485BPOS

                                                                                          Registration No. 2-86903
                                                                                                  File No. 811-3864

                                                   UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              WASHINGTON, D.C. 20549
                                                     FORM N-1A


REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                                                         [X]

         PRE-EFFECTIVE AMENDMENT NO.                                                                            [ ]

         POST-EFFECTIVE AMENDMENT NO. 43                                                                        [X]

                                                       and/or

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

         Amendment No. 41                                                                                       [X]


                                             OPPENHEIMER BALANCED FUND
- -------------------------------------------------------------------------------------------------------------------

                              6803 South Tucson Way, Centennial, Colorado 80112-3924
- -------------------------------------------------------------------------------------------------------------------
                                (Address of Principal Executive Offices) (Zip Code)

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

                                               Robert G. Zack, Esq.
                                              OppenheimerFunds, Inc.
                   Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008
- -------------------------------------------------------------------------------------------------------------------
                                      (Name and Address of Agent for Service)

It is proposed that this filing will become effective:

[  ]  Immediately upon filing pursuant to paragraph (b)
[X]   On December 28, 2007, 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
Balanced Fund



Prospectus dated December 28, 2007




                                                              Oppenheimer Balanced Fund is a mutual fund that seeks
                                                              high total return consistent with the preservation of
                                                              principal. It invests in a variety of equity and debt
                                                              securities of U.S. and foreign issuers, as well as
                                                              money market instruments.

                                                                   This prospectus contains important information
                                                              about the Fund's objective, its investment policies,
                                                              strategies and risks. It also contains important
                                                              information about how to buy and sell shares of the
                                                              Fund and other account features. Please read this
                                                              prospectus carefully before you invest and keep it
                                                              for future reference about your account.




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




                                                                                         (logo) OppenheimerFunds
                                                                                            The Right Way to Invest



CONTENTS
- ---------------------------- -----------------------------------------------------------------------------------------


                             ABOUT THE FUND

                             The Fund's Investment Objective and Principal Investment 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

                             Special Investor Services
                             AccountLink
                             PhoneLink
                             OppenheimerFunds Internet Website
                             Retirement Plans

                             How to Sell Shares
                             By Mail
                             By Telephone

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

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

The Fund's Investment Objective and Principal Investment Strategies

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks high total investment return consistent with preservation
of principal.


WHAT DOES THE FUND MAINLY INVEST IN? The Fund buys a variety of different types of securities to seek its
objective. Mainly, these include:
o        Equity securities: Primarily common stocks of U.S. and foreign companies.
o        Debt securities: Including bonds and notes issued by domestic and foreign companies (which can include
        lower-grade, high-yield securities), securities issued or guaranteed by the U.S. Government and its
        agencies and instrumentalities, including mortgage-related securities, (these are referred to as "U.S.
        Government securities"), private issuer mortgage-backed securities, debt obligations of foreign
        governments, and money market instruments, which are obligations that have a maturity of 13 months or
        less, including short-term U.S. Government securities, corporate and bank debt obligations and commercial
        paper.
The Fund may also invest in derivative instruments, including options, futures, and credit derivatives such as
credit default swaps. The Fund's 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 use different investment styles to carry out an asset allocation strategy that seeks
broad diversification across asset classes. They normally maintain a balanced mix of stocks, debt securities and
cash, although the Fund has no requirements to weight the portfolio holdings in a fixed proportion. Therefore,
the portfolio's mix of equity and debt securities and cash will change over time as the portfolio managers seek
relative values and opportunities in different asset classes.

         Because the goal of total return is to increase overall portfolio value from a combination of capital
growth and income, the Fund invests in stocks mainly for their capital appreciation potential and in debt
securities both for income and for total return. The income from debt securities and money market instruments can
also help the Fund preserve principal when stock markets are volatile.

         The portfolio managers employ both "growth" and "value" styles in selecting stocks. They employ
fundamental analysis of a company's financial statements and management structure, operations and product
development, as well as the industry of which the company is part. Value investing seeks stocks that are
temporarily out of favor or undervalued in the market by various measures, such as the stock's price/earnings
ratio. Growth investing seeks stocks that the managers believe have possibilities for increases in stock price
because of strong earnings growth compared to the market, the development of new products or services or other
favorable economic factors.

WHO IS THE FUND DESIGNED FOR? The Fund is designed primarily for investors seeking high total return from their
investment over the long term, from a fund employing different investment styles in allocating its assets among a
variety of types of securities. While the Fund seeks to select investments consistent with the preservation of
principal, investors should be willing to assume the risks of short-term share price fluctuations that are
typical for a fund with significant investments in stocks and foreign securities. Since the Fund's income level
will fluctuate, it is not designed for investors needing an assured level of current income. Because of its focus
on seeking total return over the long-term, the Fund may be appropriate for part of an investor's retirement plan
portfolio. However, the Fund is not a complete investment program.

Main Risks of Investing in the Fund

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

RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term volatility at times may be great.
The Fund will normally invest at least 25% of its total assets in stocks and other equity securities, and the
value of the Fund's portfolio therefore will be affected by changes in the stock markets. Market risk will affect
the Fund's net asset values per share, which will fluctuate as the values of the Fund's portfolio securities
change. A variety of factors can affect the price of a particular stock, and the prices of individual stocks do
not all move in the same direction uniformly or at the same time. Different stock markets may behave differently
from each other.

         Other factors can affect a particular stock's price, such as poor earnings reports by the issuer, loss
of major customers, major litigation against the issuer, or changes in government regulations affecting the
issuer or its industry. The Fund has no requirements to invest in companies in any particular capitalization
range, and can invest in securities of large companies and also small and medium-size companies, which may have
more volatile stock prices than large companies.

RISKS OF FOREIGN INVESTING. The Fund can buy securities issued by companies or governments in any country,
whether a developed or an emerging market country. While the Fund has no limits on the amounts it can invest in
foreign securities, it normally expects to invest not more than 50% of its total assets in foreign securities.
Foreign securities may offer special investment opportunities, but there are also special risks. The change in
value of a foreign currency against the U.S. dollar will result in a change in the U.S. dollar value of foreign
securities denominated in that foreign currency. Foreign issuers are not subject to the same accounting and
disclosure requirements that U.S. companies are subject to. The value of foreign investments may be affected by
exchange control regulations, expropriation or nationalization of a company's assets, foreign taxes, delays in
settlement of transactions, changes in governmental, economic or monetary policy in the U.S. or abroad, or other
political and economic factors.


         Additionally, if the Fund invests a significant amount of its assets in foreign securities, it may be
exposed to "time-zone arbitrage" attempts by investors seeking to take advantage of the differences in value of
foreign securities that might result from events that occur after the close of the foreign securities market on
which a foreign security is traded and before the close of the New York Stock Exchange (the "NYSE") that day,
when the Fund's net asset value is calculated. If such time-zone arbitrage were successful, it might dilute the
interests of other shareholders. However, the Fund's use of "fair value pricing" to adjust the closing market
prices of foreign securities under certain circumstances, to reflect what the Manager and the Board of Trustees
believe to be their fair value may help deter those activities.


Special Risks of Emerging and Developing Markets. Securities in emerging and developing markets present risks not
         found in more mature markets. Those securities may be more difficult to sell at an acceptable price and
         their prices may be more volatile than securities of issuers in more developed markets. Settlements of
         trades may be subject to greater delays so that the Fund might not receive the proceeds of a sale of a
         security on a timely basis.

         Emerging markets might have less developed trading markets and exchanges, and legal and accounting
         systems. Investments may be subject to greater risks of government restrictions on withdrawing the sales
         proceeds of securities from the country. Economies of developing countries may be more dependent on
         relatively few industries that may be highly vulnerable to local and global changes. Governments may be
         more unstable and present greater risks of nationalization or restrictions on foreign ownership of
         stocks of local companies. These investments may be very speculative.


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


Special Risks of Lower-Grade Securities. The Fund can invest up to 35% of its total assets in securities below
         investment-grade to seek income. Therefore, the Fund's credit risks are greater than those of funds that
         buy only investment-grade bonds. Lower-grade debt securities (commonly called "junk bonds") 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
         generally have greater risks that the issuers of those securities might not meet their debt obligations.
         The market for lower-grade securities may be less liquid, especially during times of general economic
         distress, and therefore they may be harder to sell at an acceptable price. These risks can reduce the
         Fund's share prices and the income it earns.

INTEREST RATE RISKS. The values of debt securities are subject to change when prevailing interest rates change.
When interest rates fall, the values of already-issued debt securities generally rise. When interest rates rise,
the values of already-issued debt securities generally fall. The magnitude of these fluctuations will often be
greater for debt securities having longer maturities than shorter-term debt securities. The Fund's share prices
can go up or down when interest rates change because of the effect of the changes on the value of the Fund's
investments in debt securities.

PREPAYMENT RISK. Prepayment risk occurs when the issuer of a security can prepay the principal prior to the
security's maturity. Securities subject to prepayment risk, including the mortgage-related securities that the
Fund can buy, have greater potential for loss when 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. Additionally, the Fund might
buy 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 the Fund paid.

         If interest rates rise rapidly, prepayments might occur at slower rates than expected, which could have
the effect of lengthening the expected maturity of a short or medium-term security. That could cause its value to
fluctuate more widely in response to changes in interest rates. In turn, this could cause the value of the Fund's
shares to fluctuate more.

         The prices and yields of mortgage-related securities 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 mortgage-related security occur faster than expected when
interest rates fall, the market value and yield of the mortgage-related security could 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.

ASSET ALLOCATION RISKS. Because the Fund typically invests in a combination of stocks, bonds and money market
instruments to seek total return, it might not achieve growth in its share prices to the same degree as funds
focusing on stocks during periods of rapidly rising prices. Also, the Fund's investments in stocks may make it
more difficult for the Manager to preserve principal in volatile stock markets. The Fund's use of value and
growth styles in selecting stocks might not be successful, particularly if stocks selected as value investments
fail to appreciate in price to the extent the Manager expected.

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.
There is no assurance that the Fund will achieve its investment objective.

         In the short term, domestic and foreign stock markets can be volatile, and the price of the Fund's
shares will go up and down in response to those changes. The Fund's income-oriented investments may help cushion
the Fund's total return from changes in stock prices, but debt securities are subject to credit, prepayment and
interest rate risks. In the OppenheimerFunds spectrum, the Fund may be less volatile than funds that focus only
on stock investments, but has less opportunities for capital growth than funds focused solely on stocks and more
risks than the funds that focus solely on investment grade bonds.

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


The Fund's Past Performance

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

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

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

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

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


For the period from 1/1/07  through  9/30/07,  the  cumulative  return (not  annualized)  before  taxes for Class A
shares was 6.01%.


During the period shown in the bar chart, the highest return (not  annualized)  before taxes for a calendar quarter
was 12.05% (2nd Qtr '03) and the lowest  return (not  annualized)  before taxes for a calendar  quarter was -11.03%
(3rd Qtr '01).


- --------------------------------------------- ------------------------- ------------------------- -------------------------
Average Annual Total Returns                                                    5 Years                   10 Years
                                                                                                   (or life of class, if
for the periods ended December 31, 2006                1 Year                                              less)
- --------------------------------------------- ------------------------- ------------------------- -------------------------
- --------------------------------------------- ------------------------- ------------------------- -------------------------
Class A Shares (inception 4/24/87)
  Return Before Taxes                                  4.01%                     5.53%                     7.06%
  Return After Taxes on Distributions                  2.44%                     4.34%                     5.00%
  Return  After Taxes on  Distributions  and           3.97%                     4.29%                     5.06%
  Sale of Fund Shares
- --------------------------------------------- ------------------------- ------------------------- -------------------------
Class B Shares (inception 8/29/95)                     4.34%                     5.49%                     7.16%
- --------------------------------------------- ------------------------- ------------------------- -------------------------
Class C Shares (inception 12/1/93)                     8.35%                     5.88%                     6.79%
- --------------------------------------------- ------------------------- ------------------------- -------------------------
- --------------------------------------------- ------------------------- ------------------------- -------------------------
Class N Shares (inception 3/1/01)                      8.82%                     6.30%                     5.15%
- --------------------------------------------- ------------------------- ------------------------- -------------------------
- --------------------------------------------- ------------------------- ------------------------- -------------------------

S&P 500  Index (reflects no deduction for              15.78%                    6.18%                     8.42%
fees, expenses or taxes)                                                                                   4.10%*

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

Lehman Bros.  Aggregate Bond Index (reflects           4.33%                     5.06%                     6.24%
no deduction for fees, expenses or taxes)                                                                  5.33%*

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

*   From 2/28/01.


The Fund's  average  annual total returns  include the applicable  sales charge:  for Class A, the current  maximum
initial  sales  charge of 5.75%;  for Class B, the  contingent  deferred  sales  charges of 5%  (1-year)  and 2% (5
years);  and for Class C and Class N, the 1%  contingent  deferred  sales  charge  for the 1-year  period.  Because
Class B shares convert to Class A shares 72 months after purchase,  Class B  "life-of-class"  performance  does not
include any contingent  deferred  sales charge and uses Class A performance  for the period after  conversion.  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 shares is compared to the
Standard & Poor's 500 Index,  an unmanaged index of U.S. equity  securities,  and to the Lehman Brothers  Aggregate
Bond Index,  an  unmanaged  index of U.S.  corporate,  government  and  mortgage-backed  securities.  The  indices'
performance  includes  reinvestment of income but does not reflect  transaction costs, fees, expenses or taxes. The
Fund's investments vary from those in the indices.

Fees and Expenses of the Fund


         The following tables are provided to help you understand the fees and expenses you may pay if you buy
and hold shares of the Fund.  The Fund pays 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 September 30, 2007.


  -----------------------------------------------------------------------------------------------------------
  Shareholder Fees (charges paid directly from your investment):
  -----------------------------------------------------------------------------------------------------------
  ----------------------------------------------- -------------- -------------- --------------- -------------
                                                     Class A        Class B     Class C Shares    Class N
                                                     Shares         Shares                         Shares
  ----------------------------------------------- -------------- -------------- --------------- -------------
  ----------------------------------------------- -------------- -------------- --------------- -------------
  Maximum Sales Charge (Load) on purchases (as
  % of offering price)                                5.75%          None            None           None
  ----------------------------------------------- -------------- -------------- --------------- -------------
  ----------------------------------------------- -------------- -------------- --------------- -------------
  Maximum Deferred Sales Charge (Load) (as % of
  the lower of the original offering
  price or redemption proceeds)                      None(1)       5.00%(2)        1.00%(3)       1.00%(4)

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

  -----------------------------------------------------------------------------------------------------------
  Annual Fund Operating Expenses (deducted from Fund assets):
  (% of average daily net assets)
  -----------------------------------------------------------------------------------------------------------
  ----------------------------------------------- -------------- -------------- --------------- -------------
                                                     Class A        Class B     Class C Shares    Class N
                                                     Shares         Shares                         Shares
  ----------------------------------------------- -------------- -------------- --------------- -------------
  ----------------------------------------------- -------------- -------------- --------------- -------------

  Management Fees                                     0.68%          0.68%          0.68%          0.68%

  ----------------------------------------------- -------------- -------------- --------------- -------------
  ----------------------------------------------- -------------- -------------- --------------- -------------
  Distribution and/or Service (12b-1) Fees            0.21%          1.00%          1.00%          0.50%
  ----------------------------------------------- -------------- -------------- --------------- -------------
  ----------------------------------------------- -------------- -------------- --------------- -------------

  Other Expenses                                      0.16%          0.27%          0.22%          0.27%

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

  Acquired Fund Fees and Expenses                     0.01%          0.01%          0.01%          0.01%

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

  Total Annual Operating Expenses                     1.06%          1.96%          1.91%          1.46%

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


Expenses may vary in future years.  "Other Expenses"  include  transfer agent fees,  custodial fees, and accounting
and legal  expenses  that the Fund pays.  The Transfer  Agent has  voluntarily  undertaken to the Fund to limit the
transfer agent fees to 0.35% of average daily net assets per fiscal year for all classes.  That  undertaking may be
amended or withdrawn at any time.  For the Fund's  fiscal year ended  September 30, 2007,  the transfer  agent fees
did not exceed the expense  limitation  described above.  The Manager will voluntarily  waive fees and/or reimburse
Fund  expenses in an amount  equal to the  indirect  management  fees  incurred  through the Fund's  investment  in
Oppenheimer  Institutional  Money Market Fund.  The Fund also receives  certain  credits from the Fund's  custodian
that,  during the fiscal year,  reduced its custodial  expenses for all share classes by 0.01% of average daily net
assets.  After these waivers and credits,  the actual "Other  Expenses" as  percentages of average daily net assets
were  0.15% for Class A shares,  0.26% for Class B shares,  0.21% for Class C shares,  and 0.26% for Class N shares
and the "Total  Annual  Operating  Expenses"  as  percentages  of average  daily net assets  were 1.04% for Class A
shares, 1.94% for Class B shares, 1.89% for Class C shares, and 1.44% for Class N shares.

1.       A Class A contingent deferred sales charge may apply to redemptions of investments of $1 million or more
     or to certain retirement plan redemptions. See "How to Buy Shares" for details.
2.       Applies to redemptions in the first year after purchase.  The contingent  deferred sales charge  gradually
     declines from 5% to 1% during years one through six 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.


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

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

  ------------------------------------- ----------------- ------------------- ------------------- -----------------
  If shares are redeemed:                    1 Year            3 Years             5 Years            10 Years
  ------------------------------------- ----------------- ------------------- ------------------- -----------------
  ------------------------------------- ----------------- ------------------- ------------------- -----------------
  Class A Shares                              $677               $894               $1,129             $1,801
  ------------------------------------- ----------------- ------------------- ------------------- -----------------
  ------------------------------------- ----------------- ------------------- ------------------- -----------------

  Class B Shares                              $701               $921               $1,267            $1,853*

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

  Class C Shares                              $296               $606               $1,041             $2,254

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

  Class N Shares                              $250               $465                $803              $1,759

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

  ------------------------------------- ----------------- ------------------- ------------------- -----------------
  If shares are not redeemed:                1 Year            3 Years             5 Years            10 Years
  ------------------------------------- ----------------- ------------------- ------------------- -----------------
  ------------------------------------- ----------------- ------------------- ------------------- -----------------
  Class A Shares                              $677               $894               $1,129             $1,801
  ------------------------------------- ----------------- ------------------- ------------------- -----------------
  ------------------------------------- ----------------- ------------------- ------------------- -----------------

  Class B Shares                              $201               $621               $1,067            $1,853*

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

  Class C Shares                              $196               $606               $1,041             $2,254

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

  Class N Shares                              $150               $465                $803              $1,759

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

In the first example,  expenses  include the initial sales charge for Class A and the  applicable  Class B, Class C
and Class N contingent  deferred  sales  charges.  In the second  example,  the Class A expenses  include the sales
charge, but Class B, Class C and Class N expenses do not include the contingent deferred sales charges.
*   Class B  expenses  for years 7 through 10 are based on Class A  expenses,  since  Class B shares  automatically
    convert to Class A shares 72 months after purchase.

About the Fund's Investments

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

         At times the Fund may focus more on investing for capital appreciation with less emphasis on seeking
income, while seeking to preserve principal. At other times, for example when stock markets are less stable, the
Fund might have greater relative emphasis on income-seeking investments, such as government securities and money
market instruments.

         The Manager tries to reduce risks by carefully researching securities before they are purchased. The
Fund attempts to reduce its exposure to market risks by diversifying its investments, that is, by not holding a
substantial amount of stock of any one company and by not investing too great a percentage of the Fund's assets
in any one issuer. Also, the Fund does not concentrate 25% or more of its total assets in investments in any one
industry. However, changes in the overall market prices of securities and the income they pay can occur at any
time. The share prices of the Fund may change daily based on changes in market prices of securities and market
conditions and in response to other economic events.

         In seeking broad diversification of the Fund's portfolio over asset classes, issuers and economies, the
portfolio managers consider overall and relative economic conditions in U.S. and foreign markets. They seek broad
diversification by investing in different countries to help moderate the special risks of investing in foreign
securities and lower-grade, high-yield debt securities.

Stock Investments. The Fund's stock investments may be exchange-traded or over-the-counter securities.
         Over-the-counter securities may have less liquidity than exchange-traded securities. Stocks represent an
         ownership interest in a company and common stocks rank below preferred stocks and bonds in their claim
         for dividends and assets if the issuer is liquidated or becomes bankrupt.


     o   Investing in Small- and Mid-Cap Stocks. The Fund may invest in small- and mid-cap companies. Small- and
         mid-cap companies can include both established and newer companies. While these companies might offer
         greater opportunities for capital appreciation than larger or more established companies, they involve
         greater risks of loss or price fluctuations than larger issuers.

         Small- and mid-cap companies may have more limited product lines or markets for their products, limited
         access to financial resources and less depth in management skill than larger, more established
         companies. Their stocks may be less liquid than those of larger issuers. That means the Fund could have
         greater difficulty selling a security of a small- or mid-cap issuer at an acceptable price, especially
         in periods of market volatility. That factor increases the potential for losses to the Fund. Also, it
         may take a longer period of time before the Fund realizes a gain on an investment in a small- or mid-cap
         company than in a larger company, if it realizes any gain at all.


Debt Securities. The Fund will normally invest at least 25% of its net assets in fixed-income senior securities,
         such as bonds and notes. The debt securities the Fund buys may be rated by nationally recognized rating
         organizations or they may be unrated securities assigned a rating by the Manager.

         The Fund has no requirements as to the maturity of the debt securities it can buy, or as to the market
         capitalization range of the issuers of those securities. The Fund's investments may be investment grade
         or below investment grade in credit quality. The Manager does not rely solely on ratings by rating
         organizations in selecting debt securities but evaluates business and economic factors affecting an
         issuer as well.

         The Fund's foreign debt investments can be denominated in U.S. dollars or in foreign currencies. Foreign
         government securities might not be backed by the government's full faith and credit. The Fund can buy
         "Brady Bonds," which are U.S. dollar-denominated debt securities collateralized by zero-coupon U.S.
         Treasury securities. They are typically issued by governments of emerging market countries and are
         considered speculative securities with higher risks of default. The Fund will buy foreign currency only
         in connection with the purchase and sale of foreign securities and not for speculation.

     o   U.S. Government Securities. The Fund can invest in securities issued or guaranteed by the U.S. Treasury
         or other U.S. Government agencies or federally-chartered corporate entities referred to as
         "instrumentalities." These are referred to as "U.S. Government securities" in this prospectus. They can
         include collateralized mortgage obligations ("CMOs") and other mortgage-related securities.

     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 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 repayment of
         principal. Although not rated, Treasury obligations have little credit risk, but prior to their maturity
         they are subject to interest rate risk.

     o   Obligations of 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. These
         have relatively little credit risk. Some are supported by the full faith and credit of the U.S.
         Government, such as Government National Mortgage Association pass-through mortgage certificates (called
         "Ginnie Maes"). Some are supported by the right of the issuer to borrow from the U.S. Treasury under
         certain circumstances, such as Federal National Mortgage Association bonds ("Fannie Maes"). Others are
         supported only by the credit of the entity that issued them.


     o   Mortgage-Related U.S. Government Securities. The Fund can buy 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, each having different interest rates and maturities. The collateral is
         either in the form of mortgage pass-through certificates issued or guaranteed by a U.S. Government
         agency or instrumentality or mortgage loans insured by a U.S. Government agency.


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

         During the period between the sale and the repurchase, the Fund will not be entitled to receive interest
         and principal payments on the securities that have been sold. It is possible that the market value of
         the securities the Fund sells may decline below the price at which the Fund is obligated to repurchase
         securities, or that the counterparty might default in its obligation. A substantial portion of the
         Fund's assets may be subject to forward roll transactions at any given time.


     o   Private-Issuer Mortgage-Backed Securities. The Fund can invest in mortgage-backed securities issued by
         private issuers, which do not offer the credit backing of U.S. Government mortgage-related securities.
         Primarily these would include multi-class debt or pass-through certificates secured by mortgage loans.
         They may be issued by banks, savings and loans, mortgage bankers and other non-governmental issuers.
         Private issuer mortgage-backed securities are subject to the credit risks of the issuers (as well as
         interest rate risks and prepayment risks), although in some cases they may be supported by insurance or
         guarantees. The market for private-issuer mortgage-backed securities may be volatile at times and may be
         less liquid than the markets for other types of securities.

     o   Asset-Backed Securities.  Asset-backed securities are similar to mortgage-backed securities, described
         above, and are backed by a pool of obligations of individual borrowers, typically accounts receivable or
         consumer loans. Most asset-backed securities do not have security interest in the underlying collateral,
         although in some cases they may be supported by insurance or guarantees. Like other debt securities,
         asset backed securities are subject to credit risk and interest rate risk. Many asset-backed securities
         may also be subject to prepayment risk.


      o  High-Yield, Lower-Grade Debt Securities. The Fund can purchase a variety of lower-grade, high-yield debt
         securities, to seek current income. These securities are sometimes called "junk bonds." The Fund limits
         these investments to not more than 35% of its total assets.

         Lower-grade debt securities are those rated below "Baa" by Moody's Investors Service ("Moody's") or
         lower than "BBB" by Standard & Poor's ("S&P") or that have comparable ratings by other
         nationally-recognized rating organizations. They include unrated securities assigned a comparable rating
         by the Manager. The Fund can invest in securities rated as low as "C" or "D" or which are in default at
         the time the Fund buys them. While securities rated "Baa" by Moody's or "BBB" by S&P are considered
         "investment grade," they have some speculative characteristics.

     o   Money Market Instruments. The Fund can invest in money market instruments, which include short-term
         certificates of deposit, bankers' acceptances, commercial paper, U.S. Government obligations, and other
         debt instruments (including bonds) issued by corporations. These securities may have variable or
         floating interest rates. The Fund's investments in commercial paper in general will be limited to paper
         in the top two rating categories of S&P or Moody's.

Derivative Investments. The Fund can invest in a number of different kinds of "derivative" investments. In
         general terms, a derivative investment is an investment contract whose value depends on (or is derived
         from) the value of an underlying asset, interest rate or index. In the broadest sense, options, futures
         contracts, and other hedging instruments the Fund might use may be considered "derivative" investments.
         In addition to using derivatives for hedging, the Fund might use other derivative investments because
         they offer the potential for increased value. The Fund is not required to use derivatives in seeking its
         objective.

         Derivatives have risks. If the issuer of the derivative investment does not pay the amount due, the Fund
         can lose money on the investment. The underlying security or investment on which a derivative is based,
         and the derivative itself, may not perform the way the Manager expected it to. As a result of these
         risks, the Fund could realize less principal or income from the investment than expected or its hedge
         might be unsuccessful. As a result, the Fund's share prices could fall. Certain derivative investments
         held by the Fund might be illiquid.

     o   Credit Derivatives.  The Fund may enter into credit default swaps, both (i) directly and (ii) indirectly
         in the form of a swap embedded within a structured note, to protect against the risk that a security
         will default.   The Fund pays a fee to enter into the trade and receives a fixed payment during the life
         of the swap.   If there is a credit event, the Fund either delivers the defaulted bond (if the Fund has
         taken the short position in the credit default swap) or pays the par amount of the defaulted bond (if
         the Fund has taken the long position in the credit default swap note). Risks of credit default swaps
         include the cost of paying for credit protection if there are no credit events.



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 objective is a fundamental policy. Other investment restrictions that are
fundamental policies are listed in the Statement of Additional Information. An investment policy is not
fundamental unless this prospectus or the Statement of Additional Information says that it is.

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

Other Equity Investments. The Fund's equity investments are mainly common stocks, but also include preferred
         stocks and securities convertible into common stock. The Manager considers some convertible securities
         to be "equity equivalents" because of the conversion feature and in that case their rating has less
         impact on the investment decision than in the case of other debt securities.

Zero-Coupon and "Stripped" Securities. Some of the U.S. Government debt securities the Fund buys are zero-coupon
         bonds that pay no interest. They are issued at a substantial discount from their face value. "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 interest-bearing securities. The Fund may have to pay out the imputed income on zero-coupon
         securities without receiving the actual cash currently. Interest-only securities are particularly
         sensitive to changes in interest rates.

         The values of interest-only mortgage-related securities are also very sensitive to prepayments of
         underlying mortgages. When prepayments tend to fall, the timing of the cash flows to these securities
         increases, making them more sensitive to changes in interest rates. The market for some of these
         securities may be limited, making it difficult for the Fund to dispose of its holdings quickly at an
         acceptable price.

Illiquid and Restricted Securities. Investments may be illiquid because they do not have an active trading
         market, making it difficult to value them or dispose of them promptly at an acceptable price.
         Restricted securities may have terms that limit their resale to other investors or may require
         registration under applicable securities laws before they may be sold publicly. The Fund will not invest
         more than 10% of its net assets in illiquid or restricted securities. The Board can increase that limit
         to 15%. Certain restricted securities that are eligible for resale to qualified institutional purchasers
         may not be subject to that limit. The Manager monitors holdings of illiquid securities on an ongoing
         basis to determine whether to sell any holdings to maintain adequate liquidity.


Hedging. The Fund can buy and sell futures contracts, put and call options, and forward contracts. These are all
         referred to as "hedging instruments."  The Fund is not required to use hedging instruments to seek its
         objective. The Fund does not use hedging instruments for speculative purposes, and has limits on its use
         of them.

         The Fund could buy and sell options, futures and forward contracts for a number of purposes. It might do
         so to try to manage its exposure to the possibility that the prices of its portfolio securities may
         decline, or to establish a position in the securities market as a temporary substitute for purchasing
         individual securities. It might do so to try to manage its exposure to changing interest rates. Forward
         contracts can be used to try to manage foreign currency risks on the Fund's foreign investments.

         There are also special risks in particular hedging strategies. Options trading involves the payment of
         premiums and can increase portfolio turnover. If a covered call written by the Fund is exercised on an
         investment that has increased in value, the Fund will be required to sell the investment at the call
         price and will not be able to realize any profit if the investment has increased in value above the call
         price.

         If the Manager used a hedging instrument at the wrong time or judged market conditions incorrectly, the
         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.


Investments in Oppenheimer Institutional Money Market Fund. The Fund can invest its free cash balances in Class E
         shares of Oppenheimer Institutional Money Market Fund, to provide liquidity or for defensive purposes.
         The Fund invests in Oppenheimer Institutional Money Market Fund rather than purchasing individual
         short-term investments to try to seek a higher yield than it could obtain on its own. Oppenheimer
         Institutional Money Market Fund is a registered open-end management investment company, regulated as a
         money market fund under the Investment Company Act of 1940, as amended and is part of the Oppenheimer
         Family of Funds. It invests in a variety of short-term, high-quality, dollar-denominated money market
         instruments issued by the U.S. Government, domestic and foreign corporations, other financial
         institutions, and other entities. Those investments may have a higher rate of return than the
         investments that would be available to the Fund directly. At the time of an investment, the Manager
         cannot predict what the yield of the Oppenheimer Institutional Money Market Fund will be because of the
         wide variety of instruments that fund holds in its portfolio. The return on those investments may, in
         some cases, be lower than the return that would have been derived from other types of investments that
         would provide liquidity. As a shareholder, the Fund will be subject to its proportional share of the
         expenses of Oppenheimer Institutional Money Market Fund's Class E shares, including its advisory fee.
         However, the Manager will waive a portion of the Fund's advisory fee to the extent of the Fund's share
         of the advisory fee paid to the Manager by Oppenheimer Institutional Money Market Fund.

Temporary Defensive and Interim Investments.  For temporary defensive purposes in times of adverse or unstable
         market, economic or political conditions, the Fund can invest up to 100% of its assets in investments
         that may be inconsistent with the Fund's principal investment strategies. Generally, the Fund would
         invest in shares of Oppenheimer Institutional Money Market Fund or in the types of money market
         instruments described above or in other short-term U.S. Government securities. The Fund might also hold
         these types of securities as interim investments pending the investment of proceeds from the sale of
         Fund shares or the sale of Fund portfolio securities or to meet anticipated redemptions of Fund shares.
         To the extent the Fund invests in these securities, it might not achieve its investment objective.


Portfolio Turnover. A change in the securities held by the Fund is known as "portfolio turnover." The Fund may
         engage in active and frequent trading to try to achieve its objective and may have a high portfolio
         turnover rate of over 100% annually. Increased portfolio turnover creates higher brokerage and
         transaction costs for the Fund (and may reduce performance). If the Fund realizes capital gains when it
         sells its investments, it must generally pay those gains out to the shareholders, increasing their
         taxable distributions. The Financial Highlights table at the end of this prospectus shows the Fund's
         portfolio turnover rate during past fiscal years.

Loans of Portfolio Securities. The Fund has entered into a Securities Lending Agreement with JPMorgan Chase.
         Under that agreement portfolio securities of the Fund may be loaned to brokers, dealers and other
         financial institutions.  The Securities Lending Agreement provides that loans must be adequately
         collateralized and may be made only in conformity with the Fund's Securities Lending Guidelines, adopted
         by the Fund's Board of Trustees. The value of the securities loaned may not exceed 25% of the value of
         the Fund's net assets.

PORTFOLIO HOLDINGS. The Fund's portfolio holdings are included in semi-annual and annual reports that are
distributed to shareholders of the Fund within 60 days after the close of the period for which such report is
being made. The Fund also discloses its portfolio holdings in its Statements of Investments on Form N-Q, which
are filed with the Securities and Exchange Commission no later than 60 days after the close of its first and
third fiscal quarters. These required filings are publicly available at the Securities and Exchange Commission.
Therefore, portfolio holdings of the Fund are made publicly available no later than 60 days after the close of
each of the Fund's fiscal quarters.

A description of the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio
securities is available in the Fund's Statement of Additional Information.

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 adviser since 1960.  The Manager and its subsidiaries and controlled
affiliates managed more than $260 billion in assets as of September 30, 2007, including other Oppenheimer funds,
with more than 6 million shareholder accounts. The Manager is located at Two World Financial Center, 225 Liberty
Street, 11th Floor, New York, New York 10281-1008.

Advisory Fees. Under the investment advisory agreement, the Fund pays the Manager an advisory fee, calculated on
         the daily net assets of the Fund, at an annual rate that declines on additional assets as the Fund
         grows: 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 $700 million,
         and 0.58% of average annual net assets in excess of $1.5 billion. The Fund's management fee for its last
         fiscal year ended September 30, 2007 was 0.68% of average annual net assets for each class of shares.

         A discussion regarding the basis for the Board of Trustees' approval of the Fund's investment advisory
         contract is available in the Fund's Annual Report to shareholders for the year ended September 30, 2007.


Portfolio Managers.  The equity component of the Fund's portfolio is managed by Emmanuel Ferreira, and the fixed
         income component of the Fund's portfolio is managed by Angelo Manioudakis, together with a team of
         investment professionals including Benjamin J. Gord, Geoffrey Caan, Thomas Swaney and Antulio N. Bomfim.


         Mr. Ferreira is the lead manager of the equity component of the Fund's portfolio. He has been a Vice
         President and portfolio manager of the Fund since January 2003 and Vice President of the Manager since
         January 2003. He is a portfolio manager and officer of other portfolios in the OppenheimerFunds complex.
         He was formerly Portfolio Manager at Lashire Investments from July 1999 through December 2002. Mr.
         Ferreira is primarily responsible for the day-to-day management of the equity component of the Fund's
         portfolio.

         The Fund's fixed-income component is managed by a portfolio management team comprised of Angelo
         Manioudakis, Benjamin Gord, Geoffrey Caan, Thomas Swaney and Antulio N. Bomfim. This portfolio
         management team is primarily responsible for the day-to-day management of the fixed-income component of
         the Fund's portfolio.


         Mr. Manioudakis has been a Vice President and portfolio manager of the Fund since January 2003, and a
         Senior Vice President of the Manager and of HarbourView Asset Management Corporation since April 2002.
         He has been a Senior Vice President of OFI Institutional Asset Management, Inc. since June 2002 and Vice
         President of Oppenheimer Real Asset Management, Inc. since November 2006.  He is also a portfolio
         manager and officer of other portfolios in the OppenheimerFunds complex. Mr. Manioudakis was Executive
         Director and portfolio manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment
         Management from August 1993 through April 2002.


         Mr. Gord has been a Vice President and portfolio manager of the Fund since February 2006 and a Vice
         President of the Manager since April 2002.  He is also a portfolio manager of other portfolios in the
         OppenheimerFunds complex.  Mr. Gord was an Executive Director and a senior fixed income analyst at
         Miller, Anderson & Sherrerd from April 1992 through March 2002.

         Mr. Caan has been a Vice President and portfolio manager of the Fund since February 2006 and a Vice
         President of the Manager since August 2003. He is also a portfolio manager of other portfolios in the
         OppenheimerFunds complex. Mr. Caan was a Vice President of ABN AMRO N.A., Inc. from June 2002 through
         August 2003, and a Vice President of Zurich Scudder Investments from January 1999 through June 2002.


         Mr. Swaney has been a portfolio manager of the Fund and a Vice President of the Manager since April 2006
         and a Vice President of the Fund since June 2006.  He is also a portfolio manager of other portfolios in
         the OppenheimerFunds complex.  Mr. Swaney was a senior analyst of the Manager's High Grade Investment
         Team from June 2002 to March 2006.  Prior to joining the Manager in June 2002, Mr. Swaney was a senior
         fixed income analyst at Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment Management
         from May 1998 through May 2002.


         Mr. Bomfim has been a Vice President and portfolio manager of the Fund since February 2006 and a Vice
         President of the Manager since October 2003.  He is also a portfolio manager of other portfolios in the
         OppenheimerFunds complex.  Mr. Bomfim was a Senior Economist at the Board of Governors of the Federal
         Reserve System from June 1992 to October 2003.


         The Statement of Additional Information provides additional information about the Portfolio Managers'
         compensation, other accounts they manage and their ownership of Fund 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. A broker or dealer may charge a processing fee for that service. Your account information
         will be shared with the dealer you designate as the dealer of record for the account.
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 do not list a dealer on the application, Class A shares are your only purchase option. The
         Distributor will act as your agent in buying Class A shares. However, we recommend that you discuss your
         investment with a financial adviser before you make a purchase to be sure that the Fund is appropriate
         for you. Class B, Class C or Class N shares may not be purchased by a new investor directly from the
         Distributor without the investor designating another registered broker-dealer. If a current investor no
         longer has another broker-dealer of record for an existing Class B, Class C or Class N account, the
         Distributor is automatically designated as the broker-dealer of record, but solely for the purpose of
         acting as the investor's agent to purchase the shares.

o        Paying by Federal Funds Wire. Shares purchased through the Distributor may be paid for by Federal Funds
         wire. The minimum wire purchase 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 can 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 share
         purchase 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 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 an initial investment for as little as $500.
         The minimum subsequent investment is $50, except that for any account established under one of these
         plans prior to November 1, 2002, the minimum additional investment will remain $25.
o        A minimum initial investment of $250 applies to certain fee based programs that have an agreement with
         the Distributor. The minimum subsequent investment for those programs is $50.
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.

o        The minimum purchase amounts listed do not apply to omnibus accounts.

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.  Your financial
adviser can provide you with more information regarding the time you must submit your purchase order and whether
the adviser is an authorized agent for the receipt of purchase orders.


Net Asset Value. The Fund calculates the net asset value of each class of shares as of the close of the NYSE, on
         each day the NYSE is open for trading (referred to in this prospectus as a "regular business day"). The
         NYSE normally closes at 4:00 p.m., Eastern time, but may close earlier on some days. All references to
         time in this prospectus are to "Eastern time."

         The net asset value per share for a class of shares on a "regular business day" is determined by
         dividing the value of the Fund's net assets attributable to that class by the number of shares of that
         class outstanding on that day. To determine net asset values, the Fund assets are valued primarily on
         the basis of current market quotations. If market quotations are not readily available or do not
         accurately reflect fair value for a security (in the Manager's judgment) or if a security's value has
         been materially affected by events occurring after the close of the market on which the security is
         principally traded, that security may be valued by another method that the Board of Trustees believes
         accurately reflects the fair value. Because some foreign securities trade in markets and on exchanges
         that operate on weekends and U.S. holidays, the values of some of the Fund's foreign investments may
         change on days when investors cannot buy or redeem Fund shares.


         The Board has adopted valuation procedures for the Fund and has delegated the day-to-day responsibility
         for fair value determinations to the Manager's Valuation Committee. Fair value determinations by the
         Manager are subject to review, approval and ratification by the Board at its next scheduled meeting
         after the fair valuations are determined. In determining whether current market prices are readily
         available and reliable, the Manager monitors the information it receives in the ordinary course of its
         investment management responsibilities for significant events that it believes in good faith will affect
         the market prices of the securities of issuers held by the Fund. Those may include events affecting
         specific issuers (for example, a halt in trading of the securities of an issuer on an exchange during
         the trading day) or events affecting securities markets (for example, a foreign securities market closes
         early because of a natural disaster). The Fund uses fair value pricing procedures to reflect what the
         Manager and the Board believe to be more accurate values for the Fund's portfolio securities, although
         it may not always be able to accurately determine such values. There can be no assurance that the Fund
         could obtain the fair value assigned to a security if it were to sell the security at the same time at
         which the Fund determines its net asset value per share.  In addition, the discussion of "time-zone
         arbitrage" describes effects that the Fund's fair value pricing policy is intended to counteract.



         If, after the close of the principal market on which a security held by the Fund is traded and before
         the time as of which the Fund's net asset values are calculated that day, an event occurs that the
         Manager learns of and believes in the exercise of its judgment will cause a material change in the value
         of that security from the closing price of the security on the principal market on which it is traded,
         the Manager will use its best judgment to determine a fair value for that security.

         The Manager believes that foreign securities values may be affected by volatility that occurs in U.S.
         markets on a trading day after the close of foreign securities markets. The Manager's fair valuation
         procedures therefore include a procedure whereby foreign securities prices may be "fair valued" to take
         those factors into account.

The Offering Price. To receive the offering price for a particular day, the Distributor or its designated agent
         must receive your order, in proper form as described in this prospectus, by the time the NYSE closes
         that day. If your order is received on a day when the NYSE 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 an authorized dealer, your dealer must receive the order by
         the close of the NYSE for you to receive that day's offering price. If your order is received on a day
         when the NYSE is closed or after it is closed, the order will receive the next offering price that is
         determined.

- -------------------------------------------------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors four different classes of shares. The
different classes of shares represent investments in the same portfolio of securities, but the classes are
subject to different expenses and will likely have different share prices. When you buy shares, be sure to
specify the class of shares. If you do not choose a class, your investment will be made in Class A shares.
- -------------------------------------------------------------------------------------------------------------------
Class A Shares. If you buy Class A shares, you pay an initial sales charge (on investments up to $1 million for
         regular accounts or lesser amounts for certain retirement plans). The amount of that sales charge will
         vary depending on the amount you invest. The sales charge rates are listed in "How Can You Buy Class A
         Shares?" below.
- -------------------------------------------------------------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales charge at the time of purchase, but you will pay an
         annual asset-based sales charge. If you sell your shares within 6 years of buying them, you will
         normally pay a contingent deferred sales charge. That contingent deferred sales charge varies depending
         on how long you own your shares, as described in "How Can You Buy Class B Shares?" below.
- -------------------------------------------------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at the time of purchase, but you will pay an
         annual asset-based sales charge. If you sell your shares within 12 months of buying them, you will
         normally pay a contingent deferred sales charge of 1.0%, as described in "How Can You Buy Class C
         Shares?" below.
- -------------------------------------------------------------------------------------------------------------------
Class N Shares. If you buy Class N shares (available only through certain retirement plans), you pay no sales
         charge at the time of purchase, but you will pay an annual asset-based sales charge. If you sell your
         shares within 18 months of the retirement plan's first purchase of Class N shares, you may pay a
         contingent deferred sales charge of 1.0%, as described in "How Can You Buy Class N Shares?" below.


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 adviser. 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
adviser 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 most likely invest in 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.


         If you 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. The Distributor normally will not accept purchase orders
         of more than $100,000 of Class B shares or $1 million or more of Class C shares from a single investor.
         Dealers or other financial intermediaries purchasing shares for their customers in omnibus accounts are
         responsible for compliance with those limits.


     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.


How Do Share Classes Affect Payments to Your Broker? A financial adviser 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 held by the dealer or financial institution for
         its own account or for its customers.


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

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

  ------------------------------------ ------------------------ ------------------------- -------------------------
  Amount of Purchase                   Front-End Sales          Front-End Sales           Concession As a
                                       Charge As a              Charge As a
                                       Percentage of            Percentage of Net         Percentage of
                                       Offering Price           Amount Invested           Offering Price
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  Less than $25,000                             5.75%                    6.10%                     4.75%
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $25,000 or more but less than                 5.50%                    5.82%                     4.75%
  $50,000
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $50,000 or more but less than                 4.75%                    4.99%                     4.00%
  $100,000
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $100,000 or more but less than                3.75%                    3.90%                     3.00%
  $250,000
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $250,000 or more but less than                2.50%                    2.56%                     2.00%
  $500,000
  ------------------------------------ ------------------------ ------------------------- -------------------------
  ------------------------------------ ------------------------ ------------------------- -------------------------
  $500,000 or more but less than $1             2.00%                    2.04%                     1.60%
  million
  ------------------------------------ ------------------------ ------------------------- -------------------------
Due to  rounding,  the actual  sales  charge  for a  particular  transaction  may be higher or lower than the rates
listed above.


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


CAN YOU REDUCE CLASS A SALES CHARGES? You and your spouse may be eligible to buy Class A shares of the Fund at
reduced sales charge rates set forth in the table above under the Fund's "Right of Accumulation" or a "Letter of
Intent." The Fund reserves the right to modify or to cease offering these programs at any time.


o        Right of Accumulation. To qualify for the reduced Class A sales charge that would apply to a larger
              purchase than you are currently making (as shown in the table above), you can add the value of any
              Class A, Class B or, Class C shares of the Fund or other Oppenheimer funds that you or your spouse
              currently own, or are currently purchasing, to the value of your Class A share purchase. Your Class
              A shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves on which you have not
              paid a sales charge will not be counted for this purpose. In totaling your holdings, you may count
              shares held in your individual accounts (including IRAs, 403(b) plans and advisor sold Section 529
              plans), your joint accounts with your spouse, or accounts you or your spouse hold as trustees or
              custodians on behalf of your children who are minors. A fiduciary can count all shares purchased
              for a trust, estate or other fiduciary account that has multiple accounts (including employee
              benefit plans for the same employer and Single K Plans for the benefit of a sole proprietor). If
              you are buying shares directly from the Fund, you must inform the Distributor of your eligibility
              and holdings at the time of your purchase in order to qualify for the Right of Accumulation. If you
              are buying shares through your financial intermediary you must notify your intermediary of your
              eligibility for the Right of Accumulation at the time of your purchase.


                  To count shares of eligible Oppenheimer funds held in accounts at other intermediaries under
              this Right of Accumulation, you may be requested to provide the Distributor or your current
              intermediary with a copy of all account statements showing your current holdings of the Fund or
              other eligible Oppenheimer funds, including statements for accounts held by you and your spouse or
              in retirement plans or trust or custodial accounts for minor children as described above. The
              Distributor or intermediary through which you are buying shares will calculate the value of your
              eligible Oppenheimer fund shares, based on the current offering price, to determine which Class A
              sales charge rate you qualify for on your current purchase.


                  Beginning on January 1, 2008, investors may also count Class A, Class B, Class C, Class G and
              Class H units purchases in advisor sold Section 529 plans, for which the Manager or the Distributor
              serves as the Program Manager or Program Distributor, to determine which Class A sales charge will
              apply to a current Class A share purchase. You must notify the Distributor or your current
              intermediary of any qualifying 529 plan holdings.

o        Letter of Intent. You may also qualify for reduced Class A sales charges by submitting a Letter of
              Intent to the Distributor. A Letter of Intent is a written statement of your intention to purchase
              a specified value of Class A, Class B or Class C shares of the Fund or other Oppenheimer funds over
              a 13 month period. Purchases made before the date of submitting a Letter of Intent will not be
              counted towards satisfying the purchases specified in the Letter. The Letter of Intent period will
              begin on the date of the first purchase following the submission of the Letter and will run for 13
              months. The total amount of your intended purchases will determine the reduced sales charge rate
              that will apply to your Class A share purchases of the Fund during that period.


              Your Class N shares, and any Class A shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer
              Cash Reserves on which you have not paid a sales charge, will not be counted for this purpose.
              Submitting a Letter of Intent does not obligate you to purchase the specified amount of shares.


              If you do not complete the anticipated purchases, you will be charged the difference between the
              sales charge that you paid and the sales charge that would apply to the actual value of shares you
              purchased. A certain portion of your shares will be held in escrow by the Fund's Transfer Agent for
              this purpose. Please refer to "How to Buy Shares - Letters of Intent" in the Fund's Statement of
              Additional Information for more complete information.

              Beginning on January 1, 2008, investors may also count Class A, Class B, Class C, Class G and Class
              H units purchases in advisor sold Section 529 plans, for which the Manager or the Distributor
              serves as the Program Manager or Program Distributor, in determining the share purchases that
              qualify for a Letter of Intent. You must notify the Distributor or your current intermediary of any
              qualifying 529 plan holdings.


Other Special Sales Charge Arrangements and Waivers. The Fund and the Distributor offer other opportunities to
purchase shares without front-end or contingent deferred sales charges under the programs described below. The
Fund reserves the right to amend or discontinue these programs at any time without prior notice.
o        Dividend Reinvestment. Dividends and/or capital gains distributions received by a shareholder from the

              Fund may be reinvested in shares of the Fund or any of the other Oppenheimer funds into which
              shares of the Fund may be exchanged without a sales charge, at the net asset value per share in
              effect on the payable date. You must notify the Transfer Agent or financial intermediary to elect
              this option and must have an existing account in the fund selected for reinvestment.

o        Exchanges of Shares. Shares of the Fund may be exchanged for shares of certain other Oppenheimer funds
              at net asset value per share at the time of exchange, without sales charge, and shares of the Fund
              can be purchased by exchange of shares of certain other Oppenheimer funds on the same basis. Please
              refer to "How to Exchange Shares" in this prospectus and in the Statement of Additional Information
              for more details, including a discussion of circumstances in which sales charges may apply on
              exchanges.
o        Reinvestment Privilege. Within six months of a redemption of certain Class A and Class B shares, the
              proceeds may be reinvested in Class A shares of the Fund, or any of the other Oppenheimer funds
              into which shares of the Fund may be exchanged, without a sales charge. This privilege applies to
              redemptions of Class A shares that were subject to an initial sales charge or Class A or Class B
              shares that were subject to a contingent deferred sales charge when redeemed. The investor must ask
              the Transfer Agent or his or her financial intermediary for that privilege at the time of
              reinvestment and must identify the account from which the redemption was made.

o        Other Special Reductions and Waivers. The Fund and the Distributor offer additional arrangements to
              reduce or eliminate front-end sales charges or to waive contingent deferred sales charges for
              certain types of transactions and for certain categories of investors (primarily retirement plans
              that purchase shares in special programs through the Distributor). These are described in greater
              detail in Appendix B to the Statement of Additional Information. The Fund's Statement of Additional
              Information may be ordered by calling 1.800.225.5677 or may be accessed through the
              OppenheimerFunds website, at www.oppenheimerfunds.com (under the heading "I Want To," follow the
              hyperlink "Access Fund Documents" and click on the icon in the column "SAI" next to the Fund's
              name). A description of these waivers and special sales charge arrangements is also available for
              viewing on the OppenheimerFunds website (under the heading "Fund Information," click on the
              hyperlink "Sales Charge Waivers"). To receive a waiver or special sales charge rate under these
              programs, the purchaser must notify the Distributor (or other financial intermediary through which
              shares are being purchased) at the time of purchase, or must notify the Transfer Agent at the time
              of redeeming shares for waivers that apply to contingent deferred sales charges. This reinvestment
              privilege does not apply to reinvestment purchases made through automatic investment options.

Class A Contingent Deferred Sales Charge. There is no initial sales charge on Class A share purchases totaling $1
         million or more of one or more of the Oppenheimer funds. However, those Class A shares may be subject to
         a 1.0% contingent deferred sales charge if they are redeemed within an 18-month "holding period"
         measured from the beginning of the calendar month of their purchase (except for shares in certain
         retirement plans, described below). That sales charge will be calculated on the lesser of the original
net asset value of the redeemed shares or the aggregate net asset value of the redeemed shares at the time of
redemption.

o        The Class A contingent deferred sales charge does not apply to shares purchased by the reinvestment of
         dividends or capital gain distributions and will not exceed the aggregate amount of the concessions the
Distributor pays on all of your purchases of Class A shares, of all Oppenheimer funds, that are subject to the
contingent deferred sales charge.

