenue Code) of the participant or beneficiary. The death or
         disability must occur after the participant's account was
         established.
         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact.
         4) Hardship withdrawals, as defined in the plan.8
         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.9
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) if the plan has made special
            arrangements with the Distributor.
         11)      Plan termination or "in-service distributions," if the
            redemption proceeds are rolled over directly to an
            OppenheimerFunds-sponsored IRA.
|_|   For distributions from 401(k) plans sponsored by broker-dealers that
         have entered into a special agreement with the Distributor allowing
         this waiver.
|_|   For distributions from retirement plans that have $10 million or more
         in plan assets and that have entered into a special agreement with
         the Distributor.
|_|   For distributions from retirement plans which are part of a retirement
         plan product or platform offered by certain banks, broker-dealers,
         financial advisors, insurance companies or record keepers which have
         entered into a special agreement with the Distributor.


 III.Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer Funds

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


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

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases:
|_|   Shares redeemed involuntarily, as described in "Shareholder Account
         Rules and Policies," in the applicable Prospectus.
|_|   Redemptions from accounts other than Retirement Plans following the
         death or disability of the last surviving shareholder. The death or
         disability must have occurred after the account was established, and
         for disability you must provide evidence of a determination of
         disability by the Social Security Administration.
|_|   The contingent deferred sales charges are generally not waived
         following the death or disability of a grantor or trustee for a
         trust account. The contingent deferred sales charges will only be
         waived in the limited case of the death of the trustee of a grantor
         trust or revocable living trust for which the trustee is also the
         sole beneficiary. The death or disability must have occurred after
         the account was established, and for disability you must provide
         evidence of a determination of disability by the Social Security
         Administration.
|_|   Distributions from accounts for which the broker-dealer of record has
         entered into a special agreement with the Distributor allowing this
         waiver.
|_|   Redemptions of Class B shares held by Retirement Plans whose records
         are maintained on a daily valuation basis by Merrill Lynch or an
         independent record keeper under a contract with Merrill Lynch.
|_|   Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
         accounts of clients of financial institutions that have entered into
         a special arrangement with the Distributor for this purpose.
|_|   Redemptions requested in writing by a Retirement Plan sponsor of Class
         C shares of an Oppenheimer fund in amounts of $500,000 or more and
         made more than 12 months after the Retirement Plan's first purchase
         of Class C shares, if the redemption proceeds are invested in Class
         N shares of one or more Oppenheimer funds.
|_|   Distributions10 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.11
         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.12
         9) On account of the participant's separation from service.13
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) offered as an investment option in a
            Retirement Plan if the plan has made special arrangements with
            the Distributor.
         11)      Distributions made on account of a plan termination or
            "in-service" distributions, if the redemption proceeds are rolled
            over directly to an OppenheimerFunds-sponsored IRA.
         12)      For distributions from a participant's account under an
            Automatic Withdrawal Plan after the participant reaches age 59 1/2,
            as long as the aggregate value of the distributions does not
            exceed 10% of the account's value, adjusted annually.
         13)      Redemptions of Class B shares under an Automatic Withdrawal
            Plan for an account other than a Retirement Plan, if the
            aggregate value of the redeemed shares does not exceed 10% of the
            account's value, adjusted annually.
         14)      For distributions from 401(k) plans sponsored by
            broker-dealers that have entered into a special arrangement with
            the Distributor allowing this waiver.
      Redemptions of Class B shares or Class C shares under an Automatic
         Withdrawal Plan from an account other than a Retirement Plan if the
         aggregate value of the redeemed shares does not exceed 10% of the
         account's value annually.

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

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


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

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

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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


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

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

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

9 or Fewer                   2.50%                2.56%              2.00%

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

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

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

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

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

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

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

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

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

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

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

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

      A shareholder's account will be credited with the amount of any
contingent deferred sales charge paid on the redemption of any Class A, Class
B or Class C shares of the Oppenheimer fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another
Oppenheimer fund within 90 days after redemption.

       V.Special Sales Charge Arrangements for Shareholders of Certain
          Oppenheimer Funds Who Were Shareholders of Connecticut Mutual
                            Investment Accounts, Inc.
- ---------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

      V!.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(R)

Internet Website:
      www.oppenheimerfunds.com
      ------------------------

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

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

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

Custodian Bank
      JPMorgan Chase Bank
      4 Chase Metro Tech Center
      Brooklyn, New York, 11245

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

Counsel to the Funds
      Myer, Swanson, Adams & Wolf, P.C.
      1600 Broadway
      Denver, Colorado 80202

Counsel to the Independent Trustees
      Mayer, Brown, Rowe & Maw
      1675 Broadway
      New York, New York 10019

1234


PX285.0203

                              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.

(c)   (i)   Specimen  Class  A  Share  Certificate  for  Oppenheimer  Bond  Fund:
      Previously  filed  with  Registrant's   Post-Effective  Amendment  No.  40,
      4/26/02, and incorporated herein by reference.

      (ii)  Specimen  Class  B  Share  Certificate  for  Oppenheimer  Bond  Fund:
      Previously  filed  with  Registrant's   Post-Effective  Amendment  No.  40,
      4/26/02, and incorporated herein by reference.

      (iii) Specimen  Class  C  Share  Certificate  for  Oppenheimer  Bond  Fund:
      Previously  filed  with  Registrant's   Post-Effective  Amendment  No.  40,
      4/26/02, and incorporated herein by reference.

      (iv)  Specimen  Class  N  Share  Certificate  for  Oppenheimer  Bond  Fund:
      Previously  filed  with  Registrant's   Post-Effective  Amendment  No.  40,
      4/26/02, and incorporated herein by reference.

      (v)   Specimen  Class  Y  Share  Certificate  for  Oppenheimer  Bond  Fund:
      Previously  filed  with  Registrant's   Post-Effective  Amendment  No.  40,
      4/26/02, and incorporated herein by reference.

(d)   (i)   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.

      (ii)  Amendment  to  Investment   Advisory   Agreement  dated  2/26/02  for
      Oppenheimer Bond Fund: Filed herewith.

(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.


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


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


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

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

(vi)  Form of Trust Company  Agency  Agreement of  OppenheimerFunds  Distributor,
      Inc.:  Previously  filed  with  Post-Effective  Amendment  No.  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)   Global  Custody  Agreement  dated August 16, 2002 between  Registrant
      and JP Morgan Chase Bank:  Previously filed with  Post-Effective  Amendment
      No. 9 to the  Registration  Statement  of  Oppenheimer  International  Bond
      Fund (Reg. No. 33-58383), 11/21/02, 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)   Amended and Restated  Service Plan and  Agreement  for Class A shares
      dated 4/23/02: Filed herewith.

      (ii)  Amended and  Restated  Distribution  and Service  Plan and  Agreement
      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.

(iii) 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.

(iv)  Distribution  and  Service  Plan and  Agreement  for  Class N shares  dated
            10/24/00: Filed herewith.

(n)   Oppenheimer  Funds  Multiple  Class Plan under Rule 18f-3  updated  through
10/22/02:   Previously  filed  with  Post-Effective   Amendment  No.  22  to  the
Registration  Statement  of  Oppenheimer  Global  Growth & Income Fund (Reg.  No.
33-33799), 11/20/02, and incorporated herein by reference.

(o)    Powers of Attorney for all Trustees/Directors and Officers except for
Beverly L. Hamilton, Robert J. Malone, Edward Cameron, F. William Marshall,
Jr., and John 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) Powers of Attorney for Edward Cameron, F. William Marshall Jr. and
John Murphy: 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.

       (ii) Powers of Attorney for Beverly L. Hamilton and Robert J. Malone:
Previously filed with Post-Effective Amendment No. 46 to the Registration
Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), 8/23/02, and
incorporated herein by reference.

(p)   Amended  and  Restated  Code  of  Ethics  of the  Oppenheimer  Funds  dated
5/15/02 under Rule 17j-1 of the Investment Company Act of 1940:  Previously filed
with   Post-Effective   Amendment  No.  29  to  the  Registration   Statement  of
Oppenheimer Discovery Fund (Reg. No. 33-371),  11/21/02,  and incorporated herein
by reference.


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

None.

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

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

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

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

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

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

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

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

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

Timothy L. Abbuhl,             None
Assistant Vice President

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

Amy B. Adamshick,              None
Vice President

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

Charles E. Albers,             None
Senior Vice President

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

Erik Anderson,                 None
Assistant Vice President

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

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

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

Patricia Avelino,              None
Assistant Vice President

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

Hany S. Ayad,                  None
Assistant Vice President

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

Victor W. Babin,               None
Senior Vice President

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

Bruce L. Bartlett,             None
Senior Vice President

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

John Michael Banta,            None
Assistant Vice President

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

Joanne Bardell,                None
Assistant Vice President

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

Lerae A. Barela,               None
Assistant Vice President

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

George Batejan,                None
Executive Vice President/
Chief Information Officer

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

Mark Bartling,                 None
Assistant Vice President

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

Kevin Baum,                    None
Vice President

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

Jeff Baumgartner,              None
Assistant Vice President

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

Connie Bechtolt,               None
Assistant Vice President

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

Robert Behal                   Assistant Vice President of HarbourView Asset
Assistant Vice President       Management Corporation. Formerly.

