485BPOS

                                                     Registration No. 33-58383
                                                            File No. 811-07255

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                  FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                    [X]

      Pre-Effective Amendment No.                                        [   ]


      Post-Effective Amendment No. 10                                      [X]


                                    and/or

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


      Amendment No. 12                                                     [X]


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                     OPPENHEIMER INTERNATIONAL BOND FUND
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              (Exact Name of Registrant as Specified in Charter)


            6803 South Tucson Way, Centennial, Colorado 80112-3924

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             (Address of Principal Executive Offices) (Zip Code)


                                (303) 768-3200

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             (Registrant's Telephone Number, including Area Code)

                             Robert G. Zack, Esq.
                            OppenheimerFunds, Inc.
                 498 Seventh Avenue, New York, New York 10018
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                   (Name and Address of Agent for Service)

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


[   ]                  Immediately upon filing pursuant to paragraph (b)
[X]  On November 22, 2002 pursuant to paragraph (b)
[   ]                  60 days after filing pursuant to paragraph (a)(1)
[   ]                     On ______________ pursuant to paragraph (a)(1)
[   ]                  75 days after filing pursuant to paragraph (a)(2)
[   ]                     On ______________ pursuant to paragraph (a)(2)
of Rule 485.


If appropriate, check the following box:

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

880n1a_02(b)(Nov_22_02).doc

Oppenheimer
INTERNATIONAL BOND FUND




Prospectus dated November 22, 2002




                                         Oppenheimer International Bond Fund is
                                         a mutual fund that seeks total return
                                         as its primary goal. As a secondary
                                         goal, it seeks income when consistent
                                         with total return. It invests
                                         primarily in foreign government and
                                         corporate bonds, in both developed and
                                         emerging markets.
                                               This Prospectus contains
                                         important information about the Fund's
                                         objectives, 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
As with all mutual funds, the            and keep it for future reference about
Securities and Exchange Commission has   your account.
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
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            The Fund's Investment Objectives and Strategies

            Main Risks of Investing in the Fund

            The Fund's Past Performance

            Fees and Expenses of the Fund

            About the Fund's Investments

            How the Fund is Managed


            ABOUT YOUR ACCOUNT
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            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 Wire
            By Checkwriting
            By Mail
            By Telephone


            How to Exchange Shares

            Shareholder Account Rules and Policies

            Dividends, Capital Gains and Taxes

            Financial Highlights


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A B O U T  T H E  F U N D
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The Fund's Investment Objectives and Strategies

WHAT ARE THE FUND'S INVESTMENT OBJECTIVES? The Fund's primary objective is to
seek total return. As a secondary objective, the Fund seeks income when
consistent with total return.


WHAT DOES THE FUND MAINLY INVEST IN?  The Fund invests mainly in debt
securities of foreign government and corporate issuers. Those debt securities
generally referred to as "bonds," include long-term and short-term government
bonds, participation interests in loans, corporate debt obligations,
"structured" notes and other debt obligations. They may include "zero coupon"
or "stripped" securities. Under normal circumstances, the Fund invests at
least 80% of its net assets (plus borrowings for investment purposes) in
"bonds" and invests in at least three countries other than the United States.
The Fund's non-fundamental policy of investing at least 80% of its net assets
in "bonds" will not be changed by the Fund's Board of Trustees without first
providing shareholders 60 days written notice of the change.  The Fund does
not limit its investments to securities of issuers in a particular market
capitalization or maturity range or rating category, and can hold rated and
unrated securities below investment grade.


      The Fund invests in debt securities of issuers in both developed and
emerging markets throughout the world. These investments are more fully
explained in "About the Fund's Investments," below.

HOW DO THE PORTFOLIO MANAGERS DECIDE WHAT SECURITIES TO BUY OR SELL? In
selecting securities for the Fund, the Fund's portfolio managers analyze the
overall investment opportunities and risks in individual national economies
by analyzing the business cycle in developed countries and political and
exchange rate factors of emerging markets. The portfolio managers currently
focus on the factors below (which may vary in particular cases and may change
over time), looking for:

o     Opportunities for higher yields than are available in U.S. markets, and
o     Opportunities in government bonds in both developed and emerging
         markets.

WHO IS THE FUND DESIGNED FOR? The Fund is designed primarily for investors
seeking total return in their investment over the long term, with the
opportunity for some income, from a fund that will invest mainly in foreign
debt securities. Those investors should be willing to assume the risks of
short-term share price fluctuations that are typical for a fund focusing on
debt investments in foreign securities, particularly those in emerging
markets. 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
long-term total return, the Fund may be appropriate for a 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 carry 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., will cause the Fund to underperform other
funds having similar objectives.

CREDIT RISK.  Debt securities are subject to credit risk.  Credit risk is the
risk that the issuer of a 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 might be reduced, and if the issuer fails to
repay principal, the values of that bond and of the Fund's shares might
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.

o     Special Risks of Lower-Grade Securities.  The Fund can invest without
         limit in securities below investment grade (commonly called "junk
         bonds") to seek total return and higher income.  Therefore, the
         Fund's credit risks are greater than those of funds that buy only
         investment-grade bonds. Lower-grade debt securities may be subject
         to greater price fluctuations and risks of loss of income and
         principal than investment-grade debt securities. Securities that are
         (or that have fallen) below investment grade are exposed to a
         greater risk that the issuers might not meet their debt
         obligations.  There may be less of a market for these securities,
         making it harder to value them or sell them at an acceptable price.
         These risks can reduce the Fund's share prices and the income it
         earns.

RISKS OF FOREIGN INVESTING. While foreign securities offer special investment
opportunities, there are also special risks that can reduce the Fund's share
prices and returns.  The change in value of a foreign currency against the
U.S. dollar will result in a change in the U.S. dollar value of securities
denominated in that foreign currency.  Currency rate changes can also affect
the distributions the Fund makes from the income it receives from foreign
securities as foreign currency values change against the U.S. dollar. Foreign
investing can result in higher transaction and operating costs for the Fund.
Foreign issuers are not subject to the same accounting and disclosure
requirements that U.S. companies are subject to.


      The value of foreign investments may be affected by exchange control
regulations, 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.


o     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 may not
         receive the proceeds of a sale of a security on a timely basis.

         Emerging markets might have less developed trading markets,
         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
         securities of local companies. These investments may be
         substantially more volatile than debt securities of issuers in the
         U.S. and other developed countries and may be very speculative.

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 longer-term debt securities than
shorter-term debt securities.  The Fund's share prices can go up or down when
interest rates change because of the effect of the changes on the value of
the Fund's investments in debt securities. Also, if interest rates fall, the
Fund's investments in new securities at lower yields will reduce the Fund's
income.

RISKS OF NON-DIVERSIFICATION.  The Fund is "non-diversified" under the
Investment Company Act of 1940. Accordingly, the Fund can invest a greater
portion of its assets in the debt securities of a single issuer than
"diversified" funds. For example, the Fund may invest a greater portion of
its assets in the debt obligations issued by the government of any single
country ("sovereign debt") or corporate issuer. This policy gives the Fund
more flexibility to invest in the debt securities of a single issuer than if
it were a "diversified" fund. However, the Fund intends to diversify its
investments so that it will qualify as a "regulated investment company" under
the Internal Revenue Code (although it reserves the right not to qualify). To
the extent the Fund invests a relatively high percentage of its assets in the
debt securities of a single issuer or a limited number of issuers, the Fund
is subject to additional risk of loss if those debt securities lose market
value.

RISKS OF DERIVATIVE INVESTMENTS. The Fund can use derivatives to seek
increased returns or to try to hedge investment and interest rate risks. In
general terms, a derivative investment is one whose value depends on (or is
derived from) the value of an underlying asset, interest rate or index.
Options, futures, structured notes and forward contracts are examples of
derivatives the Fund uses.

      If the issuer of the derivative does not pay the amount due, the Fund
can lose money on the investment. Also, the underlying security or investment
on which the derivative is based, and the derivative itself, might not
perform the way the Manager expected it to perform. If that happens, the
Fund's share prices could fall and the Fund could get less income than
expected.  Some derivatives may be illiquid, making it difficult to value
them or sell them at an acceptable price. Using derivatives can increase the
volatility of the Fund's share prices.

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form
the overall risk profile of the Fund, and can affect the value of the Fund's
investments, its investment performance and the prices of its shares. The
Fund is non-diversified and may focus its investments in the sovereign debt
of a limited number of countries. It will therefore be vulnerable to the
effects of economic changes that affect those countries.  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 objectives. In the short
term, the values of foreign debt securities, particularly those of issuers in
emerging markets, can be volatile, and the prices of the Fund's shares can go
up and down substantially. The income from some of the Fund's investments may
help cushion the Fund's total return from changes in prices, but debt
securities are subject to credit and interest rate risks that can affect
their values and income and the share prices of the Fund. In the
OppenheimerFunds spectrum, the Fund is generally more aggressive and has more
risks than bond funds that focus on U. S. government securities and
investment-grade bonds but is less aggressive than funds that invest solely
in emerging markets.

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


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

The after-tax returns are shown for Class A shares only and are calculated
using the historical highest individual federal marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or
local taxes.  The after-tax returns for the other classes of shares will
vary. 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  are not  included  in the  calculations  of return in this bar
chart, and if those charges were included,  the returns may be less than those
shown.
For the period from 1/1/02 through  9/30/02,  the cumulative  total return for
Class A shares  before  taxes was 11.48%.  During the period  shown in the bar
chart,  the  highest  return  (not  annualized)  before  taxes for a  calendar
quarter  was  6.01%   (4thQ'99)  and  the  lowest  return  before  taxes  (not
annualized) for a calendar quarter was -9.80% (3rdQ'98).








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

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Class A  Shares  (inception
6/15/95)                    -2.71%        2.49%              6.21%
  Return Before Taxes       -2.71%        -0.49%             2.84%
  Return After Taxes on     -1.65%        0.43%              3.24%
  Distributions
  Return   After  Taxes  on
  Distributions   and  Sale
  of Fund Shares

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Salomon Brothers Non-U.S.   -3.54%        0.11%              0.71%1
Dollar World Government
Bond Index (reflects no
deduction for fees,
expenses or taxes)

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Class B  Shares  (inception -3.66%        2.42%              6.26%
(6/15/95)

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Class C  Shares  (inception  0.16%        2.69%              6.15%
(6/15/95)

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Class N  Shares  (inception  N/A2          N/A                N/A
3/1/01)

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From 5/31/95.
2.    Because this is a new class of shares, return data for the period
   specified is not available.
The Fund's average annual total returns include the applicable sales charge:
for Class A, the current maximum initial sales charge of 4.75%; for Class B,
the contingent deferred sales charges of 5% (1-year) and 2% (5 years).
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.
For Class C, average annual total returns include the 1% contingent deferred
sales charge for the 1-year period.
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
Salomon Brothers Non-U.S. Dollar World Government Bond Index, a
market-capitalization-weighted index that tracks performance of 13 government
bond markets in developed countries. The index performance includes
reinvestment of income but does not reflect transaction costs or taxes. The
Fund's investments vary from those in the index.


Fees and Expenses of the Fund


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


Shareholder Fees (charges paid directly from your investment):

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                         Class A       Class B       Class C      Class N
                         Shares        Shares        Shares       Shares
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Maximum Sales Charge
(Load) on purchases       4.75%         None          None           None
(as % of offering
price)
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Maximum Deferred
Sales Charge (Load)
(as % of the lower        None1          5%2           1%3           1%4
of the original
offering price or
redemption proceeds)
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1.    A  contingent   deferred  sales  charge  may  apply  to  redemptions  of
   investments  of $1 million or more  ($500,000 for certain  retirement  plan
   accounts) of Class A shares. See "How to Buy Shares" for details.
2.    Applies to  redemptions  in first year after  purchase.  The  contingent
   deferred  sales charge  declines to 1% in the sixth year and is  eliminated
   after that.
3.    Applies to shares redeemed within 12 months of purchase.
4.    Applies  to shares  redeemed  within 18  months of a  retirement  plan's
   first purchase of Class N shares.

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

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                            Class A       Class B       Class C      Class N
                            Shares        Shares        Shares        shares
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Management Fees              0.74%         0.74%         0.74%        0.74%
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Distribution and/or
Service (12b-1) Fees         0.23%         1.00%         1.00%        0.50%

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Other Expenses               0.40%         0.40%         0.40%        0.33%

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Total Annual Operating       1.37%         2.14%         2.14%        1.57%
Expenses

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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, 2002,  the transfer agent fees did
not exceed the expense limitation described above.


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

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

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

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Class A Shares                $608          $888         $1,189       $2,043

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Class B Shares                $717          $970         $1,349       $2,0971

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Class C Shares                $317          $670         $1,149       $2,472
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Class N Shares                $260          $496          $ 855       $1,867

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

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Class A Shares                $608          $888         $1,189       $2,043

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Class B Shares                $217          $670         $1,149       $2,0971

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Class C Shares                $217          $670         $1,149       $2,472
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Class N Shares                $160          $496          $ 855       $1,867

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In the first example, expenses include the initial sales charge for Class A
and the applicable Class B, Class C or Class N contingent deferred sales
charges. In the second example, the Class A expenses include the sales
charge, but Class B, Class C and Class N expenses do not include the
contingent deferred sales charges.
1.    Class B expenses for years 7 through 10 are based on Class A expenses,
   since Class B shares automatically convert to Class A after 6 years.

About the Fund's Investments


THE FUND'S PRINCIPAL INVESTMENT POLICIES. The allocation of the Fund's
portfolio among different types of 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
below. At times the Fund may focus more on investing for growth with less
emphasis on income, while at other times it may have both growth and income
investments to seek total return. The Statement of Additional Information
contains more detailed information about the Fund's investment policies and
risks.


      The Manager tries to reduce risks by carefully researching securities
before they are purchased, and in some cases by using hedging techniques. The
Fund is non-diversified and may at times focus its investments in the debt
securities of a limited number of issuers. The Fund does not concentrate 25%
or more of its total assets in investments in the securities of any one
foreign government or in the debt and equity securities of companies in any
one foreign country or in any one industry.

      The debt securities the Fund buys may be rated by nationally recognized
rating organizations or they may be unrated securities assigned an equivalent
rating by the Manager. The Fund's investments may be above or below
investment grade in credit quality, and the Fund can invest without limit in
below-investment-grade debt securities, commonly called "junk bonds."

Foreign Debt Securities. The Fund's foreign debt investments can be
      denominated in U.S. dollars or in foreign currencies and can include
      "Brady Bonds." Those are U.S.-dollar denominated debt securities
      collateralized by zero-coupon U.S. Treasury securities. They are
      typically issued by emerging markets 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.

Participation Interests in Loans. These securities represent an undivided
      fractional interest in a loan obligation of a borrower. They are
      typically purchased from banks or dealers that have made the loan or
      are members of the loan syndicate. The loans may be to foreign or U.S.
      companies. They are subject to the risk of default by the borrower. If
      the borrower fails to pay interest or repay principal, the Fund can
      lose money on its investment. The Fund does not invest more than 5% of
      its net assets in participation interests of any one borrower.


Derivative Investments. The Fund can invest in a number of different kinds of
      "derivative" investments.  In the broadest sense, structured notes,
      options, futures contracts, and other hedging instruments the Fund uses
      may be considered "derivative investments."  In addition to using
      derivatives for hedging, the Fund may use other derivative investments
      because they offer the potential for increased income and principal
      value.


o     "Structured" Notes. The Fund buys "structured" notes, which are
         specially-designed derivative debt investments whose principal
         payments or interest payments are linked to the value of an index
         (such as a currency or securities index) or commodity. The terms of
         the instrument may be "structured" by the purchaser (the Fund) and
         the borrower issuing the note.

         The values of these notes will fall or rise in response to the
         changes in the values of the underlying security or index. They are
         subject to both credit and interest rate risks and therefore the
         Fund could receive more or less than it originally invested when a
         note matures, or it might receive less interest than the stated
         coupon payment if the underlying investment or index does not
         perform as anticipated. The prices of these notes may be very
         volatile and they may have a limited trading market, making it
         difficult for the Fund to value them or sell them at an acceptable
         price.

      o  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 hedge to seek
         its objectives. The Fund does not use hedging instruments for
         speculative purposes, and has limits on its use of them.


         The Fund could hedge 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.


         Options trading involves the payment of premiums and has special tax
         effects on the Fund. There are also special risks in particular
         hedging strategies. In writing a put, there is a risk that the Fund
         may be required to buy the underlying security at a disadvantageous
         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
         price 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.

Portfolio Turnover. The Fund engages in short-term trading to seek its
      objectives. It might have a turnover rate in excess of 250% annually.
      Portfolio turnover affects brokerage and transaction costs the Fund
      pays. If the Fund realizes capital gains when it sells portfolio
      investments, it must generally pay those gains out to shareholders,
      increasing their taxable distributions. The Financial Highlights table
      at the end of this Prospectus shows the Fund's portfolio turnover rates
      during recent fiscal years.

CAN THE FUND'S INVESTMENT OBJECTIVES AND POLICIES CHANGE? The Fund's Board of
Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to
this Prospectus. Fundamental policies cannot be changed without the approval
of a majority of the Fund's outstanding voting shares. The Fund's investment
objectives are fundamental policies. 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 objectives, 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 Debt Securities.  Under normal market conditions, the Fund can invest
      (up to 35% of its total assets) in debt securities issued by U.S.
      companies or the U.S. government to seek the Fund's goals. However,
      these are not expected to be a significant part of the Fund's normal
      long term investment strategy. The Fund's investments in U.S.
      government securities can include U.S. Treasury securities and
      securities issued or guaranteed by agencies or instrumentalities of the
      U.S. government, such as collateralized mortgage obligations (CMOs) and
      other mortgage-related securities. Mortgage-related securities are
      subject to additional risks of unanticipated prepayments of the
      underlying mortgages, which can affect the income stream to the Fund
      from those securities as well as their values.

      The Fund can also buy U.S. commercial paper, which is short-term
      corporate debt, and asset-backed securities, which are interests in
      pools of consumer loans and other trade receivables. Prepayments on the
      underlying loans may reduce the Fund's income on the securities and
      reduce their values, as with CMOs.

Zero-Coupon and "Stripped Securities.  Some of the government and corporate
      debt securities the Fund buys are zero-coupon bonds that pay no
      interest and 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. The values
      of these stripped mortgage related securities are very sensitive to
      prepayments of underlying mortgages.

      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.

Illiquid and Restricted Securities. Investments may be illiquid because they
      do not have an active trading market, making it difficult to value them
      or dispose of them promptly at an acceptable price. A restricted
      security is one that has a contractual restriction on its resale or
      which cannot be sold publicly until it is registered under the
      Securities Act of 1933. The Fund will not invest more than 10% of its
      net assets in illiquid or restricted securities (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.


"When-Issued" and "Delayed-Delivery" Transactions. The Fund can purchase
      securities on a "when-issued" basis and can purchase or sell securities
      on a "delayed-delivery" basis. Between the purchase and settlement, no
      payment is made for the security and no interest accrues to the buyer
      from the investment. There is a risk of loss to the Fund if the value
      of the when-issued security declines prior to the settlement date. No
      income accrues to the Fund on a when-issued security until the Fund
      receives the security on settlement of the trade.


Temporary Defensive and Interim Investments. In times of unstable, adverse
      market or economic conditions, the Fund can invest up to 100% of its
      assets in temporary investments that are inconsistent with the Fund's
      principal investment strategies.  These would ordinarily be short-term
      U. S. government securities, highly-rated commercial paper, bank
      obligations or repurchase agreements. The Fund could also hold these
      types of securities pending the investment of proceeds from the sale of
      Fund shares or portfolio securities or to meet anticipated redemptions
      of Fund shares.  To the extent the Fund invests defensively in these
      securities, it may not achieve its primary investment objective of
      total return.

How the Fund Is Managed


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

      The Manager has been an investment advisor since January 1960. The
Manager and its subsidiaries and controlled affiliates managed more than $120
billion in assets as of September 30, 2002 including other Oppenheimer funds,
with more than seven million shareholder accounts.  The Manager is located at
498 Seventh Avenue, New York, New York 10018.


Portfolio Managers.  The portfolio managers of the Fund, Arthur P. Steinmetz
         and Ruggero de'Rossi, are Vice Presidents of the Fund and the
         persons principally responsible for the day-to-day management of the
         Fund's investments.  Mr. Steinmetz became a portfolio manager of the
         Fund on May 20, 1999, and Mr. de'Rossi on March 6, 2000.  Mr.
         Steinmetz is a Senior Vice President of the Manager. He joined the
         Manager in 1986, and has been a portfolio manager of other
         Oppenheimer funds since 1989.  Mr. de'Rossi joined the Manager as a
         Vice President and portfolio manager on March 6, 2000.  Since 1990
         he had been associated with other international money management
         firms, most recently as a Senior Vice President and Chief Emerging
         Markets Strategist for ING Barings from July, 1998 through March,
         2000, and Vice President and head of emerging markets trading
         strategies for Citicorp Securities from May, 1995 through July 1998.
         Mr. Steinmetz and Mr. de'Rossi are also officers and portfolio
         managers of other Oppenheimer funds.


Advisory Fees.  Under the investment advisory agreement, the Fund pays the
      Manager an advisory fee at an annual rate that declines on additional
      assets as the Fund grows: 0.75% of the first $200 million of average
      annual net assets of the Fund, 0.72% of the next $200 million, 0.69% of
      the next $200 million, 0.66% of the next $200 million, 0.60% of the
      next $200 million and 0.50% of average annual net assets in excess of
      $1 billion.  The Fund's management fee for its last fiscal year ended
      September 30, 2002 was 0.74% of average annual net assets for each
      class of shares.








ABOUT your account


How to Buy Shares


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


Buying Shares Through Your Dealer. You can buy shares through any dealer,
      broker or financial institution that has a sales agreement with the
      Distributor. Your dealer will place your order with the Distributor on
      your behalf.

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

o     Buying Shares Through Asset Builder Plans. You may purchase shares of
      the Fund automatically each month from your account at a bank or other
      financial institution under an Asset Builder Plan with AccountLink.
      Details are in the Asset Builder application and the Statement of
      Additional Information.


WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
   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.
      By using an Asset Builder o  Plan or Automatic Exchange Plan (details
      are in the Statement of Additional Information), or government
      allotment plan, you can make subsequent investments (after making the
      initial investment of $500) for as little as $50. For any type of
      account established under one of these plans prior to November 1, 2002,
      the minimum additional investment will remain $25.

o     The minimum investment requirement does not apply to reinvesting
      dividends from the Fund or other Oppenheimer funds (a list of them
      appears in the Statement of Additional Information, or you can ask your
      dealer or call the Transfer Agent), or reinvesting distributions from
      unit investment trusts that have made arrangements with the Distributor.

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


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

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

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


The Offering Price. To receive the offering price for a particular day, in
      most cases the Distributor or its designated agent must receive your
      order by the time The New York Stock Exchange closes that day. If your
      order is received on a day when the Exchange is closed or after it has
      closed, the order will receive the next offering price that is
      determined after your order is received.

Buying Through a Dealer. If you buy shares through a dealer, your dealer must
      receive the order by the close of The New York Stock Exchange and
      transmit it to the Distributor so that it is received before the
      Distributor's close of business on a regular business day (normally
      5:00 P.M.) to receive that day's offering price, unless your dealer has
      made alternative arrangements with the Distributor. Otherwise, the
      order will receive the next offering price that is determined.








- ------------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors 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 advisor. Some factors to consider are how much
you plan to invest and how long you plan to hold your investment. If your
goals and objectives change over time and you plan to purchase additional
shares, you should re-evaluate those factors to see if you should consider
another class of shares. The Fund's operating costs that apply to a class of
shares and the effect of the different types of sales charges on your
investment will vary your investment results over time.


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


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


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


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

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

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


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

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


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


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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

o     the original net asset value of the redeemed shares.

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

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


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


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

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

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

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0 - 1                                   5.0%
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1 - 2                                   4.0%
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- -------------------------------------------------------------------------------
2 - 3                                   3.0%
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3 - 4                                   3.0%
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4 - 5                                   2.0%
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5 - 6                                   1.0%
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More than 6                              None

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


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

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

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


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


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


DISTRIBUTION AND SERVICE (12b-1) PLANS.


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

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


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


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

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

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

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


Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account
with an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:

    o transmit funds electronically to purchase shares by telephone (through
      a service representative or by PhoneLink) or automatically under Asset
      Builder Plans, or
    o have the Transfer Agent send redemption proceeds or transmit dividends
      and distributions directly to your bank account. Please call the
      Transfer Agent for more information.

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

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

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification
Number (PIN), by calling the PhoneLink number, 1.800.225.5677.
Purchasing Shares. You may purchase shares in amounts up to $100,000 by
      phone, by calling 1.800.225.5677. You must have established AccountLink
      privileges to link your bank account with the Fund to pay for these
      purchases.

Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
      below, you can exchange shares automatically by phone from your Fund
      account to another OppenheimerFunds account you have already
      established by calling the special PhoneLink number.

Selling Shares. You can redeem shares by telephone automatically by calling
      the PhoneLink number and the Fund will send the proceeds directly to
      your AccountLink bank account. Please refer to "How to Sell Shares,"
      below for details.

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

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


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

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

RETIREMENT PLANS. You may buy shares of the Fund for your retirement plan
account. If you participate in a plan sponsored by your employer, the plan
trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans that
individuals and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs,
      SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business
      owners or self-employed individuals.

403(b)(7) Custodial Plans. These are tax-deferred plans for employees of
      eligible tax-exempt organizations, such as schools, hospitals and
      charitable organizations.

401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for businesses and
      self-employed individuals.
      Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.

How to Sell Shares


You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your
order is received in proper form (which means that it must comply with the
procedures described below) and is accepted by the Transfer Agent. The Fund
lets you sell your shares by writing a letter, by wire, by using the Fund's
checkwriting privilege, or by telephone. You can also set up Automatic
Withdrawal Plans to redeem shares on a regular basis. If you have questions
about any of these procedures, and especially if you are redeeming shares in
a special situation, such as due to the death of the owner or from a
retirement plan account, please call the Transfer Agent first, at
1.800.225.5677, for assistance.


Certain Requests Require a Signature Guarantee. To protect you and the Fund
      from fraud, the following redemption requests must be in writing and
      must include a signature guarantee (although there may be other
      situations that also require a signature guarantee):

   o  You wish to redeem more than $100,000 and receive a check
   o  The redemption check is not payable to all shareholders listed on the

      account statement

   o  The redemption check is not sent to the address of record on your
      account statement
   o  Shares are being transferred to a Fund account with a different owner
      or name
   o  Shares are being redeemed by someone (such as an Executor) other than
      the owners.


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

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

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

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

Send courier or express mail
requests to:
OppenheimerFunds Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231

Checkwriting. To write checks against your Fund account, request that privilege
on your account application, or contact the Transfer Agent for signature cards.
They must be signed (with a signature guarantee) by all owners of the account
and returned to the Transfer Agent so that checks can be sent to you to use.
Shareholders with joint accounts can elect in writing to have checks paid over
the signature of one owner. If you previously signed a signature card to
establish checkwriting in another Oppenheimer fund, simply call 1.800.225.5677
to request checkwriting for an account in this Fund with the same registration
as the other account.

o     Checks can be written to the order of whomever you wish, but may not be
      cashed at the bank the checks are payable through or the Fund's custodian
      bank.
o     Checkwriting privileges are not available for accounts holding shares
      that are subject to a contingent deferred sales charge.

o     Checks must be written for at least $500. Checks written below the stated
      amount on the check will not be accepted. However, if you have existing
      checks indicating a $100 minimum, you may still use them for amounts of
      $100 or more.

o     Checks cannot be paid if they are written for more than your account
      value. Remember, your shares fluctuate in value and you should not write
      a check close to the total account value.
o     You may not write a check that would require the Fund to redeem shares
      that were purchased by check or Asset Builder Plan payments within the
      prior 10 days.

   Don't use your checks if you changed your Fund account number, until you
      receive new checks.

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

Use the following address for
requests by mail:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217

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


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

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

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

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

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

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


      A  contingent  deferred  sales charge will be based on the lesser of the
net  asset  value of the  redeemed  shares  at the time of  redemption  or the
original net asset value.  A contingent  deferred  sales charge is not imposed
on:

o     the amount of your  account  value  represented  by an  increase  in net
      asset value over the initial purchase price,

o     shares  purchased by the  reinvestment  of  dividends  or capital  gains
      distributions, or

o     shares redeemed in the special circumstances  described in Appendix C to
      the Statement of Additional Information.
      To determine whether a contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order:
   1. shares acquired by reinvestment of dividends and capital gains

      distributions,

   2. shares held for the holding period that applies to the class, and
   3. shares held the longest during the holding period.

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


How to Exchange Shares

Shares of the Fund may be exchanged for shares of certain Oppenheimer funds
at net asset value per share at the time of exchange, without sales charge.
Shares of the Fund can be purchased by exchange of shares of other
Oppenheimer funds on the same basis. To exchange shares, you must meet
several conditions:

   o  Shares of the fund selected for exchange must be available for sale in
      your state of residence.
   o  The prospectuses of both funds must offer the exchange privilege.
   o  You must hold the shares you buy when you establish your account for at

      least seven days before you can exchange them. After the account is
      open seven days, you can exchange shares every regular business day.

   o  You must meet the minimum purchase requirements for the fund whose
      shares you purchase by exchange.
   o  Before exchanging into a fund, you must obtain and read its prospectus.
      Shares of a particular class of the Fund may be exchanged only for

shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another fund.
In some cases, sales charges may be imposed on exchange transactions. For tax
purposes, exchanges of shares involve a sale of the shares of the fund you
own and a purchase of the shares of the other fund, which may result in a
capital gain or loss. Please refer to "How to Exchange Shares" in the
Statement of Additional Information for more details.


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

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


Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
      signed by all owners of the account. Send it to the Transfer Agent at
      the address on the back cover. Exchanges of shares held under
      certificates cannot be processed unless the Transfer Agent receives the
      certificates with the request.

Telephone  Exchange  Requests.  Telephone exchange requests may be made either
      by calling a service  representative or by using PhoneLink for automated
      exchanges by calling  1.800.225.5677.  Telephone  exchanges  may be made
      only  between  accounts  that are  registered  with the same name(s) and
      address.  Shares  held  under  certificates  may  not  be  exchanged  by
      telephone.


ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o     Shares are normally redeemed from one fund and purchased from the other
      fund in the exchange transaction on the same regular business day on
      which the Transfer Agent receives an exchange request that conforms to
      the policies described above. It must be received by the close of The
      New York Stock Exchange that day, which is normally 4:00 P.M. but may
      be earlier on some days. However, either fund may delay the purchase of
      shares of the fund you are exchanging into up to seven days if it
      determines it would be disadvantaged by the same day exchange.

o    The interests of the Fund's long-term shareholders and its ability to
      manage its investments may be adversely affected when its shares are
      repeatedly bought and sold in response to short-term market
      fluctuations--also known as "market timing." When large dollar amounts
      are involved, the Fund may have difficulty implementing long-term
      investment strategies, because it cannot predict how much cash it will
      have to invest. Market timing also may force the Fund to sell portfolio
      securities at disadvantageous times to raise the cash needed to buy a
      market timer's Fund shares. These factors may hurt the Fund's
      performance and its shareholders. When the Manager believes frequent
      trading would have a disruptive effect on the Fund's ability to manage
      its investments, the Manager and the Fund may reject purchase orders
      and exchanges into the Fund by any person, group or account that the
      Manager believes to be a market timer.
   o  The Fund may amend, suspend or terminate the exchange privilege at any
      time. The Fund will provide you notice whenever it is required to do so
      by applicable law, but it may impose changes at any time for emergency
      purposes.
   o  If the Transfer Agent cannot exchange all the shares you request
      because of a restriction cited above, only the shares eligible for
      exchange will be exchanged.


Shareholder Account Rules and Policies


More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual fee is assessed on any account valued at less than $500. The fee
      is automatically deducted from accounts annually on or about the second
      to last business day of September. See the Statement of Additional
      Information, or visit the OppenheimerFunds website, to learn how you
      can avoid this fee and for circumstances when this fee will not be
      assessed.
The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is
      in the Fund's best interest to do so.

Telephone transaction privileges for purchases, redemptions or exchanges may
      be modified, suspended or terminated by the Fund at any time. The Fund
      will provide you notice whenever it is required to do so by applicable
      law. If an account has more than one owner, the Fund and the Transfer
      Agent may rely on the instructions of any one owner. Telephone
      privileges apply to each owner of the account and the dealer
      representative of record for the account unless the Transfer Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the
      Fund will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements
      for redemptions stated in this Prospectus.

Dealers that perform account transactions for their clients by participating
      in NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders
      of the Fund if the dealer performs any transaction erroneously or
      improperly.
The redemption price for shares will vary from day to day because the value
      of the securities in the Fund's portfolio fluctuates. The redemption
      price, which is the net asset value per share, will normally differ for
      each class of shares. The redemption value of your shares may be more
      or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink or by Federal Funds wire (as elected by
      the shareholder) within seven days after the Transfer Agent receives
      redemption instructions in proper form. However, under unusual
      circumstances determined by the Securities and Exchange Commission,
      payment may be delayed or suspended. For accounts registered in the
      name of a broker-dealer, payment will normally be forwarded within
      three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
      described under "How to Sell Shares" for recently purchased shares, but
      only until the purchase payment has cleared. That delay may be as much
      as 10 days from the date the shares were purchased. That delay may be
      avoided if you purchase shares by Federal Funds wire or certified
      check, or arrange with your bank to provide telephone or written
      assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the
      account value has fallen below $200 for reasons other than the fact
      that the market value of shares has dropped. In some cases, involuntary
      redemptions may be made to repay the Distributor for losses from the
      cancellation of share purchase orders.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack
      of liquidity in the Fund's portfolio to meet redemptions). This means
      that the redemption proceeds will be paid with liquid securities from
      the Fund's portfolio.

"Backup withholding" of federal income tax may be applied against taxable
      dividends, distributions and redemption proceeds (including exchanges)
      if you fail to furnish the Fund your correct, certified Social Security
      or Employer Identification Number when you sign your application, or if
      you under-report your income to the Internal Revenue Service.

To avoid sending duplicate copies of materials to households, the Fund will
      mail only one copy of each prospectus, annual and semi-annual report
      and annual notice of the Fund's privacy policy to shareholders having
      the same last name and address on the Fund's records. The consolidation
      of these mailings, called householding, benefits the Fund through
      reduced mailing expense.

      If you want to receive multiple copies of these materials, you may call
      the Transfer Agent at 1.800.225.5677. You may also notify the Transfer
      Agent in writing. Individual copies of prospectuses, reports and
      privacy notices will be sent to you commencing within 30 days after the
      Transfer Agent receives your request to stop householding.


Dividends, Capital Gains and Taxes


Dividends. The Fund intends to declare dividends separately for each class of
shares from net investment income each regular business day and pay those
dividends to shareholders monthly on a date selected by the Board of
Trustees. Daily dividends will not be declared or paid on newly purchased
shares until Federal Funds are available to the Fund from the purchase
payment for shares. Dividends and distributions paid to Class A 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 in December of each year. The Fund may make
supplemental distributions of dividends and capital gains following the end
of its fiscal year. There can be no assurance that the Fund will pay any
capital gains distributions in a particular year.


WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your
account, specify on your application how you want to receive your dividends
and distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all
      dividends and capital gains distributions in additional shares of the
      Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
      distributions (dividends, short-term capital gains or long-term capital
      gains distributions) in the Fund while receiving the other types of
      distributions by check or having them sent to your bank account through
      AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
      dividends and capital gains distributions or have them sent to your
      bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
      reinvest all distributions in the same class of shares of another
      OppenheimerFunds account you have established.

TAXES. If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the Fund.
Distributions are subject to federal income tax and may be subject to state
or local taxes. Dividends paid from short-term capital gains and net
investment income are taxable as ordinary income.  Long-term capital gains
are taxable as long-term capital gains when distributed to shareholders.  It
does not matter how long you have held your shares. Whether you reinvest your
distributions in additional shares or take them in cash, the tax treatment is
the same.

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

      Every year the Fund will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year. Any
long-term capital gains will be separately identified in the tax information
the Fund sends you after the end of the calendar year.


Avoid "Buying a Dividend." If you buy shares on or just before the Fund
      declares a capital gains distribution, you will pay the full price for
      the shares and then receive a portion of the price back as a taxable
      capital gain.
Remember, There May be Taxes on Transactions. Because the Fund's share prices
      fluctuate, you may have a capital gain or loss when you sell or
      exchange your shares. A capital gain or loss is the difference between
      the price you paid for the shares and the price you received when you
      sold them. Any capital gain is subject to capital gains tax.

Returns of Capital Can Occur. In certain cases, distributions made by the
      Fund may be considered a non-taxable return of capital to shareholders.
      If that occurs, it will be identified in notices to shareholders.


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


Financial Highlights


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

FINANCIAL HIGHLIGHTS

 Class A   Year ended September 30,             2002      2001      2000     1999      1998
- ----------------------------------------------------------------------------------------------

 Per Share Operating Data
- ----------------------------------------------------------------------------------------------
 Net asset value, beginning of period          $ 3.95    $ 4.19    $ 4.23    $ 4.32    $ 5.51
- ----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .24       .30       .45       .58       .56
 Net realized and unrealized gain (loss)          .41      (.24)     (.08)     (.14)    (1.20)
                                               -----------------------------------------------
 Total from investment operations                 .65       .06       .37       .44      (.64)
- ----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.19)       --      (.21)     (.53)     (.53)
 Tax return of capital distribution              (.03)     (.30)     (.20)       --        --
 Distributions from net realized gain              --        --        --        --      (.02)
                                               -----------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.22)     (.30)     (.41)     (.53)     (.55)
- ----------------------------------------------------------------------------------------------
 Net asset value, end of period                 $4.38     $3.95     $4.19     $4.23     $4.32
                                               ===============================================

- ----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value(1)            16.78%     1.40%     8.93%    10.58%   (12.50)%
- ----------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)    $181,456  $118,733  $100,928  $102,236  $ 97,404
- ----------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $134,912  $117,000  $110,968  $101,948  $108,264
- ----------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                           5.16%     7.10%    10.23%    13.47%    11.09%
 Expenses                                        1.37%     1.38%     1.31%     1.26%     1.24%(3)
 Expenses, net of reduction to custodian
 and/or voluntary waiver of transfer agent fees  1.37%     1.38%     1.29%     1.25%     1.24%
- ----------------------------------------------------------------------------------------------
 Portfolio turnover rate                          372%      377%      288%      285%      446%

1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 24 | OPPENHEIMER INTERNATIONAL BOND FUND

 Class B   Year ended September 30,             2002      2001      2000     1999      1998
- ----------------------------------------------------------------------------------------------

 Per Share Operating Data
- ----------------------------------------------------------------------------------------------
 Net asset value, beginning of period          $ 3.94    $ 4.17   $ 4.22     $ 4.31    $ 5.50
- ----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .21       .26      .42        .55       .52
 Net realized and unrealized gain (loss)          .40      (.22)    (.09)      (.14)    (1.20)
                                               -----------------------------------------------
 Total from investment operations                 .61       .04      .33        .41      (.68)
- ----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.15)       --     (.20)      (.50)     (.49)
 Tax return of capital distribution              (.03)     (.27)    (.18)        --        --
 Distributions from net realized gain              --        --       --         --      (.02)
                                               -----------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.18)     (.27)    (.38)      (.50)     (.51)
- ----------------------------------------------------------------------------------------------
 Net asset value, end of period                 $4.37     $3.94    $4.17      $4.22     $4.31
                                               ===============================================

- ----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value(1)            15.90%     0.85%    7.94%      9.79%   (13.16)%
- ----------------------------------------------------------------------------------------------


- ----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)    $100,049   $84,427 $ 98,272   $118,632  $119,998
- ----------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $ 85,244   $93,455 $115,116   $122,878  $128,789
- ----------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                           4.41%     6.40%    9.63%     12.70%    10.33%
 Expenses                                        2.14%     2.14%    2.05%      2.02%     2.00%(3)
 Expenses, net of reduction to custodian
 and/or voluntary waiver of transfer agent fees  2.14%     2.14%    2.03%      2.01%     2.00%
- ----------------------------------------------------------------------------------------------
 Portfolio turnover rate                          372%      377%     288%       285%      446%

1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 25 | OPPENHEIMER INTERNATIONAL BOND FUND

FINANCIAL HIGHLIGHTS  Continued


 Class C   Year ended September 30,             2002      2001      2000     1999      1998
- ----------------------------------------------------------------------------------------------

 Per Share Operating Data
- ----------------------------------------------------------------------------------------------
 Net asset value, beginning of period          $ 3.94    $ 4.17   $ 4.22     $ 4.31    $ 5.50
- ----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .21       .26      .41        .55       .52
 Net realized and unrealized gain (loss)          .40      (.22)    (.08)      (.14)    (1.20)
                                               -----------------------------------------------
 Total from investment operations                 .61       .04      .33        .41      (.68)
- ----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders
 Dividends from net investment income            (.15)    --        (.19)      (.50)     (.49)
 Tax return of capital distribution              (.03)     (.27)    (.19)        --        --
 Distributions from net realized gain              --        --       --         --      (.02)
                                               -----------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.18)     (.27)    (.38)      (.50)     (.51)
- ----------------------------------------------------------------------------------------------
 Net asset value, end of period                 $4.37     $3.94    $4.17      $4.22     $4.31
                                               ===============================================

- ----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value(1)            15.90%     0.85%    7.95%      9.80%   (13.16)%
- ----------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)     $38,865   $25,221  $27,663    $29,456   $27,636
- ----------------------------------------------------------------------------------------------
 Average net assets (in thousands)            $28,635   $27,125  $30,710    $28,918   $29,336
- ----------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                           4.37%     6.39%    9.55%     12.76%    10.33%
 Expenses                                        2.14%     2.14%    2.05%      2.02%     2.00%(3)
 Expenses, net of reduction to custodian
 and/or voluntary waiver of transfer agent fees  2.14%     2.14%    2.03%      2.01%     2.00%
- ----------------------------------------------------------------------------------------------
 Portfolio turnover rate                          372%      377%     288%       285%      446%

1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 26 | OPPENHEIMER INTERNATIONAL BOND FUND

 Class N   Year ended September 30,                                   2002      2001(1)
- ---------------------------------------------------------------------------------------

 Per Share Operating Data
- ---------------------------------------------------------------------------------------
 Net asset value, beginning of period                               $ 3.95    $ 4.23
- ---------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                                 .21       .16
 Net realized and unrealized gain (loss)                               .42      (.28)
                                                                    -------------------
 Total from investment operations                                      .63      (.12)
- ---------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                 (.18)       --
 Tax return of capital distribution                                   (.03)     (.16)
 Distributions from net realized gain                                   --        --
                                                                    -------------------
 Total dividends and/or distributions
 to shareholders                                                      (.21)     (.16)
- ---------------------------------------------------------------------------------------
 Net asset value, end of period                                      $4.37     $3.95
                                                                    ===================

- ---------------------------------------------------------------------------------------
 Total Return, at Net Asset Value(2)                                 16.23%    (2.88)%
- ---------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------
 Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)                           $1,280      $109
- ---------------------------------------------------------------------------------------
 Average net assets (in thousands)                                  $  297      $ 34
- ---------------------------------------------------------------------------------------
 Ratios to average net assets:(3)
 Net investment income                                                4.87%     6.56%
 Expenses                                                             1.57%     1.39%
 Expenses, net of reduction to custodian
 and/or voluntary waiver of transfer agent fees                       1.57%     1.39%
- ---------------------------------------------------------------------------------------
 Portfolio turnover rate                                               372%      377%

1. For the period from March 1, 2001 (inception of offering) to September 30, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 3. Annualized for periods of less than one full year.

INFORMATION AND SERVICES


For More Information on Oppenheimer International Bond Fund
The following additional information about the Fund is available without
charge upon request:

STATEMENT OF ADDITIONAL INFORMATION. This document includes additional
information about the Fund's investment policies, risks, and operations. It
is incorporated by reference into this Prospectus (which means it is legally
part of this Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's
investments and performance is available in the Fund's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.

How to Get More Information
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Fund's privacy policy and
other information about the Fund or your account:

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

- ----------------------------- Call OppenheimerFunds Services toll-free:


By Telephone:                 -----------------------------------------------
                              1.800.CALL.OPP (225.5677)

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

- ----------------------------- Write to:


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

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

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

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



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


The Fund's shares are distributed by:                [logo]
OppenheimerFunds Distributor, Inc.