The Distributor pays concessions from its own resources equal to 1.0% of Class A purchases of $1 million or more
(other than purchases by certain retirement plans). The concession will not be paid on shares purchased by
exchange or shares that were previously subject to a front-end sales charge and dealer concession.

o        Class A Purchases by Certain Retirement Plans. There is no initial sales charge on purchases of Class A
              shares of the Fund by certain retirement plans that have $1 million or more in plan assets or that
              are part of a retirement plan or platform offered by banks, broker-dealers, financial advisors,
              insurance companies or recordkeepers. There is no contingent deferred sales charge on redemptions
              of any group retirement plan shares purchased after March 1, 2007, or certain retirement plan
              shares offered through banks, broker-dealers, financial advisors, insurance companies or
              recordkeepers.

              Until March 1, 2007, the Distributor paid a concession from its own resources on purchases by
              certain group retirement plans that were established prior to March 1, 2001 ("grandfathered
              retirement plans"). Shares purchased in grandfathered retirement plans prior to March 1, 2007 will
              continue to be subject to the contingent deferred sales charge if they are redeemed within 18
              months after purchase. Beginning March 1, 2007, the Distributor will not pay a concession on new
              share purchases by retirement plans (except plans that have $5 million or more in plan assets) and
              no new group retirement plan purchases will be subject to the contingent deferred sales charge,
              including purchases in grandfathered retirement plans. For shares purchased prior to March 1, 2007,
              the concession for grandfathered retirement plans was 0.75% of the first $2.5 million of purchases
              plus 0.25% of purchases in excess of $2.5 million. Effective March 1, 2007, the concession for
              grandfathered retirement accounts is 0.25%.

              For retirement plans that have $5 million or more in plan assets within the first six months from
              the time the account was established, the Distributor may pay dealers of record concessions equal
              to 0.25% of the purchase price of Class A shares from its own resources at the time of sale. Those
              payments are subject to certain exceptions described in "Retirement Plans" in the Statement of
              Additional Information.


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

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

- ----------------------------------------------------------- --------------------------------------------------------
Years Since Beginning of Month in Which Purchase Order      Contingent Deferred Sales Charge on Redemptions in
was Accepted                                                That Year
                                                            (As % of Amount Subject to Charge)
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
0 - 1                                                       5.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
1 - 2                                                       4.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
2 - 3                                                       3.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
3 - 4                                                       3.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
4 - 5                                                       2.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
5 - 6                                                       1.0%
- ----------------------------------------------------------- --------------------------------------------------------
- ----------------------------------------------------------- --------------------------------------------------------
More than 6                                                 None
- ----------------------------------------------------------- --------------------------------------------------------
In the table, a "year" is a 12-month period.  In applying the contingent  deferred sales charge,  all purchases are
considered to have been made on the first regular business day of the month in which the purchase was made.

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

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

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

         Class N shares are sold at net asset value without an initial sales charge. 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.

DISTRIBUTION AND SERVICE (12b-1) PLANS.


Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A shares that reimburses the
          Distributor for a portion of the costs of providing services to Class A shareholder accounts. The Fund
          makes these payments quarterly, based on 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 for providing personal service and maintenance of accounts of
          their customers that hold Class A shares.

         Prior to March 1, 2007, the Distributor paid the first year's service fee in advance for shares
         purchased in grandfathered retirement plans and it retained the service fee from the Fund with respect
         to those shares during the first year after their purchase. After the shares were held by a
         grandfathered retirement plan for a year, the Distributor paid the ongoing service fee to the dealer of
         record on a periodic basis. For shares purchased in grandfathered plans on or after March 1, 2007, the
         Distributor does not make any payment in advance and does not retain the service fee for the first year.


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 normally 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 periodically.

         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 normally 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. The Distributor normally retains
         the asset-based sales charge on Class C shares during the first year after the purchase of Class C
         shares. 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 normally retains the asset-based sales charge on Class N shares. See
         the Statement of Additional Information for exceptions.


         For certain group retirement plans held in omnibus accounts, the Distributor may pay the full Class C or
         Class N asset-based sales charge and the service fee to the dealer beginning in the first year after the
         purchase of such shares in lieu of paying the dealer the sales concession and the advance of the first
         year's service fee at the time of purchase. New group omnibus plans may not purchase Class B shares.


         For Class C shares purchased through the OppenheimerFunds Record(k)eeper Pro program, the Distributor
         will pay the Class C asset-based sales charge to the dealer of record in the first year after the
         purchase of such shares in lieu of paying the dealer a sales concession at the time of purchase. The
         Distributor will use the service fee it receives from the Fund on those shares to reimburse FASCore, LLC
         for providing personal services to the Class C accounts holding those shares.

OTHER PAYMENTS TO FINANCIAL INTERMEDIARIES AND SERVICE PROVIDERS. The Manager and the Distributor, in their
discretion, also may pay dealers or other financial intermediaries and service providers for distribution and/or
shareholder servicing activities. These payments are made out of the Manager's and/or the Distributor's own
resources, including from the profits derived from the advisory fees the Manager receives from the Fund. These
cash payments, which may be substantial, are paid to many firms having business relationships with the Manager
and Distributor. These payments are in addition to any distribution fees, servicing fees, or transfer agency fees
paid directly or indirectly by the Fund to these financial intermediaries and any commissions the Distributor
pays to these firms out of the sales charges paid by investors. These payments by the Manager or Distributor from
their own resources are not reflected in the tables in the section called "Fees and Expenses of the Fund" in this
prospectus because they are not paid by the Fund.


       "Financial intermediaries" are firms that offer and sell Fund shares to their clients, or provide
shareholder services to the Fund, or both, and receive compensation for doing so. Your securities dealer or
financial adviser, for example, is a financial intermediary, and there are other types of financial
intermediaries that receive payments relating to the sale or servicing of the Fund's shares. In addition to
dealers, the financial intermediaries that may receive payments include sponsors of fund "supermarkets," sponsors
of fee-based advisory or wrap fee programs, sponsors of college and retirement savings programs, banks and trust
companies offering products that hold Fund shares, and insurance companies that offer variable annuity or
variable life insurance products.

       In general, these payments to financial intermediaries can be categorized as "distribution-related" or
"servicing" payments. Payments for distribution-related expenses, such as marketing or promotional expenses, are
often referred to as "revenue sharing." Revenue sharing payments may be made on the basis of the sales of shares
attributable to that dealer, the average net assets of the Fund and other Oppenheimer funds attributable to the
accounts of that dealer and its clients, negotiated lump sum payments for distribution services provided, or
sales support fees. In some circumstances, revenue sharing payments may create an incentive for a dealer or
financial intermediary or its representatives to recommend or offer shares of the Fund or other Oppenheimer funds
to its customers. These payments also may give an intermediary an incentive to cooperate with the Distributor's
marketing efforts. A revenue sharing payment may, for example, qualify the Fund for preferred status with the
intermediary receiving the payment or provide representatives of the Distributor with access to representatives
of the intermediary's sales force, in some cases on a preferential basis over funds of competitors. Additionally,
as firm support, the Manager or Distributor may reimburse expenses related to educational seminars and "due
diligence" or training meetings (to the extent permitted by applicable laws or the rules of the Financial
Industry Regulatory Authority (FINRA), formerly known as the NASD) designed to increase sales representatives'
awareness about Oppenheimer funds, including travel and lodging expenditures. However, the Manager does not
consider a financial intermediary's sale of shares of the Fund or other Oppenheimer funds when selecting brokers
or dealers to effect portfolio transactions for the funds.


       Various factors are used to determine whether to make revenue sharing payments. Possible considerations
include, without limitation, the types of services provided by the intermediary, sales of Fund shares, the
redemption rates on accounts of clients of the intermediary or overall asset levels of Oppenheimer funds held for
or by clients of the intermediary, the willingness of the intermediary to allow the Distributor to provide
educational and training support for the intermediary's sales personnel relating to the Oppenheimer funds, the
availability of the Oppenheimer funds on the intermediary's sales system, as well as the overall quality of the
services provided by the intermediary and the Manager or Distributor's relationship with the intermediary. The
Manager and Distributor have adopted guidelines for assessing and implementing each prospective revenue sharing
arrangement. To the extent that financial intermediaries receiving distribution-related payments from the Manager
or Distributor sell more shares of the Oppenheimer funds or retain more shares of the funds in their client
accounts, the Manager and Distributor benefit from the incremental management and other fees they receive with
respect to those assets.

       Payments may also be made by the Manager, the Distributor or the Transfer Agent to financial
intermediaries to compensate or reimburse them for administrative or other client services provided such as
sub-transfer agency services for shareholders or retirement plan participants, omnibus accounting or
sub-accounting, participation in networking arrangements, account set-up, recordkeeping and other shareholder
services. Payments may also be made for administrative services related to the distribution of Fund shares
through the intermediary. Firms that may receive servicing fees include retirement plan administrators, qualified
tuition program sponsors, banks and trust companies, and others. These fees may be used by the service provider
to offset or reduce fees that would otherwise be paid directly to them by certain account holders, such as
retirement plans.

       The Statement of Additional Information contains more information about revenue sharing and service
payments made by the Manager or the Distributor. Your dealer may charge you fees or commissions in addition to
those disclosed in this prospectus. You should ask your dealer or financial intermediary for details about any
such payments it receives from the Manager or the Distributor and their affiliates, or any other fees or expenses
it charges.

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 you make
to the 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.


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 by the Distributor or your authorized financial
intermediary, in proper form (which means that it must comply with the procedures described below) and is
accepted by the Transfer Agent. The Fund lets you sell your shares by writing a letter, by wire, by telephone or
on the internet. 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.

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

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

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

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

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

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

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

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


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

in the following order:
     1.  shares acquired by reinvestment of dividends and capital gains distributions,
     2.  shares held for the holding period that applies to the class, and
     3.  shares held the longest during the holding period.

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

How to Exchange Shares

If you want to change all or part of your investment from one Oppenheimer fund to another, you can exchange your
shares for shares of the same class of another Oppenheimer fund that offers the exchange privilege. For example,
you can exchange Class A shares of the Fund only for Class A shares of another fund. 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 selected fund must offer the exchange privilege.
     o   You must meet the minimum purchase requirements for the selected fund.
     o   Generally, exchanges may be made only between identically registered accounts, unless all account owners
         send written exchange instructions with a signature guarantee.
     o   Before exchanging into a fund, you must obtain its prospectus and should read it carefully.

         For tax purposes, an exchange of shares of the Fund is considered a sale of those shares and a purchase
of the shares of the fund into which you are exchanging. An exchange may result in a capital gain or loss.

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

A  contingent  deferred  sales  charge  (CDSC) is not charged  when you  exchange  shares of the Fund for shares of
         another  Oppenheimer  fund.  However,  if you  exchange  your shares  during the  applicable  CDSC holding
         period,  the  holding  period  will carry over to the fund  shares  that you  acquire.  Similarly,  if you
         acquire shares of the Fund in exchange for shares of another  Oppenheimer  fund that are subject to a CDSC
         holding  period,  that  holding  period will carry over to the acquired  shares of the Fund.  In either of
         these  situations,  a CDSC may be imposed if the acquired  shares are redeemed  before the end of the CDSC
         holding period that applied to the exchanged shares.

There are a number of other special  conditions  and  limitations  that apply to certain types of exchanges.  These
         conditions  and  circumstances  are  described  in detail in the "How to Exchange  Shares"  section in the
         Statement of Additional Information.

HOW DO YOU SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing, by telephone or internet, or by
establishing an Automatic Exchange Plan.

Written Exchange Requests. Send a request letter, signed by all owners of the account, to the Transfer Agent at
         the address on the back cover. Exchanges of shares for which share certificates have been issued cannot
         be processed unless the Transfer Agent receives the certificates with the request letter.

Telephone and Internet Exchange Requests. Telephone exchange requests may be made either by calling a service
         representative or by using PhoneLink by calling 1.800.225.5677. You may submit internet exchange
         requests on the OppenheimerFunds internet website, at www.oppenheimerfunds.com. You must have obtained a
         user I.D. and password to make transactions on that website. Telephone and/or internet exchanges may be
         made only between accounts that are registered with the same name(s) and address. Shares for which share
         certificates have been issued may not be exchanged by telephone or the internet.

Automatic Exchange Plan. Shareholders can authorize the Transfer Agent to exchange a pre-determined amount of
         shares automatically on a monthly, quarterly, semi-annual or annual basis.

Please refer to "How to Exchange Shares" in the Statement of Additional Information for more details.

ARE THERE LIMITATIONS ON FREQUENT PURCHASES, REDEMPTIONS AND EXCHANGES?


Risks from Excessive Purchase, Redemption and Short-Term Exchange Activity. The OppenheimerFunds exchange
privilege affords investors the ability to switch their investments among Oppenheimer funds if their investment
needs change. However, there are limits on that privilege. Frequent purchases, redemptions and exchanges of Fund
shares may interfere with the Manager's ability to manage the Fund's investments efficiently, increase the Fund's
transaction and administrative costs and/or affect the Fund's performance, depending on various factors, such as
the size of the Fund, the nature of its investments, the amount of Fund assets the portfolio manager maintains in
cash or cash equivalents, the aggregate dollar amount and the number and frequency of trades. If large dollar
amounts are involved in exchange and/or redemption transactions, the Fund might be required to sell portfolio
securities at unfavorable times to meet redemption or exchange requests, and the Fund's brokerage or
administrative expenses might be increased.


Therefore, the Manager and the Fund's Board of Trustees have adopted the following policies and procedures to
detect and prevent frequent and/or excessive exchanges, and/or purchase and redemption activity, while balancing
the needs of investors who seek liquidity from their investment and the ability to exchange shares as investment
needs change. There is no guarantee that the policies and procedures described below will be sufficient to
identify and deter excessive short-term trading.

o        Timing of Exchanges. Exchanged shares are normally redeemed from one fund and the proceeds are
         reinvested in the fund selected for exchange on the same regular business day on which the Transfer
         Agent or its agent (such as a financial intermediary holding the investor's shares in an "omnibus" or
         "street name" account) receives an exchange request that conforms to these policies. The request must be
         received by the close of the NYSE that day, which is normally 4:00 p.m. Eastern time, but may be earlier
         on some days, in order to receive that day's net asset value on the exchanged shares. Exchange requests
         received after the close of the NYSE will receive the next net asset value calculated after the request
         is received. However, the Transfer Agent may delay transmitting the proceeds from an exchange for up to
         five business days if it determines, in its discretion, that an earlier transmittal of the redemption
         proceeds to the receiving fund would be detrimental to either the fund from which the exchange is being
         made or the fund into which the exchange is being made. The proceeds will be invested in the fund into
         which the exchange is being made at the next net asset value calculated after the proceeds are received.
         In the event that such a delay in the reinvestment of proceeds occurs, the Transfer Agent will notify
         you or your financial representative.

o        Limits on Disruptive Activity. The Transfer Agent may, in its discretion, limit or terminate trading
         activity by any person, group or account that it believes would be disruptive, even if the activity has
         not exceeded the policy outlined in this prospectus. The Transfer Agent may review and consider the
         history of frequent trading activity in all accounts in the Oppenheimer funds known to be under common
         ownership or control as part of the Transfer Agent's procedures to detect and deter excessive trading
         activity.


o        Exchanges of Client Accounts by Financial Advisers. The Fund and the Transfer Agent permit dealers and
         financial intermediaries to submit exchange requests on behalf of their customers (unless that authority
         has been revoked). A fund or the Transfer Agent may limit or refuse exchange requests submitted by
         financial intermediaries if, in the Transfer Agent's judgment, exercised in its discretion, the
         exchanges would be disruptive to any of the funds involved in the transaction.


o        Redemptions of Shares. These exchange policy limits do not apply to redemptions of shares. Shareholders
         are permitted to redeem their shares on any regular business day, subject to the terms of this
         prospectus. Further details are provided under "How to Sell Shares."

o        Right to Refuse Exchange and Purchase Orders. The Distributor and/or the Transfer Agent may refuse any
         purchase or exchange order in their discretion and are not obligated to provide notice before rejecting
         an order. The Fund may amend, suspend or terminate the exchange privilege at any time. You will receive
         60 days' notice of any material change in the exchange privilege unless applicable law allows otherwise.

o        Right to Terminate or Suspend Account Privileges. The Transfer Agent may send a written warning to
         direct shareholders that the Transfer Agent believes may be engaging in excessive purchases, redemptions
         and/or exchange activity and reserves the right to suspend or terminate the ability to purchase shares
         and/or exchange privileges for any account that the Transfer Agent determines, in carrying out these
         policies and in the exercise of its discretion, has engaged in disruptive or excessive trading activity,
         with or without such warning.

o        Omnibus Accounts. If you hold your shares of the Fund through a financial intermediary such as a
         broker-dealer, a bank, an insurance company separate account, an investment adviser, an administrator or
         trustee of a retirement plan or 529 plan, that holds your shares in an account under its name (these are
         sometimes referred to as "omnibus" or "street name" accounts), that financial intermediary may impose
         its own restrictions or limitations to discourage short-term or excessive trading. You should consult
         your financial intermediary to find out what trading restrictions, including limitations on exchanges,
         may apply.

While the Fund, the Distributor, the Manager and the Transfer Agent encourage financial intermediaries to apply
the Fund's policies to their customers who invest indirectly in the Fund, the Transfer Agent may not be able to
detect excessive short term trading activity facilitated by, or in accounts maintained in, the "omnibus" or
"street name" accounts of a financial intermediary. Therefore the Transfer Agent might not be able to apply this
policy to accounts such as (a) accounts held in omnibus form in the name of a broker-dealer or other financial
institution, or (b) omnibus accounts held in the name of a retirement plan or 529 plan trustee or administrator,
or (c) accounts held in the name of an insurance company for its separate account(s), or (d) other accounts
having multiple underlying owners but registered in a manner such that the underlying beneficial owners are not
identified to the Transfer Agent.

However, the Transfer Agent will attempt to monitor overall purchase and redemption activity in those accounts to
seek to identify patterns that may suggest excessive trading by the underlying owners. If evidence of possible
excessive trading activity is observed by the Transfer Agent, the financial intermediary that is the registered
owner will be asked to review account activity, and to confirm to the Transfer Agent and the Fund that
appropriate action has been taken to curtail any excessive trading activity. However, the Transfer Agent's
ability to monitor and deter excessive short-term trading in omnibus or street name accounts ultimately depends
on the capability and cooperation of the financial intermediaries controlling those accounts.

Additional Policies and Procedures. The Fund's Board has adopted the following additional policies and procedures
to detect and prevent frequent and/or excessive exchanges and purchase and redemption activity:

o        30-Day Limit. A direct shareholder may exchange some or all of the shares of the Fund held in his or her
         account to another eligible Oppenheimer fund once in a 30 calendar-day period. When shares are exchanged
         into a fund account, that account will be "blocked" from further exchanges into another fund for a
         period of 30 calendar days from the date of the exchange. The block will apply to the full account
         balance and not just to the amount exchanged into the account. For example, if a shareholder exchanged
         $1,000 from one fund into another fund in which the shareholder already owned shares worth $10,000,
         then, following the exchange, the full account balance ($11,000 in this example) would be blocked from
         further exchanges into another fund for a period of 30 calendar days. A "direct shareholder" is one
         whose account is registered on the Fund's books showing the name, address and tax ID number of the
         beneficial owner.

o        Exchanges Into Money Market Funds. A direct shareholder will be permitted to exchange shares of a stock
         or bond fund for shares of a money market fund that offers an exchange privilege at any time, even if
         the shareholder has exchanged shares into the stock or bond fund during the prior 30 days. However, all
         of the shares held in that money market fund would then be blocked from further exchanges into another
         fund for 30 calendar days.

o        Dividend Reinvestments/B Share Conversions. Reinvestment of dividends or distributions from one fund to
         purchase shares of another fund and the conversion of Class B shares into Class A shares will not be
         considered exchanges for purposes of imposing the 30-day limit.

o        Asset Allocation. Third-party asset allocation and rebalancing programs will be subject to the 30-day
         limit described above. Asset allocation firms that want to exchange shares held in accounts on behalf of
         their customers must identify themselves to the Transfer Agent and execute an acknowledgement and
         agreement to abide by these policies with respect to their customers' accounts. "On-demand" exchanges
         outside the parameters of portfolio rebalancing programs will be subject to the 30-day limit. However,
         investment programs by other Oppenheimer "funds-of-funds" that entail rebalancing of investments in
         underlying Oppenheimer funds will not be subject to these limits.

o        Automatic Exchange Plans. Accounts that receive exchange proceeds through automatic or systematic
         exchange plans that are established through the Transfer Agent will not be subject to the 30-day block
         as a result of those automatic or systematic exchanges (but may be blocked from exchanges, under the
         30-day limit, if they receive proceeds from other exchanges).


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 "Minimum Balance Fee" is assessed on each Fund account with a value of less than $500. The fee is
         automatically deducted from each applicable Fund account annually in September. See the Statement of
         Additional Information to learn how you can avoid this fee and for circumstances under which 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 or by
         Federal Funds wire (as elected by the shareholder) within seven days after the Transfer Agent receives
         redemption instructions in proper form. However, under unusual circumstances determined by the
         Securities and Exchange Commission, payment may be delayed or suspended. For accounts registered in the
         name of a broker-dealer, payment will normally be forwarded within three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as described under "How to Sell Shares"
         for recently purchased shares, but only until the purchase payment has cleared. That delay may be as
         much as 10 days from the date the shares were purchased. That delay may be avoided if you purchase
         shares by Federal Funds wire or certified check.
Involuntary redemptions of small accounts may be made by the Fund if the account value has fallen below $500 for
         reasons other than the fact that the market value of shares has dropped. In some cases, involuntary
         redemptions may be made to repay the Distributor for losses from the cancellation of share purchase
         orders.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack of liquidity in the Fund's portfolio
         to meet redemptions). This means that the redemption proceeds will be paid with liquid securities from
         the Fund's portfolio. If the Fund redeems your shares in kind, you may bear transaction costs and will
         bear market risks until such time as such securities are converted into cash.
Federal regulations may require the Fund to obtain your name, your date of birth (for a natural person), your
         residential street address or principal place of business and your Social Security Number, Employer
         Identification Number or other government issued identification when you open an account. Additional
         information may be required in certain circumstances or to open corporate accounts. The Fund or the
         Transfer Agent may use this information to attempt to verify your identity. The Fund may not be able to
         establish an account if the necessary information is not received. The Fund may also place limits on
         account transactions while it is in the process of attempting to verify your identity. Additionally, if
         the Fund is unable to verify your identity after your account is established, the Fund may be required
         to redeem your shares and close your account.
"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 and pay dividends separately for each class of shares from net investment
income on a quarterly basis. Dividends and distributions paid to Class A shares will generally be higher than
dividends for Class B, Class C and Class N shares, which normally have higher expenses than Class A 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 annually. 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 Oppenheimer fund, if that fund is available for exchanges and if you have an
         account established in that fund.


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 Internal Revenue Service 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.


         The Fund intends to qualify each year as a "regulated investment company" under the Internal Revenue
Code, but reserves the right not to qualify. It qualified during its last fiscal year. The Fund, as a regulated
investment company, will not be subject to federal income taxes on any of its income, provided that it satisfies
certain income, diversification and distribution requirements.

Avoid "Buying a Distribution." If you buy shares on or just before the ex-dividend date, or just before the Fund
         declares a capital gains distribution, you will pay the full price for the shares and then receive a
         portion of the price back as a taxable dividend or capital gain.
Remember, There May be Taxes on Transactions. Because the Fund's share prices fluctuate, you may have a capital
         gain or loss when you sell or exchange your shares. A capital gain or loss is the difference between the
         price you paid for the shares and the price you received when you sold them. Any capital gain is subject
         to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by the Fund may be considered a non-taxable
         return of capital to shareholders. If that occurs, it will be identified in notices to shareholders.

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

Financial Highlights

The Financial Highlights Table is presented to help you understand the Fund's financial performance for the past
five fiscal years. Certain information reflects financial results for a single Fund share. The total returns in
the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been audited by KPMG LLP, the Fund's
independent registered public accounting firm, whose report, along with the Fund's financial statements, is
included in the Statement of Additional Information, which is available upon request.



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



CLASS A     YEAR ENDED SEPTEMBER 30,                           2007          2006          2005          2004          2003
- ----------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                      $   13.94     $   14.51     $   13.75     $   12.55     $   10.51
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                           .34 1         .30 1         .24 1         .14           .21
Net realized and unrealized gain                               1.27           .21          1.38          1.16          2.08
                                                          ------------------------------------------------------------------
Total from investment operations                               1.61           .51          1.62          1.30          2.29
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                           (.34)         (.29)         (.16)         (.10)         (.22)
Tax return of capital distribution                               --            --            --            --          (.03)
Distributions from net realized gain                           (.89)         (.79)         (.70)           --            --
                                                          ------------------------------------------------------------------
Total dividends and/or distributions to shareholders          (1.23)        (1.08)         (.86)         (.10)         (.25)
- ----------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                            $   14.32     $   13.94     $   14.51     $   13.75     $   12.55
                                                          ==================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                            11.96%         3.86%        12.13%        10.37%        21.98%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                  $ 865,895     $ 810,738     $ 725,836     $ 651,754     $ 575,799
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $ 851,017     $ 752,163     $ 694,147     $ 631,041     $ 523,477
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                          2.38%         2.16%         1.69%         1.05%         1.78%
Total expenses                                                 1.05% 4       1.06%         1.05%         1.07%         1.11%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses                            1.04%         1.06%         1.05%         1.06%         1.11%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          74% 5         84% 5         73% 5         61% 5        205%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

      Year Ended September 30, 2007      1.06%

5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:

                                      PURCHASE TRANSACTIONS    SALE TRANSACTIONS
      --------------------------------------------------------------------------
      Year Ended September 30, 2007         $   814,618,659      $   879,472,606
      Year Ended September 30, 2006           1,329,963,782        1,377,730,782
      Year Ended September 30, 2005           2,097,453,846        2,135,377,175
      Year Ended September 30, 2004           1,069,526,653        1,026,457,980



CLASS B     YEAR ENDED SEPTEMBER 30,                           2007          2006          2005          2004          2003
- -----------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                      $   13.64     $   14.23     $   13.53     $   12.40     $   10.38
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                           .20 1         .17 1         .11 1         .02           .09
Net realized and unrealized gain                               1.25           .20          1.36          1.13          2.07
                                                          ------------------------------------------------------------------
Total from investment operations                               1.45           .37          1.47          1.15          2.16
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                           (.21)         (.17)         (.07)         (.02)         (.11)
Tax return of capital distribution                               --            --            --            --          (.03)
Distributions from net realized gain                           (.89)         (.79)         (.70)           --            --
                                                          ------------------------------------------------------------------
Total dividends and/or distributions to shareholders          (1.10)         (.96)         (.77)         (.02)         (.14)
- ----------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                            $   13.99     $   13.64     $   14.23     $   13.53     $   12.40
                                                          ==================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                            10.99%         2.84%        11.17%         9.26%        20.91%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                  $  90,879     $  98,021     $  98,271     $  84,924     $  64,944
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $  95,241     $  95,979     $  92,677     $  77,082     $  57,836
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                          1.48%         1.24%         0.76%         0.11%         0.81%
Total expenses                                                 1.95% 4       1.99%         1.98%         2.02%         2.08%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses                            1.94%         1.99%         1.98%         2.02%         2.08%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          74% 5         84% 5         73% 5         61% 5        205%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

      Year Ended September 30, 2007      1.96%

5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:

                                      PURCHASE TRANSACTIONS    SALE TRANSACTIONS
      --------------------------------------------------------------------------
      Year Ended September 30, 2007         $   814,618,659      $   879,472,606
      Year Ended September 30, 2006           1,329,963,782        1,377,730,782
      Year Ended September 30, 2005           2,097,453,846        2,135,377,175
      Year Ended September 30, 2004           1,069,526,653        1,026,457,980




CLASS C     YEAR ENDED SEPTEMBER 30,                           2007          2006          2005          2004          2003
- ----------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                      $   13.71     $   14.29     $   13.59     $   12.44     $   10.42
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                           .21 1         .18 1         .11 1         .04           .11
Net realized and unrealized gain                               1.25           .21          1.37          1.13          2.06
                                                          ------------------------------------------------------------------
Total from investment operations                               1.46           .39          1.48          1.17          2.17
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                           (.22)         (.18)         (.08)         (.02)         (.12)
Tax return of capital distribution                               --            --            --            --          (.03)
Distributions from net realized gain                           (.89)         (.79)         (.70)           --            --
                                                          ------------------------------------------------------------------

Total dividends and/or distributions to shareholders          (1.11)         (.97)         (.78)         (.02)         (.15)
- ----------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                            $   14.06     $   13.71     $   14.29     $   13.59     $   12.44
                                                          ==================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                            11.00%         2.97%        11.18%         9.45%        20.98%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                  $ 101,645     $  92,782     $  87,820     $  68,018     $  47,212
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $  97,640     $  90,567     $  78,091     $  60,095     $  38,407
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                          1.53%         1.30%         0.83%         0.19%         0.90%
Total expenses                                                 1.90% 4       1.93%         1.91%         1.93%         1.98%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses                            1.89%         1.92%         1.91%         1.93%         1.98%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          74% 5         84% 5         73% 5         61% 5        205%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

      Year Ended September 30, 2007      1.91%

5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:

                                      PURCHASE TRANSACTIONS    SALE TRANSACTIONS
      --------------------------------------------------------------------------
      Year Ended September 30, 2007         $   814,618,659      $   879,472,606
      Year Ended September 30, 2006           1,329,963,782        1,377,730,782
      Year Ended September 30, 2005           2,097,453,846        2,135,377,175
      Year Ended September 30, 2004           1,069,526,653        1,026,457,980



CLASS N     YEAR ENDED SEPTEMBER 30,                           2007          2006          2005          2004          2003
- ----------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                      $   13.80     $   14.38     $   13.65     $   12.49     $   10.48
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                           .28 1         .24 1         .17 1         .10           .20
Net realized and unrealized gain                               1.26           .21          1.38          1.12          2.01
                                                          ------------------------------------------------------------------
Total from investment operations                               1.54           .45          1.55          1.22          2.21
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                           (.28)         (.24)         (.12)         (.06)         (.17)
Tax return of capital distribution                               --            --            --            --          (.03)
Distributions from net realized gain                           (.89)         (.79)         (.70)           --            --
                                                          ------------------------------------------------------------------
Total dividends and/or distributions to shareholders          (1.17)        (1.03)         (.82)         (.06)         (.20)
- ----------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                            $   14.17     $   13.80     $   14.38     $   13.65     $   12.49
                                                          ==================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                            11.57%         3.42%        11.66%         9.77%        21.27%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                  $  18,240     $  14,933     $  11,803     $   8,772     $   3,349
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $  18,038     $  13,425     $  10,278     $   5,701     $   1,604
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                          1.98%         1.76%         1.24%         0.55%         1.24%
Total expenses                                                 1.45% 4       1.47%         1.50%         1.58%         1.76%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses                            1.44%         1.47%         1.50%         1.57%         1.62%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          74% 5         84% 5         73% 5         61% 5        205%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

      Year Ended September 30, 2007      1.46%

5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:

                                      PURCHASE TRANSACTIONS    SALE TRANSACTIONS
      --------------------------------------------------------------------------
      Year Ended September 30, 2007         $   814,618,659      $   879,472,606
      Year Ended September 30, 2006           1,329,963,782        1,377,730,782
      Year Ended September 30, 2005           2,097,453,846        2,135,377,175
      Year Ended September 30, 2004           1,069,526,653        1,026,457,980


INFORMATION AND SERVICES

For More Information on Oppenheimer Balanced 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 request these documents by e-mail or through the
                                            OppenheimerFunds website. You may also read or download certain
                                            documents on the OppenheimerFunds website at:
                                            www.oppenheimerfunds.com
- ------------------------------------------- ---------------------------------------------------------------------


Information about the Fund including the Statement of Additional Information can be reviewed and copied at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C. Information on the operation of
the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 1.202.551.8090.
Reports and other information about the Fund are available on the EDGAR database on the Securities and Exchange
Commission's Internet website at www.sec.gov. Copies may be obtained after payment of a duplicating fee by
electronic request at the Securities and Exchange Commission's e-mail address: publicinfo@sec.gov or by writing
to the Securities and Exchange Commission '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.: 811-3864

PR0240.001.1207
Printed on recycled paper



                                             Appendix to Prospectus of
                                             Oppenheimer Balanced Fund


         Graphic material included in the prospectus of Oppenheimer Balanced 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 Oppenheimer Balanced Fund (the "Fund") depicting the
annual total returns of a hypothetical investment in Class A shares of the Fund for each of the past ten calendar
years, without deducting sales charges or taxes. Set forth below are the relevant data points that will appear in
the bar chart:

                  Calendar                           Annual
                  Year                               Total
                  Ended                              Returns

                  12/31/97                  17.77%
                  12/31/98                   7.05%
                  12/31/99                  10.60%
                  12/31/00                   6.57%
                  12/31/01                   1.68%
                  12/31/02                  -10.60%
                  12/31/03                   23.91%
                  12/31/04                   9.67%
                  12/31/05                   3.59%
                  12/31/06                  10.36%

- -----------------------------------------------------------------------------------------------------------------
 Oppenheimer Balanced Fund
 -----------------------------------------------------------------------------------------------------------------

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


Statement of Additional Information dated December 28, 2007

         This  Statement  of  Additional  Information  is  not a  Prospectus.  This  document  contains  additional
information  about the Fund and  supplements  information in the  Prospectus  dated December 28, 2007. 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.........................................................
     Other Investment Restrictions......................................................................
     Disclosure of Portfolio Holdings...................................................................
How the Fund is Managed ................................................................................
     Organization and History...........................................................................
     Board of Trustees and Oversight Committees.........................................................
     Trustees and Officers of the Fund..................................................................
     The Manager........................................................................................
Brokerage Policies of the Fund..........................................................................
Distribution and Service Plans..........................................................................
Payments to Fund Intermediaries.........................................................................
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
Report of Independent Registered Public Accounting Firm.................................................
Financial Statements....................................................................................


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



ABOUT THE FUND



    Additional Information About the Fund's Investment Policies and Risks

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

    The Fund's Investment Policies.

    The composition of the Fund's portfolio and the techniques and strategies that the Manager may use will
    vary over time. The Fund is not required to use all of the investment techniques and strategies
    described below in seeking its objective. 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. 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.

    |X|      Investments in Equity Securities. The Fund's investments in equity securities can include those
    of foreign and U.S. companies. Equity securities include common stocks, preferred stocks, rights and
    warrants, and securities convertible into common stock. The Fund's investments can include stocks of
    companies in any market capitalization range, if the Manager believes the investment is consistent with
    the Fund's objective, including the preservation of principal. Certain equity securities might be
    selected not only for their appreciation possibilities but because they may provide dividend income.

             Small-cap growth companies may offer greater opportunities for capital appreciation than
    securities of large, more established companies. However, these securities also involve greater risks
    than securities of larger companies. Securities of small capitalization issuers may be subject to
    greater price volatility in general than securities of large-cap and mid-cap companies. Therefore, to
    the degree that the Fund has investments in smaller capitalization companies at times of market
    volatility, the Fund's share price may fluctuate more. Those investments may be limited to the extent
    the Manager believes that such investments would be inconsistent with the goal of preservation of
    principal.

                      |_| 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.

             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. Preferred stock
    may be "participating" stock, which means that it may be entitled to a dividend exceeding the stated
    dividend in certain cases.

                      |_| Growth Companies. The Fund may invest in securities of "growth" companies. Growth
    companies are those companies that the Manager believes are entering into a growth cycle in their
    business, with the expectation that their stock will increase in value. They may be established
    companies as well as newer companies in the development stage.

             Growth companies may have a variety of characteristics that in the Manager's view define them
    as "growth" issuers. They may be generating or applying new technologies, new or improved distribution
    techniques or new services. They may own or develop natural resources. They may be companies that can
    benefit from changing consumer demands or lifestyles, or companies that have projected earnings in
    excess of the average for their sector or industry. In each case, they have prospects that the Manager
    believes are favorable for the long term. The portfolio managers of the Fund look for growth companies
    with strong, capable management, sound financial and accounting policies, successful product development
    and marketing and other factors.


                      |_| Value Investing. In selecting equity investments for the Fund's portfolio, the
    portfolio managers also use a value investing style coupled with fundamental analysis of issuers. In
    using a value approach, the managers look for stocks and other equity securities that appear to be
    temporarily undervalued, by various measures, such as price/earnings ratios. Value investing seeks
    stocks having prices that are low in relation to their real worth or future prospects, with the hope
    that the Fund will realize appreciation in the value of its holdings when other investors realize the
    intrinsic value of the stock.


             Using value investing requires research as to the issuer's underlying financial condition and
    prospects. Some of the measures used to identify these securities include, among others:
    o        Price/earnings ratio, which is the stock's price divided by its earnings per share. A stock
                  having a price/earnings ratio lower than its historical range, or lower than the market as
                  a whole or that of similar companies may offer attractive investment opportunities.
    o        Price/book value ratio, which is the stock price divided by the book value of the company per
                  share. It measures the company's stock price in relation to its asset value.
    o        Dividend yield, which is measured by dividing the annual dividend by the stock price per share.
    o        Valuation of assets which compares the stock price to the value of the company's underlying
                  assets, including their projected value in the marketplace and liquidation value.

                      |_| Convertible Securities. While some convertible securities are a form of debt security, in
             many 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 credit rating
             assigned to the security has less impact on the Manager's investment decision with respect to
             convertible securities than in the case of non-convertible debt fixed-income securities.
             Convertible securities are subject to the credit risks and interest rate risks described below
             in "Debt Securities."

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

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

             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 prevailing interest rates fall and decrease
    when prevailing 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.

                      |_| 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.

    |X|      Debt Securities. The Fund can invest in a variety of domestic and foreign debt securities for
    current income. Foreign debt securities are subject to the risks of foreign securities described below.
    In general, domestic and foreign fixed-income securities are also subject to two additional types of
    risk: credit risk and interest rate risk.

                      |_| 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 debt investments can include investment-grade and non-investment-grade bonds
    (commonly referred to as "junk bonds"). Investment-grade bonds are bonds rated at least "Baa" by Moody's
    Investors Service, Inc. ("Moody's"), at least "BBB" by Standard & Poor's Rating Service ("Standard &
    Poor's") or Fitch, Inc. ("Fitch"), or have comparable ratings by another nationally-recognized
    statistical rating organization.

             In making investments in debt securities, the Manager may rely to some extent on the ratings of
    ratings organizations or it may use its own research to evaluate a security's credit-worthiness. If the
    securities 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.

                      |_| Special Risks of Lower-Grade Securities. The Fund can invest a substantial portion
    of its assets in lower-grade debt securities. Because lower-grade securities tend to offer higher yields
    than investment-grade securities, the Fund may invest in lower-grade securities if the Manager is trying
    to achieve greater income. In some cases, the appreciation possibilities of lower-grade securities may
    be a reason they are selected for the Fund's portfolio. However, these investments will be made only
    when consistent with the Fund's goal of preservation of principal that is part of the Fund's objective.

             The Fund may invest up to 35% of its total assets in "lower-grade" debt securities.
    "Lower-grade" debt securities are those rated below "investment grade" which means they have a rating
    lower than "Baa" by Moody's or lower than "BBB" by Standard & Poor's 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 included in the limitation on the percentage of
    the Fund's assets that can be invested in lower-grade securities. The Fund can invest in securities
    rated as low as "C" or "D" or which are in default at the time the Fund buys them.

             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.

             However, the Fund's limitations on these investments may reduce some of the risks to the Fund,
    as will the Fund's policy of diversifying its investments. Additionally, to the extent they can be
    converted into stock, convertible securities may be less subject to some of these risks than
    non-convertible high-yield bonds, since stock may be more liquid and less affected by some of these risk
    factors.

             While securities rated "Baa" by Moody's or "BBB" by 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. The debt security ratings definitions of the principal rating
    definitions are included in Appendix A to this Statement of Additional Information.

                      |_| Interest Rate Risk. Interest rate risk refers to the fluctuations in value of
    fixed-income securities resulting from the inverse relationship between price and yield. For example, an
    increase in general interest rates will tend to reduce the market value of already-issued fixed-income
    investments, and a decline in general interest rates will tend to increase their value. In addition,
    debt securities with longer maturities, which tend to have higher yields, are subject to potentially
    greater fluctuations in value from changes in interest rates than obligations with shorter maturities.

             Fluctuations in the market value of fixed-income securities after the Fund buys them will not
    affect the interest payable on those securities, nor the cash income from them. 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.

                      |_| 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 effective duration, and therefore its sensitivity to
    interest rate changes, would increase.

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

                      |_| Collateralized Mortgage Obligations. CMOs are multi-class bonds that are backed by
    pools of mortgage loans or mortgage pass-through certificates. They may be collateralized by:

                      (1)   pass-through certificates issued or guaranteed by Ginnie Mae, Fannie Mae, or
                            Freddie Mac,
                      (2)   unsecuritized mortgage loans insured by the Federal Housing Administration or
                            guaranteed by the Department of Veterans' Affairs,
                      (3)   unsecuritized conventional mortgages,
                      (4)   other mortgage-related securities, or
                      (5)   any combination of these.

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

    |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
    may invest may or may not be guaranteed or supported by the "full faith and credit" of the United
    States. "Full faith and credit" means generally that the taxing power of the U.S. government is pledged
    to the payment of interest and repayment of principal on a security. If a security is not backed by the
    full faith and credit of the United States, the owner of the security must look principally to the
    agency issuing the obligation for repayment. The owner might be able to assert a claim against the
    United States if the issuing agency or instrumentality does not meet its commitment. The Fund will
    invest in securities of U.S. government agencies and instrumentalities only if the Manager is satisfied
    that the credit risk with respect to such instrumentality is minimal.

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

                      |_| Treasury Inflation-Protection Securities. The Fund can buy these U.S. Treasury
    securities, called "TIPS," that are designed to provide an investment vehicle that is not vulnerable to
    inflation. The interest rate paid by TIPS is fixed. The principal value rises or falls semi-annually
    based on changes in the published Consumer Price Index. If inflation occurs, the principal and interest
    payments on TIPS are adjusted to protect investors from inflationary loss. If deflation occurs, the
    principal and interest payments will be adjusted downward, although the principal will not fall below
    its face amount at maturity.

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

                      |_| U.S. Government Mortgage-Related Securities. The Fund can invest in a variety of
    mortgage-related securities that are issued by U.S. government agencies or instrumentalities, some of
    which are described below.

    o        GNMA Certificates. The Government National Mortgage Association ("GNMA") is a wholly-owned
    corporate instrumentality of the United States within the U.S. Department of Housing and Urban
    Development. GNMA's principal programs involve its guarantees of privately-issued securities backed by
    pools of mortgages. Ginnie Maes are debt securities representing an interest in one or a pool of
    mortgages that are insured by the Federal Housing Administration or the Farmers Home Administration or
    guaranteed by the Veterans Administration.

             The Ginnie Maes in which the Fund invests are of the "fully modified pass-through" type. They
    provide that the registered holders of the Certificates will receive timely monthly payments of the
    pro-rata share of the scheduled principal payments on the underlying mortgages, whether or not those
    amounts are collected by the issuers. Amounts paid include, on a pro rata basis, any prepayment of
    principal of such mortgages and interest (net of servicing and other charges) on the aggregate unpaid
    principal balance of the Ginnie Maes, whether or not the interest on the underlying mortgages has been
    collected by the issuers.

             The Ginnie Maes purchased by the Fund are guaranteed as to timely payment of principal and
    interest by GNMA. It is expected that payments received by the issuers of Ginnie Maes on account of the
    mortgages backing the Ginnie Maes will be sufficient to make the required payments of principal of and
    interest on those GNMA Certificates. However if those payments are insufficient, the guaranty agreements
    between the issuers of the Certificates and GNMA require the issuers to make advances sufficient for the
    payments. If the issuers fail to make those payments, GNMA will do so.

             Under federal law, the full faith and credit of the United States is pledged to the payment of
    all amounts that may be required to be paid under any guaranty issued by GNMA as to such mortgage pools.
    An opinion of an Assistant Attorney General of the United States, dated December 9, 1969, states that
    such guaranties "constitute general obligations of the United States backed by its full faith and
    credit." GNMA is empowered to borrow from the United States Treasury to the extent necessary to make any
    payments of principal and interest required under those guaranties.

             Ginnie Maes are backed by the aggregate indebtedness secured by the underlying FHA-insured,
    FMHA-insured or VA-guaranteed mortgages. Except to the extent of payments received by the issuers on
    account of such mortgages, Ginnie Maes do not constitute a liability of those issuers, nor do they
    evidence any recourse against those issuers. Recourse is solely against GNMA. Holders of Ginnie Maes
    (such as the Fund) have no security interest in or lien on the underlying mortgages.

             Monthly payments of principal will be made, and additional prepayments of principal may be
    made, to the Fund with respect to the mortgages underlying the Ginnie Maes held by the Fund. All of the
    mortgages in the pools relating to the Ginnie Maes in the Fund are subject to repayment without any
    significant premium or penalty, at the option of the mortgagors. While the mortgages on
    one-to-four-family dwellings underlying certain Ginnie Maes have a stated maturity of up to 30 years, it
    has been the experience of the mortgage industry that the average life of comparable mortgages, as a
    result of prepayments, refinancing and payments from foreclosures, is considerably less.

                      |_| Federal Home Loan Mortgage Corporation Certificates. FHLMC, a corporate
    instrumentality of the United States, issues FHLMC Certificates representing interests in mortgage
    loans. FHLMC guarantees to each registered holder of a FHLMC Certificate timely payment of the amounts
    representing a holder's proportionate share in:

    (i)      interest payments less servicing and guarantee fees,
    (ii)     principal prepayments and
    (iii)    the ultimate collection of amounts representing the holder's proportionate interest in
                               principal payments on the mortgage loans in the pool represented by the FHLMC
                               Certificate, in each case whether or not such amounts are actually received.

             The obligations of FHLMC under its guarantees are obligations solely of FHLMC and are not
    backed by the full faith and credit of the United States.

                      |_| Federal National Mortgage Association (Fannie Mae) Certificates. Fannie Mae, a
    federally-chartered and privately-owned corporation, issues Fannie Mae Certificates which are backed by
    a pool of mortgage loans. Fannie Mae guarantees to each registered holder of a Fannie Mae Certificate
    that the holder will receive amounts representing the holder's proportionate interest in scheduled
    principal and interest payments, and any principal prepayments, on the mortgage loans in the pool
    represented by such Certificate, less servicing and guarantee fees, and the holder's proportionate
    interest in the full principal amount of any foreclosed or other liquidated mortgage loan. In each case
    the guarantee applies whether or not those amounts are actually received. The obligations of Fannie Mae
    under its guarantees are obligations solely of Fannie Mae and are not backed by the full faith and
    credit of the United States or any of its agencies or instrumentalities other than Fannie Mae.

                      |_| Zero-Coupon U.S. Government Securities. The Fund may buy zero-coupon U.S.
    government securities. These will typically be U.S. Treasury Notes and Bonds that have been stripped of
    their unmatured interest coupons, the coupons themselves, or certificates representing interests in
    those stripped debt obligations and coupons.

             Zero-coupon securities do not make periodic interest payments and are sold at a deep discount
    from their face value at maturity. The buyer recognizes a rate of return determined by the gradual
    appreciation of the security, which is redeemed at face value on a specified maturity date. This
    discount depends on the time remaining until maturity, as well as prevailing interest rates, the
    liquidity of the security and the credit quality of the issuer. The discount typically decreases as the
    maturity date approaches.

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

             The Fund's investment in zero-coupon securities may cause the Fund to recognize income and make
    distributions to shareholders before it receives any cash payments on the zero-coupon investment. To
    generate cash to satisfy those distribution requirements, the Fund may have to sell portfolio securities
    that it otherwise might have continued to hold or to use cash flows from other sources such as the sale
    of Fund shares.

    |X|      Forward Rolls. The Fund can enter into "forward roll" transactions with respect to
    mortgage-related securities. In this type of transaction, the Fund sells a mortgage-related security to
    a buyer and simultaneously agrees to repurchase a similar security (the same type of security, 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.  That is, 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|      Money Market Instruments. The following is a brief description of the types of 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.

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

                      |_| 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 $500 million, or
                         o   banker's acceptances (which may or may not be supported by letters of credit)
                             but only if guaranteed by a U.S. commercial bank with total assets of at least
                             U.S. $500 million.

             The Fund can purchase certificates of deposit of $100,000 or less of a domestic bank even if
    that bank has assets of less than $500 million, if the certificate of deposit is fully insured as to
    principal by the Federal Deposit Insurance Corporation. The Fund can buy only one such certificate of
    deposit from any one bank with that amount of assets and limits its investments in those certificates of
    deposit to 10% of its total assets. "Banks" include U.S. commercial banks, savings banks and savings and
    loan associations.

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

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

                      |_| 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.

    |X|      Portfolio Turnover.  The Fund can engage in short-term trading to try to achieve its objective.
    "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.

             Increased portfolio turnover creates higher brokerage and transaction costs for the Fund,
    which may reduce its overall performance. Additionally, the realization of capital gains from selling
    portfolio securities may result in distributions of taxable long-term capital gains to shareholders,
    since the Fund will normally distribute all of its capital gains realized each year, to avoid excise
    taxes under the Internal Revenue Code.

    |X|      Foreign Securities. The Fund expects to have substantial investments in foreign securities.
    These include equity securities issued by foreign companies and debt securities issued by foreign
    companies or governments, including supra-national entities. "Foreign securities" include equity and
    debt securities of 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. They also include securities of companies (including those that are located in
    the U.S. or organized under U.S. law) that derive a significant portion of their revenue or profits from
    foreign businesses, investments or sales, or that have a significant portion of their assets abroad.
    They may be traded on foreign securities exchanges or in the foreign over-the-counter markets.

             Securities of foreign issuers that are represented by American Depository Receipts or that are
    listed on a U.S. securities exchange or traded in the U.S. over-the-counter markets are not considered
    "foreign securities" for the purpose of the Fund's investment allocations, because they are not subject
    to many of the special considerations and risks, discussed below, that apply to foreign securities
    traded and held abroad.

             Because the Fund may purchase securities denominated in foreign currencies, a change in the
    value of such foreign currency against the U.S. dollar will result in a change in the amount of income
    the Fund has available for distribution. Because a portion of the Fund's investment income may be
    received in foreign currencies, the Fund will be required to compute its income in U.S. dollars for
    distribution to shareholders, and therefore the Fund will absorb the cost of currency fluctuations.
    After the Fund has distributed income, subsequent foreign currency losses may result in the Fund's
    having distributed more income in a particular fiscal period than was available from investment income,
    which could result in a return of capital to shareholders.

             Investing in foreign securities offers potential benefits not available from investing solely
    in securities of domestic issuers. They include the opportunity to invest in foreign issuers that appear
    to offer growth potential, or in foreign countries with economic policies or business cycles different
    from those of the U.S., or to reduce fluctuations in portfolio value by taking advantage of foreign
    stock markets that do not move in a manner parallel to U.S. markets. The Fund will hold foreign currency
    only in connection with the purchase or sale of foreign securities.

                      |_| Foreign Debt Obligations. The debt obligations of foreign governments and entities
    may or may not be supported by the full faith and credit of the foreign government. The Fund may 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.

                      |_| 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, 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, stock exchanges and brokers than in the U.S.;
    o        greater difficulties in commencing lawsuits;
    o        higher brokerage commission rates than in the U.S.;
    o        increased risks of delays in settlement of portfolio transactions or loss of certificates for
                         portfolio securities;
    o        possibilities in some countries of expropriation, confiscatory taxation, political, financial
                         or social instability or adverse diplomatic developments; and
    o        unfavorable differences between the U.S. economy and foreign economies.