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

Kathleen Beichert,             Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.

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

Gerald Bellamy,                None
Assistant Vice President

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

Erik S. Berg,                  None
Assistant Vice President

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

Victoria Best,                 None
Vice President

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

Rajeev Bhaman,                 None
Vice President

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

Craig Billings,                Formerly President of Lorac Technologies, Inc.
Assistant Vice President       (June 1997-July 2001).

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

Mark Binning,                  None
Assistant Vice President

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

Robert J. Bishop,              None
Vice President

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

Tracey Blinzer,                None
Assistant Vice President

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

John R. Blomfield,             None
Vice President

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

Chad Boll,                     None
Assistant Vice President

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

Kevin Bonner,                  Formerly Manager, Sales Support for Prudential
Vice President                 Insurance Company (August 1995-September 2001).

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

Robert Bonomo,                 None
Senior Vice President

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

Lowell Scott Brooks,           Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.

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

Richard Buckmaster,            None
Vice President

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

Paul Burke,                    None
Assistant Vice President

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

Mark Burns,                    Formerly a Marketing Manager with Alliance
Assistant Vice President       Capital Management (October 1999-April 2001).

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

Bruce Burroughs                None
Vice President

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

Claudia Calich,                None
Assistant Vice President

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

Michael A. Carbuto,            None
Vice President

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

Debra Casey,                   None
Assistant Vice President

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

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

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

Brett Clark,                   None
Assistant Vice President

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

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

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

Peter V. Cocuzza,              None
Vice President

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

Laura Coulston,                None
Assistant Vice President

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

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

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

George Curry,                  None.
Vice President

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

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

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

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

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

John M. Davis,                 Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.

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

Ruggero de'Rossi,              Vice President of HarbourView Asset Management
Vice President                 Corporation.

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

Craig P. Dinsell,              None
Executive Vice President

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

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

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

Rebecca K. Dolan               None
Vice President

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

Steven D. Dombrower,           Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.

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

Bruce C. Dunbar,               None
Vice President

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

Richard Edmiston,              None
Assistant Vice President

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

Daniel R. Engstrom,            None
Assistant Vice President

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

Armand B. Erpf,                None
Assistant Vice President

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

James Robert Erven             Formerly an Assistant Vice President/Senior
Assistant Vice President       Trader with Morgan Stanley Investment Management
                               (1999-April 2002).

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

George R. Evans,               None
Vice President

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

Edward N. Everett,             None
Vice President

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

Kathy Faber,                   None
Assistant Vice President

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

David Falicia,                 None
Assistant Vice President

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

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

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

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

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

Emmanuel Ferreira,             Formerly a portfolio manager with Lashire
Vice President                 Investments (July 1999-December 2002).

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

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

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

Brian Finley,                  None
Assistant Vice President

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

John Forrest,                  None
Senior Vice President

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

J. Hayes Foster,               None
Vice President

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

P. Lyman Foster,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.

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

David Foxhoven,                Assistant Vice President of OppenheimerFunds
Assistant Vice President       Legacy Program.

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

Colleen M. Franca,             None
Assistant Vice President

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

Crystal French,                None
Vice President

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

Hazem Gamal,                   None
Assistant Vice President

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

Dan P. Gangemi,                None
Vice President

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

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

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

Subrata Ghose,                 None
Assistant Vice President

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

Charles W. Gilbert,            None
Assistant Vice President

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

Alan C. Gilston,               None
Vice President

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

Sharon M. Giordano-Auleta,     None
Assistant Vice President

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

Jill E. Glazerman,             None
Vice President

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

Paul M. Goldenberg,            None
Vice President

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

Mike Goldverg,                 None
Assistant Vice President

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

Bejamin J. Gord,               Vice President of HarbourView Asset Management
Vice President                 Corporation. Formerly Executive Director with
                               Miller Anderson Sherrerd, a division of Morgan
                               Stanley Investment Management. (April 1992-March
                               2002).

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

Laura Granger,                 None
Vice President

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

Robert Grill,                  None
Senior Vice President

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

Satish Gupta,                  None
Vice President

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

Robert Guy,                    None
Senior Vice President

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

David Hager,                   None
Vice President

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

Robert Haley,                  None
Assistant Vice President

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

Marilyn Hall,                  None
Vice President

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

Ping Han,                      None
Assistant Vice President

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

Kelly Haney,                   None
Assistant Vice President

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

Neil Hanson,                   None
Vice President

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

Shari Harley,                  None
Assistant Vice President

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

Steve Hauenstein,              None
Assistant Vice President

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

Thomas B. Hayes,               None
Vice President

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

Saba Hekmat,                   Formerly Director, Credit Research Analyst at
Assistant Vice President       MetLife Investments (July 1996-October 2002).

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

Michael Henry,                 None
Assistant Vice President

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

Catherine Heron,               None
Assistant Vice President

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

Dennis Hess,                   None
Assistant Vice President

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

Dorothy F. Hirshman,           None
Vice President

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

Daniel Hoelscher,              None
Assistant Vice President

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

Scott T. Huebl,                Assistant Vice President of OppenheimerFunds
Vice President                 Legacy Program.

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

Margaret Hui,                  None
Assistant Vice President

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

John Huttlin,                  None
Vice President

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

Edward Hrybenko,               None
Vice President

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

James G. Hyland,               None
Assistant Vice President

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

Steve P. Ilnitzki,             None
Senior Vice President

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

Kathleen T. Ives,              Vice President of OppenheimerFunds Distributor,
Vice   President  &  Assistant Inc.; Vice President and Assistant Secretary of
Counsel                        Shareholder Services, Inc.; Assistant Secretary
                               of OppenheimerFunds Legacy Program and
                               Shareholder Financial Services, Inc.

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

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

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

Frank V. Jennings,             None
Vice President

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

John Jennings,                 None
Vice President

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

John Michael Johnson,          Formerly Vice President, Senior
Assistant Vice President       Analyst/Portfolio Manager at Aladdin Capital
                               Holdings Inc. (February 2001-May 2002) prior to
                               which he was Vice President and Senior Analyst
                               at Merrill Lynch Investment Managers (October
                               1996-February 2001).

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

Lewis A. Kamman,               None
Vice President

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

Charles Kandilis,              Formerly managing director of Kandilis Capital
Assistant Vice President       Management (September 1993-August 2002); CFO of
                               Kandi Corp. (October 1989-August 1993).

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

Jennifer E. Kane,              None.
Assistant Vice President

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

Lynn O. Keeshan,               None
Senior Vice President

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

Thomas W. Keffer,              None
Senior Vice President

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

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

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

Michael Keogh,                 None
Vice President

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

Garrett K. Kolb,               None
Assistant Vice President

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

Walter G. Konops,              None
Assistant Vice President

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

Avram D. Kornberg,             None
Senior Vice President

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

James Kourkoulakos,            None
Vice President

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

Brian Kramer,                  None
Assistant Vice President

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

Tracey Lange,                  None
Vice President

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

John Latino,                   Formerly a Senior Trader/Portfolio Engineer at
Assistant Vice President       Jacobs Levy Equity Management (June 1996-August
                               2002)..

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

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

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

Christopher M. Leavy,          None
Senior Vice President

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

Dina C. Lee,                   None
Assistant   Vice  President  &
Assistant Counsel

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

Dana Lehrer,                   None
Assistant Vice President

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

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

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

Michael S. Levine,             None
Vice President

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

Gang Li,                       None
Assistant Vice President

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

Shanquan Li,                   None
Vice President

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

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

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

Bill Linden,                   None
Assistant Vice President

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

Malissa B. Lischin,            Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.

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

Reed Litcher,                  None
Vice President

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

David P. Lolli,                None
Assistant Vice President

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

Daniel G. Loughran             None
Vice   President:    Rochester
Division

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

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

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

Steve Macchia,                 None
Vice President

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

Michael Magee,                 None
Vice President

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

Jerry Madzij,                  None
Assistant Vice President

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

Angelo G. Manioudakis          Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation. Formerly Executive
                               Director and portfolio manager for Miller,
                               Anderson & Sherrerd, a division of Morgan
                               Stanley Investment Management (August 1993-April
                               2002).