The Fund's SEC File No.: 811-07255

PR0880.001.1102
Printed on recycled paper






Appendix to Prospectus of
Oppenheimer International Bond Fund


      Graphic   material   included   in   the   Prospectus   of   Oppenheimer
International  Bond Fund (the "Fund") under the heading:  "Annual Total Return
(Class A) (% as of 12/31 each year)":


      A bar chart will be included  in the  Prospectus  of the Fund  depicting
the annual total  returns of a  hypothetical  investment  in Class A shares of
the Fund for each of the six most recent  calendar  years,  without  deducting
sales  charges.  Set forth below is the  relevant  data point that will appear
on the bar chart:



Year
Ended:                                Annual Total Return:
- ------                                --------------------


12/31/96                    19.29%
12/31/97                     2.46%
12/31/98                    -4.36%
12/31/99                         11.00%
12/31/00                           6.85%
12/31/01                           2.15%

- ------------------------------------------------------------------------------
Oppenheimer International Bond Fund
- ------------------------------------------------------------------------------


6803 South Tucson Way, Centennial, Colorado 80112
1.800.225.5677




      This  Statement of  Additional  Information  is not a  Prospectus.  This
document  contains  additional  information  about  the Fund  and  supplements
information  in the  Prospectus  dated  November 22,  2002.  It should be read
together with the Prospectus.  You can obtain the Prospectus by writing to the
Fund's Transfer Agent,  OppenheimerFunds  Services,  at P.O. Box 5270, Denver,
Colorado  80217,  or by calling the  Transfer  Agent at the  toll-free  number
shown above, or by downloading it from the  OppenheimerFunds  Internet website
at www.oppenheimerfunds.com.


Contents
                                                                        Page
About the Fund

Additional Information About the Fund's Investment Policies and Risks.. 2
    The Fund's Investment Policies..................................... 2
    Other Investment Techniques and Strategies......................... 6
    Other Investment Restrictions...................................... 28
How the Fund is Managed ............................................... 30
    Organization and History........................................... 30
    Board of Trustees and Oversight Committees......................... 30
    Trustees and Officers of the Fund.................................. 31
    The Manager........................................................ 38

Brokerage Policies of the Fund......................................... 39
Distribution and Service Plans......................................... 41
Performance of the Fund................................................ 46

About Your Account

How To Buy Shares...................................................... 51
How To Sell Shares..................................................... 61
How To Exchange Shares................................................. 67
Dividends, Capital Gains and Taxes..................................... 70
Additional Information About the Fund.................................. 75


Financial Information About the Fund
Independent Auditors' Report........................................... 76
Financial Statements................................................... 77

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







- ------------------------------------------------------------------------------
ABOUT THE FUND
- ------------------------------------------------------------------------------

Additional Information About the Fund's Investment Policies and Risks

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

The Fund's Investment Policies. The composition of the Fund's portfolio and
the techniques and strategies that the Fund's Manager may use in selecting
portfolio securities will vary over time. The Fund is not required to use all
of the investment techniques and strategies described below at all times in
seeking its goal. It may use some of the special investment techniques and
strategies at some times or not at all.

      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|  Foreign Securities. The Fund expects to invest primarily in
foreign securities. For the most part, these will be debt securities issued
or guaranteed 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 supranational 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 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
and Canada, Australia, New Zealand and Japan. There may be even less
liquidity in their securities markets, and settlements of purchases and sales
of securities may be subject to additional delays. They are subject to
greater risks of limitations on the repatriation of income and profits
because of currency restrictions imposed by local governments. Those
countries may also be subject to the risk of greater political and economic
instability, which can greatly affect the volatility of prices of securities
in those countries. The Manager will consider these factors when evaluating
securities in these markets, because the selection of those securities must
be consistent with the Fund's investment objectives.


         |X|  Debt Securities. The Fund can invest in a variety of debt
securities to seek its objectives. Foreign debt securities are subject to the
risks of foreign securities described above. In general, debt securities are
also subject to two additional types of risk: credit risk and interest rate
risk.

      Credit Risks.  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 Ratings Group
("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.

      Interest Rate Risks. 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.

      Special Risks of Lower-Grade Securities. The Fund can invest without
limit in lower-grade debt securities, if the Manager believes it is
consistent with the Fund's objectives. Because lower-rated 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 overall goal of total
return.

      "Lower-grade" debt securities are those rated below "investment grade"
which means they have a rating lower than "Baa" by Moody's or lower than
"BBB" by Standard & Poor's or Fitch, or similar ratings by other rating
organizations. If they are unrated, and are determined by the Manager to be
of comparable quality to debt securities rated below investment grade, they
are considered part of the Fund's portfolio of lower-grade securities.  The
Fund can invest in securities rated as low as "C" or "D" or which may be 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 risk of foreign investing discussed in the
Prospectus and in this Statement of Additional Information.

      To the extent they can be converted into stock, convertible securities
may be less subject to some of these risks than non-convertible high yield
bonds, since stock may be more liquid and less affected by some of these risk
factors.

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

      |X|  Portfolio Turnover.  "Portfolio turnover" describes the rate at
which the Fund traded its portfolio securities during its last fiscal year.
For example, if a fund sold all of its securities during the year, its
portfolio turnover rate would have been 100%. The Fund's portfolio turnover
rate will fluctuate from year to year, and the Fund may continue to have a
portfolio turnover rate of more than 250% annually.

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

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


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

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

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

      |X| U.S. Government Securities.  These are securities issued or
guaranteed by the U.S. Treasury or other government agencies or 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 (maturities of
one year or less when issued), Treasury notes (maturities of more than one
year and up to 10 years), and Treasury bonds (maturities of more than 10
years). Treasury securities are backed by the full faith and credit of the
United States as to timely payments of interest and repayments of principal.
They also can include U. S. Treasury securities that have been "stripped" by
a Federal Reserve Bank, zero-coupon U.S. Treasury securities described above,
and Treasury Inflation-Protection Securities ("TIPS").


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

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

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

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

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

      |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 may invest in
stripped mortgage-related securities that are created by segregating the cash
flows from underlying mortgage loans or mortgage securities to create two or
more new securities. Each has a specified percentage of the underlying
security's principal or interest payments. These are a form of derivative
investment.

      Mortgage securities may be partially stripped so that each class
receives some interest and some principal. However, they may be completely
stripped. In that case all of the interest is distributed to holders of one
type of security, known as an "interest-only" security, or "I/O," and all of
the principal is distributed to holders of another type of security, known as
a "principal-only" security or "P/O." Strips can be created for pass through
certificates or CMOs.

      The yields to maturity of I/Os and P/Os are very sensitive to principal
repayments (including prepayments) on the underlying mortgages. If the
underlying mortgages experience greater than anticipated prepayments of
principal, the Fund might not fully recoup its investment in an I/O based on
those assets. If underlying mortgages experience less than anticipated
prepayments of principal, the yield on the P/Os based on them could decline
substantially.  The market for some of these securities may be limited,
making it difficult for the Fund to dispose of its holdings at an acceptable
price.

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

      Some variable rate and floating rate 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. 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|  When-Issued and Delayed-Delivery Transactions.  The Fund may
invest in securities on a "when-issued" basis and may purchase or sell
securities on a "delayed-delivery" basis.  When-issued and delayed-delivery
are terms that refer to securities whose terms and indenture are available
and for which a market exists, but which are not available for immediate
delivery.

      When such transactions are negotiated, the price (which is generally
expressed in yield terms) is fixed at the time the commitment is made.
Delivery and payment for the securities take place at a later date.  The
securities are subject to change in value from market fluctuations during the
period until settlement. The value at delivery may be less than the purchase
price. For example, changes in interest rates in a direction other than that
expected by the Manager before settlement will affect the value of such
securities and may cause a loss to the Fund. During the period between
purchase and settlement, no payment is made by the Fund to the issuer and no
interest accrues to the Fund from the investment.  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 objectives and policies or for delivery pursuant to options
contracts it has entered into, and not for the purpose of investment
leverage. Although the Fund will enter into delayed-delivery or when-issued
purchase transactions to acquire securities, it may dispose of a commitment
prior to settlement. If the Fund chooses to dispose of the right to acquire a
when-issued security prior to its acquisition or to dispose of its right to
delivery or receive against a forward commitment, it may incur a gain or loss.

      At the time the Fund makes the commitment to purchase or sell a
security on a when-issued or delayed-delivery basis, it records the
transaction on its books and reflects the value of the security purchased in
determining the Fund's net asset values.  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 may 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.  No
more than 5% of the Fund's net assets can be invested in participation
interests of the same borrower.  The issuing financial institution may have
no obligation to the Fund other than to pay the Fund the proportionate amount
of the principal and interest payments it receives.

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

      |X| Repurchase Agreements. The Fund may 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 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 of 1940 ("Investment Company Act"), are collateralized by the underlying
security.  The Fund's repurchase agreements require that at all times while
the repurchase agreement is in effect, the value of the collateral must equal
or exceed the repurchase price to fully collateralize the repayment
obligation. However, if the vendor fails to pay the resale price on the
delivery date, the Fund may incur costs in disposing of the collateral and
may experience losses if there is any delay in its ability to do so. The
Manager will monitor the vendor's creditworthiness to confirm that the vendor
is financially sound and will continuously monitor the collateral's value.

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


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

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

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

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


      |X|  Forward Rolls. The Fund can enter into "forward roll" transactions
with respect to mortgage related securities. In this type of transaction, the
Fund sells a mortgage related security to a buyer and simultaneously agrees
to repurchase a similar security (the same type of security having the same
coupon and maturity) at a later date at a set price. The securities that are
repurchased will have the same interest rate as the securities that are sold,
but typically will be collateralized by different pools of mortgages (with
different prepayment histories) than the securities that have been sold.
Proceeds from the sale are invested in short-term instruments, such as
repurchase agreements. The income from those investments, plus the fees from
the forward roll transaction, are expected to generate income to the Fund in
excess of the yield on the securities that have been sold.


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

      These transactions have risks. During the period between the sale and
the repurchase, the Fund will not be entitled to receive interest and
principal payments on the securities that have been sold. It is possible that
the market value of the securities the Fund sells may decline below the price
at which the Fund is obligated to repurchase securities.


      |X|  Investments in Equity Securities. Under normal market conditions
the Fund can invest up to 20% of its assets in securities other than debt
securities, including equity securities of both foreign and U.S. companies.
However, it does not anticipate investing significant amounts of its assets
in these securities as part of its normal investment strategy. 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 objectives of total
return and income. Certain equity securities may be selected not only for
their appreciation possibilities but because they may provide dividend income.


      Risks of Investing in Stocks. Stocks fluctuate in price, and their
short-term volatility at times may be great. To the extent that the Fund
invests in equity securities, the value of the Fund's portfolio will be
affected by changes in the stock markets. Market risk can affect the Fund's
net asset values per share, which will fluctuate as the values of the Fund's
portfolio securities change.  The prices of individual stocks do not all move
in the same direction uniformly or at the same time. Different stock markets
may behave differently from each other.

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

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

      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 rating assigned to the security has less impact on the Manager's
investment decision than in the case of non-convertible debt fixed income
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.

      Rights and Warrants.  The Fund may invest up to 5% of its total assets
in warrants or rights. That limit does not apply to warrants and rights the
Fund has acquired as part of units of securities or that are attached to
other securities that the Fund buys. The Fund does not expect that it will
have significant investments in warrants and rights.

      Warrants basically are options to purchase equity securities at
specific prices valid for a specific period of time.  Their prices do not
necessarily move parallel to the prices of the underlying securities.  Rights
are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders.  Rights and warrants
have no voting rights, receive no dividends and have no rights with respect
to the assets of the issuer.

      |X| Loans of Portfolio Securities.  To raise cash for liquidity
purposes or income, the Fund can lend its portfolio securities to brokers,
dealers and other types of financial institutions approved by the Fund's
Board of Trustees. These loans are limited to not more than 25% of the value
of the Fund's net assets. The Fund currently does not intend to engage in
loans of securities in the coming year, but if it does so, such loans will
not likely exceed 5% of the Fund's total assets.

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

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

      |X| Borrowing for Leverage.  The fund may borrow for leverage as
described below under "Investment Restrictions." The Fund will pay interest
on these loans, and that interest expense will raise the overall expenses of
the Fund and reduce its returns. If it does borrow, its expenses will be
greater than comparable funds that do not borrow for leverage. Additionally,
the Fund's net asset values per share might fluctuate more than that of funds
that do not borrow. Currently, the Fund does not contemplate using this
technique in the next year but if it does so, it will not likely be to a
substantial degree.

      |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 principal are not made, the Fund could
suffer losses 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|  Bank Obligations and Securities That Are Secured By Them.  The
Fund can invest in bank obligations, including time deposits, certificates of
deposit, and bankers' acceptances. They must be either obligations of a
domestic bank with total assets of at least $1 billion or obligations of a
foreign bank with total assets of at least U.S. $1 billion. The Fund may also
invest in instruments secured by bank obligations (for example, debt which is
guaranteed by the bank). For purposes of this policy, the term "bank"
includes commercial banks, savings banks, and savings and loan associations
that may or may not be members of the Federal Deposit Insurance Corporation.

      Time deposits are non-negotiable deposits in a bank for a specified
period of time at a stated interest rate. They may or may not be subject to
withdrawal penalties. However, time deposits that are subject to withdrawal
penalties, other than those maturing in seven days or less, are subject to
the limitation on investments by the Fund in illiquid investments.

      Bankers' acceptances are marketable short-term credit instruments used
to finance the import, export, transfer or storage of goods.  They are deemed
"accepted" when a bank guarantees their payment at maturity.

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

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

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

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

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


      If the Fund takes a short position in the credit default swap, and 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.

      The Fund will invest no more than 25% of its total assets in
"unfunded" credit default swaps.  The Fund will limit its investments
in "funded" credit default swap notes to no more than 10% of its total
assets.

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

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

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

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

o     buy futures, or
o     buy calls on 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 objectives and are permissible under applicable regulations
governing the Fund.

      Futures.  The Fund can buy and sell futures contracts that relate to
(1) broadly-based bond or stock indices (these are referred to as "financial
futures"), (2) commodities (these are referred to as "commodity futures"),
(3) debt securities (these are referred to as "interest rate futures"), and
(4) foreign currencies (these are referred to as "forward contracts").

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

      An interest rate future obligates the seller to deliver (and the
purchaser to take) cash or a specified type of debt security to settle the
futures transaction. Either party could also enter into an offsetting
contract to close out the position.

      The Fund can invest a portion of its assets in commodity futures
contracts. Commodity futures may be based upon commodities within five main
commodity groups: (1) energy, which includes crude oil, natural gas, gasoline
and heating oil; (2) livestock, which includes cattle and hogs; (3)
agriculture, which includes wheat, corn, soybeans, cotton, coffee, sugar and
cocoa; (4) industrial metals, which includes aluminum, copper, lead, nickel,
tin and zinc; and (5) precious metals, which includes gold, platinum and
silver.  The Fund may purchase and sell commodity futures contracts, options
on futures contracts and options and futures on commodity indices with
respect to these five main commodity groups and the individual commodities
within each group, as well as other types of commodities.

      No money is paid or received by the Fund on the purchase or sale of a
future.  Upon entering into a futures transaction, the Fund will be required
to deposit an initial margin payment with the futures commission merchant
(the "futures broker").  Initial margin payments will be deposited with the
Fund's custodian bank in an account registered in the futures broker's name.
However, the futures broker can gain access to that account only under
specified conditions.  As the future is marked to market (that is, its value
on the Fund's books is changed) to reflect changes in its market value,
subsequent margin payments, called variation margin, will be paid to or by
the futures broker daily.

      At any time prior to expiration of the future, the Fund may elect to
close out its position by taking an opposite position, at which time a final
determination of variation margin is made and any additional cash must be
paid by or released to the Fund.  Any loss or gain on the future is then
realized by the Fund for tax purposes.  All futures transactions 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, options on commodities
indices, and options on the other types of futures described above.

         Writing Covered Call Options.  The Fund may write (that is, sell)
covered calls. If the Fund sells a call option, it must be covered.  That
means the Fund must own the security subject to the call while the call is
outstanding, or, for certain types of calls, the call may be covered by
identifying liquid assets on the Fund's books to enable the Fund to satisfy
its obligations if the call is exercised.  Up to 50% of the Fund's total
assets may be subject to calls the Fund writes.

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

      When the Fund writes a call on an index, it receives cash (a premium).
If the buyer of the call exercises it, the Fund will pay an amount of cash
equal to the difference between the closing price of the call and the
exercise price, multiplied by 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 identifying an
equivalent dollar amount of liquid assets on the Fund's books.  The Fund will
identify additional liquid assets on the Fund's books if the value of the
identified 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.

         Writing Put Options.  The Fund can sell put options on securities,
broadly-based securities indices, foreign currencies, options on commodities
indices and futures. A put option on securities gives the purchaser the right
to sell, and the writer the obligation to buy, the underlying investment at
the exercise price during the option period.  The Fund will not write puts
if, as a result, more than 50% of the Fund's net assets would be required to
be identified to cover such put options.

      If the Fund writes a put, the put must be covered by liquid assets
identified on the Fund's books. The premium the Fund receives from writing a
put represents a profit, as long as the price of the underlying investment
remains equal to or above the exercise price of the put.  However, the Fund
also assumes the obligation during the option period to buy the underlying
investment from the buyer of the put at the exercise price, even if the value
of the investment falls below the exercise price.

      If a put the Fund has written expires unexercised, the Fund realizes a
gain in the amount of the premium less the transaction costs incurred.  If
the put is exercised, the Fund must fulfill its obligation to purchase the
underlying investment at the exercise price. That price will usually exceed
the market value of the investment at that time.  In that case, the Fund may
incur a loss if it sells the underlying investment. That loss will be equal
to the sum of the sale price of the underlying investment and the premium
received minus the sum of the exercise price and any transaction costs the
Fund incurred.

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

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

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

         Purchasing Calls and Puts.  The Fund can purchase calls only on
securities, broadly-based securities indices, foreign currencies, options on
commodities indices and futures. It may do so to protect against the
possibility that the Fund's portfolio will not participate in an anticipated
rise in the securities market. When the Fund buys a call (other than in a
closing purchase transaction), it pays a premium. The Fund then has the right
to buy the underlying investment from a seller of a corresponding call on the
same investment during the call period at a fixed exercise price.

      The Fund benefits only if it sells the call at a profit or if, during
the call period, the market price of the underlying investment is above the
sum of the call price plus the transaction costs and the premium paid for the
call and the Fund exercises the call.  If the Fund does not exercise the call
or sell it (whether or not at a profit), the call will become worthless at
its expiration date. In that case, the Fund will have paid the premium but
lost the right to purchase the underlying investment.


      The Fund can buy puts only on securities, broadly-based securities
indices, foreign currencies, options on commodities indices and futures,
whether or not it owns the underlying investment. When the Fund purchases a
put, it pays a premium and, except as to puts on indices, has the right to
sell the underlying investment to a seller of a put on a corresponding
investment during the put period at a fixed exercise price.


      Buying a put on 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.

      The Fund may buy a call or put only if, after the purchase, the value
of all call and put options held by the Fund will not exceed 5% of the Fund's
total assets.

         Buying and Selling Options on Foreign Currencies.  The Fund can buy
and sell calls and puts on foreign currencies.  They include puts and calls
that trade on a securities or commodities exchange or in the over-the-counter
markets or are quoted by major recognized dealers in such options.  The Fund
could use these calls and puts to try to protect against declines in the
dollar value of foreign securities and increases in the dollar cost of
foreign securities the Fund wants to acquire.

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

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

      The Fund could write a call on a foreign currency to provide a hedge
against a decline in the U.S. dollar value of a security which the Fund owns
or has the right to acquire and which is denominated in the currency
underlying the option. That decline might be one that occurs due to an
expected adverse change in the exchange rate. In those circumstances, the
Fund covers the option by maintaining cash, U.S. government securities or
other liquid, high grade debt securities in an amount equal to the exercise
price of the option, in an identified account with the Fund's custodian bank.

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

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

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

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

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

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

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

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

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

         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 limits its exposure in
foreign currency exchange contracts in a particular foreign currency to the
amount of its assets denominated in that currency or a closely-correlated
currency.  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 might 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 might 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 could suffer a substantial decline against
a foreign currency, it could enter into a forward contract to buy that
foreign currency for a fixed dollar amount.  Alternatively, the Fund could
enter into a forward contract to sell a different foreign currency for a
fixed U.S. dollar amount if the Fund believes that the U.S. dollar value of
the foreign currency to be sold pursuant to its forward contract will fall
whenever there is a decline in the U.S. dollar value of the currency in which
portfolio securities of the Fund are denominated. That is referred to as a
"cross hedge."

      The Fund will cover its short positions in these cases by identifying
to its custodian bank assets having a value equal to the aggregate amount of
the Fund's commitment under forward contracts.  The Fund will not enter into
forward contracts or maintain a net exposure to such contracts if the
consummation of the contracts would obligate the Fund to deliver an amount of
foreign currency in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency or another currency that is the
subject of the hedge.

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


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


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

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

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

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

         Interest Rate Swap Transactions.  The Fund can enter into interest
rate swap agreements. In an interest rate swap, the Fund and another party
exchange their right to receive or their obligation to pay interest on a
security. For example, they might swap the right to receive floating rate
payments for fixed rate payments. The Fund can enter into swaps only on
securities that it owns. The Fund will not enter into swaps with respect to
more than 25% of its total assets. Also, the Fund will identify 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.  When using futures and
options on futures, the Fund is required to operate within certain guidelines
and restrictions with respect to the use of futures as established by the
Commodities Futures Trading Commission (the "CFTC").  In particular, the Fund
is exempted from registration with the CFTC as a "commodity pool operator" if
the Fund complies with the requirements of Rule 4.5 adopted by the CFTC.  The
Rule does not limit the percentage of the Fund's assets that may be used for
futures margin and related options premiums for a bona fide hedging
position.  However, under the Rule, the Fund must limit its aggregate initial
futures margin and related options premiums to not more than 5% of the Fund's
net assets for hedging strategies that are not considered bona fide hedging
strategies under the Rule. Under the Rule, the Fund must also use short
futures and options on futures solely for bona fide hedging purposes within
the meaning and intent of the applicable provisions of the Commodity Exchange
Act.


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


      Under the Investment Company Act, when the Fund purchases a future, it
must maintain cash or readily marketable short-term debt instruments in an
amount equal to the market value of the securities underlying the future,
less the margin deposit applicable to it.

         Tax Aspects of 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 Investments.  When market 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|X|     for liquidity
purposes to meet cash needs due to the redemption of Fund shares, or to hold
while waiting to invest cash received from the sale of other portfolio
securities. The Fund can buy:


      high quality, short term money market instruments, including those
         issued by the U.S Treasury or other government 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
         gradeo (rated at least Baa by Moody's or at least BBB by Standard &
         Poor's, 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 and savings and loan associations, 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.


|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.


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


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

o     The Fund cannot make loans except (a) through lending of securities,
         (b) through the purchase of debt instruments or similar evidences of
         indebtedness, (c) through ano     inter-fund lending program with
         other affiliated funds, and (d) through repurchase agreements.
o     The Fund cannot buy or sell real estate. However, the Fund can purchase
         debt securities secured by real estate or interests in real estate
         or issued by companies, including real estate investment trusts,
         which invest in real estate or interests in real estate.
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 cannot issue "senior securities," but this does not prohibit
         certain investment activities for which assets of the Fund are
         designated as segregated, or margin, collateral or escrow
         arrangements are established, to cover the related obligations.
         Examples of those activities include borrowing money, reverse
         repurchase agreements, delayed-delivery and when-issued arrangements
         for portfolio securities transactions, and contracts to buy or sell
         derivatives, hedging instruments, options or futures.
o     The Fund cannot borrow money in excess of 33 1/3% of the value of its
         total assets.  The Fund may borrow only from banks and/or affiliated
         investment companies.  The Fund cannot make any investment at a time
         during which its borrowings exceed 5% of the value of its assets.
         With respect to this fundamental policy, the Fund can borrow only if
         it maintains a 300% ratio of assets to borrowings at all times in
         the manner set forth in the Investment Company Act.
o     The Fund cannot concentrate investments. That means it cannot invest
         25% or more of its total assets in any one industry. The Fund will
         not invest 25% or more of its total assets in government securities
         of any one foreign company or in debt and equity securities issued
         by companies organized under the laws of any one foreign country.
         Obligations of the U.S. government, its agencies and
         instrumentalities are not considered to be part of an "industry" for
         the purposes of this policy.

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

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

Non-Diversification of the Fund's Investments.  The Fund is
"non-diversified," as defined in the Investment Company Act.  Funds that are
diversified have restrictions against investing too much of their assets in
the securities of any one "issuer."  That means that the Fund can invest more
of its assets in the securities of a single issuer than a fund that is
diversified.

      Being non-diversified poses additional investment risks, because if the
Fund invests more of its assets in fewer issuers, the value of its shares is
subject to greater fluctuations from adverse conditions affecting any one of
those issuers.  However, the Fund does limit its investments in the
securities of any one issuer to qualify for tax purposes as a "regulated
investment company" under the Internal Revenue Code.  By qualifying, it does
not have to pay federal income taxes if more than 90% of its earnings are
distributed to shareholders.  To qualify, the Fund must meet a number of
conditions.  First, not more than 25% of the market value of the Fund's total
assets may be invested in the securities of a single issuer.  Second, with
respect to 50% of the market value of its total assets, (1) no more than 5%
of the market value of its total assets may be invested in the securities of
a single issuer, and (2) the Fund must not own more than 10% of the
outstanding voting securities of a single issuer.  This is not a fundamental
policy.

How the Fund is Managed


Organization and History. The Fund is an open-end, non-diversified management
investment company with an unlimited number of authorized shares of
beneficial interest. The Fund was organized as a Massachusetts business trust
on February 28, 1995.


      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.


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

      The Fund currently has 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     may have a different net asset value,
o     may have separate voting rights on matters in which interests of one
      class are different from interests of another class, and
o     votes as a class on matters that affect that class alone.

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


Meetings of Shareholders.  As a Massachusetts business trust, the Fund is not
required to hold, and does not plan to hold, regular annual meetings of
shareholders. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.  Although the Fund will not normally hold annual meetings of its
shareholders,  it may hold shareholder meetings from time to time on important
matters,  and  shareholders  have the  right  to call a  meeting  to  remove a
Trustee or to take other action described in the Fund's Declaration of Trust.


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

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 and a Review Committee.
The members of the Audit Committee are Edward L. Cameron (Chairman), William
L. Armstrong, George C. Bowen and Robert J. Malone.  The Audit Committee held
seven meetings during the fiscal year ended September 30, 2002. The Audit
Committee furnishes the Board with recommendations regarding the selection of
the Fund's independent auditors. Other main functions of the Audit Committee
include, but are not limited to: (i) reviewing the scope and results of
audits and the audit fees charged; (ii) reviewing reports from the Fund's
independent auditors regarding the Fund's internal accounting procedures and
controls; and (iii) establishing a separate line of communication between the
Fund's independent auditors and its independent Trustees.

      The Audit Committee's functions include selecting and nominating, to
the full Board, nominees for election as Trustees, and selecting and
nominating Independent Trustees for election.  The Audit Committee may, but
need not, consider the advice and recommendation of the Manager and its
affiliates in selecting nominees. The full Board elects new trustees except
for those instances when a shareholder vote is required.

      To date, the Committee has been able to identify from its own resources
an ample number of qualified candidates.  Nonetheless, shareholders may
submit names of individuals, accompanied by complete and properly supported
resumes, for the Audit Committee's consideration by mailing such information
to the Committee in care of the Fund.  The Committee may consider such
persons at such time as it meets to consider possible nominees.  The
Committee, however, reserves sole discretion to determine the candidates to
present to the Board and/or shareholders when it meets for the purpose
considering potential nominees.

      The members of the Review Committee are Jon S. Fossel (Chairman),
Robert G. Avis, Sam Freedman, Beverly Hamilton and F. William Marshall, Jr.
The Review Committee held seven meetings during the fiscal year ended
September 30, 2002. Among other functions, the Review Committee reviews
reports and makes recommendations to the Board concerning the fees paid to
the Fund's transfer agent and the services provided to the Fund by the
transfer agent.  The Review Committee also reviews the Fund's investment
performance and policies and procedures adopted by the Fund to comply with
Investment Company Act and other applicable law.

Trustees and Officers of the Fund. Except for Mr. Murphy, each of the
Trustees is an independent trustee of the Fund ("Independent Trustee"). Mr.
Murphy is an "Interested Trustee," because he is affiliated with the Manager
by virtue of his positions as an officer and director of the Manager, and as
a shareholder of its parent company. Mr. Murphy was elected as a Trustee of
the Fund with the understanding that in the event he ceases to be the chief
executive officer of the Manager, he will resign as a trustee of the Fund and
the other Board II Funds (defined below) for which he is a trustee or
director.

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

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

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

    Messrs. Murphy, de'Rossi, Masterson, Molleur, Steinmetz, Vottiero,
Wixted, and Zack, and Mses. Bechtolt, Feld and Ives who are officers of the
Fund, respectively hold the same offices with one or more of the other Board
II Funds as with the Fund. As of October 29, 2002, the Trustees and officers
of the Fund, as a group, owned of record or beneficially less than 1% of each
class of shares of the Fund.  The foregoing statement does not reflect
ownership of shares held of record by an employee benefit plan for employees
of the Manager, other than the shares beneficially owned under that plan by
the officers of the Fund listed above. In addition, each Independent Trustee,
and his family members, do not own securities of either the Manager or
Distributor of the Board II Funds or any person directly or indirectly
controlling, controlled by or under common control with the Manager or
Distributor.

Affiliated Transactions and Material Business Relationships. In 2000, Mr.
Swain sold 93,000 shares of Oppenheimer Acquisition Corp. ("OAC") (the
Manager's parent holding company), for a cash payment of $4,278,930 and
surrendered for cancellation 60,000 options to MassMutual for a cash payment
of $2,569,800. In 2001, Mr. Swain surrendered for cancellation 60,000 options
to MassMutual for a cash payment of $2,700,600.  Mr. Swain has reported that
he sold a residential property to Mr. Freedman on October 23, 2001 for $1.2
million.  An independent appraisal of the property supported the sale price.

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








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

                                Independent Trustees

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

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

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

                                                             As of December 31, 2001

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

James C. Swain,     Formerly Chief Executive Officer (until  $0          Over
Chairman and        August 27, 2002) of the Board II Funds,              $100,000
Trustee, since 1995 Vice Chairman (until January 2, 2002)
Age: 69             of the Manager and President and a
                    director (until 1997) of Centennial
                    Asset Management Corporation (a
                    wholly-owned investment advisory
                    subsidiary of the Manager). Oversees 41
                    portfolios in the OppenheimerFunds
                    complex.

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

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

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

Robert G. Avis,     Formerly Director and President of A.G.  $0          Over
Trustee since 1995  Edwards Capital, Inc. (General Partner               $100,000
Age: 71             of private equity funds) (until
                    February 2001); Chairman, President and
                    Chief Executive Officer of A.G. Edwards
                    Capital, Inc. (until March 2000); Vice
                    Chairman and Director of A.G. Edwards,
                    Inc. and Vice Chairman of A.G. Edwards
                    & Sons, Inc. (its brokerage company
                    subsidiary) (until March 1999);
                    Chairman of A.G. Edwards Trust Company
                    and A.G.E. Asset Management (investment
                    advisor) (until March 1999); and a
                    Director (until March 2000) of A.G.
                    Edwards & Sons and A.G. Edwards Trust
                    Company. Oversees 41 portfolios in the
                    OppenheimerFunds complex.

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

George C. Bowen,    Formerly (until April 1999) Senior Vice  $10,001-$50,Over
Trustee since 1998  President (from September 1987) and                  $100,000
Age: 66             Treasurer (from March 1985) of the
                    Manager; Vice President (from June
                    1983) and Treasurer (since March 1985)
                    of OppenheimerFunds Distributor, Inc.
                    (a subsidiary of the Manager); Senior
                    Vice President (since February 1992),
                    Treasurer (since July 1991) Assistant
                    Secretary and a director (since
                    December 1991) of Centennial Asset
                    Management Corporation; Vice President
                    (since October 1989) and Treasurer
                    (since April 1986) of HarbourView Asset
                    Management Corporation (an investment
                    advisory subsidiary of the Manager);
                    President, Treasurer and a director
                    (June 1989-January 1990) of Centennial
                    Capital Corporation  (an investment
                    advisory subsidiary of the Manager);
                    Vice President and Treasurer (since
                    August 1978) and Secretary (since April
                    1981) of Shareholder Services, Inc. (a
                    transfer agent subsidiary of the
                    Manager); Vice President, Treasurer and
                    Secretary (since November 1989) of
                    Shareholder Financial Services, Inc. (a
                    transfer agent subsidiary of the
                    Manager); Assistant Treasurer (since
                    March 1998) of Oppenheimer Acquisition
                    Corp. (the Manager's parent
                    corporation); Treasurer (since November
                    1989) of Oppenheimer Partnership
                    Holdings, Inc. (a holding company
                    subsidiary of the Manager); Vice
                    President and Treasurer (since July
                    1996) of Oppenheimer Real Asset
                    Management, Inc. (an investment
                    advisory subsidiary of the Manager);
                    Chief Executive Officer and director
                    (since March 1996) of MultiSource
                    Services, Inc. (a broker-dealer
                    subsidiary of the Manager); Treasurer
                    (since October 1997) of
                    OppenheimerFunds International Ltd. and
                    Oppenheimer Millennium Funds plc
                    (offshore fund management subsidiaries
                    of the Manager). Oversees 41 portfolios
                    in the OppenheimerFunds complex.

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

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

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

Jon S. Fossel,      Chairman and Director (since 1998) of    $50,001-    $50,001-
Trustee since 1995  Rocky Mountain Elk Foundation (a         $100,000    $100,000
Age: 60             not-for-profit foundation); and a
                    director (since October 1999) of P.R.
                    Pharmaceuticals (a privately held
                    company) and UNUMProvident (an
                    insurance company) (since June 1,
                    2002). Formerly, Chairman and a
                    director (until October 1996) and
                    President and Chief Executive Officer
                    (until October 1995) of the Manager;
                    President, Chief Executive Officer and
                    a director of Oppenheimer Acquisition
                    Corp., Shareholder Services, Inc. and
                    Shareholder Financial Services, Inc.
                    (until October 1995). Oversees 41
                    portfolios in the OppenheimerFunds
                    complex.

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

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

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

Beverly L.          Trustee (since 1996) of MassMutual       N/A1           N/A1
Hamilton, Trustee   Institutional Funds and of MML Series
since 2002          Investment Fund (open-end investment
Age: 56             companies); Director of MML Services
                    (since April 1987) and America Funds
                    Emerging Markets Growth Fund (since
                    October 1991) (both are investment
                    companies), The California Endowment (a
                    philanthropy organization) (since April
                    2002), and Community Hospital of
                    Monterey Peninsula, (since February
                    2002); a trustee (since February 2000)
                    of Monterey International Studies (an
                    educational organization), and an
                    advisor to Unilever (Holland)'s pension
                    fund and to Credit Suisse First
                    Boston's Sprout venture capital unit.
                    Mrs. Hamilton also is a member of the
                    investment committees of the
                    Rockefeller Foundation, the University
                    of Michigan  and Hartford Hospital.
                    Formerly President (February 1991-April
                    2000) ARCO Investment Management
                    Company. Oversees 40 portfolios in the
                    OppenheimerFunds complex.

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

Robert J. Malone,   Director (since 2001) of Jones              N/A1        N/A1
Trustee since 2002  Knowledge, Inc. (a privately held
Age: 58             company), U.S. Exploration, Inc.,
                    (since 1997), Colorado UpLIFT (a
                    non-profit organization) (since 1986)
                    and a trustee of the Gallagher Family
                    Foundation (since 2000).  Formerly, Mr.
                    Malone held the following positions:
                    Chairman of U.S. Bank (a subsidiary of
                    U.S. Bancorp and formerly Colorado
                    National Bank,) (July 1996-April 1,
                    1999) and a director of Commercial
                    Assets, Inc. (1993-2000). Oversees 40
                    portfolios in the OppenheimerFunds
                    complex.

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

F. William          Trustee (since 1996) of MassMutual       $0          $50,001-
Marshall, Jr.,      Institutional Funds and of MML Series                $100,000
Trustee since 2000  Investment Fund (open-end investment
Age: 60             companies); Trustee and Chairman (since
                    May 1987) of the investment committee
                    for the Worcester Polytech Institute;
                    President and Treasurer (since January
                    1999) of the SIS Fund (a private not
                    for profit charitable organization);
                    Trustee (since 1995) of the Springfield
                    Library and Museum Association; Trustee
                    (since 1996) of the Community Music
                    School of Springfield; Member of the
                    investment committee of the Community
                    Foundation of Western Massachusetts
                    (since 1998). Formerly, Chairman
                    (January 1999-July 1999) of SIS &
                    Family Bank, F.S.B. (formerly SIS
                    Bank); President, Chief Executive
                    Officer and Director (May 1993-December
                    1998) of SIS Bankcorp, Inc. and SIS
                    Bank (formerly Springfield Institution
                    for Savings) and Executive Vice
                    President (January 1999-July 1999) of
                    Peoples Heritage Financial Group, Inc.
                    Oversees 41 portfolios in the
                    OppenheimerFunds complex.

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


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


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

                           Interested Trustee and Officer

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

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

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

                                                                As of December 31,
                                                                       2001

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

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

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


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


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

                                Officers of the Fund

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

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

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

Arthur P. Steinmetz,   Senior Vice President of the Manager (since March 1993) and
Vice President and     of HarbourView Asset Management Corporation (since March
Portfolio Manager      2000); an officer of 6 portfolios in the OppenheimerFunds
since 1999             complex.
Age:  43

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

Ruggero de'Rossi,      Vice President of the Manager (since March 2000); an officer
Vice President and     of 1 portfolio in the OppenheimerFunds complex. Prior to
Portfolio Manager      joining the Manager he was a Senior Vice President and Chief
since 2000             Emerging Markets Debt and Currency Strategist of ING
Age:  39               Barings, a global investment bank (July 1998 - March 2000);
                       before that he was a Vice President, head of emerging
                       markets trading strategies at Citicorp Securities, after
                       having run the bank's proprietary trading activity on
                       international fixed income and foreign exchange derivatives
                       (May 1995 - July 1998).

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

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

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

Philip Vottiero,       Vice President/Fund Accounting of the Manager (since March
Assistant Treasurer    2002); formerly Vice President/Corporate Accounting of the
since 2002             Manager (July 1999-March 2002) prior to which he was Chief
Age: 39                Financial Officer at Sovlink Corporation (April 1996-June
                       1999). An officer of 82 portfolios in the OppenheimerFunds
                       complex.

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

Connie Bechtolt,       Assistant Vice President of the Manager  (since September
Assistant Treasurer    1998); formerly Manager/Fund Accounting (September
since 2002             1994-September 1998) of the Manager. An officer of 82
Age: 39                portfolios in the OppenheimerFunds complex.

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

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

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

Philip T. Masterson,   Vice President and Assistant Counsel of the Manager (since
Assistant Secretary    July 1998); formerly, an associate with Davis, Graham, &
since 2002             Stubbs LLP (January 1997-June 1998). An officer of 82
Age: 38                portfolios in the OppenheimerFunds complex.

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

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

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

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

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

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

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


    |X| Remuneration of Trustees. The officers of the Fund and one Trustee of
the Fund (Mr. Murphy) are affiliated with the Manager and receive no salary
or fee from the Fund.  The remaining Trustees of the Fund received the
compensation shown below from the Fund with respect to the Fund's fiscal year
ended September 30, 2002.  Mr. Swain was affiliated with the Manager until
January 2, 2002.  The compensation from all of the Board II Funds (including
the Fund) represents compensation received as a director, trustee, managing
general partner or member of a committee of the Board during the calendar
year 2001.


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

  Trustee Name and Other    Aggregate Compensation    Total Compensation From
  Position(s) (as              fro                       Oppenheimer Funds For
  applicable)                 Fiscm Fund as of       Allich Individual Serves
                             Septeal Year Ended       WhAs Trustee/Director
                                  mber 30, 20021         of December 31, 2001
                                                      As    (41 Funds)5

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

 James C. Swain
Chairman  of the Board of           $1,362                      $02
Trustees

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

William L. Armstrong                 $805                     $78,865
  Audit Committee Member

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

Robert G. Avis                       $811                     $79,452
  Review Committee Member

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

George Bowen                         $775                     $75,936
 Audit Committee Member

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

Edward L. Cameron                    $773                     $75,794
  Audit Committee
Chairman

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

Jon. S. Fossel                       $859                     $84,177
  Review        Committee
  Chairman

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

Sam Freedman                         $851                     $83,402
  Review Committee Member

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

Beverly Hamilton                     $299                       $03
   Review Committee
Member

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

Robert J. Malone                    $2994                       $03
   Audit Committee Member

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

F. William Marshall, Jr.                  $713                 $69,922
  Review Committee Member

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

1.    * Effective July 1, 2000, Ned M. Steel resigned as a Trustee of the
   Fund and subsequently became Trustee Emeritus of the Fund. For the fiscal
   year ended September 30, 2002, Mr. Steel received $408 aggregate
   compensation from the Fund and for the calendar year ended December 31,
   2001, he received1.   $60,000 total compensation from all the Board II
  Funds. Effective July 1, 2002, Messrs. Kast and Kirchner retired as
  Trustees from the Board II funds. For the fiscal year ended September 30,
  2002, Messrs. Kast and Kirchner each received $669 and $608, respectively,
  aggregate compensation from the Fund and for the calendar year ended
  December 31, 2001, they each received $87,452 and $79,452, respectively,
  total compensation from all the Board II Funds.
1.    Aggregate compensation includes fees and deferred compensation.
2.    Mr. Swain became an Independent Trustee effective 1/1/02, prior to
   which he did not receive compensation from any of the Board II funds.
3.    Mrs. Hamilton and Mr. Malone were elected as Trustees of the Board II
   Funds effective June 1, 2002 and therefore did not receive
   compensation from any of the Board II Funds during the calendar year
   2001.  They serve as Trustees of 40 Funds.
4.    Aggregate compensation from the Fund includes $299 deferred under
   Deferred Compensation Plan described below.
5.    Mrs. Hamilton and Mr. Malone serve as Trustees for 40 Funds.


    |X|  Deferred Compensation Plan for Trustees.  The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested Trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they
are entitled to receive from the Fund.  Under the plan, the compensation
deferred by a Trustee is periodically adjusted as though an equivalent amount
had been invested in shares of one or more Oppenheimer funds selected by the
Trustee.  The amount paid to the Trustee under the plan will be determined
based upon the performance of the selected funds.

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


      |X|  Major Shareholders. As of October 29, 2002, the only persons who
owned of record or were known by the Fund to own beneficially 5% or more of
the Fund's outstanding securities of any class were the following: Charles
Schwab & Co., Inc., 101 Montgomery Street, San Francisco, CA 94104, which
owned 8,122,030.53 Class A shares (19.04% of the Class A shares then
outstanding) for the benefit of its customers; Merrill Lynch, Pierce, Fenner
& Smith, 4800 Deer Lake Drive, E., Floor 3, Jacksonville, Florida 32246,
which owned 534,694.15 Class C shares (5.76% of the Class C shares then
outstanding) for the benefit of its customers; RPSS TR Rollover IRA, FBO
Karen E Cavazos, 8902 W Palo Verde Ave., Peoria, AZ 85345-7069, which owned
16,749.44 Class N shares (5.28% of the Class N shares then outstanding)
Torchmark Corporation Svgs & Trust, 2001 3rd Ave. S., Birmingham AL
35233-2115, which owned 21,632.31 Class N shares (6.82% of the Class N shares
then outstanding) and Vincent J. Cardone TR, Oceanweather Inc. 401K, Cos
Cob,.CT 06807-2717 which owned 32,386.79 Class N shares (10.22% 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.