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

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


    |X|      Passive Foreign Investment Companies.  Some securities of corporations domiciled outside the
    U.S. which the Fund may purchase, may be considered passive foreign investment companies ("PFICs") under
    U.S. tax laws. PFICs are those foreign corporations which generate primarily passive income. They tend
    to be growth companies or "start-up" companies. For federal tax purposes, a corporation is deemed a PFIC
    if 75% or more of the foreign corporation's gross income for the income year is passive income or if 50%
    or more of its assets are assets that produce or are held to produce passive income. Passive income is
    further defined as any income to be considered foreign personal holding company income within the
    subpart F provisions defined by Internal Revenue Codess.954.


             Investing in PFICs involves the risks associated with investing in foreign securities, as
    described above. There are also the risks that the Fund may not realize that a foreign corporation it
    invests in is a PFIC for federal tax purposes. Federal tax laws impose severe tax penalties for failure
    to properly report investment income from PFICs. Following industry standards, the Fund makes every
    effort to ensure compliance with federal tax reporting of these investments. PFICs are considered
    foreign securities for the purposes of the Fund's minimum percentage requirements or limitations of
    investing in foreign securities.

             Subject to the limits under the Investment Company Act of 1940 (the "Investment Company Act"),
    the Fund may also invest in foreign mutual funds which are also deemed PFICs (since nearly all of the
    income of a mutual fund is generally passive income). Investing in these types of PFICs may allow
    exposure to varying countries because some foreign countries limit, or prohibit, all direct foreign
    investment in the securities of companies domiciled therein.

             In addition to bearing their proportionate share of a fund's expenses (management fees and
    operating expenses), shareholders will also indirectly bear similar expenses of such entities.
    Additional risks of investing in other investment companies are described below under "Investment in
    Other Investment Companies."

    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, 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.

             The Fund may buy zero-coupon and delayed interest securities, and "stripped" securities of
    corporations and of foreign government issuers. These are similar in structure to zero-coupon and
    "stripped" U.S. government securities, but in the case of foreign government securities may or may not
    be backed by the "full faith and credit" of the issuing foreign government. Zero coupon securities
    issued by foreign governments and by corporations will be subject to greater credit risks than U.S.
    government zero-coupon 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|      Commercial (Privately-Issued) Mortgage-Related Securities. The Fund may 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|      "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 demand obligations have a demand
    feature that allows the Fund to tender the obligation to the issuer or a third party prior to its
    maturity. The tender may be at par value plus accrued interest, according to the terms of the
    obligations.

             The interest rate on a floating rate demand note is adjusted automatically according to a
    stated prevailing market rate, such as a bank's prime rate, the 91-day U.S. Treasury Bill rate, or some
    other standard. The instrument's rate is adjusted automatically each time the base rate is adjusted. The
    interest rate on a variable rate demand note is also based on a stated prevailing market rate but is
    adjusted automatically at specified intervals of not less than one year. Generally, the changes in the
    interest rate on such securities reduce the fluctuation in their market value. As interest rates
    decrease or increase, the potential for capital appreciation or depreciation is less than that for
    fixed-rate obligations of the same maturity. The Manager may determine that an unrated floating rate or
    variable rate demand obligation meets the Fund's quality standards by reason of being backed by a letter
    of credit or guarantee issued by a bank that meets those quality standards.

             Floating rate and variable rate demand notes that have a stated maturity in excess of one year
    may have features that permit the holder to recover the principal amount of the underlying security at
    specified intervals not exceeding one year and upon no more than 30 days' notice. The issuer of that
    type of note normally has a corresponding right in its discretion, after a given period, to prepay the
    outstanding principal amount of the note plus accrued interest. Generally the issuer must provide a
    specified number of days' notice to the holder.

    |X|      Investing in Small, Unseasoned Companies. The Fund can invest in securities of small,
    unseasoned companies. These are companies that have been in operation for less than three years,
    including the operations of any predecessors. Securities of these companies may be subject to volatility
    in their prices. They may have a limited trading market, which may adversely affect the Fund's ability
    to dispose of them and can reduce the price the Fund might be able to obtain for them. Other investors
    that own a security issued by a small, unseasoned issuer for which there is limited liquidity might
    trade the security when the Fund is attempting to dispose of its holdings of that security. In that case
    the Fund might receive a lower price for its holdings than might otherwise be obtained.

    |X|      Investment in Other Investment Companies. The Fund can also invest in the securities of other
    investment companies, which can include open-end funds, closed-end funds and unit investment trusts,
    subject to the limits set forth in the Investment Company Act that apply to those types of investments.
    For example, the Fund can invest in Exchange-Traded Funds, which are typically open-end funds or unit
    investment trusts, listed on a stock exchange.  The Fund might do so as a way of gaining exposure to the
    segments of the equity or fixed-income markets represented by the Exchange-Traded Funds' portfolio, at
    times when the Fund may not be able to buy those portfolio securities directly.

             Investing in another investment company may involve the payment of substantial premiums above
    the value of such investment company's portfolio securities and is subject to limitations under the
    Investment Company Act.  The Fund does not intend to invest in other investment companies unless the
    Manager believes that the potential benefits of the investment justify the payment of any premiums or
    sales charges.  As a shareholder of an investment company, the Fund would be subject to its ratable
    share of that investment company's expenses, including its advisory and administration expenses.  The
    Fund does not anticipate investing a substantial amount of its net assets in shares of other investment
    companies.

    |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" or "forward commitment"
    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. No income begins to accrue to the Fund on a when-issued security until the Fund receives the
    security at settlement of the trade.

             The Fund will engage in when-issued transactions to secure what the Manager considers to be an
    advantageous price and yield at the time of entering into the obligation. When the Fund enters into a
    when-issued or delayed-delivery transaction, it relies on the other party to complete the transaction.
    Its failure to do so may cause the Fund to lose the opportunity to obtain the security at a price and
    yield the Manager considers to be advantageous.

             When the Fund engages in when-issued and delayed-delivery transactions, it does so for the
    purpose of acquiring or selling securities consistent with its investment objective and policies for its
    portfolio or for delivery pursuant to options contracts it has entered into, and not for the 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|      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 buyers participation
    interest bears to the total principal amount of the loan. 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|      Repurchase Agreements. The Fund can acquire securities subject to repurchase agreements. It may
    do so for liquidity purposes to meet anticipated redemptions of Fund shares, or pending the investment
    of the proceeds from sales of Fund shares, or pending the settlement of portfolio securities
    transactions, or for temporary defensive purposes, as described below.

             In a repurchase transaction, the Fund buys a security from, and simultaneously resells it to,
    an approved vendor for delivery on an agreed-upon future date. The resale price exceeds the purchase
    price by an amount that reflects an agreed-upon interest rate effective for the period during which the
    repurchase agreement is in effect. Approved vendors include U.S. commercial banks, U.S. branches of
    foreign banks, or broker-dealers that have been designated as primary dealers in government securities.
    They must meet credit requirements set by the Fund's Manager from time to time.

             The majority of these transactions run from day to day, and delivery pursuant to the resale
    typically occurs within one to five days of the purchase. Repurchase agreements having a maturity beyond
    seven days are subject to the Fund's limits on holding illiquid investments. The Fund will not enter
    into a repurchase agreement that causes more than 10% of its net assets to be subject to repurchase
    agreements having a maturity beyond seven days. There is no limit on the amount of the Fund's net assets
    that may be subject to repurchase agreements having maturities of seven days or less.

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

             Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the "SEC"),
    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 applicable securities laws,
    the Fund may have to cause those securities to be registered. The expenses of registering restricted
    securities may be negotiated by the Fund with the issuer at the time the Fund buys the securities. When
    the Fund must arrange registration because the Fund wishes to sell the security, a considerable period
    may elapse between the time the decision is made to sell the security and the time the security is
    registered so that the Fund could sell it. The Fund would bear the risks of any downward price
    fluctuation during that period.

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

             The Fund has limitations that apply to purchases of restricted securities, as stated in the
    Prospectus. Those percentage restrictions do not limit purchases of restricted securities that are
    eligible for sale to qualified institutional purchasers under Rule 144A of the Securities Act of 1933,
    if those securities have been determined to be liquid by the Manager under Board-approved guidelines.
    Those guidelines take into account the trading activity for such securities and the availability of
    reliable pricing information, among other factors. If there is a lack of trading interest in a
    particular Rule 144A security, the Fund's holdings of that security may be considered to be illiquid.

             Illiquid securities include repurchase agreements maturing in more than seven days and
    participation interests that do not have puts exercisable within seven days.

    |X|      Loans of Portfolio Securities.  The Fund may lend its portfolio securities pursuant to the
    Securities Lending Agreement (the "Securities Lending Agreement") with JPMorgan Chase, subject to the
    other restrictions stated in the Prospectus.  The Fund will lend such portfolio securities to attempt to
    increase the Fund's income.  Under the Securities Lending Agreement and applicable regulatory
    requirements (which are subject to change), the loan collateral must, on each business day, be at least
    equal to the value of the loaned securities and 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 to JPMorgan Chase, as agent, amounts demanded by the Fund if the demand meets the terms of
    the letter.  Such terms of the letter of credit and the issuing bank must be satisfactory to JPMorgan
    Chase and the Fund.  The Fund will receive, pursuant to the Securities Lending Agreement, 80% of all
    annual net income (i.e., net of rebates to the Borrower) from securities lending transactions. JPMorgan
    Chase has agreed, in general, to guarantee the obligations of borrowers to return loaned securities and
    to be responsible for expenses relating to securities lending. The Fund will be responsible, however,
    for risks associated with the investment of cash collateral, including the risk that the issuer of the
    security in which the cash collateral has been invested defaults.  The Securities Lending Agreement may
    be terminated by either JPMorgan Chase or the Fund on 30 days' written notice. The terms of the Fund's
    loans must also meet applicable tests under the Internal Revenue Code and permit the Fund to reacquire
    loaned securities on five business days' notice or in time to vote on any important matter.

             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.  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|      Borrowing and Leverage.  The Fund may not borrow money, except to the extent permitted under
    the Investment Company Act, the rules or regulations thereunder or any exemption therefrom that is
    applicable to the Fund, as such statute, rules or regulations may be amended or interpreted from time to
    time. Borrowing may entail "leverage," and may be a speculative investment strategy. Any borrowing will
    be made only from banks and, pursuant to the requirements of the Investment Company Act, will be made
    only to the extent that the value of the Fund's assets, less its liabilities other than borrowings, is
    equal to at least 300% of all borrowings including the proposed borrowing. If the value of the Fund's
    assets, when computed in that manner, should fail to meet the 300% asset coverage requirement, the Fund
    is required within three days to reduce its bank debt to the extent necessary to meet that coverage
    requirement. To do so, the Fund may have to sell a portion of its investments at a time when it would
    otherwise not want to sell the securities. Interest on money the Fund borrows is an expense the Fund
    would not otherwise incur, so that during periods of substantial borrowings, its expenses may increase
    more than the expenses of funds that do not borrow. The use of leverage also may make the Fund's share
    prices more sensitive to interest rate changes.

    |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. 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. However, the enhancement, if any, might not be for the full par value of the
    security. If the enhancement is exhausted and any required payments of interest or repayments of
    principal are not made, the Fund could suffer a loss on its investment or delays in receiving payment.

             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. Unlike mortgage-backed
    securities, asset-backed securities typically do not have the benefit of a security interest in the
    underlying collateral.

    |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. However, the Fund is not obligated to use derivatives
    in seeking its objective.

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

             Other derivative investments the Fund can invest in include mortgage-related securities
    (described above) and "index-linked" notes. Principal and/or interest payments on these notes depend on
    the performance of an underlying index. Currency-indexed securities are another derivative the Fund may
    use. Typically these are 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.

    |X|      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 Fund takes a short
    position in the credit default swap, if 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, if 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.

             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).

    |X|      Hedging. Although the Fund can use hedging instruments, 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 that have
    appreciated, or to facilitate selling securities for investment reasons, the Fund could:

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

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

             buy futures, or
             buy calls on such futures or on securities.

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

                      |_| Futures. The Fund can buy and sell futures contracts that relate to (1)
    broadly-based stock indices (these are referred to as "stock index futures"), (2) an individual stock
    ("single stock futures"), (3) bond indices (these are referred to as "bond index futures"), (4) debt
    securities (these are referred to as "interest rate futures"), (5) foreign currencies (these are
    referred to as "forward contracts") and (6) commodities.

             A broadly-based stock index is used as the basis for trading stock index futures. They may in
    some cases be based on stocks of issuers in a particular industry or group of industries. A stock index
    assigns relative values to the common stocks included in the index and its value fluctuates in response
    to the changes in value of the underlying stocks. A stock index cannot be purchased or sold directly.
    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.  Similarly, a single stock future obligates the seller to
    deliver (and the purchaser to take) cash or a specified equity security to settle the futures
    transaction.  Either party could also enter into an offsetting contract to close out the position.
    Single stock futures trade on a very limited number of exchanges, with contracts typically not fungible
    among the exchanges.

             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 payment is paid or received by the Fund on the purchase or sale of a future. Upon entering
    into a futures transaction, the Fund will be required to deposit an initial margin payment with the
    futures commission merchant (the "futures broker"). Initial margin payments will be deposited with the
    Fund's custodian bank in an account registered in the futures broker's name. However, the futures broker
    can gain access to that account only under specified conditions. As the future is marked to market (that
    is, its value on the Fund's books is changed) to reflect changes in its market value, subsequent margin
    payments, called variation margin, will be paid to or by the futures broker daily.

             At any time prior to expiration of the future, the Fund may elect to close out its position by
    taking an opposite position, at which time a final determination of variation margin is made and any
    additional cash must be paid by or released to the Fund. Any loss or gain on the future is then realized
    by the Fund for tax purposes. All futures transactions (except forward contracts) are effected through a
    clearinghouse associated with the exchange on which the contracts are traded.

                      |_|Put and Call Options. The Fund can buy and sell certain kinds of put options
    ("puts") and call options ("calls"). The Fund can buy and sell exchange-traded and over-the-counter put
    and call options, including index options, securities options, currency options, commodities options,
    and options on the other types of futures described above.

    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 the call may be covered by segregating liquid assets to enable the
    Fund to satisfy its obligations if the call is exercised.

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

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

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

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

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

             The Fund may also write calls on a futures contract without owning the futures contract or
    securities deliverable under the contract. To do so, at the time the call is written, the Fund must
    cover the call by segregating an equivalent dollar amount of liquid assets. The Fund will segregate
    additional liquid assets if the value of the segregated assets drops below 100% of the current value of
    the future. Because of this segregation requirement, in no circumstances would the Fund's receipt of an
    exercise notice as to that future require the Fund to deliver a futures contract. It would simply put
    the Fund in a short futures position, which is permitted by the Fund's hedging policies.

    o        Writing Put Options. The Fund can sell put options. A put option on securities gives the
    purchaser the right to sell, and the writer the obligation to buy, the underlying investment at the
    exercise price during the option period.

             If the Fund writes a put, the put must be covered by segregated liquid assets. The premium the
    Fund receives from writing a put represents a profit, as long as the price of the underlying investment
    remains equal to or above the exercise price of the put. However, the Fund also assumes the obligation
    during the option period to buy the underlying investment from the buyer of the put at the exercise
    price, even if the value of the investment falls below the exercise price. If a put the Fund has written
    expires unexercised, the Fund realizes a gain in the amount of the premium less the transaction costs
    incurred. If the put is exercised, the Fund must fulfill its obligation to purchase the underlying
    investment at the exercise price. That price will usually exceed the market value of the investment at
    that time. In that case, the Fund may incur a loss if it sells the underlying investment. That loss will
    be equal to the sum of the sale price of the underlying investment and the premium received minus the
    sum of the exercise price and any transaction costs the Fund incurred.

             When writing a put option on a security, to secure its obligation to pay for the underlying
    security the Fund will identify liquid assets on its books 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 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 o  premium paid for the call and the Fund exercises
    the call. If the Fund does not exercise the call or sell it (whether or not at a profit), the call will
    become worthless at its expiration date. In that case the Fund will have paid the premium but lost the
    right to purchase the underlying investment.


             The Fund can buy puts whether or not it holds the underlying investment in its portfolio. When
    the Fund purchases a put, it pays a premium and, except as to puts on indices, has the right to sell the
    underlying investment to a seller of a put on a corresponding investment during the put period at a
    fixed exercise price.

             Buying a put on 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.

             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.

             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.

                      |_| 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
    identified on its books) upon conversion or exchange of other foreign currency held in its portfolio.

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

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

             The Fund's option activities could affect its portfolio turnover rate and brokerage
    commissions. The exercise of calls written by the Fund might cause the Fund to sell related portfolio
    securities, thus increasing its turnover rate. The exercise by the Fund of puts on securities will cause
    the sale of underlying investments, increasing portfolio turnover. Although the decision whether to
    exercise a put it holds is within the Fund's control, holding a put might cause the Fund to sell the
    related investments for reasons that would not exist in the absence of the put.

             The Fund could pay a brokerage commission each time it buys a call or put, sells a call or put,
    or buys or sells an underlying investment in connection with the exercise of a call or put. Those
    commissions could be higher on a relative basis than the commissions for direct purchases or sales of
    the underlying investments. Premiums paid for options are small in relation to the market value of the
    underlying investments. Consequently, put and call options offer large amounts of leverage. The leverage
    offered by trading in options could result in the Fund's net asset value being more sensitive to changes
    in the value of the underlying investment.

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

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

             There is a risk in using short hedging by selling futures or purchasing puts on broadly-based
    indices or futures to attempt to protect against declines in the value of the Fund's portfolio
    securities. The risk is that the prices of the futures or the applicable index will correlate
    imperfectly with the behavior of the cash prices of the Fund's securities. For example, it is possible
    that while the Fund has used hedging instruments in a short hedge, the market may advance and the value
    of the securities held in the Fund's portfolio might decline. If that occurred, the Fund would lose
    money on the hedging instruments and also experience a decline in the value of its portfolio securities.
    However, while this could occur for a very brief period or to a very small degree, over time the value
    of a diversified portfolio of securities will tend to move in the same direction as the indices upon
    which the hedging instruments are based.

             The risk of imperfect correlation increases as the composition of the Fund's portfolio diverges
    from the securities included in the applicable index. To compensate for the imperfect correlation of
    movements in the price of the portfolio securities being hedged and movements in the price of the
    hedging instruments, the Fund might use hedging instruments in a greater dollar amount than the dollar
    amount of portfolio securities being hedged. It might do so if the historical volatility of the prices
    of the portfolio securities being hedged is more than the historical volatility of the applicable index.

             The ordinary spreads between prices in the cash and futures markets are subject to distortions,
    due to differences in the nature of those markets. First, all participants in the futures market are
    subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit
    requirements, investors may close futures contracts through offsetting transactions which could distort
    the normal relationship between the cash and futures markets. Second, the liquidity of the futures
    market depends on participants entering into offsetting transactions rather than making or taking
    delivery. To the extent participants decide to make or take delivery, liquidity in the futures market
    could be reduced, thus producing distortion. Third, from the point of view of speculators, the deposit
    requirements in the futures market are less onerous than margin requirements in the securities markets.
    Therefore, increased participation by speculators in the futures market may cause temporary price
    distortions.

             The Fund can use hedging instruments to establish a position in the securities markets as a
    temporary substitute for the purchase of individual securities (long hedging) by buying futures and/or
    calls on such futures, broadly-based indices or on securities. It is possible that when the Fund does so
    the market might decline. If the Fund then concludes not to invest in securities because of concerns
    that the market might decline further or for other reasons, the Fund will realize a loss on the hedging
    instruments that is not offset by a reduction in the price of the securities purchased.

                      |_| Forward Contracts. Forward contracts are foreign currency exchange contracts. They
    are used to buy or sell foreign currency for future delivery at a fixed price. The Fund uses them to
    "lock in" the U.S. dollar price of a security denominated in a foreign currency that the Fund has bought
    or sold, or to protect against possible losses from changes in the relative values of the U.S. dollar
    and a foreign currency. The Fund may also use "cross-hedging" where the Fund hedges against changes in
    currencies other than the currency in which a security it holds is denominated.

             Under a forward contract, one party agrees to purchase, and another party agrees to sell, a
    specific currency at a future date. That date may be any fixed number of days from the date of the
    contract agreed upon by the parties. The transaction price is set at the time the contract is entered
    into. These contracts are traded in the inter-bank market conducted directly among currency traders
    (usually large commercial banks) and their customers.

             The Fund may use forward contracts to protect against uncertainty in the level of future
    exchange rates. The use of forward contracts does not eliminate the risk of fluctuations in the prices
    of the underlying securities the Fund owns or intends to acquire, but it does fix a rate of exchange in
    advance. Although forward contracts may reduce the risk of loss from a decline in the value of the
    hedged currency, at the same time they limit any potential gain if the value of the hedged currency
    increases.

             When the Fund enters into a contract for the purchase or sale of a security denominated in a
    foreign currency, or when it anticipates receiving dividend payments in a foreign currency, the Fund
    might desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of the
    dividend payments. To do so, the Fund could enter into a forward contract for the purchase or sale of
    the amount of foreign currency involved in the underlying transaction, in a fixed amount of U.S. dollars
    per unit of the foreign currency. This is called a "transaction hedge." The transaction hedge will
    protect the Fund against a loss from an adverse change in the currency exchange rates during the period
    between the date on which the security is purchased or sold or on which the payment is declared, and the
    date on which the payments are made or received.

             The Fund could also use forward contracts to lock in the U.S. dollar value of portfolio
    positions. This is called a "position hedge." When the Fund believes that foreign currency might suffer
    a substantial decline against the U.S. dollar, it could enter into a forward contract to sell an amount
    of that foreign currency approximating the value of some or all of the Fund's portfolio securities
    denominated in that foreign currency. When the Fund believes that the U.S. dollar might suffer a
    substantial decline against a foreign currency, it could enter into a forward contract to buy that
    foreign currency for a fixed dollar amount. Alternatively, the Fund could enter into a forward contract
    to sell a different foreign currency for a fixed U.S. dollar amount if the Fund believes that the U.S.
    dollar value of the foreign currency to be sold pursuant to its forward contract will fall whenever
    there is a decline in the U.S. dollar value of the currency in which portfolio securities of the Fund
    are denominated. That is referred to as a "cross hedge."

             The Fund will cover its short positions in these cases by identifying on its books liquid
    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 may 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.

             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.  Also, the Fund will identify liquid assets on the
    Fund's books (such as cash or U.S. government securities) to cover any amounts it could owe under swaps
    that exceed the amounts it is entitled to receive, and it will adjust that amount daily, as needed.

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

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

                      |_| Regulatory Aspects of Hedging Instruments. The Commodities Futures Trading
    Commission (the "CFTC") recently eliminated limitations on futures trading by certain regulated entities
    including registered investment companies and consequently registered investment companies may engage in
    unlimited futures transactions and options thereon provided that the Fund claims an exclusion from
    regulation as a commodity pool operator. The Fund has claimed such an exclusion from registration as a
    commodity pool operator under the Commodity Exchange Act ("CEA"). The Fund may use futures and options
    for hedging and non-hedging purposes to the extent consistent with its investment objective, internal
    risk management guidelines adopted by the Fund's investment adviser (as they may be amended from time to
    time), and as otherwise set forth in the Fund's prospectus or this Statement of Additional Information.


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


             Under interpretations of the staff of the SEC regarding applicable provisions of the Investment
    Company Act, when the Fund purchases a future, it must identify liquid assets on its books in an amount
    equal to the purchase price of the future, less the margin deposit applicable to it.

                      |_| 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|      Temporary Defensive and Interim Investments.  When market, economic or political conditions are
    unstable, or the Manager believes it is otherwise appropriate to reduce holdings in stocks, the Fund can
    invest in a variety of debt securities for defensive purposes. The Fund can also purchase these
    securities for liquidity purposes to meet cash needs due to the redemption of Fund shares, or to hold
    while waiting to reinvest cash received from the sale of other portfolio securities. The Fund can buy:
    obligations issued or guaranteed by the U. S. government or its instrumentalities or agencies,
    o        commercial paper (short-term, unsecured, promissory notes of domestic or foreign companies)

                  rated in the three top rating categories of a nationally recognized rating organization,
    o        short-term debt obligations of corporate issuers, rated investment grade (rated at least Baa by
                  Moody's Investors Service, Inc. or at least BBB by Standard & Poor's Corporation, or a
                  comparable rating by another rating organization), or unrated securities judged by the
                  Manager to have a comparable quality to rated securities in those categories,
    o        certificates of deposit and bankers' acceptances of domestic and foreign banks  having total
                  assets in excess of $1 billion, and
    o        repurchase agreements.

             Short-term debt securities would normally be selected for defensive or cash management purposes
    because they can normally be disposed of quickly, are not generally subject to significant fluctuations
    in principal value and their value will be less subject to interest rate risk than longer-term debt
    securities.

    Other Investment Restrictions

    |X|      What Are "Fundamental Policies?" Fundamental policies are those policies that the Fund has
    adopted to govern its investments that can be changed only by the vote of a "majority" of the Fund's
    outstanding voting securities. Under the Investment Company Act, a "majority" vote is defined as the
    vote of the holders of the lesser of:

    o        67% or more of the shares present or represented by proxy at a shareholder meeting, if the
             holders of more than 50% of the outstanding shares are present or represented by proxy, or
    o        more than 50% of the outstanding shares.

             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|      What Are the Fund's Additional Fundamental Policies? The following investment restrictions are
    fundamental policies of the Fund.

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

    o        The Fund cannot make loans, except to the extent permitted under the Investment Company Act,
             the rules or regulations thereunder or any exemption therefrom that is applicable to the Fund,
             as such statute, rules or regulations may be amended or interpreted from time to time.

    o        The Fund cannot invest 25% or more of its total assets in any one industry.  That limit does
             not apply to securities issued or guaranteed by the U.S. government or its agencies and
             instrumentalities or securities issued by investment companies.

    o        The Fund cannot invest in real estate, physical commodities or commodity contracts, except to
             the extent permitted under the Investment Company Act, the rules or regulations thereunder or
             any exemption therefrom, as such statute, rules or regulations may be amended or interpreted
             from time to time.

    o        The Fund cannot underwrite securities of other companies. A permitted exception is in case it
             is deemed to be an underwriter under the Securities Act of 1933 when reselling any securities
             held in its own portfolio.

    o        The Fund may not borrow money, except to the extent permitted under the Investment Company Act,
             the rules or regulations thereunder or any exemption therefrom that is applicable to the Fund,
             as such statute, rules or regulations may be amended or interpreted from time to time.

    o        The Fund cannot issue senior securities, except to the extent permitted under the Investment
             Company Act, the rules or regulations thereunder or any exemption therefrom, as such statute,
             rules or regulations may be amended or interpreted from time to time.

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


             For purposes of the Fund's policy not to concentrate its investments as described above, the
    Fund has adopted classifications of industries and groups of related industries. These classifications
    are not fundamental policies.


    |X|      Does the Fund Have Additional Restrictions That Are Not "Fundamental" Policies? The Fund has an
    additional operating policy that is nPacificdCrestaSecuritiesich can be changed by the Board of Trustees   Fortis Securities
    without shareholder approval:

         o   The Fund cannot invest in the securities of other registered  investment companies or registered
             unit  investment  trusts in  reliance  on  sub-paragraph  (F) or (G) of section  12(d)(1) of the
             Investment Company Act.

    Disclosure of Portfolio Holdings.  The Fund has adopted policies and procedures concerning the
    dissemination of information about its portfolio holdings by employees, officers and/or directors of the
    Manager, Distributor and Transfer Agent. These policies are designed to assure that non-public
    information about portfolio securities is distributed only for a legitimate business purpose, and is
    done in a manner that (a) conforms to applicable laws and regulations and (b) is designed to prevent
    that information from being used in a way that could negatively affect the Fund's investment program or
    enable third parties to use that information in a manner that is harmful to the Fund.


    o        Public Disclosure. The Fund's portfolio holdings are made publicly available no later than 60
                  days after the close of each of the Fund's fiscal quarters in its semi-annual report to
                  shareholders, its annual report to shareholders, or its Statements of Investments on Form
                  N-Q. Those documents are publicly available at the SEC. In addition, the top 20 month-end
                  holdings may be posted on the OppenheimerFunds' website at www.oppenheimerfunds.com
                  (select the Fund's name under the "View Fund Information for:" menu) with a 15-day lag.
                  The Fund may release a more restrictive list of holdings (e.g., the top five or top 10
                  portfolio holdings) or may release no holdings if that is in the best interests of the
                  Fund and its shareholders.  Other general information about the Fund's portfolio
                  investments, such as portfolio composition by asset class, industry, country, currency,
                  credit rating or maturity, may also be posted.


    Until publicly disclosed, the Fund's portfolio holdings are proprietary, confidential business
    information. While recognizing the importance of providing Fund shareholders with information about
    their Fund's investments and providing portfolio information to a variety of third parties to assist
    with the management, distribution and administrative process, the need for transparency must be balanced
    against the risk that third parties who gain access to the Fund's portfolio holdings information could
    attempt to use that information to trade ahead of or against the Fund, which could negatively affect the
    prices the Fund is able to obtain in portfolio transactions or the availability of the securities that
    portfolio managers are trading on the Fund's behalf.

    The Manager and its subsidiaries and affiliates, employees, officers, and directors, shall neither
    solicit nor accept any compensation or other consideration (including any agreement to maintain assets
    in the Fund or in other investment companies or accounts managed by the Manager or any affiliated person
    of the Manager) in connection with the disclosure of the Fund's non-public portfolio holdings. The
    receipt of investment advisory fees or other fees and compensation paid to the Manager and its
    subsidiaries pursuant to agreements approved by the Fund's Board shall not be deemed to be
    "compensation" or "consideration" for these purposes. It is a violation of the Code of Ethics for any
    covered person to release holdings in contravention of portfolio holdings disclosure policies and
    procedures adopted by the Fund.

    A list of the top 20 portfolio securities holdings (based on invested assets), listed by security or by
    issuer, as of the end of each month may be disclosed to third parties (subject to the procedures below)
    no sooner than 15 days after month-end.

    Except under special limited circumstances discussed below, month-end lists of the Fund's complete
    portfolio holdings may be disclosed no sooner than 30-days after the relevant month-end, subject to the
    procedures below. If the Fund's complete portfolio holdings have not been disclosed publicly, they may
    be disclosed pursuant to special requests for legitimate business reasons, provided that:

    o        The third-party recipient must first submit a request for release of Fund portfolio holdings,
                  explaining the business reason for the request;
    o        Senior officers (a Senior Vice President or above) in the Manager's Portfolio and Legal
                  departments must approve the completed request for release of Fund portfolio holdings; and
    o        The third-party recipient must sign the Manager's portfolio holdings non-disclosure agreement
                  before receiving the data, agreeing to keep information that is not publicly available
                  regarding the Fund's holdings confidential and agreeing not to trade directly or
                  indirectly based on the information.

    The Fund's complete portfolio holdings positions may be released to the following categories of entities
    or individuals on an ongoing basis, provided that such entity or individual either (1) has signed an
    agreement to keep such information confidential and not trade on the basis of such information or (2) is
    subject to fiduciary obligations, as a member of the Fund's Board, or as an employee, officer and/or
    director of the Manager, Distributor, or Transfer Agent, or their respective legal counsel, not to
    disclose such information except in conformity with these policies and procedures and not to trade for
    his/her personal account on the basis of such information:

    o        Employees of the Fund's Manager, Distributor and Transfer Agent who need to have access to such
             information (as determined by senior officers of such entity),
    o        The Fund's independent registered public accounting firm,
    o        Members of the Fund's Board and the Board's legal counsel,
    o        The Fund's custodian bank,
    o        A proxy voting service designated by the Fund and its Board,
    o        Rating/ranking organizations (such as Lipper and Morningstar),
    o        Portfolio pricing services retained by the Manager to provide portfolio security prices, and
    o        Dealers, to obtain bids (price quotations if securities are not priced by the Fund's regular
             pricing services).


    Portfolio holdings information of the Fund may be provided, under limited circumstances, to brokers
    and/or dealers with whom the Fund trades and/or entities that provide investment coverage and/or
    analytical information regarding the Fund's portfolio, provided that there is a legitimate investment
    reason for providing the information to the broker, dealer or other entity. Month-end portfolio holdings
    information may, under this procedure, be provided to vendors providing research information and/or
    analytics to the Fund, with at least a 15-day delay after the month end, but in certain cases may be
    provided to a broker or analytical vendor with a 1-2 day lag to facilitate the provision of requested
    investment information to the manager to facilitate a particular trade or the portfolio manager's
    investment process for the Fund. Any third party receiving such information must first sign the
    Manager's portfolio holdings non-disclosure agreement as a pre-condition to receiving this information.


    Portfolio holdings information (which may include information on individual securities positions or
    multiple securities) may be provided to the entities listed below (1) by portfolio traders employed by
    the Manager in connection with portfolio trading, and (2) by the members of the Manager's Security
    Valuation Group and Accounting Departments in connection with portfolio pricing or other portfolio
    evaluation purposes:

    o        Brokers and dealers in connection with portfolio transactions (purchases and sales)
    o        Brokers and dealers to obtain bids or bid and asked prices (if securities held by the Fund are

             not priced by the Fund's regular pricing services)
    o        Dealers to obtain price quotations where the Fund is not identified as the owner.


    Portfolio holdings information (which may include information on the Fund's entire portfolio or
    individual securities therein) may be provided by senior officers of the Manager or attorneys on the
    legal staff of the Manager, Distributor, or Transfer Agent, in the following circumstances:

    o        Response to legal process in litigation matters, such as responses to subpoenas or in class
             action matters where the Fund may be part of the plaintiff class (and seeks recovery for losses
             on a security) or a defendant,

    o        Response to regulatory requests for information (the SEC, Financial Industry Regulatory
             Authority ("FINRA"), state securities regulators, and/or foreign securities authorities,
             including without limitation requests for information in inspections or for position reporting
             purposes),

    o        To potential sub-advisers of portfolios (pursuant to confidentiality agreements),
    o        To consultants for retirement plans for plan sponsors/discussions at due diligence meetings
             (pursuant to confidentiality agreements),

    o        Investment bankers in connection with merger discussions (pursuant to confidentiality
             agreements).


    Portfolio managers and analysts may, subject to the Manager's policies on communications with the press
    and other media, discuss portfolio information in interviews with members of the media, or in due
    diligence or similar meetings with clients or prospective purchasers of Fund shares or their financial
    intermediary representatives.

    The Fund's shareholders may, under unusual circumstances (such as a lack of liquidity in the Fund's
    portfolio to meet redemptions), receive redemption proceeds of their Fund shares paid as pro rata shares
    of securities held in the Fund's portfolio. In such circumstances, disclosure of the Fund's portfolio
    holdings may be made to such shareholders.


    Any permitted release of otherwise non-public portfolio holdings information must be in accordance with
    the then-current policy on approved methods for communicating confidential information.

    The Chief Compliance Officer (the "CCO") of the Fund and the Manager, Distributor, and Transfer Agent
    shall oversee the compliance by the Manager, Distributor, Transfer Agent, and their personnel with these
    policies and procedures. At least annually, the CCO shall report to the Fund's Board on such compliance
    oversight and on the categories of entities and individuals to which disclosure of portfolio holdings of
    the Fund has been made during the preceding year pursuant to these policies. The CCO shall report to the
    Fund's Board any material violation of these policies and procedures and shall make recommendations to
    the Board as to any amendments that the CCO believes are necessary and desirable to carry out or improve
    these policies and procedures.


    The Manager and/or the Fund have entered into ongoing arrangements to make available information about
    the Fund's portfolio holdings. One or more of the Oppenheimer funds may currently disclose portfolio
    holdings information based on ongoing arrangements to the following parties:

ABG Securities
ABN AMRO                                 Pacific Growth Equities               Fox-Pitt, Kelton
AG Edwards                               Friedman, Billing, Ramsey             Petrie Parkman
American Technology Research             Fulcrum Global Partners               Pictet
Auerbach Grayson                         Garp Research                         Piper Jaffray Inc.
Banc of America Securities               George K Baum & Co.                   Prager Sealy & Co.
Barclays                                 Goldman Sachs                         Prudential Securities
Bear Stearns                             HSBC                                  Ramirez & Co.
Belle Haven                              ING Barings                           Raymond James
Bloomberg                                ISI Group                             RBC Capital Markets
BNP Paribas                              ITG                                   RBC Dain Rauscher
BS Financial Services                    Janney Montgomery                     Research Direct
Buckingham Research Group                Jefferies                             Reuters
Caris & Co.                              JP Morgan Securities                  Robert W. Baird
CIBC World Markets                       JPP Eurosecurities                    Roosevelt & Cross
Citigroup Global Markets                 Keefe, Bruyette & Woods               Russell
Collins Stewart                          Keijser Securities                    Ryan Beck & Co.
Craig-Hallum Capital Group LLC           Kempen & Co. USA Inc.                 Sanford C. Bernstein
Credit Agricole Cheuvreux N.A. Inc.      Kepler Equities/Julius Baer Sec       Scotia Capital Markets
Credit Suisse                            KeyBanc Capital Markets               Societe Generale
Cowen & Company                          Leerink Swan                          Soleil Securities Group
Daiwa Securities                         Lehman Brothers                       Standard & Poors
Davy                                     Loop Capital Markets                  Stifel Nicolaus
Deutsche Bank Securities                 MainFirst Bank AG                     Stone & Youngberg
Dresdner Kleinwort Wasserstein           Makinson Cowell US Ltd                SWS Group
Emmet & Co                               Maxcor Financial                      Taylor Rafferty
Empirical Research                       Merrill Lynch                         Think Equity Partners
Enskilda Securities                      Midwest Research                      Thomson Financial
Essex Capital Markets                    Mizuho Securities                     Thomas Weisel Partners
Exane BNP Paribas                        Morgan Stanley                        UBS
Factset                                  Morningstar                           Wachovia Securities
Fidelity Capital Markets                 Natexis Bleichroeder                  Wescott Financial
Fimat USA Inc.                           Ned Davis Research Group              William Blair
First Albany                             Nomura Securities                     Yieldbook
Fixed Income Securities


How the Fund is Managed

Organization and History. The Fund is an open-end, diversified management investment company with an unlimited
number of authorized shares of beneficial interest. The Fund was organized as a Massachusetts business trust in
September 1983.  Prior to February 2004, the Fund's name was Oppenheimer Multiple Strategies Fund.

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


         The Fund currently has four classes of shares: Class A, Class B, Class C and Class N.  All classes
invest in the same investment portfolio. Only retirement plans may purchase Class N 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        will generally have a different net asset value,
o        will generally 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 a 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, but may hold shareholder meetings from time to time
  on important matters or when required to do so by the Investment Company Act or other applicable law.
  Shareholders have the right, upon a vote or declaration in writing of two-thirds of the outstanding shares of
  the Fund, to remove a Trustee or to take other action described in the Fund's Declaration of Trust.

         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.


         The Board of Trustees has an Audit Committee, a Regulatory & Oversight Committee and a Governance
Committee. Each committee is comprised solely of Trustees who are not "interested persons" under the Investment
Company Act (the "Independent Trustees"). The members of the Audit Committee are David K. Downes (Chairman),
Phillip A. Griffiths, Mary F. Miller, Russell S. Reynolds, Jr., Joseph M. Wikler and Peter I. Wold. The Audit
Committee held 5 meetings during the Fund's fiscal year ended September 30, 2007. The Audit Committee furnishes
the Board with recommendations regarding the selection of the Fund's independent registered public accounting
firm (also referred to as the "independent Auditors"). Other main functions of the Audit Committee outlined in
the Audit Committee Charter, include, but are not limited to: (i) reviewing the scope and results of financial
statement audits and the audit fees charged; (ii) reviewing reports from the Fund's independent Auditors
regarding the Fund's internal accounting procedures and controls; (iii) reviewing reports from the Manager's
Internal Audit Department; (iv) maintaining a separate line of communication between the Fund's independent
Auditors and the Independent Trustees; (v) reviewing the independence of the Fund's independent Auditors; and
(vi) pre-approving the provision of any audit or non-audit services by the Fund's independent Auditors, including
tax services, that are not prohibited by the Sarbanes-Oxley Act, to the Fund, the Manager and certain affiliates
of the Manager.

         The members of the Regulatory & Oversight Committee are Robert G. Galli (Chairman), David K. Downes,
Matthew P. Fink, Phillip A. Griffiths, Joel W. Motley and Joseph M. Wikler. The Regulatory & Oversight Committee
held 6 meetings during the Fund's fiscal year ended September 30, 2007. The Regulatory & Oversight Committee
evaluates and reports to the Board on the Fund's contractual arrangements, including the Investment Advisory and
Distribution Agreements, transfer agency and shareholder service agreements and custodian agreements as well as
the policies and procedures adopted by the Fund to comply with the Investment Company Act and other applicable
law, among other duties as set forth in the Regulatory & Oversight Committee's Charter.

         The members of the Governance Committee are Joel W. Motley (Chairman), Matthew P. Fink, Robert G. Galli,
Mary F. Miller, Russell S. Reynolds, Jr. and Peter I. Wold. The Governance Committee held 7 meetings during the
Fund's fiscal year ended September 30, 2007. The Governance Committee reviews the Fund's governance guidelines,
the adequacy of the Fund's Codes of Ethics, and develops qualification criteria for Board members consistent with
the Fund's governance guidelines, provides the Board with recommendations for voting portfolio securities held by
the Fund, and monitors the Fund's proxy voting, among other duties set forth in the Governance Committee's
Charter.


         The Governance Committee's functions also include the selection and nomination of Trustees, including
Independent Trustees for election. The Governance 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 Governance Committee has been able to identify from its own resources an ample number of
qualified candidates. Nonetheless, under the current policy of the Board, if the Board determines that a vacancy
exists or is likely to exist on the Board, the Governance Committee will consider candidates for Board membership
including those recommended by the Fund's shareholders. The Governance Committee will consider nominees
recommended by Independent Board members or recommended by any other Board members including Board members
affiliated with the Fund's Manager. The Governance Committee may, upon Board approval, retain an executive search
firm to assist in screening potential candidates. Upon Board approval, the Governance Committee may also use the
services of legal, financial, or other external counsel that it deems necessary or desirable in the screening
process. Shareholders wishing to submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street, 11th Floor, New York,
New York 10281-1008, to the attention of the Board of Trustees of Oppenheimer Balanced Fund, c/o the Secretary of
the Fund.

         Submissions should, at a minimum, be accompanied by the following: (1) the name, address, and business,
educational, and/or other pertinent background of the person being recommended; (2) a statement concerning
whether the person is an "interested person" as defined in the Investment Company Act; (3) any other information
that the Fund would be required to include in a proxy statement concerning the person if he or she was nominated;
and (4) the name and address of the person submitting the recommendation and, if that person is a shareholder,
the period for which that person held Fund shares. Shareholders should note that a person who owns securities
issued by Massachusetts Mutual Life Insurance Company (the parent company of the Manager) would be deemed an
"interested person" under the Investment Company Act. In addition, certain other relationships with Massachusetts
Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside
legal counsel may cause a person to be deemed an "interested person."

         The Governance Committee has not established specific qualifications that it believes must be met by a
trustee nominee. In evaluating trustee nominees, the Governance Committee considers, among other things, an
individual's background, skills, and experience; whether the individual is an "interested person" as defined in
the Investment Company Act; and whether the individual would be deemed an "audit committee financial expert"
within the meaning of applicable SEC rules. The Governance Committee also considers whether the individual's
background, skills, and experience will complement the background, skills, and experience of other Trustees and
will contribute to the Board. There are no differences in the manner in which the Governance Committee evaluates
nominees for trustees based on whether the nominee is recommended by a shareholder. Candidates are expected to
provide a mix of attributes, experience, perspective and skills necessary to effectively advance the interests of
shareholders.

         Trustees and Officers of the Fund. Except for Mr. Murphy, each of the Trustees is an Independent
Trustee. All of the Trustees are also directors or trustees of the following Oppenheimer funds (referred to as
"Board I Funds"):



Oppenheimer Absolute Return Fund                             Oppenheimer Money Market Fund, Inc.
Oppenheimer AMT-Free Municipals                              Oppenheimer Multi-State Municipal Trust
Oppenheimer AMT-Free New York Municipals                     Oppenheimer Portfolio Series
Oppenheimer Balanced Fund                                    Oppenheimer Real Estate Fund
Oppenheimer Baring China Fund                                Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Baring Japan Fund                                Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Baring SMA International Fund                    Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer California Municipal Fund                        Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Capital Appreciation Fund                        Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Developing Markets Fund                          Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Discovery Fund                                   Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Dividend Growth Fund                             Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Emerging Growth Fund                             Oppenheimer Select Value Fund
Oppenheimer Enterprise Fund                                  Oppenheimer Series Fund, Inc.
Oppenheimer Global Fund                                      Oppenheimer SMA Core Bond Fund
Oppenheimer Global Opportunities Fund                        Oppenheimer SMA International Bond Fund
Oppenheimer Global Value Fund                                Oppenheimer Transition 2010 Fund
Oppenheimer Gold & Special Minerals Fund                     Oppenheimer Transition 2015 Fund
Oppenheimer International Diversified Fund                   Oppenheimer Transition 2020 Fund
Oppenheimer International Growth Fund                        Oppenheimer Transition 2030 Fund
Oppenheimer International Small Company Fund                 OFI Tremont Core Strategies Hedge Fund
Oppenheimer International Value Fund                         OFI Tremont Market Neutral Hedge Fund
Oppenheimer Institutional Money Market Fund, Inc.            Oppenheimer Tremont Market Neutral Fund LLC
Oppenheimer Limited Term California Municipal Fund           Oppenheimer Tremont Opportunity Fund LLC

                                                             Oppenheimer U.S. Government Trust



         In addition to being a Board  member of each of the Board I Funds,  Messrs.  Downes,  Galli and Wruble are
directors or trustees of ten other portfolios in the Oppenheimer fund complex.


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


         Messrs. Bomfim, Caan, Ferreira, Gillespie, Gord, Manioudakis, Murphy, Petersen, Swaney, Szilagyi,
Vandehey, Wixted and Zack and Mss. Bloomberg and Ives, who are officers of the Fund, hold the same offices with
one or more of the other Board I Funds. As of December 7, 2007 the Trustees and officers of the Fund, as a group,
owned of record or beneficially less than 1% of any 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, none of
the Independent Trustees (nor any of their immediate family members) owns securities of either the Manager or the
Distributor of the Board I Funds or of any entity directly or indirectly controlling, controlled by or under
common control with the Manager or the Distributor.


         Biographical Information. The Trustees and officers, their positions with the Fund, length of service in
such position(s) and principal occupations and business affiliations during at least the past five years are
listed in the charts below. The charts also include information about each Trustee's beneficial share ownership
in the Fund and in all of the registered investment companies that the Trustee oversees in the Oppenheimer family
of funds ("Supervised Funds"). The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial,
Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement,
death or removal.

- -------------------------------------------------------------------------------------------------------------------------------------
                                                        Independent Trustees
- -------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
Name, Position(s) Held       Principal Occupation(s) During the Past 5 Years; Other           Dollar Range of     Aggregate Dollar
                                                                                                   Shares
                                                                                                Beneficially      Range Of Shares
with the Fund, Length of     Trusteeships/Directorships Held; Number of Portfolios in the         Owned in       Beneficially Owned
Service, Age                 Fund Complex Currently Overseen                                      the Fund      in Supervised Funds
- ---------------------------- ---------------------------------------------------------------- ----------------- ---------------------
- ---------------------------- ---------------------------------------------------------------- ---------------------------------------
                                                                                                     As of December 31, 2006
- ---------------------------- ---------------------------------------------------------------- ---------------------------------------
- ---------------------------- ---------------------------------------------------------------- ----------------- ---------------------

Brian F. Wruble,             General Partner of Odyssey  Partners,  L.P. (hedge fund) (since      $10,000 -         $10,000 - $50,000
Chairman of the Board of     September 1995);  Director of Special Value Opportunities Fund,      $50,000
Trustees since 2007 and      LLC (registered  investment  company) (since  September  2004);
Trustee since 2005           Member   of  Zurich   Financial   Investment   Advisory   Board
Age: 64                      (insurance)  (since October 2004);  Board of Governing Trustees
                             of The Jackson  Laboratory  (non-profit)  (since  August 1991);
                             Chairman,  The  Jackson  Laboratory  Board of  Trustees  (since
                             August  2007);  Trustee of the  Institute  for  Advanced  Study
                             (non-profit  educational  institute) (since May 1992);  Special
                             Limited Partner of Odyssey  Investment  Partners,  LLC (private
                             equity investment)  (January  1999-September  2004); Trustee of
                             Research Foundation of AIMR (investment  research,  non-profit)
                             (2000-2002);  Governor, Jerome Levy Economics Institute of Bard
                             College  (economics  research)  (August  1990-September  2001);
                             Director of Ray &  Berendtson,  Inc.  (executive  search  firm)
                             (May   2000-April   2002).   Oversees  63   portfolios  in  the
                             OppenheimerFunds complex.

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

David K. Downes,             President,  Chief Executive Officer and Board Member of CRAFund        None           Over $100,000
Trustee since 2007           Advisors,  Inc. (investment  management company) (since January
 Age: 67                     2004);  President of The Community  Reinvestment  Act Qualified
                             Investment Fund (investment  management company) (since January
                             2004);  Independent Chairman of the Board of Trustees of Quaker
                             Investment  Trust   (registered   investment   company)  (since
                             January 2004);  Director of Internet Capital Group (information
                             technology  company)  (since  October  2003);  Chief  Operating
                             Officer  and  Chief  Financial   Officer  of  Lincoln  National
                             Investment  Companies,  Inc.  (subsidiary  of Lincoln  National
                             Corporation,   a  publicly   traded   company)   and   Delaware
                             Investments  U.S., Inc.  (investment  management  subsidiary of
                             Lincoln National  Corporation)  (1993-2003);  President,  Chief
                             Executive Officer and Trustee of Delaware  Investment Family of
                             Funds  (1993-2003);  President  and  Board  Member  of  Lincoln
                             National  Convertible  Securities  Funds,  Inc. and the Lincoln
                             National  Income  Funds,  TDC  (1993-2003);  Chairman and Chief
                             Executive  Officer  of  Retirement  Financial  Services,   Inc.
                             (registered   transfer   agent  and   investment   adviser  and
                             subsidiary of Delaware  Investments  U.S.,  Inc.)  (1993-2003);
                             President  and Chief  Executive  Officer  of  Delaware  Service
                             Company, Inc. (1995-2003);  Chief Administrative Officer, Chief
                             Financial  Officer,  Vice  Chairman  and  Director of Equitable
                             Capital  Management   Corporation   (investment  subsidiary  of
                             Equitable  Life  Assurance  Society)   (1985-1992);   Corporate
                             Controller  of  Merrill  Lynch &  Company  (financial  services
                             holding company)  (1977-1985);  held the following positions at
                             the Colonial Penn Group, Inc.  (insurance  company):  Corporate
                             Budget Director  (1974-1977),  Assistant Treasurer  (1972-1974)
                             and  Director  of  Corporate   Taxes   (1969-1972);   held  the
                             following  positions at Price  Waterhouse & Company  (financial
                             services   firm):   Tax   Manager   (1967-1969),   Tax   Senior
                             (1965-1967)  and Staff  Accountant  (1963-1965);  United States
                             Marine  Corps  (1957-1959).   Oversees  63  portfolios  in  the
                             OppenheimerFunds complex.

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

Matthew P. Fink,             Trustee  of the  Committee  for  Economic  Development  (policy          None              Over $100,000
Trustee since 2005           research  foundation)  (since 2005);  Director of ICI Education
Age: 66                      Foundation  (education  foundation) (October 1991-August 2006);
[                            President   of  the   Investment   Company   Institute   (trade
                             association)  (October 1991-June 2004);  Director of ICI Mutual
                             Insurance  Company   (insurance   company)  (October  1991-June
                             2004). Oversees 53 portfolios in the OppenheimerFunds complex.

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

Robert G. Galli,             A director or trustee of other Oppenheimer  funds.  Oversees 63          None              Over $100,000
Trustee since 1993           portfolios in the OppenheimerFunds complex.
Age: 74


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

Phillip A. Griffiths,        Distinguished  Presidential  Fellow for  International  Affairs          None              None
Trustee since 1999           (since 2002) and Member  (since  1979) of the National  Academy
Age: 69                      of  Sciences;   Council  on  Foreign  Relations  (since  2002);
                             Director of GSI  Lumonics  Inc.  (precision  medical  equipment
                             supplier) (since 2001);  Senior Advisor of The Andrew W. Mellon
                             Foundation  (since  2001);  Chair of Science  Initiative  Group
                             (since  1999);  Member of the  American  Philosophical  Society
                             (since  1996);   Trustee  of  Woodward  Academy  (since  1983);
                             Foreign Associate of Third World Academy of Sciences;  Director
                             of the Institute for Advanced  Study  (1991-2004);  Director of
                             Bankers  Trust New York  Corporation  (1994-1999);  Provost  at
                             Duke  University  (1983-1991).  Oversees 53  portfolios  in the
                             OppenheimerFunds complex.