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

Marianne Manzolillo,           None
Assistant Vice President

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

LuAnn Mascia,                  None
Vice President

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

Philip T. Masterson,           None
Vice   President  &  Assistant
Counsel

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

Elizabeth McCormack,           Assistant Secretary of HarbourView Asset
Assistant Vice President       Management Corporation.

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

Charles L. McKenzie,           Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation and OFI Institutional
                               Asset Management Corporation.

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

Joseph McGovern,               None
Assistant Vice President

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

Lisa Migan,                    None
Assistant Vice President

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

Andrew J. Mika,                None
Senior Vice President

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

Joy Milan,                     None
Vice President

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

Denis R. Molleur,              None
Vice    President   &   Senior
Counsel

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

Nikolaos D. Monoyios,          None
Vice President

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

Charles Moon,                  Vice President of HarbourView Asset Management
Vice President                 Corporation. Formerly an Executive Director and
                               Portfolio Manager with Miller Anderson &
                               Sherrerd, a division of Morgan Stanley
                               Investment Management (June 1999-March 2002).

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

Stacey Morrell,                None
Vice President

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

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

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

Thomas J. Murray,              None
Vice President

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

Kenneth Nadler,                None
Vice President

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

Christina Nasta,               None
Assistant Vice President

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

David Negri,                   Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.

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

Richard Nichols,               None
Vice President

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

Barbara Niederbrach,           None
Assistant Vice President

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

William Norman,                None
Assistant Vice President

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

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

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

Frank J. Pavlak,               None
Vice President

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

David P. Pellegrino,           None
Vice President

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

Allison C. Pells,              None
Assistant Vice President

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

Susan Pergament,               None
Assistant Vice President

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

Brian Petersen,                None
Assistant Vice President

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

James F. Phillips,             None
Vice President

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

Gary Pilc,
Assistant Vice President

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

Peter E. Pisapia,              Formerly, Associate Counsel at SunAmerica Asset
Assistant   Vice  President  & Management Corp. (December 2000-December 2002).
Assistant Counsel

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

Raghaw Prasad,                 Formerly Associate Vice President with
Assistant Vice President       Prudential Securities New York (January
                               2001-November 2001) prior to which he was a
                               Director/Analytics with Prudential Investments
                               New Jersey (April 1997-November 2001).

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

Jane C. Putnam,                None
Vice President

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

Michael E. Quinn,              None
Vice President

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

Heather Rabinowitz,            None
Assistant Vice President

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

Julie S. Radtke,               None
Vice President

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

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

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

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

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

Brian N. Reid,                 Formerly an Assistant Vice President with Eaton
Assistant Vice President       Vance Management (January 2000-January 2002).

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

Marc Reinganum,                Formerly (until August 2002) Vaughn Rauscher
Vice President                 Chair in Financial Investments and Director,
                               Finance Institute of Southern Methodist
                               University, Texas.

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

Kristina Richardson,           None
Assistant Vice President

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

Claire Ring,                   None
Assistant Vice President

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

David Robertson,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.

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

Rob Robis,                     None
Assistant Vice President

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

Antoinette Rodriguez,          None
Assistant Vice President

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

Stacey Roode,                  Formerly, Assistant Vice President of Human
Vice President                 Resources of OFI (200-July 2002)

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

Jeffrey S. Rosen,              None
Vice President

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

Richard H. Rubinstein,         None
Senior Vice President

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

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

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

Andrew Ruotolo                 Director, Treasurer and Chief Financial Officer
Executive  Vice  President and of Oppenheimer Acquisition Corp.; President and
Director                       director of Shareholder Services, Inc. and
                               Shareholder Financial Services, Inc.; Director
                               (Class A) of Trinity Investment Management
                               Corporation; Chairman of the Board, Chief
                               Executive Officer, President and Director or OFI
                               Trust Company.

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

Rohit Sah,                     None
Assistant Vice President

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

Valerie Sanders,               None
Vice President

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

Karen Sandler,                 None
Assistant Vice President

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

Tricia Scarlata,               Formerly, Marketing Manager of OppenheimerFunds,
Assistant Vice President       Inc. (April 2001-August 2002); Client Service
                               Support Manager for Sanford C. Bernstein
                               (December 1999-April 2001)

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

Rudi Schadt,                   Formerly a consultant for Arthur Andersen
Vice President                 (August 2001-February 2002); director, senior
                               quantitative analyst at Brinson Partners
                               (September 2000,April 2001).

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

Jeffrey R. Schneider,          None
Vice President

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

Ellen P. Schoenfeld,           None
Vice President

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

Maria Schulte,                 None
Assistant Vice President

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

David Schultz,                 Chief Executive Officer, President & Senior
Senior Vice President          Managing Director & Director of OFI
                               Institutional Asset Management, Inc. and
                               HarbourView Asset Management Corporation;
                               Director (Class A) and Chairman of Trinity
                               Investment Management Corporation; Director of
                               Oppenheimer Trust Company.

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

Scott A. Schwegel,             None
Assistant Vice President

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

Allan P. Sedmak                None
Assistant Vice President

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

Jennifer L. Sexton,            Vice President of OFI Private Investments, Inc.
Vice President

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

Martha A. Shapiro,             None
Vice President

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

Navin Sharma,                  Formerly, Manager at BNP Paribas Cooper Neff
Vice President                 Advisors (May 2001-April 2002) prior to which he
                               was Development Manager at Reality
                               Online/Reuters America Inc. (June 2000-May 2001).

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

Steven J. Sheerin,             Formerly consultant with Pricewaterhouse Coopers
Vice President                 (November 2000-May 2001).

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

Bonnie Sherman,                None
Assistant Vice President

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

David C. Sitgreaves,           None
Assistant Vice President

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

Edward James Sivigny           Formerly a Director for ABN Amro Securities
Assistant Vice President       (July 2001-July 2002) prior to which he was
                               Associate Director for Barclays Capital
                               (1998-July 2001).

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

Enrique H. Smith,              Formerly a business analyst with Goldman Sachs
Assistant Vice President       (August 1999-August 2001).

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

Richard A. Soper,              None
Vice President

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

Louis Sortino,                 None
Assistant Vice President:
Rochester Division

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

Keith J. Spencer,              None
Vice President

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

Marco Antonio Spinar,          Formerly, Director of Business Operations at AOL
Assistant Vice President       Time Warner, AOL Time Warner Book Group (June
                               2000-December 2001).

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

Richard A. Stein,              None
Vice   President:    Rochester
Division

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

Arthur P. Steinmetz,           Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.

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

Jayne M. Stevlingson,          None
Vice President

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

Gregory J. Stitt,              None
Vice President

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

John P. Stoma,                 Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.

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

Wayne Strauss,                 None
Assistant Vice President:
Rochester Division

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

Michael Stricker,              None
Vice President

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

Deborah A. Sullivan,           Since December 2001, Secretary of Oppenheimer
Assistant Vice President,      Trust Company.
Assistant Counsel

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

Mary Sullivan,                 None
Assistant Vice President

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

Kevin L. Surrett,              None
Assistant Vice President

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

Michael Sussman,               None
Vice President

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

Susan B. Switzer,              None
Vice President

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

Anthony A. Tanner,             None
Vice   President:    Rochester
Division

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

Martin Telles,                 None
Senior Vice President

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

Paul Temple,                   Formerly a Vice President of Merrill Lynch
Vice President                 (October 2001-January 2002) prior to which he
                               was a Vice President with OppenheimerFunds, Inc.
                               (May 2000-October 5, 2001).

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

Vincent Toner,                 None
Assistant Vice President

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

Eamon Tubridy,                 None
Assistant Vice President

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

Keith Tucker,                  None
Assistant Vice President

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

James F. Turner,               Formerly portfolio manager for Technology
Vice President                 Crossover Ventures (May 2000-March 2001).

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

Cameron Ullyat,                None
Assistant Vice President

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

Angela Utaro,                  None
Assistant Vice President:
Rochester Division

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

Tanya Valency,                 None
Vice President

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

Mark S. Vandehey,              Vice President of OppenheimerFunds Distributor,
Vice President                 Inc., Centennial Asset Management Corporation
                               and Shareholder Services, Inc.

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

Maureen Van Norstrand,         None
Assistant Vice President

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

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

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

Phillip F. Vottiero,           None
Vice President

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

Samuel Sloan Walker,           Vice President of HarbourView Asset Management
Vice President                 Corporation.

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

Teresa M. Ward,                Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.

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

Jerry A. Webman,               Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.

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

Christopher D. Weiler,         None
Assistant Vice President:
Rochester Division

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

Barry D. Weiss,                None
Vice President

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

Melissa Lynn Weiss,            Formerly an Associate at Hoguet Newman & Regal,
Vice President                 LLP (January 1998-May 2002).

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

Christine Wells,               None
Vice President

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

Joseph J. Welsh,               Vice President of HarbourView Asset Management
Vice President                 Corporation.