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

    The Code of Ethics is an exhibit to the Fund's registration statement
filed with the Securities and Exchange Commission and can be reviewed and
copied at the SEC's Public Reference Room in Washington, D.C.  You can obtain
information about the hours of operation of the Public Reference Room by
calling the SEC at 1.202.942.8090.  The Code of Ethics can also be viewed as
part of the Fund's registration statement on the SEC's EDGAR database at the
SEC's Internet website at www.sec.gov.  Copies may be obtained, after paying
a duplicating fee, by electronic request at the following e-mail address:
publicinfo@sec.gov., or by writing to the SEC's Public Reference Section,
Washington, D.C.  20549-0102.

    |X|  The Investment Advisory Agreement.   The Manager provides investment
advisory and management services to the Fund under an investment advisory
agreement between the Manager and the Fund. The Manager selects securities
for the Fund's portfolio and handles its day-to-day business. The portfolio
manager of the Fund is employed by the Manager and is the person who is
principally responsible for the day-to-day management of the Fund's
portfolio. Other members of the Manager's Fixed-Income Portfolio Team provide
the portfolio manager 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.

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

Fiscal Year ended 9/30:       Management Fees Paid to OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
           2000                                 $1,910,655
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
           2001                                 $1,769,586
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

           2002                                 $1,851,525

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

    The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the investment
advisory agreement, the Manager is not liable for any loss resulting from a
good faith error or omission on its part with respect to any of its duties
under the agreement.

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


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

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

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

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

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

      In arriving at a decision, the Board did not single out any one factor
or group of factors as being more important than other factors, but
considered all factors together.  The Board judged the terms and conditions
of the investment advisory agreement, including the investment advisory fee,
in light of all of the surrounding circumstances.


Brokerage Policies of the Fund

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

      Under the investment advisory agreement, the Manager may select brokers
(other than affiliates) that provide brokerage and/or research services for
the Fund and/or the other accounts over which the Manager or its affiliates
have investment discretion.  The commissions paid to such brokers may be
higher than another qualified broker would charge, if the Manager makes a
good faith determination that the commission is fair and reasonable in
relation to the services provided. Subject to those considerations, as a
factor in selecting brokers for the Fund's portfolio transactions, the
Manager may also consider sales of shares of the Fund and other investment
companies for which the Manager or an affiliate serves as investment advisor.

Brokerage Practices Followed by the Manager.  The Manager allocates brokerage
for the Fund subject to the provisions of the investment advisory agreement
and the procedures and rules described above. Generally, the Manager's
portfolio traders allocate brokerage based upon recommendations from the
Manager's portfolio managers.  In certain instances, portfolio managers may
directly place trades and allocate brokerage. In either case, the Manager's
executive officers supervise the allocation of brokerage.

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

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

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


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


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

    The Board of Trustees permits the Manager to use stated commissions on
secondary fixed-income agency trades to obtain research if the broker
represents to the Manager that: (i) the trade is not from or for the broker's
own inventory, (ii) the trade was executed by the broker on an agency basis
at the stated commission, and (iii) the trade is not a riskless principal
transaction. The Board of Trustees permits the Manager to use concessions on
fixed-price offerings to obtain research, in the same manner as is permitted
for agency transactions.

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

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

  Fiscal Year Ended 9/30:      Total Brokerage Commissions Paid by the Fund1
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
           2000                                   $166,755
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
           2001                                   $23,8552
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

           2002                                   $34,536

- ---------------------------------------------------------------------------------
1.    Amounts do not include spreads or commissions on principal  transactions
   on a net trade basis.
2.    In the fiscal year ended 9/30/01,  the amount of  transactions  directed
   to brokers for  research  services  was  $12,630,295  and the amount of the
   commissions paid to broker-dealers for those services was $2,134.







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 different classes of shares. The Distributor
bears the expenses normally attributable to sales, including advertising and
the cost of printing and mailing prospectuses, other than those furnished to
existing shareholders. The Distributor is not obligated to sell a specific
number of shares.

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

- -------------------------------------------
Fiscal    Aggregate        Class A
                           Front-End
Year      Front-End Sales  Sales Charges
Ended     Charges on       Retained by
9/30:     Class A Shares   Distributor
- -------------------------------------------
- -------------------------------------------
  2000        $255,294         $70,759
- -------------------------------------------
- -------------------------------------------
  2001        $228,525        $50,5661
- -------------------------------------------
- -------------------------------------------

  2002        $452,569        $98,2601

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

- -----------------------------------------------------------------------------
Fiscal    Concessions on   Concessions on   Concessions on  Concessions on
Year      Class A Shares   Class B Shares   Class C Shares  Class N Shares
Ended     Advanced by      Advanced by      Advanced by     Advanced by
9/30:     Distributor1     Distributor1     Distributor1    Distributor1
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
  2000        $32,659          $551,662         $95,774           N/A
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
  2001        $61,374          $263,637         $48,250           $282
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------

  2002        $115,077         $549,159        $128,269          $6,626

- -----------------------------------------------------------------------------
1.    The  Distributor  advances  concession  payments  to dealers for certain
   sales of  Class A shares  and for  sales  of Class B,  Class C and  Class N
   shares from its own resources at the time of sale.
2.    The inception date of Class N shares was March 1, 2001.

- -----------------------------------------------------------------------------
Fiscal    Class A          Class B          Class C          Class N
          Contingent       Contingent       Contingent       Contingent
Year      Deferred Sales   Deferred Sales   Deferred Sales   Deferred Sales
Ended     Charges          Charges          Charges          Charges
9/30      Retained by      Retained by      Retained by      Retained by
          Distributor      Distributor      Distributor      Distributor
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------

  2002        $11,854          $276,434          $7,123          $1,255

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

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 Trustees1, cast in person at a meeting called
for the purpose of voting on that plan. The shareholder votes for the plans
were cast by the Manager as the sole initial holder of each class of shares
of the Fund.

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

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

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

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

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

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

    |X|  Class A Service Plan Fees. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions (they are referred to as
"recipients") for personal services and account maintenance services they
provide for their customers who hold Class A shares. The services include,
among others, answering customer inquiries about the Fund, assisting in
establishing and maintaining accounts in the Fund, making the Fund's
investment plans available and providing other services at the request of the
Fund or the Distributor. While the plan permits the Board to authorize
payments to the Distributor to reimburse itself for services under the plan,
the Board has not yet done so. The Distributor makes payments to plan
recipients quarterly at an annual rate not to exceed 0.25% of the average
annual net assets consisting of Class A shares held in the accounts of the
recipients or their customers. With respect to purchases of Class A shares
subject to a contingent deferred sales charge by certain retirement plans
that purchased such shares prior to March 1, 2001 ("grandfathered retirement
accounts"), the Distributor currently intends to pay the service fee to
Recipients in advance for the first year after the shares are purchased.
After the first year shares are outstanding, the Distributor makes service
fee payments to Recipients quarterly on those shares.  The advance payment is
based on the net asset value of shares sold.  Shares purchased by exchange do
not qualify for the advance service fee payment. If Class A shares purchased
by grandfathered retirement accounts are redeemed during the first year after
their purchase, the Recipient of the service fees on those shares will be
obligated to repay the Distributor a pro rata portion of the advance payment
of the service fee made on those shares.


    For the fiscal period ended September 30, 2002, payments under the Class
A Plan totaled $313,178, all of which was paid by the Distributor to
recipients. That included $13,551 paid to an affiliate of the Distributor's
parent company.  Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in
subsequent years. The Distributor may not use payments received under the
Class A Plan to pay any of its interest expenses, carrying charges, or other
financial costs, or allocation of overhead.


    |X|  Class B, Class C and Class N Service and Distribution Plan Fees.
Under each plan service fees and distribution fees are computed on the
average of the net asset value of shares in the respective class, determined
as of the close of each regular business day during the period.  Each plan
provides for the Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the amounts paid by
the Fund under the plan during the period for which the fee is paid. The
types of services that Recipients provide are similar to the services
provided under the Class A service plan, described above.

    Each Plan permits the Distributor to retain both the asset-based sales
charges and the service fees or to pay recipients the service fee on a
quarterly basis, without payment in advance. However, the Distributor
currently intends to pay the service fee paid under the Class B Class C and
Class N plans to recipients in advance for the first year after the shares
are purchased. After the first year shares are outstanding, the Distributor
makes service fee payments quarterly on those shares under the Class B, Class
C and Class N plans. The advance payment is based on the net asset value of
shares sold. Shares purchased by exchange do not qualify for the advance
service fee payment. If Class B, Class C or Class N shares are redeemed
during the first year after their purchase, the recipient of the service fees
on those shares will be obligated to repay the Distributor a pro rata portion
of the advance payment of the service fee made on those shares.  In cases
where the Distributor is the broker of record for Class B, Class C and Class
N shares, the Distributor will retain the asset-based sales charge and
service fee for Class B, Class C and Class N shares.

    The asset-based sales charge and service fees increase Class B and Class
C expenses by 1.00% and effective November 1, 2001 the asset-based sales
charge and service fees increases Class N expenses by 0.50% of the net assets
per year of the respective class.

    The Distributor retains the asset based sales charge on Class B and Class
N shares. The Distributor retains the asset-based sales charge on Class C
shares during the first year the shares are outstanding. It pays the
asset-based sales charge as an ongoing 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 quarterly in
lieu of paying the sales concessions and service fee in advance at the time
of purchase.

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

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

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

    The Distributor's actual expenses in selling Class B, Class C and Class N
shares may be more than the payments it receives from the contingent deferred
sales charges collected on redeemed shares and from the Fund under the
plans.  If either the Class B, Class C or Class N plan is terminated by the
Fund, the Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to the Distributor for distributing shares before
the plan was terminated.

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

 Distribution Fees Paid to the Distributor in the Fiscal Year Ended 9/30/02

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

 Class B Plan $851,975       $656,7711        $4,991,285       4.99%


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

              $285,981       $52,0832         $1,079,070       2.78%
 Class C Plan

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

              $1,444         $8593            $12,754          1.00%
 Class N Plan

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

1.    Includes  $5,248  paid  to an  affiliate  of  the  Distributor's  parent
   company.
2.    Includes  $3,442  paid  to an  affiliate  of  the  Distributor's  parent
   company.
Includes $30 paid to an affiliate of the Distributor's parent company.

    All payments under the Class B, Class C and Class N plans are subject to
the limitations imposed by the Conduct Rules of the National Association of
Securities Dealers, Inc. on payments of asset-based sales charges and service
fees.


Performance of the Fund


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


      The Fund's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. In general, any advertisement by the Fund of its performance data
must include the average annual total returns for the advertised class of
shares of the Fund. Those returns must be shown for the 1, 5 and 10-year
periods (or the life of the class, if less) ending as of the most recently
ended calendar quarter prior to the publication of the advertisement (or its
submission for publication).  Certain types of yields may also be shown,
provided that they are accompanied by standardized average annual total
returns.

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


o     Yields and total returns measure the performance of a hypothetical
         account in the Fund over various periods and do not show the
         performance of each shareholder's account. Your account's
         performance will vary from the model performance data if your
         dividendso      are received in cash, or you buy or sell shares
         during the period, or you bought your shares at a different time and
         price than the shares used in the model.

o     The Fund's performance returns do not reflect the effect of taxes on
         dividends and capital gains distributions (unless otherwise
         indicated).


o     An investment in the Fund is not insured by the FDIC or any other
         government agency.

o     The principal value of the Fund's shares, and its yields and total
         returns are not guaranteed and normally will fluctuate on a daily
         basis.
o     When an investor's shares are redeemed, they may be worth more or less
         than their original cost.

o     Yields and total returns for any given past period represent historical
         performance information and are not, and should not be considered, a
         prediction of future yields or returns.

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

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

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

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


 Standardized Yield = 2a-b +1)6 -1]
                       ---
                     [(
                       cd



      The symbols above represent the following factors:

      a =  dividends and interest earned during the 30-day period.

      b =  expenses accrued for the period (net of any expense assumptions).

      c =  the  average  daily  number  of shares  of that  class  outstanding
           during the 30-day period that were entitled to receive dividends.

      d =  the maximum  offering price per share of that class on the last day
           of the period, adjusted for undistributed net investment income.

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

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

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


      The maximum offering price for Class A shares includes the current
maximum initial sales charge.  The maximum offering price for Class B and
Class C shares is the net asset value per share, without considering the
effect of contingent deferred sales charges. The Class A dividend yield may
also be quoted without deducting the maximum initial sales charge.

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

             The Fund's Yields for the 30-Day Periods Ended 9/30/02

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

                  Standardized Yield                 Dividend Yield

  Class of
  Shares
  -----------------------------------------------------------------------------
  -----------------------------------------------------------------------------
                Without         After         Without            After
                 Sales          Sales          Sales             Sales
                Charge         Charge          Charge            Charge
  -----------------------------------------------------------------------------
  -----------------------------------------------------------------------------

  Class A        5.29%          5.04%          5.60%             5.33%

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

  Class B        4.48%           N/A           4.74%              N/A

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

  Class C        4.49%           N/A           4.72%              N/A

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

  Class N        5.53%           N/A           5.33%              N/A

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

      |X| Total Return Information.  There are different types of "total
returns" to measure the Fund's performance. Total return is the change in
value of a hypothetical investment in the Fund over a given period, assuming
that all dividends and capital gains distributions are reinvested in
additional shares and that the investment is redeemed at the end of the
period. Because of differences in expenses for each class of shares, the
total returns for each class are separately measured. The cumulative total
return measures the change in value over the entire period (for example, 10
years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show actual
year-by-year performance. The Fund uses standardized calculations for its
total returns as prescribed by the SEC. The methodology is discussed below.


      In calculating total returns for Class A shares, the current maximum
sales charge of 4.75% (as a percentage of the offering price) is deducted
from the initial investment ("P") (unless the return is shown without sales
charge, as described below).  For Class B shares, payment of the applicable
contingent deferred sales charge is applied, depending on the period for
which the return is shown: 5.0% in the first year, 4.0% in the second year,
3.0% in the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth
year and none thereafter. For Class C shares, the 1.0% contingent deferred
sales charge is deducted for returns for the one-year period. For Class N
shares, the 1% contingent deferred sales charge is deducted for returns for
the one year and life of class periods. Class N total returns may also be
calculated for the periods prior to 3/1/01 (the inception date for Class N
shares), based on the Fund's Class A returns, adjusted to reflect the higher
Class N 12b-1 fees.


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



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


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

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



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


 ERV - P   = Total Return

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

    P


      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 September 30, 2002

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
         Cumulative Total              Average Annual Total Returns
Class    Returns (Life of
of       Class)
Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                                 1-Year            5-Year       Life of Class
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
         After    Without   After    Without  After   Without  After    Without
         Sales    Sales     Sales    Sales    Sales   Sales    Sales    Sales
         Charge   Charge    Charge   Charge   Charge  Charge   Charge   Charge
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A  65.32%1  73.56%1   11.23%   16.78%   3.52%   4.53%    7.14%1   7.85%1

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

Class B  65.85%2  65.85%2   10.90%   15.90%   3.49%   3.76%    7.18%2   7.18%2

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

Class C  64.22%3  64.22%3   14.90%   15.90%   3.77%   3.77%    7.04%3   7.04%3

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

Class N  12.87%4  12.87%4   15.23%   16.23%   7.96%   7.96%      N/A      N/A

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

1.    Inception of Class A:   6/15/95
2.    Inception of Class B:   6/15/95
3.    Inception of Class C:   6/15/95
4.    Inception of Class N:   3/01/01


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

        Average Annual Total Returns for Class A Shares (After Sales Charge)
                      For the Periods Ended September 30, 2002

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

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

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

      After Taxes on Distributions     9.61%          0.78%          3.87%1

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

      After Taxes on                   6.79%          1.32%          4.01%1
      Distributions and
      Redemption of Fund Shares

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

   1. Inception date of Class A: 6/15/95








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

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


      |X| Morningstar Ratings. From time to time the Fund may publish the
star rating of the performance of its classes of shares by Morningstar, Inc.,
an independent mutual fund monitoring service.  Morningstar rates mutual
funds in their specialized market sector.  The Fund is ranked among
international bond funds.

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


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

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

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

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

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








ABOUT your account


- ------------------------------------------------------------------------------
                              How to Buy Shares
- ------------------------------------------------------------------------------

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


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

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

      |X|   Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and your spouse
can add together:

      o  Class A and Class B shares you purchase for your individual accounts
            (including IRAs and 403(b) plans), or for your joint accounts, or
            for trust or custodial accounts on behalf of your children who
            are minors, and
o     Current purchases of Class A and Class B shares of the Fund and other
            Oppenheimer funds to reduce the sales charge rate that applies to
            current purchases of Class A shares, and
         Class A and Class B shares of Oppenheimer funds you previously
            purchasedo   subject to an initial or contingent deferred sales
            charge to reduce the sales charge rate for current purchases of
            Class A shares, provided that you still hold your investment in
            one of the Oppenheimer funds.

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

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


Oppenheimer Bond Fund                     Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer New York Municipal Fund
Oppenheimer Capital Preservation Fund     Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund           Oppenheimer Quest Balanced Value Fund

                                          Oppenheimer  Quest  Capital  Value Fund,
Oppenheimer Champion Income Fund          Inc.

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


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


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

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


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

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


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

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


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

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


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


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


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


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

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

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

      (a) Class A shares sold with a
            front-end sales charge or
            subject to a Class A
            contingent deferred sales
            charge,

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


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

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


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

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


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

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

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

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


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


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

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

      |X|   Availability of Class N
Shares.  In addition to the description
of the types of retirement plans which
may purchase Class N shares contained in
the prospectus, Class N shares also are
offered to the following:
      o     to all rollover IRAs
            (including SEP IRAs and
            SIMPLE IRAs),
o     to all rollover contributions made
            to Individual 401(k) plans,
            Profit-Sharing Plans and
            Money Purchase Pension Plans,

o     to all direct rollovers from
            OppenheimerFunds-sponsored
            Pinnacle and Ascender
            retirement plans,
o     to all trustee-to-trustee IRA
            transfers,
o     to all 90-24 type 403(b) transfers,
o     to Group Retirement Plans (as
            defined in Appendix C to
            this Statement of Additional
            Information) which have
            entered into a special
            agreement with the
            Distributor for that purpose,
o     to Retirement Plans qualified
            under Sections 401(a) or
            401(k) of the Internal
            Revenue Code, the
            recordkeeper or the plan
            sponsor for which has
            entered into a special
            agreement with the
            Distributor,
o     to Retirement Plans of a plan
            sponsor where the aggregate
            assets of all such plans
            invested in the Oppenheimer
            funds is $500,000 or more,

o     to OppenheimerFunds-sponsored
            Ascender 401(k) plans that
            pay for the purchase with
            the redemption proceeds of
            Class A shares of one or
            more Oppenheimer funds.

o     to certain customers of
            broker-dealers and financial
            advisors that are identified
            in a special agreement
            between the broker-dealer or
            financial advisor and the
            Distributor for that purpose.

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


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

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

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


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


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

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

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


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


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

      |X|   Securities Valuation.  The
Fund's Board of Trustees has established
procedures for the valuation of the
Fund's securities. In general those
procedures are as follows:
o     Equity securities traded on a U.S.
securities exchange or on Nasdaq(R)are
valued as follows:
      (1)   if last sale information is
               regularly reported, they
               are valued at the last
               reported sale price on
               the principal exchange on
               which they are traded or
               on Nasdaq, as applicable,
               on that day, or

(2)   if last sale information is not
               available on a valuation
               date, they are valued at
               the last reported sale
               price preceding the
               valuation date if it is
               within the spread of the
               closing "bid" and "asked"
               prices on the valuation
               date or, if not,  at the
               closing "bid" price on
               the valuation date.
      o     Equity securities traded on
a foreign securities exchange generally
are valued in one of the following ways:
      (1)   at the last sale price
               available to the pricing
               service approved by the
               Board of Trustees, or
(2)   at the last sale price obtained by
               the Manager from the
               report of the principal
               exchange on which the
               security is traded at its
               last trading session on
               or immediately before the
               valuation date, or
(3)   at the mean between the "bid" and
               "asked" prices obtained
               from the principal
               exchange on which the
               security is traded or, on
               the basis of reasonable
               inquiry, from two market
               makers in the security.

         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:o


(1)   debt instruments that have a
                 maturity of more than
                 397 days when issued,
(2)   debt instruments that had a
                 maturity of 397 days or
                 less when issued and
                 have a remaining
                 maturity of more than
                 60 days, and
(3)   non-money market debt instruments
                 that had a maturity of
                 397 days or less when
                 issued and which have a
                 remaining maturity of
                 60 days or less.
      o     The following securities are
valued at cost, adjusted for
amortization of premiums and accretion
of discounts:
      (1)   money market debt securities
               held by a non-money
               market fund that had a
               maturity of less than 397
               days when issued that
               have a remaining maturity
               of 60 days or less, and
(2)   debt instruments held by a money
               market fund that have a
               remaining maturity of 397
               days or less.
      o     Securities (including
restricted securities) not having
readily-available market quotations are
valued at fair value determined under
the Board's procedures.  If the Manager
is unable to locate two market makers
willing to give quotes, a security may
be priced at the mean between the "bid"
and "asked" prices provided by a single
active market maker (which in certain
cases may be the "bid" price if no
"asked" price is available).

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

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


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

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


- -----------------------------------------
           How to Sell Shares
- -----------------------------------------

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


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

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

      for individual accounts,
         represents that they are the
         registered owner(s) of the
         shares of the Fund in that
         account;
      for accounts for corporations,
         partnerships, trusts and other
         entities, represents that they
         are an officer, general
         partner, trustee or other
         fiduciary or agent, as
         applicable, duly authorized to
         act on behalf of the registered
         owner(s);
      authorizes the Fund, its Transfer
         Agent and any bank through
         which the Fund's drafts
         (checks) are payable to pay all
         checks drawn on the Fund
         account of such person(s) and
         to redeem a sufficient amount
         of shares from that account to
         cover payment of each check;
         specifically acknowledges that
            if they choose to permit
            checks to be honored if
            there is a single signature
            on checks drawn against
            joint accounts, or accounts
            for corporations,

         partnerships, trusts or other
         entities, the signature of any
         one signatory on a check will
         be sufficient to authorize
         payment of that check and
         redemption from the account,
         even if that account is
         registered in the names of more
         than one person or more than
         one authorized signature
         appears on the Checkwriting
         card or the application, as
         applicable;

      understands that the Checkwriting
         privilege may be terminated or
         amended at any time by the Fund
         and/or the Fund's bank; and
      acknowledges and agrees that
         neither the Fund nor its bank
         shall incur any liability for
         that amendment or termination
         of checkwriting privileges or
         for redeeming shares to pay
         checks reasonably believed by
         them to be genuine, or for
         returning or not paying checks
         that have not been accepted for
         any reason.

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
$200 or such lesser amount as the Board
may fix.  The Board will not cause the
involuntary redemption of shares in an
account if the aggregate net asset value
of such shares has fallen below the
stated minimum solely as a result of
market fluctuations.  If the Board
exercises this right, it may also fix
the requirements for any notice to be
given to the shareholders in question
(not less than 30 days). The Board may
alternatively set requirements for the
shareholder to increase the investment,
or set other terms and conditions so
that the shares would not be
involuntarily redeemed.

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


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

Distributions From Retirement Plans.
Requests for distributions from
OppenheimerFunds-sponsored IRAs,
SEP-IRAs, SIMPLE IRAs, 403(b)(7)
custodial plans, 401(k) plans or pension
or profit-sharing plans should be
addressed to "Trustee, OppenheimerFunds
Retirement Plans," c/o the Transfer
Agent at its address listed in "How To
Sell Shares" in the Prospectus or on the
back cover of this Statement of
Additional Information.  The request
must:

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


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


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

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

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

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


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


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

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


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

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


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

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

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

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

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

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

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

How to Exchange Shares


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

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

      The following funds only offer
      Class A shares:
Centennial America Fund, L.P.             Centennial New York Tax Exempt Trust
      Centennial California Tax Exempt Trust  Centennial Tax Exempt Trust
      Centennial Government Trust             Oppenheimer Money Market Fund, Inc.
      Centennial Money Market Trust

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

      The following funds do not offer Class Y shares:
      Oppenheimer California Municipal Fund   Oppenheimer Limited Term Municipal
                                              Fund
      Oppenheimer Capital Income Fund         Oppenheimer New Jersey Municipal
                                              Fund
      Oppenheimer Cash Reserves               Oppenheimer New York Municipal Fund
      Oppenheimer Champion Income Fund        Oppenheimer Pennsylvania Municipal
                                              Fund
      Oppenheimer Convertible Securities Fund Oppenheimer Rochester National
                                              Municipals
      Oppenheimer Disciplined Allocation Fund Oppenheimer Senior Floating Rate
                                              Fund
      Oppenheimer Gold & Special Minerals
      Fund                                    Oppenheimer Small Cap Value Fund
      Oppenheimer International Bond Fund
      Oppenheimer International Small         Limited Term New York Municipal
      Company Fund                            Fund

o     Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
      shares of any other fund.

o     Class B, Class C and Class N shares of Oppenheimer Cash Reserves are
      generally available only by exchange from the same class of shares of
      other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k)
      plans.
o  Class M shares of Oppenheimer Convertible Securities Fund may be exchanged
      only for Class A shares of other Oppenheimer funds. They may not be
      acquired by exchange of shares of any class of any other Oppenheimer
      funds except Class A shares of Oppenheimer Money Market Fund or
      Oppenheimer Cash Reserves acquired by exchange of Class M shares.

o     Class X shares of Limited Term New York Municipal Fund may be exchanged
      only for Class B shares of other Oppenheimer funds and no exchanges may
      be made to Class X shares.

o     Shares of Oppenheimer Capital Preservation Fund may not be exchanged
      for shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash
      Reserves or Oppenheimer Limited-Term Government Fund.  Only
      participants in certain retirement plans may purchase shares of
      Oppenheimer Capital Preservation Fund, and only those participants may
      exchange shares of other Oppenheimer funds for shares of Oppenheimer
      Capital Preservation Fund.
o     Class A shares of Oppenheimer Senior Floating Rate Fund are not
      available by exchange of shares of Oppenheimer Money Market Fund or
      Class A shares of Oppenheimer Cash Reserves.
   Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund and
      Oppenheimer Select Managers QM Active Balanced Fund are only available
      to retirement plans and are available only by exchange from the same
      class of shares of other Oppenheimer funds held by retirement plans.
      Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any money market fund offered by the Distributor. Shares of any
money market fund purchased without a sales charge may be exchanged for
shares of Oppenheimer funds offered with a sales charge upon payment of the
sales charge. They may also be used to purchase shares of Oppenheimer funds
subject to an early withdrawal charge or contingent deferred saleso.....

      charge.

o     Shares of Oppenheimer Money Market Fund, Inc. purchased with the
      redemption proceeds of shares of other mutual funds (other than funds
      managed by the Manager or its subsidiaries) redeemed within the 30 days
      prior to that purchase may subsequently be exchanged for shares of
      other Oppenheimer funds without being subject to an initial sales
      charge or contingent deferred sales charge. To qualify for that
      privilege, the investor or the investor's dealer must notify the
      Distributor of eligibility for this privilege at the time the shares of
      Oppenheimer Money Market Fund, Inc. are purchased. If requested, they
      must supply proof of entitlement to this privilege.
o     Shares of the Fund acquired by reinvestment of dividends or
      distributions from any of the other Oppenheimer funds or from any unit
      investment trust for which reinvestment arrangements have been made
      with the Distributor may be exchanged at net asset value for shares of
      any of the Oppenheimer funds.


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

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

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

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

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

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

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

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


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

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

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


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

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


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

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

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

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

Dividends, Capital Gains and Taxes


Dividends and Distributions. The Fund has no fixed dividend rate and there
can be no assurance as to the payment of any dividends or the realization of
any capital gains. The dividends and distributions paid by a class of shares
will vary from time to time depending on market conditions, the composition
of the Fund's portfolio, and expenses borne by the Fund or borne separately
by a class. Dividends are calculated in the same manner, at the same time,
and on the same day for each class of shares. However, dividends on Class B,
Class C and Class N shares are expected to be lower than dividends on Class A
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. Since it is anticipated that most of the Fund's income will be
derived from interest it receives on its investments, the Fund does not
anticipate that its distributions will qualify for this deduction.


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

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


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

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

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


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

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. All income and any tax withheld by the Fund is remitted by the Fund
to the U.S. Treasury and is identified in reports mailed to shareholders in
March of each year.

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

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

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


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


Additional Information About the Fund

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


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

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


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

INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- To the Board of Trustees and Shareholders of Oppenheimer International Bond Fund:

  We have audited the accompanying statement of assets and liabilities of Oppenheimer International Bond Fund, including the statement of investments, as of September 30, 2002, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

  We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2002, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

  In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer International Bond Fund as of September 30, 2002, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP Denver, Colorado October 25, 2002

STATEMENT OF INVESTMENTS  September 30, 2002

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

 U.S. Government Obligations--6.6%
- ------------------------------------------------------------------------------------
 Federal Home Loan Mortgage Corp., 4.75%, 1/15/13 [EUR]   5,990,000    $  5,921,693
- ------------------------------------------------------------------------------------
 Federal National Mortgage Assn. Sr. Unsec. Nts.,
 2.125%, 10/9/07 [JPY]                                  905,000,000       7,957,964
 Federal National Mortgage Assn. Unsec. Nts.,
 1.75%, 3/26/08(1) [JPY]                                830,000,000       7,284,828
                                                                       -------------
 Total U.S. Government Obligations (Cost $20,643,146)                    21,164,485

- ------------------------------------------------------------------------------------
 Foreign Government Obligations--69.7%
- ------------------------------------------------------------------------------------
 Argentina--0.7%
 Argentina (Republic of) Bonds:
 11.75%, 6/15/15(3)                                         105,000          22,575
 Series 2008, 7%, 12/19/08(3)                             1,279,000         278,182
 Series 2018, 3.063%, 6/19/18(3)                          3,793,969         701,884
- ------------------------------------------------------------------------------------
 Argentina (Republic of) Global Unsec. Unsub. Bonds, Series BGL5,
 11.375%, 1/30/17(3,4)                                      200,000          43,000
- ------------------------------------------------------------------------------------
 Argentina (Republic of) Unsec. Bonds, 12.375%,
 2/21/12(3,4)                                               490,000         100,450
- ------------------------------------------------------------------------------------
 Argentina (Republic of) Unsec. Unsub. Bonds, 11.75%,
 4/7/09(3,4,5)                                            1,165,000         250,475
- ------------------------------------------------------------------------------------
 Argentina (Republic of) Unsub. Bonds, Series 2031,
 2.79%, 6/19/31(3)                                        3,500,120         647,522
- ------------------------------------------------------------------------------------
 Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas,
 Series PBA1, 3.257%, 4/1/07(3,5) [ARP]                   2,307,630         277,617
                                                                       -------------
                                                                          2,321,705

- ------------------------------------------------------------------------------------
 Australia--1.0%
 Australia (Commonwealth of) Bonds, Series 808,
 8.75%, 8/15/08 [AUD]                                     4,870,000       3,120,850
- ------------------------------------------------------------------------------------
 Austria--2.1%
 Austria (Republic of) Bonds:
 3.40%, 10/20/04 [EUR]                                    1,580,000       1,570,102
 4.30%, 7/15/03 [EUR]                                       940,000         935,970
 6.25%, 7/15/27 [EUR]                                       723,000         836,727
- ------------------------------------------------------------------------------------
 Austria (Republic of) Nts., 5.50%, 10/20/07 [EUR]        3,330,000       3,540,911
                                                                       -------------
                                                                          6,883,710

- ------------------------------------------------------------------------------------
 Belgium--3.4%
 Belgium (Kingdom of) Bonds:
 5%, 9/28/11 [EUR]                                        1,020,000       1,049,497
 5.50%, 3/28/28 [EUR]                                     1,362,000       1,434,097
 Series 26, 6.25%, 3/28/07 [EUR]                          5,285,000       5,756,451
- ------------------------------------------------------------------------------------
 Belgium (Kingdom of) Debs., 7.25%, 4/29/04 [EUR]         2,510,000       2,635,673
                                                                       -------------
                                                                         10,875,718

- ------------------------------------------------------------------------------------
 Belize--0.1%
 Belize (Government of) Bonds, 9.50%, 8/15/12               450,000         446,625
- ------------------------------------------------------------------------------------
 Brazil--2.6%
 Brazil (Federal Republic of) Bonds:
 8.875%, 4/15/24                                          3,390,000       1,364,475
 Series 15 yr., 3.125%, 4/15/09(6)                        1,161,176         606,715

11 | OPPENHEIMER INTERNATIONAL BOND FUND

STATEMENT OF INVESTMENTS  Continued

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

 Brazil Continued
 Brazil (Federal Republic of) Debt Capitalization Bonds, Series 20 yr.,
 8%, 4/15/14                                         $    1,973,950    $    977,105
- ------------------------------------------------------------------------------------
 Brazil (Federal Republic of) Debt Conversion Bonds:
 Series 18 yr., 3.125%, 4/15/12(6)                        5,570,000       2,207,112
 Series D, 3.125%, 4/15/12(6)                             2,070,000         820,238
- ------------------------------------------------------------------------------------
 Brazil (Federal Republic of) Unsec. Unsub.
 Bonds, 11%, 8/17/40                                      5,529,200       2,446,671
                                                                       -------------
                                                                          8,422,316

- ------------------------------------------------------------------------------------
 Bulgaria--0.2%
 Bulgaria (Republic of) Interest Arrears Debs.,
 Series PDI, 2.688%, 7/28/11(6)                             897,250         791,823
- ------------------------------------------------------------------------------------
 Canada--1.0%
 Canada (Government of) Bonds, 5.50%, 6/1/09 [CAD]        4,625,000       3,084,334
- ------------------------------------------------------------------------------------
 Chile--0.6%
 Chile (Republic of) Nts., 7.125%, 1/11/12                1,650,000       1,799,949
- ------------------------------------------------------------------------------------
 Colombia--1.8%
 Colombia (Republic of) Bonds:
 9.75%, 4/23/09                                           1,500,000       1,218,750
 10%, 1/23/12                                             1,186,000         963,625
- ------------------------------------------------------------------------------------
 Colombia (Republic of) Nts., 8.625%, 4/1/08              2,040,000       1,637,100
- ------------------------------------------------------------------------------------
 Colombia (Republic of) Unsec. Unsub. Bonds:
 8.375%, 2/15/27                                            475,000         290,937
 11.75%, 2/25/20                                            213,000         174,128
- ------------------------------------------------------------------------------------
 Colombia (Republic of) Unsec. Unsub. Nts.:
 11.375%, 1/31/08 [EUR]                                     990,000         791,295
 11.50%, 5/31/11 [EUR]                                      900,000         694,676
                                                                       -------------
                                                                          5,770,511

- ------------------------------------------------------------------------------------
 Dominican Republic--0.4%
 Dominican Republic Unsec. Unsub. Bonds, 9.50%, 9/27/06   1,340,000       1,410,350
- ------------------------------------------------------------------------------------
 Ecuador--1.3%
 Ecuador (Republic of) Unsec. Bonds, 6%, 8/15/30(6)      11,070,000       4,095,900
- ------------------------------------------------------------------------------------
 El Salvador--0.3%
 El Salvador (Republic of) Unsec. Nts., 8.50%, 7/25/11(7)   760,000         822,700
- ------------------------------------------------------------------------------------
 France--2.7%
 France (Government of) Obligations Assimilables du Tresor Bonds:
 5%, 7/25/12 [EUR]                                          510,000         528,731
 5.75%, 10/25/32 [EUR]                                    1,320,000       1,474,514
- ------------------------------------------------------------------------------------
 France (Government of) Treasury Nts.:
 3.50%, 7/12/04 [EUR]                                     2,535,000       2,525,052
 3.75%, 1/12/07 [EUR]                                     4,210,000       4,190,180
                                                                       -------------
                                                                          8,718,477

12 | OPPENHEIMER INTERNATIONAL BOND FUND

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

 Germany--3.2%
 Germany (Republic of) Bonds:
 5.50%, 1/4/31 [EUR]                                      1,371,000    $  1,480,970
 Series 01, 5%, 7/4/11 [EUR]                              1,010,000       1,052,185
 Series 139, 4%, 2/16/07 [EUR]                            4,960,000       4,978,439
- ------------------------------------------------------------------------------------
 Treuhandanstalt Gtd. Nts., 6.75%, 5/13/04 [EUR]          2,740,000       2,860,670
                                                                       -------------
                                                                         10,372,264

- ------------------------------------------------------------------------------------
 Great Britain--3.2%
 United Kingdom Treasury Bonds, 5.75%, 12/7/09 [GBP]      6,105,000      10,458,068
- ------------------------------------------------------------------------------------
 Greece--2.8%
 Greece (Republic of) Bonds, 5.35%, 5/18/11 [EUR]         7,170,000       7,475,443
- ------------------------------------------------------------------------------------
 Greece (Republic of) Sr. Unsub. Bonds, 4.65%,
 4/19/07 [EUR]                                            1,550,000       1,590,352
                                                                       -------------
                                                                          9,065,795

- ------------------------------------------------------------------------------------
 Guatemala--0.1%
 Guatemala (Republic of) Nts., 10.25%, 11/8/11(5)           160,000         184,400
- ------------------------------------------------------------------------------------
 Italy--3.7%
 Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali:
 0.375%, 10/10/06 [JPY]                                  59,000,000         487,402
 4.50%, 7/1/04 [EUR]                                      2,050,000       2,075,247
 5%, 10/15/07 [EUR]                                       4,345,000       4,531,953
 5.25%, 8/1/11 [EUR]                                      2,045,000       2,143,146
 6%, 5/1/31 [EUR]                                           990,000       1,114,417
- ------------------------------------------------------------------------------------
 Italy (Republic of) Treasury Nts., Cert Di Credito Del Tesoro, 4.20%,
 10/1/02(6) [EUR]                                         1,545,000       1,526,466
                                                                       -------------
                                                                         11,878,631

- ------------------------------------------------------------------------------------
 Ivory Coast--0.2%
 Ivory Coast (Government of) Past Due Interest Bonds, Series F, 1.905%,
 3/29/18(3,4,5) [FRF]                                    16,007,500         521,546
- ------------------------------------------------------------------------------------
 Mexico--3.3%
 United Mexican States Bonds:
 8.30%, 8/15/31                                           2,995,000       2,912,637
 11.50%, 5/15/26(8)                                       2,755,000       3,478,188
- ------------------------------------------------------------------------------------
 United Mexican States Nts.:
 7.50%, 1/14/12                                           2,589,000       2,624,599
 8.375%, 1/14/11                                          1,595,000       1,682,725
                                                                       -------------
                                                                         10,698,149

- ------------------------------------------------------------------------------------
 Nigeria--0.2%
 Nigeria (Federal Republic of) Promissory Nts.,
 Series RC, 5.092%, 1/5/10(3,4)                           1,510,734         727,431
- ------------------------------------------------------------------------------------
 Norway--0.5%
 Norway (Government of) Bonds, 5.50%, 5/15/09 [NOK]      12,070,000       1,586,358

13 | OPPENHEIMER INTERNATIONAL BOND FUND

STATEMENT OF INVESTMENTS  Continued

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

 Panama--1.5%
 Panama (Republic of) Bonds:
 9.375%, 4/1/29                                      $    1,062,000    $  1,080,585
 10.75%, 5/15/20                                            740,000         745,550
- ------------------------------------------------------------------------------------
 Panama (Republic of) Interest Reduction Bonds,
 5%, 7/17/14(6)                                           1,626,657       1,354,192
- ------------------------------------------------------------------------------------
 Panama (Republic of) Past Due Interest Debs.,
 2.75%, 7/17/16(6)                                        2,456,947       1,726,005
                                                                       -------------
                                                                          4,906,332

- ------------------------------------------------------------------------------------
 Peru--1.5%
 Peru (Republic of) Sr. Nts., Zero Coupon,
 4.53%, 2/28/16(2)                                       10,058,878       4,758,855
- ------------------------------------------------------------------------------------
 Philippines--3.4%
 Philippines (Republic of) Nts., 10.625%, 3/16/25         4,500,000       4,691,250
- ------------------------------------------------------------------------------------
 Philippines (Republic of) Unsec. Bonds, 9.875%, 1/15/19  6,309,000       6,277,455
                                                                       -------------
                                                                         10,968,705

- ------------------------------------------------------------------------------------
 Portugal--1.4%
 Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub. Bonds,
 5.85%, 5/20/10 [EUR]                                     4,135,000       4,496,856
- ------------------------------------------------------------------------------------
 Russia--8.4%
 Russian Federation Unsec. Unsub. Nts.:
 8.75%, 7/24/05                                             640,000         681,600
 10%, 6/26/07                                             4,815,000       5,224,275
 12.75%, 6/24/28                                          1,372,000       1,670,716
- ------------------------------------------------------------------------------------
 Russian Federation Unsub. Nts., 5%, 3/31/30(6)          25,616,000      18,075,290
- ------------------------------------------------------------------------------------
 Russian Ministry of Finance Debs., Series V, 3%, 5/14/08 1,920,000       1,347,456
                                                                       -------------
                                                                         26,999,337

- ------------------------------------------------------------------------------------
 South Africa--1.1%
 South Africa (Republic of) Unsec. Nts.:
 7.375%, 4/25/12                                          3,065,000       3,237,406
 8.50%, 6/23/17                                             280,000         302,050
 9.125%, 5/19/09                                             20,000          23,300
                                                                       -------------
                                                                          3,562,756

- ------------------------------------------------------------------------------------
 Spain--5.9%
 Spain (Kingdom of) Bonds, Bonos y Obligacion del Estado:
 4.65%, 10/31/04(5) [EUR]                                 4,155,000       4,230,235
 4.80%, 10/31/06 [EUR]                                    8,805,000       9,134,035
 5.75%, 7/30/32 [EUR]                                     2,245,000       2,476,129
- ------------------------------------------------------------------------------------
 Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado,
 5.40%, 7/30/11 [EUR]                                     2,840,000       3,010,698
                                                                       -------------
                                                                         18,851,097

14 | OPPENHEIMER INTERNATIONAL BOND FUND

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

 Supranational--1.0%
 European Investment Bank Nts., 2.125%, 9/20/07 [JPY]   348,000,000    $  3,115,249
- ------------------------------------------------------------------------------------
 Sweden--0.5%
 Sweden (Kingdom of) Debs., Series 1040, 6.50%,
 5/5/08 [SEK]                                            13,350,000       1,571,449
- ------------------------------------------------------------------------------------
 The Netherlands--4.8%
 The Netherlands (Government of) Bonds:
 5%, 7/15/11 [EUR]                                        3,450,000       3,575,684
 5.50%, 1/15/28 [EUR]                                     1,820,000       1,947,459
 5.75%, 1/15/04 [EUR]                                     3,010,000       3,075,331
 Series 1, 5.75%, 2/15/07 [EUR]                           6,410,000       6,861,442
                                                                       -------------
                                                                         15,459,916

- ------------------------------------------------------------------------------------
 Turkey--1.0%
 Turkey (Republic of) Bonds, 11.75%, 6/15/10              1,710,000       1,534,725
- ------------------------------------------------------------------------------------
 Turkey (Republic of) Sr. Unsec. Unsub. Nts.,
 11.875%, 1/15/30                                         1,035,000         869,400
- ------------------------------------------------------------------------------------
 Turkey (Republic of) Sr. Unsub. Bonds, 12.375%, 6/15/09  1,015,000         936,337
                                                                       -------------
                                                                          3,340,462

- ------------------------------------------------------------------------------------
 Ukraine--1.0%
 Ukraine (Republic of) Sr. Unsec. Nts., 11%, 3/15/07      2,966,880       3,114,853
- ------------------------------------------------------------------------------------
 Uruguay--0.1%
 Banco Central Del Uruguay Nts., Series A,
 6.75%, 2/19/21(5)                                          315,000         194,512
- ------------------------------------------------------------------------------------
 Venezuela--2.7%
 Venezuela (Republic of) Bonds, 9.25%, 9/15/27            7,715,000       5,149,762
- ------------------------------------------------------------------------------------
 Venezuela (Republic of) Collateralized Par Bonds, Series W-B,
 6.75%, 3/31/20                                             159,000         127,598
- ------------------------------------------------------------------------------------
 Venezuela (Republic of) Debs., Series DL,
 2.875%, 12/18/07(6)                                      3,771,368       2,856,811
- ------------------------------------------------------------------------------------
 Venezuela (Republic of) Front-Loaded Interest Reduction Bonds:
 Series A, 2.688%, 3/31/07(6)                               842,839         625,808
 Series B, 2.688%, 3/31/07(6)                                76,189          56,570
                                                                       -------------
                                                                          8,816,549
                                                                       -------------
 Total Foreign Government Obligations (Cost $220,555,680)               224,214,538