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

Mary F. Miller,              Trustee of the  American  Symphony  Orchestra  (not-for-profit)          None              Over $100,000
Trustee since 2004           (since  October  1998);  and Senior Vice  President and General
Age: 65                      Auditor  of  American  Express  Company   (financial   services
                             company) (July 1998-February  2003).  Oversees  53portfolios in
                             the OppenheimerFunds complex.

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

Joel W. Motley,              Managing  Director of Public Capital  Advisors,  LLC (privately          None              Over $100,000
Trustee since 2002           held  financial  advisor)  (since  January  2006).  Director of
Age: 55                      Columbia  Equity  Financial  Corp.   (privately-held  financial
                             advisor)  (since 2002);  Managing  Director of Carmona  Motley,
                             Inc.  (privately-held  financial advisor) (since January 2002);
                             Managing    Director   of   Carmona    Motley    Hoffman   Inc.
                             (privately-held   financial  advisor)  (January   1998-December
                             2001);  Member  of the  Finance  and  Budget  Committee  of the
                             Council  on  Foreign   Relations,   Member  of  the  Investment
                             Committee  of the  Episcopal  Church of America,  Member of the
                             Investment  Committee  and  Board of  Human  Rights  Watch  and
                             Member of the Investment  Committee of Historic  Hudson Valley.
                             Oversees 53 portfolios in the OppenheimerFunds complex.

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

Russell S. Reynolds, Jr.,    Chairman of RSR Partners  (formerly  "The  Directorship  Search          None              Over $100,000
Trustee since 1989           Group,  Inc.") (corporate  governance  consulting and executive
Age: 76                      recruiting)  (since 1993); Life Trustee of International  House
                             (non-profit  educational  organization);  Former Trustee of The
                             Historical  Society of the Town of Greenwich;  Former  Director
                             of Greenwich  Hospital  Association.  Oversees 53 portfolios in
                             the OppenheimerFunds complex.

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

Joseph M. Wikler,            Director of the following  medical device  companies:  Medintec          None              Over $100,000
Trustee since 2005           (since  1992)  and  Cathco  (since  1996);  Director  of  Lakes
Age: 66                      Environmental     Association     (environmental     protection
                             organization)  (since 1996); Member of the Investment Committee
                             of the Associated  Jewish  Charities of Baltimore (since 1994);
                             Director of Fortis/Hartford  mutual funds (1994-December 2001).
                             Director of C-TASC (a privately  held  bio-statistics  company)
                             (since   May   2007).    Oversees   53    portfolios   in   the
                             OppenheimerFunds complex.

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

Peter I. Wold,               President   of  Wold  Oil   Properties,   Inc.   (oil  and  gas          None              Over $100,000
Trustee since 2005           exploration  and  production   company)   (since  1994);   Vice
Age: 59                      President  of American  Talc  Company,  Inc.  (talc  mining and
                             milling)  (since  1999);  Managing  Member of  Hole-in-the-Wall
                             Ranch  (cattle   ranching)   (since  1979);   Vice   President,
                             Secretary and Treasurer of Wold Trona  Company,  Inc. (soda ash
                             processing  and  production)   (1996  -  2006);   Director  and
                             Chairman of the Denver  Branch of the Federal  Reserve  Bank of
                             Kansas City (1993-1999); and Director of PacifiCorp.  (electric
                             utility)   (1995-1999).   Oversees   53   portfolios   in   the
                             OppenheimerFunds complex.

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

         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. The address of
Mr. Murphy is Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008. Mr.
Murphy serves as a Trustee for an indefinite term, or until his resignation, retirement, death or removal and as
an officer for annual term, or until his resignation, retirement, death or removal.

- ------------------------------------------------------------------------------------------------------------------------------------
                                                  Interested Trustee and Officer
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------- ----------------------------------------------------------------- ---------------- ---------------------
Name, Position(s) Held      Principal Occupation(s) During the Past 5 Years; Other             Dollar Range      Aggregate Dollar
                                                                                                 of Shares
                                                                                               Beneficially      Range Of Shares
with Fund, Length of        Trusteeships/Directorships Held; Number of Portfolios in the         Owned in       Beneficially Owned
Service, Age                Fund Complex Currently Overseen                                      the Fund      in Supervised Funds
- --------------------------- ----------------------------------------------------------------- ---------------- ---------------------
- --------------------------- ----------------------------------------------------------------- --------------------------------------
                                                                                                             As of December 31, 2006
- --------------------------- ----------------------------------------------------------------- --------------------------------------
- --------------------------- ----------------------------------------------------------------- ----------------- --------------------

John V. Murphy,             Chairman,  Chief  Executive  Officer and Director of the Manager         None              Over $100,000
Trustee since 2001 and      since June 2001; President of the  Manager(September  2000-March
President and Principal     2007);  President and a director or trustee of other Oppenheimer
Executive Officer since     funds;  President and Director of Oppenheimer  Acquisition Corp.
2001                        ("OAC")  (the   Manager's   parent   holding   company)  and  of
Age: 58                     Oppenheimer   Partnership   Holdings,   Inc.   (holding  company
                            subsidiary  of the  Manager)  (since  July  2001);  Director  of
                            OppenheimerFunds  Distributor,  Inc. (subsidiary of the Manager)
                            (November   2001-December   2006);   Chairman  and  Director  of
                            Shareholder   Services,   Inc.  and  of  Shareholder   Financial
                            Services,  Inc.  (transfer  agent  subsidiaries  of the Manager)
                            (since July 2001);  President  and Director of  OppenheimerFunds
                            Legacy  Program  (charitable  trust program  established  by the
                            Manager)   (since   July  2001);   Director  of  the   following
                            investment   advisory   subsidiaries   of   the   Manager:   OFI
                            Institutional   Asset   Management,   Inc.,   Centennial   Asset
                            Management    Corporation,    Trinity   Investment    Management
                            Corporation   and  Tremont  Capital   Management,   Inc.  (since
                            November 2001),  HarbourView  Asset  Management  Corporation and
                            OFI Private  Investments,  Inc.  (since  July  2001);  President
                            (since  November  1,  2001) and  Director  (since  July 2001) of
                            Oppenheimer  Real  Asset   Management,   Inc.;   Executive  Vice
                            President of Massachusetts  Mutual Life Insurance Company (OAC's
                            parent  company)   (since   February  1997);   Director  of  DLB
                            Acquisition   Corporation  (holding  company  parent  of  Babson
                            Capital  Management  LLC)  (since  June  1995);  Member  of  the
                            Investment   Company   Institute's  Board  of  Governors  (since
                            October ,   2003);   Chairman   of  the   Investment   Company's
                            Institute's  Board of Governors  (since October 2007).  Oversees
                            102 portfolios in the OppenheimerFunds complex.

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


The addresses of the officers in the chart below are as follows: for Messrs. Bomfim, Caan, Ferreira, Gillespie,
Gord, Manioudakis, Swaney and Zack and Ms. Bloomberg, Two World Financial Center, 225 Liberty Street, New York,
New York 10281-1008, for Messrs. Petersen, Szilagyi, Vandehey and Wixted and Ms. Ives, 6803 S. Tucson Way,
Centennial, Colorado 80112-3924. Each officer serves for an annual term or until his or her resignation,
retirement, death or removal.

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

Emmanuel Ferreira,                  Vice  President of the Manager  since  January  2003;  Vice  President of the Fund since
Vice President and Portfolio        2003.  Portfolio Manager at Lashire Investments (July  1999-December  2002). A portfolio
Manager since 2003                  manager and officer of 3 portfolios in the OppenheimerFunds complex.
Age:  40

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

Angelo Manioudakis,                 Senior Vice President of the Manager and of  HarbourView  Asset  Management  Corporation
Vice President and Portfolio        since April 2002, and of OFI Institutional Asset Management,  Inc. since June 2002; Vice
Manager since 2003                  President  of  Oppenheimer  Real  Asset  Management,  Inc.  since  November  2006;  Vice
Age:  41                            President  of the  Fund  since  2003.  Executive  Director  and  portfolio  manager  for
                                    MSIM/Miller,  Anderson & Sherrerd,  (Morgan Stanley Asset Management) (August 1993-April
                                    2002). A portfolio manager and officer of 15 portfolios in the OppenheimerFunds complex.

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

Antulio Bomfim,                     Vice  President of the Manager  since  October  2003;  Vice  President of the Fund since
Vice President since 2006 and       2006.  Senior  Economist at the Board of Governors of the Federal  Reserve  System (June
Portfolio Manager since 2003        1992-October  2003).  A  portfolio  manager  and  an  officer  of 12  portfolios  in the
Age: 40                             OppenheimerFunds complex.

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

Geoffrey Caan,                      Vice  President  of the Manager  since  August  2003;  Vice  President of the Fund since
Vice President since 2006 and       2006.  Vice President of ABN AMRO NA, Inc. (June  2002-August  2003);  Vice President of
Portfolio Manager since 2003        Zurich Scudder Investments  (January 1999-June 2002). A portfolio manager and officer of
Age: 38                             12 portfolios in the OppenheimerFunds complex.

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

Benjamin J. Gord,                   Vice  President of the Manager and of HarbourView  Asset  Management  Corporation  since
Vice President since 2006 and       April 2002 and of OFI  Institutional  Asset  Management,  Inc.  since  June  2002;  Vice
Portfolio Manager since 2002        President of the Fund since 2006.  Executive Director and senior fixed income analyst at
Age:  45                            Miller Anderson & Sherrerd,  a division of Morgan Stanley  Investment  Management (April
                                    1992-March   2002).   A  portfolio   manager  and  officer  of  12   portfolios  in  the
                                    OppenheimerFunds complex.

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

Thomas Swaney                       Vice  President of the Manager since April 2006;  Vice President of the Fund since 2006;
Vice President and Portfolio        Senior  analyst on high grade  investment  team (June  2002-March  2006).  Senior  fixed
Manager since 2006                  income analyst at Miller  Anderson & Sherrerd,  a division of Morgan Stanley  Investment
Age: 35                             Management (May 1998-May 2002). A portfolio  manager and officer of 12 portfolios in the

                                    OppenheimerFunds complex.
- ----------------------------------- -----------------------------------------------------------------------------------------
- ----------------------------------- -----------------------------------------------------------------------------------------

Mark S. Vandehey,                   Senior Vice  President and Chief  Compliance  Officer of the Manager (since March 2004);
Vice President and Chief            Chief Compliance Officer of the Manager,  OppenheimerFunds Distributor, Inc., Centennial
Compliance Officer since 2004       Asset Management and Shareholder  Services,  Inc. (Since March 2004);  Vice President of
Age: 57                             OppenheimerFunds   Distributor,   Inc.,  Centennial  Asset  Management  Corporation  and
                                    Shareholder  Services,  Inc.  (since June 1983).  Former Vice  President and Director of
                                    Internal Audit of the Manager  (1997-February 2004). An officer of 102 portfolios in the
                                    OppenheimerFunds complex.

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

Brian W. Wixted,                    Senior Vice President and Treasurer of the Manager (since March 1999);  Treasurer of the
Treasurer and Principal  Financial  following:  HarbourView Asset Management  Corporation,  Shareholder  Financial Services,
& Accounting Officer since 1999     Inc.,  Shareholder  Services,   Inc.,  Oppenheimer  Real  Asset  Management,   Inc.  and
Age: 48                             Oppenheimer  Partnership  Holdings,  Inc. (since March 1999),  OFI Private  Investments,
                                    Inc.  (since  March  2000),  OppenheimerFunds   International  Ltd.  (since  May  2000),
                                    OppenheimerFunds  plc (since May 2000), OFI Institutional Asset Management,  Inc. (since
                                    November  2000),  and   OppenheimerFunds   Legacy  Program   (charitable  trust  program
                                    established by the Manager) (since June 2003);  Treasurer and Chief Financial Officer of
                                    OFI Trust Company (trust company subsidiary of the Manager) (since May 2000);  Assistant
                                    Treasurer  of  the  following:   OAC  (since  March  1999),Centennial  Asset  Management
                                    Corporation  (March  1999-October  2003)  and  OppenheimerFunds  Legacy  Program  (April
                                    2000-June 2003). An officer of 102 portfolios in the OppenheimerFunds complex.

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

Brian Petersen,                     Vice President of the Manager  (since  February  2007);  Assistant Vice President of the
Assistant Treasurer since 2004      Manager  (August  2002-February  2007);  Manager/Financial  Product  Accounting  of  the
Age: 37                             Manager (November 1998-July 2002). An officer of 102 portfolios in the  OppenheimerFunds

                                    complex.
- ----------------------------------- -----------------------------------------------------------------------------------------
- ----------------------------------- -----------------------------------------------------------------------------------------

Brian C. Szilagyi,                  Assistant  Vice  President  of the  Manager  (since July  2004);  Director of  Financial
Assistant Treasurer since 2005      Reporting and Compliance of First Data Corporation  (April  2003-July 2004);  Manager of
Age: 37                             Compliance  of Berger  Financial  Group LLC (May  2001-March  2003).  An  officer of 102

                                    portfolios in the OppenheimerFunds complex.
- ----------------------------------- -----------------------------------------------------------------------------------------
- ----------------------------------- -----------------------------------------------------------------------------------------

Robert G. Zack,                     Executive Vice President  (since January 2004) and General Counsel (since March 2002) of
Secretary since 2001                the Manager;  General  Counsel and Director of the  Distributor  (since  December 2001);
Age: 59                             General  Counsel of Centennial  Asset  Management  Corporation  (since  December  2001);
                                    Senior Vice President and General Counsel of HarbourView  Asset  Management  Corporation
                                    (since  December  2001);  Secretary and General  Counsel of OAC (since  November  2001);
                                    Assistant  Secretary  (since  September  1997) and  Director  (since  November  2001) of
                                    OppenheimerFunds  International  Ltd.  and  OppenheimerFunds  plc;  Vice  President  and
                                    Director of Oppenheimer  Partnership  Holdings,  Inc. (since December 2002); Director of
                                    Oppenheimer Real Asset  Management,  Inc. (since November 2001);  Senior Vice President,
                                    General  Counsel and Director of Shareholder  Financial  Services,  Inc. and Shareholder
                                    Services,  Inc.  (since  December  2001);  Senior Vice  President,  General  Counsel and
                                    Director of OFI Private  Investments,  Inc. and OFI Trust Company (since November 2001);
                                    Vice  President  of  OppenheimerFunds  Legacy  Program  (since June  2003);  Senior Vice
                                    President  and  General  Counsel of OFI  Institutional  Asset  Management,  Inc.  (since
                                    November 2001);  Director of OppenheimerFunds  International  Distributor Limited (since
                                    December  2003);  Senior Vice  President  (May  1985-December  2003).  An officer of 102
                                    portfolios in the OppenheimerFunds complex.

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

Kathleen T. Ives,                   Vice  President  (since June 1998) and Senior  Counsel and  Assistant  Secretary  (since
Assistant Secretary since 2001      October  2003) of the  Manager;  Vice  President  (since 1999) and  Assistant  Secretary
Age: 42                             (since  October  2003) of the  Distributor;  Assistant  Secretary  of  Centennial  Asset
                                    Management  Corporation (since October 2003); Vice President and Assistant  Secretary of
                                    Shareholder Services,  Inc. (since 1999); Assistant Secretary of OppenheimerFunds Legacy
                                    Program and Shareholder  Financial  Services,  Inc.  (since  December  2001);  Assistant
                                    Counsel of the Manager (August  1994-October  2003). An officer of 102 portfolios in the
                                    OppenheimerFunds complex.

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

Lisa I. Bloomberg,                  Vice  President  and  Associate  Counsel of the  Manager  (since  May 2004);  First Vice
Assistant Secretary since 2004      President  (April  2001-April  2004),  Associate  General Counsel  (December  2000-April
Age: 39                             2004). An officer of 102 portfolios in the OppenheimerFunds complex.

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

Phillip S. Gillespie,               Senior Vice President and Deputy General Counsel of the Manager (since  September 2004);
Assistant Secretary since 2004      First Vice President  (2001-September  2004);  Director  (2000-September  2004) and Vice
Age: 43                             President  (1998-2000)  of  Merrill  Lynch  Investment  Management.  An  officer  of 102

                                    portfolios in the OppenheimerFunds complex.
- ----------------------------------- -----------------------------------------------------------------------------------------


           |X|  Remuneration of the Officers and Trustees. The officers and the interested Trustee of the
Fund, who are affiliated with the Manager, receive no salary or fee from the Fund. The Independent Trustees'
compensation from the Fund, shown below, is for serving as a Trustee and member of a committee (if applicable),
with respect to the Fund's fiscal year ended September 30, 2007. The total compensation from the Fund and fund
complex represents compensation, including accrued retirement benefits, for serving as a Trustee and member of a
committee (if applicable) of the Boards of the Fund and other funds in the OppenheimerFunds complex during the
calendar year ended December 31, 2006.



- --------------------------------- -------------------- --------------------- ---------------------- --------------------------
Name and Other Fund Position(s)        Aggregate                               Estimated Annual      Total Compensation From
                                                       Retirement Benefits
                                   Compensation From    Accrued as Part of       Benefits Upon
(as applicable)                       the Fund(1)         Fund Expenses          Retirement(2)      the Fund and Fund Complex
- --------------------------------- -------------------- --------------------- ---------------------- --------------------------
- --------------------------------- ------------------------------------------ ---------------------- --------------------------

                                    Fiscal year ended September 30, 2007                             Year ended December 31,

                                                                                                              2006
- --------------------------------- ------------------------------------------ ---------------------- --------------------------
- --------------------------------- -------------------- --------------------- ---------------------- --------------------------

Brian F. Wruble(3)                    $2,744 (4)               $935             $81,942(5) (20)           $241,260 (6)

Chairman of the Board
- --------------------------------- -------------------- --------------------- ---------------------- --------------------------
- --------------------------------- -------------------- --------------------- ---------------------- --------------------------

Clayton K. Yeutter((7))                 $671(8)               $9,599              $117,498(9)               $173,700


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

David K. Downes(21)
Audit Committee Chairman and
Regulatory & Oversight
Committee Member                         $340                  N/A                $45,913(22)             $146,668(23)

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

Matthew P. Fink                         $2,182                $1,024              $56,034(10)               $113,472
Governance Committee Member and
Regulatory & Oversight
Committee Member

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

Robert G. Galli                         $2,689                $1,564           $574,819(10) (11)          $264,812 (12)
Regulatory & Oversight
Committee Chairman & Governance
Committee Member

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

Phillip A. Griffiths                  $2,803(13)              $3,855             $327,278(20)               $150,760
Audit Committee Member and
Regulatory & Oversight
Committee Member

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

Mary F. Miller
Audit Committee Member and
Governance Committee Member           $2,156(14)               $639               $66,814(20)               $106,792

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

Joel W. Motley                        $2,431(15)              $1,440              $97,539(20)               $150,760
Governance Committee Chairman
and Regulatory & Oversight
Committee Member

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

Kenneth A. Randall(16)                  $1,703                $7,645              $67,138(17)               $134,080


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

Russell S. Reynolds, Jr.                $2,169                $3,107              $59,739(17)               $110,120
Audit Committee Member and
Governance Committee Member

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

Joseph M. Wikler
Audit Committee Member and
Regulatory & Oversight
Committee Member                      $2,126(18)              $3,257             $159,825(20)                $99,080

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

Peter I. Wold
Audit Committee Member and            $2,126 (19)             $2,464             $108,941(20)                $99,080
Governance Committee Member

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


1.        "Aggregate Compensation From the Fund" includes fees and deferred compensation, if any.
2.       "Estimated Annual Benefits Upon Retirement' is based on a straight life payment election with the
     assumption that Trustee will retire at the age of 75 and is eligible (after 7 years of service) to receive
     retirement plan benefits with respect to certain Board I Funds. Although the Trustees of the Fund and other
     Board I Funds are no longer accruing benefits, plan participants will receive previously accrued benefits as
     described below under "Retirement Plan for Trustees." Plan Participants have each elected a distribution
     method with respect to their benefits under the Plan.
3.                Mr. Wruble became Chairman of the Board I Funds on January 1, 2007.
4.       Includes $2,744 deferred by Mr. Wruble under the "Compensation Deferral Plan" described below
5.       Includes $45,544 estimated benefits to be paid to Mr. Wruble for serving as a director or trustee of 10

     other Oppenheimer funds that are not Board I Funds.
6.       Includes $135,500 paid to Mr. Wruble for serving as a director or trustee of 10 other Oppenheimer funds
     (at December 31, 2006) that are not Board I Funds.
7.       Mr. Yeutter retired as Chairman of the Board of Trustees of the Board I Funds effective December 31,
     2006.

8.       Includes $168 deferred by Mr. Yeutter under the "Compensation Deferral Plan" described below.
9.       Mr. Yeutter elected to receive a single life annuity based on his benefits as of December 31, 2006
10.      Elected to receive a lump-sum payout in lieu of Retirement Plan benefits as of December 31, 2006.
11.      Includes $49,811 estimated benefits to be paid to Mr. Galli for serving as a director or trustee of 10

     other Oppenheimer funds that are not Board I Funds.
12.      Includes $135,500 paid to Mr. Galli for serving as a director or trustee of 10 other Oppenheimer funds
     (at December 31, 2006) that are not Board I Funds.

13.      Includes $2,457 deferred by Mr. Griffiths under the "Compensation Deferral  Plan" described below.
14.      Includes $1,078 deferred by Ms. Miller under the "Compensation Deferral Plan" described below
15.      Includes $1,216 deferred by Mr. Motley under the "Compensation Deferral  Plan" described below.
16.      Mr. Randall retired from the Board I Funds effective June 30, 2007.
17.      Mr. Randall and Mr. Reynolds have elected to receive Joint Survival Annuity benefits payments based on
     the value of their Retirement Plan benefits as of December 31, 2006.
18.      Includes $1,063 deferred by Mr. Wikler under the "Compensation Deferral Plan" described below.
19.       Includes $2,126 deferred by Mr. Wold under the "Compensation Deferral Plan" described below
20.      Received a lump-sum roll-over to the Compensation Deferral Plan in lieu of Retirement Plan benefits as
     of December 31, 2006.
21.      Mr. Downes was appointed as Trustee to the Board I funds on August 1, 2007
22.      Estimated benefits to be paid to Mr. Downes for serving as a director or trustee of 10 other Oppenheimer
     Funds that are not Board I Funds.
23.      Compensation paid to Mr. Downes for serving as a director or trustee of 10 other Oppenheimer Funds that
     are not Board I Funds.

         |X|  Retirement Plan for Trustees.  The Board I Funds adopted a retirement plan that provides for
payments to retired Independent Trustees. Payments are up to 80% of the average compensation paid during a
Trustee's five years of service in which the highest compensation was received. A Trustee must serve as director
or trustee for any of the Board I Funds for at least seven years to be eligible for retirement plan benefits and
must serve for at least 15 years to be eligible for the maximum benefit.  The Board has frozen the retirement
plan with respect to new accruals as of December 31, 2006 (the "Freeze Date").  Each Trustee continuing to serve
on the Board of any of the Board I Funds after the Freeze Date (each such Trustee a "Continuing Board Member")
may elect to have his accrued benefit as of that date (i.e., an amount equivalent to the actuarial present value
of his benefit under the retirement plan as of the Freeze Date) (i) paid at once or over time, (ii) rolled into
the Compensation Deferral Plan described below, or (iii) in the case of Continuing Board Members having at least
7 years of service as of the Freeze Date paid in the form of an annual benefit or joint and survivor annual
benefit.  The Board determined to freeze the retirement plan after considering a recent trend among corporate
boards of directors to forego retirement plan payments in favor of current compensation.

         |X|  Compensation Deferral Plan. The Board of Trustees has adopted a Compensation Deferral  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 certain Board I Funds. 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 amount
of compensation deferred and the performance of the selected funds.


         Deferral of the Trustees' fees under the plan will not materially affect a Fund's assets, liabilities or
net income per share. The plan will not obligate a 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 SEC, a 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 compensation account.



|X|      Major Shareholders. As of December 7, 2007 the only persons or entities who owned of record or were
known by the Fund to own beneficially 5% or more of any class of the Fund's outstanding shares were:

         MLPF&S for the Sole Benefit of its Customers,  Attn. Fund Admn. #97C26,  4800 Deer Lake Drive E.,
         Floor 3,  Jacksonville,  FL  32246-6484,  which owned  397,173.806  Class C shares  (5.58% of the
         Class C shares then outstanding).

         Orchard Trust Co. LLC, FBO Oppen.  RecordkeeperPro,  8515 E. Orchard Road,  Greenwood Village, CO
         80111-500, which owed 82,864.284 Class N shares (6.71% of the Class N shares then outstanding).

         RPSS TR Proto Circuits Inc. 401k PSP, 401(K) Plan, Attn.:  Sally Floyd, 6610 NW 21st Avenue,  Ft.
         Lauderdale,  FL 33309-1821,  which owned  70,963.216  Class N shares (5.74% of the Class N shares
         then outstanding).

         MLPF&S for the Sole Benefit of its Customers,  Attn.  Fund Admn.,  4800 Deer Lake Drive E., Floor
         3,  Jacksonville,  FL  32246-6484,  which owned  65,147.595  Class N shares (5.27% of the Class N
         shares then outstanding).

         MG Trust Company Cust.,  Herman,  Herman, Katz & Cotlar PSP, 700 17th Street,  Suite 300, Denver,
         CO,  80202-3531,  which  owned  62,511.415  Class N shares  (5.06%  of the  Class N  shares  then
         outstanding).


The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a holding company controlled by
Massachusetts Mutual Life Insurance Company, a global, diversified insurance and financial services organization.

|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 SEC 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 1.202.551.8090. 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|      Portfolio Proxy Voting. The Fund has adopted Portfolio Proxy Voting Policies and Procedures, which
include Proxy Voting Guidelines, under which the Fund votes proxies relating to securities ("portfolio proxies")
held by the Fund. The Fund's primary consideration in voting portfolio proxies is the financial interests of the
Fund and its shareholders. The Fund has retained an unaffiliated third-party as its agent to vote portfolio
proxies in accordance with the Fund's Proxy Voting Guidelines and to maintain records of such portfolio proxy
voting. The Portfolio Proxy Voting Policies and Procedures include provisions to address conflicts of interest
that may arise between the Fund and the Manager or the Manager's affiliates or business relationships. Such a
conflict of interest may arise, for example, where the Manager or an affiliate of the Manager manages or
administers the assets of a pension plan or other investment account of the portfolio company soliciting the
proxy or seeks to serve in that capacity. The Manager and its affiliates generally seek to avoid such conflicts
by maintaining separate investment decision making processes to prevent the sharing of business objectives with
respect to proposed or actual actions regarding portfolio proxy voting decisions. Additionally, the Manager
employs the following two procedures: (1) if the proposal that gives rise to the conflict is specifically
addressed in the Proxy Voting Guidelines, the Manager will vote the portfolio proxy in accordance with the Proxy
Voting Guidelines, provided that they do not provide discretion to the Manager on how to vote on the matter; and
(2) if such proposal is not specifically addressed in the Proxy Voting Guidelines or the Proxy Voting Guidelines
provide discretion to the Manager on how to vote, the Manager will vote in accordance with the third-party proxy
voting agent's general recommended guidelines on the proposal provided that the Manager has reasonably determined
that there is no conflict of interest on the part of the proxy voting agent. If neither of the previous two
procedures provides an appropriate voting recommendation, the Manager may retain an independent fiduciary to
advise the Manager on how to vote the proposal or may abstain from voting. The Proxy Voting Guidelines'
provisions with respect to certain routine and non-routine proxy proposals are summarized below:
o        The Fund generally votes with the recommendation of the issuer's management on routine matters,
              including ratification of the independent registered public accounting firm, unless circumstances
              indicate otherwise.
o        The Fund evaluates nominees for director nominated by management on a case-by-case basis, examining the
              following factors, among others: Composition of the board and key board committees, attendance at
              board meetings, corporate governance provisions and takeover activity, long-term company
              performance and the nominee's investment in the company.
o        In general, the Fund opposes anti-takeover proposals and supports the elimination, or the ability of
              shareholders to vote on the preservation or elimination, of anti-takeover proposals, absent unusual
              circumstances.
o        The Fund supports shareholder proposals to reduce a super-majority vote requirement, and opposes
              management proposals to add a super-majority vote requirement.
o        The Fund opposes proposals to classify the board of directors.
o        The Fund supports proposals to eliminate cumulative voting.
o        The Fund opposes re-pricing of stock options without shareholder approval.
o        The Fund generally considers executive compensation questions such as stock option plans and bonus plans
              to be ordinary business activity. The Fund analyzes stock option plans, paying particular attention
              to their dilutive effect. While the Fund generally supports management proposals, the Fund opposes
              plans it considers to be excessive.

         The Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's Form N-PX filing is available (i) without charge,
upon request, by calling the Fund toll-free at 1.800.525.7048 and (ii) on the SEC's website at www.sec.gov.


|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 Equity Portfolio Team and 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 Fund pays expenses not expressly assumed by the Manager under the advisory agreement. The advisory
agreement lists examples of expenses paid by the Fund. The major categories relate to interest, taxes, brokerage
commissions, fees to certain Trustees, legal and audit expenses, custodian and transfer agent expenses, share
issuance costs, certain printing and registration costs and non-recurring expenses, including litigation costs.
The management fees paid by the Fund to the Manager are calculated at the rates described in the Prospectus,
which are applied to the assets of the Fund as a whole. The fees are allocated to each class of shares based upon
the relative proportion of the Fund's net assets represented by that class. The management fees paid by the Fund
to the Manager during its last three fiscal years were:

         ---------------------------------- ----------------------------------------------------------------
         Fiscal Year ended 9/30:                    Management Fees Paid to OppenheimerFunds, Inc.
         ---------------------------------- ----------------------------------------------------------------
         ---------------------------------- ----------------------------------------------------------------

         ---------------------------------- ----------------------------------------------------------------
         ---------------------------------- ----------------------------------------------------------------
                       2005                                           $6,085,297
         ---------------------------------- ----------------------------------------------------------------
         ---------------------------------- ----------------------------------------------------------------
                       2006                                           $6,551,281
         ---------------------------------- ----------------------------------------------------------------
         ---------------------------------- ----------------------------------------------------------------

                       2007                                           $7,210,624

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

         The investment advisory agreement states that in the absence of willful misfeasance, bad faith, gross
negligence in the performance of its duties or reckless disregard of its obligations and duties under the
investment advisory agreement, the Manager is not liable for any loss the Fund sustains in connection with
matters to which the agreement relates.

         The agreement permits the Manager to act as investment adviser for any other person, firm or corporation
and to use the name "Oppenheimer" in connection with other investment companies for which it may act as
investment adviser or general distributor. If the Manager shall no longer act as investment adviser to the Fund,
the Manager may withdraw the right of the Fund to use the name "Oppenheimer" as part of its name.

 Portfolio Managers. The Fund's portfolio is managed by Emmanuel Ferreira, Angelo Manioudakis and a team of
investment professionals including Benjamin Gord, Geoffrey Caan, Thomas Swaney and Antulio N. Bomfim (each is
referred to as a "Portfolio Manager" and collectively they are referred to as the "Portfolio Managers").  They
are the persons who are responsible for the day-to-day management of the Fund's investments.


            Other Accounts Managed by the Portfolio Managers.  In addition to managing the Fund's
investment portfolio, Messrs. Ferreira, Manioudakis, Gord, Caan, Swaney and Bomfim also manage other investment
portfolios on behalf of the Manager or its affiliates. The following table provides information, as of September
30, 2007, regarding the other portfolios managed by Messrs. Ferreira, Manioudakis, Gord, Caan, Swaney and Bomfim.
None of those portfolios has an advisory fee based on performance:


     Portfolio Manager       Registered   Total Assets   Other Pooled  Total Assets in     Other     Total Assets
                                         in Registered                   Other Pooled
                             Investment    Investment     Investment      Investment                   in Other
                             Companies     Companies       Vehicles        Vehicles      Accounts      Accounts
                              Managed      Managed(1)      Managed        Managed(1)      Managed    Managed(1,2)
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     Emmanuel Ferreira           2           $1,979          N/A             N/A            N/A           N/A

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

     Angelo Manioudakis          19         $27,569           7              $204            7           $437

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

     Benjamin Gord               17         $27,153           7              $204            7           $437

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

     Geoffrey Caan               17         $27,153           7              $204            7           $437

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

     Thomas Swaney               17         $27,153           7              $204            7           $437

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

     Antulio N. Bomfim           17         $27,153           7              $204            7           $437

     ---------------------------------------------------------------------------------------------------------------
     1.  In millions.
     2.  Does not include personal accounts of portfolio managers and their families, which are subject to the Code of
     Ethics.


       As indicated above, each of the Portfolio Managers also manage other funds and/or accounts. Potentially,
at times, those responsibilities could conflict with the interests of the Fund. That may occur whether the
investment strategies of the other funds or accounts are the same as, or different from, the Fund's investment
objectives and strategies. For example the Portfolio Manager may need to allocate investment opportunities
between the Fund and another fund or account having similar objectives or strategies, or he may need to execute
transactions for another fund or account that could have a negative impact on the value of securities held by the
Fund. Not all funds and accounts advised by the Manager have the same management fee. If the management fee
structure of another fund or account is more advantageous to the Manager than the fee structure of the Fund, the
Manager could have an incentive to favor the other fund or account. However, the Manager's compliance procedures
and Code of Ethics recognize the Manager's fiduciary obligations to treat all of its clients, including the Fund,
fairly and equitably, and are designed to preclude the Portfolio Managers from favoring one client over another.
It is possible, of course, that those compliance procedures and the Code of Ethics may not always be adequate to
do so. At different times, one or more of the Fund's Portfolio Managers may manage other funds or accounts with
investment objectives and strategies that are similar to those of the Fund, or may manage funds or accounts with
investment objectives and strategies that are different from those of the Fund.


        Compensation of the Portfolio Managers.  The Fund's Portfolio Managers are employed and compensated by
the Manager, not the Fund. Under the Manager's compensation program for its portfolio managers and portfolio
analysts, their compensation is based primarily on the investment performance results of the funds and accounts
they manage, rather than on the financial success of the Manager. This is intended to align the portfolio
managers' and analysts' interests with the success of the funds and accounts and their investors. The Manager's
compensation structure is designed to attract and retain highly qualified investment management professionals and
to reward individual and team contributions toward creating shareholder value. As of September 30, 2007, each
Portfolio Managers' compensation consisted of three elements:

a base salary, an annual discretionary bonus and eligibility to participate in long-term awards of options and
appreciation rights in regard to the common stock of the Manager's holding company parent. Senior portfolio
managers may also be eligible to participate in the Manager's deferred compensation plan.


The base pay component of each portfolio manager is reviewed regularly to ensure that it reflects the performance
of the individual, is commensurate with the requirements of the particular portfolio, reflects any specific
competence or specialty of the individual manager, and is competitive with other comparable positions, to help
the Manager attract and retain talent. The annual discretionary bonus is determined by senior management of the
Manager and is based on a number of factors, including a fund's pre-tax performance for periods of up to five
years, measured against an appropriate benchmark selected by management. The Lipper benchmark with respect to the
Fund is Lipper Mixed Asset Target Allocation - Moderate.  Other factors include management quality (such as style
consistency, risk management, sector coverage, team leadership and coaching) and organizational development.  The
Portfolio Managers' compensation is not based on the total value of the Fund's portfolio assets, although the
Fund's investment performance may increase those assets. The compensation structure is also intended to be
internally equitable and serve to reduce potential conflicts of interest between the Fund and other funds and
accounts managed by the Portfolio Managers.  The compensation structure of other portfolios managed by the
Portfolio Managers is different from the compensation structure of the Fund, described above. A portion of the
Portfolio Managers' compensation with regard to those portfolios may, under certain circumstances, include an
amount based in part on the amount of the portfolios' management fee.

            Ownership of Fund Shares.  As of September 30, 2007, each of the Portfolio Managers did not
beneficially own any shares of the Fund.



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, 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 for the services provided. 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, in choosing brokers to execute portfolio transactions for the
Fund, the Manager may select brokers (other than affiliates) that provide both brokerage and research services to
the Fund. The commissions paid to those 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.

Brokerage Practices Followed by the Manager. The Manager allocates brokerage for the Fund subject to the
provisions of the investment advisory agreement and other applicable rules and procedures described below.

         The Manager's portfolio traders allocate brokerage based upon recommendations from the Manager's
portfolio managers, together with the portfolio traders' judgment as to the execution capability of the broker or
dealer. 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 that are available
in U.S. markets. Brokerage commissions are paid primarily for transactions in listed securities or for certain
fixed-income agency transactions executed 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 accounts advised by the Manager have investment policies similar to those of the Fund. Those other
accounts 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 accounts 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. When possible, the
Manager tries to combine concurrent orders to purchase or sell the same security by more than one of the accounts
managed by the Manager or its affiliates. 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.

         Rule 12b-1 under the Investment Company Act prohibits any fund from compensating a broker or dealer for
promoting or selling the fund's shares by (1) directing to that broker or dealer any of the fund's portfolio
transactions, or (2) directing any other remuneration to that broker or dealer, such as commissions, mark-ups,
mark downs or other fees from the fund's portfolio transactions, that were effected by another broker or dealer
(these latter arrangements are considered to be a type of "step-out" transaction). In other words, a fund and its
investment adviser cannot use the fund's brokerage for the purpose of rewarding broker-dealers for selling the
fund's shares.

         However, the Rule permits funds to effect brokerage transactions through firms that also sell fund
shares, provided that certain procedures are adopted to prevent a quid pro quo with respect to portfolio
brokerage allocations. As permitted by the Rule, the Manager has adopted procedures (and the Fund's Board of
Trustees has approved those procedures) that permit the Fund to direct portfolio securities transactions to
brokers or dealers that also promote or sell shares of the Fund, subject to the "best execution" considerations
discussed above. Those procedures are designed to prevent: (1) the Manager's personnel who effect the Fund's
portfolio transactions from taking into account a broker's or dealer's promotion or sales of the Fund shares when
allocating the Fund's portfolio transactions, and (2) the Fund, the Manager and the Distributor from entering
into agreements or understandings under which the Manager directs or is expected to direct the Fund's brokerage
directly, or through a "step-out" arrangement, to any broker or dealer in consideration of that broker's or
dealer's promotion or sale of the Fund's shares or the shares of any of the other Oppenheimer funds.

         The investment advisory agreement permits the Manager to allocate brokerage for research services. The
research services provided by a particular broker may be useful both to the Fund and to one or more of the other
accounts advised by the Manager or its affiliates. Investment research may be supplied to the Manager by the
broker or 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, analytical
software 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.

         Although the Manager currently does not do so, the Board of Trustees may permit 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 may also permit 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 broaden the scope and supplement 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.


         During the fiscal years ended September 30, 2005, 2006 and 2007, the Fund paid the total brokerage
commissions indicated in the chart below. During the fiscal year ended September 30 2007, the Fund paid $427,009
in commissions to firms that provide brokerage and research services to the Fund with respect to $1,489,204,049
of aggregate portfolio transactions. All such transactions were on a "best execution" basis, as described above.
The provision of research services was not necessarily a factor in the placement of all such transactions.


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

     Fiscal Year Ended September 30,                Total Brokerage Commissions Paid by the Fund*

- ------------------------------------------- ---------------------------------------------------------------
- ------------------------------------------- ---------------------------------------------------------------
                   2005                                                $383,713
- ------------------------------------------- ---------------------------------------------------------------
- ------------------------------------------- ---------------------------------------------------------------
                   2006                                                $590,399
- ------------------------------------------- ---------------------------------------------------------------
- ------------------------------------------- ---------------------------------------------------------------

                   2007                                                $506,401

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

   *Amounts do not include spreads or commissions on principal transactions on a net trade basis.


Distribution and Service Plans

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

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

- ---------------------- -------------------- --------------------
                            Aggregate         Class A Front-
       Fiscal               Front-End            End Sales
        Year              Sales Charges           Charges
        Ended              on Class A           Retained by
        9/30:                Shares            Distributor*
- ---------------------- -------------------- --------------------
- ---------------------- -------------------- --------------------
        2005               $1,317,632            $407,881
- ---------------------- -------------------- --------------------
- ---------------------- -------------------- --------------------
        2006               $1,225,981            $347,378
- ---------------------- -------------------- --------------------
- ---------------------- -------------------- --------------------

        2007               $1,148,842            $380,279

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

- ---------------------- -------------------- -------------------- -------------------- --------------------
                           Concessions          Concessions          Concessions          Concessions
                           on Class A           on Class B           on Class C           on Class N
     Fiscal Year             Shares               Shares               Shares               Shares
     Ended 9/30            Advanced by          Advanced by          Advanced by          Advanced by
                          Distributor*         Distributor*         Distributor*         Distributor*
- ---------------------- -------------------- -------------------- -------------------- --------------------
- ---------------------- -------------------- -------------------- -------------------- --------------------

- ---------------------- -------------------- -------------------- -------------------- --------------------
- ---------------------- -------------------- -------------------- -------------------- --------------------
        2005                 $34,719             $573,577             $182,944              $18,914
- ---------------------- -------------------- -------------------- -------------------- --------------------
- ---------------------- -------------------- -------------------- -------------------- --------------------
        2006                 $54,726             $475,189             $140,977              $10,156
- ---------------------- -------------------- -------------------- -------------------- --------------------
- ---------------------- -------------------- -------------------- -------------------- --------------------

        2007                 $38,020             $382,772              $84,409              $7,141

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

- ------------------ --------------------------------------------------------------------- ----------------------
   Fiscal Year      Class A Contingent      Class B Contingent     Class C Contingent     Class N Contingent
                      Deferred Sales          Deferred Sales         Deferred Sales         Deferred Sales

      Ended         Charges Retained by    Charges Retained by     Charges Retained by    Charges Retained by
      9/30              Distributor            Distributor             Distributor            Distributor

- ------------------ --------------------------------------------------------------------- ----------------------
- ---------------------------------------------------------------------------------------- ----------------------
          2005                  $2,396              $175,201              $21,759               $6,448
- ---------------------------------------------------------------------------------------- ----------------------
- ------------------ --------------------------------------------------------------------- ----------------------
          2006                 $11,568              $220,052              $20,088               $4,077
- ------------------ --------------------------------------------------------------------- ----------------------
- ------------------ ---------------------- ----------------------- ---------------------- ----------------------

      2007                $8,702                 $184,174                $11,743                $1,354

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



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 Trustees(1), 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.  In their sole
discretion, they may also from time to time make substantial payments from their own resources, which include the
profits the Manager derives from the advisory fees it receives from the Fund, to compensate brokers, dealers,
financial institutions and other intermediaries for providing distribution assistance and/or administrative
services or that otherwise promote sales of the Fund's shares.  These payments, some of which may be referred to
as "revenue sharing," may relate to the Fund's inclusion on a financial intermediary's preferred list of funds
offered to its clients.

         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 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. Those reports are subject to the
review and approval of the Independent Trustees.

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

         Under the plans for a class, no payment will be made to any recipient in any period 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.


|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 (referred to as "recipients") for
personal services and account maintenance services they provide for their customers who hold Class A shares. The
services include, among others, answering customer inquiries about the Fund, assisting in establishing and
maintaining accounts in the Fund, making the Fund's investment plans available and providing other services at
the request of the Fund or the Distributor. The Class A service plan permits reimbursements to the Distributor at
a rate of up to 0.25% of average annual net assets of Class A shares. The Distributor makes payments to
recipients periodically at an annual rate not to exceed 0.25% of the average annual Class A share net assets held
in the accounts of the recipients or their customers.

|X|           The Distributor does not receive or retain the service fee on Class A shares in accounts for which
the Distributor has been listed as the broker-dealer of record. 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 shares purchased prior to March 1, 2007 with respect to certain group retirement plans that
were established prior to March 1, 2001 ("grandfathered retirement plans"). Prior to March 1, 2007, the
Distributor paid the 0.25% service fee for grandfathered retirement plans in advance for the first year and
retained the first year's service fee paid by the Fund with respect to those shares. After the shares were held
for a year, the Distributor paid the ongoing service fees to recipients on a periodic basis. Such shares are
subject to a contingent deferred sales charge if they are redeemed within 18 months. If Class A shares purchased
in a grandfathered retirement plan prior to March 1, 2007 are redeemed within 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 those fees. For Class A shares purchased in grandfathered retirement plans on
or after March 1, 2007, the Distributor does not make any payment in advance and does not retain the service fee
for the first year. Such shares are not subject to the contingent deferred sales charge.

         For the fiscal year ended September 30, 2007 payments under the Class A plan totaled $1,815,172, of
which $2,444 was retained by the Distributor under the arrangement described above, regarding grandfathered
retirement accounts, and included $207,361 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 Distribution and Service Plan Fees. Under each plan, distribution and
service fees are computed on the average of the net asset value of shares in the respective class, determined as
of the close of each regular business day during the period. Each plan provides for the Distributor to be
compensated at a flat rate, whether the Distributor's distribution expenses are more or less than the amounts
paid by the Fund under the plan during the period for which the fee is paid. The types of services that
recipients provide are similar to the services provided under the Class A service plan, described above.

         Each plan permits the Distributor to retain both the asset-based sales charges and the service fees or
to pay recipients the service fee on a periodic basis, without payment in advance. However, the Distributor
currently intends to pay the service fee to recipients in advance for the first year after Class B, Class C and
Class N shares are purchased. After the first year Class B, Class C or Class N shares are outstanding, after
their purchase, the Distributor makes service fee payments periodically 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. Class B, Class C or Class N shares may not be
purchased by a new investor directly from the Distributor without the investor designating another registered
broker-dealer.  If a current investor no longer has another broker-dealer of record for an existing account, the
Distributor is automatically designated as the broker-dealer of record, but solely for the purpose of acting as
the investor's agent to purchase the shares.  In those cases, the Distributor retains the asset-based sales
charge paid on Class B, Class C and Class N shares, but does not retain any service fees as to the assets
represented by that account.

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

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

         The asset-based sales charge 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 charge to the Distributor for its services rendered in distributing Class B,
Class C and Class N shares. The payments are made to the Distributor in recognition that the Distributor:
o        pays sales concessions to authorized brokers and dealers at the time of sale and pays service fees as
              described above,
o        may finance payment of sales concessions and/or the advance of the service fee payment to recipients
              under the plans, or may provide such financing from its own resources or from the resources of an
              affiliate,
o        employs personnel to support distribution of Class B, Class C and Class N shares,
o        bears the costs of sales literature, advertising and prospectuses (other than those furnished to current
              shareholders) and state "blue sky" registration fees and certain other distribution expenses,
o        may not be able to adequately compensate dealers that sell Class B, Class C and Class N shares without
              receiving payment under the plans and therefore may not be able to offer such Classes for sale
              absent the plans,
o        receives payments under the plans consistent with the service fees and asset-based sales charges paid by
              other non-proprietary funds that charge 12b-1 fees,
o        may use the payments under the plan to include the Fund in various third-party distribution programs
              that may increase sales of Fund shares,
o        may experience increased difficulty selling the Fund's shares if payments under theo     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.

         During a calendar year, 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 asset-based sales charges paid to the Distributor by the Fund under the distribution and service
plans. Those excess expenses are carried over on the Distributor's books and may be recouped from asset-based
sales charge payments from the Fund in future years. However, the Distributor has voluntarily agreed to cap the
amount of expenses under the plans that may be carried over from year to year and recouped that relate to (i)
expenses the Distributor has incurred that represent compensation and expenses of its sales personnel and (ii)
other direct distribution costs it has incurred, such as sales literature, state registration fees, advertising
and prospectuses used to offer Fund shares. The cap on the carry-over of those categories of expenses is set at
0.70% of annual gross sales of shares of the Fund. If those categories of expenses exceed the capped amount, the
Distributor bears the excess costs. If the Class B, Class C or Class N plan were to be terminated by the Fund,
the Fund's Board of Trustees may allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares prior to the termination of the plan.

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

              Distribution and Service Fees Paid to the Distributor for the Fiscal Year Ended 9/30/07

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

Class B Plan                 $948,835(1)            $749,088               $2,873,405                 3.16%

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

Class C Plan                 $974,017(2)            $127,383               $2,003,922                 1.97%

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

Class N Plan                 $90,084(3)             $26,519                 $227,118                  1.25%

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

1.       Includes $11,997 paid to an affiliate of the Distributor's parent company.
2.       Includes $22,462 paid to an affiliate of the Distributor's parent company.
3.       Includes $3,814 paid to an affiliate of the Distributor's parent company.

All payments under the plans are subject to the limitations imposed by the Conduct Rules of FINRA on payments of
asset-based sales charges and service fees.


Payments to Fund Intermediaries

         Financial intermediaries may receive various forms of compensation or reimbursement from the Fund in the
form of 12b-1 plan payments as described in the preceding section of this Statement of Additional Information.
They may also receive payments or concessions from the Distributor, derived from sales charges paid by the
clients of the financial intermediary, also as described in this Statement of Additional Information.
Additionally, the Manager and/or the Distributor (including their affiliates) may make payments to financial
intermediaries in connection with their offering and selling shares of the Fund and other Oppenheimer funds,
providing marketing or promotional support, transaction processing and/or administrative services. Among the
financial intermediaries that may receive these payments are brokers and dealers who sell and/or hold shares of
the Fund, banks (including bank trust departments), registered investment advisers, insurance companies,
retirement plan and qualified tuition program administrators, third party administrators, and other institutions
that have selling, servicing or similar arrangements with the Manager or Distributor. The payments to
intermediaries vary by the types of product sold, the features of the Fund share class and the role played by the
intermediary.

         Possible types of payments to financial intermediaries include, without limitation, those discussed
below.

o        Payments made by the Fund, or by an investor buying or selling shares of the Fund may include:

o        depending on the share class that the investor selects, contingent deferred sales charges or initial
                    front-end sales charges, all or a portion of which front-end sales charges are payable by the
                    Distributor to financial intermediaries (see "About Your Account" in the Prospectus);


o        ongoing asset-based payments attributable to the share class selected, including fees payable under the
                  Fund's distribution and/or service plans adopted under Rule 12b-1 under the Investment Company
                  Act, which are paid from the Fund's assets and allocated to the class of shares to which the

                    plan relates (see "About the Fund -- Distribution and Service Plans" above);

o        shareholder servicing payments for providing omnibus accounting, recordkeeping, networking, sub-transfer
                    agency or other administrative or shareholder services, including retirement plan and 529
                    plan administrative services fees, which are paid from the assets of a Fund as reimbursement
                    to the Manager or Distributor for expenses they incur on behalf of the Fund.

o        Payments made by the Manager or Distributor out of their respective resources and assets, which may
             include profits the Manager derives from investment advisory fees paid by the Fund. These payments
             are made at the discretion of the Manager and/or the Distributor. These payments, often referred to
             as "revenue sharing" payments, may be in addition to the payments by the Fund listed above.

o        These types of payments may reflect compensation for marketing support, support provided in offering the
                    Fund or other Oppenheimer funds through certain trading platforms and programs, transaction
                    processing or other services;


o        The Manager and Distributor each may also pay other compensation to the extent the payment is not
                    prohibited by law or by any self-regulatory agency, such as FINRA. Payments are made based on
                    the guidelines established by the Manager and Distributor, subject to applicable law.



         These payments may provide an incentive to financial intermediaries to actively market or promote the
sale of shares of the Fund or other Oppenheimer funds, or to support the marketing or promotional efforts of the
Distributor in offering shares of the Fund or other Oppenheimer funds. In addition, some types of payments may
provide a financial intermediary with an incentive to recommend the Fund or a particular share class. Financial
intermediaries may earn profits on these payments, since the amount of the payment may exceed the cost of
providing the service. Certain of these payments are subject to limitations under applicable law. Financial
intermediaries may categorize and disclose these arrangements to their clients and to members of the public in a
manner different from the disclosures in the Fund's Prospectus and this Statement of Additional Information. You
should ask your financial intermediary for information about any payments it receives from the Fund, the Manager
or the Distributor and any services it provides, as well as the fees and commissions it charges.