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

Diederick Wermolder,           Director of OppenheimerFunds International Ltd.;
Vice President                 Senior Vice President (Managing Director of the
                               International Division) of OFI Institutional
                               Asset Management, Inc.

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

Catherine M. White,            Assistant Vice President of OppenheimerFunds
Assistant Vice President       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,              Formerly Senior Vice President of HarbourView
Senior Vice President          Asset Management Corporation (May 1999-July
                               2002).

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

Donna M. Winn,                 President, Chief Executive Officer and Director
Senior Vice President          of OFI Private Investments, Inc.; Director and
                               President of OppenheimerFunds Legacy Program;
                               Senior Vice President of OppenheimerFunds
                               Distributor, Inc.

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

                  Kenneth      Formerly, principal at Richards & Tierney, Inc.
Winston,                       (until June 2001).
Senior Vice President

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

                  Philip       None
Witkower,
                  Senior  Vice
President

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

                  Brian     W. Treasurer of HarbourView Asset Management
Wixted,                        Corporation; OppenheimerFunds International
                  Senior  Vice Ltd., Oppenheimer Partnership Holdings, Inc.,
President and                  Oppenheimer Real Asset Management Corporation,
Treasurer                      Shareholder Services, Inc., Shareholder
                               Financial Services, Inc., OFI Private
                               Investments, Inc. and OFI Institutional Asset
                               Management, Inc.; Treasurer and Chief Financial
                               Officer of Oppenheimer Trust Company; Assistant
                               Treasurer of Oppenheimer Acquisition Corp. and
                               OppenheimerFunds Legacy Program.

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

Carol Wolf,                    Serves on the Board of the Colorado Ballet.
Senior Vice President

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

Kurt Wolfgruber,               Director of Tremont Advisers, Inc. (as of
Senior Vice President          January 2002).

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

Caleb C. Wong,                 None
Vice President

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

Edward C. Yoensky,             None
Assistant Vice President

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

Jill Zachman,                  None
Vice   President:    Rochester
Division

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

Lucy Zachman,                  None
Assistant Vice President

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

Robert G. Zack                 General Counsel and Director of OppenheimerFunds
Senior Vice President and      Distributor, Inc.; General Counsel of Centennial
General Counsel                Asset Management Corporation; Senior Vice
                               President and General Counsel of HarbourView
                               Asset Management Corporation and OFI
                               Institutional Asset Management, Inc.; Senior
                               Vice President, General Counsel and Director of
                               Shareholder Financial Services, Inc.,
                               Shareholder Services, Inc., OFI Private
                               Investments, Inc. and Oppenheimer Trust Company;
                               Vice President and Director of Oppenheimer
                               Partnership Holdings, Inc.; Secretary of OAC
                               Acquisition Corp.; Director and Assistant
                               Secretary of OppenheimerFunds International
                               Ltd.; Director of Oppenheimer Real Asset
                               Management, Inc.; Vice President of
                               OppenheimerFunds Legacy Program.

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

Neal A. Zamore,                None
Vice President

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

Mark D. Zavanelli,             None
Vice President

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

Alex Zhou,                     None
Assistant Vice President

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

Arthur J. Zimmer,              Senior Vice President (since April 1999) of
Senior Vice President          HarbourView Asset Management Corporation.

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

The Oppenheimer Funds include the following:

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

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

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

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

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

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

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

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

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

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

Name & Principal                Position & Office         Position and Office
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 Cricle
Marietta, GA 30067

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

James Barker                    Vice President            None

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

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
412 Towne Green Circle
Addison, TX 75001

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

Kathleen Mary Byron             Vice President            None
6 Dahlia Drive
Irvine, CA 92618

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

Andrew Chonofsky                Vice President            None

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

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

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

Joseph A. DiMauro               Vice President            None
244 McKinley Avenue
Grosse Pointe Farms, MI 48236

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

Steven Dombrower(w)             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

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

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

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

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

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

Paul R. LeMire                  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

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

Montana Low                     Vice President            None

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

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

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

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

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

Mark Mezzanotte                 Vice President            None

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

Robert Moser                    Vice President            None

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

John V. Murphy(2)               Director                  President, Principal
                                                          Executive Officer,
                                                          Chairman & Manager

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

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

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

Chad V. Noel                    Vice President            None
2408 Eagleridge Drive
Henderson, NV 89014

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

Bradford Norford                Vice President            None

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

Raymond C. Olson(1)             Assistant Vice President  None
                                & Treasurer

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

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

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

Gazell Pettway                  Vice President            None

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

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

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

Dusting Raring                  Vice President            None

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

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

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

Louis H. Reynolds(2)            Vice President            None

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

Michelle Simone Richter(2)      Vice President            None

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

Ruxandra Risko(2)               Vice President            None

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

David R. Robertson(2)           Senior Vice President     None

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

Kenneth A. Rosenson             Vice President            None
24753 Bantage Point Terr.
Malibu, CA 90265

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

James H. Ruff(2)                President & Director      None

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

William R. Rylander             Vice President            None
85 Evergreen Road
Vernon, CT 06066

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

Thomas Sabow(2)                 Vice President            None

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

John Saunders                   Vice President            None

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

Tonya Sax                       Vice President            None

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

Alfredo Scalzo                  Vice President            None
9616 Lake Chase Island Way
Tampa, FL 33626

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

Thomas Schmitt                  Vice President            None

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

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

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

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)              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

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

Vincent Vermete                 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 &         Secretary
                                Director

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

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

(c)   Not applicable.

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

The accounts,  books and other documents  required to be maintained by Registrant
pursuant  to  Section  31(a) of the  Investment  Company  Act of 1940  and  rules
promulgated  thereunder  are in the possession of  OppenheimerFunds,  Inc. at its
offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.

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 City of New York and State of New York on the 25th day of
February, 2003.

                              OPPENHEIMER INTEGRITY FUNDS

                              By:  /s/ John V. Murphy*
                              -----------------------------------
                              John V. Murphy, President, Principal Executive
                              Officer & 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 & Trustee          February 25, 2003
- -----------------------
James C. Swain

/s/ John V. Murphy*          President, Principal        February 25, 2003
- ------------------------------                           Executive Officer
John V. Murphy               & Trustee

/s/ Brian W. Wixted*         Treasurer, Principal        February 25, 2003
- -------------------------    Financial &
Brian W. Wixted              Accounting Officer

/s/ William L. Armstrong*    Trustee                     February 25, 2003
- -------------------------------
William L. Armstrong

/s/ Robert G. Avis*          Trustee                     February 25, 2003
- ----------------------
Robert G. Avis

/s/ George C. Bowen*         Trustee                     February 25, 2003
- -------------------------
George C. Bowen

/s/ Edward L. Cameron*       Trustee                     February 25, 2003
- ----------------------------
Edward L. Cameron

/s/ Jon S. Fossel*           Trustee                     February 25, 2003
- --------------------
Jon S. Fossel

/s/ Sam Freedman*            Trustee                     February 25, 2003
- ----------------------
Sam Freedman

/s/ Beverly L. Hamilton*     Trustee                     February 25, 2003
- ------------------------
Beverly L. Hamilton

/s/ Robert J. Malone*        Trustee                     February 25, 2003
- ----------------------------
Robert J. Malone

/s/ F. William Marshall, Jr.*                            Trustee  February 25,
2003
- ------------------------------
F. William Marshall, Jr.


*By: /s/ Robert G. Zack                                  February 25, 2003
- -----------------------------------------
Robert G. Zack, Attorney-in-Fact

                           OPPENHEIMER INTEGRITY FUNDS


                       Registration Statement No. 2-76547

                         Post-Effective Amendment No. 41

                                  EXHIBIT INDEX
                                  -------------


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

23(d)(ii)   Amendment to Investment Advisory Agreement

23(j)       Independent Auditor's Consent.

23(m)(i)    Amended and Restated Plan & Agreement for Class A shares

23(m)(iv)   Distribution and Service Plan and Agreement for Class N shares

EX-99.D

                                 AMENDMENT TO

                         INVESTMENT ADVISORY AGREEMENT



      WHEREAS,  Oppenheimer  Integrity Funds  (hereinafter  referred to as the
"Trust"),   and  OppenheimerFunds,   Inc.  (formerly  Oppenheimer   Management
Corporation)  (hereinafter  referred to as "OFI"),  are party to an Investment
Advisory Agreement dated July 10, 1995 (the "Agreement");

      WHEREAS,  Oppenheimer  Bond Fund ("Bond  Fund") is a series of the Trust
having a separate portfolio, investment policies and investment restrictions;

      WHEREAS,  on February 26, 2002 the Trust's Board of Trustees  approved a
reduction in the annual  management fee rate for Bond Fund to become effective
as of such date; and

      WHEREAS,  the Trust and OFI desire to amend the Agreement to reflect the
foregoing management fee change;

      NOW, THEREFORE, the Trust and OFI agree as follows:

      1. All references to Oppenheimer  Management  Corporation and OMC in the
Agreement   are  hereby   replaced  with   OppenheimerFunds,   Inc.  and  OFI,
respectively.