- ------------------------------------------------------------------------------------
 Loan Participations--2.1%
- ------------------------------------------------------------------------------------
 Algeria (Republic of) Loan Participation Nts.,
 2.625%, 3/4/10(5,6)                                      3,236,250       2,849,923
- ------------------------------------------------------------------------------------
 Deutsche Bank AG, Indonesia Rupiah Loan Participation Nts.:
 2.636%, 5/21/04(3)                                         360,000         185,400
 2.636%, 3/25/05(3)                                         165,000          86,625
 2.636%, 12/14/13(3,5)                                      495,000         222,750
- ------------------------------------------------------------------------------------
 Deutsche Bank AG, OAO Gazprom Loan Participation Nts.,
 10%, 12/9/02(5)                                          1,400,000       1,408,820
- ------------------------------------------------------------------------------------
 Russia (Government of) Debs., Series VI, 3%, 5/14/06     2,320,000       1,912,118
                                                                       -------------
 Total Loan Participations (Cost $6,650,684)                              6,665,636

15 | OPPENHEIMER INTERNATIONAL BOND FUND

STATEMENT OF INVESTMENTS  Continued

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

 Corporate Bonds and Notes--8.6%
- ------------------------------------------------------------------------------------
 Capital Gaming International, Inc., 11.50% Promissory
 Nts., 8/1/1995(3,4,5)                               $        2,000    $         --
- ------------------------------------------------------------------------------------
 Chohung Bank, 11.875% Sub. Nts., 4/1/10(6)                 145,000         170,208
- ------------------------------------------------------------------------------------
 European Investment Bank, 3% Eligible Interest Nts.,
 9/20/06 [JPY]                                          938,000,000       8,546,325
- ------------------------------------------------------------------------------------
 Fuji JGB Investment LLC:
 9.87% Non-Cum. Bonds, Series A, 12/31/49(6)              1,140,000       1,037,513
 9.87% Non-Cum. Bonds, Series A, 12/31/49(7)             10,981,000       9,993,797
- ------------------------------------------------------------------------------------
 Hanvit Bank, 12.75% Unsec. Sub. Nts., 3/1/10(6)          2,337,000       2,776,961
- ------------------------------------------------------------------------------------
 IBJ Preferred Capital Co. (The) LLC, 8.79% Non-Cum. Bonds,
 Series A, 12/29/49(6)                                      380,000         318,037
- ------------------------------------------------------------------------------------
 Mexican Williams Sr. Nts., 2.076%, 11/15/08(5,6)           500,000         514,610
- ------------------------------------------------------------------------------------
 Ongko International Finance Co. BV, 10.50% Sec.
 Nts., 3/29/04(3,4,5)                                       550,000           8,250
- ------------------------------------------------------------------------------------
 Petronas Capital Ltd.:
 7.875% Nts., 5/22/22                                     1,385,000       1,541,526
 7.875% Nts., 5/22/22(7)                                    875,000         961,107
- ------------------------------------------------------------------------------------
 Pfizer, Inc., 0.80% Unsec. Bonds, Series INTL,
 3/18/08 [JPY]                                          131,000,000       1,090,806
- ------------------------------------------------------------------------------------
 Tokai Preferred Capital Co. LLC, 9.98% Non-Cum. Bonds,
 Series A, 12/29/49(7)                                      695,000         634,290
                                                                       -------------
 Total Corporate Bonds and Notes (Cost $28,091,611)                      27,593,430

                                                             Shares
- ------------------------------------------------------------------------------------
 Common Stocks--0.0%
- ------------------------------------------------------------------------------------
 i Shares MSCI Hong Kong Index Fund(4) (Cost $2,284)            225           1,604

                                                              Units
- ------------------------------------------------------------------------------------
 Rights, Warrants and Certificates--1.0%
- ------------------------------------------------------------------------------------
 Banco Central Del Uruguay Rts., Exp. 1/2/21(4,5)           315,000              --
- ------------------------------------------------------------------------------------
 Chesapeake Energy Corp. Wts.:
 Exp. 1/23/03(4,5)                                              326              --
 Exp. 9/1/04(4,5)                                               350              --
- ------------------------------------------------------------------------------------
 ICG Communications, Inc. Wts., Exp. 9/15/05(4,5)               495               5
- ------------------------------------------------------------------------------------
 Loral Space & Communications Ltd. Wts., Exp. 1/15/07(4,5)       50              --
- ------------------------------------------------------------------------------------
 Mexico Value Rts., Exp. 6/30/03(4)                          70,000              21
- ------------------------------------------------------------------------------------
 Microcell Telecommunications, Inc. Wts., Exp. 6/1/06(4,7)      100              19
- ------------------------------------------------------------------------------------
 Morgan Stanley Wts., Exp. 6/5/03(4)                        357,965       3,078,714
- ------------------------------------------------------------------------------------
 Protection One, Inc. Wts., Exp. 6/30/05(4,5)                   640              --
                                                                       -------------
 Total Rights, Warrants and Certificates (Cost $3,771,364)                3,078,759

16 | OPPENHEIMER INTERNATIONAL BOND FUND

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

 Structured Notes--7.8%
- ------------------------------------------------------------------------------------
 Credit Suisse First Boston Corp. (Nassau Branch), U.S. Dollar/Philippine
 Peso Linked Nts., 12.50%, 3/15/12(6) [PHP]             119,085,000    $  2,258,810
- ------------------------------------------------------------------------------------
 Credit Suisse First Boston International, U.S. Dollar/South African Rand
 Linked Nts., 1.965%, 5/23/22(5,6)                        2,100,000       2,087,400
- ------------------------------------------------------------------------------------
 Deutsche Bank AG:
 Brazilian Real Linked Nts., 22%, 2/8/04                  3,475,000       2,611,810
 Colombian Peso Linked Nts., 2.201%, 4/22/04(6)             810,000         757,269
 Columbian Peso Linked Nts., 14.61%, 8/8/04(5,6)            595,000         579,292
 Mexican Peso Linked Nts., 1.66%, 4/9/12(6)               3,000,000       2,692,800
- ------------------------------------------------------------------------------------
 JPMorgan Chase Bank:
 EMBI Plus Linked CD, 0.54%, 2/6/03                       2,480,000       2,443,536
 EMBI Plus/EMBI Global Linked Bonds, 1.02%, 3/11/03       1,130,000       1,001,862
 EMBI Plus/EMBI Global Linked Bonds, 1.20%, 4/4/03          740,000         644,536
 Hungarian Forint/Euro Linked Bonds, 2%, 7/14/03          2,780,000       2,757,204
 Hungarian Forint/Euro Linked Nts., 1.82%, 8/6/03         2,010,000       1,966,383
- ------------------------------------------------------------------------------------
 Salomon Smith Barney, Inc., Mexican Peso Linked Nts., 1.78%,
 12/6/02 [MXN]                                           23,808,000       2,231,033
- ------------------------------------------------------------------------------------
 Standard Chartered Bank, Indonesian Rupiah Linked Nts., 12.86%,
 10/21/02 [IDR]                                      26,733,350,000       2,970,214
                                                                       -------------
 Total Structured Notes (Cost $26,194,778)                               25,002,149

                                       Date       Strike  Contracts
- ------------------------------------------------------------------------------------
 Options Purchased--0.0%
- ------------------------------------------------------------------------------------
 Brazilian Real Call(4,5)          10/11/02     3.335brr     32,144           1,420
- ------------------------------------------------------------------------------------
 Chiliean Peso Call(4,5)           10/11/02    719.50clp     10,496           5,904
- ------------------------------------------------------------------------------------
 Japanese Yen Call(4,5)             2/18/03    116.33jpy    408,780         147,628
- ------------------------------------------------------------------------------------
 Qatar (State of) Sr. Unsec.
 Unsub. Bonds, 9.75%,
 6/15/30 Put(4,5)                   3/19/03         114%    155,236          17,730
                                                                       -------------
 Total Options Purchased (Cost $606,656)                                    172,682

                                                          Principal
                                                             Amount
- ------------------------------------------------------------------------------------
 Joint Repurchase Agreements--3.8%
- ------------------------------------------------------------------------------------
 Undivided interest of 4.10% in joint repurchase agreement with BNP
 Paribas Securities Corp., 1.85%, dated 9/30/02, to be repurchased at
 $12,313,633 on 10/1/02, collateralized by U.S. Treasury Bonds, 7.25%--
 10.375%, 11/15/12--2/15/20, with a value of $308,594,118
 (Cost $12,313,000)                                     $12,313,000      12,313,000
- ------------------------------------------------------------------------------------
 Total Investments, at Value (Cost $318,829,203)               99.6%    320,206,283
- ------------------------------------------------------------------------------------
 Other Assets Net of Liabilities                                0.4       1,444,713
                                                        ----------------------------
 Net Assets                                                   100.0%   $321,650,996
                                                        ============================

17 | OPPENHEIMER INTERNATIONAL BOND FUND STATEMENT OF INVESTMENTS Continued Footnotes to Statement of Investments

Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies:

ARP Argentine Peso AUD Australian Dollar BRR Brazilian Real CAD Canadian Dollar CLP Chilean Peso EUR Euro FRF French Franc GBP British Pound Sterling IDR Indonesian Rupiah JPY Japanese Yen MXN Mexican Nuevo Peso NOK Norwegian Krone PHP Philippines Peso SEK Swedish Krona 1. A sufficient amount of securities has been designated to cover outstanding foreign currency contracts. See Note 5 of Notes to Financial Statements. 2. Zero coupon bond reflects effective yield on the date of purchase. 3. Issuer is in default. 4. Non-income producing security. 5. Identifies issues considered to be illiquid or restricted--See Note 9 of Notes to Financial Statements. 6. Represents the current interest rate for a variable or increasing rate security. 7. 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 $12,411,913 or 3.86% of the Fund's net assets as of September 30, 2002. 8. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows:

                      Principal (000s) Expiration  Exercise     Premium Market Value
                        Subject to Put       Date     Price    Received   See Note 1
- ------------------------------------------------------------------------------------
United Mexican States Bonds,

11.50%, 5/15/26                 $1,970    3/19/03    0.013%    $175,330     $184,195





          18 | OPPENHEIMER INTERNATIONAL BOND FUND

Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:

 Geographic Diversification                     Market Value         Percent
- -----------------------------------------------------------------------------
 United States                                  $ 52,229,135            16.3%
 Russia                                           30,320,275             9.5
 Spain                                            18,851,097             5.9
 Mexico                                           16,136,613             5.0
 The Netherlands                                  15,459,916             4.8
 Philippines                                      13,227,515             4.1
 Italy                                            11,878,631             3.7
 Supranational                                    11,661,574             3.6
 Brazil                                           11,034,126             3.5
 Belgium                                          10,875,718             3.4
 Great Britain                                    10,458,068             3.3
 Germany                                          10,372,264             3.2
 Greece                                            9,065,795             2.8
 Venezuela                                         8,816,549             2.8
 France                                            8,718,477             2.7
 Colombia                                          7,107,072             2.2
 Austria                                           6,883,710             2.1
 South Africa                                      5,650,156             1.8
 Panama                                            4,906,332             1.5
 Peru                                              4,758,855             1.5
 Hungary                                           4,723,587             1.5
 Portugal                                          4,496,856             1.4
 Ecuador                                           4,095,900             1.3
 Indonesia                                         3,473,239             1.1
 Turkey                                            3,340,462             1.0
 Australia                                         3,120,850             1.0
 Ukraine                                           3,114,853             1.0
 Canada                                            3,084,353             1.0
 Korea, Republic of South                          2,947,169             0.9
 Algeria                                           2,849,923             0.9
 Malaysia                                          2,502,633             0.8
 Argentina                                         2,321,705             0.7
 Chile                                             1,799,949             0.6
 Egypt                                             1,646,398             0.5
 Norway                                            1,586,358             0.5
 Sweden                                            1,571,449             0.5
 Dominican Republic                                1,410,350             0.4
 El Salvador                                         822,700             0.3
 Bulgaria                                            791,823             0.2
 Nigeria                                             727,431             0.2
 Ivory Coast                                         521,546             0.2
 Belize                                              446,625             0.1
 Uruguay                                             194,512             0.1
 Guatemala                                           184,400             0.1
 Qatar                                                17,730              --
 Hong Kong                                             1,604              --
                                                -----------------------------
 Total                                          $320,206,283           100.0%
                                                =============================

See accompanying Notes to Financial Statements. 19 | OPPENHEIMER INTERNATIONAL BOND FUND

STATEMENT OF ASSETS AND LIABILITIES  September 30, 2002


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

 Assets
- -----------------------------------------------------------------------------------
 Investments, at value (cost $318,829,203)--
 see accompanying statement                                           $320,206,283
- -----------------------------------------------------------------------------------
 Cash                                                                      280,826
- -----------------------------------------------------------------------------------
 Cash--foreign currencies (cost $57,960)                                    34,370
- -----------------------------------------------------------------------------------
 Cash used for collateral on futures, forwards and put options           1,482,000
- -----------------------------------------------------------------------------------
 Unrealized appreciation on foreign currency contracts                      72,667
- -----------------------------------------------------------------------------------
 Receivables and other assets:
 Investments sold (including $8,073 sold on a when-issued basis)        10,805,149
 Interest, dividends and principal paydowns                              5,549,585
 Shares of beneficial interest sold                                      2,942,058
 Swap contract                                                              24,402
 Other                                                                       2,003
                                                                      -------------
 Total assets                                                          341,399,343

- -----------------------------------------------------------------------------------
 Liabilities
- -----------------------------------------------------------------------------------
 Unrealized depreciation on foreign currency contracts                      27,677
- -----------------------------------------------------------------------------------
 Options written, at value (premiums received $175,330)--
 see accompanying statement                                                184,195
- -----------------------------------------------------------------------------------
 Payables and other liabilities:
 Investments purchased                                                  11,165,848
 Shares of beneficial interest redeemed                                  5,719,680
 Closed foreign currency contracts                                       1,857,013
 Dividends                                                                 338,880
 Distribution and service plan fees                                        184,849
 Shareholder reports                                                       122,626
 Transfer and shareholder servicing agent fees                              55,705
 Daily variation on futures contracts                                       48,732
 Trustees' compensation                                                        561
 Other                                                                      42,581
                                                                      -------------
 Total liabilities                                                      19,748,347

- -----------------------------------------------------------------------------------
 Net Assets                                                           $321,650,996
                                                                      =============

- -----------------------------------------------------------------------------------
 Composition of Net Assets
- -----------------------------------------------------------------------------------
 Par value of shares of beneficial interest                           $     73,530
- -----------------------------------------------------------------------------------
 Additional paid-in capital                                            354,813,493
- -----------------------------------------------------------------------------------
 Overdistributed net investment income                                    (896,072)
- -----------------------------------------------------------------------------------
 Accumulated net realized loss on investments and foreign
 currency transactions                                                 (33,864,554)
- -----------------------------------------------------------------------------------
 Net unrealized appreciation on investments and translation of
 assets and liabilities denominated in foreign currencies                1,524,599
                                                                      -------------
 Net Assets                                                           $321,650,996
                                                                      =============

20 | OPPENHEIMER INTERNATIONAL BOND FUND

- ----------------------------------------------------------------------------------
 Net Asset Value Per Share
- ----------------------------------------------------------------------------------

 Class A Shares:
 Net asset value and redemption price per share (based on net assets of
 $181,456,110 and 41,427,996 shares of beneficial interest outstanding)      $4.38
 Maximum offering price per share (net asset value plus sales charge of
 4.75% of offering price)                                                    $4.60
- ----------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of
 $100,049,144 and 22,905,683 shares of beneficial interest outstanding)      $4.37
- ----------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of
 $38,865,249 and 8,903,178 shares of beneficial interest outstanding)        $4.37
- ----------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of
 $1,280,493 and 292,966 shares of beneficial interest outstanding)           $4.37

See accompanying Notes to Financial Statements. 21 | OPPENHEIMER INTERNATIONAL BOND FUND

STATEMENT OF OPERATIONS  For the Year Ended September 30, 2002


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

 Investment Income
- -----------------------------------------------------------------------------------
 Interest (net of foreign withholding taxes of $7,794)                 $16,275,556
- -----------------------------------------------------------------------------------
 Dividends                                                                     929
                                                                       ------------
 Total investment income                                                16,276,485

- -----------------------------------------------------------------------------------
 Expenses
- -----------------------------------------------------------------------------------
 Management fees                                                         1,851,525
- -----------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                   313,178
 Class B                                                                   851,975
 Class C                                                                   285,981
 Class N                                                                     1,444
- -----------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                   332,663
 Class B                                                                   214,823
 Class C                                                                    72,417
 Class N                                                                       566
- -----------------------------------------------------------------------------------
 Shareholder reports                                                       199,424
- -----------------------------------------------------------------------------------
 Custodian fees and expenses                                               101,941
- -----------------------------------------------------------------------------------
 Trustees' compensation                                                      9,385
- -----------------------------------------------------------------------------------
 Other                                                                      60,643
                                                                       ------------
 Total expenses                                                          4,295,965
 Less reduction to custodian expenses                                       (8,013)
                                                                       ------------
 Net expenses                                                            4,287,952

- -----------------------------------------------------------------------------------
 Net Investment Income                                                  11,988,533

- -----------------------------------------------------------------------------------
 Realized and Unrealized Gain (Loss)
- -----------------------------------------------------------------------------------
 Net realized gain (loss) on:
 Investments (including premiums on options exercised)                   9,290,822
 Closing of futures contracts                                             (406,037)
 Closing and expiration of option contracts written                        178,461
 Foreign currency transactions                                           7,156,017
                                                                       ------------
 Net realized gain                                                      16,219,263
- -----------------------------------------------------------------------------------
 Net change in unrealized appreciation on:
 Investments                                                             4,381,613
 Translation of assets and liabilities denominated
 in foreign currencies                                                   2,335,373
                                                                       ------------
 Net change                                                              6,716,986
                                                                       ------------
 Net realized and unrealized gain                                       22,936,249
- -----------------------------------------------------------------------------------
 Net Increase in Net Assets Resulting from Operations                  $34,924,782
                                                                       ============

See accompanying Notes to Financial Statements. 22 | OPPENHEIMER INTERNATIONAL BOND FUND

STATEMENTS OF CHANGES IN NET ASSETS


 Year Ended September 30,                                       2002          2001
- -----------------------------------------------------------------------------------

 Operations
- -----------------------------------------------------------------------------------
 Net investment income                                  $ 11,988,533  $ 16,024,101
- -----------------------------------------------------------------------------------
 Net realized gain (loss)                                 16,219,263   (18,499,271)
- -----------------------------------------------------------------------------------
 Net change in unrealized appreciation                     6,716,986     2,722,710
                                                        ---------------------------
 Net increase in net assets resulting from operations     34,924,782       247,540

- -----------------------------------------------------------------------------------
 Dividends and/or Distributions to Shareholders
- -----------------------------------------------------------------------------------
 Dividends from net investment income:
 Class A                                                  (5,960,008)           --
 Class B                                                  (3,128,518)           --
 Class C                                                  (1,038,402)           --
 Class N                                                     (12,245)           --
- -----------------------------------------------------------------------------------
 Tax return of capital distribution:
 Class A                                                  (1,001,844)   (8,487,688)
 Class B                                                    (633,014)   (6,076,453)
 Class C                                                    (212,641)   (1,760,643)
 Class N                                                      (2,205)       (1,308)

- -----------------------------------------------------------------------------------
 Beneficial Interest Transactions
- -----------------------------------------------------------------------------------
 Net increase (decrease) in net assets resulting from beneficial interest
 transactions:
 Class A                                                  50,685,955    26,717,450
 Class B                                                   7,421,458    (8,296,328)
 Class C                                                  10,958,666      (825,212)
 Class N                                                   1,158,705       110,344

- -----------------------------------------------------------------------------------
 Net Assets
- -----------------------------------------------------------------------------------
 Total increase                                           93,160,689     1,627,702
- -----------------------------------------------------------------------------------
 Beginning of period                                     228,490,307   226,862,605
                                                        ---------------------------
 End of period [including overdistributed net investment
 income of $896,072 and $436,204, respectively]         $321,650,996  $228,490,307
                                                        ===========================

See accompanying Notes to Financial Statements. 23 | OPPENHEIMER INTERNATIONAL BOND FUND

FINANCIAL HIGHLIGHTS


 Class A   Year ended September 30,             2002      2001      2000     1999      1998
- ----------------------------------------------------------------------------------------------

 Per Share Operating Data
- ----------------------------------------------------------------------------------------------
 Net asset value, beginning of period          $ 3.95    $ 4.19    $ 4.23    $ 4.32    $ 5.51
- ----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .24       .30       .45       .58       .56
 Net realized and unrealized gain (loss)          .41      (.24)     (.08)     (.14)    (1.20)
                                               -----------------------------------------------
 Total from investment operations                 .65       .06       .37       .44      (.64)
- ----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.19)       --      (.21)     (.53)     (.53)
 Tax return of capital distribution              (.03)     (.30)     (.20)       --        --
 Distributions from net realized gain              --        --        --        --      (.02)
                                               -----------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.22)     (.30)     (.41)     (.53)     (.55)
- ----------------------------------------------------------------------------------------------
 Net asset value, end of period                 $4.38     $3.95     $4.19     $4.23     $4.32
                                               ===============================================

- ----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value(1)            16.78%     1.40%     8.93%    10.58%   (12.50)%
- ----------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)    $181,456  $118,733  $100,928  $102,236  $ 97,404
- ----------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $134,912  $117,000  $110,968  $101,948  $108,264
- ----------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                           5.16%     7.10%    10.23%    13.47%    11.09%
 Expenses                                        1.37%     1.38%     1.31%     1.26%     1.24%(3)
 Expenses, net of reduction to custodian
 and/or voluntary waiver of transfer agent fees  1.37%     1.38%     1.29%     1.25%     1.24%
- ----------------------------------------------------------------------------------------------
 Portfolio turnover rate                          372%      377%      288%      285%      446%

1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 24 | OPPENHEIMER INTERNATIONAL BOND FUND

 Class B   Year ended September 30,             2002      2001      2000     1999      1998
- ----------------------------------------------------------------------------------------------

 Per Share Operating Data
- ----------------------------------------------------------------------------------------------
 Net asset value, beginning of period          $ 3.94    $ 4.17   $ 4.22     $ 4.31    $ 5.50
- ----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .21       .26      .42        .55       .52
 Net realized and unrealized gain (loss)          .40      (.22)    (.09)      (.14)    (1.20)
                                               -----------------------------------------------
 Total from investment operations                 .61       .04      .33        .41      (.68)
- ----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income            (.15)       --     (.20)      (.50)     (.49)
 Tax return of capital distribution              (.03)     (.27)    (.18)        --        --
 Distributions from net realized gain              --        --       --         --      (.02)
                                               -----------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.18)     (.27)    (.38)      (.50)     (.51)
- ----------------------------------------------------------------------------------------------
 Net asset value, end of period                 $4.37     $3.94    $4.17      $4.22     $4.31
                                               ===============================================

- ----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value(1)            15.90%     0.85%    7.94%      9.79%   (13.16)%
- ----------------------------------------------------------------------------------------------


- ----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)    $100,049   $84,427 $ 98,272   $118,632  $119,998
- ----------------------------------------------------------------------------------------------
 Average net assets (in thousands)           $ 85,244   $93,455 $115,116   $122,878  $128,789
- ----------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                           4.41%     6.40%    9.63%     12.70%    10.33%
 Expenses                                        2.14%     2.14%    2.05%      2.02%     2.00%(3)
 Expenses, net of reduction to custodian
 and/or voluntary waiver of transfer agent fees  2.14%     2.14%    2.03%      2.01%     2.00%
- ----------------------------------------------------------------------------------------------
 Portfolio turnover rate                          372%      377%     288%       285%      446%

1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 25 | OPPENHEIMER INTERNATIONAL BOND FUND

FINANCIAL HIGHLIGHTS  Continued


 Class C   Year ended September 30,             2002      2001      2000     1999      1998
- ----------------------------------------------------------------------------------------------

 Per Share Operating Data
- ----------------------------------------------------------------------------------------------
 Net asset value, beginning of period          $ 3.94    $ 4.17   $ 4.22     $ 4.31    $ 5.50
- ----------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                            .21       .26      .41        .55       .52
 Net realized and unrealized gain (loss)          .40      (.22)    (.08)      (.14)    (1.20)
                                               -----------------------------------------------
 Total from investment operations                 .61       .04      .33        .41      (.68)
- ----------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders
 Dividends from net investment income            (.15)    --        (.19)      (.50)     (.49)
 Tax return of capital distribution              (.03)     (.27)    (.19)        --        --
 Distributions from net realized gain              --        --       --         --      (.02)
                                               -----------------------------------------------
 Total dividends and/or distributions
 to shareholders                                 (.18)     (.27)    (.38)      (.50)     (.51)
- ----------------------------------------------------------------------------------------------
 Net asset value, end of period                 $4.37     $3.94    $4.17      $4.22     $4.31
                                               ===============================================

- ----------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value(1)            15.90%     0.85%    7.95%      9.80%   (13.16)%
- ----------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)     $38,865   $25,221  $27,663    $29,456   $27,636
- ----------------------------------------------------------------------------------------------
 Average net assets (in thousands)            $28,635   $27,125  $30,710    $28,918   $29,336
- ----------------------------------------------------------------------------------------------
 Ratios to average net assets:(2)
 Net investment income                           4.37%     6.39%    9.55%     12.76%    10.33%
 Expenses                                        2.14%     2.14%    2.05%      2.02%     2.00%(3)
 Expenses, net of reduction to custodian
 and/or voluntary waiver of transfer agent fees  2.14%     2.14%    2.03%      2.01%     2.00%
- ----------------------------------------------------------------------------------------------
 Portfolio turnover rate                          372%      377%     288%       285%      446%

1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 26 | OPPENHEIMER INTERNATIONAL BOND FUND

 Class N   Year ended September 30,                                   2002      2001(1)
- ---------------------------------------------------------------------------------------

 Per Share Operating Data
- ---------------------------------------------------------------------------------------
 Net asset value, beginning of period                               $ 3.95    $ 4.23
- ---------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                                 .21       .16
 Net realized and unrealized gain (loss)                               .42      (.28)
                                                                    -------------------
 Total from investment operations                                      .63      (.12)
- ---------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                 (.18)       --
 Tax return of capital distribution                                   (.03)     (.16)
 Distributions from net realized gain                                   --        --
                                                                    -------------------
 Total dividends and/or distributions
 to shareholders                                                      (.21)     (.16)
- ---------------------------------------------------------------------------------------
 Net asset value, end of period                                      $4.37     $3.95
                                                                    ===================

- ---------------------------------------------------------------------------------------
 Total Return, at Net Asset Value(2)                                 16.23%    (2.88)%
- ---------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------
 Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------
 Net assets, end of period (in thousands)                           $1,280      $109
- ---------------------------------------------------------------------------------------
 Average net assets (in thousands)                                  $  297      $ 34
- ---------------------------------------------------------------------------------------
 Ratios to average net assets:(3)
 Net investment income                                                4.87%     6.56%
 Expenses                                                             1.57%     1.39%
 Expenses, net of reduction to custodian
 and/or voluntary waiver of transfer agent fees                       1.57%     1.39%
- ---------------------------------------------------------------------------------------
 Portfolio turnover rate                                               372%      377%

1. For the period from March 1, 2001 (inception of offering) to September 30, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 3. Annualized for periods of less than one full year. See accompanying Notes to Financial Statements. 27 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. Significant Accounting Policies

  Oppenheimer International Bond Fund (the Fund) is a registered investment company organized as a Massachusetts Business Trust. The Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended. The Fund’s investment objective is to seek total return. 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. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. Classes A, B, C and N have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares six years after the date of purchase.

        The following is a summary of significant accounting policies consistently followed by the Fund.

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

  Securities Valuation. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund’s assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Trustees, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Trustees. Short-term “money market type” debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value).

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

  Structured Notes. The Fund invests in foreign currency-linked structured notes whose market values and redemption prices are linked to foreign currency exchange rates. The structured notes are leveraged, which increases the volatility of each note’s market value relative to the change in the underlying foreign currency exchange rate. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of September 30, 2002, the market value of these securities comprised 7.8% of the Fund’s net assets and resulted in unrealized losses in the current period of $1,192,630. The Fund also hedges a portion of the foreign currency exposure generated by these securities, as discussed in Note 5.

28 | OPPENHEIMER INTERNATIONAL BOND FUND - --------------------------------------------------------------------------------

  Securities Purchased on a When-Issued Basis. Delivery and payment for securities that have been purchased by the Fund on a when-issued basis can take place a month or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains segregated assets with a market value equal to or greater than the amount of its commitments. These transactions of securities on a when-issued basis may increase the volatility of the Fund’s net asset value to the extent the Fund executes such transactions while remaining substantially fully invested. As of September 30, 2002, the Fund had entered into when-issued sale commitments of $8,073.

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

  Security Credit Risk. The Fund invests in high-yield securities, which may be subject to a greater degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may be more sensitive to economic conditions than lower-yielding, higher-rated fixed-income securities. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of September 30, 2002, securities with an aggregate market value of $4,073,708, representing 1.27% of the Fund’s net assets, were in default.

- -------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions.

  The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund’s Statement of Operations.

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

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

29 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued

  Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

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

  Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders. Therefore, no federal income or excise tax provision is required.

  As of September 30, 2002, the Fund had available for federal income tax purposes unused capital loss carryforwards as follows:

Expiring 2002 $ 3,670,346 2003 449,603 2006 3,413,515 2007 24,055,190 2008 4,438,059 2009 1,299,082 Total $37,325,795(1) =========== 1. Includes $4,119,949 of the $8,187,009 unused capital loss carryforward acquired in the February 15, 2001 merger with Oppenheimer World Bond Fund which is no longer subject to limitation under IRS Sections 382 or 384. - --------------------------------------------------------------------------------

  Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date.

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

  Classification of Dividends and Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund.

30 | OPPENHEIMER INTERNATIONAL BOND FUND - --------------------------------------------------------------------------------

  The Fund adjusts the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, during the year ended September 30, 2002, amounts have been reclassified to reflect a decrease in paid-in capital of $1,816,973, a decrease in undistributed net investment income of $459,524, and a decrease in accumulated net realized loss on investments of $2,276,497. As noted in the Statement of Changes in Net Assets for federal income tax purposes, the Fund realized a return of capital of $1,849,704. Net assets of the Fund were unaffected by the reclassifications.

  The tax character of distributions paid during the years ended September 30, 2002 and September 30, 2001 was as follows:

Year Ended Year Ended September 30, 2002 September 30, 2001 -------------------------------------------------------- Distributions paid from: Ordinary income $10,139,173 $ -- Long-term capital gain -- -- Return of capital 1,849,704 16,326,092 ------------------------------- Total $11,988,877 $16,326,092 ===============================

  As of September 30, 2002, the components of distributable earnings on a tax basis were as follows:

Overdistributed net investment income $ (896,072) Accumulated net realized loss (33,864,554) Net unrealized appreciation 1,524,599 ------------ Total $(33,236,027) ============ - --------------------------------------------------------------------------------

  Investment Income. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned.

- -------------------------------------------------------------------------------- Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 31 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 2. Shares of Beneficial Interest

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

                                     Year Ended                   Year Ended
                                 September 30, 2002          September 30, 2001(1)
                                Shares        Amount         Shares         Amount
- -----------------------------------------------------------------------------------
 Class A

 Sold                       29,697,373  $129,350,915     11,475,782   $ 47,469,618
 Dividends and/or
 distributions reinvested    1,145,883     4,834,797      1,365,106      5,584,489
 Acquisition--Note 11               --            --      9,099,764     38,855,992
 Redeemed                  (19,476,112)  (83,499,757)   (15,986,371)   (65,192,649)
                           --------------------------------------------------------
 Net increase               11,367,144  $ 50,685,955      5,954,281   $ 26,717,450
                           ========================================================

- -----------------------------------------------------------------------------------
 Class B
 Sold                        9,030,170  $ 39,252,375      2,577,998   $ 10,449,838
 Dividends and/or
 distributions reinvested      515,987     2,162,691        765,041      3,126,381
 Acquisition--Note 11               --            --      2,119,613      9,008,355
 Redeemed                   (8,090,580)  (33,993,608)    (7,563,989)   (30,880,902)
                           --------------------------------------------------------
 Net increase (decrease)     1,455,577  $  7,421,458     (2,101,337)  $ (8,296,328)
                           ========================================================

- -----------------------------------------------------------------------------------
 Class C
 Sold                        4,734,148  $ 20,471,644      2,442,689   $ 10,125,425
 Dividends and/or
 distributions reinvested      180,877       759,597        228,472        933,199
 Acquisition--Note 11               --            --        389,518      1,655,452
 Redeemed                   (2,420,774)  (10,272,575)    (3,283,543)   (13,539,288)
                           --------------------------------------------------------
 Net increase (decrease)     2,494,251  $ 10,958,666       (222,864)  $   (825,212)
                           ========================================================

- -----------------------------------------------------------------------------------
 Class N
 Sold                          292,426  $  1,277,397         27,136   $    109,074
 Dividends and/or
 distributions reinvested        2,942        12,571            426          1,270
 Redeemed                      (29,964)     (131,263)            --             --
                           --------------------------------------------------------
 Net increase                  265,404  $  1,158,705         27,562   $    110,344
                           ========================================================

1. For the year ended September 30, 2001, for Class A, B and C shares and for the period from March 1, 2001 (inception of offering) to September 30, 2001, for Class N shares. - -------------------------------------------------------------------------------- 3. Purchases and Sales of Securities

  The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended September 30, 2002, were $817,788,025 and $785,530,575, respectively.

32 | OPPENHEIMER INTERNATIONAL BOND FUND

  As of September 30, 2002, unrealized appreciation (depreciation) based on cost of securities for federal income tax purposes of $319,807,053 was composed of:

Gross unrealized appreciation $10,536,781 Gross unrealized depreciation (10,137,551) ----------- Net unrealized appreciation $ 399,230 ===========

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

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

  Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for an annual fee of 0.75% of the first $200 million of average annual net assets of the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million, 0.60% of the next $200 million and 0.50% of average annual net assets in excess of $1 billion.

- -------------------------------------------------------------------------------- Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a $22.50 per account fee.

  OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes, up to an annual rate of 0.35% of average net assets per class. This undertaking may be amended or withdrawn at any time.

- -------------------------------------------------------------------------------- Distribution and Service Plan (12b-1) Fees. Under its General Distributor's Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the different classes of shares of the Fund.

  The compensation paid to (or retained by) the Distributor from the sale of shares or on the redemption of shares is shown in the table below for the period indicated.

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

 September 30, 2002  $452,569       $98,260       $115,077       $549,159       $128,269         $6,626

1. The Distributor advances concession payments to dealers for certain sales of Class A shares and for sales of Class B, Class C and Class N shares from its own resources at the time of sale. Class A Class B Class C Class N Contingent Contingent Contingent Contingent Deferred Deferred Deferred Deferred Sales Charges Sales Charges Sales Charges Sales Charges Retained by Retained by Retained by Retained by Year Ended Distributor Distributor Distributor Distributor - ------------------------------------------------------------------------------- September 30, 2002 $11,854 $276,434 $7,123 $1,255 33 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates Continued

  Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A Shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. For the year ended September 30, 2002, payments under the Class A Plan totaled $313,178, all of which were paid by the Distributor to recipients, and included $13,551 paid to an affiliate of the Manager. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years.

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

  Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B shares and on Class C shares and the Fund pays the Distributor an annual asset-based sales charge of 0.25% per year on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan.

        Distribution fees paid to the Distributor for the year ended September 30, 2002, were as follows:

Distributor's Distributor's Aggregate Aggregate Unreimbursed Unreimbursed Expenses as % Total Payments Amount Retained Expenses of Net Assets Under Plan by Distributor Under Plan of Class - ------------------------------------------------------------------------------ Class B Plan $851,975 $656,771 $4,991,285 4.99% Class C Plan 285,981 52,083 1,079,070 2.78 Class N Plan 1,444 859 12,754 1.00 - -------------------------------------------------------------------------------- 5. Foreign Currency Contracts

  A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts for operational purposes and to seek to protect against adverse exchange rate fluctuations. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract.

  The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates as provided by a reliable bank, dealer or pricing service. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation.

  The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transactions. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations.

34 | OPPENHEIMER INTERNATIONAL BOND FUND

  As of September 30, 2002, the Fund had outstanding foreign currency contracts as follows:

                            Expiration       Contract    Valuation as of    Unrealized   Unrealized
 Contract Description            Dates  Amount (000s)     Sept. 30, 2002  Appreciation Depreciation
- ----------------------------------------------------------------------------------------------------

 Contracts to Purchase
 Canadian Dollar (CAD)        11/27/02          4,945CAD      $3,111,934       $    --       $18,211
 Euro (EUR)                   10/16/02-
                              12/27/02          8,880EUR       8,753,784        72,667            --
                                                                               ---------------------
                                                                                72,667        18,211
                                                                               ---------------------
 Contracts to Sell
 Australian Dollar (AUD)      11/27/02          5,760AUD       3,114,305            --           621
 British Pound Sterling (GBP)  10/1/02             23GBP          36,218            --           472
 Euro (EUR)                     5/5/03            665EUR         651,429            --         8,373
                                                                               ---------------------
                                                                                    --         9,466
                                                                               ---------------------
 Total Unrealized Appreciation and Depreciation                                $72,667       $27,677
                                                                               =====================

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

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

  The Fund generally sells futures contracts to hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying fixed income securities.

  Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or expires.

  Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported on the Statement of Operations as closing and expiration of futures contracts.

  Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.

35 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 6. Futures Contracts Continued

  As of September 30, 2002, the Fund had outstanding futures contracts as follows:

                                                                                 Unrealized
                                 Expiration   Number of     Valuation as of    Appreciation
 Contract Description                  Dates  Contracts  September 30, 2002  (Depreciation)
- --------------------------------------------------------------------------------------------
 Contracts to Purchase

 Euro-Bobl                           12/6/02        782         $84,974,924        $294,535
                                                                                   ---------

 Contracts to Sell
 Euro-Bundesobligation               12/6/02        160          17,828,932         (41,113)
 Euro-Schatz                         12/6/02        241          25,051,804         (50,018)
 Japan (Government of) Bonds, 10 yr.12/11/02         20          23,065,550         118,285
 U.S. Treasury Nts., 5 yr.          12/19/02        357          40,798,406        (306,797)
                                                                                   ---------
                                                                                   (279,643)
                                                                                   ---------
                                                                                   $ 14,892
                                                                                   =========

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

  The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities.

  The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option.

  Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid.

  Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. 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.

36 | OPPENHEIMER INTERNATIONAL BOND FUND Written option activity for the year ended September 30, 2002 was as follows:

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

 Options outstanding as of
 September 30, 2001                 --      $     --           280,537,595      $ 147,278
 Options written                 3,624       607,801             3,702,770        242,025
 Options closed or expired      (3,605)     (139,860)         (284,237,595)      (175,953)
 Options exercised                 (19)     (467,941)                 (800)       (38,020)
                     ---------------------------------------------------------------------
 Options outstanding as of
 September 30, 2002                 --      $     --                 1,970       $175,330
                     =====================================================================

- -------------------------------------------------------------------------------- 8. Credit Swap Transactions

  The Fund may enter into a credit swap transaction to seek to maintain a total return on a particular investment or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as a notional principal amount. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement on a daily basis. The Fund enters into swaps only on securities it owns. Credit swaps are subject to credit risks (if the counterparty fails to meet its obligations). The Fund segregates liquid assets to cover any amounts it could owe under swaps that exceed the amounts it is entitled to receive.

  As of September 30, 2002, the Fund had entered into the following credit swap agreements:

                            Expiration    Notional       Valuation as of      Unrealized
 Contract Description             Date      Amount    September 30, 2002    Appreciation
- -----------------------------------------------------------------------------------------
 J.P. Morgan Chase Bank, Jordon

 (Kingdom of ) Credit Nts.      6/6/06    390,000                $24,402         $24,402

- -------------------------------------------------------------------------------- 9. Illiquid or Restricted Securities

  As of September 30, 2002, investments in securities included issues that are illiquid or restricted. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. The aggregate value of illiquid or restricted securities subject to this limitation as of September 30, 2002 was

37 | OPPENHEIMER INTERNATIONAL BOND FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- 9. Illiquid or Restricted Securities Continued

  $13,536,889, which represents 4.20% of the Fund’s net assets, of which $34,370 is considered restricted. Information concerning restricted securities is as follows:

Acquisition Valuation as of Unrealized Security Date Cost September 30, 2002 Depreciation - ----------------------------------------------------------------------------- Currency Argentine Peso 1/15/02 $57,960 $34,370 $23,590 - -------------------------------------------------------------------------------- 10. Bank Borrowings

  The Fund may borrow from a bank for temporary or emergency purposes including, without limitation, funding of shareholder redemptions provided asset coverage for borrowings exceeds 300%. The Fund has entered into an agreement which enables it to participate with other Oppenheimer funds in an unsecured line of credit with a bank, which permits borrowings up to $400 million, collectively. Interest is charged to each fund, based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Borrowings are payable within 30 days after such loan is executed. The Fund also pays a commitment fee equal to its pro rata share of the average unutilized amount of the credit facility at a rate of 0.08% per annum.

  The Fund had no borrowings outstanding during the year ended or at September 30, 2002.

- -------------------------------------------------------------------------------- 11. Acquisition of Oppenheimer World Bond Fund

  On February 16, 2001, the Fund acquired all of the net assets of Oppenheimer World Bond Fund, pursuant to an Agreement and Plan of Reorganization approved by the Oppenheimer World Bond Fund shareholders on February 9, 2001. The Fund issued (at an exchange ratio of 1.663545 for Class A, 1.671579 for Class B and 1.668707 for Class C of the Fund to one share of Oppenheimer International Bond Fund) 9,099,764; 2,119,613; and 389,518 shares of beneficial interest for Class A, Class B and Class C, respectively, valued at $38,855,992, $9,008,355 and $1,655,452 in exchange for the net assets, resulting in combined Class A net assets of $141,638,099, Class B net assets of $103,839,460 and Class C net assets of $29,637,104 on February 16, 2001. The net assets acquired included net unrealized appreciation of $432,989 and unused capital loss carryforward of $8,187,009. The exchange qualified as a tax-free reorganization for federal income tax purposes.

38 | OPPENHEIMER INTERNATIONAL BOND FUND

                                     A-6
                                  Appendix A

                             RATINGS DEFINITIONS

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


Moody's Investors Service, Inc. ("Moody's")

LONG-TERM (TAXABLE) BOND RATINGS

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

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

A: Bonds rated "A" possess many favorable investment attributes and are to be
considered as upper-medium grade obligations.  Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment some time in the future.

Baa: Bonds rated "Baa" are considered medium-grade obligations; that is, they
are neither highly protected nor poorly secured.  Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment characteristics
and have speculative characteristics as well.

Ba: Bonds rated "Ba" are judged to have speculative elements. Their future
cannot be considered well-assured.  Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future.  Uncertainty of position
characterizes bonds in this class.

B: Bonds rated "B" generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa: Bonds rated "Caa" are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.

Ca: Bonds rated "Ca" represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

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

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

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a
ranking in the lower end of that generic rating category. Advanced refunded
issues that are secured by certain assets are identified with a # symbol.

Short-Term Ratings - Taxable Debt

These ratings apply to the ability of issuers to honor senior debt
obligations having an original maturity not exceeding one year:

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may
be more affected by external conditions. Ample alternate liquidity is
maintained.

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

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


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

LONG-TERM CREDIT RATINGS

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

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

A: Bonds rated "A" are somewhat  more  susceptible  to the adverse  effects of
changes  in  circumstances   and  economic   conditions  than  obligations  in
higher-rated   categories.   However,  the  obligor's  capacity  to  meet  its
financial commitment on the obligation is still strong.

BBB:  Bonds rated  "BBB"  exhibit  adequate  protection  parameters.  However,
adverse economic conditions or changing  circumstances are more likely to lead
to a weakened capacity of the obligor to meet its financial  commitment on the
obligation.