         Although brokers or dealers that sell Fund shares may also act as a broker or dealer in connection with
the execution of the purchase or sale of portfolio securities by the Fund or other Oppenheimer funds, a financial
intermediary's sales of shares of the Fund or such other Oppenheimer funds is not a consideration for the Manager
when choosing brokers or dealers to effect portfolio transactions for the Fund or such other Oppenheimer funds.

         Revenue sharing payments can pay for distribution-related or asset retention items including, without
limitation,

o        transactional support, one-time charges for setting up access for the Fund or other Oppenheimer funds on
              particular trading systems, and paying the intermediary's networking fees;
         o        program support, such as expenses related to including the Oppenheimer funds in retirement
              plans, college savings plans, fee-based advisory or wrap fee programs, fund "supermarkets", bank or
              trust company products or insurance companies' variable annuity or variable life insurance
              products;
o        placement on the dealer's list of offered funds and providing representatives of the Distributor with
              access to a financial intermediary's sales meetings, sales representatives and management
              representatives.

         Additionally, the Manager or Distributor may make payments for firm support, such as business planning
assistance, advertising, and educating a financial intermediary's sales personnel about the Oppenheimer funds and
shareholder financial planning needs.


         For the year ended December 31, 2006, the following financial intermediaries that are broker-dealers
offering shares of the Oppenheimer funds, and/or their respective affiliates, received revenue sharing or similar
distribution-related payments from the Manager or Distributor for marketing or program support:

  1st Global Capital Co.                                  Advantage Capital Corporation / FSC
   Aegon                                                  Aetna Life Ins & Annuity Co.
   AG Edwards                                             AIG Financial Advisors
   AIG Life                                               Allianz Life Insurance Company
   Allstate Life                                          American Enterprise Life Insurance
   American General Annuity                               American Portfolios
   Ameriprise                                             Ameritas
   Annuity Investors Life                                 Associated Securities
   AXA Advisors                                           AXA Equitable Life Insurance
   Banc One Securities Corporation                        BNY Investment Center
   Cadaret Grant & Co, Inc.                               Chase Investment Services
   Citicorp Investment Services, Inc.                     Citigroup Global Markets Inc (SSB)
   CitiStreet                                             Citizen's Bank of Rhode Island
   Columbus Life                                          Commonwealth Financial Network
   CUNA Brokerage Services, Inc.                          CUSO Financial Services, L.P.
   Edward D Jones & Co.                                   Federal Kemper
   Financial Network (ING)                                GE Financial Assurance
   GE Life & Annuity                                      Genworth Financial
   GlenBrook Life and Annuity Co.                         Great West Life
   Hartford Life Insurance Co.                            HD Vest Investment Services
   Hewitt Associates                                      IFMG Securities, Inc.
   ING Financial Advisers                                 ING Financial Partners
   Jefferson Pilot Securities Co.                         Kemper Investors Life Insurance Co.
   Legend Equities Co.                                    Legg Mason Wood Walker
   Lincoln Benefit National Life                          Lincoln Financial
   Lincoln Investment Planning, Inc.                      Linsco Private Ledger Financial
   Mass Mutual                                            McDonald Investments, Inc.
   Merrill Lynch                                          Minnesota Life
   Mony Life                                              Morgan Stanley Dean Witter
   Multifinancial (ING)                                   Mutual Service Co.
   National Planning Co.                                  Nationwide
   NFP                                                    Park Avenue Securities LLC
   PFS Investments, Inc.                                  Phoenix Life Insurance Co.
   Plan Member Securities                                 Prime Capital Services, Inc.
   Primevest Financial Services, Inc.                     Protective Life Insurance Co.
   Provident Mutual Life & Annuity                        Prudential
   Raymond James & Associates, Inc.                       RBC Daine Rauscher
   Royal Alliance                                         Securities America, Inc.
   Security Benefit                                       Security First-Metlife
   Signator Investments                                   Sun Life Insurance Co.
   Sun Trust Securities, Inc.                             Thrivent Financial
   Travelers Life & Annuity Co.                           UBS Financial Services, Inc.
   Union Central                                          United Planners
   Wachovia                                               Walnut Street Securities (Met Life)
   Waterstone Financial Group                             Wells Fargo

         For the year ended December 31, 2006, the following firms, which in some cases are broker-dealers,
received payments from the Manager or Distributor for administrative or other services provided (other than
revenue sharing arrangements), as described above:

  1st Global Capital Co.                                 A G Edwards
  ACS HR Solutions                                       ADP
  AETNA Life Ins & Annuity Co.                           Alliance Benefit Group
  American Enterprise Investments                        American Express Retirement Service
  American Funds (Fascorp)                               American United Life Insurance Co.
  Ameriprise                                             Ameritrade, Inc.
  AMG Administrative Management Group                    AST (American Stock & Transfer)
  AXA Advisors                                           Baden Retirement
  BCG - New                                              BCG (Programs for Benefit Plans)
  Bear Stearns Securities Co.                            Benefit Administration, Inc.(WA)
  Benefit Administration, Inc.(WIS)                      Benefit Plans Administration
  Benetech, Inc.                                         Bisys
  Boston Financial Data Services                         Ceridian
  Charles Schwab & Co, Inc.                              Citigroup Global Markets Inc (SSB)
  CitiStreet                                             City National Investments
  Clark Consulting                                       CPI
  DA Davidson & Co.                                      Daily Access. Com, Inc.
  Davenport & Co, LLC                                    David Lerner Associates
  Digital Retirement Solutions                           DR, Inc.
  Dyatech                                                E*Trade Clearing LLC
  Edgewood                                               Edward D Jones & Co.
  Equitable Life / AXA                                   ERISA Administrative Svcs, Inc
  ExpertPlan.com                                         FAS Co. (FASCore/RK Pro)
  FBD Consulting                                         Ferris Baker Watts, Inc.
  Fidelity                                               First Clearing LLC
  First Southwest Co.                                    First Trust - Datalynx
  First Trust Corp                                       Franklin Templeton
  Geller Group                                           Great West Life
  H&R Block Financial Advisors, Inc.                     Hartford Life Insurance Co.
  HD Vest Investment Services                            Hewitt Associates
  HSBC Brokerage USA, Inc.                               ICMA - RC Services
  Independent Plan Coordinators                          Ingham Group
  Interactive Retirement Systems                         Invesmart
  Janney Montgomery Scott, Inc.                          JJB Hillard W L Lyons, Inc.
  John Hancock                                           JP Morgan
  July Business Services                                 Kaufman & Goble
  Legend Equities Co.                                    Legg Mason Wood Walker
  Lehman Brothers, Inc.                                  Liberty-Columbia 529 Program
  Lincoln Investment Planning, Inc.                      Lincoln National Life Insurance Co.
  Linsco Private Ledger Financial                        MassMutual
  Matrix Settlement & Clearance Services                 McDonald Investments, Inc.
  Mercer HR Services                                     Merrill Lynch
  Mesirow Financial, Inc.                                MetLife
  MFS Investment Management                              Mid Atlantic Capital Co.
  Milliman USA                                           Morgan Keegan & Co, Inc.
  Morgan Stanley Dean Witter                             Nathan & Lewis Securities, Inc.
  National City Bank                                     National Deferred Comp
  National Financial                                     National Investor Services Co.
  Nationwide                                             Newport Retirement Services
  Northwest Plan Services                                NY Life Benefits
  Oppenheimer & Co, Inc.                                 Peoples Securities, Inc.
  Pershing                                               PFPC
  Piper Jaffray & Co.                                    Plan Administrators
  Plan Member Securities                                 Primevest Financial Services, Inc.
  Principal Life Insurance                               Prudential
  PSMI Group                                             Quads Trust Company
  Raymond James & Associates, Inc.                       Reliastar
  Robert W Baird & Co.                                   RSM McGladrey
  Scott & Stringfellow, Inc.                             Scottrade, Inc.
  Southwest Securities, Inc.                             Standard Insurance Co
  Stanley, Hunt, Dupree & Rhine                          Stanton Group, Inc.
  Sterne Agee & Leach, Inc.                              Stifel Nicolaus & Co, Inc.
  Sun Trust Securities, Inc.                             Symetra
  T Rowe Price                                           The 401k Company
  The Princeton Retirement Group Inc.                    The Retirement Plan Company, LLC
  TruSource                                              TruSource Union Bank of CA
  UBS Financial Services, Inc.                           Unified Fund Services (UFS)
  US Clearing Co.                                        USAA Investment Management Co.
  USI Consulting Group                                   Valic
  Vanguard Group                                         Wachovia
  Web401K.com                                            Wedbush Morgan Securities
  Wells Fargo                                            Wilmington Trust



Performance of the Fund

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

         The Fund's illustrations of its performance data in advertisements must comply with rules of the SEC.
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.

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

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

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


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

              In calculating total returns for Class A shares, the current maximum sales charge of 5.75% (as a
percentage of the offering price) is deducted from the initial investment ("P" in the formula below) (unless the
return is shown without sales charge, as described below). For Class B shares, payment of the applicable
contingent deferred sales charge is applied, depending on the period for which the return is shown:  5.0% in the
first year, 4.0% in the second year, 3.0% in the third and fourth years, 2.0% in the fifth year, 1.0% in the
sixth year and none thereafter. For Class C shares, the 1.0% contingent deferred sales charge is deducted for
returns for the one-year period. For Class N shares, the 1.0% contingent deferred sales charge is deducted for
returns for the one-year period, and total returns for the periods prior to 03/01/01 (the inception date for
Class N shares) are based on the Fund's Class A returns, adjusted to reflect the higher Class N 12b-1 fees.


o        Average Annual Total Return. The "average annual total return" of each class is an average annual
compounded rate of return for each year in a specified number of years. It is the rate of return based on the
change in value of a hypothetical initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an Ending Redeemable Value ("ERV" in the formula) of that investment,
according to the following formula:


ERV   l/n      - 1     = Average Annual Total Return
  P


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


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


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

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


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

    ERV - P        = Total Return
- ----------------
       P


         o        Total Returns at Net Asset Value. . From time to time the Fund may also quote a cumulative or
an average annual total return "at net asset value" (without deducting sales charges) for Class A, Class B, Class
C or Class N shares. Each is based on the difference in net asset value per share at the beginning and the end of
the period for a hypothetical investment in that class of shares (without considering front-end or contingent
deferred sales charges) and takes into consideration the reinvestment of dividends and capital gains
distributions.


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

                                The Fund's Total Returns for the Periods Ended 9/30/07

  --------------------------------------------------------------------------------------------------------------------
  -------------- -------------------------- --------------------------------------------------------------------------
                 Cumulative Total Returns                         Average Annual Total Returns
                 (10 years or Life of
  Class      of  Class)
  Shares
  -------------- -------------------------- --------------------------------------------------------------------------
  -------------- -------------------------- ----------------------- ----------------------- --------------------------
                                                    1-Year                 5-Years                  10-Years
                                                                                              (or life-of-class if
                                                                                                      less)
  -------------- -------------------------- ----------------------- ----------------------- --------------------------
  -------------- ------------ ------------- ----------- ----------- ----------- ----------- ------------- ------------
                 After        Without       After       Without     After       Without     After Sales   Without
                 Sales        Sales Charge  Sales       Sales       Sales       Sales       Charge        Sales
                 Charge                     Charge      Charge      Charge      Charge                    Charge
  -------------- ------------ ------------- ----------- ----------- ----------- ----------- ------------- ------------
  -------------- ------------ ------------- ----------- ----------- ----------- ----------- ------------- ------------

  Class A(1)       76.13%        86.88%       5.53%       11.96%      10.60%      11.91%       5.82%         6.45%

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

  Class B(2)       77.77%        77.77%       5.99%       10.99%      10.62%      10.89%       5.92%         5.92%

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

  Class C(3)       71.89%        71.89%       10.00%      11.00%      10.97%      10.97%       5.57%         5.57%

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

  Class N(4)       41.77%        41.77%       10.57%      11.57%      11.39%      11.39%       5.45%         5.45%

  -------------- ------------ ------------- ----------- ----------- ----------- ----------- ------------- ------------
  1. Inception of Class A: 4/24/87.
  2. Inception of Class B: 8/29/95.
  3. Inception of Class C: 12/1/93.
  4. Inception of Class N: 3/1/01.

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

                  Average Annual Total Returns for Class A(1) Shares (After Sales Charge)

                                       For the Periods Ended 9/30/07

- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------ --------------------- --------------------- ---------------------
                                                  1-Year               5-Years
                                                                                             10-Years
- ------------------------------------------ --------------------- --------------------- ---------------------
- ------------------------------------------ --------------------- --------------------- ---------------------

After Taxes on Distributions                      3.82%                 9.39%                 3.84%

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

After Taxes on Distributions and                  4.85%                 8.75%                 3.98%

Redemption of Fund Shares
- ------------------------------------------ --------------------- --------------------- ---------------------
         1. Inception of Class A:   4/24/87.

Other Performance Comparisons. The Fund compares its performance annually to that of an appropriate broadly-based
market index in its Annual Report to shareholders. You can obtain that information by contacting the Transfer
Agent at the addresses or telephone numbers shown on the cover of this Statement of Additional Information. The
Fund may also compare its performance to that of other investments, including other mutual funds, or use rankings
of its performance by independent ranking entities. Examples of these performance comparisons are set forth below.


         |X|  Lipper Rankings. From time to time the Fund may publish the ranking of the performance of its
classes of shares by Lipper, Inc. ("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring
service. Lipper monitors the performance of regulated investment companies, including the Fund, and ranks their
performance for various periods in categories based on investment styles. The Lipper performance rankings are
based on total returns that include the reinvestment of capital gain distributions and income dividends but do
not take sales charges or taxes into consideration. Lipper also publishes "peer-group" indices of the performance
of all mutual funds in a category that it monitors and averages of the performance of the funds in particular
categories.

Morningstar Ratings. From time to time the Fund may publish the star rating of the performance of its classes of
shares by Morningstar, Inc. ("Morningstar"), an independent mutual fund monitoring service. Morningstar rates
mutual funds in their specialized market sector.


         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
B contains more information about the special sales charge arrangements offered by the Fund, and the circumstances
in which sales charges may be reduced or waived for certain classes of investors.

When you purchase shares of the Fund, your ownership interest in the shares of the Fund will be recorded as a
book entry on the records of the Fund.  The Fund will not issue or re-register physical share certificates.

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 "NYSE"). The NYSE 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 NYSE, the shares will be
purchased and dividends will begin to accrue on the next regular business day. The proceeds of ACH transfers are
normally received by the Fund three days after the transfers are initiated. If the proceeds of the ACH transfer
are not received on a timely basis, the Distributor reserves the right to cancel the purchase order. The
Distributor and the Fund are not responsible for any delays in purchasing shares resulting from delays in ACH
transmissions.


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


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 Municipals                               Oppenheimer New Jersey Municipal Fund
Oppenheimer AMT-Free New York Municipals                      Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Balanced Fund                                     Oppenheimer Portfolio Series:
Oppenheimer Baring China Fund                                     Active Allocation Fund
Oppenheimer Baring Japan Fund                                     Equity Investor Fund
Oppenheimer Baring SMA International Fund                         Conservative Investor Fund
Oppenheimer Core Bond Fund                                        Moderate Investor Fund
                                                              Oppenheimer Portfolio Series Fixed Income Active
Oppenheimer California Municipal Fund                         Allocation
Oppenheimer Capital Appreciation Fund                         Oppenheimer Principal Protected Main Street Fund
Oppenheimer Capital Income Fund                               Oppenheimer Principal Protected Main Street Fund II
Oppenheimer Champion Income Fund                              Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Commodity Strategy Total Return Fund              Oppenheimer Quest Balanced Fund
Oppenheimer Convertible Securities Fund                       Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Developing Markets Fund                           Oppenheimer Quest Opportunity Value Fund
Oppenheimer Discovery Fund                                    Oppenheimer Real Estate Fund
Oppenheimer Dividend Growth Fund                              Oppenheimer Rising Dividends Fund, Inc.
Oppenheimer Emerging Growth Fund                              Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Equity Fund, Inc.                                 Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Equity Income Fund, Inc.                          Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Global Fund                                       Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Global Opportunities Fund                         Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Global Value Fund                                 Oppenheimer Rochester National Municipals
Oppenheimer Gold & Special Minerals Fund                      Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer International Bond Fund                           Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer International Diversified Fund                    Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer International Growth Fund                         Oppenheimer Select Value Fund
Oppenheimer International Small Company Fund                  Oppenheimer Senior Floating Rate Fund
Oppenheimer International Value Fund                          Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Limited Term California Municipal Fund            Oppenheimer SMA Core Bond Fund
Oppenheimer Limited-Term Government Fund                      Oppenheimer SMA International Bond Fund
Oppenheimer Limited Term Municipal Fund                       Oppenheimer Strategic Income Fund
Oppenheimer Main Street Fund                                  Oppenheimer U.S. Government Trust
Oppenheimer Main Street Opportunity Fund                      Oppenheimer Value Fund
Oppenheimer Main Street Small Cap Fund                        Limited-Term New York Municipal Fund
Oppenheimer MidCap Fund                                       Rochester Fund Municipals


LifeCycle Funds
   Oppenheimer Transition 2010 Fund
   Oppenheimer Transition 2015 Fund
   Oppenheimer Transition 2020 Fund
   Oppenheimer Transition 2030 Fund

And the following money market funds:
Oppenheimer Cash Reserves                                     Centennial Government Trust
Oppenheimer Institutional Money Market Fund                   Centennial Money Market Trust
Oppenheimer Money Market Fund, Inc.                           Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust                        Centennial Tax Exempt Trust


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


Letter of Intent. Under a Letter of Intent (a "Letter"), you may be able to reduce the sales charge rate that
applies to your purchases of Class A shares if you purchase Class A, Class B or Class C shares of the Fund or
other Oppenheimer funds. A Letter is an investor's statement in writing to the Distributor of his or her
intention to purchase a specified value of Class A, Class B and Class C shares of the Fund or other
Oppenheimer funds during a 13-month period (the "Letter period"), which begins on the date of the investor's
first share purchase following the establishment of the Letter. The sales charge on each purchase of Class A
shares during the Letter period will be at the rate that would apply 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 does not fulfill the terms of the Letter within the
Letter period, he or she agrees to pay the additional sales charges that would have been applicable to the
purchases that were made. The investor agrees that shares equal in value to 2% of the intended purchase
amount will be held in escrow by the Transfer Agent for that purpose, as described in "Terms of Escrow"
below. It is the responsibility of the dealer of record and/or the investor to advise the Distributor about
the Letter when placing purchase orders during the Letter period.

To determine whether an investor has fulfilled the terms of a Letter, the Transfer Agent will count purchases
of "qualified shares" of Class A, Class B and Class C during the Letter period. Purchases of Class N or Class
Y shares, purchases made by reinvestment of dividends or capital gains distributions from the Fund or other
Oppenheimer funds, purchases of Class A shares with redemption proceeds under the Reinvestment Privilege
(described below), and purchases of Class A shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash
Reserves on which a sales charge has not been paid do not count as "qualified shares" for satisfying the
terms of a Letter. In addition, the investor will be considered to have fulfilled the Letter if the value of
the investor's total holdings of qualified shares on the last day of the Letter period, calculated at the net
asset value on that day, equals or exceeds the intended purchase amount.

Beginning on January 1, 2008, investors may also count Class A, Class B, Class C, Class G and Class H unit
purchases in advisor sold Section 529 plans, for which the Manager or the Distributor serves as the Program
Manager or Program Distributor, to your share purchases that qualify for a Letter of Intent. You must notify
the Distributor or your current intermediary of any qualifying 529 plan holdings.

If the terms of the Letter are not fulfilled within the Letter period, 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
on the first business day following the expiration of the Letter period to reflect the sales charge rates
that apply to the actual total purchases. If total eligible purchases during the Letter 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 may be adjusted to the lower rate. That adjustment will only
be made 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 reduced
sales charge adjustment will be made by adding to the investors account the number of additional shares that
would have been purchased if the lower sales charge rate had been used. Those additional shares will be
determined using the net asset value per share in effect on the date of such adjustment.

By establishing a Letter, the investor agrees to be bound by the terms of the Prospectus, this Statement of
Additional Information and the application used for a Letter, and if those terms are amended to be bound by
the amended terms and that any amendments by the Fund will apply automatically to existing Letters. Group
retirement plans qualified under section 401(a) of the Internal Revenue Code may not establish a Letter,
however defined benefit plans and Single K sole proprietor plans may do so.

|X|      Terms of Escrow That Apply to Letters of Intent.
     1.       Out of the initial purchase, or out of subsequent purchases if necessary, the Transfer Agent
     will hold in escrow Fund shares equal to 2% of the intended purchase amount specified in the Letter. For
     example, if the intended purchase amount is $50,000, the escrow amount would be shares valued at $1,000
     (computed at the offering price for a $50,000 share purchase). Any dividends and capital gains
     distributions on the escrowed shares will be credited to the investor's account.
     2.       If the Letter applies to more than one fund account, the investor can designate the fund from
     which shares will be escrowed. If no fund is selected, the Transfer Agent will escrow shares in the fund
     account that has the highest dollar balance on the date of the first purchase under the Letter. If there
     are not sufficient shares to cover the escrow amount, the Transfer Agent will escrow shares in the fund
     account(s) with the next highest balance(s). If there are not sufficient shares in the accounts to which
     the Letter applies, the Transfer Agent may escrow shares in other accounts that are linked for Right of
     Accumulation purposes. Additionally, if there are not sufficient shares available for escrow at the time
     of the first purchase under the Letter, the Transfer Agent will escrow future purchases until the escrow
     amount is met.
     3.       If, during the Letter period, an investor exchanges shares of the Fund for shares of another
     fund (as described in the Prospectus section titled "How to Exchange Shares"), the Fund shares held in
     escrow will automatically be exchanged for shares of the other fund and the escrow obligations will also
     be transferred to that fund.
     4.       If the total purchases under the Letter are less than the intended purchases specified, on the
     first business day after the end of the Letter period the Distributor will redeem escrowed shares equal
     in value 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 purchases had been made at a single time. Any
     shares remaining after such redemption will be released from escrow.
     5.       If the terms of the Letter are fulfilled, the escrowed shares will be promptly released to the
     investor at the end of the Letter period.
     6.       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.


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.


         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 charges or at reduced sales charge rates, as described in Appendix B to this Statement of Additional
Information. Certain special sales charge arrangements described in that Appendix apply to retirement plans whose
records are maintained on a daily valuation basis by Merrill Lynch Pierce Fenner & 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 had less than $1 million in
assets invested in applicable investments (other than assets invested in money market funds), then the retirement
plan may purchase only Class C shares of the Oppenheimer funds. If, on the date the plan sponsor signed the
Merrill Lynch record keeping service agreement, the plan had $1 million or more in assets but less than $5
million in assets invested in applicable investments (other than assets invested in money market funds), then the
retirement plan may purchase only Class N shares of the Oppenheimer funds. If, on the date the plan sponsor
signed the Merrill Lynch record keeping service agreement, the plan had $5 million or more in assets invested in
applicable investments (other than assets invested in money market funds), then the retirement plan may purchase
only Class A shares of the Oppenheimer funds.

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 accounts in 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 a purchase order of more than $100,000 for Class B shares or a purchase
order of $1 million or more to purchase Class C shares on behalf of a single investor (not including dealer
"street name" or omnibus accounts).

Class B, Class C or Class N shares may not be purchased by a new investor directly from the Distributor without
the investor designating another registered broker-dealer.


         Class A Shares Subject to a Contingent Deferred Sales Charge. Under a special arrangement with the
Distributor, 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 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, 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 Class A share purchases by a retirement plan that are made with
the redemption proceeds of Class N shares of an Oppenheimer fund 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 B to this Statement of Additional
                  Information) which have entered into a special agreement with the Distributor for that purpose,

o        to Retirement Plans qualified under Sections 401(a) or 401(k) of the Internal Revenue Code, the
                  recordkeeper or the plan sponsor for which has entered into a special agreement with the
                  Distributor,
o        to Retirement Plans of a plan sponsor where the aggregate assets of all such plans invested in the
                  Oppenheimer funds is $500,000 or more,
o        to Retirement Plans with at least 100 eligible employees or $500,000 or more in plan assets,
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).

Fund Account Fees. As stated in the Prospectus, a $12 annual "Minimum Balance Fee" is assessed on each Fund
account with a share balance valued under $500. The Minimum Balance Fee is automatically deducted from each such
Fund account in September.

         Listed below are certain cases in which the Fund has elected, in its discretion, not to assess the Fund
Account Fees.  These exceptions are subject to change:
o        A fund account whose shares were acquired after September 30th of the prior year;
o        A fund account that has a balance below $500 due to the automatic conversion of shares from Class B to
                  Class A shares. However, once all Class B shares held in the account have been converted to
                  Class A shares the new account balance may become subject to the Minimum Balance Fee;

o        Accounts of shareholders who elect to access their account documents electronically via eDoc Direct;
o        A fund account that has only certificated shares and, has a balance below $500 and is being escheated;
o        Accounts of shareholders that are held by broker-dealers under the NSCC Fund/SERV system in Networking
                  level 1 and 3 accounts;

o        Accounts held under the Oppenheimer Legacy Program and/or holding certain Oppenheimer Variable Account
                  Funds;
o        Omnibus accounts holding shares pursuant to the Pinnacle, Ascender, Custom Plus, Record(k)eeper Pro and
                  Pension Alliance Retirement Plan programs; and
o        A fund account that falls below the $500 minimum solely due to market fluctuations within the 12-month
                  period preceding the date the fee is deducted.

o        Accounts held in the Portfolio Builder Program which is offered through certain broker/dealers to
                  qualifying shareholders.


         To access account documents electronically via eDocs Direct, please visit the Service Center on our
website at www.oppenheimerfunds.com and click the hyperlink "Sign Up for Electronic Document Delivery" under the
heading "I Want To," or call 1.888.470.0862 for instructions.

         The Fund reserves the authority to modify Fund Account Fees in its discretion.

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 NYSE on each day that the NYSE 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 NYSE 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 NYSE'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 NYSE members may conduct trading in certain securities on days on which the NYSE 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 many foreign
stock exchanges and over-the-counter markets normally is completed before the close of the NYSE.

         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 NYSE, 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.

         ?    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 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, 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 New York 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, 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 on the valuation date. If not, the value
shall be the closing bid price on the principal exchange on the valuation date. If the put, call or future is not
traded on an exchange, it shall be valued by the mean between "bid" and "asked" prices obtained by the Manager
from two active market makers. In certain cases that may be at the "bid" price if no "asked" price is available.

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


How to Sell Shares

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

Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of redemption proceeds may be delayed
if the Fund's custodian bank is not open for business on a day when the Fund would normally authorize the wire to
be made, which is usually the Fund's next regular business day following the redemption. In those circumstances,
the wire will not be transmitted until the next bank business day on which the Fund is open for business. No
dividends will be paid on the proceeds of redeemed shares awaiting transfer by Federal Funds wire.

Reinvestment Privilege. Within six months of a redemption, a shareholder may reinvest all or part of the
redemption proceeds of:
o        Class A shares purchased subject to an initial sales charge or Class A shares on which a contingent
              deferred sales charge was paid, or
o        Class B shares that were subject to the Class B contingent deferred sales charge when redeemed.

         The reinvestment may be made without sales charge only in Class A shares of the Fund or any of the other
Oppenheimer funds into which shares of the Fund are exchangeable as described in "How to Exchange Shares" below.
Reinvestment will be at the net asset value next computed after the Transfer Agent receives the reinvestment
order. The shareholder must ask the Transfer Agent for that privilege at the time of reinvestment. This privilege
does not apply to Class C, and Class N 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 $500 or such lesser
amount as the Board may fix. The Board will not cause the involuntary redemption of shares in an account if the
aggregate net asset value of such shares has fallen below the stated minimum solely as a result of market
fluctuations. If the Board exercises this right, it may also fix the requirements for any notice to be given to
the shareholders in question (not less than 30 days). The Board may alternatively set requirements for the
shareholder to increase the investment, or set other terms and conditions so that the shares would not be
involuntarily redeemed.

Transfers of Shares. A transfer of shares to a different registration is not an event that triggers the payment
of sales charges. Therefore, shares are not subject to the payment of a contingent deferred sales charge of any
class at the time of transfer to the name of another person or entity. It does not matter whether the transfer
occurs by absolute assignment, gift or bequest, as long as it does not involve, directly or indirectly, a public
sale of the shares. When shares subject to a contingent deferred sales charge are transferred, the transferred
shares will remain subject to the contingent deferred sales charge. It will be calculated as if the transferee
shareholder had acquired the transferred shares in the same manner and at the same time as the transferring
shareholder.

         If less than all shares held in an account are transferred, and some but not all shares in the account
would be subject to a contingent deferred sales charge if redeemed at the time of transfer, the priorities
described in the Prospectus under "How to Buy Shares" for the imposition of the Class B, Class C and Class N
contingent deferred sales charge will be followed in determining the order in which shares are transferred.

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

         Participants (other than self-employed plan sponsors) in OppenheimerFunds-sponsored pension or
profit-sharing plans with shares of 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 NYSE 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 NYSE closes. Normally, the NYSE closes at 4:00 p.m., but may do so earlier on
some days.

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

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

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


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


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


         |X|  Automatic Exchange Plans. Shareholders can authorize the Transfer Agent to automatically exchange a
pre-determined amount of shares of the Fund for shares (of the same class) of other Oppenheimer funds that offer
the exchange privilege 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.


         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.

         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 California Tax Exempt Trust                       Centennial New York Tax Exempt Trust
     Centennial Government Trust                                  Centennial Tax Exempt Trust
     Centennial Money Market Trust

     The following funds do not offer Class N shares:

     Limited Term New York Municipal Fund                         Oppenheimer Rochester Arizona Municipal Fund
     Oppenheimer AMT-Free Municipals                              Oppenheimer Rochester Maryland Municipal Fund
     Oppenheimer AMT-Free New York Municipals                     Oppenheimer Rochester Massachusetts Municipal Fund
     Oppenheimer California Municipal Fund                        Oppenheimer Rochester Michigan Municipal Fund
     Oppenheimer Institutional Money Market Fund                  Oppenheimer Rochester Minnesota Municipal Fund
     Oppenheimer Limited Term California Municipal Fund           Oppenheimer Rochester National Municipals
     Oppenheimer Limited Term Municipal Fund                      Oppenheimer Rochester North Carolina Municipal Fund
     Oppenheimer Money Market Fund, Inc.                          Oppenheimer Rochester Ohio Municipal Fund
     Oppenheimer New Jersey Municipal Fund                        Oppenheimer Rochester Virginia Municipal Fund
     Oppenheimer Principal Protected Main Street Fund II          Oppenheimer Senior Floating Rate Fund
     Oppenheimer Pennsylvania Municipal Fund                      Rochester Fund Municipals



     The following funds do not offer Class Y shares:

     Limited Term New York Municipal Fund                        Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer AMT-Free Municipals                             Oppenheimer Principal Protected Main Street Fund
     Oppenheimer AMT-Free New York Municipals                    Oppenheimer Principal Protected Main Street Fund II
     Oppenheimer Balanced Fund                                   Oppenheimer Principal Protected Main Street Fund III
     Oppenheimer California Municipal Fund                       Oppenheimer Quest International Value Fund, Inc.
     Oppenheimer Capital Income Fund                              Oppenheimer Rochester Arizona Municipal Fund
     Oppenheimer Cash Reserves                                    Oppenheimer Rochester Maryland Municipal Fund
     Oppenheimer Convertible Securities Fund                      Oppenheimer Rochester Massachusetts Municipal Fund
     Oppenheimer Dividend Growth Fund                             Oppenheimer Rochester Michigan Municipal Fund
     Oppenheimer Equity Income Fund, Inc.                         Oppenheimer Rochester Minnesota Municipal Fund
     Oppenheimer Gold & Special Minerals Fund                     Oppenheimer Rochester National Municipals
     Oppenheimer Institutional Money Market Fund                  Oppenheimer Rochester North Carolina Municipal Fund
     Oppenheimer Limited Term California Municipal Fund           Oppenheimer Rochester Ohio Municipal Fund
     Oppenheimer Limited Term Municipal Fund                      Oppenheimer Rochester Virginia Municipal Fund
     Oppenheimer New Jersey Municipal Fund


o        Oppenheimer Money Market Fund, Inc. only offers Class A and Class Y shares.
o        Oppenheimer Institutional Money Market Fund only offers Class E, Class L and Class P shares.
o        Class B and Class C 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, Inc. or Oppenheimer Cash
         Reserves acquired by exchange of Class M shares.

o        Class A shares of Oppenheimer funds may be exchanged at net asset value for shares of certain money
         market funds offered by the Distributor. Shares of certain money market funds purchased without a sales
         charge may be exchanged for shares of Oppenheimer funds offered with a sales charge upon payment of the
         sales charge.

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 the same class of any of the
         other Oppenheimer funds into which you may exchange shares.
o        Shares of Oppenheimer Principal Protected Main Street Fund may be exchanged at net asset value for
         shares of the same class of any of the other Oppenheimer funds into which you may exchange shares.
         However, shareholders are not permitted to exchange shares of other Oppenheimer funds for shares of
         Oppenheimer Principal Protected Main Street Fund until after the expiration of the warranty period
         (8/5/2010).
o        Shares of Oppenheimer Principal Protected Main Street Fund II may be exchanged at net asset value for
         shares of the same class of any of the other Oppenheimer funds into which you may exchange shares.
         However, shareholders are not permitted to exchange shares of other Oppenheimer funds for shares of
         Oppenheimer Principal Protected Main Street Fund II until after the expiration of the warranty period
         (3/3/2011).
o        Shares of Oppenheimer Principal Protected Main Street Fund III may be exchanged at net asset value for
         shares of the same class of any of the other Oppenheimer funds into which you may exchange shares.
         However, shareholders are not permitted to exchange shares of other Oppenheimer funds for shares of
         Oppenheimer Principal Protected Main Street Fund III until after the expiration of the warranty period
         (12/16/2011).

o        Class A, Class B, Class C and Class N shares of Oppenheimer Developing Markets Fund may be acquired by
         exchange only with a minimum initial investment of $50,000. An existing shareholder of that fund may
         make additional exchanges into that fund with as little as $50.
o        Shares of Oppenheimer International Small Company Fund may be acquired only by existing shareholders of
         that fund. Existing shareholders may make exchanges into the fund with as little as $50.
o        In most cases, shares of Oppenheimer Small- & Mid-Cap Value Fund may be acquired only by shareholders
         who currently own shares of that fund.
o        Oppenheimer Global Value Fund only offers Class A and Class Y shares. Class Y shares of that fund may be
         acquired only by participants in certain group retirement plans that have an agreement with the
         Distributor.


         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 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. Except, however, with respect to Class A
shares of Oppenheimer Rochester National Municipals and Rochester Fund Municipals acquired prior to October 22,
2007, in which case the Class A contingent deferred sales charge is imposed on the acquired shares if they are
redeemed within 24 months measured from the beginning of the calendar month of the initial purchase of the
exchanged Class A shares.

o        When Class A shares of Oppenheimer Rochester National Municipals and Rochester Fund Municipals acquired
prior to October 22, 2007 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        Except with respect to the Class B shares described in the next two paragraphs, the 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 B shares of Oppenheimer Limited Term California Municipal Fund, Oppenheimer
Limited-Term Government Fund, Oppenheimer Limited Term Municipal Fund, Limited Term New York Municipal Fund and
Oppenheimer Senior Floating Rate Fund, the Class B contingent deferred sales charge is imposed on the acquired
shares if they are redeemed within five years of the initial purchase of the exchanged Class B shares.

o        With respect to Class B shares of Oppenheimer Cash Reserves that were acquired through the exchange of
Class B shares initially purchased in the Oppenheimer Capital Preservation Fund, the Class B contingent deferred
sales charge is imposed on the acquired shares if they are redeemed within five years of that initial purchase.

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|  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.

         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 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 features that
are available in the new fund (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.

         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 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 advisors 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.


         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.

         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.

         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. The Fund may be
subject to U.S. Federal income tax, and an interest charge, on certain distributions or gains from the sale of
shares of a foreign company considered to be a PFIC, even if those amounts are paid out as dividends to
shareholders. To avoid imposition of the interest charge, the Fund may elect to "mark to market" all PFIC shares
that it holds at the end of each taxable year. In that case, any increase or decrease in the value of those
shares would be recognized as ordinary income or as ordinary loss (but only to the extent of previously
recognized "mark-to-market" gains).


         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 28% 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). Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and
all income and any tax withheld is identified in reports mailed to shareholders in January of each year with a
copy sent to the IRS.

         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.


         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. Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and all
income and any tax withheld is identified in reports mailed to shareholders in March of each year with a copy
sent to the IRS.

         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
28% on ordinary income dividends, capital gains distributions and the proceeds of the redemption of shares, paid
to any foreign person. Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and all income
and any tax withheld is identified in reports mailed to shareholders in January of each year with a copy sent to
the IRS.

         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 into which you may
exchange shares. 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 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 Registered Public Accounting Firm. KPMG LLP serves as the independent registered public accounting
firm for the Fund.  KPMG LLP audits the Fund's financial statements and performs other related audit services.
KPMG LLP also acts as the independent registered public accounting firm for the Manager and certain other funds
advised by the Manager and its affiliates. Audit and non-audit services provided by KPMG LLP to the Fund must be
pre-approved by the Audit Committee.



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER BALANCED FUND:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Balanced Fund, including the statement of investments, as of
September 30, 2007, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). 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 September 30, 2007, by correspondence
with the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Balanced Fund as of September 30, 2007, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with U.S.
generally accepted accounting principles.

KPMG LLP

Denver, Colorado
November 16, 2007

STATEMENT OF INVESTMENTS  September 30, 2007
- --------------------------------------------------------------------------------

                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--48.0%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--5.8%
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.6%
Liberty Media Holding Corp.-Interactive,
   Series A 1                                         368,700   $     7,082,727
- --------------------------------------------------------------------------------
MEDIA--4.7%
Liberty Global, Inc., Series A 1                      635,277        26,059,063
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series C 1                      644,261        24,907,130
                                                                ----------------
                                                                     50,966,193
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.5%
Office Depot, Inc. 1                                  240,900         4,967,358
- --------------------------------------------------------------------------------
CONSUMER STAPLES--5.6%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.8%
Costco Wholesale Corp.                                311,500        19,116,755
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.3%
ConAgra Foods, Inc.                                   126,100         3,294,993
- --------------------------------------------------------------------------------
TOBACCO--3.5%
Altria Group, Inc.                                    320,300        22,270,459
- --------------------------------------------------------------------------------
Loews Corp./Carolina Group                            185,800        15,278,334
                                                                ----------------
                                                                     37,548,793

- --------------------------------------------------------------------------------
ENERGY--3.0%
- --------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS--3.0%
BP plc, ADR                                            87,800         6,088,930
- --------------------------------------------------------------------------------
Exxon Mobil Corp.                                     190,200        17,604,912
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA, ADR                            55,800         4,212,900
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA, Preference                    129,000         4,176,841
                                                                ----------------
                                                                     32,083,583

- --------------------------------------------------------------------------------
FINANCIALS--7.8%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--2.3%
E*TRADE Financial Corp. 1                             365,500         4,773,430
- --------------------------------------------------------------------------------
UBS AG                                                358,040        19,251,281
                                                                ----------------
                                                                     24,024,711

- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.5%
Wachovia Corp.                                        325,462        16,321,919
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.2%
Bank of America Corp.                                 111,854         5,622,901
- --------------------------------------------------------------------------------
Citigroup, Inc.                                       162,800         7,597,876
                                                                ----------------
                                                                     13,220,777


                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE--2.3%
AMBAC Financial Group, Inc.                            75,000   $     4,718,250
- --------------------------------------------------------------------------------
Everest Re Group Ltd.                                  77,400         8,532,576
- --------------------------------------------------------------------------------
National Financial Partners Corp.                      99,100         5,250,318
- --------------------------------------------------------------------------------
Platinum Underwriters Holdings Ltd.                   173,800         6,249,848
                                                                ----------------
                                                                     24,750,992

- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.5%
Freddie Mac                                            89,000         5,251,890
- --------------------------------------------------------------------------------
HEALTH CARE--5.6%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.5%
deCODE genetics, Inc. 1                               340,500         1,181,535
- --------------------------------------------------------------------------------
Human Genome Sciences, Inc. 1                         464,000         4,774,560
- --------------------------------------------------------------------------------
Orexigen Therapeutics, Inc. 1                         315,880         4,172,775
- --------------------------------------------------------------------------------
Vanda Pharmaceuticals, Inc. 1                         457,200         6,359,652
                                                                ----------------
                                                                     16,488,522

- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.8%
Beckman Coulter, Inc.                                  68,000         5,015,680
- --------------------------------------------------------------------------------
Boston Scientific Corp. 1                             261,100         3,642,345
                                                                ----------------
                                                                      8,658,025

- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--1.3%
Medco Health Solutions, Inc. 1                         38,500         3,480,015
- --------------------------------------------------------------------------------
Skilled Healthcare Group, Inc., Cl. A 1               170,100         2,679,075
- --------------------------------------------------------------------------------
WellPoint, Inc. 1                                      98,400         7,765,728
                                                                ----------------
                                                                     13,924,818

- --------------------------------------------------------------------------------
PHARMACEUTICALS--2.0%
Abbott Laboratories                                   102,900         5,517,498
- --------------------------------------------------------------------------------
Medicines Co. (The) 1                                 336,000         5,984,160
- --------------------------------------------------------------------------------
Novartis AG, ADR                                      184,900        10,162,104
                                                                ----------------
                                                                     21,663,762

- --------------------------------------------------------------------------------
INDUSTRIALS--5.6%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.8%
Boeing Co.                                            102,500        10,761,475
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 1                              134,717         2,996,106
- --------------------------------------------------------------------------------
Spirit Aerosystems Holdings, Inc., Cl. A 1            164,570         6,408,356
- --------------------------------------------------------------------------------
United Technologies Corp.                             254,500        20,482,160
                                                                ----------------
                                                                     40,648,097


                                                                          VALUE
                                                       SHARES        SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.2%
Sinomem Technology Ltd. 1                           1,794,000   $     1,600,304
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--1.2%
Siemens AG, Sponsored ADR                              94,400        12,956,400
- --------------------------------------------------------------------------------
MACHINERY--0.4%
Navistar International Corp. 1                         76,600         4,726,220
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--11.8%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.1%
Cisco Systems, Inc. 1                                 288,000         9,535,680
- --------------------------------------------------------------------------------
QUALCOMM, Inc.                                         60,400         2,552,504
                                                                ----------------
                                                                     12,088,184

- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.7%
International Business Machines Corp.                  63,200         7,444,960
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.7%
eBay, Inc. 1                                          227,300         8,869,246
- --------------------------------------------------------------------------------
Google, Inc., Cl. A 1                                   6,000         3,403,620
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1                                        209,300         5,617,612
                                                                ----------------
                                                                     17,890,478

- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.8%
Texas Instruments, Inc.                               245,900         8,997,481
- --------------------------------------------------------------------------------
SOFTWARE--7.5%
Microsoft Corp.                                       911,400        26,849,844
- --------------------------------------------------------------------------------
Novell, Inc. 1                                      1,049,500         8,018,180
- --------------------------------------------------------------------------------
Synopsys, Inc. 1                                      502,100        13,596,868
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1               1,911,047        32,640,683
                                                                ----------------
                                                                     81,105,575

- --------------------------------------------------------------------------------
MATERIALS--2.0%
- --------------------------------------------------------------------------------
CHEMICALS--0.3%
Lubrizol Corp. (The)                                   47,900         3,116,374
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.4%
Texas Industries, Inc.                                 27,300         2,143,050
- --------------------------------------------------------------------------------
Vulcan Materials Co.                                   29,900         2,665,585
                                                                ----------------
                                                                      4,808,635

- --------------------------------------------------------------------------------
METALS & MINING--1.3%
Carpenter Technology Corp.                             44,500         5,785,445
- --------------------------------------------------------------------------------
Companhia Vale do Rio Doce, Sponsored ADR             272,400         7,749,780
                                                                ----------------
                                                                     13,535,225






                                                                                                                    VALUE
                                                                                                     SHARES    SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------

UTILITIES--0.8%
- --------------------------------------------------------------------------------------------------------------------------
ENERGY TRADERS--0.8%
AES Corp. (The) 1                                                                                   272,400   $ 5,458,896
- --------------------------------------------------------------------------------------------------------------------------
Dynegy, Inc., Cl. A 1                                                                               321,400     2,969,736
                                                                                                              ------------
                                                                                                                8,428,632
                                                                                                              ------------
Total Common Stocks (Cost $391,317,055)                                                                       516,712,383

                                                                                                      UNITS
- --------------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------------------------------------------------
Lucent Technologies, Inc. Wts., Exp. 12/10/07 1 (Cost $0)                                            11,758           123


                                                                                                  PRINCIPAL
                                                                                                     AMOUNT
- --------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--3.2%
- --------------------------------------------------------------------------------------------------------------------------
Ace Securities Corp. Home Equity Loan Trust, Asset-Backed Pass-Through
Certificates, Series 2005-HE7, Cl. A2B, 5.311%, 11/25/35 2                                      $   890,000       884,683
- --------------------------------------------------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile Asset-Backed Certificates, Series 2005-1A,
Cl. A2, 5.556%, 4/20/08 2,3                                                                         630,000       629,626
- --------------------------------------------------------------------------------------------------------------------------
Argent Securities Trust 2004-W8, Asset-Backed Pass-Through Certificates,
Series 2004-W8, Cl. A2, 5.611%, 5/25/34 2                                                         1,500,534     1,481,857
- --------------------------------------------------------------------------------------------------------------------------
Argent Securities Trust 2006-W5, Asset-Backed Pass-Through Certificates,
Series 2006-W5, Cl. A2B, 5.231%, 5/26/36 2                                                        1,250,000     1,238,399
- --------------------------------------------------------------------------------------------------------------------------
Capital One Prime Auto Receivables Trust, Automobile Asset-Backed
Certificates, Series 2005-1, Cl. A4, 5.773%, 4/15/11 2                                            4,970,000     4,944,672
- --------------------------------------------------------------------------------------------------------------------------
Centex Home Equity Loan Trust 2005-D, Asset-Backed Certificates,
Series 2005-D, Cl. AV2, 5.401%, 10/25/35 2                                                          644,198       642,457
- --------------------------------------------------------------------------------------------------------------------------
Centex Home Equity Loan Trust 2006-A, Asset-Backed Certificates,
Series 2006-A, Cl. AV2, 5.231%, 5/16/36 2                                                         1,570,000     1,558,885
- --------------------------------------------------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust, Credit Card Receivable Nts.,
Series 2003-C4, Cl. C4, 5%, 6/10/15                                                                 310,000       292,063
- --------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc. 2005-WF2, Asset-Backed Pass-Through
Certificates, Series 2005-WF2, Cl. AF2, 4.922%, 8/25/35 2                                           213,316       212,851
- --------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2002-4, Asset-Backed Certificates,
Series 2002-4, Cl. A1, 5.871%, 2/25/33 2                                                             31,485        29,846
- --------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-11, Asset-Backed Certificates,
Series 2005-11, Cl. AF2, 4.657%, 2/25/36                                                            650,000       644,223
- --------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-16, Asset-Backed Certificates,
Series 2005-16, Cl. 2AF2, 5.382%, 5/25/36 2                                                       1,700,000     1,681,243
- --------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2005-17, Asset-Backed Certificates:
Series 2005-17, Cl. 1AF1, 5.331%, 5/25/36 2                                                         251,151       250,748
Series 2005-17, Cl. 1AF2, 5.363%, 5/25/36 2                                                         420,000       415,884
- --------------------------------------------------------------------------------------------------------------------------
CWABS Asset-Backed Certificates Trust 2006-25, Asset-Backed Certificates,
Series 2006-25, Cl. 2A2, 5.251%, 12/25/29 2                                                         920,000       900,533








                                                                                                  PRINCIPAL         VALUE
                                                                                                     AMOUNT    SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------

ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2005-FF10, Mtg. Pass-Through
Certificates, Series 2005-FF10, Cl. A3, 5.341%, 11/25/35 2                                      $ 2,600,000   $ 2,563,165
- --------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF10, Mtg. Pass-Through
Certificates, Series 2006-FF10, Cl. A3, 5.221%, 7/25/36 2                                         1,230,000     1,207,194
- --------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF5, Mtg. Pass-Through
Certificates, Series 2006-FF5, Cl. 2A1, 5.181%, 5/15/36 2                                           344,451       342,934
- --------------------------------------------------------------------------------------------------------------------------
First Franklin Mortgage Loan Trust 2006-FF9, Mtg. Pass-Through
Certificates, Series 2006-FF9, Cl. 2A2, 5.241%, 7/7/36 2                                            620,000       606,439
- --------------------------------------------------------------------------------------------------------------------------
Ford Credit Auto Owner Trust, Automobile Loan Pass-Through
Certificates, Series 2005-A, Cl. A3, 3.48%, 11/17/08                                                 60,734        60,695
- --------------------------------------------------------------------------------------------------------------------------
Honda Auto Receivables Owner Trust, Automobile Receivable Obligations,
Series 2005-2, Cl. A4, 4.15%, 10/15/10                                                              920,000       912,698
- --------------------------------------------------------------------------------------------------------------------------
Household Home Equity Loan Trust, Home Equity Loan Pass-Through Certificates:
Series 2005-3, Cl. A1, 5.798%, 1/20/35 2                                                            649,052       633,615
Series 2006-4, Cl. A2V, 5.606%, 3/20/36 2,4                                                         340,000       335,360
- --------------------------------------------------------------------------------------------------------------------------
Lehman XS Trust, Mtg. Pass-Through Certificates, Series 2005-2, Cl. 2A1B,
5.18%, 8/25/35 2                                                                                    581,336       581,377
- --------------------------------------------------------------------------------------------------------------------------
Litigation Settlement Monetized Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31 4                                                            403,622       401,681
- --------------------------------------------------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust, Credit Card Receivables,
Series 2003-C7, Cl. C7, 7.103%, 3/15/16 2                                                         2,900,000     2,870,288
- --------------------------------------------------------------------------------------------------------------------------
Option One Mortgage Loan Trust, Asset-Backed Certificates, Series 2006-2,
Cl. 2A2, 5.231%, 7/1/36 2                                                                         2,060,000     2,031,492
- --------------------------------------------------------------------------------------------------------------------------
Popular ABS Mortgage Pass-Through Trust 2005-2, Mtg. Pass-Through
Certificates, Series 2005-2, Cl. AF2, 4.415%, 4/25/35 2                                              98,391        98,041
- --------------------------------------------------------------------------------------------------------------------------
RAMP Series 2004-RS7 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2004-RS7, Cl. AI32, 4.45%, 7/25/28                                                           170,406       169,653
- --------------------------------------------------------------------------------------------------------------------------
RAMP Series 2006-RS4 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2006-RS4, Cl. A1, 5.211%, 7/25/36 2                                                          374,869       373,537
- --------------------------------------------------------------------------------------------------------------------------
RASC Series 2006-KS7 Trust, Home Equity Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-KS7, Cl. A2, 5.231%, 9/25/36 2                                          1,500,000     1,474,440
- --------------------------------------------------------------------------------------------------------------------------
Specialty Underwriting & Residential Finance Trust, Home Equity
Asset-Backed Obligations, Series 2005-BC3, Cl. A2B, 5.381%, 6/25/36 2                             1,155,979     1,152,215
- --------------------------------------------------------------------------------------------------------------------------
Structured Asset Investment Loan Trust, Mtg. Pass-Through Certificates:
Series 2006-2, Cl. A1, 5.191%, 4/25/36 2                                                            257,074       256,312
Series 2006-BNC3, Cl. A2, 5.171%, 9/25/36 2                                                       1,026,727     1,018,479
- --------------------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Mtg. Pass-Through Certificates,
Series 2005-4XS, Cl. 3A1, 5.18%, 3/26/35                                                            481,976       482,741
- --------------------------------------------------------------------------------------------------------------------------
Wells Fargo Home Equity Asset-Backed Securities 2006-2 Trust, Home
Equity Asset-Backed Certificates, Series 2006-2, Cl. A2, 5.42%,7/25/36 2                          1,230,000     1,215,641
                                                                                                              ------------
Total Asset-Backed Securities (Cost $35,056,677)                                                               34,595,967