      2.  Paragraph 5 of the  Agreement is replaced in its  entirety  with the
following:

      The Trust  agrees  to pay OFI and OFI  agrees to accept as full
      compensation  for the  performance  of all functions and duties
      to be  performed  pursuant  to  the  provisions  hereof,  a fee
      computed  on the  aggregate  net asset  value of the Fund as of
      the  close of each  business  day and  payable  monthly  at the
      following annual rate:

      0.60% of the first $200 million of average annual net assets;
      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.



      3. Except for the  foregoing,  no other  provision  of the  Agreement is
modified or amended and the  Agreement,  as amended  hereby,  shall  remain in
full force and effect.


Date: February 26, 2002


                              Oppenheimer Integrity Funds, on behalf of
                                Oppenheimer Bond Fund



                              By: _______________________________________
                                    Robert G. Zack, Vice President & Secretary


                              OppenheimerFunds, Inc.



                              By: _______________________________________
                                    Merryl Hoffman, Vice President

EX-99.M

                             AMENDED AND RESTATED

                          SERVICE PLAN AND AGREEMENT

                                     with

                      OppenheimerFunds Distributor, Inc.

                            For Class A Shares of

                             Oppenheimer Bond Fund


This Amended and Restated  SERVICE PLAN AND AGREEMENT (the "Plan") is dated as
of the 23rd day of April,  2002, by and between  Oppenheimer  Integrity  Funds
(the "Trust"),  on behalf of its Oppenheimer Bond Fund series (the "Fund") and
OppenheimerFunds Distributor, Inc. (the "Distributor").

1.    The Plan.  This Plan is the Fund's written  service plan for its Class A
      ---------
Shares  described  in the Fund's  registration  statement  as of the date this
Plan  takes  effect,  contemplated  by and to  comply  with  Rule  2830 of the
Conduct  Rules  of the  National  Association  of  Securities  Dealers,  Inc.,
pursuant to which the Fund will  reimburse  the  Distributor  for a portion of
its costs incurred in connection with the personal  service and maintenance of
shareholder  accounts  ("Accounts") that hold Class A Shares (the "Shares") of
the Fund.  The Fund may be deemed to be acting as  distributor  of  securities
of which  it is the  issuer,  pursuant  to Rule  12b-1  under  the  Investment
Company  Act of 1940 (the "1940  Act"),  according  to the terms of this Plan.
The  Distributor  is  authorized  under  the  Plan  to  pay  "Recipients,"  as
hereinafter  defined,  for  rendering  services  and  for the  maintenance  of
Accounts.  Such  Recipients are intended to have certain rights as third-party
beneficiaries under this Plan.

2.    Definitions.  As used in this Plan,  the following  terms shall have the
      -----------
following meanings:

      (a)   "Recipient"  shall  mean  any  broker,   dealer,   bank  or  other
      institution  which:  (i) has rendered  services in  connection  with the
      personal  service and  maintenance  of Accounts;  (ii) shall furnish the
      Distributor  (on  behalf  of the  Fund)  with  such  information  as the
      Distributor  shall  reasonably  request to answer such  questions as may
      arise  concerning  such  service;  and  (iii) has been  selected  by the
      Distributor  to receive  payments  under the Plan.  Notwithstanding  the
      foregoing,  a majority of the Trust's  Board of Trustees  (the  "Board")
      who are not  "interested  persons"  (as defined in the 1940 Act) and who
      have no direct or indirect  financial  interest in the operation of this
      Plan or in any  agreements  relating  to  this  Plan  (the  "Independent
      Trustees") may remove any broker,  dealer,  bank or other institution as
      a  Recipient,   whereupon   such   entity's   rights  as  a  third-party
      beneficiary hereof shall terminate.


      (b)   "Qualified  Holdings" shall mean, as to any Recipient,  all Shares
      owned  beneficially  or of record by: (i) such  Recipient,  or (ii) such
      brokerage or other  customers,  or investment  advisory or other clients
      of such  Recipient  and/or  accounts  as to which  such  Recipient  is a
      fiduciary or custodian or co-fiduciary  or  co-custodian  (collectively,
      the "Customers"),  but in no event shall any such Shares be deemed owned
      by more than one  Recipient  for  purposes  of this  Plan.  In the event
      that two entities would  otherwise  qualify as Recipients as to the same
      Shares,  the Recipient which is the dealer of record on the Fund's books
      shall be deemed the  Recipient  as to such  Shares for  purposes of this
      Plan.

3.    Payments.
      ---------

      (a) Under the Plan,  the Fund  will make  payments  to the  Distributor,
      within forty-five (45) days of the end of each calendar quarter,  in the
      amount of the  lesser of:  (i) 0.25% on an annual  basis of the  average
      during the  calendar  quarter of the  aggregate  net asset  value of the
      Shares,  computed  as of the  close of each  business  day,  or (ii) the
      Distributor's  actual  expenses  under the Plan for that  quarter of the
      type  approved by the Board.  Notwithstanding  the  foregoing,  the Fund
      will not make  payments to the  Distributor  in excess of the amount the
      Distributor  pays to  Recipients.  The  Distributor  will  use  such fee
      received from the Fund in its entirety to reimburse  itself for payments
      to  Recipients  and for its  other  expenditures  and  costs of the type
      approved by the Board incurred in connection  with the personal  service
      and maintenance of Accounts including,  but not limited to, the services
      described in the  following  paragraph.  The  Distributor  may make Plan
      payments to any "affiliated  person" (as defined in the 1940 Act) of the
      Distributor if such affiliated person qualifies as a Recipient.

            The services to be rendered by the  Distributor  and Recipients in
      connection  with the personal  service and the  maintenance  of Accounts
      may  include,  but shall not be  limited  to, the  following:  answering
      routine  inquiries from the Recipient's  customers  concerning the Fund,
      providing  such  customers  with  information  on  their  investment  in
      Shares,  assisting in the  establishment  and maintenance of accounts or
      sub-accounts  in the  Fund,  making  the  Fund's  investment  plans  and
      dividend   payment   options   available,   and  providing   such  other
      information  and  customer  liaison  services  and  the  maintenance  of
      Accounts as the Distributor or the Fund may reasonably  request.  It may
      be presumed  that a  Recipient  has  provided  services  qualifying  for
      compensation  under the Plan if it has  Qualified  Holdings of Shares to
      entitle it to  payments  under the Plan.  In the event  that  either the
      Distributor   or  the  Board   should  have  reason  to  believe   that,
      notwithstanding the level of Qualified Holdings,  a Recipient may not be
      rendering appropriate services, then the Distributor,  at the request of
      the Board,  shall require the  Recipient to provide a written  report or
      other   information   to  verify  that  said   Recipient   is  providing
      appropriate  services in this regard.  If the  Distributor  still is not
      satisfied,  it may take  appropriate  steps to terminate the Recipient's
      status as such  under  the Plan,  whereupon  such  entity's  rights as a
      third-party beneficiary hereunder shall terminate.

            Payments  received by the Distributor from the Fund under the Plan
      will not be used to pay any interest expense,  carrying charges or other
      financial  costs, or allocation of overhead by the  Distributor,  or for
      any other purpose other than for the payments  described in this Section
      3. The amount  payable to the  Distributor  each quarter will be reduced
      to the extent that reimbursement  payments  otherwise  permissible under
      the Plan have not been  authorized  by the Board for that  quarter.  Any
      unreimbursed  expenses  incurred for any quarter by the  Distributor may
      not be recovered in later periods.

(b)   The Distributor shall make payments to any Recipient  quarterly,  within
            forty-five (45)
      days of the end of each calendar quarter,  at a rate not to exceed 0.25%
      on an annual  basis of the average  during the  calendar  quarter of the
      aggregate  net asset  value of the  Shares  computed  as of the close of
      each  business  day, of  Qualified  Holdings  owned  beneficially  or of
      record by the Recipient or by its Customers.  However,  no such payments
      shall  be made to any  Recipient  for any  such  quarter  in  which  its
      Qualified  Holdings do not equal or exceed,  at the end of such quarter,
      the minimum amount  ("Minimum  Qualified  Holdings"),  if any, to be set
      from time to time by a majority of the Independent Trustees.