BB, B, CCC, CC, and C

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

BB: Bonds rated "BB" are less vulnerable to nonpayment than other  speculative
issues.  However, they face major ongoing uncertainties or exposure to adverse
business,  financial, or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B: Bonds rated "B" are more  vulnerable to  nonpayment  than bonds rated "BB",
but the obligor  currently has the capacity to meet its  financial  commitment
on the obligation.  Adverse business,  financial,  or economic conditions will
likely  impair the  obligor's  capacity or  willingness  to meet its financial
commitment on the obligation.

CCC:  Bonds  rated  "CCC" are  currently  vulnerable  to  nonpayment,  and are
dependent upon favorable business,  financial, and economic conditions for the
obligor to meet its financial  commitment on the  obligation.  In the event of
adverse  business,  financial,  or  economic  conditions,  the  obligor is not
likely  to  have  the  capacity  to  meet  its  financial  commitment  on  the
obligation.

CC: Bonds rated "CC" are currently highly vulnerable to nonpayment.

C:  Subordinated  debt or preferred stock  obligations rated "C" are currently
highly  vulnerable  to  nonpayment.  The "C"  rating  may be  used to  cover a
situation where a bankruptcy  petition has been filed or similar action taken,
but  payments  on this  obligation  are  being  continued.  A "C" also will be
assigned to a preferred  stock issue in arrears on  dividends  or sinking fund
payments, but that is currently paying.

D: Bonds  rated "D" are in payment  default.  The "D" rating  category is used
when  payments  on an  obligation  are not  made on the  date  due even if the
applicable  grace period has not expired,  unless  Standard & Poor's  believes
that such payments will be made during such grace period.  The "D" rating also
will be used  upon the  filing of a  bankruptcy  petition  or the  taking of a
similar action if payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating
categories. The "r" symbol is attached to the ratings of instruments with
significant noncredit risks.

SHORT-TERM ISSUE CREDIT RATINGS

A-1: A short-term bond rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity
to meet its financial commitment on these obligations is extremely strong.

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

A-3: A short-term bond rated "A-3" exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

B: A short-term bond rated "B" is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.


C: A short-term bond rated "C" is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D: A short-term bond rated "D" is in payment default. The "D" rating category
is used when payments on an obligation are not made on the date due even if
the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.


Fitch, Inc.

INTERNATIONAL LONG-TERM CREDIT RATINGS

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.

AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.

B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk.  Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.







DDD, DD, and D: Default. The ratings of obligations in this category are
based on their prospects for achieving partial or full recovery in a
reorganization or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision, the
following serve as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding amounts and accrued
interest. "DD" indicates potential recoveries in the range of 50%-90%, and
"D" the lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy
a higher portion of their outstanding obligations, while entities rated "D"
have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the major rating categories.  Plus and minus signs are
not added to the "AAA" category or to categories below "CCC," nor to
short-term ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS

F1:  Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2:   Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3:   Fair credit quality. Capacity for timely payment of financial
commitments is adequate. However, near-term adverse changes could result in a
reduction to non-investment grade.

B:    Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial and
economic conditions.

C:      High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a sustained, favorable
business and economic environment.

D:     Default. Denotes actual or imminent payment default.










                                     B-1
                                  Appendix B

- ------------------------------------------------------------------------------
                           Industry Classifications
- ------------------------------------------------------------------------------


Aerospace & Defense                Household Durables
Air Freight & Couriers             Household Products
Airlines                           Industrial Conglomerates
Auto Components                    Insurance
Automobiles                        Internet & Catalog Retail
Banks                              Internet Software & Services
Beverages                          Information Technology Consulting &
                                   Services
Biotechnology                      Leisure Equipment & Products
Building Products                  Machinery
Chemicals                          Marine
Commercial Services & Supplies     Media
Communications Equipment           Metals & Mining
Computers & Peripherals            Multiline Retail
Construction & Engineering         Multi-Utilities
Construction Materials             Office Electronics
Containers & Packaging             Oil & Gas
Distributors                       Paper & Forest Products
Diversified Financials             Personal Products
Diversified Telecommunication      Pharmaceuticals
Services
Electric Utilities                 Real Estate
Electrical Equipment               Road & Rail
Electronic Equipment & Instruments Semiconductor Equipment & Products
Energy Equipment & Services        Software
Food & Drug Retailing              Specialty Retail
Food Products                      Textiles & Apparel
Gas Utilities                      Tobacco
Health Care Equipment & Supplies   Trading Companies & Distributors
Health Care Providers & Services   Transportation Infrastructure
Hotels Restaurants & Leisure       Water Utilities
                                   Wireless Telecommunication Services









                                     C-12
                                  Appendix C

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

In certain cases, the initial sales charge that applies to purchases of Class
A shares1 of the Oppenheimer funds or the contingent deferred sales charge
that may apply to Class A, Class B or Class C shares may be waived.2  That is
because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors.

Not all waivers apply to all funds. For example, waivers relating to
Retirement Plans do not apply to Oppenheimer municipal funds, because shares
of those funds are not available for purchase by or on behalf of retirement
plans. Other waivers apply only to shareholders of certain funds.

For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds,
the term "Retirement Plan" refers to the following types of plans:
         1) plans qualified under Sections 401(a) or 401(k) of the Internal
            Revenue Code,
         2) non-qualified deferred compensation plans,
         3) employee benefit plans3
         4) Group Retirement Plans4
         5) 403(b)(7) custodial plan accounts
         6) Individual Retirement Accounts ("IRAs"), including traditional
            IRAs, Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the
"Transfer Agent") of the particular Oppenheimer fund. These waivers and
special arrangements may be amended or terminated at any time by a particular
fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this
document as the "Manager").

Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
I.






 Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
- ------------------------------------------------------------------------------

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to
Initial Sales Charge but May Be Subject to the Class A Contingent Deferred
Sales Charge (unless a waiver applies).

      There is no initial sales charge on purchases of Class A shares of any
of the Oppenheimer funds in the cases listed below. However, these purchases
may be subject to the Class A contingent deferred sales charge if redeemed
within 18 months (24 months in the case of Oppenheimer Rochester National
Municipals and Rochester Fund Municipals) of the beginning of the calendar
month of their purchase, as described in the Prospectus (unless a waiver
described elsewhere in this Appendix applies to the redemption).
Additionally, on shares purchased under these waivers that are subject to the
Class A contingent deferred sales charge, the Distributor will pay the
applicable concession described in the Prospectus under "Class A Contingent
Deferred Sales Charge."5 This waiver provision applies to:
|_|   Purchases of Class A shares aggregating $1 million or more.
|_|   Purchases of Class A shares by a Retirement Plan that was permitted to
         purchase such shares at net asset value but subject to a contingent
         deferred sales charge prior to March 1, 2001. That included plans
         (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares
         costing $500,000 or more, 2) had at the time of purchase 100 or more
         eligible employees or total plan assets of $500,000 or more, or 3)
         certified to the Distributor that it projects to have annual plan
         purchases of $200,000 or more.
|_|   Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
         purchases are made:
         1) through a broker, dealer, bank or registered investment adviser
            that has made special arrangements with the Distributor for those
            purchases, or
         2) by a direct rollover of a distribution from a qualified
            Retirement Plan if the administrator of that Plan has made
            special arrangements with the Distributor for those purchases.
|_|   Purchases of Class A shares by Retirement Plans that have any of the
         following record-keeping arrangements:
         1) The record keeping is performed by Merrill Lynch Pierce Fenner &
            Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
            Retirement Plan. On the date the plan sponsor signs the
            record-keeping service agreement with Merrill Lynch, the Plan
            must have $3 million or more of its assets invested in (a) mutual
            funds, other than those advised or managed by Merrill Lynch
            Investment Management, L.P. ("MLIM"), that are made available
            under a Service Agreement between Merrill Lynch and the mutual
            fund's principal underwriter or distributor, and  (b)  funds
            advised or managed by MLIM (the funds described in (a) and (b)
            are referred to as "Applicable Investments").
         2) The record keeping for the Retirement Plan is performed on a
            daily valuation basis by a record keeper whose services are
            provided under a contract or arrangement between the Retirement
            Plan and Merrill Lynch. On the date the plan sponsor signs the
            record keeping service agreement with Merrill Lynch, the Plan
            must have $3 million or more of its assets (excluding assets
            invested in money market funds) invested in Applicable
            Investments.
         3) The record keeping for a Retirement Plan is handled under a
            service agreement with Merrill Lynch and on the date the plan
            sponsor signs that agreement, the Plan has 500 or more eligible
            employees (as determined by the Merrill Lynch plan conversion
            manager).
      II.






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

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

Class A shares purchased by the following investors are not subject to any
Class A sales charges (and no concessions are paid by the Distributor on such
purchases):
|_|   The Manager or its affiliates.
|_|   Present or former officers, directors, trustees and employees (and
         their "immediate families") of the Fund, the Manager and its
         affiliates, and retirement plans established by them for their
         employees. The term "immediate family" refers to one's spouse,
         children, grandchildren, grandparents, parents, parents-in-law,
         brothers and sisters, sons- and daughters-in-law, a sibling's
         spouse, a spouse's siblings, aunts, uncles, nieces and nephews;
         relatives by virtue of a remarriage (step-children, step-parents,
         etc.) are included.
|_|   Registered management investment companies, or separate accounts of
         insurance companies having an agreement with the Manager or the
         Distributor for that purpose.
|_|   Dealers or brokers that have a sales agreement with the Distributor, if
         they purchase shares for their own accounts or for retirement plans
         for their employees.
|_|   Employees and registered representatives (and their spouses) of dealers
         or brokers described above or financial institutions that have
         entered into sales arrangements with such dealers or brokers (and
         which are identified as such to the Distributor) or with the
         Distributor. The purchaser must certify to the Distributor at the
         time of purchase that the purchase is for the purchaser's own
         account (or for the benefit of such employee's spouse or minor
         children).
|_|   Dealers, brokers, banks or registered investment advisors that have
         entered into an agreement with the Distributor providing
         specifically for the use of shares of the Fund in particular
         investment products made available to their clients. Those clients
         may be charged a transaction fee by their dealer, broker, bank or
         advisor for the purchase or sale of Fund shares.
|_|   Investment advisors and financial planners who have entered into an
         agreement for this purpose with the Distributor and who charge an
         advisory, consulting or other fee for their services and buy shares
         for their own accounts or the accounts of their clients.
|_|   "Rabbi trusts" that buy shares for their own accounts, if the purchases
         are made through a broker or agent or other financial intermediary
         that has made special arrangements with the Distributor for those
         purchases.
|_|   Clients of investment advisors or financial planners (that have entered
         into an agreement for this purpose with the Distributor) who buy
         shares for their own accounts may also purchase shares without sales
         charge but only if their accounts are linked to a master account of
         their investment advisor or financial planner on the books and
         records of the broker, agent or financial intermediary with which
         the Distributor has made such special arrangements . Each of these
         investors may be charged a fee by the broker, agent or financial
         intermediary for purchasing shares.
|_|   Directors, trustees, officers or full-time employees of OpCap Advisors
         or its affiliates, their relatives or any trust, pension, profit
         sharing or other benefit plan which beneficially owns shares for
         those persons.
|_|   Accounts for which Oppenheimer Capital (or its successor) is the
         investment advisor (the Distributor must be advised of this
         arrangement) and persons who are directors or trustees of the
         company or trust which is the beneficial owner of such accounts.
|_|   A unit investment trust that has entered into an appropriate agreement
         with the Distributor.
|_|   Dealers, brokers, banks, or registered investment advisers that have
         entered into an agreement with the Distributor to sell shares to
         defined contribution employee retirement plans for which the dealer,
         broker or investment adviser provides administration services.
      Retirement Plans and deferred compensation plans and trusts used to
         fund those plans (including, for example, plans qualified or created
         under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue
         Code), in each case if those purchases are made through a broker,
         agent or other financial intermediary that has made special
         arrangements with the Distributor for those purchases.
|_|   A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
         Advisors) whose Class B or Class C shares of a Former Quest for
         Value Fund were exchanged for Class A shares of that Fund due to the
         termination of the Class B and Class C TRAC-2000 program on November
         24, 1995.
|_|   A qualified Retirement Plan that had agreed with the former Quest for
         Value Advisors to purchase shares of any of the Former Quest for
         Value Funds at net asset value, with such shares to be held through
         DCXchange, a sub-transfer agency mutual fund clearinghouse, if that
         arrangement was consummated and share purchases commenced by
         December 31, 1996.

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

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

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

The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
|_|   To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|   Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account
         Rules and Policies," in the applicable fund Prospectus).
|_|   For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
         1) Following the death or disability (as defined in the Internal

            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established.

         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact.
         Hardship withdrawals, as defined in the plan.6
         5) Under a Qualified Domestic Relations Order, as defined in the
            Internal Revenue Code, or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.
         9) Separation from service.7
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) if the plan has made special
            arrangements with the Distributor.
         11)      Plan termination or "in-service distributions," if the
            redemption proceeds are rolled over directly to an
            OppenheimerFunds-sponsored IRA.
|_|   For distributions from 401(k) plans sponsored by broker-dealers that
         have entered into a special agreement with the Distributor allowing
         this waiver.
|_|   For distributions from retirement plans that have $10 million or more
         in plan assets and that have entered into a special agreement with
         the Distributor.
|_|   For distributions from retirement plans which are part of a retirement
         plan product or platform offered by certain banks, broker-dealers,
         financial advisors, insurance companies or record keepers which have
         entered into a special agreement with the Distributor.
III.    Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer
                                         Funds
- ---------------------------------------------------------------------------------

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

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases:
|_|   Shares redeemed involuntarily, as described in "Shareholder Account
         Rules and Policies," in the applicable Prospectus.
|_|   Redemptions from accounts other than Retirement Plans following the

         death or disability of the last surviving shareholder. The death or
         disability must have occurred after the account was established, and
         for disability you must provide evidence of a determination of
         disability by the Social Security Administration.
      The contingent deferred sales charges are generally not waived
         following the death or disability of a grantor or trustee for a
         trust account. The contingent deferred sales charges will only be
         waived in the limited case of the death of the trustee of a grantor
         trust or revocable living trust for which the trustee is also the
         sole beneficiary. The death or disability must have occurred after
         the account was established, and for disability you must provide
         evidence of a determination of disability by the Social Security
         Administration.

|_|   Distributions from accounts for which the broker-dealer of record has
         entered into a special agreement with the Distributor allowing this
         waiver.
|_|   Redemptions of Class B shares held by Retirement Plans whose records
         are maintained on a daily valuation basis by Merrill Lynch or an
         independent record keeper under a contract with Merrill Lynch.
|_|   Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
         accounts of clients of financial institutions that have entered into
         a special arrangement with the Distributor for this purpose.
|_|   Redemptions requested in writing by a Retirement Plan sponsor of Class
         C shares of an Oppenheimer fund in amounts of $500,000 or more and
         made more than 12 months after the Retirement Plan's first purchase
         of Class C shares, if the redemption proceeds are invested in Class
         N shares of one or more Oppenheimer funds.
|_|   Distributions8 from Retirement Plans or other employee benefit plans
         for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established in an Oppenheimer fund.
         2) To return excess contributions made to a participant's account.
         3) To return contributions made due to a mistake of fact.
         4) To make hardship withdrawals, as defined in the plan.9
         5) To make distributions required under a Qualified Domestic
            Relations Order or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.10
         9) On account of the participant's separation from service.11
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) offered as an investment option in a
            Retirement Plan if the plan has made special arrangements with
            the Distributor.
         11)      Distributions made on account of a plan termination or
            "in-service" distributions, if the redemption proceeds are rolled
            over directly to an OppenheimerFunds-sponsored IRA.

         12)      For distributions from a participant's account under an
            Automatic Withdrawal Plan after the participant reaches age 59 1/2,
            as long as the aggregate value of the distributions does not
            exceed 10% of the account's value, adjusted annually.

         13)      Redemptions of Class B shares under an Automatic Withdrawal
            Plan for an account other than a Retirement Plan, if the
            aggregate value of the redeemed shares does not exceed 10% of the
            account's value, adjusted annually.
         14)      For distributions from 401(k) plans sponsored by
            broker-dealers that have entered into a special arrangement with
            the Distributor allowing this waiver.

|_|   Redemptions of Class B shares or Class C shares under an Automatic
         Withdrawal Plan from an account other than a Retirement Plan if the
         aggregate value of the redeemed shares does not exceed 10% of the
         account's value annually.


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

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






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

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

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

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

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

A. Reductions or Waivers of Class A Sales Charges.

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

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

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

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







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

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

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

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

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

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

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

o     liquidation of a shareholder's account if the aggregate net asset value
            of shares held in the account is less than the required minimum
            account value.


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

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

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

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

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

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

      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;
   as tax-free returns of excess contributions to such retirement or employee
      benefit plans;
   5) in whole or in part, in connection with shares sold to any state,
      county, or city, or any instrumentality, department, authority, or
      agency thereof, that is prohibited by applicable investment laws from
      paying a sales charge or concession in connection with the purchase of
      shares of any registered investment management company;
   6) in connection with the redemption of shares of the Fund due to a
      combination with another investment company by virtue of a merger,
      acquisition or similar reorganization transaction;
   7) in connection with the Fund's right to involuntarily redeem or
      liquidate the Fund;
   8) in connection with automatic redemptions of Class A shares and Class B
      shares in certain retirement plan accounts pursuant to an Automatic
      Withdrawal Plan but limited to no more than 12% of the original value
      annually; or

   9) as involuntary redemptions of shares by operation of law, or under
      procedures set forth in the Fund's Articles of Incorporation, or as
      adopted by the Board of Directors of the Fund.

VI.       Special Reduced Sales Charge for Former Shareholders of Advance
                                America Funds, Inc.
- ------------------------------------------------------------------------------

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

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









Oppenheimer International Bond Fund

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

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

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

Transfer Agent
      OppenheimerFunds Services

      P.O. Box 5270
      Denver, Colorado 80217
      1.800.CALL.OPP (225.5677)


Custodian Bank

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


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


Counsel to the Funds

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


Counsel to the Independent Trustees
      Mayer, Brown, Rowe & Maw
      1675 Broadway
      New York, New York 10019
1234
PX880.001.1102


- --------

                                                             1 Mrs. Hamilton and Mr. Malone were elected as Trustees to the Board II Funds
                                                                                        effective June 1, 2002.

1  In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund and who do not
have any direct or indirect financial interest in the operation of the
distribution plan or any agreement under the plan.
1 Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
2 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred sales
charges mean the Fund's Early Withdrawal Charges and references to
"redemptions" mean "repurchases" of shares.
3 An "employee benefit plan" means any plan or arrangement, whether or not it
is "qualified" under the Internal Revenue Code, under which Class N shares of
an Oppenheimer fund or funds are purchased by a fiduciary or other
administrator for the account of participants who are employees of a single
employer or of affiliated employers. These may include, for example, medical
savings accounts, payroll deduction plans or similar plans. The fund accounts
must be registered in the name of the fiduciary or administrator purchasing
the shares for the benefit of participants in the plan.
4 The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship,
members and employees of a partnership or association or other organized
group of persons (the members of which may include other groups), if the
group has made special arrangements with the Distributor and all members of
the group participating in (or who are eligible to participate in) the plan
purchase shares of an Oppenheimer fund or funds through a single investment
dealer, broker or other financial institution designated by the group. Such
plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans
other than plans for public school employees. The term "Group Retirement
Plan" also includes qualified retirement plans and non-qualified deferred
compensation plans and IRAs that purchase shares of an Oppenheimer fund or
funds through a single investment dealer, broker or other financial
institution that has made special arrangements with the Distributor.
5 However, that concession will not be paid on purchases of shares in amounts
of $1 million or more (including any right of accumulation) by a Retirement
Plan that pays for the purchase with the redemption proceeds of Class C
shares of one or more Oppenheimer funds held by the Plan for more than one
year.
6 This provision does not apply to IRAs.
7 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.
8 The distribution must be requested prior to Plan termination or the
elimination of the Oppenheimer funds as an investment option under the Plan.
9 This provision does not apply to IRAs.

10 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan.
11 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.

                      OPPENHEIMER INTERNATIONAL BOND FUND

                                   FORM N-1A

                                    PART C

                               OTHER INFORMATION


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

(a)   (i)   Amended  and  Restated   Declaration  of  Trust  dated   11/14/00:
Previously filed with Registrant's  Post- Effective  Amendment No. 8, 1/17/01,
and incorporated herein by reference.

      (ii)  Amendment  Number 1 dated  8/27/02  to the  Amended  and  Restated
Declaration of Trust dated 11/14/00: Filed herewith.

(b)   By-Laws as amended and restated  through  October 24,  2000:  Previously
filed  with  Registrant's  Post-  Effective  Amendment  No.  9,  1/25/02,  and
incorporated herein by reference.

(c)   (i)   Specimen  Class  A  Share   Certificate:   Previously  filed  with
            Registrant's  Post-  Effective  Amendment  No.  9,  1/25/02,   and
            incorporated herein by reference.

      (ii)  Specimen  Class  B  Share   Certificate:   Previously  filed  with
            Registrant's  Post-  Effective  Amendment  No.  9,  1/25/02,   and
            incorporated herein by reference.

      Specimen Class C Share  Certificate:  Previously filed with Registrant's
            Post- Effective Amendment No. 9, 1/25/02,  and incorporated herein
            by reference.

      Specimen Class N Share  Certificate:  Previously filed with Registrant's
            Post- Effective Amendment No. 9, 1/25/02,  and incorporated herein
            by reference.


(d)   Investment Advisory Agreement dated 6/5/95: Previously filed with
Registrant's Pre-Effective Amendment No. 1, 5/16/95, and incorporated herein
by reference.

(e)   (i)   General Distributor's Agreement dated 6/5/95: Previously filed
with Registrant's Pre-Effective Amendment No. 1, 5/16/95, and incorporated
herein by reference.

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

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

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

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

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

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


(g)   Global Custody Agreement dated August 16, 2002 between Registrant and
JP Morgan Chase Bank:  Filed herewith.

(h)   Not applicable.


(i)   Opinion and Consent of Counsel dated 5/25/95: Previously filed with
Registrant's Pre-Effective Amendment No. 2, 5/30/95, and incorporated herein
by reference.

(j)   Independent Auditors' Consent: filed herewith.

(k)   Not applicable.

(l)   Investment Letter dated 5/30/95 from OppenheimerFunds, Inc. (then named
Oppenheimer Management Corporation) to Registrant: Previously filed with
Registrant's Pre-Effective Amendment No. 2, 5/30/95, and incorporated herein
by reference.


(m)   (i)   Amended and Restated Service Plan and Agreement dated 4/23/02 for
Class A shares under Rule 12b-1: Filed herewith.


      (ii)  Amended and Restated Distribution and Service Plan and Agreement
for Class B shares, dated 2/24/98, under Rule 12b-1: Previously filed with
Post-Effective Amendment No. 4 to Registration Statement, 11/25/98, and
incorporated herein by reference.


      (iii) Amended and Restated Distribution and Service Plan and Agreement
for Class C shares, dated 2/24/98, under Rule 12b-1: Previously filed with
Post-Effective Amendment No. 4 to Registration Statement, 11/25/98, and
incorporated herein by reference.

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

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

(o)    Powers of Attorney for all Trustees/Directors and Officers except for
Beverly L. Hamilton, Robert J. Malone, Edward Cameron, F. William Marshall,
Jr., and John Murphy (including Certified Board Resolutions): Previously
filed with Pre-Effective Amendment No. 2 to the Registration Statement of
Oppenheimer Select Managers (Reg. No. 333-49774), 2/8/01, and incorporated
herein by reference.

       (i) Powers of Attorney for Edward Cameron, F. William Marshall Jr. and
John Murphy: Previously filed with Post-Effective Amendment No. 45 to the
Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076),
10/26/01, and incorporated herein by reference.

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

(p)   Amended and Restated Code of Ethics of the Oppenheimer Funds dated May
15, 2002 under Rule 17j-1 of the Investment Company Act of 1940: Previously
filed with Post-Effective Amendment No. 28 to the Registration Statement of
Oppenheimer Discovery Fund (Reg. No. 33-371), 11/22/02, and incorporated
herein by reference.


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

None.

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

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

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
Item 26. - Business and Other Connections of the Investment Adviser

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

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

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

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

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

Timothy L. Abbuhl,             None
Assistant Vice President

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

Amy B. Adamshick,              None
Vice President

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

Charles E. Albers,             None
Senior Vice President

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

Edward J. Amberger,            None
Assistant Vice President

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

Erik Anderson,                 None
Assistant Vice President

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

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

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

Hany S. Ayad,                  None
Assistant Vice President

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

Victor W. Babin,               None
Senior Vice President

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

Bruce L. Bartlett,             None
Senior Vice President

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

John Michael Banta,            None
Assistant Vice President

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

Lerae A. Barela,               None
Assistant Vice President

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

George Batejan,                None
Executive Vice President/
Chief Information Officer

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

Kevin Baum,                    None
Vice President

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

Jeff Baumgartner,              None
Assistant Vice President

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

Connie Bechtolt,               None
Assistant Vice President

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

Robert Behal                   Assistant Vice President of HarbourView Asset
Assistant Vice President       Management Corporation. Formerly, Associate
                               Director at MetLife (Jan 2000-May 2000).

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

Kathleen Beichert,             Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.

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

Erik S. Berg,                  None
Assistant Vice President

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

Rajeev Bhaman,                 None
Vice President

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

Mark Binning,                  None
Assistant Vice President

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

Robert J. Bishop,              None
Vice President

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

John R. Blomfield,             None
Vice President

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

Chad Boll,                     None
Assistant Vice President

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

Lowell Scott Brooks,           Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.

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

Richard Buckmaster,            None
Vice President

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

Mark Burns,                    Formerly a Marketing Manager with Alliance
Assistant Vice President       Capital Management (October 1999-April 2001).

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

Bruce Burroughs                None
Vice President

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

Claudia Calich,                None
Assistant Vice President

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

Michael A. Carbuto,            None
Vice President

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

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

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

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

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

Peter V. Cocuzza,              None
Vice President

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

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

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

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

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

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

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

John M. Davis,                 Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.

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

Robert A. Densen,              None
Senior Vice President

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

Ruggero de'Rossi,              Vice President of HarbourView Asset Management
Vice President                 Corporation.

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

Craig P. Dinsell,              None
Executive Vice President

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

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

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

Rebecca K. Dolan               None
Vice President

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

Steven D. Dombrower,           Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.

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

Bruce C. Dunbar,               None
Vice President

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

Richard Edmiston,              None
Assistant Vice President

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

Daniel R. Engstrom,            None
Assistant Vice President

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

Armand B. Erpf,                None
Assistant Vice President

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

James Robert Erven             Formerly an Assistant Vice President/Senior
Assistant Vice President       Trader with Morgan Stanley Investment Management
                               (1999-April 2002).

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

George R. Evans,               None
Vice President

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

Edward N. Everett,             None
Vice President

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

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

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

Scott T. Farrar,               Vice President of OFI Private Investments, Inc.
Vice President

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

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

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

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

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

P. Lyman Foster,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.

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

David Foxhoven,                Assistant Vice President of OppenheimerFunds
Assistant Vice President       Legacy Program.

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

Colleen M. Franca,             None
Assistant Vice President

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

Crystal French,                None
Vice President

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

Dan P. Gangemi,                None
Vice President

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

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

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

Subrata Ghose,                 None
Assistant Vice President

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

Charles W. Gilbert,            None
Assistant Vice President

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

Alan C. Gilston,               None
Vice President

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

Sharon M. Giordano,            None
Assistant Vice President

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

Jill E. Glazerman,             None
Vice President

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

Paul M. Goldenberg,            None
Vice President

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

Mike Goldverg,                 None
Assistant Vice President

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

Bejamin J. Gord,               Vice President of HarbourView Asset Management
Vice President                 Corporation. Formerly Executive Director with
                               Miller Anderson Sherrerd, a division of Morgan
                               Stanley Investment Management. (April 1992-March
                               2002).

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

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

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

Robert Grill,                  None
Senior Vice President

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

Robert Guy,                    None
Senior Vice President

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

David Hager,                   None
Vice President

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

Robert Haley,                  None
Assistant Vice President

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

Marilyn Hall,                  None
Vice President

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

Kelly Haney,                   None
Assistant Vice President

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

Thomas B. Hayes,               None
Vice President

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

Dorothy F. Hirshman,           None
Vice President

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

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

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

Scott T. Huebl,                Assistant Vice President of OppenheimerFunds
Vice President                 Legacy Program.

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

Margaret Hui,                  None
Assistant Vice President

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

John Huttlin,                  None
Vice President

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

James G. Hyland,               None
Assistant Vice President

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

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

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

Kathleen T. Ives,              Vice President of OppenheimerFunds Distributor,
Vice   President  &  Assistant Inc.; Vice President and Assistant Secretary of
Counsel                        Shareholder Services, Inc.; Assistant Secretary
                               of OppenheimerFunds Legacy Program and
                               Shareholder Financial Services, Inc.

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

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

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

Frank V. Jennings,             None
Vice President

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

John Jennings,                 None
Vice President

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

John Michael Johnson,          Formerly Vice President, Senior
Assistant Vice President       Analyst/Portfolio Manager at Aladdin Capital
                               Holdings Inc. (February 2001-May 2002) prior to
                               which he was Vice President and Senior Analyst
                               at Merrill Lynch Investment Managers (October
                               1996-February 2001).

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

Lewis A. Kamman,               None
Vice President

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

Jennifer E. Kane,              None.
Assistant Vice President

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

Lynn O. Keeshan,               None
Senior Vice President

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

Thomas W. Keffer,              None
Senior Vice President

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

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

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

Michael Keogh,                 None
Vice President

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

Garrett K. Kolb,               None
Assistant Vice President

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

Walter G. Konops,              None
Assistant Vice President

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

Avram D. Kornberg,             None
Senior Vice President

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

James Kourkoulakos,            None
Vice President

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

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

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

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

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

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

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

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

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

Michael S. Levine,             None
Vice President

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

Gang Li,                       None
Assistant Vice President

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

Shanquan Li,                   None
Vice President

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

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

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

Bill Linden,                   None
Assistant Vice President

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

Malissa B. Lischin,            Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.

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

Reed Litcher,                  None
Vice President

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

David P. Lolli,                None
Assistant Vice President

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

Daniel G. Loughran             None
Vice   President:    Rochester
Division

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

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

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

Steve Macchia,                 None
Vice President

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

Angelo G. Manioudakis          Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation. Formerly Executive
                               Director and portfolio manager for Miller,
                               Anderson & Sherrerd, a division of Morgan
                               Stanley Investment Management (August 1993-April
                               2002).

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

Marianne Manzolillo,           None
Assistant Vice President

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

Philip T. Masterson,           None
Vice   President  &  Assistant
Counsel

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

Elizabeth McCormack,           Assistant Secretary of HarbourView Asset
Assistant Vice President       Management Corporation.

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

Charles L. McKenzie,           Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation and OFI Institutional
                               Asset Management Corporation.

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

Lisa Migan,                    None
Assistant Vice President

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

Andrew J. Mika,                None
Senior Vice President

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

Joy Milan,                     None
Vice President

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

Denis R. Molleur,              None
Vice    President   &   Senior
Counsel

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

Nikolaos D. Monoyios,          None
Vice President

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

Charles Moon,                  Vice President of HarbourView Asset Management
Vice President                 Corporation. Formerly an Executive Director and
                               Portfolio Manager with Miller Anderson &
                               Sherrerd, a division of Morgan Stanley
                               Investment Management (June 1999-March 2002).

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

John Murphy,                   Director of OppenheimerFunds Distributor, Inc.,
Chairman,   President,   Chief Centennial Asset Management Corporation,
Executive Officer & Director   HarbourView Asset Management Corporation, OFI
                               Private Investments, Inc., OFI Institutional
                               Asset Management, Inc. and Tremont Advisers,
                               Inc.; Director (Class A) of Trinity Investments
                               Management Corporation; President and Director
                               of Oppenheimer Acquisition Corp., Oppenheimer
                               Partnership Holdings, Inc., Oppenheimer Real
                               Asset Management, Inc.; Chairman and Director of
                               Shareholder Financial Services, Inc. and
                               Shareholder Services, Inc.; Executive Vice
                               President of MassMutual Life Insurance Company;
                               director of DLB Acquisition Corp.

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Thomas J. Murray,              None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kenneth Nadler,                None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David Negri,                   Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Richard Nichols,               None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Barbara Niederbrach,           None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Raymond C. Olson,              Assistant Vice President and Treasurer of
Assistant Vice President       OppenheimerFunds Distributor, Inc.; Treasurer of
                               Centennial Asset Management Corporation.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Frank J. Pavlak,               None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David P. Pellegrino,           None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Allison C. Pells,              None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
James F. Phillips,             None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Raghaw Prasad,                 Formerly Associate Vice President with
Assistant Vice President       Prudential Securities New York (January
                               2001-November 2001) prior to which he was a
                               Director/Analytics with Prudential Investments
                               New Jersey (April 1997-November 2001).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jane C. Putnam,                None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael E. Quinn,              None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Julie S. Radtke,               None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Norma J. Rapini,               None
Assistant Vice President:
Rochester Division
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Thomas P. Reedy,               Vice President (since April 1999) of HarbourView
Vice President                 Asset Management Corporation.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Brian N. Reid,                 Formerly an Assistant Vice President with Eaton
Assistant Vice President       Vance Management (January 2000-January 2002).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kristina Richardson,           None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David Robertson,               Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Rob Robis,                     None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Antoinette Rodriguez,          None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jeffrey S. Rosen,              None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Richard H. Rubinstein,         None
Senior Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
James H. Ruff,                 President and Director of OppenheimerFunds
Executive Vice President       Distributor, Inc. and Centennial Asset
                               Management Corporation; Executive Vice President
                               of OFI Private Investments, Inc.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Andrew Ruotolo                 Director, Treasurer and Chief Financial Officer
Executive  Vice  President and of Oppenheimer Acquisition Corp.; President and
Director                       director of Shareholder Services, Inc. and
                               Shareholder Financial Services, Inc.; Director
                               (Class A) of Trinity Investment Management
                               Corporation; Chairman of the Board, Chief
                               Executive Officer, President and Director or OFI
                               Trust Company.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Rohit Sah,                     None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Valerie Sanders,               None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Tricia Scarlata,               Formerly, Marketing Manager of OppenheimerFunds,
Assistant Vice President       Inc. (April 2001-August 2002); Client Service
                               Support Manager for Sanford C. Bernstein
                               (December 1999-April 2001)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jeffrey R. Schneider,          None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Ellen P. Schoenfeld,           None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David Schultz,                 Chief Executive Officer, President & Senior
Senior Vice President          Managing Director & Director of OFI
                               Institutional Asset Management, Inc. and
                               HarbourView Asset Management Corporation;
                               Director (Class A) and Chairman of Trinity
                               Investment Management Corporation; Director of
                               Oppenheimer Trust Company.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Scott A. Schwegel,             None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Allan P. Sedmak                None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jennifer L. Sexton,            Vice President of OFI Private Investments, Inc.
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Martha A. Shapiro,             None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Navin Sharma,                  Formerly, Manager at BNP Paribas Cooper Neff
Vice President                 Advisors (May 2001-April 2002) prior to which he
                               was Development Manager at Reality
                               Online/Reuters America Inc. (June 2000-May 2001).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Steven J. Sheerin,             Formerly consultant with Pricewaterhouse Coopers
Vice President                 (November 2000-May 2001) prior to which he was a
                               Vice President of Merrill Lynch Pierce Fenner &
                               Smith, Inc. (July 1998-October 2000).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Bonnie Sherman,                None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David C. Sitgreaves,           None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Edward James Sivigny           Formerly a Director for ABN Amro Securities
Assistant Vice President       (July 2001-July 2002) prior to which he was
                               Associate Director for Barclays Capital
                               (1998-July 2001).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Enrique H. Smith,              Formerly a business analyst with Goldman Sachs
Assistant Vice President       (August 1999-August 2001).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Richard A. Soper,              None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Louis Sortino,                 None
Assistant Vice President:
Rochester Division
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Keith J. Spencer,              None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Marco Antonio Spinar,          Formerly, Director of Business Operations at AOL
Assistant Vice President       Time Warner, AOL Time Warner Book Group (June
                               2000-December 2001).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Richard A. Stein,              None
Vice   President:    Rochester
Division
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Arthur P. Steinmetz,           Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jayne M. Stevlingson,          None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Gregory J. Stitt,              None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John P. Stoma,                 Senior Vice President of OppenheimerFunds
Senior Vice President          Distributor, Inc.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Wayne Strauss,                 None
Assistant Vice President:
Rochester Division
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael Stricker,              None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Deborah A. Sullivan,           Since December 2001, Secretary of Oppenheimer
Assistant Vice President,      Trust Company.
Assistant Counsel
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Mary Sullivan,                 None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kevin L. Surrett,              None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Susan B. Switzer,              None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Anthony A. Tanner,             None
Vice   President:    Rochester
Division
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Paul Temple,                   Formerly a Vice President of Merrill Lynch
Vice President                 (October 2001-January 2002) prior to which he
                               was a Vice President with OppenheimerFunds, Inc.
                               (May 2000-October 5, 2001).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Vincent Toner,                 None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Eamon Tubridy,                 None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
James F. Turner,               Formerly portfolio manager for Technology
Vice President                 Crossover Ventures (May 2000-March 2001).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Cameron Ullyat,                None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Angela Utaro,                  None
Assistant Vice President:
Rochester Division
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Mark S. Vandehey,              Vice President of OppenheimerFunds Distributor,
Vice President                 Inc., Centennial Asset Management Corporation
                               and Shareholder Services, Inc.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maureen Van Norstrand,         None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Vincent Vermette,              Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Phillip F. Vottiero,           None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Samuel Sloan Walker,           Vice President of HarbourView Asset Management
Vice President                 Corporation.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Teresa M. Ward,                Vice President of OppenheimerFunds Distributor,
Vice President                 Inc.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jerry A. Webman,               Senior Vice President of HarbourView Asset
Senior Vice President          Management Corporation.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Christopher D. Weiler,         None
Assistant Vice President:
Rochester Division
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Barry D. Weiss,                None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Melissa Lynn Weiss,            Formerly an Associate at Hoguet Newman & Regal,
Vice President                 LLP (January 1998-May 2002).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Christine Wells,               None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Joseph J. Welsh,               Vice President of HarbourView Asset Management
Vice President                 Corporation.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Diederick Wermolder,           Director of OppenheimerFunds International Ltd.;
Vice President                 Senior Vice President (Managing Director of the
                               International Division) of OFI Institutional
                               Asset Management, Inc.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Catherine M. White,            Assistant Vice President of OppenheimerFunds
Assistant Vice President       Distributor, Inc. Formerly, Assistant Vice
                               President with Gruntal & Co. LLC (September 1998
                               - October 2000); member of the American Society
                               of Pension Actuaries (ASPA) since 1995.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
William L. Wilby,              Formerly Senior Vice President of HarbourView
Senior Vice President          Asset Management Corporation (May 1999-July
                               2002).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Donna M. Winn,                 President, Chief Executive Officer and Director
Senior Vice President          of OFI Private Investments, Inc.; Director and
                               President of OppenheimerFunds Legacy Program;
                               Senior Vice President of OppenheimerFunds
                               Distributor, Inc.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kenneth Winston,               Principal at Richards & Tierney, Inc. (until
Senior Vice President          June 2001).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Brian W. Wixted,               Treasurer of HarbourView Asset Management
Senior Vice President and      Corporation; OppenheimerFunds International
Treasurer                      Ltd., Oppenheimer Partnership Holdings, Inc.,
                               Oppenheimer Real Asset Management Corporation,
                               Shareholder Services, Inc., Shareholder
                               Financial Services, Inc., OFI Private
                               Investments, Inc. and OFI Institutional Asset
                               Management, Inc.; Treasurer and Chief Financial
                               Officer of Oppenheimer Trust Company; Assistant
                               Treasurer of Oppenheimer Acquisition Corp. and
                               OppenheimerFunds Legacy Program.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Carol Wolf,                    Serves on the Board of the Colorado Ballet.
Senior Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kurt Wolfgruber,               Director of Tremont Advisers, Inc. (as of
Senior Vice President          January 2002).
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Caleb C. Wong,                 None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Edward C. Yoensky,             None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Robert G. Zack                 General Counsel and Director of OppenheimerFunds
Senior Vice President and      Distributor, Inc.; General Counsel of Centennial
General Counsel                Asset Management Corporation; Senior Vice
                               President and General Counsel of HarbourView
                               Asset Management Corporation and OFI
                               Institutional Asset Management, Inc.; Senior
                               Vice President, General Counsel and Director of
                               Shareholder Financial Services, Inc.,
                               Shareholder Services, Inc., OFI Private
                               Investments, Inc. and Oppenheimer Trust Company;
                               Vice President and Director of Oppenheimer
                               Partnership Holdings, Inc.; Secretary of OAC
                               Acquisition Corp.; Director and Assistant
                               Secretary of OppenheimerFunds International
                               Ltd.; Director of Oppenheimer Real Asset
                               Management, Inc.; Vice President of
                               OppenheimerFunds Legacy Program.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jill Zachman,                  None
Vice   President:    Rochester
Division
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Neal A. Zamore,                None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Mark D. Zavanelli,             None
Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Alex Zhou,                     None
Assistant Vice President
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Arthur J. Zimmer,              Senior Vice President (since April 1999) of
Senior Vice President          HarbourView Asset Management Corporation.
- ---------------------------------------------------------------------------------

The Oppenheimer Funds include the following:

Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Limited Term New York Municipal Fund (Rochester Portfolio Series)
Oppenheimer Bond Fund (a series of Oppenheimer Integrity Funds)
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Capital Preservation Fund
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Concentrated Growth Fund
Oppenheimer Convertible Securities Fund (Bond Fund Series)
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Europe Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer High Yield Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer  Limited Term Municipal  Fund (a series of  Oppenheimer  Municipal
Fund)
Oppenheimer Main Street Growth & Income Fund (a series of Oppenheimer Main
   Street Funds, Inc.
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer MidCap Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multiple Strategies Fund
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust (3 series):
     Oppenheimer New Jersey Municipal Fund
     Oppenheimer Pennsylvania Municipal Fund
     Oppenheimer Rochester National Municipals
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds (3 series)
     Oppenheimer Quest Balanced Value Fund
     Oppenheimer Quest Opportunity Value Fund
     Oppenheimer Small Cap Value Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Real Estate Fund
Oppenheimer Select Managers (6 series):
     Gartmore Millennium Growth Fund II
     Jennison Growth Fund
     Mercury Advisors Focus Growth Fund
     Mercury Advisors S&P 500 Index Fund
     QM Active Balanced Fund
     Salomon Brothers Capital Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Series Fund, Inc. (2 series):
     Oppenheimer Disciplined Allocation Fund
     Oppenheimer Value Fund
Oppenheimer Special Value Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Tremont Market Neutral Fund LLC
Oppenheimer Tremont Opportunity Fund LLC
Oppenheimer Trinity Core Fund
Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Trinity Value Fund
Oppenheimer U.S. Government Trust
Oppenheimer Variable Account Funds (10 series):
     Oppenheimer Aggressive Growth Fund/VA
     Oppenheimer Bond Fund/VA
     Oppenheimer Capital Appreciation Fund/VA
     Oppenheimer Global Securities Fund/VA
     Oppenheimer High Income Fund/VA
     Oppenheimer Main Street Growth & Income Fund/VA
     Oppenheimer Main Street Small Cap Fund/VA
     Oppenheimer Money Fund/VA
     Oppenheimer Multiple Strategies Fund/VA
     Oppenheimer Strategic Bond Fund/VA
Panorama Series Fund, Inc. (4 series):
     Growth Portfolio
     Government Securities Portfolio
     Oppenheimer International Growth Fund/VA
     Total Return Portfolio
Rochester Fund Municipals

The address of the  Oppenheimer  funds  listed  above,  Shareholder  Financial
Services,  Inc.,  Shareholder  Services,  Inc.,   OppenheimerFunds   Services,
Centennial   Asset   Management   Corporation,   Centennial   Capital   Corp.,
Oppenheimer Real Asset Management,  Inc. and  OppenheimerFunds  Legacy Program
is 6803 South Tucson Way, Centennial, Colorado 80112-3924.

The address of OppenheimerFunds,  Inc.,  OppenheimerFunds  Distributor,  Inc.,
HarbourView Asset Management  Corporation,  Oppenheimer  Partnership Holdings,
Inc.,  Oppenheimer  Acquisition  Corp.,  OFI Private  Investments,  Inc.,  OFI
Institutional  Asset  Management,  Inc. and  Oppenheimer  Trust Company is 498
Seventh Avenue, New York, New York 10018.