                                                                                                  PRINCIPAL         VALUE
                                                                                                     AMOUNT    SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------

MORTGAGE-BACKED OBLIGATIONS--33.2%
- --------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--22.2%
- --------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--22.1%
Federal Home Loan Mortgage Corp.:
4.50%, 5/15/18-5/15/19                                                                          $ 6,616,731   $ 6,382,068
5%, 8/15/33-12/15/34                                                                              2,231,065     2,135,941
6%, 4/15/17-3/15/33                                                                               1,950,252     1,966,849
6.50%, 4/15/18-4/15/34                                                                            4,374,656     4,493,452
7%, 5/15/29-11/15/32                                                                              2,825,377     2,935,573
8%, 4/15/16                                                                                          47,160        49,857
9%, 8/15/22-5/15/25                                                                                  13,951        15,002
- --------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., CMO Gtd. Real Estate Mtg. Investment
Conduit Multiclass Pass-Through Certificates:
Series 151, Cl. F, 9%, 5/15/21                                                                       31,477        31,434
Series 2006-11, Cl. PS, 5.752%, 3/25/36 2                                                           705,804       733,862
Series 2034, Cl. Z, 6.50%, 2/15/28                                                                  400,514       412,633
Series 2043, Cl. ZP, 6.50%, 4/15/28                                                               1,143,540     1,176,907
Series 2053, Cl. Z, 6.50%, 4/15/28                                                                  423,384       437,288
Series 2055, Cl. ZM, 6.50%, 5/15/28                                                                 560,596       575,125
Series 2075, Cl. D, 6.50%, 8/15/28                                                                1,377,715     1,422,427
Series 2080, Cl. Z, 6.50%, 8/15/28                                                                  854,328       881,896
Series 2387, Cl. PD, 6%, 4/15/30                                                                     15,399        15,368
Series 2427, Cl. ZM, 6.50%, 3/15/32                                                               1,494,857     1,546,024
Series 2500, Cl. FD, 6.253%, 3/15/32 2                                                              168,462       169,710
Series 2526, Cl. FE, 6.153%, 6/15/29 2                                                              249,131       250,316
Series 2551, Cl. FD, 6.153%, 1/15/33 2                                                              192,271       192,982
Series 2592, Cl. F, 6.503%, 12/15/32 2                                                            3,780,473     3,831,183
Series 3025, Cl. SJ, 3.658%, 8/15/35 2                                                              153,954       159,736
- --------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed
Security:
Series 176, Cl. IO, 7.32%, 6/1/26 5                                                                 333,338        82,942
Series 183, Cl. IO, 5.03%, 4/1/27 5                                                                 527,100       130,647
Series 184, Cl. IO, 10.63%, 12/1/26 5                                                               573,190       146,150
Series 192, Cl. IO, 11.48%, 2/1/28 5                                                                164,192        42,111
Series 200, Cl. IO, 10.52%, 1/1/29 5                                                                197,909        51,604
Series 2003-118, Cl. S, 8.04%, 12/25/33 5                                                         3,115,275       413,016
Series 2005-87, Cl. SE, (1)%, 10/25/35 5                                                          5,382,489       237,755
Series 2005-87, Cl. SG, 6.71%, 10/25/35 5                                                         5,039,487       322,840
Series 2130, Cl. SC, (5.20)%, 3/15/29 5                                                             426,697        34,076
Series 216, Cl. IO, 11.77%, 12/1/31 5                                                               376,907        94,182
Series 224, Cl. IO, 7.36%, 3/1/33 5                                                               1,168,618       294,582
Series 243, Cl. 6, 9.32%, 12/15/32 5                                                                725,312       183,612
Series 2796, Cl. SD, (6.08)%, 7/15/26 5                                                             634,478        50,817
Series 2802, Cl. AS, (3.83)%, 4/15/33 5                                                           1,155,870        67,899
Series 2920, Cl. S, (10.25)%, 1/15/35 5                                                           3,583,730       186,263
Series 3000, Cl. SE, (11.22)%, 7/15/25 5                                                          3,758,455       156,823
Series 3110, Cl. SL, 8.70%, 2/15/26 5                                                               615,862        24,786






                                                                                                  PRINCIPAL         VALUE
                                                                                                     AMOUNT    SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------

FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp., Principal-Only Stripped Mtg.-Backed
Security:
Series 176, Cl. PO, 5.53%, 6/1/26 6                                                             $   141,615   $   111,682
Series 192, Cl. PO, 6.73%, 2/1/28 6                                                                 164,192       126,266
- --------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 5/25/18-8/25/20                                                                           19,948,272    19,254,392
5%, 12/25/17-9/25/35                                                                             49,091,948    47,667,646
5.50%, 10/25/19-11/25/34                                                                         43,995,438    43,270,008
5.50%, 10/1/21-10/1/36 7                                                                          5,941,000     5,836,250
6%, 9/25/19-11/25/33                                                                             21,264,094    21,430,927
6%, 10/1/21-10/1/36 7                                                                             5,261,995     5,310,979
6.50%, 6/25/17-11/25/31                                                                          10,748,743    11,047,202
7%, 11/25/17-1/25/35                                                                              4,292,274     4,462,358
7.50%, 1/25/08-1/25/33                                                                              450,893       473,068
8.50%, 7/25/32                                                                                       21,207        22,803
- --------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Grantor Trust, CMO, Trust 2002-T1, Cl. A2,
7%, 11/25/31                                                                                      1,225,198     1,271,388
- --------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., CMO Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates:
Trust 1992-15, Cl. KZ, 7%, 2/25/22                                                                   64,126        64,933
Trust 1993-215, Cl. ZQ, 6.50%, 11/25/23                                                           1,338,364     1,370,064
Trust 1993-87, Cl. Z, 6.50%, 6/25/23                                                              1,049,308     1,090,039
Trust 1996-35, Cl. Z, 7%, 7/25/26                                                                   193,522       201,015
Trust 1998-61, Cl. PL, 6%, 11/25/28                                                                 648,181       659,439
Trust 2001-44, Cl. QC, 6%, 9/25/16                                                                1,945,510     1,998,337
Trust 2001-50, Cl. NE, 6%, 8/25/30                                                                   33,627        33,455
Trust 2001-51, Cl. OD, 6.50%, 10/25/31                                                            1,482,367     1,517,724
Trust 2001-70, Cl. LR, 6%, 9/25/30                                                                  135,397       135,775
Trust 2001-82, Cl. ZA, 6.50%, 1/25/32                                                               592,729       608,599
Trust 2003-130, Cl. CS, 3.838%, 12/25/33 2                                                        1,017,063       939,147
Trust 2003-17, Cl. EQ, 5.50%, 3/25/23                                                             1,138,000     1,106,706
Trust 2003-28, Cl. KG, 5.50%, 4/25/23                                                             1,045,000     1,021,517
Trust 2003-84, Cl. PW, 3%, 6/25/22                                                                  673,334       667,561
Trust 2004-101, Cl. BG, 5%, 1/25/20                                                               1,869,000     1,830,479
Trust 2005-59, Cl. NQ, 4.047%, 5/25/35 2                                                            760,581       710,225
Trust 2005-71, Cl. DB, 4.50%, 8/25/25                                                               160,000       146,388
Trust 2006-24, Cl. DB, 5.50%, 4/25/26                                                             4,010,000     3,963,616
Trust 2006-44, Cl. OA, 5.50%, 12/25/26                                                            2,817,282     2,830,246
Trust 2006-46, Cl. SW, 5.385%, 6/25/36 2                                                            554,876       570,557
Trust 2006-50, Cl. KS, 5.385%, 6/25/36 2                                                          1,375,615     1,342,747
Trust 2006-50, Cl. SA, 5.385%, 6/25/36 2                                                            447,968       438,962
Trust 2006-50, Cl. SK, 5.385%, 6/25/36 2                                                          1,248,962     1,253,798
Trust 2006-57, Cl. PA, 5.50%, 8/25/27                                                             3,435,689     3,450,343
Trust 2006-64, Cl. MD, 5.50%, 7/25/36                                                             5,101,000     4,940,021
- --------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed
Security:
Trust 1993-223, Cl. PM, 11.86%, 10/25/23 5                                                           27,953         1,539
Trust 2001-65, Cl. S, 6.48%, 11/25/31 5                                                           1,719,061       191,877






                                                                                                  PRINCIPAL          VALUE
                                                                                                     AMOUNT     SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------------------

FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed
Security: Continued
Trust 2001-81, Cl. S, 0.44%, 1/25/32 5                                                          $   367,158   $     39,131
Trust 2002-38, Cl. IO, (5.99)%, 4/25/32 5                                                           603,974         38,866
Trust 2002-47, Cl. NS, (0.20)%, 4/25/32 5                                                           726,234         70,215
Trust 2002-51, Cl. S, (0.08)%, 8/25/32 5                                                            666,845         65,032
Trust 2002-52, Cl. SD, (3.28)%, 9/25/32 5                                                           743,940         72,043
Trust 2002-77, Cl. IS, (0.19)%, 12/18/32 5                                                        1,028,992        102,123
Trust 2002-77, Cl. SH, 1.28%, 12/18/32 5                                                            484,281         48,590
Trust 2002-9, Cl. MS, 0.67%, 3/25/32 5                                                              504,681         48,925
Trust 2002-96, Cl. SK, 8.08%, 4/25/32 5                                                           4,587,970        458,971
Trust 2003-33, Cl. SP, 9.36%, 5/25/33 5                                                           1,772,535        225,835
Trust 2003-4, Cl. S, 7.36%, 2/25/33 5                                                               944,058        111,341
Trust 2003-46, Cl. IH, 6.96%, 6/25/33 5                                                           6,287,758      1,260,931
Trust 2004-54, Cl. DS, (7.66)%, 11/25/30 5                                                          695,537         45,477
Trust 2005-19, Cl. SA, (4.86)%, 3/25/35 5                                                         9,436,175        530,673
Trust 2005-40, Cl. SA, (5.33)%, 5/25/35 5                                                         2,016,753        106,959
Trust 2005-6, Cl. SE, (3.44)%, 2/25/35 5                                                          2,539,032        126,458
Trust 2005-71, Cl. SA, (2.22)%, 8/25/25 5                                                         2,369,298        154,973
Trust 2006-33, Cl. SP, 10.75%, 5/25/36 5                                                          5,593,832        466,248
Trust 214, Cl. 2, 18%, 3/1/23 5                                                                     909,730        214,034
Trust 222, Cl. 2, 14.26%, 6/1/23 5                                                                1,214,302        286,610
Trust 240, Cl. 2, 19.20%, 9/1/23 5                                                                1,919,499        515,644
Trust 247, Cl. 2, 12.63%, 10/1/23 5                                                                 240,757         62,675
Trust 252, Cl. 2, 12.85%, 11/1/23 5                                                                 896,331        241,288
Trust 273, Cl. 2, 14.05%, 8/1/26 5                                                                  254,491         64,477
Trust 319, Cl. 2, 12.22%, 2/1/32 5                                                                  361,768         90,394
Trust 321, Cl. 2, 7.45%, 4/1/32 5                                                                 3,697,992        934,802
Trust 331, Cl. 9, 9.06%, 2/1/33 5                                                                   122,159         29,069
Trust 334, Cl. 17, 22.65%, 2/1/33 5                                                                 593,409        148,807
Trust 339, Cl. 7, 7.91%, 7/1/33 5                                                                 2,632,432        608,285
Trust 342, Cl. 2, 11.49%, 9/1/33 5                                                                  449,675        114,998
Trust 344, Cl. 2, 8.94%, 12/1/33 5                                                                7,025,291      1,798,670
Trust 345, Cl. 9, 8.72%, 1/1/34 5                                                                 1,603,801        373,769
Trust 362, Cl. 12, 6.81%, 8/1/35 5                                                                5,238,994      1,199,535
Trust 362, Cl. 13, 6.83%, 8/1/35 5                                                                2,908,608        668,772
- ---------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed
Security, Trust 1993-184, Cl. M, 5.48%, 9/25/23 6                                                   436,815        373,590
                                                                                                              -------------
                                                                                                               237,404,026

- --------------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--0.1%
Government National Mortgage Assn.:
6.375%, 4/8/26 2                                                                                     22,127        22,372
7%, 4/29/09-4/29/26                                                                                 213,961       224,002
7.50%, 3/29/09-5/29/27                                                                              804,067       844,125
8%, 5/30/17                                                                                          31,228        33,005
8.50%, 8/15/17-12/29/17                                                                              19,873        21,257







                                                                                                  PRINCIPAL         VALUE
                                                                                                     AMOUNT    SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------

GNMA/GUARANTEED Continued
Government National Mortgage Assn., Interest-Only Stripped Mtg.-Backed
Security:
Series 2001-21, Cl. SB, (2.38)%, 1/16/27 5                                                      $   875,146   $    70,282
Series 2002-15, Cl. SM, (4.60)%, 2/16/32 5                                                          722,213        57,547
Series 2002-76, Cl. SY, (7.29)%, 12/16/26 5                                                       1,721,020       122,687
Series 2004-11, Cl. SM, (6.20)%, 1/17/30 5                                                          578,692        42,460
                                                                                                              ------------
                                                                                                                1,437,737

- --------------------------------------------------------------------------------------------------------------------------
NON-AGENCY--11.0%
- --------------------------------------------------------------------------------------------------------------------------
COMMERCIAL--4.8%
Banc of America Commercial Mortgage, Inc., Commercial Mtg. Pass-Through
Certificates, Series 2005-3, Cl. A2, 4.501%, 7/10/43                                              1,810,000     1,785,637
- --------------------------------------------------------------------------------------------------------------------------
Banc of America Funding Corp., CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32                                                            1,125,767     1,142,466
- --------------------------------------------------------------------------------------------------------------------------
Banc of America Mortgage Securities, Inc., CMO Pass-Through Certificates,
Series 2004-8, Cl. 5A1, 6.50%, 5/25/32                                                              931,947       940,597
- --------------------------------------------------------------------------------------------------------------------------
ChaseFlex Trust 2006-2, Multiclass Mtg. Pass-Through Certificates,
Series 2006-2, Cl. A1B, 5.231%, 8/25/08 2                                                           555,757       555,201
- --------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc. 2006-WF1, Asset-Backed Pass-Through
Certificates, Series 2006-WF1, Cl. A2B, 5.536%, 3/1/36                                              460,000       459,092
- --------------------------------------------------------------------------------------------------------------------------
Citigroup/Deutsche Bank Commercial Mortgage Trust, Commercial Mtg.
Obligations, Series 2007-CD4, Cl. A2B, 5.205%, 12/11/49 4                                         2,150,000     2,142,653
- --------------------------------------------------------------------------------------------------------------------------
CitiMortgage Alternative Loan Trust 2006-A5, Mtg. Pass-Through
Certificates, Series 2006-A5, Cl. 1A1, 5.531%, 10/25/36 2                                         3,056,907     3,030,970
- --------------------------------------------------------------------------------------------------------------------------
Deutsche Alt-A Securities Mortgage Loan Trust, Mtg. Pass-Through Certificates:
Series 2006-AB2, Cl. A7, 5.961%, 6/25/36                                                          1,028,159     1,028,504
Series 2006-AB4, Cl. A1A, 6.005%, 10/25/36                                                        2,090,760     2,084,180
Series 2006-AB3, Cl. A7, 6.36%, 4/25/08                                                             303,416       303,851
- --------------------------------------------------------------------------------------------------------------------------
First Horizon Alternative Mortgage Securities Trust, Mtg. Pass-Through
Certificates, Series 2007-FA2, Cl. 1A1, 5.50%, 4/25/37                                            1,072,727     1,071,080
- --------------------------------------------------------------------------------------------------------------------------
First Union National Bank/Lehman Brothers/Bank of America Commercial
Mtg. Trust, Pass-Through Certificates, Series 1998-C2, Cl. A2, 6.56%, 11/18/35                      634,046       635,210
- --------------------------------------------------------------------------------------------------------------------------
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2004-C3, Cl. A2, 4.433%, 7/10/39                                                             960,000       951,200
Series 2005-C3, Cl. A2, 4.853%, 7/10/45                                                           1,080,000     1,075,281
- --------------------------------------------------------------------------------------------------------------------------
Greenwich Capital Commercial Funding Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-GG3, Cl. A2, 4.305%, 8/10/42                                                          1,520,000     1,498,548
Series 2005-GG5, Cl. A2, 5.117%, 4/10/37                                                          1,200,000     1,202,956
Series 2007-GG9, Cl. A2, 5.381%, 3/10/39 4                                                        4,440,000     4,453,631
- --------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-LDP2, Cl. A2, 4.575%, 7/15/42                                                           440,000       434,821





                                                                                                        PRINCIPAL            VALUE
                                                                                                           AMOUNT       SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------

COMMERCIAL Continued
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg.
Pass-Through Certificates: Continued
Series 2005-LDP4, Cl. A2, 4.79%, 10/15/42                                                              $ 1,560,000   $    1,549,119
Series 2007-LDPX, Cl. A2S, 5.305%, 1/15/49                                                                 410,000          409,255
Series 2006-CB14, Cl. A4, 5.481%, 12/12/44                                                               2,270,000        2,269,299
Series 2007-LD12, Cl. A2, 5.827%, 2/15/51                                                                1,020,000        1,038,842
- ------------------------------------------------------------------------------------------------------------------------------------
LB-UBS Commercial Mortgage Trust, Commercial Mtg. Pass-Through
Certificates:
Series 2005-C5, Cl. A2, 4.885%, 9/15/30                                                                  1,280,000        1,277,039
Series 2007-C1, Cl. A2, 5.318%, 1/15/12                                                                  1,780,000        1,783,327
- ------------------------------------------------------------------------------------------------------------------------------------
Mastr Alternative Loan Trust, CMO Pass-Through Certificates:
Series 2004-9, Cl. A3, 4.70%, 8/25/34 2                                                                    319,820          318,827
Series 2004-6, Cl. 10A1, 6%, 7/25/34                                                                     1,448,908        1,452,213
- ------------------------------------------------------------------------------------------------------------------------------------
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates,
Series 1998-D6, Cl. A1B, 6.59%, 3/15/30                                                                  2,000,979        2,008,559
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 4                                          1,554,000        1,665,876
- ------------------------------------------------------------------------------------------------------------------------------------
RALI Series 2003-QS1 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2003-QS1, Cl. A2, 5.75%, 1/25/33                                                                    686,681          689,531
- ------------------------------------------------------------------------------------------------------------------------------------
RALI Series 2007-QS6 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2007-QS6, Cl. A114, 5.75%, 4/25/37                                                                1,467,537        1,471,505
- ------------------------------------------------------------------------------------------------------------------------------------
Residential Asset Securitization Trust 2006-A9CB, CMO Pass-Through
Certificates, Series 2006-A9CB, Cl. A5, 6%, 9/25/36                                                      2,008,976        2,010,900
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust 2005-C17, Commercial Mtg.
Pass-Through Certificates, Series 2005-C17, Cl. A2, 4.782%, 3/15/42                                      2,490,000        2,476,620
- ------------------------------------------------------------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust 2006-C29, Commercial Mtg.
Pass-Through Certificates, Series 2006-C29, Cl. A2, 5.272%, 11/15/48                                       492,000          492,326
- ------------------------------------------------------------------------------------------------------------------------------------
WAMU, Mtg. Pass-Through Certificates:
Series 2003-AR9, Cl. 2A, 4.048%, 9/25/33 2                                                               1,471,827        1,456,860
Series 2006-AR8, Cl. 2A1, 6.134%, 8/25/36 2                                                              4,357,890        4,390,100
                                                                                                                     ---------------
                                                                                                                         51,556,076

- ------------------------------------------------------------------------------------------------------------------------------------
MANUFACTURED HOUSING--0.7%
Wells Fargo Mortgage-Backed Securities 2006-AR12 Trust, Mtg.
Pass-Through Certificates, Series 2006-AR12, Cl. 2A1, 6.10%, 9/25/36 2                                   3,373,568        3,416,350
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR2 Trust, Mtg. Pass-Through
Certificates, Series 2006-AR2, Cl. 2A5, 5.095%, 3/25/36 2                                                3,941,725        3,909,567
                                                                                                                     ---------------
                                                                                                                          7,325,917

- ------------------------------------------------------------------------------------------------------------------------------------
MULTIFAMILY--3.7%
Banc of America Mortgage Securities, Inc., CMO Pass-Through Certificates:
Series 2003-E, Cl. 2A2, 4.35%, 6/25/33 2                                                                 2,500,972        2,524,813
Series 2005-F, Cl. 2A3, 4.718%, 7/25/35 2                                                                2,818,808        2,790,971









                                                                                                        PRINCIPAL            VALUE
                                                                                                           AMOUNT       SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------

MULTIFAMILY Continued
Bear Stearns ARM Trust 2006-4, Mtg. Pass-Through Certificates,
Series 2006-4, Cl. 2A1, 5.81%, 10/25/36 2                                                              $ 1,555,769   $    1,566,340
- ------------------------------------------------------------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust, Inc. 2006-AR5, Mtg. Pass-Through
Certificates, Series 2006-AR5, Cl. 1A3A, 5.903%, 7/25/36 2                                               1,159,298        1,176,806
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Alternative Loan Trust, CMO:
Series 2008-85CB, Cl. 2A3, 5.50%, 2/25/36                                                                1,730,000        1,691,864
Series 2004-28CB, Cl. 2A4, 5.75%, 1/25/35                                                                2,325,000        2,178,913
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Home Loans Servicing LP, Mtg. Pass-Through Certificates,
Series 2007-HY1, Cl. 1A1, 5.702%, 4/25/37 2                                                              2,814,579        2,814,831
- ------------------------------------------------------------------------------------------------------------------------------------
Countrywide Home Loans, CMO:
Series 2003-46, Cl. 1A2, 4.129%, 1/19/34 2                                                               2,056,510        2,064,137
Series 2005-HYB1, Cl. 5A1, 5.001%, 3/25/35 2                                                             2,636,007        2,584,111
- ------------------------------------------------------------------------------------------------------------------------------------
GMAC Mortgage Corp. Loan Trust, Mtg. Pass-Through Certificates:
Series 2005-AR4, Cl. 2A1, 5.295%, 7/19/35 2                                                              3,205,344        3,208,433
Series 2004-J4, Cl. A7, 5.50%, 9/25/34                                                                   1,600,000        1,513,407
- ------------------------------------------------------------------------------------------------------------------------------------
GSR Mortgage Loan Trust 2005-AR7, Mtg. Pass-Through Certificates,
Series 2005-AR7, Cl. 3A1, 5.161%, 11/25/35 2                                                             4,535,266        4,523,216
- ------------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors Trust 2007-2, Mtg. Pass-Through
Certificates, Series 2007-2, Cl. 2A1, 6.009%, 6/25/37 2,7                                                3,796,578        3,871,263
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2004-AA Trust, Mtg. Pass-Through
Certificates, Series 2004-AA, Cl. 2A, 4.995%, 12/25/34 2                                                   923,723          915,575
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2004-S Trust, Mtg. Pass-Through
Certificates, Series 2004-S, Cl. A1, 3.539%, 9/25/34 2                                                     769,636          755,666
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2005-AR2 Trust, Mtg. Pass-Through
Certificates, Series 2005-AR2, Cl. 2A2, 4.545%, 3/25/35 2                                                  574,961          569,001
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2005-AR4, Trust, Mtg. Pass-Through
Certificates, Series 2005-AR4, Cl. 2A2, 4.524%, 4/25/35 2                                                  949,896          940,008
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR10 Trust, Mtg. Pass-Through
Certificates:
Series 2006-AR10, Cl. 4A1, 5.56%, 7/25/36 2                                                              1,877,133        1,868,658
Series 2006-AR10, Cl. 2A1, 5.645%, 7/25/36 2                                                             1,434,136        1,432,363
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR2 Trust, Mtg. Pass-Through
Certificates, Series 2006-AR2. Cl. 2A6, 5.091%, 3/25/36 2                                                  758,658          754,674
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2006-AR6 Trust, Mtg. Pass-Through
Certificates, Series 2006-AR6, Cl. 3A1, 5.094%, 3/25/36 2                                                  853,089          850,722
                                                                                                                     ---------------
                                                                                                                         40,595,772

- ------------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL--1.8%
Countrywide Alternative Loan Trust, CMO:
Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32                                                                  2,117,030        2,142,460
Series 2005-J3, Cl. 3A1, 6.50%, 9/25/34                                                                  1,233,074        1,255,883
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Mortgage Loan Trust 2006-AR, Mtg. Pass-Through
Certificates, Series 2006-AR, Cl. 5A3, 5.424%, 6/25/36 2                                                 1,070,000        1,059,713



                                                                                                        PRINCIPAL            VALUE
                                                                                                           AMOUNT       SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------

RESIDENTIAL Continued
RALI Series 2006-QS13 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2006-QS13, Cl. 1A8, 6%, 9/25/36                                                                 $ 1,413,514   $    1,414,671
- ------------------------------------------------------------------------------------------------------------------------------------
RALI Series 2006-QS5 Trust, Mtg. Asset-Backed Pass-Through Certificates,
Series 2006-QS5, Cl. 2A2, 6%, 4/25/08                                                                    1,265,822        1,266,140
- ------------------------------------------------------------------------------------------------------------------------------------
WAMU, Mtg. Pass-Through Certificates:
Series 2007-HY6, Cl. 2A1, 5.704%, 6/25/37 2                                                              2,649,331        2,627,185
Series 2006-AR12, Cl. 2A1, 5.75%, 10/25/36 2                                                             4,159,184        4,140,336
- ------------------------------------------------------------------------------------------------------------------------------------
Washington Mutual Mortgage Loan Trust, Mtg. Pass-Through Certificates,
2007-A, Cl. 1A8, 6%, 2/25/37                                                                             4,017,591        4,063,363
- ------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage-Backed Securities 2003-6 Trust, Mtg. Pass-Through
Certificates, Series 2003-6, Cl. 1A1, 5%, 6/25/18                                                        1,602,773        1,562,520
                                                                                                                     ---------------
                                                                                                                         19,532,271
                                                                                                                     ---------------
Total Mortgage-Backed Obligations (Cost $356,199,588)                                                                   357,851,799

- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank Unsec. Bonds, 3.50%, 11/15/07 8                                                   1,160,000        1,157,928
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 4.75%, 2/15/37                                                                      1,362,000        1,344,656
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 4.75%, 8/15/17                                                                         425,000          430,777
                                                                                                                     ---------------
Total U.S. Government Obligations (Cost $2,922,673)                                                                       2,933,361

- ------------------------------------------------------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--9.2%
- ------------------------------------------------------------------------------------------------------------------------------------
ABN Amro Bank NV (NY Branch), 7.125% Sub. Nts., Series B, 10/15/93                                         500,000          546,609
- ------------------------------------------------------------------------------------------------------------------------------------
Albertson's, Inc., 8% Sr. Unsec. Debs., 5/1/31                                                           1,715,000        1,749,542
- ------------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc, 6.278% Perpetual Bonds 9                                                              4,660,000        4,100,614
- ------------------------------------------------------------------------------------------------------------------------------------
Belo Corp., 8% Sr. Unsec. Unsub. Nts., 11/1/08                                                           3,005,000        3,079,404
- ------------------------------------------------------------------------------------------------------------------------------------
Buckeye Partners LP, 4.625% Sr. Nts., 7/15/13                                                            2,355,000        2,215,765
- ------------------------------------------------------------------------------------------------------------------------------------
Caesars Entertainment, Inc., 7.50% Sr. Unsec. Nts., 9/1/09 4                                             2,240,000        2,297,012
- ------------------------------------------------------------------------------------------------------------------------------------
Capmark Financial Group, Inc., 5.875% Nts., 5/10/12 3                                                    1,160,000        1,057,473
- ------------------------------------------------------------------------------------------------------------------------------------
Centex Corp., 5.80% Sr. Unsec. Nts., 9/15/09                                                             1,395,000        1,373,426
- ------------------------------------------------------------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr. Unsec. Nts., 11/1/08                                                        1,530,000        1,554,950
- ------------------------------------------------------------------------------------------------------------------------------------
CIT Group Funding Co. of Canada, 4.65% Sr. Unsec. Nts., 7/1/10                                           1,320,000        1,268,775
- ------------------------------------------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc., 6.25% Nts., 3/15/11                                                  1,425,000        1,306,969
- ------------------------------------------------------------------------------------------------------------------------------------
Coca-Cola Co. (The), 7.375% Unsec. Debs., 7/29/93                                                          440,000          521,637
- ------------------------------------------------------------------------------------------------------------------------------------
Cox Enterprises, Inc., 4.375% Nts., 5/1/08 3                                                             2,115,000        2,102,132
- ------------------------------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 7.25% Sr. Unsec. Nts., 7/15/08                                                       1,695,000        1,703,475
- ------------------------------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc.:
6.125% Nts., 1/15/14                                                                                       895,000          796,806
8% Sr. Nts., 2/1/09                                                                                        785,000          779,536



                                                                                                        PRINCIPAL            VALUE
                                                                                                           AMOUNT       SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------

NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31                                                       $ 1,187,000   $    1,420,133
- ------------------------------------------------------------------------------------------------------------------------------------
Dillard's, Inc., 6.625% Unsec. Nts., 11/15/08                                                              535,000          527,644
- ------------------------------------------------------------------------------------------------------------------------------------
Eastman Kodak Co., 3.625% Nts., Series A, 5/15/08 4                                                        244,000          237,900
- ------------------------------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 5.75% Sr. Unsec. Nts., 10/1/08                                                       2,530,000        2,536,325
- ------------------------------------------------------------------------------------------------------------------------------------
El Paso Corp., 6.50% Sr. Unsec. Nts., 6/1/08                                                               390,000          392,737
- ------------------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co., 9.75% Sr. Unsec. Nts., 9/15/10                                                    3,920,000        4,000,646
- ------------------------------------------------------------------------------------------------------------------------------------
Gap, Inc. (The), 9.80% Unsub. Nts., 12/15/08 2                                                             228,000          240,878
- ------------------------------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 8% Bonds, 11/1/31                                                       1,670,000        1,642,716
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Capital, Inc. (The), 6.345% Sub. Bonds, 2/15/34                                            3,665,000        3,425,408
- ------------------------------------------------------------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual Bonds, Series A 3,9                                                      4,600,000        4,084,933
- ------------------------------------------------------------------------------------------------------------------------------------
HSBC Finance Capital Trust IX, 5.911% Nts., 11/30/35 2                                                   3,200,000        3,041,786
- ------------------------------------------------------------------------------------------------------------------------------------
Hyundai Motor Manufacturing Alabama LLC, 5.30% Sr. Unsec. Nts., 12/19/08 3                               1,140,000        1,138,556
- ------------------------------------------------------------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr. Sec. Nts., 11/14/08 2,4                                               920,000          943,000
- ------------------------------------------------------------------------------------------------------------------------------------
Kaneb Pipe Line Operating Partnership LP, 5.875% Sr. Unsec. Nts., 6/1/13                                 1,630,000        1,640,709
- ------------------------------------------------------------------------------------------------------------------------------------
Kinder Morgan Energy Partners LP, 7.30% Sr. Unsec. Nts., 8/15/33                                         1,275,000        1,339,946
- ------------------------------------------------------------------------------------------------------------------------------------
Lennar Corp., 7.625% Sr. Unsec. Nts., 3/1/09                                                             1,915,000        1,971,958
- ------------------------------------------------------------------------------------------------------------------------------------
Liberty Media Corp., 7.875% Sr. Nts., 7/15/09                                                              610,000          630,801
- ------------------------------------------------------------------------------------------------------------------------------------
Liberty Media LLC, 7.75% Sr. Nts., 7/15/09                                                               1,835,000        1,881,352
- ------------------------------------------------------------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec. Unsub. Nts., 12/1/34                                                        1,100,000          894,628
- ------------------------------------------------------------------------------------------------------------------------------------
MetLife, Inc., 6.40% Jr. Unsec. Sub. Bonds, 12/15/36 2                                                   3,430,000        3,272,278
- ------------------------------------------------------------------------------------------------------------------------------------
MGM Mirage, Inc., 6% Sr. Sec. Nts., 10/1/09                                                              2,585,000        2,578,538
- ------------------------------------------------------------------------------------------------------------------------------------
Monongahela Power Co., 7.36% Unsec. Nts., Series A, 1/15/10                                              2,035,000        2,152,761
- ------------------------------------------------------------------------------------------------------------------------------------
NCR Corp., 7.125% Sr. Unsec. Unsub. Nts., 6/15/09                                                        1,695,000        1,752,650
- ------------------------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 7.375% Sr. Nts., Series D, 8/1/15                                           1,565,000        1,591,724
- ------------------------------------------------------------------------------------------------------------------------------------
PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 3                                    475,276          455,539
- ------------------------------------------------------------------------------------------------------------------------------------
Popular North America, Inc., 4.70% Nts., 6/30/09                                                         2,540,000        2,529,792
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 3                                              2,520,000        3,100,880
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 3                                                2,140,000        2,629,236
- ------------------------------------------------------------------------------------------------------------------------------------
PSEG Funding Trust I, 5.381% Nts., 11/16/07                                                              1,320,000        1,318,109
- ------------------------------------------------------------------------------------------------------------------------------------
Pulte Homes, Inc., 4.875% Nts., 7/15/09                                                                    885,000          826,409
- ------------------------------------------------------------------------------------------------------------------------------------
Qwest Corp., 5.625% Unsec. Nts., 11/15/08                                                                  245,000          245,919
- ------------------------------------------------------------------------------------------------------------------------------------
R&B Falcon Corp., 9.50% Sr. Unsec. Nts., 12/15/08                                                          750,000          787,544
- ------------------------------------------------------------------------------------------------------------------------------------
Rogers Wireless, Inc., 9.625% Sr. Sec. Nts., 5/1/11                                                      1,905,000        2,147,120
- ------------------------------------------------------------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd., 7% Sr. Unsec. Unsub. Nts., 10/15/07 4                                        550,000          550,000
- ------------------------------------------------------------------------------------------------------------------------------------
SLM Corp., 4% Nts., 1/15/09                                                                              1,765,000        1,701,299
- ------------------------------------------------------------------------------------------------------------------------------------
Standard Pacific Corp., 5.125% Sr. Unsec. Unsub. Nts., 4/1/09                                              930,000          790,500
- ------------------------------------------------------------------------------------------------------------------------------------
TEPPCO Partners LP, 6.125% Nts., 2/1/13                                                                    930,000          937,843


                                                                                                        PRINCIPAL            VALUE
                                                                                                           AMOUNT       SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------

NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Tribune Co., 5.50% Nts., Series E, 10/6/08 4                                                           $ 1,485,000   $    1,403,325
- ------------------------------------------------------------------------------------------------------------------------------------
TXU Energy Co. LLC:
6.125% Nts., 3/15/08                                                                                     1,330,000        1,339,055
6.194% Sr. Nts., 9/16/08 2,3                                                                             1,865,000        1,868,240
- ------------------------------------------------------------------------------------------------------------------------------------
Univision Communications, Inc.:
3.50% Sr. Unsec. Nts., 10/15/07                                                                          1,270,000        1,263,650
3.875% Sr. Unsec. Nts., 10/15/08                                                                           590,000          575,250
- ------------------------------------------------------------------------------------------------------------------------------------
Valero Logistics Operations LP, 6.05% Nts., 3/15/13                                                        435,000          437,128
- ------------------------------------------------------------------------------------------------------------------------------------
Westar Energy, Inc., 7.125% Sr. Unsec. Nts., 8/1/09                                                      1,950,000        1,994,302
- ------------------------------------------------------------------------------------------------------------------------------------
Williams Cos., Inc. (The) Credit Linked Certificate Trust, 6.75% Nts., 4/15/09 4                         2,385,000        2,408,850
                                                                                                                     ---------------
Total Non-Convertible Corporate Bonds and Notes (Cost $100,172,158)                                                      99,104,122

                                                                                                            SHARES
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--6.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E, 5.37% 10,11
(Cost $73,733,633)                                                                                      73,733,633       73,733,633
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $959,401,784)                                                              100.8%   1,084,931,388
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS                                                                         (0.8)      (8,272,305)
                                                                                                       -----------------------------
NET ASSETS                                                                                                   100.0%  $1,076,659,083
                                                                                                       =============================






FOOTNOTES TO STATEMENT OF INVESTMENTS

1. Non-income producing security.

2. Represents the current interest rate for a variable or increasing rate
security.

3. 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 $17,066,615 or 1.59% of the Fund's net
assets as of September 30, 2007.

4. Illiquid security. The aggregate value of illiquid securities as of September
30, 2007 was $16,839,288, which represents 1.56% of the Fund's net assets. See
Note 11 of accompanying Notes.

5. 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 $14,331,117 or 1.33% of the Fund's net assets
as of September 30, 2007.

6. 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.
These securities amount to $611,538 or 0.06% of the Fund's net assets as of
September 30, 2007.

7. When-issued security or forward commitment to be delivered and settled after
September 30, 2007. See Note 1 of accompanying Notes.

8. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $369,339. See Note 6 of accompanying Notes.

9. This bond has no contractual maturity date, is not redeemable and
contractually pays an indefinite stream of interest. Rate reported represents
the current interest rate for this variable rate security.

10. Rate shown is the 7-day yield as of September 30, 2007.

11. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended September 30, 2007, by virtue of the Fund owning at
least 5% of the voting securities of the issuer or as a result of the Fund and
the issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:



                                         SHARES                                      SHARES
                                  SEPTEMBER 30,         GROSS         GROSS   SEPTEMBER 30,
                                           2006     ADDITIONS    REDUCTIONS            2007
- --------------------------------------------------------------------------------------------

Oppenheimer Institutional Money
Market Fund, Cl. E                           --   548,558,274   474,824,641      73,733,633


                                                                      VALUE        DIVIDEND
                                                                 SEE NOTE 1          INCOME
- --------------------------------------------------------------------------------------------

Oppenheimer Institutional Money
Market Fund, Cl. E                                              $73,733,633      $4,765,793




STATEMENT OF ASSETS AND LIABILITIES  September 30, 2007
- --------------------------------------------------------------------------------


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

ASSETS
- -------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $885,668,151)                                                   $ 1,011,197,755
Affiliated companies (cost $73,733,633)                                                           73,733,633
                                                                                             ----------------
                                                                                               1,084,931,388
- -------------------------------------------------------------------------------------------------------------
Cash                                                                                               3,765,868
- -------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $128,529)                                                       2,445,076
- -------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $6,244,323 sold on a when-issued basis or forward commitment)         18,434,655
Interest, dividends and principal paydowns                                                         4,442,535
Shares of beneficial interest sold                                                                   722,528
Futures margins                                                                                       51,926
Other                                                                                                 64,600
                                                                                             ----------------
Total assets                                                                                   1,114,858,576

- -------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $188,418)                                                       2,155,237
- -------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $21,300,035 purchased on a when-issued basis
or forward commitment)                                                                            33,487,668
Shares of beneficial interest redeemed                                                             1,311,529
Distribution and service plan fees                                                                   590,673
Trustees' compensation                                                                               193,283
Transfer and shareholder servicing agent fees                                                        129,036
Shareholder communications                                                                           110,552
Other                                                                                                221,515
                                                                                             ----------------
Total liabilities                                                                                 38,199,493

- -------------------------------------------------------------------------------------------------------------
NET ASSETS                                                                                   $ 1,076,659,083
                                                                                             ================

- -------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------
Paid-in capital                                                                              $   903,411,784
- -------------------------------------------------------------------------------------------------------------
Accumulated net investment income                                                                  6,772,727
- -------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions                    41,256,476
- -------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies                                                                125,218,096
                                                                                             ----------------
NET ASSETS                                                                                   $ 1,076,659,083
                                                                                             ================





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

NET ASSET VALUE PER SHARE
- ------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $865,895,026
and 60,457,347 shares of beneficial interest outstanding)                                     $ 14.32
Maximum offering price per share (net asset value plus sales charge of 5.75%
of offering price)                                                                            $ 15.19
- ------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $90,878,671 and 6,495,545 shares
of beneficial interest outstanding)                                                           $ 13.99
- ------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $101,644,777 and 7,229,012 shares
of beneficial interest outstanding)                                                           $ 14.06
- ------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $18,240,609 and 1,287,637 shares
of beneficial interest outstanding)                                                           $ 14.17




STATEMENT OF OPERATIONS  For the Year Ended September 30, 2007
- --------------------------------------------------------------------------------


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

INVESTMENT INCOME
- -----------------------------------------------------------------------------------------
Interest                                                                   $  24,640,719
- -----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $133,670)          6,608,708
Affiliated companies                                                           4,765,793
- -----------------------------------------------------------------------------------------
Portfolio lending fees                                                           240,564
- -----------------------------------------------------------------------------------------
Other income                                                                      36,647
                                                                           --------------
Total investment income                                                       36,292,431

- -----------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------
Management fees                                                                7,210,624
- -----------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                                        1,815,172
Class B                                                                          948,835
Class C                                                                          974,017
Class N                                                                           90,084
- -----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                                        1,030,115
Class B                                                                          204,766
Class C                                                                          176,346
Class N                                                                           44,064
- -----------------------------------------------------------------------------------------
Shareholder communications:
Class A                                                                          160,522
Class B                                                                           38,179
Class C                                                                           23,055
Class N                                                                            2,827
- -----------------------------------------------------------------------------------------
Trustees' compensation                                                            60,901
- -----------------------------------------------------------------------------------------
Custodian fees and expenses                                                       11,616
- -----------------------------------------------------------------------------------------
Other                                                                             89,951
                                                                           --------------
Total expenses                                                                12,881,074
Less reduction to custodian expenses                                              (1,686)
Less waivers and reimbursements of expenses                                      (90,250)
                                                                           --------------
Net expenses                                                                  12,789,138

- -----------------------------------------------------------------------------------------
NET INVESTMENT INCOME                                                         23,503,293






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

REALIZED AND UNREALIZED GAIN (LOSS)
- -----------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments from unaffiliated companies                                    $  54,901,480
Closing and expiration of option contracts written                               305,031
Closing and expiration of futures contracts                                     (391,223)
Foreign currency transactions                                                    113,669
Swap contracts                                                                   135,071
Increase from payment by affiliate                                                95,461
                                                                           --------------
Net realized gain                                                             55,159,489
- -----------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments                                                                   38,440,304
Translation of assets and liabilities denominated in foreign currencies        1,047,132
Futures contracts                                                               (426,052)
Swap contracts                                                                   (82,189)
                                                                           --------------
Net change in unrealized appreciation                                         38,979,195

- -----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS                       $ 117,641,977
                                                                           ==============




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



YEAR ENDED SEPTEMBER 30,                                                                     2007             2006
- -------------------------------------------------------------------------------------------------------------------

OPERATIONS
- -------------------------------------------------------------------------------------------------------------------
Net investment income                                                              $   23,503,293   $   18,884,078
- -------------------------------------------------------------------------------------------------------------------
Net realized gain                                                                      55,159,489       69,364,968
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation                                                  38,979,195      (53,167,263)
                                                                                   --------------------------------
Net increase in net assets resulting from operations                                  117,641,977       35,081,783

- -------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A                                                                               (20,079,749)     (16,011,740)
Class B                                                                                (1,423,760)      (1,186,200)
Class C                                                                                (1,532,394)      (1,173,973)
Class N                                                                                  (362,666)        (238,509)
                                                                                   --------------------------------
                                                                                      (23,398,569)     (18,610,422)
- -------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A                                                                               (51,176,462)     (39,741,174)
Class B                                                                                (6,078,031)      (5,399,948)
Class C                                                                                (5,885,017)      (4,997,038)
Class N                                                                                (1,116,454)        (703,418)
                                                                                   --------------------------------
                                                                                      (64,255,964)     (50,841,578)

- -------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A                                                                                30,877,600      111,393,954
Class B                                                                                (9,669,827)       3,678,115
Class C                                                                                 6,173,205        8,465,336
Class N                                                                                 2,816,552        3,576,958
                                                                                   --------------------------------
                                                                                       30,197,530      127,114,363

- -------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Total increase                                                                         60,184,974       92,744,146
- -------------------------------------------------------------------------------------------------------------------
Beginning of period                                                                 1,016,474,109      923,729,963
                                                                                   --------------------------------
End of period (including accumulated net investment income of
$6,772,727 and $6,230,268, respectively)                                           $1,076,659,083   $1,016,474,109
                                                                                   ================================




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



CLASS A     YEAR ENDED SEPTEMBER 30,                           2007          2006          2005          2004          2003
- ----------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                      $   13.94     $   14.51     $   13.75     $   12.55     $   10.51
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                           .34 1         .30 1         .24 1         .14           .21
Net realized and unrealized gain                               1.27           .21          1.38          1.16          2.08
                                                          ------------------------------------------------------------------
Total from investment operations                               1.61           .51          1.62          1.30          2.29
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                           (.34)         (.29)         (.16)         (.10)         (.22)
Tax return of capital distribution                               --            --            --            --          (.03)
Distributions from net realized gain                           (.89)         (.79)         (.70)           --            --
                                                          ------------------------------------------------------------------
Total dividends and/or distributions to shareholders          (1.23)        (1.08)         (.86)         (.10)         (.25)
- ----------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                            $   14.32     $   13.94     $   14.51     $   13.75     $   12.55
                                                          ==================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                            11.96%         3.86%        12.13%        10.37%        21.98%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                  $ 865,895     $ 810,738     $ 725,836     $ 651,754     $ 575,799
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $ 851,017     $ 752,163     $ 694,147     $ 631,041     $ 523,477
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                          2.38%         2.16%         1.69%         1.05%         1.78%
Total expenses                                                 1.05% 4       1.06%         1.05%         1.07%         1.11%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses                            1.04%         1.06%         1.05%         1.06%         1.11%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          74% 5         84% 5         73% 5         61% 5        205%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

      Year Ended September 30, 2007      1.06%

5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:

                                      PURCHASE TRANSACTIONS    SALE TRANSACTIONS
      --------------------------------------------------------------------------
      Year Ended September 30, 2007         $   814,618,659      $   879,472,606
      Year Ended September 30, 2006           1,329,963,782        1,377,730,782
      Year Ended September 30, 2005           2,097,453,846        2,135,377,175
      Year Ended September 30, 2004           1,069,526,653        1,026,457,980




CLASS B     YEAR ENDED SEPTEMBER 30,                           2007          2006          2005          2004          2003
- -----------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                      $   13.64     $   14.23     $   13.53     $   12.40     $   10.38
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                           .20 1         .17 1         .11 1         .02           .09
Net realized and unrealized gain                               1.25           .20          1.36          1.13          2.07
                                                          ------------------------------------------------------------------
Total from investment operations                               1.45           .37          1.47          1.15          2.16
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                           (.21)         (.17)         (.07)         (.02)         (.11)
Tax return of capital distribution                               --            --            --            --          (.03)
Distributions from net realized gain                           (.89)         (.79)         (.70)           --            --
                                                          ------------------------------------------------------------------
Total dividends and/or distributions to shareholders          (1.10)         (.96)         (.77)         (.02)         (.14)
- ----------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                            $   13.99     $   13.64     $   14.23     $   13.53     $   12.40
                                                          ==================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                            10.99%         2.84%        11.17%         9.26%        20.91%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                  $  90,879     $  98,021     $  98,271     $  84,924     $  64,944
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $  95,241     $  95,979     $  92,677     $  77,082     $  57,836
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                          1.48%         1.24%         0.76%         0.11%         0.81%
Total expenses                                                 1.95% 4       1.99%         1.98%         2.02%         2.08%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses                            1.94%         1.99%         1.98%         2.02%         2.08%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          74% 5         84% 5         73% 5         61% 5        205%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

      Year Ended September 30, 2007      1.96%

5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:

                                      PURCHASE TRANSACTIONS    SALE TRANSACTIONS
      --------------------------------------------------------------------------
      Year Ended September 30, 2007         $   814,618,659      $   879,472,606
      Year Ended September 30, 2006           1,329,963,782        1,377,730,782
      Year Ended September 30, 2005           2,097,453,846        2,135,377,175
      Year Ended September 30, 2004           1,069,526,653        1,026,457,980





CLASS C     YEAR ENDED SEPTEMBER 30,                           2007          2006          2005          2004          2003
- ----------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                      $   13.71     $   14.29     $   13.59     $   12.44     $   10.42
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                           .21 1         .18 1         .11 1         .04           .11
Net realized and unrealized gain                               1.25           .21          1.37          1.13          2.06
                                                          ------------------------------------------------------------------
Total from investment operations                               1.46           .39          1.48          1.17          2.17
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                           (.22)         (.18)         (.08)         (.02)         (.12)
Tax return of capital distribution                               --            --            --            --          (.03)
Distributions from net realized gain                           (.89)         (.79)         (.70)           --            --
                                                          ------------------------------------------------------------------

Total dividends and/or distributions to shareholders          (1.11)         (.97)         (.78)         (.02)         (.15)
- ----------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                            $   14.06     $   13.71     $   14.29     $   13.59     $   12.44
                                                          ==================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                            11.00%         2.97%        11.18%         9.45%        20.98%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                  $ 101,645     $  92,782     $  87,820     $  68,018     $  47,212
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $  97,640     $  90,567     $  78,091     $  60,095     $  38,407
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                          1.53%         1.30%         0.83%         0.19%         0.90%
Total expenses                                                 1.90% 4       1.93%         1.91%         1.93%         1.98%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses                            1.89%         1.92%         1.91%         1.93%         1.98%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          74% 5         84% 5         73% 5         61% 5        205%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

      Year Ended September 30, 2007      1.91%

5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:

                                      PURCHASE TRANSACTIONS    SALE TRANSACTIONS
      --------------------------------------------------------------------------
      Year Ended September 30, 2007         $   814,618,659      $   879,472,606
      Year Ended September 30, 2006           1,329,963,782        1,377,730,782
      Year Ended September 30, 2005           2,097,453,846        2,135,377,175
      Year Ended September 30, 2004           1,069,526,653        1,026,457,980



CLASS N     YEAR ENDED SEPTEMBER 30,                           2007          2006          2005          2004          2003
- ----------------------------------------------------------------------------------------------------------------------------

PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period                      $   13.80     $   14.38     $   13.65     $   12.49     $   10.48
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                           .28 1         .24 1         .17 1         .10           .20
Net realized and unrealized gain                               1.26           .21          1.38          1.12          2.01
                                                          ------------------------------------------------------------------
Total from investment operations                               1.54           .45          1.55          1.22          2.21
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                           (.28)         (.24)         (.12)         (.06)         (.17)
Tax return of capital distribution                               --            --            --            --          (.03)
Distributions from net realized gain                           (.89)         (.79)         (.70)           --            --
                                                          ------------------------------------------------------------------
Total dividends and/or distributions to shareholders          (1.17)        (1.03)         (.82)         (.06)         (.20)
- ----------------------------------------------------------------------------------------------------------------------------

Net asset value, end of period                            $   14.17     $   13.80     $   14.38     $   13.65     $   12.49
                                                          ==================================================================

- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2                            11.57%         3.42%        11.66%         9.77%        21.27%
- ----------------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands)                  $  18,240     $  14,933     $  11,803     $   8,772     $   3,349
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $  18,038     $  13,425     $  10,278     $   5,701     $   1,604
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income                                          1.98%         1.76%         1.24%         0.55%         1.24%
Total expenses                                                 1.45% 4       1.47%         1.50%         1.58%         1.76%
Expenses after payments, waivers and/or reimbursements
and reduction to custodian expenses                            1.44%         1.47%         1.50%         1.57%         1.62%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          74% 5         84% 5         73% 5         61% 5        205%


1. Per share amounts calculated based on the average shares outstanding during
the period.

2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.

3. Annualized for periods less than one full year.

4. Total expenses including indirect expenses from affiliated fund were as
follows:

      Year Ended September 30, 2007      1.46%

5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:

                                      PURCHASE TRANSACTIONS    SALE TRANSACTIONS
      --------------------------------------------------------------------------
      Year Ended September 30, 2007         $   814,618,659      $   879,472,606
      Year Ended September 30, 2006           1,329,963,782        1,377,730,782
      Year Ended September 30, 2005           2,097,453,846        2,135,377,175
      Year Ended September 30, 2004           1,069,526,653        1,026,457,980




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

- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES

Oppenheimer Balanced Fund (the Fund) is registered under the Investment Company
Act of 1940, as amended, as an open end management investment company. The
Fund's investment objective is to seek high total investment return consistent
with preservation of principal. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager).