      Alternatively,  the  Distributor  may,  at its  sole  option,  make  the
      following  service  fee  payments  to any  Recipient  quarterly,  within
      forty-five (45) days of the end of each calendar  quarter:  (A) "Advance
      Service  Fee  Payments"  at a rate not to  exceed  0.25% of the  average
      during the calendar  quarter of the aggregate net asset value of Shares,
      computed  as of the close of  business  on the day such Shares are sold,
      constituting  Qualified  Holdings,  sold by the  Recipient  during  that
      quarter and owned  beneficially  or of record by the Recipient or by its
      Customers,  plus (B) service fee  payments at a rate not to exceed 0.25%
      on an annual  basis of the average  during the  calendar  quarter of the
      aggregate  net asset  value of Shares,  computed as of the close of each
      business day,  constituting  Qualified Holdings owned beneficially or of
      record by the  Recipient or by its  Customers  for a period of more than
      one (1) year.  At the  Distributor's  sole option,  Advance  Service Fee
      Payments may be made more often than quarterly,  and sooner than the end
      of the calendar quarter.  In the event Shares are redeemed less than one
      year after the date such Shares were sold,  the  Recipient  is obligated
      to and will repay the  Distributor  on demand a pro rata portion of such
      Advance  Service  Fee  Payments,  based on the  ratio  of the time  such
      Shares were held to one (1) year.

      A majority of the  Independent  Trustees may at any time or from time to
      time increase or decrease and  thereafter  adjust the rate of fees to be
      paid to the Distributor or to any Recipient,  but not to exceed the rate
      set forth  above,  and/or  increase  or  decrease  the  number of shares
      constituting  Minimum Qualified  Holdings.  The Distributor shall notify
      all  Recipients  of the  Minimum  Qualified  Holdings  and  the  rate of
      payments  hereunder  applicable  to  Recipients,  and shall provide each
      Recipient  with written  notice within thirty (30) days after any change
      in these  provisions.  Inclusion of such  provisions or a change in such
      provisions in a revised current  prospectus shall constitute  sufficient
      notice.

      (c)   Under  the  Plan,  payments  may be  made  to  Recipients:  (i) by
      OppenheimerFunds,  Inc.  ("OFI")  from  its  own  resources  (which  may
      include  profits  derived  from the  advisory  fee it receives  from the
      Fund),  or (ii) by the  Distributor (a subsidiary of OFI),  from its own
      resources.

4.    Selection  and  Nomination  of  Trustees.  While this Plan is in effect,
      -----------------------------------------
the selection or  replacement  of  Independent  Trustees and the nomination of
those persons to be Trustees of the Trust who are not "interested  persons" of
the Trust or the Fund shall be committed to the discretion of the  Independent
Trustees.   Nothing  herein  shall  prevent  the  Independent   Trustees  from
soliciting  the  views or the  involvement  of  others  in such  selection  or
nomination  if the final  decision on any such  selection  and  nomination  is
approved by a majority of the incumbent Independent Trustees.


5.    Reports.  While  this  Plan is in  effect,  the  Treasurer  of the Trust
      -------
shall  provide at least  quarterly a written  report to the Trust's  Board for
its review,  detailing  the amount of all payments made pursuant to this Plan,
the  identity of the  Recipient  of each such  payment,  and the  purposes for
which the payments were made.  The report shall state  whether all  provisions
of  Section 3 of this Plan have been  complied  with.  The  Distributor  shall
annually  certify to the Board the amount of its total expenses  incurred that
year with  respect to the  personal  service  and  maintenance  of Accounts in
conjunction with the Board's annual review of the continuation of the Plan.

6.    Related  Agreements.  Any  agreement  related  to this Plan  shall be in
      -------------------
writing and shall  provide that:  (i) such  agreement may be terminated at any
time,  without  payment  of  any  penalty,  by  vote  of  a  majority  of  the
Independent  Trustees or by a vote of the holders of a "majority"  (as defined
in the 1940 Act) of the Fund's  outstanding voting securities of the Class, on
not more than sixty days written  notice to any other party to the  agreement;
(ii)  such  agreement  shall  automatically  terminate  in  the  event  of its
"assignment"  (as  defined  in the 1940  Act);  (iii) it shall go into  effect
when  approved  by a vote of the Board and its  Independent  Trustees  cast in
person at a meeting  called for the purpose of voting on such  agreement;  and
(iv) it shall,  unless terminated as herein provided,  continue in effect from
year to year only so long as such  continuance  is  specifically  approved  at
least annually by the Board and its  Independent  Trustees cast in person at a
meeting called for the purpose of voting on such continuance.

7.    Effectiveness,  Continuation,  Termination and Amendment.  This Plan has
      ---------------------------------------------------------
been  approved  by a vote of the  Independent  Trustees  cast in  person  at a
meeting  called  on April 23,  2002 for the  purpose  of voting on this  Plan.
Unless terminated as hereinafter  provided,  it shall continue in effect until
renewed by the Board in accordance  with the Rule and thereafter  from year to
year  thereafter or as the Board may otherwise  determine only so long as such
continuance  is  specifically  approved at least annually by the Board and its
Independent  Trustees  by a vote cast in person  at a meeting  called  for the
purpose  of voting on such  continuance.  This Plan may be  terminated  at any
time by vote of a majority of the  Independent  Trustees or by the vote of the
holders  of  a  "majority"  (as  defined  in  the  1940  Act)  of  the  Fund's
outstanding  voting  securities  of Class A. This Plan may not be  amended  to
increase  materially the amount of payments to be made without approval of the
Class  A  Shareholders,  in the  manner  described  above,  and  all  material
amendments  must be  approved  by a vote of the Board  and of the  Independent
Trustees.

8.    Disclaimer  of  Shareholder  and  Trustee  Liability.   The  Distributor
      -----------------------------------------------------
understands  that the  obligations  of the Trust and the Fund  under this Plan
are not  binding  upon any  Trustee  or  shareholder  of the Trust or the Fund
personally,  but bind only the Fund and the Fund's  property.  The Distributor
represents  that it has notice of the  provisions of the  Declaration of Trust
of the  Trust  disclaiming  shareholder  and  Trustee  liability  for  acts or
obligations of the Fund and the Trust.



                              Oppenheimer Integrity Funds,
                              on behalf of Oppenheimer Bond Fund



                        By:   _____________________________
                             Robert G. Zack, Esq.
                             Vice President and Secretary


                              OppenheimerFunds Distributor, Inc.



                                     By:  _____________________________
                                          Katherine P. Feld, Esq.
                                          Vice President & Secretary

EX-99.J

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 41 to Registration
Statement No. 2-76547 of Oppenheimer Integrity Funds on Form N-1A of our
report dated January 23, 2003, 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
February 24, 2003

EX-99.M

                 DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
                                     WITH
                      OPPENHEIMERFUNDS DISTRIBUTOR, INC.
                            FOR CLASS N SHARES OF
                  OPPENHEIMER INTEGRITY FUNDS, ON BEHALF OF
                            OPPENHEIMER BOND FUND

This  Distribution  and Service Plan and Agreement (the "Plan") is dated as of
the 24th day of October,  2000, by and between Oppenheimer Integrity Funds, on
behalf  of   Oppenheimer   Bond  Fund  (the   "Fund")   and   OppenheimerFunds
Distributor, Inc. (the "Distributor").

1.    The Plan. This Plan is the Fund's written  distribution and service plan
      ----------
for Class N shares of the Fund (the  "Shares"),  contemplated by Rule 12b-1 as
it may be amended from time to time (the "Rule") under the Investment  Company
Act of 1940 (the "1940 Act"),  pursuant to which the Fund will  compensate the
Distributor  for its services in connection  with the  distribution of Shares,
and the personal  service and  maintenance of  shareholder  accounts that hold
Shares  ("Accounts").  The Fund may act as  distributor of securities of which
it is the issuer,  pursuant to the Rule,  according to the terms of this Plan.
The terms and  provisions of this Plan shall be  interpreted  and defined in a
manner  consistent  with the provisions and  definitions  contained in (i) the
1940 Act, (ii) the Rule,  (iii) Rule 2830 of the Conduct Rules of the National
Association  of  Securities  Dealers,  Inc.,  or any  applicable  amendment or
successor  to such rule (the "NASD  Conduct  Rules")  and (iv) any  conditions
pertaining   either  to   distribution-related   expenses  or  to  a  plan  of
distribution  to which the Fund is  subject  under any order on which the Fund
relies,  issued at any time by the U.S.  Securities  and  Exchange  Commission
("SEC").

2.    Definitions.  As used in this Plan,  the following  terms shall have the
      -----------
following meanings:

      (a)   "Recipient"  shall mean any broker,  dealer,  bank or other person
or entity which: (i) has rendered assistance  (whether direct,  administrative
or both) in the distribution of Shares or has provided  administrative support
services  with  respect to Shares  held by  Customers  (defined  below) of the
Recipient;  (ii) shall  furnish the  Distributor  (on behalf of the Fund) with
such information as the Distributor  shall  reasonably  request to answer such
questions  as may  arise  concerning  the sale of  Shares;  and (iii) has been
selected by the Distributor to receive payments under the Plan.