The address of Tremont  Advisers,  Inc. is 555 Theodore  Fremd  Avenue,  Suite
206-C, Rye, New York 10580.

The  address  of  OppenheimerFunds  International  Ltd.  is Bloc C, Irish Life
Center, Lower Abbey Street, Dublin 1, Ireland.

The address of Trinity Investment  Management  Corporation is 301 North Spring
Street, Bellefonte, Pennsylvania 16823.

Item 27. Principal Underwriter
- ------------------------------

(a)   OppenheimerFunds Distributor, Inc. is the Distributor of the
Registrant's shares. It is also the Distributor of each of the other
registered open-end investment companies for which OppenheimerFunds, Inc. is
the investment adviser, as described in Part A and B of this Registration
Statement and listed in Item 26(b) above (except Oppenheimer Multi-Sector
Income Trust and Panorama Series Fund, Inc.) and for MassMutual Institutional
Funds.

(b)   The directors  and officers of the  Registrant's  principal  underwriter
are:

- ---------------------------------------------------------------------------------
Name & Principal                Position & Office         Position and Office
Business Address                with Underwriter          with Registrant
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Robert Agan(1)                  Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Janette Aprilante(1)            Secretary                 None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jason R. Bach                   Vice President            None
3264 Winthrop Cricle
Marietta, GA 30067
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kathleen Beichert(1)            Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Gabriella Bercze(2)             Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Douglas S. Blankenship          Vice President            None
17011 Woodbark
Spring, TX 77379
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Tracey Blinzler(1)              Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kevin Bonner(1)                 Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
L. Scott Brooks(2)              Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kevin E. Brosmith               Senior Vice President     None
170 Phillip Court
Lake Bluff, IL 60044
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jeffrey W. Bryan(2)             Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Susan Burton                    Vice President            None
412 Towne Green Circle
Addison, TX 75001
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kathleen Mary Byron             Vice President            None
6 Dahlia Drive
Irvine, CA 92618
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Robert A. Coli                  Vice President            None
12 White Tail Lane
Bedminster, NJ 07921
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jill E. Crockett(2)             Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Jeffrey D. Damia(2)             Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John Davis(2)                   Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Stephen J. Demetrovits(2)       Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Joseph A. DiMauro               Vice President            None
244 McKinley Avenue
Grosse Pointe Farms, MI 48236
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Steven Dombrower(w)             Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
George P. Dougherty             Vice President            None
4090 Redbud Circle
Doylestown, PA 18901
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Cliff H. Dunteman               Vice President            None
1196 Fieldstone Dr.
Crystal Lake, IL 60014-1642
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John Eiler(2)                   Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kent M. Elwell                  Vice President            None
35 Crown Terrace
Yardley, PA 19067
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Gregg A. Everett                Vice President            None
7124 Trysail Circle
Tampa, FL 33607
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
George R. Fahey                 Vice President            None
9 Townview Court
Flemington, NJ 08822
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Eric C. Fallon                  Vice President            None
10 Worth Circle
Newton, MA 02458
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Katherine P. Feld(2)            Vice President            Assistant Secretary
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Mark J. Ferro(2)                Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Ronald H. Fielding(3)           Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Patrick W. Flynn (1)            Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John E. Forrest(2)              Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John ("J) Fortuna(2)            Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
P. Lyman Foster(2)              Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Luiggino J. Galleto             Vice President            None
10302 Riesling Court
Charlotte, NC 28277
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michelle M. Gans                Vice President            None
2700 Polk Street, Apt. #9
San Francisco, CA 94109
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Lucio Giliberti                 Vice President            None
6 Cyndi Court
Flemington, NJ 08822
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Raquel Granahan(2)              Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Ralph Grant(2)                  Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael D. Guman                Vice President            None
3913 Pleasant Avenue
Allentown, PA 18103
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Tonya N. Hammet                 Assistant Vice President  None
2612 W. Grand Reserve Circle
#227
Clearwater, FL 33759
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Clifford W. Heidinger           Vice President            None
90 Gates Street
Portsmouth, NH 03801
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Phillipe D. Hemery              Vice President            None
184 Park Avenue
Rochester, NY 14607
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Elyse R. Jurman Herman          Vice President            None
1194 Hillsboro Mile, Villa 51
Hillsboro Beach, FL  33062
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Wendy G. Hetson                 Vice President            None
4 Craig Street
Jericho, NY 11753
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kristen L. Heyburn              Vice President            None
2315 Mimosa Drive #2
Houston, TX 77019
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
William E. Hortz(2)             Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Edward Hrybenko(2)              Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Brian F. Husch(2)               Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Richard L. Hymes(2)             Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kathleen T. Ives(1)             Vice President            Assistant Secretary
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Eric K. Johnson                 Vice President            None
28 Oxford Avenue
Mill Valley, CA 94941
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Mark D. Johnson                 Vice President            None
15792 Scenic Green Court
Chesterfield, MO 63017
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John S. Kavanaugh               Vice President            None
2 Cervantes, Apt. #301
San Francisco, CA 94123
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Christina J. Keller(2)          Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Brian G. Kelly                  Vice President            None
60 Larkspur Road
Fairfield, CT 06430
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael Keogh(2)                Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Lisa Klassen(1)                 Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Richard Klein                   Senior Vice President     None
4820 Fremont Avenue So.
Minneapolis, MN 55409
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Richard Knott(2)                Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Dean Kopperud(2)                Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Brent A. Krantz                 Senior Vice President     None
P. O. Box 1313
Seahurst, WA 98062
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David T. Kuzia                  Vice President            None
9697 S. Golden Eagle Dr.
Highlands, CO 80126
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Tracey Lange(2)                 Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Paul R. LeMire                  Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Dawn Lind                       Vice President            None
21 Meadow Lane
Rockville Centre, NY 11570
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Malissa Lischin(2)              Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
James V. Loehle                 Vice President            None
30 Wesley Hill Lane
Warwick, NY 10990
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John J. Lynch                   Vice President            None
5341 Ellsworth
Dallas, TX 75206
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Mark Macken                     Vice President            None
462 Lincoln Avenue
Sayville, NY 11782
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael Magee(2)                Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Steven C. Manns                 Vice President            None
1941 W. Wolfram
Chicago, IL 60657
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Todd A. Marion                  Vice President            None
3 St. Marks Place
Cold Spring Harbor, NY 11724
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David M. Martin                 Vice President            None
10155 S. Woodrose Lane
Highlands Ranch, CO 80126
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
LuAnn Mascia(2)                 Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Theresa-Marie Maynier           Vice President            None
2421 Charlotte Drive
Charlotte, NC 28203
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Anthony P. Mazzariello          Vice President            None
704 Beaver Road
Leetsdale, PA 15056
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John C. McDonough               Vice President            None
3812 Leland Street
Chevy Chase, MD 20815
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kent C. McGowan                 Vice President            None
18424 12th Avenue West
Lynnwood, WA 98037
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John V. Murphy(2)               Director                  President, Principal
                                                          Executive Officer and
                                                          Trustee/Director
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Wendy Jean Murray               Vice President            None
32 Carolin Road
Upper Montclair, NJ 07043
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Christina Nasta(2)              Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kevin P. Neznek(2)              Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Chad V. Noel                    Vice President            None
2408 Eagleridge Drive
Henderson, NV 89014
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Raymond C. Olson(1)             Assistant Vice President  None
                                & Treasurer
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Brian C. Perkes                 Vice President            None
8734 Shady Shore Drive
Frisco, TX 75034
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Charles K. Pettit               Vice President            None
22 Fall Meadow Drive
Pittsford, NY 14534
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
William L. Presutti             Vice President            None
238 Kemp Avenue
Fair Haven, NJ 07704
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Elaine Puleo-Carter(2)          Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Christopher L. Quinson          Vice President            None
19 Cayuga Street
Rye, NY 10580
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Minnie Ra                       Vice President            None
100 Dolores Street, #203
Carmel, CA 93923
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Heather Rabinowitz(2)           Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Gary D. Rakan                   Vice President            None
25031 Woodridge Triangle
Farmington, MI 48335
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael A. Raso                 Vice President            None
16 N. Chatsworth Ave., Apt. 301
Larchmont, NY 10538
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Douglas Rentschler              Vice President            None
677 Middlesex Road
Grosse Pointe Park, MI 48230
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Louis H. Reynolds(2)            Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michelle Simone Richter(2)      Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Ruxandra Risko(2)               Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David R. Robertson(2)           Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Kenneth A. Rosenson             Vice President            None
24753 Bantage Point Terr.
Malibu, CA 90265
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
James H. Ruff(2)                President & Director      None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
William R. Rylander             Vice President            None
85 Evergreen Road
Vernon, CT 06066
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Thomas Sabow(2)                 Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Alfredo Scalzo                  Vice President            None
9616 Lake Chase Island Way
Tampa, FL 33626
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael Sciortino               Vice President            None
785 Beau Chene Drive
Mandeville, LA 70471
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Eric Sharp                      Vice President            None
862 McNeill Circle
Woodland, CA 95695
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Debbie Simon(2)                 Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Douglas Bruce Smith             Vice President            None
808 South 194th Street
Seattle,WA 98148
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
William A. Spetrino             Vice President            None
7631 Yennicook Way
Hudson, OH 44236
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Bryan Stein(2)                  Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
John Stoma(2)                   Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Brian C. Summe                  Vice President            None
239 N. Colony Drive
Edgewood, KY 41017
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael Sussman(2)              Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
George T. Sweeney               Senior Vice President     None
5 Smoke House Lane
Hummelstown, PA 17036
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
 Scott McGregor Tatum           Vice President            None
 704 Inwood
Southlake, TX 76092
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
James Taylor(2)                 Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Martin Telles(2)                Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
David G. Thomas                 Vice President            None
1328 N. Cleveland Street
Arlington, VA 22201
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Bryan K.Toma                    Vice President            None
14575 S. Gallery
Olathe, KS 66062
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Floyd A. Tucker                 Vice President            None
1930 W. Barry Ave., #2
Chicago, IL 60657
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Tanya Valency(2)                Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Mark Vandehey(1)                Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Vincent Vermete                 Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Teresa Ward(1)                  Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Michael J. Weigner              Vice President            None
4905 W. San Nicholas Street
Tampa, FL 33629
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Donn Weise                      Vice President            None
3249 Earlmar Drive
Los Angeles, CA 90064
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Catherine White(2)              Assistant Vice President  None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Thomas Wilson(2)                Vice President            None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Donna Winn(2)                   Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Philip Witkower(2)              Senior Vice President     None
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Cary Patrick Wozniak            Vice President            None
18808 Bravata Court
San Diego, CA 92128
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Gregor D. Yuska                 Vice President            None
16035 Canterbury Estates Dr.
Ellisville, MO 63021
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Robert G. Zack(2)               General Counsel &         Vice President and
                                Director                  Secretary
- ---------------------------------------------------------------------------------

(1)6803 South Tucson Way, Centennial, CO 80112-3924
(2)498 Seventh Avenue, New York, NY 10018
(3)350 Linden Oaks, Rochester, NY 14623

(c)   Not applicable.

Item 28. Location of Accounts and Records
- -----------------------------------------

The  accounts,  books  and  other  documents  required  to  be  maintained  by
Registrant  pursuant to Section  31(a) of the  Investment  Company Act of 1940
and rules  promulgated  thereunder are in the possession of  OppenheimerFunds,
Inc. at its offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.

Item 29. Management Services
- ----------------------------

Not applicable

Item 30. Undertakings
- ---------------------

Not applicable.








                                  SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on
the 21st day of November, 2002.

                              Oppenheimer International Bond Fund

                        By:  /s/ John V. Murphy*
                        ---------------------------------------------
                        John V. Murphy, President,
                        Principal Executive Officer & Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures                   Title                       Date
- ----------                   -----                       ----

/s/ James C. Swain*
- -----------------------      Chairman & Trustee          November 21, 2002
James C. Swain

/s/ John V. Murphy*          President, Principal        November 21, 2002
- ------------------------     Executive Officer & Trustee
John V. Murphy

/s/ Brian W. Wixted*         Treasurer, Principal        November 21, 2002
- -------------------------    Financial &
Brian W. Wixted              Accounting Officer

/s/ William L. Armstrong*    Trustee                     November 21, 2002
- -------------------------------
William L. Armstrong

/s/ Robert G. Avis*          Trustee                     November 21, 2002
- ----------------------
Robert G. Avis

/s/ George Bowen*            Trustee                     November 21, 2002
- ----------------------
George Bowen

/s/ Edward Cameron*          Trustee                     November 21, 2002
- ------------------------
Edward Cameron

/s/ Jon S. Fossel*           Trustee                     November 21, 2002
- --------------------
Jon S. Fossel

/s/ Sam Freedman*            Trustee                     November 21, 2002
- ----------------------
Sam Freedman

/s/ Beverly L. Hamilton*
- ------------------------------Trustee                   November 21, 2002
Beverly L. Hamilton

/s/ Robert J. Malone*
- --------------------------   Trustee                     November 21, 2002
Robert J. Malone

/s/ F. William Marshall, Jr.*   Trustee                  November 21, 2002
- --------------------------------
F. William Marshall, Jr.

*By: /s/ Robert G. Zack
- -----------------------------------------
Robert G. Zack, Attorney-in-Fact






                     Oppenheimer International Bond Fund

                     Registration Statement No. 33-58353


                                EXHIBIT INDEX
                                -------------


Exhibit No.       Description
- -----------       -----------

23(a)(ii)         Amendment Number 1 dated 8/27/02 to the Amended and
                  Restated Declaration of Trust dated 11/14/00.

23(g)             Global Custody Agreement dated August 16, 2002 between
                  Registrant and JP Morgan Chase Bank

23(j)             Independent Auditors' Consent.

23(m)(i)          Amended and Restated Service Plan and Agreement dated
                  4/23/02 for Class A shares under Rule 12b-1.

23(m)(iv)         Amended and Restated Service Plan and Agreement dated
                  10/24/00 for Class N shares under Rule 12b-1.



880ptc_02(b).doc

EX-3.(I)

                                                             Exhibit 23(a)(ii)
                               AMENDMENT No. 1
                                    to the
                  AMENdED AND RESTATED DECLARATION OF TRUST
                                      of
                     OPPENHEIMER INTERNATIONAL BOND FUND

      This  Amendment  Number 1 is made as of August 27,  2002 to the  Amended
and Restated Declaration of Trust of Oppenheimer  International Bond Fund (the
"Trust"),  dated  as of  November  14,  2000,  by  and  among  the  individual
executing this Amendment below on behalf of the Trustees of the Trust.

      WHEREAS,  the Trustees established  Oppenheimer  International Bond Fund
as a trust fund under the laws of the Commonwealth of  Massachusetts,  for the
investment and reinvestment of funds contributed thereto,  under a Declaration
of Trust dated February 2, 1995 as amended and restated November 14, 2000;

      WHEREAS,  the Trustees,  acting pursuant to Section 12 of ARTICLE NINTH,
of the Trust's  Amended and Restated  Declaration  of Trust dated November 14,
2000,  desire to change the registered agent of the Trust as established under
the Amended and Restated Declaration of Trust dated November 14, 2000;

      WHEREAS,  the Trustees,  acting  pursuant to Section 12 of ARTICLE NINTH
of the Trust's  Amended and Restated  Declaration  of Trust dated November 14,
2000,  desire to correct a  typographical  error regarding the number of Share
Classes established under the Amended and Restated  Declaration of Trust dated
November 14, 2000;

      NOW,  THEREFORE,  the Trust's Amended and Restated  Declaration of Trust
is amended as follows:

      Article FIRST of the Trust's  Amended and Restated  Declaration of Trust
is amended by changing the registered agent as follows:

           The   Registered   Agent  of  Service   for   Process  is  CT
      Corporation System, 101 Federal Street, Boston, MA 02110.

      Section 3 of Article  FOURTH,  of the  Trust's  Declaration  of Trust is
hereby  amended by changing the following  words located in the first sentence
that  currently  reads ", and said Shares shall be divided into four Classes,"
to read ", and said Shares shall be divided into five Classes,".

Acting  pursuant to Section 12 of ARTICLE NINTH,  the  undersigned  signs this
amendment by and on behalf of the Trust.

                                             Oppenheimer International Bond
Fund
                                             /s/ Kathleen T. Ives
                                             Kathleen T. Ives,
                                             Assistant Secretary

N1a\880\OrgDocs\880_A&R_DOT(0702-Amend#1).doc

EX-1

                                                              Exhibit 23(m)(i)
                             AMENDED AND RESTATED

                          SERVICE PLAN AND AGREEMENT

                                     with

                      OppenheimerFunds Distributor, Inc.

                            For Class A Shares of

                      Oppenheimer International Bond Fund


This Amended and Restated  SERVICE PLAN AND AGREEMENT (the "Plan") is dated as
of the 23rd day of April, 2002, by and between Oppenheimer  International Bond
Fund (the "Fund") and OppenheimerFunds Distributor, Inc. (the "Distributor").

1.    The Plan.  This Plan is the Fund's written  service plan for its Class A
      ---------
Shares  described  in the Fund's  registration  statement  as of the date this
Plan  takes  effect,  contemplated  by and to  comply  with  Rule  2830 of the
Conduct  Rules  of the  National  Association  of  Securities  Dealers,  Inc.,
pursuant to which the Fund will  reimburse  the  Distributor  for a portion of
its costs incurred in connection with the personal  service and maintenance of
shareholder  accounts  ("Accounts") that hold Class A Shares (the "Shares") of
the Fund.  The Fund may be deemed to be acting as  distributor  of  securities
of which  it is the  issuer,  pursuant  to Rule  12b-1  under  the  Investment
Company  Act of 1940 (the "1940  Act"),  according  to the terms of this Plan.
The  Distributor  is  authorized  under  the  Plan  to  pay  "Recipients,"  as
hereinafter  defined,  for  rendering  services  and  for the  maintenance  of
Accounts.  Such  Recipients are intended to have certain rights as third-party
beneficiaries under this Plan.

2.    Definitions.  As used in this Plan,  the following  terms shall have the
      -----------
following meanings:

      (a)   "Recipient"  shall  mean  any  broker,   dealer,   bank  or  other
      institution  which:  (i) has rendered  services in  connection  with the
      personal  service and  maintenance  of Accounts;  (ii) shall furnish the
      Distributor  (on  behalf  of the  Fund)  with  such  information  as the
      Distributor  shall  reasonably  request to answer such  questions as may
      arise  concerning  such  service;  and  (iii) has been  selected  by the
      Distributor  to receive  payments  under the Plan.  Notwithstanding  the
      foregoing,  a majority  of the Fund's  Board of Trustees  (the  "Board")
      who are not  "interested  persons"  (as defined in the 1940 Act) and who
      have no direct or indirect  financial  interest in the operation of this
      Plan or in any  agreements  relating  to  this  Plan  (the  "Independent
      Trustees") may remove any broker,  dealer,  bank or other institution as
      a  Recipient,   whereupon   such   entity's   rights  as  a  third-party
      beneficiary hereof shall terminate.

      (b)   "Qualified  Holdings" shall mean, as to any Recipient,  all Shares
      owned  beneficially  or of record by: (i) such  Recipient,  or (ii) such
      brokerage or other  customers,  or investment  advisory or other clients
      of such  Recipient  and/or  accounts  as to which  such  Recipient  is a
      fiduciary or custodian or co-fiduciary  or  co-custodian  (collectively,
      the "Customers"),  but in no event shall any such Shares be deemed owned
      by more than one  Recipient  for  purposes  of this  Plan.  In the event
      that two entities would  otherwise  qualify as Recipients as to the same
      Shares,  the Recipient which is the dealer of record on the Fund's books
      shall be deemed the  Recipient  as to such  Shares for  purposes of this
      Plan.

3.    Payments.
      ---------

      (a) Under the Plan,  the Fund  will make  payments  to the  Distributor,
      within forty-five (45) days of the end of each calendar quarter,  in the
      amount of the  lesser of:  (i) 0.25% on an annual  basis of the  average
      during the  calendar  quarter of the  aggregate  net asset  value of the
      Shares,  computed  as of the  close of each  business  day,  or (ii) the
      Distributor's  actual  expenses  under the Plan for that  quarter of the
      type  approved by the Board.  Notwithstanding  the  foregoing,  the Fund
      will not make  payments to the  Distributor  in excess of the amount the
      Distributor  pays to  Recipients.  The  Distributor  will  use  such fee
      received from the Fund in its entirety to reimburse  itself for payments
      to  Recipients  and for its  other  expenditures  and  costs of the type
      approved by the Board incurred in connection  with the personal  service
      and maintenance of Accounts including,  but not limited to, the services
      described in the  following  paragraph.  The  Distributor  may make Plan
      payments to any "affiliated  person" (as defined in the 1940 Act) of the
      Distributor if such affiliated person qualifies as a Recipient.
            The services to be rendered by the  Distributor  and Recipients in
      connection  with the personal  service and the  maintenance  of Accounts
      may  include,  but shall not be  limited  to, the  following:  answering
      routine  inquiries from the Recipient's  customers  concerning the Fund,
      providing  such  customers  with  information  on  their  investment  in
      Shares,  assisting in the  establishment  and maintenance of accounts or
      sub-accounts  in the  Fund,  making  the  Fund's  investment  plans  and
      dividend   payment   options   available,   and  providing   such  other
      information  and  customer  liaison  services  and  the  maintenance  of
      Accounts as the Distributor or the Fund may reasonably  request.  It may
      be presumed  that a  Recipient  has  provided  services  qualifying  for
      compensation  under the Plan if it has  Qualified  Holdings of Shares to
      entitle it to  payments  under the Plan.  In the event  that  either the
      Distributor   or  the  Board   should  have  reason  to  believe   that,
      notwithstanding the level of Qualified Holdings,  a Recipient may not be
      rendering appropriate services, then the Distributor,  at the request of
      the Board,  shall require the  Recipient to provide a written  report or
      other   information   to  verify  that  said   Recipient   is  providing
      appropriate  services in this regard.  If the  Distributor  still is not
      satisfied,  it may take  appropriate  steps to terminate the Recipient's
      status as such  under  the Plan,  whereupon  such  entity's  rights as a
      third-party beneficiary hereunder shall terminate.

            Payments  received by the Distributor from the Fund under the Plan
      will not be used to pay any interest expense,  carrying charges or other
      financial  costs, or allocation of overhead by the  Distributor,  or for
      any other purpose other than for the payments  described in this Section
      3. The amount  payable to the  Distributor  each quarter will be reduced
      to the extent that reimbursement  payments  otherwise  permissible under
      the Plan have not been  authorized  by the Board for that  quarter.  Any
      unreimbursed  expenses  incurred for any quarter by the  Distributor may
      not be recovered in later periods.

(b)   The Distributor shall make payments to any Recipient  quarterly,  within
            forty-five (45)
      days of the end of each calendar quarter,  at a rate not to exceed 0.25%
      on an annual  basis of the average  during the  calendar  quarter of the
      aggregate  net asset  value of the  Shares  computed  as of the close of
      each  business  day, of  Qualified  Holdings  owned  beneficially  or of
      record by the Recipient or by its Customers.  However,  no such payments
      shall  be made to any  Recipient  for any  such  quarter  in  which  its
      Qualified  Holdings do not equal or exceed,  at the end of such quarter,
      the minimum amount  ("Minimum  Qualified  Holdings"),  if any, to be set
      from time to time by a majority of the Independent Trustees.

      Alternatively,  the  Distributor  may,  at its  sole  option,  make  the
      following  service  fee  payments  to any  Recipient  quarterly,  within
      forty-five (45) days of the end of each calendar  quarter:  (A) "Advance
      Service  Fee  Payments"  at a rate not to  exceed  0.25% of the  average
      during the calendar  quarter of the aggregate net asset value of Shares,
      computed  as of the close of  business  on the day such Shares are sold,
      constituting  Qualified  Holdings,  sold by the  Recipient  during  that
      quarter and owned  beneficially  or of record by the Recipient or by its
      Customers,  plus (B) service fee  payments at a rate not to exceed 0.25%
      on an annual  basis of the average  during the  calendar  quarter of the
      aggregate  net asset  value of Shares,  computed as of the close of each
      business day,  constituting  Qualified Holdings owned beneficially or of
      record by the  Recipient or by its  Customers  for a period of more than
      one (1) year.  At the  Distributor's  sole option,  Advance  Service Fee
      Payments may be made more often than quarterly,  and sooner than the end
      of the calendar quarter.  In the event Shares are redeemed less than one
      year after the date such Shares were sold,  the  Recipient  is obligated
      to and will repay the  Distributor  on demand a pro rata portion of such
      Advance  Service  Fee  Payments,  based on the  ratio  of the time  such
      Shares were held to one (1) year.
      A majority of the  Independent  Trustees may at any time or from time to
      time increase or decrease and  thereafter  adjust the rate of fees to be
      paid to the Distributor or to any Recipient,  but not to exceed the rate
      set forth  above,  and/or  increase  or  decrease  the  number of shares
      constituting  Minimum Qualified  Holdings.  The Distributor shall notify
      all  Recipients  of the  Minimum  Qualified  Holdings  and  the  rate of
      payments  hereunder  applicable  to  Recipients,  and shall provide each
      Recipient  with written  notice within thirty (30) days after any change
      in these  provisions.  Inclusion of such  provisions or a change in such
      provisions in a revised current  prospectus shall constitute  sufficient
      notice.

      (c)   Under  the  Plan,  payments  may be  made  to  Recipients:  (i) by
      OppenheimerFunds,  Inc.  ("OFI")  from  its  own  resources  (which  may
      include  profits  derived  from the  advisory  fee it receives  from the
      Fund),  or (ii) by the  Distributor (a subsidiary of OFI),  from its own
      resources.

4.    Selection  and  Nomination  of  Trustees.  While this Plan is in effect,
      ----------------------------------------
the selection or  replacement  of  Independent  Trustees and the nomination of
those persons to be Trustees of the Fund who are not  "interested  persons" of
the Fund shall be committed to the  discretion  of the  Independent  Trustees.
Nothing  herein shall prevent the  Independent  Trustees from  soliciting  the
views or the  involvement  of others in such  selection or  nomination  if the
final  decision on any such selection and nomination is approved by a majority
of the incumbent Independent Trustees.

5.    Reports.  While this Plan is in effect,  the Treasurer of the Fund shall
      -------
provide  at least  quarterly  a  written  report to the  Fund's  Board for its
review,  detailing the amount of all payments made pursuant to this Plan,  the
identity of the  Recipient  of each such  payment,  and the purposes for which
the payments  were made.  The report  shall state  whether all  provisions  of
Section  3 of this  Plan  have  been  complied  with.  The  Distributor  shall
annually  certify to the Board the amount of its total expenses  incurred that
year with  respect to the  personal  service  and  maintenance  of Accounts in
conjunction with the Board's annual review of the continuation of the Plan.







6.    Related  Agreements.  Any  agreement  related  to this Plan  shall be in
      -------------------
writing and shall  provide that:  (i) such  agreement may be terminated at any
time,  without  payment  of  any  penalty,  by  vote  of  a  majority  of  the
Independent  Trustees or by a vote of the holders of a "majority"  (as defined
in the 1940 Act) of the Fund's  outstanding voting securities of the Class, on
not more than sixty days written  notice to any other party to the  agreement;
(ii)  such  agreement  shall  automatically  terminate  in  the  event  of its
"assignment"  (as defined in the 1940 Act); (iii) it shall go into effect when
approved by a vote of the Board and its  Independent  Trustees  cast in person
at a meeting called for the purpose of voting on such  agreement;  and (iv) it
shall,  unless terminated as herein provided,  continue in effect from year to
year  only so long as such  continuance  is  specifically  approved  at  least
annually  by the  Board  and its  Independent  Trustees  cast in  person  at a
meeting called for the purpose of voting on such continuance.

7.    Effectiveness,  Continuation,  Termination and Amendment.  This Plan has
      ---------------------------------------------------------
been  approved  by a vote of the  Independent  Trustees  cast in  person  at a
meeting  called on April 23,  2002,  for the  purpose  of voting on this Plan.
Unless terminated as hereinafter  provided,  it shall continue in effect until
renewed by the Board in accordance  with the Rule and thereafter  from year to
year  thereafter or as the Board may otherwise  determine only so long as such
continuance  is  specifically  approved at least annually by the Board and its
Independent  Trustees  by a vote cast in person  at a meeting  called  for the
purpose  of voting on such  continuance.  This Plan may be  terminated  at any
time by vote of a majority of the  Independent  Trustees or by the vote of the
holders  of  a  "majority"  (as  defined  in  the  1940  Act)  of  the  Fund's
outstanding  voting  securities  of Class A. This Plan may not be  amended  to
increase  materially the amount of payments to be made without approval of the
Class  A  Shareholders,  in the  manner  described  above,  and  all  material
amendments  must be  approved  by a vote of the Board  and of the  Independent
Trustees.







8.   Disclaimer  of  Shareholder  and  Trustee   Liability.   The  Distributor
     ------------------------------------------------------
understands  that the  obligations of the Fund under this Plan are not binding
upon any  Trustee or  shareholder  of the Fund  personally,  but bind only the
Fund and the Fund's  property.  The Distributor  represents that it has notice
of the  provisions  of the  Declaration  of  Trust  of  the  Fund  disclaiming
shareholder and Trustee liability for acts or obligations of the Fund.


                              Oppenheimer International Bond Fund



                        By:   _/s/ Robert G. Zack_____________________
                               ------------------
                                                Robert    G.    Zack,     Vice
President and Secretary


                              OppenheimerFunds Distributor, Inc.



                                     By:  __/s/       Katherine       P.
                                            ----------------------------------
Feld____________________
                                          Katherine P. Feld
                                          Vice President & Secretary






Legal./N1a/880/org/880(A&RServPlanClassA)(042302).doc

EX-1

                                                           Exhibit 23 (m) (iv)
                 DISTRIBUTION AND SERVICE PLAN AND AGREEMENT
                                     with
                      OppenheimerFunds Distributor, Inc.
                            For Class N Shares of
                     Oppenheimer International Bond Fund

This  Distribution  and Service Plan and Agreement (the "Plan") is dated as of
the 24th day of October,  2000, by and between Oppenheimer  International Bond
Fund (the "Fund") and OppenheimerFunds Distributor, Inc. (the "Distributor").

1.    The Plan. This Plan is the Fund's written  distribution and service plan
      ---------
for Class N shares of the Fund (the  "Shares"),  contemplated by Rule 12b-1 as
it may be amended from time to time (the "Rule") under the Investment  Company
Act of 1940 (the "1940 Act"),  pursuant to which the Fund will  compensate the
Distributor  for its services in connection  with the  distribution of Shares,
and the personal  service and  maintenance of  shareholder  accounts that hold
Shares  ("Accounts").  The Fund may act as  distributor of securities of which
it is the issuer,  pursuant to the Rule,  according to the terms of this Plan.
The terms and  provisions of this Plan shall be  interpreted  and defined in a
manner  consistent  with the provisions and  definitions  contained in (i) the
1940 Act, (ii) the Rule,  (iii) Rule 2830 of the Conduct Rules of the National
Association  of  Securities  Dealers,  Inc.,  or any  applicable  amendment or
successor  to such rule (the "NASD  Conduct  Rules")  and (iv) any  conditions
pertaining   either  to   distribution-related   expenses  or  to  a  plan  of
distribution  to which the Fund is  subject  under any order on which the Fund
relies,  issued at any time by the U.S.  Securities  and  Exchange  Commission
("SEC").

2.    Definitions.  As used in this Plan,  the following  terms shall have the
      -----------
following meanings:

      (a)   "Recipient"  shall mean any broker,  dealer,  bank or other person
or entity which: (i) has rendered assistance  (whether direct,  administrative
or both) in the distribution of Shares or has provided  administrative support
services  with  respect to Shares  held by  Customers  (defined  below) of the
Recipient;  (ii) shall  furnish the  Distributor  (on behalf of the Fund) with
such information as the Distributor  shall  reasonably  request to answer such
questions  as may  arise  concerning  the sale of  Shares;  and (iii) has been
selected by the Distributor to receive payments under the Plan.

      (b)   "Independent  Trustees" shall mean the members of the Fund's Board
of Trustees who are not  "interested  persons" (as defined in the 1940 Act) of
the  Fund  and who  have no  direct  or  indirect  financial  interest  in the
operation of this Plan or in any agreement relating to this Plan.

      (c)   "Customers"  shall  mean  such  brokerage  or other  customers  or
investment  advisory or other  clients of a Recipient,  and/or  accounts as to
which  such  Recipient  provides  administrative  support  services  or  is  a
custodian or other fiduciary.

      (d)   "Qualified  Holdings" shall mean, as to any Recipient,  all Shares
owned  beneficially  or of  record  by:  (i)  such  Recipient,  or  (ii)  such
Recipient's  Customers,  but in no event shall any such Shares be deemed owned
by more than one  Recipient  for purposes of this Plan. In the event that more
than one person or entity  would  otherwise  qualify as  Recipients  as to the
same Shares,  the Recipient  which is the dealer of record on the Fund's books
as  determined  by the  Distributor  shall be deemed the  Recipient as to such
Shares for purposes of this Plan.

3.    Payments  for  Distribution   Assistance  and  Administrative  Support
      ------------------------------------------------------------------------
Services.
- ---------

      (a)   Payments to the  Distributor.  In  consideration  of the  payments
            -----------------------------
made by the Fund to the  Distributor  under this Plan, the  Distributor  shall
provide  administrative  support  services  and  distribution  services to the
Fund.  Such  services  include  distribution   assistance  and  administrative
support  services  rendered  in  connection  with  Shares (1) sold in purchase
transactions,  (2) issued in exchange for shares of another investment company
for which the  Distributor  serves as distributor or  sub-distributor,  or (3)
issued pursuant to a plan of  reorganization  to which the Fund is a party. If
the Board  believes  that the  Distributor  may not be  rendering  appropriate
distribution  assistance or administrative support services in connection with
the sale of Shares,  then the Distributor,  at the request of the Board, shall
provide the Board with a written  report or other  information  to verify that
the  Distributor is providing  appropriate  services in this regard.  For such
services, the Fund will make the following payments to the Distributor:

            (i)  Administrative  Support Service Fees.  Within forty-five (45)
                 -------------------------------------
days of the end of each calendar  quarter,  the Fund will make payments in the
aggregate  amount of 0.0625%  (0.25% on an annual basis) of the average during
that calendar  quarter of the aggregate net asset value of the Shares computed
as of the close of each  business day (the  "Service  Fee").  Such Service Fee
payments  received from the Fund will compensate the Distributor for providing
administrative  support services with respect to Accounts.  The administrative
support  services in connection  with  Accounts may include,  but shall not be
limited to, the  administrative  support  services that a Recipient may render
as described in Section 3(b)(i) below.

            (ii)  Distribution  Assistance  Fees  (Asset-Based  Sales Charge).
                  ------------------------------------------------------------
Within ten (10) days of the end of each month,  the Fund will make payments in
the  aggregate  amount of 0.0208%  (0.25% on an annual  basis) of the  average
during the month of the  aggregate  net asset  value of Shares  computed as of
the  close  of each  business  day  (the  "Asset-Based  Sales  Charge").  Such
Asset-Based  Sales Charge payments  received from the Fund will compensate the
Distributor for providing distribution  assistance in connection with the sale
of Shares.

      The distribution  assistance  services to be rendered by the Distributor
in  connection  with the Shares may include,  but shall not be limited to, the
following:  (i) paying sales commissions to any broker,  dealer, bank or other
person or entity  that sells  Shares,  and/or  paying  such  persons  "Advance
Service  Fee  Payments"  (as defined  below) in advance of,  and/or in amounts
greater than, the amount provided for in Section 3(b) of this Agreement;  (ii)
paying  compensation  to and  expenses of  personnel  of the  Distributor  who
support  distribution of Shares by Recipients;  (iii)  obtaining  financing or
providing such financing  from its own  resources,  or from an affiliate,  for
the  interest  and other  borrowing  costs of the  Distributor's  unreimbursed
expenses  incurred in rendering  distribution  assistance  and  administrative
support  services  to the Fund;  and (iv)  paying  other  direct  distribution
costs,   including   without   limitation  the  costs  of  sales   literature,
advertising  and  prospectuses  (other than those  prospectuses  furnished  to
current  holders of the Fund's shares  ("Shareholders"))  and state "blue sky"
registration expenses.

      (b)   Payments to Recipients.  The  Distributor is authorized  under the
            -----------------------
Plan  to  pay  Recipients  (1)  distribution  assistance  fees  for  rendering
distribution  assistance  in  connection  with the sale of Shares  and/or  (2)
service fees for  rendering  administrative  support  services with respect to
Accounts.  However,  no such  payments  shall be made to any Recipient for any
quarter in which its Qualified  Holdings do not equal or exceed, at the end of
such quarter, the minimum amount ("Minimum Qualified Holdings"),  if any, that
may be set from time to time by a majority of the  Independent  Trustees.  All
fee payments  made by the  Distributor  hereunder  are subject to reduction or
chargeback so that the aggregate  service fee payments and Advance Service Fee
Payments do not exceed the limits on payments to  Recipients  that are, or may
be, imposed by the NASD Conduct Rules.  The Distributor may make Plan payments
to any "affiliated  person" (as defined in the 1940 Act) of the Distributor if
such  affiliated  person  qualifies as a Recipient or retain such  payments if
the Distributor qualifies as a Recipient.

      In   consideration   of  the  services   provided  by  Recipients,   the
Distributor may make the following payments to Recipients:

            (i)  Service  Fee.  In  consideration  of  administrative  support
                 ------------
services  provided by a Recipient during a calendar  quarter,  the Distributor
may make service fee payments to that Recipient  quarterly,  within forty-five
(45)  days  of the end of  each  calendar  quarter,  at a rate  not to  exceed
0.0625% (0.25% on an annual basis) of the average during the calendar  quarter
of the aggregate  net asset value of Shares,  computed as of the close of each
business day, constituting  Qualified Holdings owned beneficially or of record
by the  Recipient  or by its  Customers  for a period of more than the minimum
period (the "Minimum  Holding  Period"),  if any, that may be set from time to
time by a majority of the Independent Trustees.

      Alternatively,  the  Distributor  may,  at its  sole  option,  make  the
following service fee payments to any Recipient  quarterly,  within forty-five
(45)  days of the end of each  calendar  quarter:  (A)  "Advance  Service  Fee
Payments"  at a rate not to exceed  0.25% of the average  during the  calendar
quarter of the aggregate  net asset value of Shares,  computed as of the close
of business on the day such Shares are sold,  constituting Qualified Holdings,
sold by the Recipient during that quarter and owned  beneficially or of record
by the Recipient or by its Customers,  plus (B) service fee payments at a rate
not to exceed  0.0625%  (0.25% on an annual  basis) of the average  during the
calendar  quarter of the aggregate  net asset value of Shares,  computed as of
the  close  of  each  business  day,  constituting  Qualified  Holdings  owned
beneficially  or of record by the  Recipient or by its  Customers for a period
of more than one (1) year. At the Distributor's  sole option,  Advance Service
Fee  Payments may be made more often than  quarterly,  and sooner than the end
of the calendar  quarter.  In the event Shares are redeemed less than one year
after the date such Shares were sold,  the  Recipient is obligated to and will
repay the  Distributor  on demand a pro rata portion of such  Advance  Service
Fee Payments,  based on the ratio of the time such Shares were held to one (1)
year.

      The  administrative  support  services to be rendered by  Recipients  in
connection  with the Accounts  may  include,  but shall not be limited to, the
following:  answering routine inquiries  concerning the Fund, assisting in the
establishment  and  maintenance  of accounts or  sub-accounts  in the Fund and
processing Share redemption  transactions,  making the Fund's investment plans
and dividend payment options  available,  and providing such other information
and services in connection with the rendering of personal  services and/or the
maintenance  of  Accounts,  as the  Distributor  or the  Fund  may  reasonably
request.

(ii)  Distribution   Assistance  Fee  (Asset-Based   Sales  Charge)  Payments.
- ------------------------------------------------------------------------------
 Irrespective of whichever  alternative  method of making service fee payments
 to Recipients  is selected by the  Distributor,  in addition the  Distributor
 may make  distribution  assistance fee payments to each Recipient  quarterly,
 within  forty-five  (45) days after the end of each  calendar  quarter,  at a
 rate not to exceed  0.0625%  (0.25% on an annual basis) of the average during
 the calendar  quarter of the aggregate net asset value of Shares  computed as
 of the close of each  business  day  constituting  Qualified  Holdings  owned
 beneficially  or of record by the  Recipient or its Customers for a period of
 more than one (1) year.  Alternatively,  at its sole option,  the Distributor
 may make distribution  assistance fee payments to a Recipient  quarterly,  at
 the rate described  above, on Shares  constituting  Qualified  Holdings owned
 beneficially  or of record by the Recipient or its Customers  without  regard
 to the 1-year holding period  described  above.  Distribution  assistance fee
 payments shall be made only to Recipients  that are  registered  with the SEC
 as a broker-dealer or are exempt from registration.

      The  distribution  assistance  to  be  rendered  by  the  Recipients  in
connection  with the sale of Shares may include,  but shall not be limited to,
the  following:  distributing  sales  literature and  prospectuses  other than
those furnished to current Shareholders,  providing compensation to and paying
expenses of personnel of the Recipient who support the  distribution of Shares
by the  Recipient,  and  providing  such other  information  and  services  in
connection with the  distribution of Shares as the Distributor or the Fund may
reasonably request.

      (c)   A majority  of the  Independent  Trustees  may at any time or from
time to time  (i)  increase  or  decrease  the  rate of fees to be paid to the
Distributor or to any Recipient,  but not to exceed the rates set forth above,
and/or  (ii)  direct the  Distributor  to  increase  or  decrease  any Minimum
Holding  Period,  any  maximum  period  set by a majority  of the  Independent
Trustees  during  which  fees  will be paid on Shares  constituting  Qualified
Holdings  owned  beneficially  or of record by a Recipient or by its Customers
(the  "Maximum  Holding   Period"),   or  Minimum  Qualified   Holdings.   The
Distributor  shall notify all  Recipients of any Minimum  Qualified  Holdings,
Maximum  Holding Period and Minimum  Holding Period that are  established  and
the rate of payments  hereunder  applicable to  Recipients,  and shall provide
each  Recipient  with written  notice within thirty (30) days after any change
in  these  provisions.  Inclusion  of  such  provisions  or a  change  in such
provisions  in a supplement  or amendment to or revision of the  prospectus of
the Fund shall constitute sufficient notice.

      (d)   The Service  Fee and the  Asset-Based  Sales  Charge on Shares are
subject to reduction or elimination  under the limits to which the Distributor
is, or may become, subject under the NASD Conduct Rules.

      (e)   Under the Plan,  payments may also be made to  Recipients:  (i) by
OppenheimerFunds,  Inc.  ("OFI")  from its own  resources  (which may  include
profits  derived from the advisory fee it receives from the Fund),  or (ii) by
the  Distributor  (a  subsidiary  of  OFI),  from  its  own  resources,   from
Asset-Based  Sales Charge payments or from the proceeds of its borrowings,  in
either case, in the discretion of OFI or the Distributor, respectively.

      (f)   Recipients  are  intended to have  certain  rights as  third-party
beneficiaries  under this Plan, subject to the limitations set forth below. It
may be presumed  that a Recipient  has  provided  distribution  assistance  or
administrative  support  services  qualifying for payment under the Plan if it
has Qualified  Holdings of Shares that entitle it to payments  under the Plan.
If either the  Distributor  or the Board  believe  that,  notwithstanding  the
level of Qualified  Holdings,  a Recipient  may not be  rendering  appropriate
distribution   assistance   in   connection   with  the  sale  of   Shares  or
administrative  support services for Accounts,  then the  Distributor,  at the
request of the Board,  shall require the Recipient to provide a written report
or other  information to verify that said  Recipient is providing  appropriate
distribution  assistance and/or services in this regard. If the Distributor or
the  Board of  Trustees  still is not  satisfied  after  the  receipt  of such
report,  either may take appropriate steps to terminate the Recipient's status
as a  Recipient  under  the  Plan,  whereupon  such  Recipient's  rights  as a
third-party  beneficiary  hereunder shall  terminate.  Additionally,  in their
discretion  a majority  of the  Fund's  Independent  Trustees  at any time may
remove any  broker,  dealer,  bank or other  person or entity as a  Recipient,
whereupon  such  person's  or  entity's  rights as a  third-party  beneficiary
hereof  shall  terminate.  Notwithstanding  any other  provision of this Plan,
this Plan  does not  obligate  or in any way make the Fund  liable to make any
payment  whatsoever  to any  person  or  entity  other  than  directly  to the
Distributor.  The  Distributor  has no  obligation  to pay any Service Fees or
Distribution  Assistance  Fees to any  Recipient  if the  Distributor  has not
received  payment of Service  Fees or  Distribution  Assistance  Fees from the
Fund.