      The Fund offers Class A, Class B, Class C and Class N shares. Class A
shares are sold at their offering price, which is normally net asset value plus
a front-end sales charge. Class B, Class C and Class N shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class N shares are sold only through retirement plans. Retirement plans
that offer Class N shares may impose charges on those accounts. All classes of
shares have identical rights and voting privileges with respect to the Fund in
general and exclusive voting rights on matters that affect that class alone.
Earnings, net assets and net asset value per share may differ due to each class
having its own expenses, such as transfer and shareholder servicing agent fees
and shareholder communications, directly attributable to that class. Class A, B,
C and N have separate distribution and/or service plans. Class B shares will
automatically convert to Class A shares six years after the date of purchase.

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


- --------------------------------------------------------------------------------
SECURITIES  VALUATION.  The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business.  Securities  may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized  by the Board of  Trustees.  Securities  listed or traded on National
Stock  Exchanges or other  domestic  exchanges are valued based on the last sale
price of the security  traded on that exchange prior to the time when the Fund's
assets are  valued.  Securities  traded on  NASDAQ(R)  are  valued  based on the
closing  price  provided by NASDAQ prior to the time when the Fund's  assets are
valued.  In the absence of a sale, the security is valued at the last sale price
on the prior  trading  day, if it is within the spread of the closing  "bid" and
"asked"  prices,  and if not,  at the closing  bid price.  Securities  traded on
foreign  exchanges  are  valued  based on the last sale  price on the  principal
exchange on which the security is traded, as identified by the portfolio pricing
service,  prior to the time when the Fund's assets are valued. In the absence of
a sale,  the security is valued at the official  closing  price on the principal
exchange.  Corporate,   government  and  municipal  debt  instruments  having  a
remaining  maturity in excess of sixty days and all  mortgage-backed  securities
will be  valued  at the mean  between  the "bid"  and  "asked"  prices.  Futures
contracts  traded on a  commodities  or futures  exchange  will be valued at the
final settlement  price or official  closing price on the principal  exchange as
reported by such  principal  exchange at its trading  session ending at, or most
recently  prior to, the time when the  Fund's  assets are  valued.  Options  are
valued daily based upon the last sale price on the  principal  exchange on which
the option is traded.  Securities  (including  restricted  securities) for which
market  quotations  are not  readily  available  are valued at their fair value.
Foreign and domestic  securities  whose values have been materially  affected by
what the Manager  identifies as a significant  event occurring before the Fund's
assets are valued but after the close of their respective exchanges will be fair
valued.  Fair value is  determined  in good  faith  using  consistently  applied
procedures  under the  supervision  of the  Board of  Trustees.  Investments  in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value.  Short-term  "money market type" debt securities
with  remaining  maturities  of sixty days or less are valued at amortized  cost
(which approximates market value).

- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment take place generally at least ten days or more after the
trade date. Normally the settlement date occurs within six months after the
trade date; however, the Fund may, from time to time, purchase securities whose
settlement date extends six months or more beyond trade date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains internally designated assets with a market value equal to or greater
than the amount of its purchase commitments. The purchase of securities on a
when-issued basis or forward commitment may increase the volatility of the
Fund's net asset value to the extent the Fund executes such transactions while
remaining substantially fully invested. The Fund may also sell securities that
it purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of September 30, 2007, the Fund had purchased
$21,300,035 of securities issued on a when-issued basis or forward commitment
and sold $6,244,323 of securities issued on a when-issued basis or forward
commitment.

- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the New
York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each
day the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Trustees.

      Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.

      The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.

- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments, if applicable.
As a shareholder, the Fund is subject to its proportional share of IMMF's Class
E expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.

- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.

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

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

The tax components of capital shown in the following table represent
distribution requirements the Fund must satisfy under the income tax
regulations, losses the Fund may be able to offset against income and gains
realized in future years and unrealized appreciation or depreciation of
securities and other investments for federal income tax purposes.

                                                               NET UNREALIZED
                                                                 APPRECIATION
                                                             BASED ON COST OF
                                                               SECURITIES AND
  UNDISTRIBUTED    UNDISTRIBUTED             ACCUMULATED    OTHER INVESTMENTS
  NET INVESTMENT       LONG-TERM                    LOSS   FOR FEDERAL INCOME
  INCOME                    GAIN    CARRYFORWARD 1,2,3,4         TAX PURPOSES
  ---------------------------------------------------------------------------
     $14,684,429     $34,694,479                $467,065         $124,522,976

1. The Fund had $165 of post-October foreign currency losses which were
deferred.

2. The Fund had $466,900 of straddle losses which were deferred.

3. During the fiscal year ended September 30, 2007, the Fund utilized $213,555
of capital loss carryforward to offset capital gains realized in that fiscal
year.

4. During the fiscal year ended September 30, 2006, the Fund utilized $2,115,654
of capital loss carryforward to offset capital gains realized in that fiscal
year.

- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for September 30, 2007. Net assets of
the Fund were unaffected by the reclassifications.

                                   INCREASE TO        REDUCTION TO
                                   ACCUMULATED     ACCUMULATED NET
              INCREASE TO       NET INVESTMENT       REALIZED GAIN
              PAID-IN CAPITAL           INCOME    ON INVESTMENTS 5
              ----------------------------------------------------
              $3,860,361              $437,735          $4,298,096

5. $3,575,463, including $2,911,829 of long-term capital gain, was distributed
in connection with Fund share redemptions.

The tax character of distributions paid during the years ended September 30,
2007 and September 30, 2006 was as follows:

                                            YEAR ENDED           YEAR ENDED
                                    SEPTEMBER 30, 2007   SEPTEMBER 30, 2006
   ------------------------------------------------------------------------
   Distributions paid from:
   Ordinary income                  $       23,398,579   $       27,772,855
   Long-term capital gain                   64,255,954           41,679,145
                                    ---------------------------------------
   Total                            $       87,654,533   $       69,452,000
                                    =======================================

The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of September 30, 2007 are noted below. The
primary difference between book and tax appreciation or depreciation of
securities and other investments, if applicable, is attributable to the tax
deferral of losses or tax realization of financial statement unrealized gain or
loss.

          Federal tax cost of securities          $      960,279,927
          Federal tax cost of other investments          (74,214,518)
                                                  ------------------
          Total federal tax cost                  $      886,065,409
                                                  ==================
          Gross unrealized appreciation           $      146,308,039
          Gross unrealized depreciation                  (21,785,063)
                                                  ------------------
          Net unrealized appreciation             $      124,522,976
                                                  ==================

- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding
new participants effective December 31, 2006 (the "Freeze Date") and existing
Plan Participants as of the Freeze Date will continue to receive accrued
benefits under the Plan. Active independent trustees as of the Freeze Date have
each elected a distribution method with respect to their benefits under the
Plan. During the year ended September 30, 2007, the Fund's projected benefit
obligations were increased by $36,943 and payments of $35,125 were made to
retired trustees, resulting in an accumulated liability of $125,636 as of
September 30, 2007.

      The Board of Trustees has adopted a compensation deferral plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of the annual compensation they are entitled to receive from the Fund.
For purposes of determining the amount owed to the Trustee under the plan,
deferred amounts are treated as though equal dollar amounts had been invested in
shares of the Fund or in other Oppenheimer funds selected by the Trustee. The
Fund purchases shares of the funds selected for deferral by the Trustee in
amounts equal to his or her deemed investment, resulting in a Fund asset equal
to the deferred compensation liability. Such assets are included as a component
of "Other" within the asset section of the Statement of Assets and Liabilities.
Deferral of trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
investment income per share. Amounts will be deferred until distributed in
accordance to the compensation deferral plan.

- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
and paid quarterly. Capital gain distributions, if any, are declared and paid
annually.

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

- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.

- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued

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

- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.

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

- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST

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



                                 YEAR ENDED SEPTEMBER 30, 2007   YEAR ENDED SEPTEMBER 30, 2006
                                       SHARES           AMOUNT        SHARES            AMOUNT
- -----------------------------------------------------------------------------------------------

CLASS A
Sold                                6,131,500    $  86,517,298     6,707,218    $   92,313,989
Dividends and/or
distributions reinvested            4,745,903       65,665,433     3,764,837        51,001,543
Acquisition-Note 14                        --               --     7,679,053       105,279,820
Redeemed                           (8,582,423)    (121,305,131)   (9,999,585)     (137,201,398)
                                 --------------------------------------------------------------
Net increase                        2,294,980    $  30,877,600     8,151,523      $111,393,954
                                 ==============================================================

- -----------------------------------------------------------------------------------------------
CLASS B
Sold                                1,194,731    $  16,478,946     1,486,495    $   20,023,127
Dividends and/or
distributions reinvested              519,741        7,027,431       459,149         6,095,358
Acquisition-Note 14                        --               --       852,361        11,421,633
Redeemed                           (2,404,916)     (33,176,204)   (2,519,583)      (33,862,003)
                                 --------------------------------------------------------------
Net increase (decrease)              (690,444)   $  (9,669,827)      278,422    $    3,678,115
                                 ==============================================================

- -----------------------------------------------------------------------------------------------
CLASS C
Sold                                1,379,987    $  19,118,489     1,733,303    $   23,444,138
Dividends and/or
distributions reinvested              494,376        6,720,594       420,150         5,602,992
Acquisition-Note 14                        --               --       622,399         8,383,715
Redeemed                           (1,414,896)     (19,665,878)   (2,152,123)      (28,965,509)
                                 --------------------------------------------------------------
Net increase                          459,467    $   6,173,205       623,729    $    8,465,336
                                 ==============================================================





                                 YEAR ENDED SEPTEMBER 30, 2007   YEAR ENDED SEPTEMBER 30, 2006
                                       SHARES           AMOUNT        SHARES            AMOUNT
- -----------------------------------------------------------------------------------------------

CLASS N
Sold                                  544,228    $   7,636,814       394,439    $    5,367,295
Dividends and/or
distributions reinvested              101,356        1,387,392        67,430           905,224
Acquisition-Note 14                        --               --       134,474         1,824,806
Redeemed                             (439,945)      (6,207,654)     (334,942)       (4,520,367)
                                 --------------------------------------------------------------
Net increase                          205,639    $   2,816,552       261,401    $    3,576,958
                                 ==============================================================


- --------------------------------------------------------------------------------
3.PURCHASES AND SALES OF SECURITIES

The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the year ended
September 30, 2007, were as follows:

                                               PURCHASES             SALES
   -----------------------------------------------------------------------
   Investment securities                    $528,432,255    $  573,555,487
   U.S. government and
   government agency obligations             146,352,780       174,601,917
   To Be Announced (TBA)
   mortgage-related securities               814,618,659       879,472,606

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

MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:

                       FEE SCHEDULE
                       ---------------------------------
                       Up to $200 million          0.75%
                       Next $200 million           0.72
                       Next $200 million           0.69
                       Next $200 million           0.66
                       Next $700 million           0.60
                       Over $1.5 billion           0.58

- --------------------------------------------------------------------------------
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 per account fee. For the year ended September 30, 2007, the Fund paid
$1,464,703 to OFS for services to the Fund.

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

- --------------------------------------------------------------------------------
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
periodically 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 periodically for
providing personal services and maintenance

- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
of accounts of their customers that hold Class A shares. Any unreimbursed
expenses the Distributor incurs with respect to Class A shares in any fiscal
year cannot be recovered in subsequent periods. Fees incurred by the Fund under
the plan are detailed in the Statement of Operations.

- --------------------------------------------------------------------------------
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 compensate the Distributor for its services in connection with the
distribution of those 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 each plan. If either the Class B, Class C or
Class N plan is terminated by the Fund or by the shareholders of a class, the
Board of Trustees and its independent trustees must determine whether the
Distributor shall be entitled to payment from the Fund of all or a portion of
the service fee and/or asset-based sales charge in respect to shares sold prior
to the effective date of such termination. The Distributor determines its
uncompensated expenses under the plan at calendar quarter ends. The
Distributor's aggregate uncompensated expenses under the plan at September 30,
2007 for Class B, Class C and Class N shares were $2,873,405, $2,003,922 and
$227,118, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.

- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the following table for the period
indicated.



                                              CLASS A         CLASS B         CLASS C         CLASS N
                              CLASS A      CONTINGENT      CONTINGENT      CONTINGENT      CONTINGENT
                            FRONT-END        DEFERRED        DEFERRED        DEFERRED        DEFERRED
                        SALES CHARGES   SALES CHARGES   SALES CHARGES   SALES CHARGES   SALES CHARGES
                          RETAINED BY     RETAINED BY     RETAINED BY     RETAINED BY     RETAINED BY
YEAR ENDED                DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR     DISTRIBUTOR
- ------------------------------------------------------------------------------------------------------

September 30, 2007           $380,279          $8,702        $184,174         $11,743          $1,354
- ------------------------------------------------------------------------------------------------------


PAYMENTS, WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to
limit transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.

     The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the year ended September 30, 2007, the Manager waived $90,250 for
IMMF management fees.

     The Distributor paid the Fund $2,270 in restitution as part of a settlement
with respect to an investigation of certain agreements between the Distributor
and various financial
intermediaries that had selling agreements with the Distributor. The payment
increased the Fund's total returns by less than 0.01%.

      During the six months ended September 30, 2007, the Manager voluntarily
reimbursed the Fund $93,191 for certain transactions. The payment increased the
Fund's total returns by less than 0.01%.

- --------------------------------------------------------------------------------
5.FOREIGN CURRENCY CONTRACTS

A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.

      The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.

      The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.

      As of September 30, 2007, the Fund had no outstanding foreign currency
contracts.

- --------------------------------------------------------------------------------
6.FUTURES CONTRACTS

A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. 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 protection from changes in market value of stocks 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 as a 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 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 has expired.

- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued

     Cash held by the broker to cover initial margin requirements on open
futures contracts is noted in the Statement of Assets and Liabilities.
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 in the Statement of Operations at the closing and expiration of futures
contracts. The net change in unrealized appreciation and depreciation is
reported in the Statement of Operations.

     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 September 30, 2007, the Fund had outstanding futures contracts as follows:



                                                                                          UNREALIZED
                                         EXPIRATION   NUMBER OF      VALUATION AS OF    APPRECIATION
CONTRACT DESCRIPTION                          DATES   CONTRACTS   SEPTEMBER 30, 2007   (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------

CONTRACTS TO PURCHASE
U.S. Long Bonds                            12/19/07         492   $       54,781,125   $     161,050
U.S. Treasury Nts., 5 yr.                  12/31/07         111           11,880,469          66,382
                                                                                       --------------
                                                                                             227,432
                                                                                       --------------

CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr.                  12/31/07         512          106,008,000        (422,365)
U.S. Treasury Nts., 10 yr.                 12/19/07         323           35,297,844        (100,875)
                                                                                       --------------
                                                                                            (523,240)
                                                                                       --------------
                                                                                       $    (295,808)
                                                                                       ==============


- --------------------------------------------------------------------------------
7. OPTION ACTIVITY

The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.

     The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.

     Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.

     Securities designated to cover outstanding call or put options are noted in
the Statement of Investments where applicable. Contracts subject to call or put,
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 September 30, 2007 was as
follows:

                                                         CALL OPTIONS
                                            --------------------------
                                            NUMBER OF       AMOUNT OF
                                            CONTRACTS        PREMIUMS
         -------------------------------------------------------------
         Options outstanding as of
         September 30, 2006                        --   $          --
         Options written                          956         355,641
         Options closed or expired               (956)       (355,641)
                                            --------------------------
         Options outstanding as of
         September 30, 2007                        --   $          --
                                            ==========================

- --------------------------------------------------------------------------------
8. CREDIT DEFAULT SWAP CONTRACTS

A credit default swap is a bilateral contract that enables an investor to buy or
sell protection against a defined-issuer credit event. The Fund may enter into
credit default swaps to hedge an existing position or to obtain exposure to a
security or market by purchasing or selling credit protection. The Fund may
enter into credit default swaps on a single security, or a basket of securities.

     In a credit default swap contract, the purchaser of the contract will pay a
periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security.

     The periodic interest fees are accrued daily as a component of unrealized
appreciation (depreciation) and are recorded as realized gain (loss) upon
payment. In the event that the credit default swap is exercised due to a credit
event, the difference between the value of the underlying security and the
notional amount is recorded as realized gain (loss) and is included on the
Statement of Operations.

     Credit default swaps are marked to market daily using primarily quotations
from counterparties and brokers. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations.

- --------------------------------------------------------------------------------
8. CREDIT DEFAULT SWAP CONTRACTS Continued

Risks of credit default swaps include, but are not limited to, 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, adverse
pricing when purchasing bonds to satisfy its delivery obligation, and the need
to fund the delivery obligation (either cash or defaulted securities depending
on whether the Fund is the purchaser or seller of the credit default swap
contract, respectively).

Information regarding such credit default swaps as of September 30, 2007 is as
follows:



                                                             BUY/SELL    NOTIONAL                               PREMIUM
                                                               CREDIT      AMOUNT  PAY/RECEIVE  TERMINATION       PAID/
COUNTERPARTY               REFERENCE ENTITY                PROTECTION      (000S)   FIXED RATE        DATES  (RECEIVED)       VALUE
- ------------------------------------------------------------------------------------------------------------------------------------

Barclays Bank plc:
                           Beazer Homes USA, Inc.                Sell     $   545       2.1000%     6/20/08   $      --  $  (39,494)
                           Capmark Financial
                           Group, Inc.                           Sell       1,020       1.0000      6/20/12          --     (88,841)
                           Countrywide Home
                           Loans, Inc.                           Sell       1,360       0.7500      9/20/08          --     (53,476)
                           Lear Corp.                            Sell       1,730       1.0000      6/20/08          --       4,649
                           Lehman Brothers
                           Holdings, Inc.                        Sell       2,205       0.4900      9/20/10          --     (15,465)
                           Merrill Lynch & Co., Inc.             Sell       4,195       0.6800      9/20/08          --      14,210
                           Toys "R" Us, Inc.                     Sell       1,085       1.4500      9/20/08          --     (13,709)
- ------------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
                           ArvinMeritor, Inc.                    Sell       1,755       1.5500      9/20/08          --       2,367
                           Belo Corp.                             Buy       3,255       0.9000      6/20/13          --      51,505
                           CDX.NA.HY.8 Index                     Sell       5,050       2.7500      6/20/12      28,441    (107,423)
                           CDX.NA.HY.8 Index                     Sell       1,820       2.7500      6/20/12      14,699     (38,715)
                           CDX.NA.HY.8 Index                      Buy       1,820       2.7500      6/20/14      26,251      82,063
                           CDX.NA.HY.8 Index                     Sell         940       2.7500      6/20/12     (75,193)    (19,995)
                           CDX.NA.HY.8-V1 Index                   Buy       5,050       2.7500      6/20/14      91,496     227,703
                           Freescale Semiconductor, Inc.         Sell       1,075       0.7500      3/20/08          --      (6,693)
                           Freescale Semiconductor, Inc.         Sell       1,010       0.6000      3/20/08          --      (7,039)
                           Intelsat Ltd.                         Sell       1,135       3.4500      9/20/08          --       1,630
                           Quebecor World, Inc.                  Sell       1,120       2.6000      9/20/08          --       9,304
                           Rite Aid Corp.                        Sell       1,700       0.8750      6/20/08          --     (19,434)
                           Saks, Inc.                            Sell       1,785       2.0000      9/20/08          --      15,107
                           The Goodyear Tire &
                           Rubber Co.                            Sell       1,690       1.5500      9/20/08          --      17,253
                           Univision
                           Communications, Inc.                  Sell         495       0.7500      3/20/08          --      (1,211)
- ------------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
                           ABX.HE.AA.06-2 Index                  Sell         470       0.1700      5/25/46     (56,396)    (49,363)
                           Allied Waste North
                           America, Inc.                         Sell         990       2.0000      9/20/09          --       7,239
                           Allied Waste North
                           America, Inc.                         Sell         630       2.0000      9/20/09          --       4,607
                           CDX.NA.HY.8 Index                     Sell         935       2.7500      6/20/12     (81,150)    (20,236)
                           CDX.NA.HY.8 Index                     Sell         935       2.7500      6/20/12     (56,606)    (20,236)
                           CDX.NA.HY.8 Index                     Sell         870       2.7500      6/20/12     (59,885)    (18,829)
                           CDX.NA.HY.8 Index                     Sell         455       2.7500      6/20/12     (36,612)     (9,848)
                           CDX.NA.HY.8 Index                     Sell       5,050       2.7500      6/20/12      24,128    (109,298)
                           CDX.NA.HY.8 Index                      Buy       5,050       2.7500      6/20/14      98,966     235,783
                           CDX.NA.HY.8 Index                     Sell       5,030       2.7500      6/20/12      31,857    (108,865)
                           CDX.NA.HY.8 Index                      Buy       5,030       2.7500      6/20/14      84,462     234,850
                           CDX.NA.HY.8 Index                     Sell       4,990       2.7500      6/20/12      35,103    (107,999)








                                                             BUY/SELL    NOTIONAL                               PREMIUM
                                                               CREDIT      AMOUNT  PAY/RECEIVE  TERMINATION       PAID/
COUNTERPARTY               REFERENCE ENTITY                PROTECTION      (000S)   FIXED RATE        DATES  (RECEIVED)       VALUE
- ------------------------------------------------------------------------------------------------------------------------------------

Deutsche Bank AG:
Continued
                           CDX.NA.HY.8 Index                      Buy     $ 4,990       2.7500%     6/20/14   $  77,172  $  232,982
                           CDX.NA.HY.8 Index                     Sell       2,995       2.7500      6/20/12      27,704     (64,821)
                           CDX.NA.HY.8 Index                      Buy       2,995       2.7500      6/20/14      39,684     139,836
                           Centex Corp.                          Sell         280       1.5500      9/20/09          --      (8,911)
                           Countrywide Home
                           Loans, Inc.                           Sell         885       3.2500      9/20/08          --     (14,418)
                           Dillard's, Inc.                       Sell         450       0.7500      9/20/08          --      (4,741)
                           Dow Jones CDX.NA.IG.7 Index            Buy       3,600       0.4000     12/20/11         370      20,959
                           Eastman Kodak Co.                     Sell       1,395       1.0000     12/20/08          --      13,811
                           Georgia-Pacific Corp.                 Sell       1,690       1.7500      9/20/08          --      19,292
                           Intelsat Ltd.                         Sell         455       2.8500      9/20/08          --       2,039
                           Lehman Brothers
                           Holdings, Inc.                        Sell       2,035       1.4100      9/20/08          --      11,854
                           Levi Strauss & Co.                    Sell         990       1.0000      9/20/08          --       2,401
                           Levi Strauss & Co.                    Sell         740       0.9000      9/20/08          --       1,062
                           MBIA, Inc.                            Sell       1,100       0.5200      9/20/08          --     (11,396)
                           MBIA, Inc.                            Sell       1,100       0.6000      9/20/08          --     (10,576)
                           Owens-Illinois, Inc.                  Sell         940       1.2500      9/20/08          --       5,514
                           Tenet Healthcare Corp.                Sell       1,725       1.6000      3/20/09          --     (69,824)
                           The Bear Stearns Cos., Inc.           Sell       4,180       2.3500      9/20/08          --      54,405
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
                           ABX.HE.AA.06-2 Index                  Sell         165       0.1700      5/25/46     (13,595)    (16,498)
                           Capmark Financial Group, Inc.         Sell       1,065       0.9500      6/20/12          --    (103,545)
                           Dole Food Co., Inc.                   Sell       1,695       3.8800      9/20/08          --       3,727
                           First Data Corp.                      Sell       1,080       1.1500      9/20/08          --     (14,941)
                           K. Hovnanian Enterprises, Inc.        Sell         645       6.7500      9/20/08          --     (18,079)
                           Pulte Homes, Inc.                     Sell       1,605       2.7500      9/20/09          --     (52,639)
                           Quebecor World, Inc.                  Sell         515       3.0000      9/20/08          --       4,818
                           Sara Lee Corp.                         Buy       1,385       0.4190      9/20/12          --      (8,357)
                           Smurfit-Stone Container
                           Enterprises, Inc.                     Sell       1,685       1.4500      9/20/08          --       7,447
                           Standard Pacific Corp.                Sell         845       6.6250      9/20/08          --     (54,930)
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
                           Amkor Technology, Inc.                Sell         160       2.6500      9/20/08          --       1,585
                           Citi Group, Inc.                      Sell       1,285       1.2500      9/20/08          --     (13,415)
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.:
                           D.R. Horton, Inc.                     Sell       1,630       4.2000     12/20/08          --        (948)
                           Morgan Stanley                        Sell       4,235       0.6400      9/20/08          --      12,595
                           Nortel Networks Corp.                 Sell         270       1.8500      9/20/08          --         385
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
                           ABX.HE.AA.06-2 Index                  Sell         320       0.1700      5/25/46     (31,998)    (34,865)
                           ABX.HE.AA.06-2 Index                  Sell         165       0.1700      5/25/46     (13,182)    (17,977)
                           Beazer Homes USA, Inc.                Sell       1,165       2.1500      6/20/08          --    (136,229)
                           CDX.NA.HY.8 Index                     Sell       4,965       2.7500      6/20/12      40,306    (101,461)
                           CDX.NA.HY.8 Index                      Buy       4,965       2.7500      6/20/14      71,406     208,008
                           CDX.NA.HY.8 Index                     Sell       4,860       2.7500      6/20/12      44,955     (99,315)
                           CDX.NA.HY.8 Index                      Buy       4,860       2.7500      6/20/14      64,395     203,609
                           CDX.NA.HY.8 Index                     Sell         915       2.7500      6/20/12     (59,831)    (18,698)
                           Countrywide Home Loans,
                           Inc.                                  Sell         870       0.7500      9/20/08          --     (30,605)
                           Countrywide Home Loans,
                           Inc.                                  Sell       3,180       0.4200      6/20/09          --    (179,100)


- --------------------------------------------------------------------------------
8. CREDIT DEFAULT SWAP CONTRACTS Continued



                                                             BUY/SELL    NOTIONAL                               PREMIUM
                                                               CREDIT      AMOUNT  PAY/RECEIVE  TERMINATION       PAID/
COUNTERPARTY               REFERENCE ENTITY                PROTECTION      (000S)   FIXED RATE        DATES  (RECEIVED)       VALUE
- ------------------------------------------------------------------------------------------------------------------------------------

Morgan Stanley
Capital Services, Inc.:
Continued
                           El Paso Corp.                         Sell     $ 2,090       0.5200%     3/20/10   $      --  $  (19,934)
                           First Data Corp.                      Sell         675       1.3500      9/20/08          --      (5,775)
                           Ford Motor Co.                        Sell       2,090       7.1500     12/20/16          --     122,781
                           Ford Motor Co.                        Sell         990       7.0500     12/20/16          --      53,083
                           General Motors Corp.                  Sell       1,035       5.8000     12/20/16          --      47,368
                           General Motors Corp.                   Buy       1,035       4.0000     12/20/08          --      (6,712)
                           General Motors Corp.                  Sell       1,005       5.7500     12/20/16          --      43,257
                           General Motors Corp.                   Buy       1,005       3.9500     12/20/08          --      (5,919)
                           Harrah's Operating Co., Inc.          Sell         905       2.2000      9/20/08          --       4,715
                           Inco Ltd.                              Buy       1,065       0.6300      3/20/17          --      (6,101)
                           Inco Ltd.                              Buy       1,055       0.7000      3/20/17          --     (11,520)
                           J.C. Penney Co., Inc.                 Sell       1,050       1.0700     12/20/17          --      (3,167)
                           K. Hovnanian Enterprises, Inc.        Sell         525       1.8500      6/20/08          --     (25,927)
                           K. Hovnanian
                           Enterprises, Inc.                     Sell         525       1.8500      6/20/08          --     (25,927)
                           Kohl's Corp.                           Buy       1,575       0.6600     12/20/17          --         (29)
                           Lennar Corp.                          Sell       1,190       2.9000     12/20/08          --      (9,606)
                           Residential Capital LLC               Sell       2,560       6.1200      9/20/08          --    (130,165)
                           Sara Lee Corp.                         Buy       1,775       0.4180      9/20/12          --     (15,727)
                           The Kroger Co.                         Buy       2,075       0.4775      6/20/12          --     (16,875)
                           Toys "R" Us, Inc.                     Sell         655       2.5500      9/20/08          --      (4,304)
                           Tribune Co.                           Sell       1,015       1.0000      6/20/08          --     (45,441)
                           Vale Overseas Ltd.                    Sell       1,065       1.1000      3/20/17          --       4,361
                           Vale Overseas Ltd.                    Sell       1,055       1.1700      3/20/17          --       9,593
                                                                                                             -----------------------
                                                                                                              $ 316,947  $ (135,830)
                                                                                                             =======================


- --------------------------------------------------------------------------------
9.INTEREST RATE SWAP CONTRACTS

An interest rate swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. Interest rate swaps involve the exchange
of rights to receive or commitments to pay interest. One cash flow stream will
typically be a floating rate payment based upon a specified index while the
other is typically a fixed rate. Payments under the swap are based on an agreed
upon principal amount but since this principal amount is not exchanged, it
represents neither an asset nor a liability to either counter-party, and is
referred to as notional. Interest rate swaps are marked to market daily using
primarily quotations from counterparties, and brokers. The value of the
contracts is separately disclosed on the Statement of Assets and Liabilities.
The unrealized appreciation (depreciation) related to the change in the
valuation of the notional amount of the swap is combined with the amount due to
(owed by) the Fund at termination or settlement. The net change in this amount
during the period is included on the Statement of Operations. The Fund also
records any periodic payments received from (paid to) the counterparty,
including at termination, under such contracts as realized gain (loss) on the
Statement of Operations.


      Swap agreements entail both interest rate risk and credit risk. There is a
risk, 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.

As of September 30, 2007, the Fund had entered into the following interest rate
swap agreements:



SWAP                   NOTIONAL          PAID BY    RECEIVED BY    TERMINATION
COUNTERPARTY             AMOUNT         THE FUND       THE FUND          DATES        VALUE
- --------------------------------------------------------------------------------------------

Credit Suisse                        Three-Month
International       $ 4,640,000    USD BBA LIBOR          5.428%        8/7/17    $  83,102
- --------------------------------------------------------------------------------------------
                                     Three-Month
Deutsche Bank AG      3,920,000    USD BBA LIBOR          5.445         8/8/17       73,798
                                                                                  ----------
                                                                                  $ 156,900
                                                                                  ==========


Index abbreviation is as follows:

BBA LIBOR    British Bankers' Association London-Interbank Offered Rate

- --------------------------------------------------------------------------------
10. TOTAL RETURN SWAP CONTRACTS

A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counter-party, and is
referred to as notional. Total return swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Fund at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).

- --------------------------------------------------------------------------------
10. TOTAL RETURN SWAP CONTRACTS Continued

As of September 30, 2007, the Fund had entered into the following total return
swap agreements:



SWAP                             NOTIONAL                 PAID BY           RECEIVED BY   TERMINATION
COUNTERPARTY                       AMOUNT                THE FUND              THE FUND         DATES       VALUE
- ------------------------------------------------------------------------------------------------------------------

Deutsche Bank AG:
                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
                                             Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
                                                    CMBS AAA 8.5+       Index plus 27.5
                              $ 5,600,000                   Index          basis points       11/1/07   $  38,621

                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
                                             Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
                                                    CMBS AAA 8.5+        Index minus 45
                                4,570,000                   Index          basis points        2/1/08      28,756

                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
                                             Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
                                                    CMBS AAA 8.5+         Index plus 60
                               13,320,000                   Index          basis points        2/1/08      95,470

                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
                                             Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
                                                    CMBS AAA 8.5+         Index plus 25
                                1,220,000                   Index          basis points        2/1/08       8,388
- ------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.:
                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
                                             Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
                                                    CMBS AAA 8.5+       Index plus 32.5
                                4,700,000                   Index          basis points       11/1/07      31,926

                                                 If negative, the      If positive, the
                                            absolute value of the   Total Return of the
                                             Lehman Brothers U.S.       Lehman Brothers
                                                    CMBS AAA 8.5+    U.S. CMBS AAA 8.5+
                               5,650,0000                   Index                 Index        2/1/08     (36,855)

                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
                                             Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
                                                    CMBS AAA 8.5+         Index plus 60
                                4,843,000                   Index          basis points        2/1/08      33,072








SWAP                             NOTIONAL                 PAID BY           RECEIVED BY   TERMINATION
COUNTERPARTY                       AMOUNT                THE FUND              THE FUND         DATES       VALUE
- ------------------------------------------------------------------------------------------------------------------

Lehman Brothers
Special Financing, Inc.:
Continued
                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
                                             Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
                                                    CMBS AAA 8.5+        Index minus 25
                              $ 2,970,000                   Index          basis points        3/1/08   $  18,941
- ------------------------------------------------------------------------------------------------------------------
                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
Morgan Stanley                               Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
Capital Services,                                   CMBS AAA 8.5+        Index plus 110
Inc.                           1,000,0000                   Index          basis points       1/31/08       7,486
- ------------------------------------------------------------------------------------------------------------------
                                                                       If positive, the
                                                 If negative, the   Total Return of the
                                            absolute value of the       Lehman Brothers
                                             Lehman Brothers U.S.    U.S. CMBS AAA 8.5+
                                                    CMBS AAA 8.5+         Index plus 60
UBS AG                          6,054,000                   Index          basis points        2/1/08      42,964
                                                                                                        ----------
                                                                                                        $ 268,769
                                                                                                        ==========


Abbreviation is as follows:

CMBS    Commercial Mortgage Backed Securities

- --------------------------------------------------------------------------------
11. ILLIQUID SECURITIES

As of September 30, 2007, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 10% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.

- --------------------------------------------------------------------------------
12. SECURITIES LENDING

The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of
securities, letters of credit or cash, against the loaned securities and
maintains collateral in an amount not less than 100% of the market value of the
loaned securities during the period of the loan. The market value of the loaned
securities is determined at the close of business each day. If the Fund is
undercollateralized at the close of business due to an increase in market value
of securities on loan, additional collateral is requested from the borrowing
counterparty and is delivered to the Fund on the next business day. Cash
collateral may be invested in approved investments and the Fund bears the risk
of any loss in value of these investments. The Fund retains a portion of the
interest earned from the collateral. If the borrower defaults on its obligation
to return the securities loaned because of insolvency or other reasons,
the Fund could experience delays and cost in recovering the securities loaned or
in gaining access to the collateral. The Fund continues to receive the economic
benefit of interest or dividends paid on the securities loaned in the form of a
substitute payment received from the borrower. As of September 30, 2007, the
Fund had no securities on loan.

- --------------------------------------------------------------------------------
13. RECENT ACCOUNTING PRONOUNCEMENT

In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions
taken in the course of preparing the Fund's tax returns to determine whether it
is "more-likely-than-not" that tax positions taken in the Fund's tax return will
be ultimately sustained. A tax liability and expense must be recorded in respect
of any tax position that, in Management's judgment, will not be fully realized.
FIN 48 is effective for fiscal years beginning after December 15, 2006. As of
September 30, 2007, the Manager has evaluated the implications of FIN 48 and
does not currently anticipate a material impact to the Fund's financial
statements. The Manager will continue to monitor the Fund's tax positions
prospectively for potential future impacts.

      In September 2006, ("FASB") issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and expands disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. As of September 30, 2007, the Manager does not believe the
adoption of SFAS No. 157 will materially impact the financial statement amounts;
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.

- --------------------------------------------------------------------------------
14. ACQUISITION OF OPPENHEIMER DISCIPLINED ALLOCATION FUND

On May 11, 2006, the Fund acquired all of the net assets of Oppenheimer
Disciplined Allocation Fund, pursuant to an Agreement and Plan of Reorganization
approved by the Oppenheimer Disciplined Allocation Fund shareholders on April
20, 2006. The Fund issued (at an exchange ratio of 1.082920 for Class A,
1.125484 for Class B, 1.087721 for Class C and 1.090241 for Class N of the Fund)
to one share of Oppenheimer Disciplined Allocation Fund 7,679,053; 852,361;
622,399 and 134,474 shares of beneficial interest for Class A, Class B, Class C
and Class N, respectively, valued at $105,279,820, $11,421,633, $8,383,715 and
$1,824,806 in exchange for the net assets, resulting in combined Class A net
assets of $811,983,024, Class B net assets of $101,954,869, Class C net assets
of $95,423,574 and Class N net assets of $14,874,615 on May 11, 2006. The net
assets acquired included net unrealized appreciation of $7,913,564 and an unused
capital loss carryforward of $2,329,209 potential utilization subject to tax
limitations. The exchange qualified as a tax-free reorganization for federal
income tax purposes.


                                                  Appendix A

                                                RATINGS DEFINITIONS

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

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM RATINGS: BONDS AND PREFERRED STOCK ISSUER RATINGS

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

A: Bonds and preferred stock rated "A" possess many favorable investment attributes and are to be considered as
upper-medium grade obligations.  Factors giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment some time in the future.

Baa: Bonds and preferred stock 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 and preferred stock rated "Ba" are judged to have speculative elements. Their future cannot be
considered well-assured.  Often the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.  Uncertainty of position
characterizes bonds in this class.

B: Bonds and preferred stock rated "B" generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract over any long period of time may
be small.

Caa: Bonds and preferred stock rated "Caa" are of poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca: Bonds and preferred stock rated "Ca" represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings.

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

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from "Aa" through "Caa."
The modifier "1" indicates that the obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in the lower end of that
generic rating category. Advanced refunded issues that are secured by certain assets are identified with a #
symbol.

PRIME RATING SYSTEM (SHORT-TERM RATINGS - TAXABLE DEBT)
These ratings are opinions of the ability of issuers to honor senior financial obligations and contracts. Such
obligations generally have an original maturity not exceeding one year, unless explicitly noted.

Prime-1: Issuer has a superior ability for repayment of senior short-term debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt obligations. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while
appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.

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

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

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

LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based in varying degrees, on the following considerations:
o        Likelihood of payment-capacity and willingness of the obligor to meet its financial commitment on an
         obligation in accordance with the terms of the obligation;
o        Nature of and provisions of the obligation; and
o        Protection afforded by, and relative position of, the obligation in the event of bankruptcy,
         reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors'
         rights.
     The issue ratings definitions are expressed in terms of default risk. As such, they pertain to senior
obligations of an entity. Junior obligations are typically rated lower than senior obligations, to reflect the
lower priority in bankruptcy, as noted above.

AAA: An obligation 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:  An obligation 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: An obligation rated "A" are somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its
financial commitment on the obligation is still strong.

BBB: An obligation rated "BBB" exhibit adequate protection parameters. However, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

BB, B, CCC, CC, and C
An obligation 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: An obligation rated "BB" are less vulnerable to nonpayment than other speculative issues. However, they face
major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead
to the obligor's inadequate capacity to meet its financial commitment on the obligation.

B: An obligation rated "B" are more vulnerable to nonpayment than obligations rated "BB", but the obligor
currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or
economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.

CCC: An obligation rated "CCC" are currently vulnerable to nonpayment, and are dependent upon favorable business,
financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the
event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to
meet its financial commitment on the obligation.

CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.

C: Subordinated debt or preferred stock obligations rated "C" are currently highly vulnerable to nonpayment. The
"C" rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken,
but payments on this obligation are being continued. A "C" also will be assigned to a preferred stock issue in
arrears on dividends or sinking fund payments, but that is currently paying.

D: An obligation rated "D" are in payment default. The "D" rating category is used when payments on an obligation
are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D" rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative
standing within the major rating categories.

c: The `c' subscript is used to provide additional information to investors that the bank may terminate its
obligation to purchase tendered bonds if the long-term credit rating of the issuer is below an investment-grade
level and/or the issuer's bonds are deemed taxable.

p: The letter `p' indicates that the rating is provisional. A provisional rating assumes the successful
completion of the project financed by the debt being rated and indicates that payment of debt service
requirements is largely or entirely dependent upon the successful, timely completion of the project. This rating,
however, while addressing credit quality subsequent to completion of the project, makes no comment on the
likelihood of or the risk of default upon failure of such completion. The investor should exercise his own
judgment with respect to such likelihood and risk.

Continuance of the ratings is contingent upon Standard & Poor's receipt of an executed copy of the escrow
agreement or closing documentation confirming investments and cash flows.

r: The `r' highlights derivative, hybrid, and certain other obligations that Standard & Poor's believes may
experience high volatility or high variability in expected returns as a result of noncredit risks. Examples of
such obligations are securities with principal or interest return indexed to equities, commodities, or
currencies; certain swaps and options; and interest-only and principal-only mortgage securities. The absence of
an `r' symbol should not be taken as an indication that an obligation will exhibit no volatility or variability
in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are rated on the same basis as domestic
corporate and municipal issues. The ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.

Bond Investment Quality Standards

Under present commercial bank regulations issued by the Comptroller of the Currency, bonds rated in the top four
categories (`AAA', `AA', `A', `BBB', commonly known as investment-grade ratings) generally are regarded as
eligible for bank investment. Also, the laws of various states governing legal investments impose certain rating
or other standards for obligations eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries in general

SHORT-TERM ISSUE CREDIT RATINGS
Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In
the U.S., for example, that means obligations with an original maturity of no more than 365 days-including
commercial paper.

A-1: A short-term obligation rated "A-1" is rated in the highest category by Standard & Poor's. The obligor's
capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations
are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment
on these obligations is extremely strong.

A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rating categories. However, the obligor's
capacity to meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

B: A short-term obligation rated "B" is regarded as having significant speculative characteristics. The obligor
currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the
obligation.

C: A short-term obligation rated "C" is currently vulnerable to nonpayment and is dependent upon favorable
business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated "D" is in payment default. The "D" rating category is used when payments on an
obligation are not made on the date due even if the applicable grace period has not expired, unless Standard &
Poor's believes that such payments will be made during such grace period. The "D" rating also will be used upon
the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are
jeopardized.

NOTES:
A Standard & Poor's note rating reflects the liquidity factors and market access risks unique to notes. Notes due
in three years or less will likely receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in making that assessment:
o        Amortization schedule-the larger the final maturity relative to other maturities, the more likely it will
         be treated as a note; and
o        Source of payment-the more dependent the issue is on the market for its refinancing, the more likely
         it will be treated as a note.

SP-1: Strong capacity to pay principal and interest. An issue with a very strong capacity to pay debt service is
given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and
economic changes over the term of the notes.

SP-3: Speculative capacity to pay principal and interest.

Fitch, Inc.
International credit ratings assess the capacity to meet foreign currency or local currency commitments. Both
"foreign currency" and "local currency" ratings are internationally comparable assessments. The local currency
rating measures the probability of payment within the relevant sovereign state's currency and jurisdiction and
therefore, unlike the foreign currency rating, does not take account of the possibility of foreign exchange
controls limiting transfer into foreign currency.

INTERNATIONAL LONG-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency ratings.

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of credit risk. They are assigned only
in the case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of credit risk. They indicate a very
strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk. The capacity for timely payment of
financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a low expectation of credit risk. The
capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances
and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit risk developing, particularly as the
result of adverse economic change over time. However, business or financial alternatives may be available to
allow financial commitments to be met. Securities rated in this category are not investment grade.


B: Highly Speculative. "B" ratings indicate that significant credit risk is present, but a limited margin of
safety remains. Financial commitments are currently being met. However, capacity for continued payment is
contingent upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk.  Default is a real possibility. Capacity for meeting financial commitments is
solely reliant upon sustained, favorable business or economic developments. A "CC" rating indicates that default
of some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are based on their prospects for achieving
partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are
highly speculative and cannot be estimated with any precision, the following serve as general guidelines. "DDD"
obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest.
"DD" indicates potential recoveries in the range of 50%-90%, and "D" the lowest recovery potential, i.e., below
50%.

Entities rated in this category have defaulted on some or all of their obligations. Entities rated "DDD" have the
highest prospect for resumption of performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal reorganization or liquidation process;
those rated "DD" are likely to satisfy a higher portion of their outstanding obligations, while entities rated
"D" have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote relative status within the major rating
categories.  Plus and minus signs are not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS
The following ratings scale applies to foreign currency and local currency ratings. A short-term rating has a
time horizon of less than 12 months for most obligations, or up to three years for U.S. public finance
securities, and thus places greater emphasis on the liquidity necessary to meet financial commitments in a timely
manner.

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



 OppenheimerFunds Special Sales Charge Arrangements
                     and Waivers

     In certain  cases,  the initial  sales  charge that applies to purchases of
Class A shares(1) of the  Oppenheimer  funds or the  contingent  deferred  sales
charge  that may apply to Class A, Class B or Class C shares  may be  waived.(2)
That is because of the economies of sales efforts  realized by  OppenheimerFunds
Distributor,  Inc.,  (referred to in this document as the "Distributor"),  or by
dealers  or other  financial  institutions  that offer  those  shares to certain
classes of investors. Not all waivers apply to all funds.

     For  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 created or qualified under
                  Sections 401(a) or 401(k) of the
                  Internal Revenue Code,
              2)  non-qualified deferred
                  compensation plans,
              3)  employee benefit plans(3)
              4)  Group Retirement Plans(4)
              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  shares of  Oppenheimer  Rochester  National
Municipals and Rochester Fund Municipals purchased prior to October 22, 2007) of
the  beginning  of the  calendar  month of their  purchase,  as described in the
Prospectus (unless a waiver described  elsewhere in this Appendix applies to the
redemption).  Additionally,  on shares  purchased  under these  waivers that are
subject to the Class A contingent  deferred sales charge,  the Distributor  will
pay the  applicable  concession  described  in the  Prospectus  under  "Class  A
Contingent Deferred Sales Charge."(5) This waiver provision applies to:

     |_| Purchases of Class A shares aggregating $1 million or more.

     |_|  Purchases of Class A shares,  prior to March 1, 2007,  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
                  $5 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 advisers 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 advisers 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 advisers 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 adviser 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
              adviser (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.

|_|      Effective March 1, 2007, 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.

|_|      Effective October 1, 2005, taxable accounts
              established with the proceeds of
              Required Minimum Distributions from
              Retirement Plans.

|_|      Purchases by former shareholders of Atlas
              Strategic Income Fund of the Class A
              shares of any Oppenheimer fund that is
              available for exchange to shareholders
              of Oppenheimer Strategic Income Fund.


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

     1. 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 or unit investment
              trusts for which reinvestment
              arrangements have been made with the
              Distributor.
|_|      Shares purchased by certain Retirement
              Plans that are part of a retirement
              plan or platform offered by banks,
              broker-dealers, financial advisors or
              insurance companies, or serviced by
              recordkeepers.
|_|      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.
|_|      Shares purchased in amounts of less than
              $5.

     2. Class A shares issued and purchased in the  following  transactions  are
not subject to sales charges (a dealer concession at the annual rate of 0.25% is
paid by the  Distributor  on  purchases  made  within the first 6 months of plan
establishment):

|_|      Retirement Plans that have $5 million or
              more in plan assets.
|_|      Retirement Plans with a single plan sponsor
              that have $5 million or more in
              aggregate assets invested in
              Oppenheimer funds.

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

     The Class A contingent  deferred sales charge is also waived if shares that
would otherwise be subject to the contingent  deferred sales charge are redeemed
in the following cases:

|_|      To make Automatic Withdrawal Plan payments
              that are limited annually to no more
              than 12% of the account value adjusted
              annually.
|_|      Involuntary redemptions of shares by
              operation of law or involuntary
              redemptions of small accounts (please
              refer to "Shareholder Account Rules
              and Policies," in the applicable fund
              Prospectus).
|_|      For distributions from Retirement Plans,
              deferred compensation plans or other
              employee benefit plans for any of the
              following purposes:
              1)  Following the death or disability
                  (as defined in the Internal
                  Revenue Code) of the participant
                  or beneficiary. The death or
                  disability must occur after the
                  participant's account was
                  established.
              2)  To return excess contributions.
              3)  To return contributions made due
                  to a mistake of fact.
              4)  Hardship withdrawals, as defined in the
                  plan.(6)
              5)  Under a Qualified Domestic
                  Relations Order, as defined in the
                  Internal Revenue Code, or, in the
                  case of an IRA, a divorce or
                  separation agreement described in
                  Section 71(b) of the Internal
                  Revenue Code.
              6)  To meet the minimum distribution
                  requirements of the Internal
                  Revenue Code.
              7)  To make "substantially equal
                  periodic payments" as described in
                  Section 72(t) of the Internal
                  Revenue Code.
              8)  For loans to participants or
                  beneficiaries.
              9)  Separation from service.(7)
              10) Participant-directed redemptions
                  to purchase shares of a mutual
                  fund (other than a fund managed by
                  the Manager or a subsidiary of the
                  Manager) if the plan has made
                  special arrangements with the
                  Distributor.
              11) Plan termination or "in-service
                  distributions," if the redemption
                  proceeds are rolled over directly
                  to an OppenheimerFunds-sponsored
                  IRA.

|_|      For distributions from 401(k) plans
              sponsored by broker-dealers that have
              entered into a special agreement with
              the Distributor allowing this waiver.
|_|      For distributions from retirement plans
              that have $10 million or more in plan
              assets and that have entered into a
              special agreement with the Distributor.
|_|      For distributions from retirement plans
              which are part of a retirement plan
              product or platform offered by certain
              banks, broker-dealers, financial
              advisors, insurance companies or
              record keepers which have entered into
              a special agreement with the
              Distributor.
|_|      At the sole discretion of the Distributor,
              the contingent deferred sales charge
              may be waived for redemptions of
              shares requested by the shareholder of
              record within 60 days following the
              termination by the Distributor of the
              selling agreement between the
              Distributor and the shareholder of
              record's broker-dealer of record for
              the account.

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 (as
              defined in the Internal Revenue Code).
|_|      Distributions from accounts for which the
              broker-dealer of record has entered
              into a special agreement with the
              Distributor allowing this waiver.
|_|      At the sole discretion of the Distributor,
              the contingent deferred sales charge
              may be waived for redemptions of
              shares requested by the shareholder of
              record within 60 days following the
              termination by the Distributor of the
              selling agreement between the
              Distributor and the shareholder of
              record's broker-dealer of record for
              the account.
|_|      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 of Class C shares of an
              Oppenheimer fund in amounts of $1
              million or more requested in writing
              by a Retirement Plan sponsor and
              submitted more than 12 months after
              the Retirement Plan's first purchase
              of Class C shares, if the redemption
              proceeds are invested to purchase
              Class N shares of one or more
              Oppenheimer funds.
|_|      Distributions(8) from Retirement Plans or
              other employee benefit plans for any
              of the following purposes:
              1)  Following the death or disability
                  (as defined in the Internal
                  Revenue Code) of the participant
                  or beneficiary. The death or
                  disability must occur after the
                  participant's account was
                  established in an Oppenheimer fund.
              2)  To return excess contributions
                  made to a participant's account.
              3)  To return contributions made due
                  to a mistake of fact.
              4)  To make hardship withdrawals, as
                  defined in the plan.(9)
              5)  To make distributions required
                  under a Qualified Domestic
                  Relations Order or, in the case of
                  an IRA, a divorce or separation
                  agreement described in Section
                  71(b) of the Internal Revenue Code.
              6)  To meet the minimum distribution
                  requirements of the Internal
                  Revenue Code.
              7)  To make "substantially equal
                  periodic payments" as described in
                  Section 72(t) of the Internal
                  Revenue Code.
              8)  For loans to participants or
                  beneficiaries.(10)
              9)  On account of the participant's
                  separation from service.(11)
              10) Participant-directed redemptions
                  to purchase shares of a mutual
                  fund (other than a fund managed by
                  the Manager or a subsidiary of the
                  Manager) offered as an investment
                  option in a Retirement Plan if the
                  plan has made special arrangements
                  with the Distributor.
              11) Distributions made on account of a
                  plan termination or "in-service"
                  distributions, if the redemption
                  proceeds are rolled over directly
                  to an OppenheimerFunds-sponsored
                  IRA.
              12) For distributions from a
                  participant's account under an
                  Automatic Withdrawal Plan after
                  the participant reaches age 59 1/2,
                  as long as the aggregate value of
                  the distributions does not exceed
                  10% of the account's value,
                  adjusted annually.
              13) Redemptions of Class B shares
                  under an Automatic Withdrawal Plan
                  for an account other than a
                  Retirement Plan, if the aggregate
                  value of the redeemed shares does
                  not exceed 10% of the account's
                  value, adjusted annually.
              14) For distributions from 401(k)
                  plans sponsored by broker-dealers
                  that have entered into a special
                  arrangement with the Distributor
                  allowing this waiver.

|_|      Redemptions of Class B shares or Class C
              shares under an Automatic Withdrawal
              Plan from an account other than a
              Retirement Plan if the aggregate value
              of the redeemed shares does not exceed
              10% of the account's value annually.