      (b)   "Independent  Trustees" shall mean the members of the Fund's Board
of Trustees who are not  "interested  persons" (as defined in the 1940 Act) of
the  Fund  and who  have no  direct  or  indirect  financial  interest  in the
operation of this Plan or in any agreement relating to this Plan.

      (c)   "Customers"  shall  mean  such  brokerage  or other  customers  or
investment  advisory or other  clients of a Recipient,  and/or  accounts as to
which  such  Recipient  provides  administrative  support  services  or  is  a
custodian or other fiduciary.

      (d)   "Qualified  Holdings" shall mean, as to any Recipient,  all Shares
owned  beneficially  or of  record  by:  (i)  such  Recipient,  or  (ii)  such
Recipient's  Customers,  but in no event shall any such Shares be deemed owned
by more than one  Recipient  for purposes of this Plan. In the event that more
than one person or entity  would  otherwise  qualify as  Recipients  as to the
same Shares,  the Recipient  which is the dealer of record on the Fund's books
as  determined  by the  Distributor  shall be deemed the  Recipient as to such
Shares for purposes of this Plan.

3.    Payments  for  Distribution   Assistance  and  Administrative  Support
      ------------------------------------------------------------------------
Services.
- ---------

      (a)   Payments to the  Distributor.  In  consideration  of the  payments
            -------------------------------
made by the Fund to the  Distributor  under this Plan, the  Distributor  shall
provide  administrative  support  services  and  distribution  services to the
Fund.  Such  services  include  distribution   assistance  and  administrative
support  services  rendered  in  connection  with  Shares (1) sold in purchase
transactions,  (2) issued in exchange for shares of another investment company
for which the  Distributor  serves as distributor or  sub-distributor,  or (3)
issued pursuant to a plan of  reorganization  to which the Fund is a party. If
the Board  believes  that the  Distributor  may not be  rendering  appropriate
distribution  assistance or administrative support services in connection with
the sale of Shares,  then the Distributor,  at the request of the Board, shall
provide the Board with a written  report or other  information  to verify that
the  Distributor is providing  appropriate  services in this regard.  For such
services, the Fund will make the following payments to the Distributor:

            (i)  Administrative  Support Service Fees.  Within forty-five (45)
                 ---------------------------------------
days of the end of each calendar  quarter,  the Fund will make payments in the
aggregate  amount of 0.0625%  (0.25% on an annual basis) of the average during
that calendar  quarter of the aggregate net asset value of the Shares computed
as of the close of each  business day (the  "Service  Fee").  Such Service Fee
payments  received from the Fund will compensate the Distributor for providing
administrative  support services with respect to Accounts.  The administrative
support  services in connection  with  Accounts may include,  but shall not be
limited to, the  administrative  support  services that a Recipient may render
as described in Section 3(b)(i) below.

            (ii)  Distribution  Assistance Fees  (Asset-Based  Sales Charge).
                  ------------------------------------------------------------
Within ten (10) days of the end of each month,  the Fund will make payments in
the  aggregate  amount of 0.0208%  (0.25% on an annual  basis) of the  average
during the month of the  aggregate  net asset  value of Shares  computed as of
the  close  of each  business  day  (the  "Asset-Based  Sales  Charge").  Such
Asset-Based  Sales Charge payments  received from the Fund will compensate the
Distributor for providing distribution  assistance in connection with the sale
of Shares.

            The  distribution  assistance  services  to  be  rendered  by  the
Distributor  in  connection  with the  Shares  may  include,  but shall not be
limited  to,  the  following:  (i) paying  sales  commissions  to any  broker,
dealer,  bank or other person or entity that sells Shares,  and/or paying such
persons  "Advance  Service Fee  Payments"  (as  defined  below) in advance of,
and/or in amounts  greater  than,  the amount  provided for in Section 3(b) of
this Agreement;  (ii) paying  compensation to and expenses of personnel of the
Distributor who support distribution of Shares by Recipients;  (iii) obtaining
financing or  providing  such  financing  from its own  resources,  or from an
affiliate,  for the interest and other  borrowing  costs of the  Distributor's
unreimbursed  expenses  incurred  in  rendering  distribution  assistance  and
administrative  support  services to the Fund;  and (iv) paying  other  direct
distribution   costs,   including  without   limitation  the  costs  of  sales
literature,  advertising  and  prospectuses  (other  than  those  prospectuses
furnished to current holders of the Fund's shares  ("Shareholders")) and state
"blue sky" registration expenses.

      (b)   Payments to Recipients.  The  Distributor is authorized  under the
            -------------------------
Plan  to  pay  Recipients  (1)  distribution  assistance  fees  for  rendering
distribution  assistance  in  connection  with the sale of Shares  and/or  (2)
service fees for  rendering  administrative  support  services with respect to
Accounts.  However,  no such  payments  shall be made to any Recipient for any
quarter in which its Qualified  Holdings do not equal or exceed, at the end of
such quarter, the minimum amount ("Minimum Qualified Holdings"),  if any, that
may be set from time to time by a majority of the  Independent  Trustees.  All
fee payments  made by the  Distributor  hereunder  are subject to reduction or
chargeback so that the aggregate  service fee payments and Advance Service Fee
Payments do not exceed the limits on payments to  Recipients  that are, or may
be, imposed by the NASD Conduct Rules.  The Distributor may make Plan payments
to any "affiliated  person" (as defined in the 1940 Act) of the Distributor if
such  affiliated  person  qualifies as a Recipient or retain such  payments if
the Distributor qualifies as a Recipient.

            In  consideration  of the  services  provided by  Recipients,  the
Distributor may make the following payments to Recipients:

            (i)  Service  Fee.  In  consideration  of  administrative  support
                 ------------
services  provided by a Recipient during a calendar  quarter,  the Distributor
shall  make  service  fee  payments  to  that  Recipient   quarterly,   within
forty-five  (45) days of the end of each  calendar  quarter,  at a rate not to
exceed  0.0625%  (0.25% on an annual basis) of the average during the calendar
quarter of the aggregate  net asset value of Shares,  computed as of the close
of each business day,  constituting  Qualified  Holdings owned beneficially or
of record by the  Recipient or by its  Customers for a period of more than the
minimum period (the "Minimum  Holding  Period"),  if any, that may be set from
time to time by a majority of the Independent Trustees.

            Alternatively,  the Distributor may, at its sole option,  make the
following service fee payments to any Recipient  quarterly,  within forty-five
(45)  days of the end of each  calendar  quarter:  (A)  "Advance  Service  Fee
Payments"  at a rate not to exceed  0.25% of the average  during the  calendar
quarter of the aggregate  net asset value of Shares,  computed as of the close
of business on the day such Shares are sold,  constituting Qualified Holdings,
sold by the Recipient during that quarter and owned  beneficially or of record
by the Recipient or by its Customers,  plus (B) service fee payments at a rate
not to exceed  0.0625%  (0.25% on an annual  basis) of the average  during the
calendar  quarter of the aggregate  net asset value of Shares,  computed as of
the  close  of  each  business  day,  constituting  Qualified  Holdings  owned
beneficially  or of record by the  Recipient or by its  Customers for a period
of more than one (1) year. At the Distributor's  sole option,  Advance Service
Fee  Payments may be made more often than  quarterly,  and sooner than the end
of the calendar  quarter.  In the event Shares are redeemed less than one year
after the date such Shares were sold,  the  Recipient is obligated to and will
repay the  Distributor  on demand a pro rata portion of such  Advance  Service
Fee Payments,  based on the ratio of the time such Shares were held to one (1)
year.

            The  administrative  support services to be rendered by Recipients
in connection with the Accounts may include,  but shall not be limited to, the
following:  answering routine inquiries  concerning the Fund, assisting in the
establishment  and  maintenance  of accounts or  sub-accounts  in the Fund and
processing Share redemption  transactions,  making the Fund's investment plans
and dividend payment options  available,  and providing such other information
and services in connection with the rendering of personal  services and/or the
maintenance  of  Accounts,  as the  Distributor  or the  Fund  may  reasonably
request.