4.    Selection and Nomination of Trustees.  While this Plan is in effect, the
      ------------------------------------
selection  and  nomination  of persons to be  Trustees of the Fund who are not
"interested  persons"  of  the  Fund   ("Disinterested   Trustees")  shall  be
committed to the discretion of the incumbent Disinterested  Trustees.  Nothing
herein shall prevent the incumbent  Disinterested Trustees from soliciting the
views or the  involvement of others in such selection or nomination as long as
the final  decision  on any such  selection  and  nomination  is approved by a
majority of the incumbent Disinterested Trustees.

5.    Reports.  While this Plan is in effect,  the Treasurer of the Fund shall
      -------
provide  written  reports to the Fund's  Board for its review,  detailing  the
amount of all  payments  made  under this Plan and the  purpose  for which the
payments were made. The reports shall be provided  quarterly,  and shall state
whether all provisions of Section 3 of this Plan have been complied with.

6.    Related  Agreements.  Any  agreement  related  to this Plan  shall be in
      -------------------
writing and shall  provide that:  (i) such  agreement may be terminated at any
time,  without  payment  of  any  penalty,  by a  vote  of a  majority  of the
Independent  Trustees or by a vote of the holders of a "majority"  (as defined
in the 1940 Act) of the Fund's  outstanding  voting Class N shares;  (ii) such
termination  shall be on not more than sixty days' written notice to any other
party to the agreement;  (iii) such agreement shall automatically terminate in
the  event of its  "assignment"  (as  defined  in the  1940  Act);  (iv)  such
agreement  shall go into effect  when  approved by a vote of the Board and its
Independent  Trustees  cast in person at a meeting  called for the  purpose of
voting on such agreement;  and (v) such agreement shall,  unless terminated as
herein  provided,  continue  in effect  from year to year only so long as such
continuance is specifically  approved at least annually by a vote of the Board
and its  Independent  Trustees  cast in  person at a  meeting  called  for the
purpose of voting on such continuance.

7.    Effectiveness,  Continuation,  Termination and Amendment.  This Plan has
      ---------------------------------------------------------
been approved by a vote of the Board and of its  Independent  Trustees cast in
person at a meeting  called on October 24, 2000,  for the purpose of voting on
this Plan and shall take effect as of the date first set forth  above.  Unless
terminated as hereinafter  provided, it shall continue in effect until renewed
by the Board in accordance  with the Rule and thereafter  from year to year or
as the Board may otherwise  determine but only so long as such  continuance is
specifically  approved  at  least  annually  by a vote  of the  Board  and its
Independent  Trustees  cast in person at a meeting  called for the  purpose of
voting on such continuance

      This  Plan may not be  amended  to  increase  materially  the  amount of
payments  to be  made  under  this  Plan,  without  approval  of the  Class  N
Shareholders at a meeting called for that purpose and all material  amendments
must be approved by a vote of the Board and of the Independent Trustees.

      This Plan may be  terminated  at any time by a vote of a majority of the
Independent  Trustees  or by the  vote  of the  holders  of a  "majority"  (as
defined in the 1940 Act) of the Fund's  outstanding  Class N voting shares. In
the event of such  termination,  the Board and its Independent  Trustees shall
determine  whether the Distributor  shall be entitled to payment from the Fund
of all or a portion of the Service Fee and/or the Asset-Based  Sales Charge in
respect of Shares sold prior to the effective date of such termination.

8.    Disclaimer  of  Shareholder  and  Trustee  Liability.   The  Distributor
      -----------------------------------------------------
understands  that the  obligations of the Fund under this Plan are not binding
upon any  Trustee or  shareholder  of the Fund  personally,  but bind only the
Fund and the Fund's  property.  The Distributor  represents that it has notice
of the  provisions  of the  Declaration  of  Trust  of  the  Fund  disclaiming
shareholder and Trustee liability for acts or obligations of the Fund.

                                          Oppenheimer International Bond Fund


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


                                          OppenheimerFunds Distributor, Inc.


                                                /s/ Katherine P. Feld
                                          By: ______________________________
                                                Katherine P. Feld
                                                Vice President and Secretary


n1a\880\12b-1N (Oct 2000)

EX-10

Global Custody Agreement - New York Law
November 2001version
267454:v02
                                                     Exhibit 23(g)
           -------------------------------------------------------



                           GLOBAL CUSTODY AGREEMENT

                                   BETWEEN

                            OPPENHEIMERFUNDS, INC.
               on behalf of each investment company identified
                                as a Customer
                         in Exhibit A attached hereto
          individually and severally, and not jointly and severally


                                     AND

                             JPMORGAN CHASE BANK




                                                 August 16, 2002








ii


ii
Global Custody Agreement -  New York Law
November 2001 version
267454:v02


Global Custody Agreement -  New York Law
November 2001  version
267454:v02
                           GLOBAL CUSTODY AGREEMENT
                              TABLE OF CONTENTS

1.  INTENTION OF THE PARTIES;  DEFINITIONS----------------------------------------3


  1.1 Intention of the Parties----------------------------------------------------3
      ------------------------

  1.2 Definitions-----------------------------------------------------------------3
      -----------

2.  WHAT BANK IS REQUIRED TO DO---------------------------------------------------6


  2.1 Set Up Accounts-------------------------------------------------------------6
      ---------------

  2.2 Cash Account----------------------------------------------------------------6
      ------------

  2.3 Segregation of Assets; Nominee Name-----------------------------------------7
      -----------------------------------

  2.4 Settlement of Trades--------------------------------------------------------7
      --------------------

  2.5 Settlement Procedures; Contractual Settlement Date Accounting---------------8
      -------------------------------------------------------------

  2.6 Settlement Procedures; Actual Settlement Date Accounting--------------------8
      --------------------------------------------------------

  2.7 Income Collection (Autocredit(R))---------------------------------------------9
      ---------------------------------

  2.8 Certain Ministerial Acts----------------------------------------------------9
      ------------------------

  2.9 Corporate Actions-----------------------------------------------------------9
      -----------------

  2.10  Proxies------------------------------------------------------------------10
        -------

  2.11  Statements---------------------------------------------------------------12
        ----------

  2.12  Access to Bank's Records-------------------------------------------------12
        ------------------------

  2.13  Maintenance of Financial Assets at Subcustodian Locations----------------13
        ---------------------------------------------------------

  2.14  Tax Relief Services -----------------------------------------------------13
        --------------------

  2.15  Foreign Exchange Transactions--------------------------------------------13
        -----------------------------
2.16  Compliance with SEC Rule 17f-5
- ------------------------------------
       ----------------------------------------------------------------------
2.17  Compliance with SEC Rule 17f-7
- ------------------------------------
       ----------------------------------------------------------------------
2.18  Securities Entitlement Orders
- -----------------------------------
       --------------------------------------------------------------------------
2.19  Confirmations
- -------------------
       ---------------------------------------------------------------------------------------------

3.  INSTRUCTIONS-----------------------------------------------------------------17


  3.1 Acting on Instructions; Unclear Instructions-------------------------------17
      --------------------------------------------

  3.2 Confirmation of Oral Instructions/Security Devices-------------------------17
      --------------------------------------------------

  3.3 Instructions; Contrary to Law/Market Practice------------------------------18
      ---------------------------------------------

  3.4     Cut-off Times----------------------------------------------------------18
          -------------

4.  FEES EXPENSES AND OTHER AMOUNTS OWING TO BANK--------------------------------18


  4.1 Fees and Expenses----------------------------------------------------------18
      -----------------

  4.2 Overdrafts-----------------------------------------------------------------18
      ----------

5.  SUBCUSTODIANS, SECURITIES DEPOSITORIES AND OTHER AGENTS----------------------19


  5.1 Appointment of Subcustodians-----------------------------------------------19
      ----------------------------

  5.2 Liability for Subcustodians------------------------------------------------20
      ---------------------------

  5.3 Use of Agents--------------------------------------------------------------20
      -------------

6.  ADDITIONAL PROVISIONS RELATING TO CUSTOMER-----------------------------------21


  6.1 Representations of Customer and Bank---------------------------------------21
      ------------------------------------

  6.2 Provision of Additional Information to Bank--------------------------------21
      ----------------------- -------------------

  6.3 Customer is Liable to Bank Even if it is Acting for Another Person---------21
      ------------------------------------------------------------------

7.  WHEN BANK IS LIABLE TO CUSTOMER----------------------------------------------22


  7.1 Standard of Care; Liability------------------------------------------------22
      ---------------------------

  7.2 Force Majeure--------------------------------------------------------------23
      -------------

  7.3 Bank May Consult With Counsel----------------------------------------------23
      -----------------------------

  7.4 Bank Provides Diverse Financial Services and May Generate Profits as a
      -----------------------------------------------------------------------
  Result-------------------------------------------------------------------------23
  ------

8.  TAXATION---------------------------------------------------------------------24


  8.1 Tax Obligations------------------------------------------------------------24
      ---------------

  8.2 Tax Reclaims---------------------------------------------------------------24
      ------------

9.  TERMINATION------------------------------------------------------------------25


10. Miscellaneous----------------------------------------------------------------25


  10.1  Notices------------------------------------------------------------------25
        -------

  10.2  Successors and Assigns---------------------------------------------------25
        ----------------------

  10.3  Interpretation-----------------------------------------------------------26
        --------------

  10.4  Entire Agreement---------------------------------------------------------26
        ----------------

  10.5  Information Concerning Deposits at Bank's London Branch------------------26
        -------------------------------------------------------

  10.6  Insurance----------------------------------------------------------------27
        ---------

  10.7  Governing Law and Jurisdiction-------------------------------------------27
        ------------------------------

  10.8  Severability; Waiver; and Survival---------------------------------------27
        ----------------------------------

  10.9  Counterparts-------------------------------------------------------------28
        ------------

  10.10 No Third Party Beneficiaries---------------------------------------------28
        ----------------------------
  10.11   Confidentiality
          ---------------
- ----------------------------------------------------------------------------------------
   10.12    Limited Obligations
            -------------------
- --------------------------------------------------------------------------









35

Investment Company Rider to Global Custody Agreement
November 2001 version
267462:v01
                           GLOBAL CUSTODY AGREEMENT


      This Agreement,  dated August 16, 2002, is by and between JPMORGAN CHASE
BANK ("Bank"),  with a place of business at 4 MetroTech Center, Attn: Investor
Services,  Brooklyn, New York 11245; and OppenheimerFunds,  Inc., with a place
of business at 6803 South Tucson Way, Attn:  Banking  Operations,  Centennial,
Colorado 80112 on behalf of each  investment  company  identified on Exhibit A
attached hereto (each hereinafter referred to as the "Customer")  individually
and severally, and not jointly and severally.



                   1. INTENTION OF THE PARTIES; DEFINITIONS

1.1   Intention of the Parties.
      ------------------------

      (a)   Customer  hereby  employs the Bank as the Custodian of all assets
            ==================================================================
of  Customer  which  are  delivered  to  and  accepted  by  the  Bank  or any
==============================================================================
Subcustodian,  including  Securities,  Financial  Assets  and cash,  and Bank
==============================================================================
hereby  accepts such  employment,  pursuant to the terms and  conditions  set
==============================================           =====================
forth herein  governing  custodial,  settlement  and certain other  associated
==============
services  offered  by Bank to  Customer.  Bank  will  be  responsible  for the
performance  of only  those  duties  that  are set  forth  in this  Agreement.
Customer  acknowledges that Bank is not providing any legal, tax or investment
advice in connection with the services hereunder.

      (b)   Investing  in  foreign  markets  may be a  risky  enterprise.  The
holding of  Financial  Assets and cash in foreign  jurisdictions  may  involve
risks of loss or other  special  considerations.  Bank will not be liable  for
any loss that results from Country Risk, as defined herein.
                                       =====================

1.2   Definitions.
      -----------

      (a)   As used herein,  the following terms have the meaning  hereinafter
stated.

      "1940 Act" means the Investment Company Act of 1940, as amended.
      =================================================================

      "Account" has the meaning set forth in Section 2.1 of this Agreement.

      "Affiliate" means an entity controlling,  controlled by, or under common
control with, Bank.

      "Affiliated Subcustodian" means a Subcustodian that is an Affiliate.

      "Applicable Law" means any statute,  whether  national,  state or local,
applicable in the United States or any other country,  the rules of the treaty
establishing  the  European  Community,  any other law,  rule,  regulation  or
interpretation of any governmental  entity, any applicable common law, and any
decree,  injunction,  judgment,  order,  ruling,  or writ of any  governmental
entity.

      "Authorized  Person"  means  any  person  who  has  been  designated  by
written  notice  from  Customer  (or  by any  agent  designated  by  Customer,
including,  without  limitation,  an  investment  manager) to act on behalf of
Customer  hereunder.  Such  persons  will  continue to be  Authorized  Persons
until such time as Bank  receives  Instructions  from  Customer (or its agent)
that any such person is no longer an Authorized Person.

      "Bank  Indemnitees"  means Bank and its nominees,  directors,  officers,
employees and agents.

      "Bank's  London Branch" means the London branch office of JPMorgan Chase
Bank.

      "Cash Account" has the meaning set forth in Section 2.1(a)(ii).

      "Corporate  Action" means any  subscription  right,  bonus issue,  stock
repurchase plan,  redemption,  exchange,  tender offer, class action notice or
                                                        =====================
similar  matter with respect to a Financial  Asset in the  Securities  Account
that require  discretionary  action by the holder,  but does not include proxy
voting.
======

      "Country  Risk"  means  the risk of  investing  or  holding  assets in a
particular  country or market,  including,  but not limited to, risks  arising
from  nationalization,   expropriation  or  other  governmental  actions;  the
country's   financial   infrastructure,   including   prevailing  custody  and
settlement  practices;  laws  applicable  to the  safekeeping  and recovery of
Financial  Assets and cash held in custody;  the regulation of the banking and
securities   industries,   including   changes  in  market   rules;   currency
restrictions,  devaluations or fluctuations;  and market conditions  affecting
the orderly execution of securities transactions or the value of assets.

      "Entitlement  Holder"  means  the  person  named  on  the  records  of a
Securities  Intermediary as the person having a Securities Entitlement against
the Securities Intermediary.

      "Financial  Asset"  means,  as the  context  requires,  either the asset
itself or the means by which a person's  claim to it is  evidenced,  including
but not  limited  to a  Security,  a  security  certificate,  or a  Securities
Entitlement.  "Financial Asset" does not include cash.

      "Foreign  Financial  Assets" means Financial  Assets,  including foreign
currencies,  for which the primary market is outside the United States and any
cash  and  cash   equivalents   that  are   reasonably   necessary  to  effect
transactions in those Financial Assets.

      "Institutional  Clients" means U.S. registered  investment  companies,
      ========================================================================
major  U.S.  commercial  banks,   insurance  companies,   pension  funds  or
==============================================================================
substantially similar financial  institutions which as part of their ordinary
==============================================================================
business  operations  purchase  or sell  Financial  Assets  and  make  use of
==============================================================================
custodial services in the applicable jurisdiction or market.
============================================================

      "Instructions"  means  instructions  which:  (i) are received by Bank in
writing or via Bank's electronic instruction system, SWIFT, telephone,  tested
telex,  facsimile  or such other  methods as are for the time being  agreed by
Customer (or an  Authorized  Person) and Bank;  and (ii) Bank believes in good
faith have been given by an Authorized  Person or are transmitted  with proper
testing or  authentication  pursuant  to terms and  conditions  which Bank may
specify.

      "Liabilities" means any liabilities,  losses,  claims,  costs,  damages,
penalties,  fines, obligations, or expenses of any kind whatsoever (including,
without  limitation,  reasonable  and  appropriate  attorneys',  accountants',
consultants' or experts' fees and disbursements).

      "Securities" means stocks, bonds, rights,  warrants and other negotiable
and   non-negotiable   instruments,   whether   issued  in   certificated   or
uncertificated  form,  that are  commonly  traded  or  dealt in on  securities
exchanges or financial  markets.  "Securities" also means other obligations of
an issuer, or shares,  participations and interests in an issuer recognized in
the country in which it is issued or dealt in as a medium for  investment  and
any other property as may be acceptable to Bank for the Securities Account.

      "Securities  Account" means each  Securities  custody  account on Bank's
records to which Financial Assets are or may be credited pursuant hereto.

        "Securities Depository" means:
                                =======

        (i) when referring to a securities depository located outside the
        ==================================================================
        U.S., an 'Eligible Securities Depository' which, in turn, shall have
        =====================================================================
        the same meaning  as in SEC Rule 17f-7(b)(1)(i)-(vi) as the same may
        =====================================================================
        be amended from time to time, or that has otherwise been made exempt
        =====================================================================
        pursuant to an SEC exemptive order.
        ====================================

        (ii) when referring to a securities depository located in the U.S.
        ===================================================================
        shall mean a securities depository as defined in SEC Rule 17f-4(a).
        ===================================================================
      .
      "Securities  Entitlement"  means the rights and property interests of an
Entitlement  Holder with  respect to a Financial  Asset as set forth in Part 5
of Article 8 of the Uniform  Commercial  Code of the State of New York, as the
same may be amended from time to time.

      "Securities  Intermediary"  means Bank,  a  Subcustodian,  a  Securities
Depository,  and any other financial  institution which in the ordinary course
of business maintains custody accounts for others and acts in that capacity.

        "Subcustodian" means the following:
                       =====      =========

        (i)  a 'U.S. Bank', which shall mean a U.S. bank as defined in SEC
===========================================================================
rule 17f-5(a)(7);
=================

        (ii)  an 'Eligible Foreign Custodian', which shall mean: (x) a
        ===============================================================
        banking institution or trust company, incorporated or organized under
        ======================================================================
        the laws of a country other than the                       United
        ==================================================================
        States, that is regulated as such by that country's government or an
        =====================================================================
        agency thereof, and (y) a majority-owned direct or indirect
        ============================================================
        subsidiary of a U.S. bank or bank holding company which subsidiary is
        ======================================================================
        incorporated or organized under the laws of a country other than the
        =====================================================================
        United States. In addition, an Eligible Foreign Custodian shall also
        =====================================================================
        mean any other entity that shall have been so qualified by exemptive
        =====================================================================
        order, rule or other appropriate action of the SEC.
        ===================================================

        (iii)  For purposes of clarity, it is agreed that as used in Section
        =========================================================
        5.2(a), the term Subcustodian shall not include any Eligible Foreign
        =====================================================================
        Custodian as to which Bank has not acted as Foreign Custody Manager,
        ====================================================================
        and that Subcustodian includes Affiliated Subcustodians.
           ==================

      (b)   All  terms in the  singular  will  have the  same  meaning  in the
plural  unless the  context  otherwise  provides  and vice versa and the word
                                                      ====      ==============
"will" shall be read to mean "shall."
=================================== =


                        2. WHAT BANK IS REQUIRED TO DO

2.1   Set Up Accounts.
      ---------------

      (a)   Bank  will   establish   and  maintain  the   following   accounts
("Accounts"):

            (i)   a Securities  Account in the name of Customer for  Financial
                  Assets,  which  may be  received  by or on behalf of Bank or
                  its Subcustodian  for the account of Customer,  including as
                  an Entitlement Holder; and

            (ii)  an  account in the name of  Customer  ("Cash  Account")  for
                  any and all cash in any  currency  received  by or on behalf
                  of Bank or its Subcustodian for the account of Customer.
                          ====================

Notwithstanding  paragraph  (ii),  cash held in respect of those markets where
Customer  is  required  to have a cash  account in its own name held  directly
with the  relevant  Subcustodian  or a Securities  Depository  will be held in
that manner and will not be part of the Cash Account.

      (b)   At the request of Customer,  additional  Accounts may be opened in
the future, which will be subject to the terms of this Agreement.

2.2   Cash Account.
      ------------

      Except as otherwise  provided in  Instructions  acceptable to Bank,  all
cash  held in the Cash  Account  will be  deposited  during  the  period it is
credited to the Accounts in one or more deposit  accounts at Bank or at Bank's
London  Branch.  Any cash so  deposited  with  Bank's  London  Branch  will be
payable  exclusively  by  Bank's  London  Branch in the  applicable  currency,
subject to compliance with Applicable Law, including,  without limitation, any
restrictions  on  transactions  in  the  applicable  currency  imposed  by the
country of the applicable currency.

2.3   Segregation of Assets; Nominee Name.
      -----------------------------------

      (a)   Bank will identify in its records that Financial  Assets  credited
to Customer's  Securities  Account belong to Customer (except as otherwise may
be agreed by Bank and Customer).

      (b)   To the extent  permitted  by  Applicable  Law or market  practice,
Bank will  require  each  Subcustodian  to identify  in its own  records  that
Financial  Assets  credited  to  Customer's   Securities   Account  belong  to
                   ===============================================
customers  of Bank,  such  that it is  readily  apparent  that  the  Financial
Assets do not belong to Bank or the Subcustodian.

(c)   Bank is authorized, in its discretion:

            (i)   to  hold  in  bearer  form,  such  Financial  Assets  as are
                  customarily  held in bearer form or are delivered to Bank or
                  its Subcustodian in bearer form;

             (ii)       to  hold  Financial  Assets  in or  deposit  Financial
                  Assets with any  Securities  Depository,  settlement  system
                  or  dematerialized  book  entry or  similar  systems  as to
                                                                      ========
                  which, in the case of a foreign Securities Depository, Bank
                  ============================================================
                  has provided the analysis of custody risks  contemplated by
                  ============================================================
                  Section  (a)(1)(i)(A)  of Rule 17f-7 under the 1940 Act and
                  ============================================================
                  not,  after   delivering  a  notice  required  by  Section
                  ============================================================
                  (a)(1)(i)(B)  of Rule  17f-7  under the 1940 Act,  received
                  ============================================================
                  Instructions from Customer to withdraw securities therefrom
                  ============================================================
                  (a "Reported Depository"); and
                  =========================

(iii) to register in the name of  Customer,  Bank,  a  Subcustodian,  or their
                  respective   nominees,   such   Financial   Assets   as  are
                  customarily held in registered  form;  provided,  however,
                                                      ========================
                  that if it is market  practice in a country  for  Financial
                  ============================================================
                  Assets customarily held in registered form to be registered
                  ============================================================
                  in the name of a Reported Depository, Bank is authorized in
                  ============================================================
                  its  discretion  to register such  Financial  Assets in the
                  ============================================================
                  name of such Reported Depository or its nominee.
                  ===============================================

            (d)   Except  with the  specific  consent  of  Customer,  Customer
======================================================================
authorizes  Bank or its  Subcustodian  to hold  Financial  Assets  in  omnibus
accounts or in  Customer's  name,  as required by local market  practice,  and
will accept  delivery of Financial  Assets of the same class and  denomination
as those deposited with Bank or its Subcustodian.
        ==========

2.4   Settlement of Trades.
      --------------------

      When Bank receives an Instruction  directing settlement of a transaction
in (i.e.,  purchase or sale of) Financial Assets that includes all information
   =============================
reasonably  required  by Bank,  Bank will use  reasonable  care to effect such
============
settlement as  instructed.  Settlement  of  transactions  in Financial  Assets
will be conducted in  accordance  with  prevailing  standards of the market in
which the transaction  occurs for  transactions  by  Institutional  Clients.
                             =================================================
Notwithstanding  applicable  market  standards,  the Bank  shall  not  deliver
==============================================             ===================
Financial  Assets or  payment in  advance  of  receipt  or  settlement  of the
expected  consideration  unless  instructed to do so by Customer.  In the case
                       =========================================
of  the  failure  of   Customer's   counterparty   to  deliver  the   expected
consideration   as  agreed,   Bank  will  contact  the  counterparty  to  seek
settlement,  but Bank will not be obligated to  institute  legal  proceedings,
file a proof of  claim  in any  insolvency  proceeding,  or take  any  similar
action.

2.5   Settlement  Procedures; Contractual Settlement Date Accounting.
      ---------------------------------------------------------------

      (a)   Securities  will be  transferred,  exchanged  or delivered by the
            ==================================================================
Custodian or  Subcustodian  upon receipt by Custodian of  Instructions  which
==============================================================================
include all  information  required by  Custodian.  Bank will use  "contractual
================================================================
settlement date  accounting" as described below with respect to the settlement
of trades in those markets where Bank generally offers contractual  settlement
date accounting and will notify Customer of those markets from time to time.

            (i)   Sales:  On the settlement  date for a sale, Bank will credit
                  the Cash  Account with the proceeds of the sale and transfer
                  the relevant  Financial Assets to an account at Bank pending
                  settlement of the trade to the extent not already delivered.
                                          =============

            (ii)  Purchases:  On the  settlement  date  for the  purchase  (or
                  earlier,   if   market   practice   generally   used   by
                                                      ========================
                  Institutional  Clients  requires  delivery  of the  purchase
                  ========================
                  price  before  the  settlement  date),  Bank will  debit the
                  Cash  Account  with  the  settlement  amount  and  credit  a
                                 ====
                  separate   account   at  Bank.   Bank  then  will  post  the
                  Securities  Account  as  awaiting  receipt  of the  expected
                  Financial  Assets.  Customer  will  not be  entitled  to the
                  credit in its  Securities  Account of the  Financial  Assets
                  ===========================================
                  that  are  awaiting  receipt  until  Bank or a  Subcustodian
                  actually receives them.

Bank  reserves  the  right to  restrict  in good  faith  the  availability  of
contractual  settlement date  accounting for reasons of  insufficient  cash in
Customer's  Cash  Account or local  market  constraints  that  would  prohibit
settlement.

      (b)   Bank  may (in  its  absolute  discretion)  upon  oral  or  written
notification to Customer  reverse any pending debit or credit made pursuant to
Section 2.5(a) prior to a transaction's  actual settlement,  and Bank will not
be liable for any costs or liabilities resulting from such reversal.  Customer
acknowledges  that the  procedures  described  in this  sub-section  are of an
administrative  nature,  and Bank  does not  undertake  to make  loans  and/or
Financial Assets available to Customer.

2.6   Settlement  Procedures;  Actual Settlement Date Accounting.
      ----------------------------------------------------------

      With respect to any sale or purchase  transaction  that is not posted to
the  Account on the  contractual  settlement  date as  referred  to in Section
2.5,  Bank  will  post  the  transaction  on the  date on  which  the  cash or
Financial  Assets  received as  consideration  for the transaction is actually
received by Bank.

2.7   Income Collection ; Autocredit(R).
      ---------------------------------

      (a)   Autocredit(R).  Bank will credit all  interest  and  dividends  and
            -------------             ==========================================
all other income and  payments,  including  redemption  proceeds on Financial
==============================================================================
Assets,  whether  paid in cash or in kind,  as the same  become  payable  and
==============================================================================
credit the same to the Cash  Account,  net of any taxes that are  withheld  by
==================
Bank or any third  party.  Bank may reverse  such credits upon oral or written
notification  to Customer that Bank believes  that the  corresponding  payment
will not be  received by Bank  within a  reasonable  period or such credit was
incorrect.

      (b)   Income  Collection.  Bank will use reasonable,  good faith efforts
            ------------------             ===============
to contact  appropriate  parties  to collect  unpaid  interest,  dividends  or
redemption  proceeds,  but neither Bank nor its Subcustodians  will be obliged
to file any formal  notice of default,  institute  legal  proceedings,  file a
proof of claim in any  insolvency  proceeding,  or take any similar  action.
                                                                           ===
With Bank's permission,  which shall not be unreasonably  withheld,  Customer
==============================================================================
may use the name of Bank or a  Subcustodian  when  necessary  to comment  and
==============================================================================
prosecute such legal  proceedings to collect  amounts due, and Bank will, and
==============================================================================
will cause each  Subcustodian  to, cooperate fully with Customer in assisting
==============================================================================
in collecting such amounts.
==========================

2.8   Certain Ministerial Acts.
      ------------------------

      (a)   Until Bank receives Instructions to the contrary, Bank will:

            (i)   present  all  Financial  Assets for which Bank has  received
                  notice  of a call  for  redemption  or that  have  otherwise
                  matured,  and all  income  and  interest  coupons  and other
                  income items that call for payment upon presentation;

            (ii)  execute in the name of  Customer  such  certificates  as may
                  be  required  to obtain  payment  in  respect  of  Financial
                  Assets; and

            (iii) exchange  interim or  temporary  documents  of title held in
                  the Securities Account for definitive documents of title.

      (b)   Bank  may  provide   information   concerning   the   Accounts  to
Subcustodians,  Securities Depositories,  counterparties, issuers of Financial
Assets,   governmental   entities,   securities   exchanges,   self-regulatory
entities,  and similar  entities to the extent  required by Applicable  Law or
as may be required by market  practice for accounts of  Institutional  Clients
                                        ======================================
in order to provide the services contemplated by this Agreement.

2.9   Corporate Actions.
      -----------------

      (a)   Subject to the  standard  of  reasonable  care of Section  7.1(a),
Bank will follow Corporate  Actions through receipt of notices from issuers,
          ====================================================================
from Subcustodians, Securities Depositories and notices published in industry
==============================================================================
publications  and reported in reporting  services.  Bank will promptly  notify
========================================================================
Customer of any Corporate  Action of which  information is either (i) received
by it or a Subcustodian  to the extent that Bank's central  corporate  actions
department has actual  knowledge of the Corporate Action in time to notify its
customers  in a  timely  manner;  or (ii)  published  via a formal  notice  in
publications  and reporting  services  routinely used by Bank for this purpose
in time for Bank to notify its  customers in a timely  manner.  Bank also will
use its reasonable  efforts to notify Customer of any class action  litigation
for  which  information  is  actually  received  by Bank's  central  corporate
actions department but shall not be liable for any Liabilities  arising out of
Bank's   failure  to  identify   Customer's   interest  in  any  class  action
litigation.  Bank does not commit,  however, to provide information concerning
Corporate  Actions or class action  litigation  relating to  Financial  Assets
being held at Customer's  request in a name not subject to the control of Bank
or its Subcustodian.

      (b)   If an  Authorized  Person fails to provide Bank with  Instructions
prior to the deadline  set by the  Securities  Depository  with respect to any
Corporate  Action,  neither  Bank nor its  Subcustodians  or their  respective
nominees will take any action in relation to that Corporate Action,  except as
otherwise  agreed in  writing by Bank and  Customer  or as may be set forth by
Bank as a default  action in the  notification  it provides  under Section 2.9
(a) with respect to that  Corporate  Action.  If Customer  provides  Bank with
Instructions  with respect to any  Corporate  Action after the deadline set by
the Bank but before the deadline set by the Securities Depository,  Bank shall
use  commercially  reasonable  efforts  to act on such  Instructions.  If Bank
fails to act on  Instructions  provided by Customer  prior to the deadline set
by Bank with respect to any Corporate  Action,  Bank will be liable for direct
losses incurred by Customer.

      Bank's deadline for receipt of  Instructions  from Customer with respect
to any Corporate  Action shall not precede the deadline set by the  Securities
Depository by more than a commercially  reasonable  period of time,  with such
interval between the Bank's deadline and the Securities  Depository's deadline
as agreed upon between Customer and Bank.


(c)   Bank may sell or otherwise dispose of fractional  interests in Financial
 Assets  arising out of a Corporate  Action  and, to the extent  necessary  to
 protect  Customer's  interest  in that  Corporate  Action,  credit  the  Cash
 Account with the proceeds of the sale or  disposition.  If some, but not all,
 of an outstanding  class of Financial  Asset is called for  redemption,  Bank
 may allot the amount  redeemed  among the  respective  beneficial  holders of
 such  class of  Financial  Asset in any  basis  such  that  Customer  is not
                                          ====================================
 allocated a higher proportion of the redeemed  Financial Asset than it would
 =============================================================================
 on a pro rata basis.
 ====================


       (d)  Notices of  Corporate  Actions  and class  actions  dispatched  to
Customer may have been  obtained  from sources which Bank does not control and
may have been  translated or  summarized.  Although Bank believes such sources
to be reliable,  Bank has no duty to verify the information  contained in such
notices nor the  faithfulness  of any  translation  or summary  and  therefore
does not guarantee its accuracy, completeness or timeliness.

2.10  Proxies.
      -------

      (a)   As may be agreed upon between  Customer  and Bank,  and subject to
            ===============================================================
and upon the terms of this  sub-section,  Bank will  monitor  information  in
                                                   ===========================
accordance  with  standard  procedures  as  notified  to  Customer  and  will
==============================================================================
promptly provide Customer with information  which it receives on matters to be
voted upon at meetings of holders of Financial Assets  ("Notifications"),  and
Bank will act in accordance with  Customer's  Instructions in relation to such
Notifications   ("the  active  proxy  voting  service").   If  information  is
received  by Bank at its proxy  voting  department  too late to permit  timely
voting by  Customer,  Bank's only  obligation  will be to  provide,  so far as
reasonably  practicable,  a Notification (or summary information  concerning a
Notification) on an "information only" basis.

      (b)   The  active  proxy  voting  service is  available  only in certain
markets,  details of which are  available  from Bank on request.  Provision of
the active proxy voting service is conditional  upon receipt by Bank of a duly
completed  enrollment  form as well as  additional  documentation  that may be
required for certain markets.

      (c)   Bank will act upon  Instructions  to vote on matters  referred  to
in a  Notification,  provided  Instructions  are received by Bank at its proxy
voting  department by the deadline  referred to in the relevant  Notification.
If  Instructions  are not  received  in a  timely  manner,  Bank  will  not be
obligated to provide further notice to Customer.

      (d)   Bank  reserves  the  right  to  provide   Notifications  or  parts
thereof in the  language  received,  but shall use  commercially  reasonable
                                  ============================================
efforts to provide  such  Notifications  in English in a timely  manner.  Bank
==========================================================================
will attempt in good faith to provide  accurate  and  complete  Notifications,
whether or not translated.

      (e)   Customer  acknowledges  that  Notifications  and other information
furnished  pursuant to the active proxy voting  service  ("information")  not
                                                                          ====
the  intellectual  property of Customer.  Accordingly,  Customer will not make
                               ========
any use of such  information  except  in  connection  with  the  active  proxy
voting service, and to the extent necessary to effectuate Customer's voting.
              =============================================================

      (f)   In  markets   where  the  active  proxy  voting   service  is  not
available or where Bank has not received a duly completed  enrollment  form or
other  relevant   documentation,   Bank  will  not  provide  Notifications  to
Customer  but  will  endeavor  to act  upon  Instructions  to vote on  matters
before  meetings  of  holders  of  Financial  Assets  where  it is  reasonably
practicable  for Bank (or its  Subcustodians  or  nominees as the case may be)
to do so and where such  Instructions  are  received  in time for Bank to take
timely  action  (the  "passive  proxy  voting  service").  Bank  shall  in all
events  promptly  send  notices and proxy  information  it receives  either to
Customer or as directed by Customer.

      (g)   Customer  acknowledges that the provision of proxy voting services
(whether active or passive) may be precluded or restricted  under a variety of
circumstances.  These circumstances include, but are not limited to:

            (i)   the Financial Assets being on loan or out for registration,

            (ii)  the  pendency of conversion or another Corporate Action;

            (iii) Financial Assets being held at Customer's  request in a name
                  not subject to the control of Bank or its Subcustodian;

            (iv)  Financial  Assets  being  held  in a  margin  or  collateral
                  account at Bank or another  bank or broker,  or otherwise in
                  a manner which affects voting;

            (v)   local market  regulations or practices,  or  restrictions by
                  the issuer;  and

            (vi)  Bank  may  be  required  to  vote  all  shares  held  for  a
                  particular  issue for all of Bank's customers on a net basis
                  (i.e.  a net yes or no vote  based  on  voting  instructions
                  received  from all its  customers).  Where this is the case,
                  Bank will inform Customer by means of the Notification.

      (h)   Notwithstanding  the  fact  that  Bank  may  act  in  a  fiduciary
capacity  with  respect to Customer  under  other  agreements,  in  performing
active or passive  proxy  voting  services  Bank will be acting  solely as the
agent of Customer,  and will not exercise any discretion,  with regard to such
proxy services or vote any proxy except when directed by an Authorized Person.

2.11  Statements and Information Available On-Line.
      --------------------------------------------

      (a)   Bank will send to Customer, or make available to Customer on-line
                          ============                    ============       =
or otherwise at Customer's  reasonable request, at times mutually agreed upon,
===============         ======================
formal  statements  of account  in Bank's  standard  format  for each  Account
        ==========
maintained by Customer with Bank,  identifying  the Financial  Assets and cash
held  in  each  Account  (each  such  statement  a  "Statement  of  Account").
Additionally,  Bank will  send (or make  available  on-line  to)  Customer  an
advice or  notification  of any  transfers  of cash or  Financial  Assets with
respect to each  Account.  Bank will not be liable with  respect to any matter
set forth in those  portions  of any  Statement  of Account or any such advice
(or  reasonably  implied  therefrom)  to which  Customer  has not given Bank a
written  exception  or  objection  within  ninety  (90) days of receipt of the
                                           ======   ==
Statement  of  Account,  provided  such  matter  is not the  result  of Bank's
negligence,  willful misconduct or bad faith.  References in this Agreement to
Statements of Account include Statements of Account in electronic form.

      (b)   Prices and other information  obtained from  non-affiliated  third
                                                         ================
parties  which  may  be  contained  in  any  Statement  of  Account  or  other
statement  sent to Customer  have been  obtained from sources Bank believes to
be  reliable.  Bank  does  not,  however,  make any  representation  as to the
accuracy  of  such  information  or  that  the  prices  specified  necessarily
reflect the  proceeds  that would be  received  on a disposal of the  relevant
Financial Assets.

      (c)   Customer  acknowledges  that,  except for Statements of Account or
as otherwise  expressly  agreed by Bank,  records and reports  available to it
on-line may not be accurate due to valuation  differences by reason of prices
                                   ===========================================
used by Customer to value its  Financial  Assets,  delays in updating  Account
===================================================
records, and other causes.

2.12  Access to Bank's Records.
      ------------------------

      Bank  will  allow  Customer's   independent   public   accountants  such
reasonable  access to the records of Bank  relating to Financial  Assets as is
required in connection with their examination of books and records  pertaining
to Customer's  affairs.  Subject to  restrictions  under  Applicable Law, Bank
also  will  obtain an  undertaking  to permit  Customer's  independent  public
accountants,   reasonable  access  to  the  records  of  any  Subcustodian  of
Securities  held in the  Securities  Account as may be required in  connection
with such examination.

2.13  Maintenance of Financial Assets at Subcustodian Locations.
      ---------------------------------------------------------

      (a)   Unless   Instructions   require  another  location  acceptable  to
Bank,  Financial  Assets will be held in the country or  jurisdiction in which
their  principal  trading market is located,  where such Financial  Assets may
be presented  for  payment,  where such  Financial  Assets were  acquired,  or
where  such  Financial  Assets  are  held  in  a  Reported  Depository.   Bank
                                         =============================
reserves the right to refuse to accept  delivery of  Financial  Assets or cash
in  countries  and  jurisdictions  other than those  referred to in Schedule 2
to this Agreement, as in effect from time to time.

      (b)   Bank  will  not be  obliged  to  follow  an  Instruction  to  hold
Financial  Assets with,  or have them  registered  or recorded in the name of,
any  person  not  chosen by Bank or its  Subcustodian.  However,  if  Customer
                                =====================
does  instruct  Bank to hold  Financial  Assets  and/or  cash with or register
or  record  Financial  Assets in the name of a person  not  chosen by Bank or
                                                                           ===
its  Subcutodian  and  Bank  agrees  to do  so,  except  in a case  in  which
==================                            ================================
registration  or  recording  in the  name of a person  chosen  by Bank or its
==============================================================================
Subcustodian  would impose risks to Customer not present if  registration  or
==============================================================================
recordation  were in a different  name,  the  consequences  of doing so are at
======================================
Customer's  own risk and Bank  (i) will not be  liable  therefor  and (ii) may
not provide  services under this Agreement with respect to Financial  Assets s
or cash so  held,  including,  without  limitation,  services  provided  under
Sections 2.8, 2.9, 2.10, and 8.2.

2.14  Tax Relief Services.
      -------------------

      Bank will provide tax relief services as provided in Section 8.2.


2.15   Foreign Exchange Transactions.
       -----------------------------

      To facilitate the  administration  of Customer's  trading and investment
activity and pursuant to Instructions  from  CustomerBank may, but will not be
obliged  to,  enter  into spot or  forward  foreign  exchange  contracts  with
Customer,  and may also provide  foreign  exchange  contracts  and  facilities
through its  Affiliates or  Subcustodians.  Instructions,  including  standing
Instructions,  may be issued  with  respect  to such  contracts,  but Bank may
establish rules or limitations  concerning any foreign exchange  facility made
available.  In all cases where Bank,  its  Affiliates or  Subcustodians  enter
into  a  master  foreign  exchange   contract  that  covers  foreign  exchange
transactions  for the  Accounts,  the terms  and  conditions  of that  foreign
exchange  contract and, to the extent not inconsistent,  this Agreement,  will
apply to such transactions.

2.16.  Compliance with Securities and Exchange  Commission ("SEC") Rule 17f-5
       -----------------------------------------------------------------------
("Rule     17f-5").
- -------------------

      (a)  Customer's  board of directors (or  equivalent  body)  (hereinafter
`Board')  hereby  delegates  to Bank,  and,  as to those  countries  listed in
Schedule 2 hereto (and as the same may be amended on notice to  Customer  from
time to time),  Bank hereby accepts the delegation to it, of the obligation to
perform as Customer's  `Foreign  Custody  Manager' (as that term is defined in
rule 17f-5(a)(3) as promulgated  under the Investment  Company Act of 1940, as
amended  ("1940 Act"),  including for the purposes of: (i) selecting  Eligible
Foreign  Custodians (as that term is defined in rule  17f-5(a)(1),  and as the
same may be amended from time to time,  or that have  otherwise  been exempted
pursuant  to an SEC  exemptive  order) to hold  Foreign  Financial  Assets and
Cash, (ii) evaluating the contractual  arrangements with such Eligible Foreign
Custodians (as set forth in rule  17f-5(c)(2)),  (iii) monitoring such foreign
custody arrangements (as set forth in rule 17f-5(c)(3)).

      (b) In connection with the foregoing, Bank shall:

      (i) Promptly  advise  Customer of the placement of Customer's  Financial
      Assets and Cash with an Eligible  Foreign  Custodian in connection  with
      execution of this Agreement;

      (ii)  provide  written  reports   notifying   Customer's  Board  of  the
      placement of Financial Assets and Cash with particular  Eligible Foreign
      Custodians  and of any  material  change in the  arrangements  with such
      Eligible  Foreign  Custodians,  with  such  reports  to be  provided  to
      Customer's  Board  at such  times  as the  Board  deems  reasonable  and
      appropriate  based on the  circumstances  of Customer's  foreign custody
      arrangements  (and until further notice from Customer such reports shall
      be provided not less than  quarterly  with  respect to the  placement of
      Financial Assets and Cash with particular  Eligible  Foreign  Custodians
      and with  reasonable  promptness  upon the  occurrence  of any  material
      change in the arrangements with such Eligible Foreign Custodians);

      (iii)  exercise  such  reasonable   care,   prudence  and  diligence  in
      performing  as  Customer's  Foreign  Custody  Manager as a person having
      responsibility  for the safekeeping of Foreign Financial Assets and cash
      would exercise;

      (iv) in selecting an Eligible Foreign  Custodian,  first have determined
      that  Foreign  Financial  Assets and cash placed and  maintained  in the
      safekeeping  of such  Eligible  Foreign  Custodian  shall be  subject to
      reasonable care, based on the standards  applicable to custodians in the
      relevant  market,  after having  considered all factors  relevant to the
      safekeeping  of such  Foreign  Financial  Assets  and  cash,  including,
      without limitation, those factors set forth in rule 17f-5(c)(1)(i)-(iv);

      (v)  determine  that  the  written  contract  with an  Eligible  Foreign
      Custodian  requires that the Eligible  Foreign  Custodian  shall provide
      reasonable  care for  Foreign  Financial  Assets  and Cash  based on the
      standards applicable to custodians in the relevant market;

      (vi)  determine  that the  written  contract  with an  Eligible  Foreign
      Custodian    contains    the    provisions    set    forth    in    Rule
      17f-5(c)(2)(i)(A)-(F)  or, in lieu of any of all of the  provisions  set
      forth  in  Rule   17f-5(c)(2)(i)(A)-(F),   other  provisions  that  Bank
      determines will provide,  in their  entirety,  the same or level of care
      and  protection  for the Foreign  Financial  Assets as the provisions in
      Rule 17f-5(c)(2)(i)(A)-(F), in their entirety; and .