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

The contingent deferred sales charge is also waived
on Class B and Class C shares sold or issued in the
following cases:

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

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


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

     Oppenheimer Rising Dividends Fund, Inc.
     Oppenheimer Small- & Mid- Cap Value Fund
     Oppenheimer Quest Balanced Fund
     Oppenheimer Quest International Value Fund, Inc.
     Oppenheimer Quest Opportunity Value Fund


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

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

     All of the funds  listed  above are  referred  to in this  Appendix  as the
"Former Quest for Value Funds." The waivers of initial and  contingent  deferred
sales charges  described in this Appendix apply to shares of an Oppenheimer fund
that are either:

|_|      acquired by such shareholder pursuant to an
              exchange of shares of an Oppenheimer
              fund that was one of the Former Quest
              for Value Funds, or
|_|      purchased by such shareholder by exchange
              of shares of another Oppenheimer fund
              that were acquired pursuant to the
              merger of any of the Former Quest for
              Value Funds into that other
              Oppenheimer fund on November 24, 1995.

A.   Reductions or Waivers of Class A Sales Charges.

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

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


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

- -------------------------------- ---------------------------- --------------------------------- ---------------------
9 or Fewer                       2.50%                        2.56%                             2.00%
- -------------------------------- ---------------------------- --------------------------------- ---------------------
- -------------------------------- ---------------------------- --------------------------------- ---------------------
At least 10 but not more than    2.00%                        2.04%                             1.60%
49
- -------------------------------- ---------------------------- --------------------------------- ---------------------

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

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

|X|      Waiver of Class A Sales Charges for Certain Shareholders.  Class A shares purchased by the following
investors are not subject to any Class A initial or contingent deferred sales charges:
o        Shareholders who were shareholders of the AMA Family of Funds on February 28, 1991 and who acquired
                  shares of any of the Former Quest for Value Funds by merger of a portfolio of the AMA Family of
                  Funds.
o        Shareholders who acquired shares of any Former Quest for Value Fund by merger of any of the portfolios
                  of the Unified Funds.
o
|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.
o
|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 Core Bond Fund,
     Oppenheimer Value Fund and
are modified as described below for those Fund shareholders who were shareholders of the following funds
(referred to as the "Former Connecticut Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:
     Connecticut Mutual Liquid Account                            Connecticut Mutual Total Return Account
     Connecticut Mutual Government Securities Account             CMIA LifeSpan Capital Appreciation Account
     Connecticut Mutual Income Account                            CMIA LifeSpan Balanced Account
     Connecticut Mutual Growth Account                            CMIA Diversified Income Account

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

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

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

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

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

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

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

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

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

Shareholders of Oppenheimer AMT-Free Municipals, 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 adviser 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 adviser 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 advisers 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 advisers 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 adviser provides
              administrative services.


Oppenheimer Balanced Fund

Internet Website:
         www.oppenheimerfunds.com

Investment Adviser
         OppenheimerFunds, Inc.
         Two World Financial Center
         225 Liberty Street, 11th Floor
         New York, New York 10281-1008

Distributor
         OppenheimerFunds Distributor, Inc.
         Two World Financial Center
         225 Liberty Street, 11th Floor
         New York, New York 10281-1008

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 Registered Public Accounting Firm
         KPMG LLP
         707 Seventeenth Street
         Denver, Colorado 80202

Legal Counsel
         Mayer Brown LLP
         1675 Broadway
         New York, New York 10019

1234


PX0240.001.1207




(1) In accordance with Rule 12b-1 of the Investment Company Act, the term "Independent Trustees" in this
Statement of Additional Information refers to those Trustees who are not "interested persons" of the Fund and who
do not have any direct or indirect financial interest in the operation of the distribution plan or any agreement
under the plan.
(1) Certain waivers also apply to Class M shares of Oppenheimer Convertible Securities Fund.
(2) In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered closed-end fund, references to
contingent deferred sales charges mean the Fund's Early Withdrawal Charges and references to "redemptions" mean
"repurchases" of shares.
(3) An "employee benefit plan" means any plan or arrangement, whether or not it is "qualified" under the Internal
Revenue Code, under which Class N shares of an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single employer or of affiliated employers.
These may include, for example, medical savings accounts, payroll deduction plans or similar plans. The fund
accounts must be registered in the name of the fiduciary or administrator purchasing the shares for the benefit
of participants in the plan.
(4) The term "Group Retirement Plan" means any qualified or non-qualified retirement plan for employees of a
corporation or sole proprietorship, members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the group has made special arrangements with
the Distributor and all members of the group participating in (or who are eligible to participate in) the plan
purchase shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial
institution designated by the group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b)
plans other than plans for public school employees. The term "Group Retirement Plan" also includes qualified
retirement plans and non-qualified deferred compensation plans and IRAs that purchase shares of an Oppenheimer
fund or funds through a single investment dealer, broker or other financial institution that has made special
arrangements with the Distributor.
(5) However, that concession will not be paid on purchases of shares in amounts of $1 million or more (including
any right of accumulation) by a Retirement Plan that pays for the purchase with the redemption proceeds of Class
C shares of one or more Oppenheimer funds held by the Plan for more than one year.
(6) This provision does not apply to IRAs.
(7) This provision only applies to qualified retirement plans and 403(b)(7) custodial plans after your separation
from service in or after the year you reached age 55.
(8) The distribution must be requested prior to Plan termination or the elimination of the Oppenheimer funds as
an investment option under the Plan.
(9) This provision does not apply to IRAs.
(10) This provision does not apply to loans from 403(b)(7) custodial plans and loans from the
OppenheimerFunds-sponsored Single K retirement plan.
(11) This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to
IRAs.


OPPENHEIMER BALANCED FUND

                                                     FORM N-1A

                                                      PART C

                                                 OTHER INFORMATION

Item 23.  Exhibits

(a)      (i) Amendment  dated  2/19/04 to the Amended and Restated  Declaration  of Trust dated 3/6/97:  Previously
filed with Registrant's Post-Effective Amendment No. 39, 11/23/04, and incorporated herein by reference.

         (ii) Amended and Restated  Declaration of Trust dated 3/6/97:  Previously  filed with  Post-Effective  No.
29, 11/24/97, and incorporated herein by reference.

(b)      (i)  Amended and Restated By-Laws dated June 16, 2005: Previously filed with Post-Effective No. 41,
01/27/06, and incorporated herein by reference.

(c)      (i) Specimen Class A Share Certificate:  Previously filed with Registrant's  Post-Effective  Amendment No.
37, 11/21/02, and incorporated herein by reference.

         (ii) Specimen Class B Share  Certificate:  Previously  filed with  Registrant's  Post-Effective  Amendment
No. 37, 11/21/02, and incorporated herein by reference.

         (iii) Specimen Class C Share  Certificate:  Previously filed with  Registrant's  Post-Effective  Amendment
No. 37, 11/21/02, and incorporated herein by reference.

         (iv) Specimen Class N Share  Certificate:  Previously  filed with  Registrant's  Post-Effective  Amendment
No. 37, 11/21/02, and incorporated herein by reference.

(d)      Amended and Restated  Investment  Advisory  Agreement  dated 1/1/05:  Previously  filed with  Registrant's
Post-Effective Amendment No. 40, 11/23/05, and incorporated herein by reference.

(e)      (i) General  Distributor's  Agreement dated 12/10/92:  Previously filed with  Registrant's  Post-Effective
Amendment No. 15, 4/19/93,  refiled with  Registrant's  Post-Effective  Amendment No. 20, 3/2/95,  pursuant to Item
102 of Regulation S-T and incorporated herein by reference.

(ii)     Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective
Amendment No. 34 to the Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.33-17850),
(10/23/06), and incorporated herein by reference.

(iii)    Form of Broker Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective
Amendment No. 34 to the Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.33-17850),
(10/23/06), and incorporated herein by reference.

(iv)     Form of Agency Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective
Amendment No. 34 to the Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg. No.33-17850),
(10/23/06), 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. 34 to the Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg.
No.33-17850), (10/23/06), and incorporated herein by reference.

(f)      (i)  Amended and Restated Retirement Plan for Non-Interested Trustees or Directors dated 8/9/01:
Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Gold & Special
Minerals Fund (Reg. No. 2-82590), (10/25/01), and incorporated herein by reference.

         (ii)  Form of Compensation Deferral Plan for Disinterested Trustees/Directors: Previously filed with
Post-Effective Amendment No. 1 to the Registration Statement of Oppenheimer Baring Japan Fund (Reg. No.
333-137581), (9/27/07), and incorporated herein by reference.


(g)          (i) Global Custody Agreement dated August 16, 2002: Previously filed with Post
Effective Amendment No. 51 to the Registration Statement of Oppenheimer Capital
Appreciation Fund (Reg. No. 2-69719), (10/23/06), and incorporated herein by reference.

             (ii) Amendment dated October 2, 2003 to the Global Custody Agreement dated August
16, 2002: Previously filed with Pre-Effective Amendment No. 1 to the Registration Statement of Oppenheimer
Principal Protected Trust II (Reg. 333-108093), (11/6/03), and incorporated herein by reference.


(h)      Not applicable.

(i)      Opinion  and  Consent  of  Counsel  dated  3/2/87:  Previously  filed  with  Registrant's   Post-Effective
Amendment No. 7, 4/24/87,  refiled with Registrant's  Post-Effective Amendment No. 20, 3/2/95, pursuant to Item 102
of Regulation S-T and incorporated herein by reference.

(j)      Independent Registered Public Accounting Firm's Consent: Filed herewith.

(k)      Not applicable.

(l)      (i) Investment Letter from OppenheimerFunds,  Inc. (formerly named "Oppenheimer  Management  Corporation")
to  Registrant  dated  October 25,  1984:  Previously  filed with  Registrant's  Post-Effective  Amendment  No. 31,
11/30/98, and incorporated herein by reference.

         (ii) Investment Letter from OppenheimerFunds,  Inc. (formerly named "Oppenheimer  Management  Corporation)
to  Registrant  dated  November 30, 1986:  Previously  filed with  Registrant's  Post-Effective  Amendment  No. 31,
11/30/98, and incorporated herein by reference.

(m)      (i) Amended and Restated  Service Plan and Agreement for Class A shares dated 10/26/05:  Previously  filed
with Registrant's Post-Effective Amendment No. 42, 1/26/07, and incorporated herein by reference.

         (ii)  Amended  and  Restated  Distribution  and  Service  Plan and  Agreement  for  Class B  shares  dated
10/26/05:  Previously filed with Registrant's  Post-Effective Amendment No. 42, 1/26/07, and incorporated herein by
reference.

(iii)    Amended and Restated  Distribution  and Service  Plan and  Agreement  for Class C shares  dated  10/26/05:
Previously filed with Registrant's Post-Effective Amendment No. 42, 1/26/07, and incorporated herein by reference.

         (iv)  Amended  and  Restated  Distribution  and  Service  Plan and  Agreement  for  Class N  shares  dated
10/26/05:  Previously filed with Registrant's  Post-Effective Amendment No. 42, 1/26/07, and incorporated herein by
reference.

  (n)     Oppenheimer Funds Multiple Class Plan under Rule 18f-3 updated through 8/29/07: Previously filed with
  the Initial Registration Statement of Oppenheimer Portfolio Series Fixed Income Investor Fund (Reg. No.
  333-146105), (9/14/07), and incorporated herein by reference.

(o)          Power of Attorney for all Trustees/Directors and Brian Wixted dated August 16,
2007: Previously filed with Pre-Effective Amendment No. 1 to the Registration Statement of
Oppenheimer Global Value Fund (Reg. No. 333-144517), 9/10/07, and incorporated herein by
reference.

(p)      Amended and Restated Code of Ethics of the Oppenheimer Funds dated August 30, 2007 under Rule 17j-1 of
the Investment Company Act of 1940: Previously filed with the Initial Registration Statement of Oppenheimer
Portfolio Series Fixed Income Investor Fund (Reg. No. 333-146105), (09/14/07), 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,                       Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patrick Adams                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Agan,                             Senior  Vice  President  of  Shareholder   Financial  Services,   Inc.  and
Senior Vice President                    Shareholders   Services,   Inc.;   Vice   President   of   OppenheimerFunds
                                         Distributor,  Inc., Centennial Asset Management Corporation and OFI Private
                                         Investments Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carl Algermissen,                        None
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Amato,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Tracey Beck Apostolopoulos,              None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Janette Aprilante,                       Secretary   (since   December  2001)  of:   Centennial   Asset   Management
Vice President & Secretary               Corporation,   OppenheimerFunds   Distributor,   Inc.,   HarbourView  Asset
                                         Management   Corporation   (since  June  2003),   Oppenheimer   Real  Asset
                                         Management,   Inc.,  Shareholder  Financial  Services,   Inc.,  Shareholder
                                         Services,  Inc., Trinity Investment  Management  Corporation (since January
                                         2005),  OppenheimerFunds  Legacy  Program,  OFI  Private  Investments  Inc.
                                         (since June 2003) and OFI Institutional Asset Management,  Inc. (since June
                                         2003). Assistant Secretary of OFI Trust Company (since December 2001).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dmitri Artemiev                          Formerly (until January 2007) Analyst/Developer at Fidelity Investments.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Hany S. Ayad,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James F. Bailey,                         Senior Vice President of  Shareholder  Services,  Inc.  (since March 2006).
Senior Vice President                    Formerly Vice  President at T. Rowe Price Group  (September  2000 - January
                                         2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Baker,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Michael Banta,                      None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Adam Bass,                               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kevin Baum,                              None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeff Baumgartner,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marc Baylin,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Todd Becerra,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kathleen Beichert,                       Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gerald B. Bellamy,                       Assistant Vice President (Sales Manager of the  International  Division) of
Assistant Vice President                 OFI Institutional Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Erik S. Berg,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Bertucci,                         None
Assistant Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rajeev Bhaman,                           None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Craig Billings,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark Binning,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert J. Bishop,                        Treasurer (since October 2003) of  OppenheimerFunds  Distributor,  Inc. and
Vice President                           Centennial Asset Management Corporation.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Beth Bleimehl,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa I. Bloomberg,                       None
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Veronika Boesch,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Chad Boll,                               None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Antulio N. Bomfim,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michelle Borre Massick,                  None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lori E. Bostrom,                         None
Vice President & Senior Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Bourgeois,                          Assistant Vice President of Shareholder Services, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David J. Bowers                          Formerly (until July 2007) Analyst at Evergreen Investments.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Boydell,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard Britton,                         Formerly  CTO/Managing  Director of IT  Infrastructure  at GMAC Residential
Vice President                           Funding Corporation (October 2000 - October 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Garrett C. Broadrup,                     Formerly  an  Associate  at Davis Polk & Wardwell  (October  2002 - October
Assistant Vice President & Assistant     2006).
Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Bromberg,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Holly Broussard,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kristine Bryan-Levin,                    None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Stephanie Bullington,                    None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Paul Burke,                              None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark Burns,                              None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
JoAnne Butler,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Geoffrey Caan,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dale William Campbell,                   Formerly (until January 2007) Manager at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patrick Campbell,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Catherine Carroll,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Debra Casey,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Maria Castro,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Chaffee,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles Chibnik,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patrick Sheng Chu,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brett Clark,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
H.C. Digby Clements,                     None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas Closs,                            Formerly  (until  January 2007)  Development  Manager at  OppenheimerFunds,
Assistant Vice President                 Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Peter V. Cocuzza,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gerald James Concepcion,                 None.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Susan Cornwell,                          Senior  Vice  President  of  Shareholder   Financial  Services,   Inc.  and
Senior Vice President                    Shareholder   Services,    Inc.;   Vice   President   of   OppenheimerFunds
                                         Distributor,    Inc.,   Centennial   Asset   Management   Corporation   and
                                         OppenheimerFunds Legacy Program.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Cheryl Corrigan,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Belinda J. Cosper,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Scott Cottier,                           None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lauren Coulston,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Terry Crady,                             Formerly IT Development Manager at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
George Curry,                            Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie C. Cusker,                         None
Assistant Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kevin Dachille,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Damian,                             None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Dawson,                           None.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Delano,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kendra Delisa,                           Formerly (until January 2007) Manager at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard Demarco,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Craig P. Dinsell,                        None
Executive Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Randall C. Dishmon,                      None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rebecca K. Dolan,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Steven D. Dombrower,                     Senior Vice President of OFI Private  Investments  Inc.;  Vice President of
Vice President                           OppenheimerFunds Distributor, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Sara Donahue,                            Formerly (until November 2006) Manager at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Alicia Dopico,                           Formerly (until August 2007) Manager at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas Doyle,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Bruce C. Dunbar,                         None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Dvorak,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard Edmiston,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
A. Taylor Edwards,                       None
Vice President & Assistant Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Venkat Eleswarapu,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel R. Engstrom,                      None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James Robert Erven,                      None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
George R. Evans,                         None
Senior Vice President & Director of
International Equities
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Edward N. Everett,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kathy Faber,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Falicia,                           Assistant  Secretary  (as of July  2004) of  HarbourView  Asset  Management
Assistant Vice President                 Corporation.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rachel Fanopoulos,                       Formerly Manager (until August 2007) of OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Matthew Farkas,                          Formerly Associate at Epstein Becker & Green, P.C.  (September 2000 - March
Assistant Vice President and Assistant   2006).
Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kristie Feinberg,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
William Ferguson,                        Formerly Senior Marketing  Manager at ETrade (June 2006 - January 2007) and
Assistant Vice President                 Senior Marketing Manager at Axa Financial (April 2000 - June 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Emmanuel Ferreira,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ronald H. Fielding,                      Vice  President  of  OppenheimerFunds  Distributor,  Inc.;  Director of ICI
Senior Vice President;                   Mutual Insurance Company;  Governor of St. John's College;  Chairman of the
Chairman of the Rochester Division       Board of  Directors  of  International  Museum  of  Photography  at  George
                                         Eastman House.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Bradley G. Finkle,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Steven Fling,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John E. Forrest,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Foxhoven,                          Assistant Vice President of OppenheimerFunds Legacy Program.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Colleen M. Franca,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Barbara Fraser,                          None
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Donald French,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dominic Freud,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Hazem Gamal,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles Gapay,                           Formerly (as of January 2007) Help Desk Manager at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Seth Gelman,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Timothy Gerlach,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles W. Gilbert,                      None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kurt Gibson,                             Formerly Manager at Barclays Capital (January 2002 - April 2006).
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Phillip S. Gillespie,                    None
Senior Vice President & Assistant
Secretary
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Alan C. Gilston,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jacqueline Girvin-Harkins,               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jill E. Glazerman,                       None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Benjamin J. Gord,                        Vice  President of  HarbourView  Asset  Management  Corporation  and of OFI
Vice President                           Institutional Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Raquel Granahan,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert B. Grill,                         None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carol Guttzeit,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marilyn Hall,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kelly Haney,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Steve Hauenstein,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert W. Hawkins,                       None
Vice President & Assistant Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas B. Hayes,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Heidi Heikenfeld,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Annika Helgerson,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel Herrmann,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dennis Hess,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joseph Higgins,                          Vice President of OFI Institutional Asset Management, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dorothy F. Hirshman,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel Hoelscher,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Eivind Holte,                            Formerly Vice President at U.S. Trust (June 2005 - October 2007)
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Hourihan,                          Assistant  Secretary of OFI  Institutional  Asset  Management,  Inc. (since
Vice President & Associate Counsel       April 2006).  Formerly Vice President and Senior  Counsel at  Massachusetts
                                         Financial Service Company (June 2004 - March 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Edward Hrybenko,                         Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kevin Andrew Huddleston,                 None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Scott T. Huebl,                          Assistant Vice President of OppenheimerFunds Legacy Program.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Margaret Hui,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dana Hunter,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Huttlin,                            Senior Vice  President  (Director  of the  International  Division)  (since
Senior Vice President                    January 2004) of OFI Institutional Asset Management,  Inc.; Director (since
                                         June 2003) of OppenheimerFunds International Distributor Limited.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James G. Hyland,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kelly Bridget Ireland,                   None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kathleen T. Ives,                        Vice  President and Assistant  Secretary of  OppenheimerFunds  Distributor,
Vice President, Senior Counsel &         Inc. and  Shareholder  Services,  Inc.;  Assistant  Secretary of Centennial
Assistant Secretary                      Asset   Management   Corporation,   OppenheimerFunds   Legacy  Program  and
                                         Shareholder Financial Services, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
William Jaume,                           Senior Vice President of HarbourView  Asset Management  Corporation and OFI
Vice President                           Institutional Asset Management, Inc.; Director of OFI Trust Company.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Frank V. Jennings,                       None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Jennings,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jin Jo,                                  Formerly Audit Manager at Deloitte & Touche LLP (as of August 2007)
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Kadehjian,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles Kandilis,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Amee Kantesaria,                         Formerly Counsel at Massachusetts Mutual Life Insurance Company
Assistant Vice President and             (May 2005-December 2006).
Assistant Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rezo Kanovich,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas W. Keffer,                        None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James Kennedy,                           Formerly self-employed (December 2005 - September 2006).
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Keogh,                           Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Kiernan,                            None
Assistant Vice President & Marketing
Compliance Manager
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Kim,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Audrey Kiszla,                           Formerly Vice President at First Horizon Merchant Services  (December 2005-
Vice President                           May 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Klassen,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard Knott,                           None
Executive Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel Kohn,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Martin S. Korn,                          None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Tatyana Kosheleva,                       Formerly (as of April 2007) Finance Manager at IBM Corp.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Kramer,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
S. Arthur Krause,                        Formerly Product Manager of OppenheimerFunds, Inc. (as of January 2007).
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gloria LaFond,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Lamentino,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Tracey Lange,                            Vice  President  of  OppenheimerFunds  Distributor,  Inc.  and OFI  Private
Vice President                           Investments Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeffrey P. Lagarce,                      President of OFI Institutional Asset Management, Inc. as of January 2005.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Latino,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gayle Leavitt,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christopher M. Leavy,                    None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Randy Legg,                              None
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Laura Leitzinger,                        Senior  Vice  President  of  Shareholder  Services,  Inc.  and  Shareholder
Senior Vice President                    Financial Services, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Justin Leverenz,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael S. Levine,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Levitt,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gang Li,                                 None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Shanquan Li,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie A. Libby,                          Senior Vice President of OFI Private Investments Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel Lifshey,                          None
Assistant 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 Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Justin Livengood,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christina Loftus,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David P. Lolli,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel G. Loughran                       None
Senior Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patricia Lovett,                         Vice  President of  Shareholder  Financial  Services,  Inc. and Senior Vice
Senior Vice President                    President of Shareholder Services, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Misha Lozovik,                           None.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Dongyan Ma,                              None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Steve Macchia,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Daniel Martin,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jerry Mandzij,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Angelo G. Manioudakis,                   Senior Vice President of HarbourView  Asset  Management  Corporation and of
Senior Vice President                    OFI Institutional Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carolyn Maxson,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
William T. Mazzafro,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Trudi McCanna,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Neil McCarthy,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Elizabeth McCormack,                     Vice  President and Assistant  Secretary of  HarbourView  Asset  Management
Vice President                           Corporation.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joseph McDonnell,                        Formerly Senior Vice President at Lehman Bros. (April 1995 - March 2006).
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joseph McGovern,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles L. McKenzie,                     Chairman of the Board,  Director,  Chief Executive Officer and President of
Senior Vice President                    OFI Trust Company;  Chairman,  Chief Executive  Officer,  Chief  Investment
                                         Officer and Director of OFI  Institutional  Asset  Management,  Inc.; Chief
                                         Executive  Officer,  President,  Senior  Managing  Director and Director of
                                         HarbourView Asset Management Corporation;  Chairman, President; Director of
                                         Trinity   Investment   Management   Corporation   and  Vice   President  of
                                         Oppenheimer Real Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
William McNamara,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mary McNamee,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Medev,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lucienne Mercogliano,                    None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jay Mewhirter,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Andrew J. Mika,                          None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jan Miller,                              None.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rejeev Mohammed,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Nikolaos D. Monoyios,                    None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Sarah Morrison,                          Formerly (as of January 2007) Manager at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jill Mulcahy,                            None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John V. Murphy,                          President  and  Management  Director  of  Oppenheimer   Acquisition  Corp.;
Chairman, Chief                          President  and  Director  of  Oppenheimer  Real  Asset  Management,   Inc.;
Executive Officer & Director             Chairman  and  Director  of  Shareholder  Services,  Inc.  and  Shareholder
                                         Financial Services, Inc.; Director of OppenheimerFunds  Distributor,  Inc.,
                                         OFI Institutional  Asset Management,  Inc., Trinity  Investment  Management
                                         Corporation,  Tremont Group Holdings,  Inc.,  HarbourView  Asset Management
                                         Corporation and OFI Private  Investments Inc.;  Executive Vice President of
                                         Massachusetts  Mutual Life Insurance  Company;  Director of DLB Acquisition
                                         Corporation;  a  member  of the  Investment  Company  Institute's  Board of
                                         Governors.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Meaghan Murphy,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Suzanne Murphy,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas J. Murray,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christine Nasta,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Paul Newman,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
William Norman,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James B. O'Connell,                      None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Matthew O'Donnell,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Ogren,                              Formerly Manager at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Tony Oh,                                 None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John J. Okray,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kristina Olson,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lerae A. Palumbo,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kathleen Patton,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David P. Pellegrino,                     None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Allison C. Pells,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert H. Pemble,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lori L. Penna,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian Petersen,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marmeline Petion-Midy,                   None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Pfeffer,                           Senior Vice President of HarbourView  Asset  Management  Corporation  since
Senior Vice President & Chief            February 2004.
Financial Officer
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
James F. Phillips,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gary Pilc,                               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John Piper,                              Assistant Vice President of Shareholder Services, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeaneen Pisarra,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Nicolas Pisciotti,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christine Polak,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Sergei Polevikov,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeffrey Portnoy,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Preuss,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ellen Puckett,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Paul Quarles,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael E. Quinn,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie S. Radtke,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Timothy Raeke,                           Formerly (as of July 2007) Vice President at MFS Investment Management.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Norma J. Rapini,                         None
Assistant Vice President :
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Corry E. Read,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marc Reinganum,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jill Reiter,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Eric Rhodes,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Eric Richter,                            Vice  President  of  HarbourView  Asset  Management  Corporation.  Formerly
Vice President                           Investment  Officer at Alaska  Permanent  Fund  Corporation  (April  2005 -
                                         February 2006)
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Claire Ring,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Grace Roberts,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David Robertson,                         Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert Robis,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Antoinette Rodriguez,                    None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Stacey Roode,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jeffrey S. Rosen,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jessica Rosenfeld,                       None.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Stacy Roth,                              None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard Royce,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Adrienne Ruffle,                         None.
Vice President & Assistant Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kim Russomanno,                          None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gerald Rutledge,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie Anne Ryan,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Timothy Ryan,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rohit Sah,                               None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Gary Salerno,                            Formerly  (as  of  May  2007)   Separate   Account   Business   Liaison  at
Assistant Vice President                 OppenheimerFunds, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Valerie Sanders,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kurt Savallo,                            Formerly Senior Business Analyst at OppenheimerFunds, Inc.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rudi W. Schadt,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mary Beth Schellhorn,                    Formerly  Human  Resources  Generalist at Misys Banking  Systems  (November
Assistant Vice President                 2000 - June 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ellen P. Schoenfeld,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Patrick Schneider,                       Formerly Human Resources Manager at ADT Security Services  (December 2001 -
Assistant Vice President                 July 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Scott A. Schwegel,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Allan P. Sedmak,                         None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jennifer L. Sexton,                      Senior Vice President of OFI Private Investments Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Asutosh Shah,                            Formerly Vice  President at Merrill  Lynch  Investment  Managers  (February
Vice President                           2002 - February 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kamal Shah,                              None.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Navin Sharma,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Tammy Sheffer,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mary Dugan Sheridan,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
David C. Sitgreaves,                     None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Skatrud,                         Formerly (as of March 2007) Corporate Bond Analyst at Putnam Investments.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Enrique H. Smith,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kevin Smith,                             None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Louis Sortino,                           None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Keith J. Spencer,                        None
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Marco Antonio Spinar,                    None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brett Stein,                             Formerly Vice President of Client Services at XAware,  Inc. (October 2002 -
Vice President                           August 2006).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Richard A. Stein,                        None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Arthur P. Steinmetz,                     Senior Vice President of HarbourView Asset Management Corporation.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jennifer Stevens,                        None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Benjamin Stewart,                        None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Peter Strzalkowski,                      Formerly (as of August  2007)  Founder/Managing  Partner at Vector  Capital
Vice President                           Management.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
John P. Stoma,                           Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Amy Sullivan,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Deborah A. Sullivan,                     Secretary of OFI Trust Company.
Vice President & Assistant Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carole Sumption,                         Formerly Vice President at Policy Studies, Inc. (July 2003 - April 2007).
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Michael Sussman,                         Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Thomas Swaney,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Brian C. Szilagyi,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Martin Telles,                           Senior Vice President of OppenheimerFunds Distributor, Inc.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Charles Toomey,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Vincent Toner,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Melinda Trujillo,                        Formerly Senior Manager at CoBank, ACB (January 2004 - April 2006).
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Leonid Tsvayg,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Keith Tucker,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Cameron Ullyatt,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Angela Uttaro,                           None
Assistant Vice President: Rochester
Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark S. Vandehey,                        Vice   President   and  Chief   Compliance   Officer  of   OppenheimerFunds
Senior Vice President & Chief            Distributor,  Inc., Centennial Asset Management Corporation and Shareholder
Compliance Officer                       Services,  Inc.; Chief Compliance  Officer of HarbourView  Asset Management
                                         Corporation,  Real Asset Management,  Inc., Shareholder Financial Services,
                                         Inc., Trinity Investment Management  Corporation,  OppenheimerFunds  Legacy
                                         Program,  OFI  Private  Investments  Inc.  and OFI  Trust  Company  and OFI
                                         Institutional Asset Management, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Maureen Van Norstrand,                   None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Nancy Vann,                              None
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Rene Vecka,                              None
Assistant Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Vincent Vermette,                        Assistant Vice President of OppenheimerFunds Distributor, Inc.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Elaine Villas-Obusan,                    None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ryan Virag,                              None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jake Vogelaar,                           None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Phillip F. Vottiero,                     None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lisa Walsh,                              None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Darren Walsh,                            Formerly  General  Manager and Senior Vice President of Comverse  (December
Executive Vice President                 2005 - September 2006);  Senior Vice President of Strategic  Initiatives at
                                         CSG Systems (2002 - December 2005)
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Deborah Weaver,
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Jerry A. Webman,                         Senior Vice President of HarbourView Asset Management Corporation.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christopher D. Weiler,                   None
Vice President:
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Barry D. Weiss,                          Vice  President  of  HarbourView   Asset  Management   Corporation  and  of
Vice President                           Centennial Asset Management Corporation.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Melissa Lynn Weiss,                      None
Vice President & Associate Counsel
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Christine Wells,                         None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Joseph J. Welsh,                         Vice President of HarbourView Asset Management Corporation.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Catherine M. White,                      Assistant Vice President of OppenheimerFunds  Distributor,  Inc.; member of
Assistant Vice President                 the American Society of Pension Actuaries (ASPA) since 1995.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Troy Willis,                             None
Assistant Vice President,
Rochester Division
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mitchell Williams,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Julie Wimer,                             None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Donna M. Winn,                           President,  Chief Executive  Officer & Director of OFI Private  Investments
Senior Vice President                    Inc.; Director & President of OppenheimerFunds  Legacy Program; Senior Vice
                                         President of OppenheimerFunds Distributor, Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
  Philip Witkower,                       Senior Vice President of OppenheimerFunds Distributor, Inc.
  Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
  Brian W. Wixted,                       Treasurer of HarbourView  Asset  Management  Corporation;  OppenheimerFunds
Senior Vice President & Treasurer        International Ltd.,  Oppenheimer Real Asset Management,  Inc.,  Shareholder
                                         Services,   Inc.,   Shareholder  Financial  Services,   Inc.,  OFI  Private
                                         Investments    Inc.,   OFI   Institutional    Asset    Management,    Inc.,
                                         OppenheimerFunds  plc and  OppenheimerFunds  Legacy Program;  Treasurer and
                                         Chief  Financial  Officer  of OFI Trust  Company;  Assistant  Treasurer  of
                                         Oppenheimer Acquisition Corp.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Carol E. Wolf,                           Senior Vice President of HarbourView  Asset  Management  Corporation and of
Senior Vice President                    Centennial  Asset  Management  Corporation;  serves  on  the  Board  of the
                                         Colorado Ballet.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Meredith Wolff,                          None.
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Oliver Wolff,                            None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Kurt Wolfgruber,                         Director of Tremont Group  Holdings,  Inc.,  HarbourView  Asset  Management
President, Chief Investment Officer &    Corporation  and OFI  Institutional  Asset  Management,  Inc.  (since  June
Director                                 2003).   Management  Director  of  Oppenheimer   Acquisition  Corp.  (since
                                         December 2005).
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Caleb C. Wong,                           None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Edward C. Yoensky,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Geoff Youell,                            None.
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Lucy Zachman,                            None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Robert G. Zack,                          General  Counsel  of  Centennial  Asset  Management  Corporation;   General
Executive Vice President &               Counsel and Director of  OppenheimerFunds  Distributor,  Inc.;  Senior Vice
General Counsel                          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.;  Executive Vice
                                         President,  General Counsel and Director of OFI Trust Company; Director and
                                         Assistant  Secretary  of  OppenheimerFunds   International   Limited;  Vice
                                         President,  Secretary and General Counsel of Oppenheimer Acquisition Corp.;
                                         Director  of  OppenheimerFunds   International  Distributor  Limited;  Vice
                                         President of OppenheimerFunds  Legacy Program;  Vice President and Director
                                         of Oppenheimer Partnership Holdings Inc.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Neal A. Zamore,                          None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Anna Zatulovskaya,                       None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Mark D. Zavanelli,                       None
Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Alex Zhou,                               None
Assistant Vice President
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Ronald Zibelli, Jr.                      Formerly  Managing  Director  and Small Cap Growth  Team  Leader at Merrill
Vice President                           Lynch.
- ---------------------------------------- ----------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------------------------------------------------
Arthur J. Zimmer,                        Senior Vice President of HarbourView Asset Management Corporation.
Senior Vice President
- ---------------------------------------- ----------------------------------------------------------------------------

The Oppenheimer Funds include the following:

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 (a series of Rochester Portfolio Series)
OFI Tremont Core Strategies Hedge Fund
OFI Tremont Market Neutral Hedge Fund
Oppenheimer Absolute Return Fund
Oppenheimer AMT-Free Municipals
Oppenheimer AMT-Free New York Municipals
Oppenheimer Balanced Fund
Oppenheimer Baring China Fund
Oppenheimer Baring Japan Fund
Oppenheimer Baring SMA International Fund
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Commodity Strategy Total Return Fund
Oppenheimer Convertible Securities Fund (a series of Bond Fund Series)
Oppenheimer Core Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Dividend Growth Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Equity Fund, Inc.
Oppenheimer Equity Income Fund, Inc.
Oppenheimer Global Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Global Value Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer International Bond Fund
Oppenheimer Institutional Money Market Fund
Oppenheimer International Diversified Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer International Value Fund (a series of Oppenheimer International Value Trust)
Oppenheimer Limited Term California Municipal Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Limited Term Municipal Fund (a series of Oppenheimer Municipal Fund)
Oppenheimer Main Street Fund (a series of Oppenheimer Main Street Funds, Inc.)
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer Master Loan Fund LLC
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals
Oppenheimer Portfolio Series (4 series)
     Active Allocation Fund
     Equity Investor Fund
     Conservative Investor Fund
     Moderate Investor Fund
Oppenheimer Portfolio Series Fixed Income Active Allocation Fund
Oppenheimer Principal Protected Main Street Fund (a series of Oppenheimer Principal
     Protected Trust)
Oppenheimer Principal Protected Main Street Fund II (a series of Oppenheimer Principal
     Protected Trust II)
Oppenheimer Principal Protected Main Street Fund III (a series of Oppenheimer Principal
     Protected Trust III)
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small- & Mid-Cap Value Fund
Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Real Estate Fund
Oppenheimer Rising Dividends Fund, Inc.
Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Select Value Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (1 series):
Oppenheimer Value Fund
Oppenheimer SMA Core Bond Fund
Oppenheimer SMA International Bond Fund
Oppenheimer Strategic Income Fund
Oppenheimer Transition 2010 Fund
Oppenheimer Transition 2015 Fund
Oppenheimer Transition 2020 Fund
Oppenheimer Transition 2030 Fund
Oppenheimer Tremont Market Neutral Fund, LLC
Oppenheimer Tremont Opportunity Fund, LLC
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (11 series):
     Oppenheimer Balanced Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Core Bond Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer MidCap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Strategic Bond Fund/VA
     Oppenheimer Value Fund/VA
Panorama Series Fund, Inc. (4 series):
     Government Securities Portfolio
     Growth 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,  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  Acquisition  Corp., OFI Private  Investments Inc., OFI  Institutional  Asset Management,
Inc.  Oppenheimer  Real Asset  Management,  Inc. and OFI Trust Company is Two World Financial  Center,  225 Liberty
Street, 11th Floor, New York, New York 10281-1008.

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

The address of OppenheimerFunds International Ltd. is 30 Herbert Street, Dublin 2, Ireland.

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

The address of  OppenheimerFunds  International  Distributor  Limited is Suite 1601, Central Tower, 28 Queen's Road
Central, Hong Kong.


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 Part B of this  Registration  Statement  and listed in Item 26(b)
above (except 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
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Timothy Abbhul(1)                                Vice President and Treasurer         None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Robert Agan(1)                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Anthony Allocco(2)                               Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Janette Aprilante(2)                             Secretary                            None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Tracey Apostolopoulos(1)                         Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
James Barker                                     Vice President                       None
1723 W. Nelson Street
Chicago, IL 60657
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kathleen Beichert(1)                             Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Rocco Benedetto(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Beringer                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Rick Bettridge                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
David A. Borrelli                                Vice President                       None
105 Black Calla Ct.
San Ramon, CA 94583
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Jeffrey R. Botwinick                             Vice President                       None
4431 Twin Pines Drive
Manlius, NY 13104
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Sarah Bourgraf(1)                                Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Bryan Bracchi                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michelle Brennan(2)                              Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Joshua Broad(2)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kevin E. Brosmith                                Senior Vice President                None
5 Deer Path
South Natlick, MA 01760
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Jeffrey W. Bryan                                 Vice President                       None
1048 Malaga Avenue
Coral Gables, FL 33134
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Ross Burkstalker                                 Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Patrick Campbell(1)                              Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Robert Caruso                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Donelle Chisolm(2)                               Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Andrew Chonofsky                                 Vice President                       None
109 Wade Avenue, Apt. 365
Raleigh, NC 27605
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Angelanto Ciaglia(2)                             Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Melissa Clayton(2)                               Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Craig Colby(2)                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Rodney Constable(1)                              Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Susan Cornwell(1)                                Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Neev Crane                                       Vice President                       None
1530 Beacon Street, Apt. #1403
Brookline, MA 02446
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael Daley                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Fredrick Davis                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John Davis(2)                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Stephen J. Demetrovits(2)                        Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Steven Dombrower                                 Vice President                       None
13 Greenbrush Court
Greenlawn, NY 11740
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
George P. Dougherty                              Vice President                       None
328 Regency Drive
North Wales, PA 19454
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Cliff H. Dunteman                                Vice President                       None
N 53 W 27761 Bantry Road
Sussex, WI 53089-45533
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Beth Arthur Du Toit(1)                           Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kent M. Elwell                                   Vice President                       None
35 Crown Terrace
Yardley, PA 19067
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Gregg A. Everett                                 Vice President                       None
4328 Auston Way
Palm Harbor, FL 34685-4017
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
George R. Fahey                                  Senior Vice President                None
9511 Silent Hills Lane
Lone Tree, CO 80124
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Eric C. Fallon                                   Vice President                       None
10 Worth Circle
Newton, MA 02458
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
James Fereday                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Joseph Fernandez                                 Vice President                       None
1717 Richbourg Park Drive
Brentwood, TN 37027
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Mark J. Ferro                                    Senior Vice President                None
104 Beach 221st Street
Breezy Point, NY 11697
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Ronald H. Fielding(3)                            Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Eric P. Fishel                                   Vice President                       None
725 Boston Post Rd., #12
Sudbury, MA 01776
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Patrick W. Flynn                                 Senior Vice President                None
14083 East Fair Avenue
Englewood, CO 80111
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John E. Forrest(2)                               Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John ("J") Fortuna(2)                            Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Jayme D. Fowler                                  Vice President                       None
3818 Cedar Springs Road, #101-349
Dallas, TX 75219
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
William Friebel                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Alyson Frost                                     Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Richard Fuermann                                 Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Charlotte Gardner(1)                             Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Lucio Giliberti                                  Vice President                       None
6 Cyndi Court
Flemington, NJ 08822
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael Gottesman                                Vice President                       None
255 Westchester Way
Birmingham, MI 48009
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Raquel Granahan(4)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Ralph Grant                                      Senior Vice President                None
10 Boathouse Close
Mt. Pleasant, SC 29464
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kahle Greenfield(2)                              Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Robert Grill(2)                                  Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Eric Grossjung                                   Vice President                       None
4002 N. 194th Street
Elkhorn, NE 68022
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael D. Guman                                 Vice President                       None
3913 Pleasant Avenue
Allentown, PA 18103
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
James E. Gunter                                  Vice President                       None
603 Withers Circle
Wilmington, DE 19810
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Garrett Harbron                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kevin J. Healy(2)                                Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Wendy G. Hetson(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Jennifer Hoelscher(1)                            Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
William E. Hortz(2)                              Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Edward Hrybenko(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Amy Huber(1)                                     Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Brian F. Husch                                   Vice President                       None
37 Hollow Road
Stonybrook, NY 11790
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Patrick Hyland(2)                                Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Keith Hylind(2)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kathleen T. Ives(1)                              Vice President & Assistant           Assistant Secretary
                                                 Secretary
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Shonda Rae Jaquez(2)                             Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Nivan Jaleeli                                    Vice President                       None
13622 E. Geronimo Rd.
Scottsdale, AZ 85259
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Eric K. Johnson                                  Vice President                       None
8588 Colonial Drive
Lone Tree, CO 80124
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Elyse Jurman                                     Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Matthew Kasa                                     Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Keffer(2)                                 Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael Keogh(2)                                 Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Brian Kiley(2)                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Lisa Klassen(1)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Richard Klein                                    Senior Vice President                None
4820 Fremont Avenue South
Minneapolis, MN 55419
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Richard Knott(1)                                 President and Director               None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Brent A. Krantz                                  Senior Vice President                None
61500 Tam McArthur Loop
Bend, OR 97702
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Eric Kristenson(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
David T. Kuzia                                   Vice President                       None
10258 S. Dowling Way
Highlands Ranch, CO 80126
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Tracey Lange(2)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Jesse Levitt(2)                                  Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Eric J. Liberman                                 Vice President                       None
27 Tappan Ave., Unit West
Sleepy Hollow, NY 10591
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Malissa Lischin(2)                               Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Christina Loftus(2)                              Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Loncar                                    Vice President                       None
1401 North Taft Street, Apt. 726
Arlington, VA 22201
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Craig Lyman                                      Vice President                       None
7425 Eggshell Drive
N. Las Vegas, NV 89084
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Peter Maddox(2)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael Malik                                    Vice President                       None
546 Idylberry Road
San Rafael, CA 94903
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Steven C. Manns                                  Vice President                       None
1627 N. Hermitage Avenue
Chicago, IL 60622
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Todd A. Marion                                   Vice President                       None
24 Midland Avenue
Cold Spring Harbor, NY 11724
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
LuAnn Mascia(2)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael McDonald                                 Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John C. McDonough                                Senior Vice President                None
533 Valley Road
New Canaan, CT 06840
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kent C. McGowan                                  Vice President                       None
9510 190th Place SW
Edmonds, WA 98020
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Brian F. Medina                                  Vice President                       None
3009 Irving Street
Denver, CO 80211
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
William Meerman                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Daniel Melehan                                   Vice President                       None
906 Bridgeport Court
San Marcos, CA 92069
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Saul Mendoza                                     Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Mark Mezzanotte                                  Vice President                       None
16 Cullen Way
Exeter, NH 03833
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Matthew L. Michaelson                            Vice President                       None
1250 W. Grace, #3R
Chicago, IL 60613
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Noah Miller(1)                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Clint Modler(1)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Robert Moser                                     Vice President                       None
9650 East Aspen Hill Circle
Lone Tree, CO 80124
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
David W. Mountford                               Vice President                       None
7820 Banyan Terrace
Tamarac, FL 33321
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Gzim Muja                                        Vice President                       None
269 S. Beverly Dr. #807
Beverly Hills, CA 90212
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Matthew Mulcahy(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Wendy Jean Murray                                Vice President                       None
32 Carolin Road
Upper Montclair, NJ 07043
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John S. Napier                                   Vice President                       None
17 Hillcrest Ave.
Darien, CT 06820
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Christina Nasta(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kevin P. Neznek(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Christopher Nicholson                            Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Bradford G. Norford                              Vice President                       None
5095 Lahinch Ct.
Westerville, OH 43082
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Alan Panzer                                      Vice President                       None
6755 Ridge Mill Lane
Atlanta, GA 30328
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Donald Pawluk(2)                                 Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Brian C. Perkes                                  Vice President                       None
6 Lawton Ct.
Frisco, TX 75034
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Wayne Perry                                      Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Charles K. Pettit(2)                             Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Aaron Pisani(1)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Rachel Powers                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Nicole Pretzel                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Elaine M. Puleo-Carter(2)                        Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Minnie Ra                                        Vice President                       None
100 Dolores Street, #203
Carmel, CA 93923
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Dusting Raring                                   Vice President                       None
27 Blakemore Drive
Ladera Ranch, CA 92797
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael A. Raso                                  Vice President                       None
3 Vine Place
Larchmont, NY 10538
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Richard E. Rath                                  Vice President                       None
46 Mt. Vernon Ave.
Alexandria, VA 22301
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Ramsey Rayan                                     Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
William J. Raynor(5)                             Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Corry Read(2)                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Ruxandra Risko(2)                                Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
David R. Robertson(2)                            Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Ian M. Roche                                     Vice President                       None
7070 Bramshill Circle
Bainbridge, OH 44023
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael Rock                                     Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kenneth A. Rosenson                              Vice President                       None
24753 Vantage Pt. Terrace
Malibu, CA 90265
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Sabow                                     Vice President                       None
6617 Southcrest Drive
Edina, MN 55435
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John Saunders                                    Vice President                       None
2251 Chantilly Ave.
Winter Park, FL 32789
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Thomas Schmitt                                   Vice President                       None
40 Rockcrest Rd
Manhasset, NY 11030
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
William Schories                                 Vice President                       None
3 Hill Street
Hazlet, NJ 07730
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Jennifer Sexton(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Eric Sharp                                       Vice President                       None
862 McNeill Circle
Woodland, CA 95695
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Debbie A. Simon                                  Vice President                       None
55 E. Erie St., #4404
Chicago, IL 60611
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Bryant Smith                                     Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Christopher M. Spencer                           Vice President                       None
2353 W 118th Terrace
Leawood, KS 66211
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John A. Spensley                                 Vice President                       None
375 Mallard Court
Carmel, IN 46032
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Alfred St. John(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Bryan Stein                                      Vice President                       None
8 Longwood Rd.
Voorhees, NJ 08043
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John Stoma(2)                                    Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Wayne Strauss(3)                                 Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Brian C. Summe                                   Vice President                       None
2479 Legends Way
Crestview Hills, KY 41017
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michael Sussman(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
George T. Sweeney                                Senior Vice President                None
5 Smokehouse Lane
Hummelstown, PA 17036
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
James Taylor(2)                                  Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Martin Telles(2)                                 Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Paul Temple(2)                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
David G. Thomas                                  Vice President                       None
16628 Elk Run Court
Leesburg, VA 20176
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Mark S. Vandehey(1)                              Vice President and Chief             Vice President and Chief
                                                 Compliance Officer                   Compliance Officer
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Vincent Vermete(2)                               Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Patrick Walsh                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kenneth Lediard Ward                             Vice President                       None
1400 Cottonwood Valley Circle N.
Irving, TX 75038
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Teresa Ward(1)                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Janeanne Weickum                                 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
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Chris G. Werner                                  Vice President                       None
98 Crown Point Place
Castle Rock, CO 80108
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Catherine White(2)                               Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Ryan Wilde(1)                                    Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Julie Wimer(2)                                   Assistant Vice President             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Donna Winn(2)                                    Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Peter Winters                                    Vice President                       None
911 N. Organce Ave, Pat. 514
Orlando, FL 32801
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Patrick Wisneski(1)                              Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Philip Witkower(2)                               Senior Vice President                None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Kurt Wolfgruber                                  Director                             None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Meredith Wolff(2)                                Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Michelle Wood(2)                                 Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Cary Patrick Wozniak                             Vice President                       None
18808 Bravata Court
San Diego, CA 92128
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
John Charles Young                               Vice President                       None
3914 Southwestern
Houston, TX 77005
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Jill Zachman(2)                                  Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Robert G. Zack(2)                                General Counsel & Director           Secretary
- ------------------------------------------------ ------------------------------------ ---------------------------------
- ------------------------------------------------ ------------------------------------ ---------------------------------
Steven Zito(1)                                   Vice President                       None
- ------------------------------------------------ ------------------------------------ ---------------------------------

(1) 6803 South Tucson Way, Centennial, CO 80112-3924
(2) Two World Financial Center, 225 Liberty Street, 11th Floor, New York, NY 10281-1008
(3) 350 Linden Oaks, Rochester, NY 14623
(4) 555 Theodore Fremd Avenue, Rye, NY 10580
(5) Independence Wharf, 470 Atlantic Avenue, 11th Floor, Boston, MA 02210



(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 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 28th
day of December, 2007.


                                            OPPENHEIMER BALANCED FUND


                                            By:      John V. Murphy*
                                                     John V. Murphy, President
                                                     Principal Executive Officer and Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by
the following persons in the capacities on the dates indicated:

Signatures                                  Title                                       Date


Brian F. Wruble*                            Chairman of the                             December 28, 2007
Brian F. Wruble                             Board of Trustees


John V. Murphy*                             President, Principal                        December 28, 2007
John V. Murphy                              Executive Officer and Trustee


Brian W. Wixted*                            Treasurer, Principal                        December 28, 2007
Brian W. Wixted                             Financial & Accounting Officer

David K. Downes*                            Trustee                                     December 28, 2007
David K. Downes

Matthew P. Fink*                            Trustee                                     December 28, 2007
Matthew P.Fink


Robert G. Galli*                            Trustee                                     December 28, 2007
Robert G. Galli


Phillip A. Griffiths*                       Trustee                                     December 28, 2007
Phillip A. Griffiths


Mary F. Miller*                             Trustee                                     December 28, 2007
Mary F. Miller


Joel W. Motley*                             Trustee                                     December 28, 2007
Joel W. Motley

Russell S. Reynolds, Jr.*                   Trustee                                     December 28, 2007
Russell S. Reynolds, Jr.


Joseph M. Wikler*                           Trustee                                     December 28, 2007
Joseph M. Wikler


Peter I. Wold*                              Trustee                                      December 28, 2007
Peter I. Wold


*By:     /s/ Mitchell J. Lindauer
         Mitchell J. Lindauer, Attorney-in-Fact




                                             Oppenheimer Balanced Fund

                                          Post-Effective Amendment No. 43

                                              Registration No 2-86903

                                                   Exhibit Index


Exhibit No.                Description

23 (j)                     Independent Registered Public Accounting Firm's Consent

EX-23

                         CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Board of Trustees of
Oppenheimer Balanced Fund

We consent to the use in this Registration Statement of Oppenheimer Balanced Fund, of our report dated
November 16, 2007, included in the Statement of Additional Information, which is part of such
Registration Statement, and to the references to our firm under the headings "Financial Highlights"
appearing in the Prospectus, which is also part of such Registration Statement and "Independent
Registered Public Accounting Firm" appearing in the Statement of Additional Information.



/s/ KPMG LLP
KPMG LLP

Denver, Colorado
December 26, 2007