            (ii)  Distribution  Assistance  Fee  (Asset-Based  Sales  Charge)
                  ------------------------------------------------------------
Payments.  Irrespective of whichever  alternative method of making service fee
- -----------
payments to Recipients is selected by the  Distributor,  the Distributor  may,
at its  sole  option,  make  distribution  assistance  fee  payments  to  each
Recipient  quarterly,  within  forty-five  (45)  days  after  the  end of each
calendar  quarter,  at a rate not to exceed 0.0625% (0.25% on an annual basis)
of the average  during the calendar  quarter of the  aggregate net asset value
of  Shares  computed  as of  the  close  of  each  business  day  constituting
Qualified  Holdings  owned  beneficially  or of record by the Recipient or its
Customers for a period of more than one (1) year.  Alternatively,  at its sole
option,  the  Distributor may make  distribution  assistance fee payments to a
Recipient  quarterly,  at the rate  described  above,  on Shares  constituting
Qualified  Holdings  owned  beneficially  or of record by the Recipient or its
Customers  without  regard  to the  1-year  holding  period  described  above.
Distribution  assistance  fee payments  shall be made only to Recipients  that
are  registered  with  the  SEC  as  a   broker-dealer   or  are  exempt  from
registration.

            The  distribution  assistance to be rendered by the  Recipients in
connection  with the sale of Shares may include,  but shall not be limited to,
the  following:  distributing  sales  literature and  prospectuses  other than
those furnished to current Shareholders,  providing compensation to and paying
expenses of personnel of the Recipient who support the  distribution of Shares
by the  Recipient,  and  providing  such other  information  and  services  in
connection with the  distribution of Shares as the Distributor or the Fund may
reasonably request.

      (c)   A majority  of the  Independent  Trustees  may at any time or from
time to time  (i)  increase  or  decrease  the  rate of fees to be paid to the
Distributor or to any Recipient,  but not to exceed the rates set forth above,
and/or  (ii)  direct the  Distributor  to  increase  or  decrease  any Minimum
Holding  Period,  any  maximum  period  set by a majority  of the  Independent
Trustees  during  which  fees  will be paid on Shares  constituting  Qualified
Holdings  owned  beneficially  or of record by a Recipient or by its Customers
(the  "Maximum  Holding   Period"),   or  Minimum  Qualified   Holdings.   The
Distributor  shall notify all  Recipients of any Minimum  Qualified  Holdings,
Maximum  Holding Period and Minimum  Holding Period that are  established  and
the rate of payments  hereunder  applicable to  Recipients,  and shall provide
each  Recipient  with written  notice within thirty (30) days after any change
in  these  provisions.  Inclusion  of  such  provisions  or a  change  in such
provisions  in a supplement  or amendment to or revision of the  prospectus of
the Fund shall constitute sufficient notice.

      (d)   The Service  Fee and the  Asset-Based  Sales  Charge on Shares are
subject to reduction or elimination  under the limits to which the Distributor
is, or may become, subject under the NASD Conduct Rules.

      (e)   Under the Plan,  payments may also be made to  Recipients:  (i) by
OppenheimerFunds,  Inc.  ("OFI")  from its own  resources  (which may  include
profits  derived from the advisory fee it receives from the Fund),  or (ii) by
the  Distributor  (a  subsidiary  of  OFI),  from  its  own  resources,   from
Asset-Based  Sales Charge payments or from the proceeds of its borrowings,  in
either case, in the discretion of OFI or the Distributor, respectively.

      (f)   Recipients  are  intended to have  certain  rights as  third-party
beneficiaries  under this Plan, subject to the limitations set forth below. It
may be presumed  that a Recipient  has  provided  distribution  assistance  or
administrative  support  services  qualifying for payment under the Plan if it
has Qualified  Holdings of Shares that entitle it to payments  under the Plan.
If either the  Distributor  or the Board  believe  that,  notwithstanding  the
level of Qualified  Holdings,  a Recipient  may not be  rendering  appropriate
distribution   assistance   in   connection   with  the  sale  of   Shares  or
administrative  support services for Accounts,  then the  Distributor,  at the
request of the Board,  shall require the Recipient to provide a written report
or other  information to verify that said  Recipient is providing  appropriate
distribution  assistance and/or services in this regard. If the Distributor or
the  Board of  Trustees  still is not  satisfied  after  the  receipt  of such
report,  either may take appropriate steps to terminate the Recipient's status
as a  Recipient  under  the  Plan,  whereupon  such  Recipient's  rights  as a
third-party  beneficiary  hereunder shall  terminate.  Additionally,  in their
discretion  a majority  of the  Fund's  Independent  Trustees  at any time may
remove any  broker,  dealer,  bank or other  person or entity as a  Recipient,
whereupon  such  person's  or  entity's  rights as a  third-party  beneficiary
hereof  shall  terminate.  Notwithstanding  any other  provision of this Plan,
this Plan  does not  obligate  or in any way make the Fund  liable to make any
payment  whatsoever  to any  person  or  entity  other  than  directly  to the
Distributor.  The  Distributor  has no  obligation  to pay any Service Fees or
Distribution  Assistance  Fees to any  Recipient  if the  Distributor  has not
received  payment of Service  Fees or  Distribution  Assistance  Fees from the
Fund.

4.    Selection and Nomination of Trustees.  While this Plan is in effect, the
      ------------------------------------
selection  and  nomination  of persons to be  Trustees of the Fund who are not
"interested  persons"  of  the  Fund   ("Disinterested   Trustees")  shall  be
committed to the discretion of the incumbent Disinterested  Trustees.  Nothing
herein shall prevent the incumbent  Disinterested Trustees from soliciting the
views or the  involvement of others in such selection or nomination as long as
the final  decision  on any such  selection  and  nomination  is approved by a
majority of the incumbent Disinterested Trustees.

5.    Reports.  While this Plan is in effect,  the Treasurer of the Fund shall
      -------
provide  written  reports to the Fund's  Board for its review,  detailing  the
amount of all  payments  made  under this Plan and the  purpose  for which the
payments were made. The reports shall be provided  quarterly,  and shall state
whether all provisions of Section 3 of this Plan have been complied with.

6.    Related  Agreements.  Any  agreement  related  to this Plan  shall be in
      -------------------
writing and shall  provide that:  (i) such  agreement may be terminated at any
time,  without  payment  of  any  penalty,  by a  vote  of a  majority  of the
Independent  Trustees or by a vote of the holders of a "majority"  (as defined
in the 1940 Act) of the Fund's  outstanding  voting Class N shares;  (ii) such
termination  shall be on not more than sixty days' written notice to any other
party to the agreement;  (iii) such agreement shall automatically terminate in
the  event of its  "assignment"  (as  defined  in the  1940  Act);  (iv)  such
agreement  shall go into effect  when  approved by a vote of the Board and its
Independent  Trustees  cast in person at a meeting  called for the  purpose of
voting on such agreement;  and (v) such agreement shall,  unless terminated as
herein  provided,  continue  in effect  from year to year only so long as such
continuance is specifically  approved at least annually by a vote of the Board
and its  Independent  Trustees  cast in  person at a  meeting  called  for the
purpose of voting on such continuance.

7.    Effectiveness,  Continuation,  Termination and Amendment.  This Plan has
      -----------------------------------------------------------
been approved by a vote of the Board and of its  Independent  Trustees cast in
person at a meeting  called on October 24, 2000,  for the purpose of voting on
this Plan and shall take effect as of the date first set forth  above.  Unless
terminated as hereinafter  provided, it shall continue in effect until renewed
by the Board in accordance  with the Rule and thereafter  from year to year or
as the Board may otherwise  determine but only so long as such  continuance is
specifically  approved  at  least  annually  by a vote  of the  Board  and its
Independent  Trustees  cast in person at a meeting  called for the  purpose of
voting on such continuance

      This  Plan may not be  amended  to  increase  materially  the  amount of
payments  to be  made  under  this  Plan,  without  approval  of the  Class  N
Shareholders at a meeting called for that purpose and all material  amendments
must be approved by a vote of the Board and of the Independent Trustees.

      This Plan may be  terminated  at any time by a vote of a majority of the
Independent  Trustees  or by the  vote  of the  holders  of a  "majority"  (as
defined in the 1940 Act) of the Fund's  outstanding  Class N voting shares. In
the event of such  termination,  the Board and its Independent  Trustees shall
determine  whether the Distributor  shall be entitled to payment from the Fund
of all or a portion of the Service Fee and/or the Asset-Based  Sales Charge in
respect of Shares sold prior to the effective date of such termination.

8.    Disclaimer  of  Shareholder  and  Trustee  Liability.   The  Distributor
      --------------------------------------------------------
understands  that the  obligations of the Fund under this Plan are not binding
upon any  Trustee or  shareholder  of the Fund  personally,  but bind only the
Fund and the Fund's  property.  The Distributor  represents that it has notice
of the  provisions  of the  Declaration  of  Trust  of  the  Fund  disclaiming
shareholder and Trustee liability for acts or obligations of the Fund.

                                    Oppenheimer Integrity Funds,
                                    on behalf of Oppenheimer Bond Fund



                                    By: ______________________________
                                          Robert G. Zack
                                          Assistant Secretary


                                    OppenheimerFunds Distributor, Inc.



                                    By: ______________________________
                                          Katherine P. Feld
                                          Vice President and Secretary