      (vii) have  established  a system to monitor the  initial and  continued
      appropriateness  of maintaining  Foreign  Financial Assets and cash with
      particular Eligible Foreign Custodians and of the governing  contractual
      arrangements; it being understood,  however, that in the event that Bank
      shall have determined that the existing  Eligible Foreign Custodian in a
      given country would no longer afford Foreign  Financial  Assets and cash
      reasonable  care and that no other  Eligible  Foreign  Custodian in that
      country  would afford  reasonable  care,  Bank shall  promptly so advise
      Customer  and shall  then act in  accordance  with the  Instructions  of
      Customer  with  respect  to  the  disposition  of the  affected  Foreign
      Financial Assets and cash.

Subject  to  (b)(i)-(vii)  above,  Bank is  hereby  authorized  to  place  and
maintain  Foreign  Financial  Assets  and  cash on  behalf  of  Customer  with
Eligible Foreign Custodians  pursuant to a written contract deemed appropriate
by Bank.


      (c) Bank  represents  to Customer  that it is a U.S.  Bank as defined in
Rule  17f-5(a)(7).   Customer   represents  to  Bank  that:  (1)  the  Foreign
Financial  Assets and cash being placed and  maintained in Bank's  custody are
subject  to the 1940 Act,  as the same may be amended  from time to time;  (2)
its Board has  determined  that it is reasonable to rely on Bank to perform as
Customer's  Foreign  Custody  in each  country in which  Customer's  Financial
Assets and cash  shall be held  hereunder  and  determined  to accept  Country
Risk.  Nothing  contained  herein shall  require Bank to make any selection or
to  engage  in  any  monitoring  on  behalf  of  Customer  that  would  entail
consideration of Country Risk.

For  purposes  hereof,  "Country  Risk" shall mean  systemic  risks of holding
      assets in a particular
country including,  but no limited to, (a) an Eligible Foreign Custodian's use
      of an Eligible
Securities  Depository as defined in Rule 17f-7 under the  Investment  Company
      Act of 1940 as
amended,  (b) such  country's  financial  infrastructure,  (c) such  country's
      prevailing custody and
settlement   practices,   (d)   nationalization,    expropriation   or   other
      governmental actions, (e)
 regulation  of the banking or  securities  industry,  (f) currency  controls,
      restrictions, devaluations
 or  fluctuations,   and  (g)  market  conditions  which  affect  the  orderly
      execution of securities
transactions or affect the value of securities.


      (d) Bank shall provide to Customer such information  relating to Country
Risk as is  specified  in  Schedule  1 hereto.  Customer  hereby  acknowledges
that:  (i) such  information is solely  designed to inform  Customer of market
conditions and procedures  and is not intended as a  recommendation  to invest
or  not  invest  in  particular  markets;  and  (ii)  Bank  has  gathered  the
information  from sources it considers  reliable,  but that Bank shall have no
responsibility for inaccuracies or incomplete information.

2.17  Compliance with SEC Rule 17f-7 ("Rule 17f-7").
      ----------------------------------------------

      (a) Bank shall have  provided for  consideration  by Customer,  prior to
the  placement  of  Customer's  Foreign  Financial  Assets  with any  Eligible
Securities  Depository  in connection  with  execution of this  Agreement,  an
analysis of the custody risks associated with maintaining  Customer's  Foreign
Financial Assets with each Eligible  Securities  Depository used by Bank as of
the date  hereof (or, in the case of an  Eligible  Securities  Depository  not
used by  Bank  as of the  date  hereof,  prior  to the  initial  placement  of
Customer's  Foreign  Financial  Assets  at  such  Depository).  The  foregoing
analysis will be provided to Customer at Bank's  Website.  In connection  with
the  foregoing,   Customer  shall  notify  Bank  of  any  Eligible  Securities
Depositories at which it does not choose to have its Foreign  Financial Assets
held.  Bank shall  monitor  the  custody  risks  associated  with  maintaining
Customer's   Foreign  Financial  Assets  at  each  such  Eligible   Securities
Depository on a continuing  basis and shall  promptly  notify  Customer or its
adviser of any material changes in such risks.

      In conducting the aforementioned  analysis,  Bank shall consider factors
relevant to custody risks, including but not limited to:

(i)   the depository's expertise and market reputation;
(ii)  the quality of the despository's services;
(iii) the depository's financial strength;
(iv)  insurance or indemnification arrangements;
(v)   the extent and quality of regulation and independent  examination of the
            depository;
(vi)  the depository's standing in published ratings;
(vii) the   depository's   internal   controls   and  other   procedures   for
            safeguarding investments; and
(viii)      any related legal proceedings.

      (b) Bank shall  exercise  reasonable  care,  prudence  and  diligence in
performing the requirements set forth in Section 2.17(a) above.

      (c)  Based  on  the  information  available  to it in  the  exercise  of
diligence,  Bank  shall  determine  the  eligibility  under rule 17f-7 of each
depository  before including it on Schedule 3 hereto and shall promptly advise
Customer  if  any  Eligible  Securities  Depository  ceases  to  be  eligible.
(Eligible  Securities  Depositories used by Bank as of the date hereof are set
forth in  Schedule  3  hereto,  and as the same may be  amended  on  notice to
Customer from time to time.)


2.18        Securities Entitlement Orders.
            -----------------------------

    Bank  shall at all times be bound by  Instructions  (except  as  otherwise
herein  provided)  as to  Securities  Entitlements  of Customer  and shall not
permit,  honor or act upon any  prior,  equal or  contemporaneous  claim to or
instructions  or orders of any kind with respect to  Financial  Assets or Cash
by or from any  other  person  or  entity  of any  kind,  and  shall  keep all
Financial  Assets  and Cash at all  times  free from all  security  interests,
charges,  claims,   mortgages,   pledges  or  other  liens,   restrictions  or
encumbrances  other  than those  arising  in  connection  with  settlement  of
transactions  pursuant to this  Agreement  and other  charges and  payments by
Bank as permitted by this Agreement.


2.19  Confirmations.
      --------------

      Bank shall send  Customer  confirmations  of  transfers  to and from the
Accounts at the end of each business day.


                               3. INSTRUCTIONS

3.1   Acting on Instructions; Unclear Instructions.
      --------------------------------------------

      (a)   Customer  authorizes Bank to accept and act upon any  Instructions
received  by  it  without   inquiry.   Customer   will   indemnify   the  Bank
Indemnitees  against,  and hold each of them harmless  from,  any  Liabilities
that  may  be  imposed  on,   incurred  by,  or  asserted   against  the  Bank
Indemnitees  as a result of any action or omission  taken in  accordance  with
any  Instructions  or other  directions  upon which Bank is authorized to rely
under  the  terms  of  this  Agreement,   provided  that  Bank  shall  not  be
indemnified  against  or held  harmless  from  any  liability  arising  out of
Bank's negligence, fraud or willful misconduct.

      (b)   Unless  otherwise  expressly   provided,   all  Instructions  will
continue in full force and effect until canceled or superseded.

      (c)   Bank may (in its sole  discretion  and without  affecting any part
of this Section 3.1) seek  clarification  or  confirmation  of an  Instruction
from an  Authorized  Person and may decline to act upon an  Instruction  if it
does not receive  clarification or confirmation  satisfactory to it. Bank will
not, except as provided in Section 7.1 hereof,  be liable for any loss arising
   ===========================================
from any delay  while it seeks  such  clarification  or  confirmation  and it
                                                                     =========
documents that it sought clarification or confirmation.
======================================================

      (d)   In  executing  or  paying a payment  order  Bank may rely upon the
identifying  number (e.g.  Fedwire  routing number or account) of any party as
instructed in the payment  order.  Customer  assumes full  responsibility  for
any  inconsistency  between  the name and  identifying  number of any party in
payment orders issued to Bank in Customer's name.

3.2   Confirmation of Oral Instructions/Security Devices.
      --------------------------------------------------

      Any   Instructions   delivered  to  Bank  by  telephone   will  promptly
thereafter   be  confirmed   in  writing  by  an   Authorized   Person.   Each
confirmation is to be clearly marked  "Confirmation."  Bank will not be liable
for  having  followed  such  Instructions  notwithstanding  the  failure of an
Authorized  Person to send such  confirmation  in  writing  or the  failure of
such  confirmation  to  conform  to  the  telephone  Instructions  received,
                                                                           ===
provided that Bank shall have  exercised  reasonable  care in following  such
==============================================================================
Instructions.  In the  event  of a  discrepancy  between  Instructions  and a
==============================================================================
subsequent  confirmation,  Bank  will  immediately  notify  Customer  of such
==============================================================================
discrepancy.    Either   party   may   record   any   of   their    telephonic
===========
communications.   Customer   will   comply   with  any   security   procedures
reasonably  required  by Bank from time to time with  respect to  verification
of  Instructions.  Customer  will be  responsible  for  safeguarding  any test
keys,  identification  codes or other  security  devices  that  Bank will make
available to Customer or any Authorized Person.

3.3   Instructions; Contrary to Law/Market Practice.
      ---------------------------------------------

      Bank need not act upon Instructions  which it reasonably  believes to be
contrary  to law,  regulation  or market  practice  and will  immediately  so
                                                  ============================
notify  Customer,  but Bank will be under no duty to  investigate  whether any
================
Instructions comply with Applicable Law or market practice.

3.4   Cut-off Times.
      -------------

      Bank has  established  cut-off  times for receipt of some  categories of
Instruction,  which are consistent with industry  standards for the receipt of
such  instructions  and which  will be made  available  to  Customer.  If Bank
receives  an  Instruction  after  its  established  cut-off  time,  Bank  will
attempt  to act upon the  Instruction  on the day  requested  if Bank deems it
practicable  to do so  or  otherwise  as  soon  as  practicable  on  the  next
business day.

4.    FEES, EXPENSES AND OTHER AMOUNTS OWING TO BANK

4.1   Fees and Expenses.
      ----------------- -

      Customer  will pay Bank for its  services  hereunder  the fees set forth
in  Schedule A hereto or such other  amounts as may be agreed  upon in writing
from  time  to  time,   together  with  Bank's  reasonable   out-of-pocket  or
incidental   expenses,   including,   but  not  limited  to,   reasonable  and
appropriate  legal fees.  Customer  authorizes Bank to deduct amounts owing to
it from the Cash  Account,  for any  undisputed  fees or expenses from time to
                                     ==========
time  more  than 60 days in  arrears.  Bank  may  increase  the  fees for its
      ===================                                   =====    =========
services  hereunder  by not less  than  thirty  days'  notice  in  writing  to
===================
Customer.  Without  prejudice to Bank's other rights,  Bank reserves the right
to charge  interest  on  undisputed  overdue  amounts  from the due date until
                         ============
actual  payment  at such  rate as Bank may  reasonably  determine  but not to
                                                                 =============
exceed an annual rate of the then-current Federal funds plus 0.25%.
====================================================================

4.2   Overdrafts.
      ----------

      If a debit  to any  currency  in the  Cash  Account  results  in a debit
balance in that currency  (without regard to Cash Account  investments),  then
       ================================================================
Bank may, in its  discretion,  (i) advance an amount  equal to the  overdraft,
(ii) refuse to settle in whole or in part the  transaction  causing such debit
balance,  or  (iii)  if any  such  transaction  is  posted  to the  Securities
Account,  reverse  any such  posting.  If Bank elects to make such an advance,
the  advance  will be deemed a loan to  Customer,  payable on demand,  bearing
interest  at the  applicable  rate  charged  by  Bank  from  time  to time to
                                                                          ====
customers  similar to  Customer,  for such  overdrafts,  from the date of such
===============================
advance to the date of payment  (both  after as well as before  judgment)  and
otherwise on the terms on which Bank makes similar  overdrafts  available from
time to time.  No prior  action  or  course of  dealing  on  Bank's  part with
respect  to the  settlement  of  transactions  on  Customer's  behalf  will be
asserted by Customer  against Bank for Bank's  refusal to make advances to the
Cash Account or to settle any  transaction  for which  Customer  does not have
sufficient available funds in the applicable currency in the Cash Account.

      Custodian  may,  without  prior notice to Customer,  set off any payment
obligation  owed to it by Customer  under this Section 4.2 against  Customer's
Cash  Account,  regardless  of currency  involved.  If,  after set off against
Customer's  Cash  Account,  there  remains a debit  balance under this Section
4.2,  then,  with respect to Financial  Assets in the  Securities  Account and
without  prejudice  to Bank's  rights as a Securities  Intermediary  under New
York law (including,  but not limited to, under the Uniform  Commercial Code),
upon notice to Customer,  Bank shall be entitled to withhold  delivery of such
Financial  Assets  against  settlement  of pending  trades,  sell or otherwise
realize any such  Financial  Assets and to apply the proceeds in  satisfaction
of any such payment obligation,  provided that the foregoing is not prohibited
by Section 18 of the Investment Company Act of 1940.


         5. SUBCUSTODIANS, SECURITIES DEPOSITORIES, AND OTHER AGENTS

5.1   Appointment of Subcustodians; Use of Securities Depositories.
      ------------------------------------------------------------

      (a)   Bank is  authorized  under this  Agreement to act through and hold
Customer's  Financial  Assets  with  Subcustodians,  being at the date of this
                                     =============
Agreement  the  entities  listed  in  Schedule  2.  Bank  will use  reasonable
                                                ====
care in the selection  and continued  appointment  of such  Subcustodians.  In
addition,  Bank and each  Subcustodian may deposit  Financial Assets with, and
hold Financial  Assets in, any Reported  Depository or "other U.S.  Securities
                               ====================     ============
Depository."   Customer   will  provide  Bank  with  such   documentation   or
acknowledgements  that  Bank may  reasonably  require  to hold  the  Financial
                                  ============
Assets in such Securities Depositories.
               =======================

      (b)   Any  agreement  Bank enters into with a  Subcustodian  for holding
Bank's  customers'  assets will  provide  that such assets will not be subject
to any right,  charge,  security interest,  lien or claim of any kind in favor
of such  Subcustodian  or its  creditors  except a claim for payment for their
safe custody or administration,  or, in the case of cash deposits,  except for
liens or  rights  in favor of  creditors  of the  Subcustodian  arising  under
bankruptcy,  insolvency  or similar  law,  and that the  beneficial  ownership
thereof  will be freely  transferable  without  the  payment of money or value
other  than  for  safe  custody  or   administration.   Where  a  Subcustodian
deposits  Securities  with  a  Securities  Depository,  Bank  will  cause  the
Subcustodian  to identify on its records as belonging to Bank,  as agent,  the
Securities   shown  on  the   Subcustodian's   account   at  such   Securities
Depository.  This  Section  5.1(b) will not apply to the extent of any special
agreement or arrangement made by Customer with any particular Subcustodian.

      (c)   Bank  will  not be  liable  for  any  act or  omission  by (or the
insolvency  of) any  Securities  Depository.  In the event  Customer  incurs a
loss due to the negligence,  willful misconduct, or insolvency of a Securities
Depository,  Bank will make good faith  efforts,  in its  discretion,  to seek
recovery  from the  Securities  Depository,  but Bank will not be obligated to
institute  legal  proceedings,  file  a  proof  of  claim  in  any  insolvency
proceeding, or take any similar action.

5.2   Liability for Subcustodians.
      ---------------------------

      (a)   Subject to Section  7.1(b),  Bank will be liable for direct losses
incurred by Customer that result from:

            (i)   the failure by a Subcustodian  to use reasonable care in the
                  provision of  custodial  services by it in  accordance  with
                  the  standards  prevailing  in  the  relevant  market  for
                                                                         =====
                  Institutional   Clients   or  from  the  fraud  or   willful
                  ==========================
                  misconduct or default of such  Subcustodian in the provision
                             ===========
                  of custodial services by it; or

            (ii)  the    bankruptcy   or   insolvency   of   any    Affiliated
                     ===================
                  Subcustodian.

      (b)   Subject to Section 7.1(b) and Bank's duty to use  reasonable  care
                               === =
in the  monitoring  of a  Subcustodian's  financial  condition as reflected in
its published  financial  statements  and other publicly  available  financial
information  concerning  it, Bank will not be  responsible  for the insolvency
of any Subcustodian which is not a branch or an Affiliated Subcustodian.

      (c)   Bank   reserves   the   right   to   add,    replace   or   remove
Subcustodians.  Bank will give prompt  notice of any such  action,  which will
be advance  notice if  practicable.  Bank will identify the name,  address and
principal  place of business of any  Subcustodian  and the name and address of
the  governmental  agency or other  regulatory  authority  that  supervises or
regulates such Subcustodian.

5.3   Use of Agents.
      -------------

      (a)   Bank may provide  certain  services under this  Agreement  through
third  parties,  which may be  Affiliates.  Except to the extent  provided  in
Section 5.2 with respect to  Subcustodians,  Bank will not be responsible  for
any loss as a result of a failure by any broker or any other  third party that
it selects and retains using  reasonable  care to provide  ancillary  services
that it may not customarily  provide itself,  including,  without  limitation,
delivery  services and  providers  of  information  regarding  matters such as
pricing, proxy voting or Corporate Actions. Nevertheless,  Bank will be liable
for the performance of any such service  provider  selected by Bank that is an
                                =================
Affiliate  to the same extent as Bank would have been  liable if it  performed
such services itself.

      (b)   In the case of the  sale  under  Section  2.9(c)  of a  fractional
interest (or in other cases where  Customer has requested  Bank to arrange for
execution  of a trade)  Bank  will  place  trades  with a  broker  which is an
Affiliate to the extent that Bank has  established  a program for such trading
with  such   Affiliate.   An  affiliated   broker  may  charge  its  customary
commission  (or  retain  its  customary  spread)  with  respect  to  any  such
transaction.



                6. ADDITIONAL PROVISIONS RELATING TO CUSTOMER

6.1   Representations of Customer and Bank.
      ------------------------------------

      (a)   Customer  represents  and warrants that (i) it has full  authority
and power,  and has obtained all necessary  authorizations  and  consents,  to
deposit and  control the  Financial  Assets and cash in the  Accounts,  to use
Bank as its  custodian  in  accordance  with the terms of this  Agreement,  to
incur  indebtedness  as  contemplated  by this  Agreement,  and to enter  into
foreign exchange  transactions;  (ii) assuming  execution and delivery of this
Agreement by Bank,  this  Agreement  is  Customer's  legal,  valid and binding
obligation,  enforceable  in  accordance  with its terms and it has full power
and  authority to enter into and has taken all necessary  corporate  action to
authorize  the  execution  of this  Agreement  (iii) it has not  relied on any
oral or written  representation  made by Bank or any person on its behalf, and
acknowledges  that this  Agreement  sets out to the fullest  extent the duties
of Bank;  and (iv) it is a  resident  of the United  States  and shall  notify
Bank of any changes in residency.

      (b)   Bank  represents  and  warrants  that (i) assuming  execution  and
delivery of this  Agreement  by  Customer,  this  Agreement  is Bank's  legal,
valid and binding  obligation,  enforceable in accordance with its terms, (ii)
it has full  power and  authority  to enter  into and has taken all  necessary
corporate  action to authorize the execution of this Agreement,  (iii) it has
                                                              ================
not  relied on any oral or written  representation  made by  Customer  or any
==============================================================================
person on its behalf,  and  acknowledges  that this Agreement sets out to the
==============================================================================
fullest  extent the duties of Customer;  and (iv) it is qualified to act as a
==============================================================================
custodian for investment companies registered under the 1940 Act.
================================================================

Each party may rely upon the above or the  certification  of such other  facts
==========
as may be required to perform its obligations hereunder.
                      ======= ===

6.2   Provision of Additional Information.
      -----------------------------------

      Upon  request,  each  party  will  promptly  provide  to the other  such
                      ===========                              =========
information  about  itself  and its  financial  status as the other  party may
                                                          ================
reasonably  request,  including its  organizational  documents and its current
                                ===
audited and unaudited financial statements.

6.3   Customer is Liable to Bank Even if it is Acting for Another Person.
      ------------------------------------------------------------------

      If  Customer  is  acting  as an agent  for a  disclosed  or  undisclosed
principal  in respect of any  transaction,  cash,  or  Financial  Asset,  Bank
nevertheless  will treat Customer as its principal for all purposes under this
Agreement.  In this regard,  Customer will be liable to Bank as a principal in
respect of any  transactions  relating to the Account.  The foregoing will not
affect any rights Bank might have against Customer's principal.


                      7. WHEN BANK IS LIABLE TO CUSTOMER

7.1   Standard of Care; Liability.
      ---------------------------

      (a)   Bank  will  use  reasonable  care in  performing  its  obligations
under this  Agreement.  Bank will not be in violation of this  Agreement  with
respect  to  any  matter  as to  which  it has  satisfied  its  obligation  of
reasonable care.

      (b)   Bank will be liable for  Customer's  direct  damages to the extent
they result from Bank's  negligence or willful  misconduct  in performing  its
duties as set out in this  Agreement  and to the  extent  provided  in Section
5.2(a)  or  breach  of  any  warranty  or   representation   made  under  this
Agreement.  In  the  event  of  such  negligence  or  willful  misconduct  the
liability  of the Bank in  connection  with the loss or damage will not exceed
(i) the lesser of the  current  replacement  cost of any  Financial  Assets or
the  market  value of the  Financial  Assets  to  which  such  loss or  damage
relates at the time the  Customer  reasonably  should  have been aware of such
negligence or willful misconduct,  plus (ii) compensatory  interest up to that
time at the  rate  applicable  to the base  currency  of the  Customers'  Cash
Account.  Nevertheless,  under no  circumstances  will Bank be liable  for any
indirect,  incidental,  consequential or special damages  (including,  without
limitation,  lost  profits)  of any form  incurred  by any  person or  entity,
whether  or not  foreseeable  and  regardless  of the type of  action in which
such  a  claim  may  be  brought,   with  respect  to  the  Accounts,   Bank's
performance hereunder, or Bank's role as custodian.

      (c)   Customer will  indemnify the Bank  Indemnitees  against,  and hold
them harmless from,  any  Liabilities  that may be imposed on,  incurred by or
asserted  against any of the Bank Indemnitees to the extent in connection with
                                              ==============
or arising out of (i) Bank's  performance  under this Agreement,  provided the
Bank  Indemnitees  have not  acted  with  negligence  or  engaged  in fraud or
willful  misconduct in connection with the Liabilities in question or (ii) any
action or omission taken by Bank or such Bank  Indemnitees in accordance with
============================     =============================================
any  Instructions or other directions of Customer on which Bank is authorized
=====================================            =============================
hereunder to rely.  Nevertheless,  Customer will not be obligated to indemnify
=================
any  Bank  Indemnitee  under  the  preceding  sentence  with  respect  to  any
Liability for which Bank is liable under Section 5.2 of this Agreement.

      (d)   Without limiting  Subsections  7.1(a),  (b) or (c), Bank will have
no  duty  or  responsibility  to:  (i)  question   Instructions  or  make  any
suggestions to Customer or an Authorized Person regarding such Instructions,
                                                                           ===
except as provided in Section 3.2,  provided  that the  Instructions  are not
==============================================================================
clearly incorrect on their face; (ii) supervise or make  recommendations  with
===============================
respect to  investments  or the  retention of Financial  Assets;  (iii) advise
Customer  or an  Authorized  Person  regarding  any  default in the payment of
principal or income of any security  other than as provided in Section  2.7(b)
of this  Agreement;  (iv) except as may otherwise be required by Sections 2.16
or 2.17,  evaluate  or report to Customer or an  Authorized  Person  regarding
the financial  condition of any broker,  agent or other party to which Bank is
instructed by an  Authorized  Person to deliver  Financial  Assets or cash; or
           ==========================
(v)  review or  reconcile  trade  confirmations  received  from  brokers  (and
Customer  or  its  Authorized  Persons  issuing  Instructions  will  bear  any
responsibility to review such  confirmations  against  Instructions  issued to
and Statements of Account issued by Bank).

         (e) Promptly after receipt by Bank of notice of commencement of any
=============================================================================
action, Bank will, if a claim in respect thereof is  made against Customer
===========================================================================
under this Agreement, notify Customer of the commencement thereof; but the
===========================================================================
omission so to notify Customer will not relieve it from any liability which
============================================================================
it may have to Customer otherwise than under this Agreement. In case any such
==============================================================================
action is brought against Bank, and it notified Customer of the commencement
=============================================================================
thereof, Customer will be entitled to participate therein and, to the extent
=============================================================================
that Customer may wish, assume the defense thereof; provided, that in the
==========================================================================
case of any claim that Bank deems significant, Bank shall have the right to
============================================================================
consent to Customer's choice of counsel in its defense of such action, such
============================================================================
consent not to be unreasonably withheld. After notice from Customer of
=======================================================================
Customer's intention to assume the defense of an action, Bank shall bear the
=============================================================================
expenses of any additional counsel obtained by Bank, and Customer shall not
============================================================================
be liable to Bank under this section for any legal or other expenses
=====================================================================
subsequently incurred by Bank in connection with the defense thereof other
===========================================================================
than reasonable costs of investigation. Bank shall in no case confess any
==========================================================================
claim or make any compromise in any case in which Customer is asked to
=======================================================================
indemnify Bank except with Customer's prior written consent.
============================================================

7.2   Force Majeure.
      -------------

      Bank will  maintain and update from time to time  business  continuation
and disaster  recovery  procedures  with respect to its custody  business that
it determines from time to time meet  reasonable  commercial  standards.  Bank
will have no liability,  however,  for any damage,  loss, expense or liability
of any nature  that  Customer  may  suffer or incur,  caused by an act of God,
fire,  flood,  civil  or  labor  disturbance,  war,  act of  any  governmental
authority  or other  act or  threat of any  authority  (de jure or de  facto),
malfunction  of  equipment  or  software  (except  where such  malfunction  is
primarily  attributable  to Bank's  negligence in maintaining the equipment or
software),  failure of  operations  of any  external  funds  transfer  system,
inability to obtain or  interruption  of external  communications  facilities,
or any  cause  beyond  the  reasonable  control  of  Bank  (including  without
limitation, the non-availability of appropriate foreign exchange).

7.3   Bank  May Consult With Counsel.
      ------------------------------

      Bank  will be  entitled  to rely  on,  and may act upon  the  advice  of
professional  advisers  in relation  to matters of law,  regulation  or market
practice (which may be the  professional  advisers of Customer),  and will not
be liable to Customer for any action  reasonably  taken or omitted pursuant to
                                      ============
such advice of which it promptly notifies Customer.
           =======================================

7.4   Bank Provides Diverse Financial  Services and May Generate Profits as a
      ------------------------------------------------------------------------
Result.
- ------

      Customer  acknowledges  that Bank or its  Affiliates may have a material
interest  in  transactions  entered  into  by  Customer  with  respect  to the
Account  or that  circumstances  are  such  that  Bank  may  have a  potential
conflict of duty or interest.  For  example,  Bank or its  Affiliates  may act
as a market  maker in the  Financial  Assets  to  which  Instructions  relate,
provide  brokerage  services to other customers,  act as financial  adviser to
the issuer of such  Financial  Assets,  act in the same  transaction  as agent
for more  than one  customer,  have a  material  interest  in the issue of the
Financial  Assets;  or earn  profits  from any of these  activities.  Customer
further  acknowledges  that Bank or its  Affiliates  may be in  possession  of
investment-related   information   tending  to  show  that  the   Instructions
received  may not be in the best  interests  of Customer  but that Bank is not
under any duty to disclose any such information.


                                 8. TAXATION

8.1   Tax Obligations.
      ---------------

      (a)   Customer  confirms that Bank is authorized to deduct from any cash
received or credited to the Cash  Account any taxes or levies  required by any
revenue or governmental authority in respect of Customer's Accounts; provided
                                                                   ===========
that such cash shall be paid to such revenue or governmental authority or set
==============================================================================
aside in a separate account of Customer for such purpose.
========================================================

      (b)   Customer will provide to Bank such certifications,  documentation,
and information as it may reasonably require in connection with taxation.
                          ===========

      (c)    Customer  will  be  responsible  for  the  payment  of all  taxes
relating to the  Financial  Assets in the  Securities  Account.  Customer will
indemnify  and hold Bank  harmless  from and against any and all  liabilities,
penalties,  interest or additions  to tax with  respect to or resulting  from,
any delay in, or  failure  by,  Bank (i) to pay,  withhold  or report any U.S.
federal,  state or  local  taxes or  foreign  taxes  imposed  on  Customer's
                                                                ==============
Financial  Assets,  or (ii) to report interest,  dividend or other income paid
=================
or credited to the Cash Account, provided,  however, that Customer will not be
liable to Bank for any penalty or  additions to tax due as a result of Bank's
                                                        ======================
failure  to pay or  withhold  tax or to  report  interest,  dividend  or other
=======     ===     ========         ==========
income  paid or  credited  to the Cash  Account  solely as a result of Bank's
                                                 =============================
negligent acts or omissions.
===========================

8.2   Tax Reclaims.
      -------------

      (a)   Subject to the  provisions of this Section,  Bank will apply for a
reduction of withholding  tax and any refund of any tax paid or tax credits in
respect of income  payments on  Financial  Assets  credited to the  Securities
Account that Bank believes may be  available.  To defray  expenses  pertaining
to nominal tax claims,  Bank may from  time-to-time set minimum  thresholds as
to a de minimus  value of tax reclaims or reduction  of  withholding  which it
will pursue in respect of income payments under this section.  Notwithstanding
any  minimum  threshold  set  by  Bank,  Bank  will  file  a  tax  reclaim  or
application for reduction of withholding if requested by Customer.

      (b)   The  provision  of a tax  reclaim  service by Bank is  conditional
                                      =======
upon Bank  receiving from Customer (i) a declaration of its identity and place
of  residence  and (ii)  certain  other  documentation  requested by Bank (pro
                                                        ==================
forma  copies of which are  available  from  Bank),  prior to the  receipt  of
Financial Assets in the Account or the payment of income.

      (c)   Bank will  perform  tax  reclaim  services  only with  respect  to
                                     =======
taxation  levied  by the  revenue  authorities  of the  countries  advised  to
Customer from time to time and Bank may, by  notification  in writing,  in its
absolute  discretion,  supplement  or amend  the  countries  in which  the tax
relief  services  are  offered.  Other  than  as  expressly  provided  in this
Section 8.2, Bank will have no  responsibility  with regard to Customer's  tax
position or status in any jurisdiction.

      (d)   Customer   confirms  that  Bank  is  authorized  to  disclose  any
information required by any revenue authority or any governmental entity with
            ========                                                     =====
appropriate jurisdiction in relation to the processing of any tax reclaim.
=========================                                          ======


                                  9. TERMINATION

      This Agreement  will continue until  terminated by either Bank giving to
Customer,  or  Customer  giving to Bank , a notice in writing  specifying  the
date of termination,  which date shall be not less than 60 days after the date
of giving such  notice.  If Customer  gives  notice of  termination,  Customer
shall  designate a successor  custodian or custodian to whom Bank must deliver
the Financial  Assets and cash. If Bank gives notice of termination,  Customer
shall,  within  sixty days of the  notice,  notify  Bank as to identity of the
successor  custodian or  custodians.  Upon the date of  termination  specified
in the notice,  this  Agreement  shall  terminate,  and Bank shall deliver the
Financial  Assets  and  cash to the  successor  custodian(s).  If a  successor
custodian is not  designated  by Customer in  accordance  with the  foregoing,
Bank  shall,  upon  the  date  of  termination  specified  in  the  notice  of
termination, deliver the Financial Asset and cash to Customer.

      Bank will in any event be  entitled  to deduct  any  undisputed  amounts
                                                           ============
owing  to it  prior  to  delivery  of the  Financial  Assets  and  cash  (and,
accordingly,  Bank will be  entitled  to sell  Financial  Assets and apply the
sale proceeds in  satisfaction  of undisputed  amounts owing to it).  Customer
                                  ===========
will  reimburse  Bank  promptly  for all  out-of-pocket  expenses it incurs in
delivering  Financial  Assets upon  termination.  Termination  will not affect
any of the  liabilities  either  party  owes to the other  arising  under this
Agreement prior to such termination.


                                 10. MISCELLANEOUS

10.1  Notices.
      -------

      Notices (other than  Instructions)  will be served by registered mail or
hand  delivery  to the  address  of the  respective  parties as set out on the
first page of this  Agreement,  unless notice of a new address is given to the
other  party in writing.  Notice will not be deemed to be given  unless it has
been received.

10.2  Successors and Assigns.
      ----------------------

        This Agreement will be binding on each of the parties' successors and
assigns, but the parties agree that neither party can assign its rights and
obligations under this Agreement without the prior written consent of the
other party, which consent will not be unreasonably withheld. In the event
                                                             ==============
that Customer substitutes another bank or trust company for Bank due to a
==========================================================================
change in
=========
control of Bank, Bank shall pay all of Customer's reasonable expenses
======================================================================
incurred in connection with the transition to the successor custodian,
=======================================================================
including, without limitation, the expenses associated with the transfer of
============================================================================
securities, monies and other properties and Customer's negotiation of new
==========================================================================
custodian contractual documentation.
====================================


10.3  Interpretation.
      --------------

      Headings  are  for  convenience  only  and are not  intended  to  affect
interpretation.  References  to sections  are to  sections  of this  Agreement
and  references to  sub-sections  and paragraphs  are to  sub-sections  of the
sections and paragraphs of the sub-sections in which they appear.

10.4  Entire Agreement.
      ----------------

      (a)   The following Rider(s) are incorporated into this Agreement:

            ___   Cash Trade Execution;

            ___   Cash Sweep;

            ___   Accounting Services;

            ___   Mutual Fund.


      (b)   This  Agreement,  including the  Schedules,  Exhibits,  and Riders
(and any  separate  agreement  which  Bank and  Customer  may enter  into with
respect  to any Cash  Account),  sets out the  entire  Agreement  between  the
parties in connection with the subject matter,  and this Agreement  supersedes
any  other  agreement,  statement,  or  representation  relating  to  custody,
whether  oral or  written.  Amendments  must be in writing  and signed by both
parties.

10.5  Information Concerning Deposits at Bank's London Branch.
      -------------------------------------------------------

      Under U.S federal  law,  deposit  accounts  that  Customer  maintains in
Bank's foreign  branches  (outside of the U.S.) are not insured by the Federal
Deposit Insurance  Corporation  ("FDIC");  in the event of Bank's liquidation,
foreign branch deposits have a lesser preference than U.S. deposits;  and such
foreign  deposits are subject to cross-border  risks.  Bank's London Branch is
a member of the  United  Kingdom  Deposit  Protection  Scheme  (the  "Scheme")
established  under  Banking Act 1987 (as amended).  This Scheme  provides that
in the event of Bank's  insolvency  payments may be made to certain  customers
of Bank's  London  Branch.  Payments  under the Scheme are limited to 90% of a
depositor's  total  cash  deposits  subject  to a maximum  payment  to any one
depositor of(pound)18,000 (or 20,000 euros if greater).  Most deposits  denominated
in sterling and other  European  Economic Area  Currencies  and euro made with
Bank within the United  Kingdom  are  covered.  Further  details of the Scheme
are available on request.

10.6  Insurance.
      ---------

      Bank will not be required to maintain  any  insurance  coverage  for the
benefit of Customer.

10.7  Governing Law and Jurisdiction.
      ------------------------------ -

      This  Agreement will be construed,  regulated,  and  administered  under
the laws of the United  States or State of New York,  as  applicable,  without
regard  to New  York's  principles  regarding  conflict  of laws.  The  United
States  District  Court for the  Southern  District  of New York will have the
sole  and  exclusive   jurisdiction   over  any  lawsuit  or  other   judicial
proceeding  relating to or arising  from this  Agreement.  If that court lacks
federal  subject  matter  jurisdiction,  the Supreme Court of the State of New
York,  New York County will have sole and  exclusive  jurisdiction.  Either of
these  courts  will  have  proper  venue  for any  such  lawsuit  or  judicial
proceeding,   and  the  parties   waive  any   objection  to  venue  or  their
convenience  as a forum.  The parties agree to submit to the  jurisdiction  of
any of  the  courts  specified  and to  accept  service  of  process  to  vest
personal  jurisdiction  over them in any of these courts.  The parties further
hereby knowingly,  voluntarily and intentionally  waive, to the fullest extent
permitted  by  Applicable  Law,  any right to a trial by jury with  respect to
any  such  lawsuit  or  judicial   proceeding  arising  or  relating  to  this
Agreement or the transactions  contemplated  hereby. To the extent that in any
jurisdiction  Customer may now or  hereafter be entitled to claim,  for itself
or its assets,  immunity  from suit,  execution,  attachment  (before or after
judgment)  or other legal  process,  Customer  shall not claim,  and it hereby
irrevocably waives, such immunity.

10.8  Severability; Waiver; and Survival.
      ----------------------------------

      (a)   If one or more  provisions  of this  Agreement  are held  invalid,
illegal  or  unenforceable  in any  respect  on the  basis  of any  particular
circumstances   or  in  any   jurisdiction,   the   validity,   legality   and
enforceability  of such provision or provisions  under other  circumstances or
in other jurisdictions and of the remaining  provisions will not in any way be
affected or impaired.

      (b)  Except as  otherwise  provided  herein,  no failure or delay on the
part of either party in exercising any power or right hereunder  operates as a
waiver,  nor  does  any  single  or  partial  exercise  of any  power or right
preclude any other or further exercise,  or the exercise of any other power or
right. No waiver by a party of any provision of this  Agreement,  or waiver of
any breach or default,  is effective unless it is in writing and signed by the
party against whom the waiver is to be enforced.

      (c)   Each  party's  rights,   protections,   and  remedies  under  this
            ===========
Agreement shall survive its termination.

10.9  Counterparts.
      ------------

      This  Agreement  may be executed in several  counterparts  each of which
will be deemed to be an original  and  together  will  constitute  one and the
same agreement.

10.10 No Third Party Beneficiaries.
      ----------------------------

      A person  who is not a party to this  Agreement  shall  have no right to
enforce any term of this Agreement.

10.11   Confidentiality.
========----------------

         Bank shall not disclose any information regarding Customer's
======================================================================
Securities, Securities Account, Financial Assets or cash under this Agreement
==============================================================================
except as is reasonably necessary to provide services to Customer, as
======================================================================
required by law or regulation or the organizational documents of the issuer
============================================================================
of any Financial Asset, or otherwise with the consent of Customer. Customer
============================================================================
agrees to keep this Agreement confidential and, except where disclosure is
===========================================================================
required by law or regulation, shall only disclose it (or any part of it)
==========================================================================
with the prior written consent of Bank.
=======================================

10.12   Limited Obligations.
========-------------------=

         With respect to a Customer organized as a Massachusetts business
==========================================================================
trust, a copy of such Customer's Declaration of Trust is on file with the
==========================================================================
Secretary of State of The Commonwealth of Massachusetts, the Bank
==================================================================
acknowledges that the obligations of or arising out of this Agreement with
===========================================================================
respect to such Customer are not binding upon any of such Customer's
=====================================================================
trustees, officers, employees, agents or shareholders individually, but are
============================================================================
binding solely upon the assets and property of the Customer in accordance
==========================================================================
with its proportionate interest hereunder. Bank further acknowledges that the
==============================================================================
assets and liabilities of each series are separate and distinct, and that the
==============================================================================
obligations of or arising out of this Agreement are binding solely upon the
============================================================================
assets or property of the series on behalf of which the Customer has executed
==============================================================================
this instrument. Bank also agrees that the obligations of each Customer and
============================================================================
series hereunder shall be several and not joint, in accordance with its
========================================================================
proportionate interest hereunder, and agrees not to proceed against any
========================================================================
Customer or series for the obligations of another Customer or series.
=====================================================================

         Customers may be added or deleted as parties to this Agreement from
=============================================================================
time to time by amendment to Exhibit A.
=======================================

                                    OPPENHEIMERFUNDS, INC.



                              By:_______________________________________
                                    Title:    Senior   Vice    President   and
                                    Treasurer,  on behalf  of each  investment
                                    company   identified   as  a  Customer  in
                                    Exhibit  A  attached  hereto  individually
                                    and   severally,   and  not   jointly  and
                                    severally


                                    JPMORGAN CHASE BANK


                                    By:_______________________________________

                                    Title:___________________________________







                                                      EXHIBIT A
                                                      ---------

List of  Investment  Companies  that are a Party to this  Agreement  (each,  a
"Customer"):


- --------------------------------------------------------------------------
                                Fund Name
- --------------------------------------------------------------------------
- -----------------------------------
Oppenheimer Champion Income Fund
- -----------------------------------
- --------------------------------------------------------------------------
Oppenheimer Strategic Income Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Multiple Strategies Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of Oppenheimer
Strategic Bond Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer High Yield Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Integrity Funds for the account of Oppenheimer Bond Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of  Oppenheimer Main
Street Small Cap Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Capital  Appreciation Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Global Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of Oppenheimer Global
Securities Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Panorama Series Fund, Inc. for the account of Growth Portfolio
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Panorama Series Fund, Inc. for the account of Total Return Portfolio
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of Oppenheimer
Capital Appreciation Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Panorama Series Fund, Inc. for the account of Government Securities
Portfolio
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Panorama Series Fund, Inc. for the account of Oppenheimer International
Growth Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of Oppenheimer
Aggressive Growth Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of Oppenheimer Bond
Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of Oppenheimer High
Income Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of Oppenheimer Main
Street Growth & Income Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account Oppenheimer Money
Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Variable Account Funds for the account of Oppenheimer
Multiple Strategies Fund/VA
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Multi-Sector Income Trust
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Real Asset Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Developing Markets Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer International  Small Company Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer International Growth Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer Main Street Small Cap Fund
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Oppenheimer International Bond Fund
- --------------------------------------------------------------------------









Schedule A
- -----------

FEES
- -----

OppenheimerFunds Fee Schedule                                  August 16, 2002

                Domestic Custody Services
                                            Annual
 Market Value Fees                       Safekeeping
                                        (basis points)
- ----------------------------------------------------------
- ----------------------------------------------------------
 First $15 billion                    0.15 bp
- ----------------------------------------------------------
- ----------------------------------------------------------
 Next $10 billion                     0.10 bp
- ----------------------------------------------------------
- ----------------------------------------------------------
 Over $25 billion                     0.05 bp
- ----------------------------------------------------------

                 Global Custody Services
- ----------------------------------------------------------
                                            Annual
 Market                                  Safekeeping
                                        (basis points)
- ----------------------------------------------------------
- ----------------------------------------------------------
 Argentina                            25
- ----------------------------------------------------------
- ----------------------------------------------------------
 Australia                            3.8
- ----------------------------------------------------------
- ----------------------------------------------------------
 Austria                              4
- ----------------------------------------------------------
- ----------------------------------------------------------
 Bahrain                              45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Bangladesh                           35
- ----------------------------------------------------------
- ----------------------------------------------------------
 Belgium                              6
- ----------------------------------------------------------
- ----------------------------------------------------------
 Bermuda                              45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Botswana                             35
- ----------------------------------------------------------
- ----------------------------------------------------------
 Brazil                               10
- ----------------------------------------------------------
- ----------------------------------------------------------
 Bulgaria                             50
- ----------------------------------------------------------
- ----------------------------------------------------------
 Canada                               1.43
- ----------------------------------------------------------
- ----------------------------------------------------------
 CEDEL/Euroclear                      1.75
- ----------------------------------------------------------
- ----------------------------------------------------------
 Chile                                25
- ----------------------------------------------------------
- ----------------------------------------------------------
 China (Shanghai)                     35
- ----------------------------------------------------------
- ----------------------------------------------------------
 China (Shenzhen)                     35
- ----------------------------------------------------------
- ----------------------------------------------------------
 Colombia                             35
- ----------------------------------------------------------
- ----------------------------------------------------------
 Croatia                              45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Cyprus                               40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Czech Republic                       25
- ----------------------------------------------------------
- ----------------------------------------------------------
 Denmark                              6
- ----------------------------------------------------------
- ----------------------------------------------------------
 Ecuador                              40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Egypt                                25
- ----------------------------------------------------------
- ----------------------------------------------------------
 Estonia                              45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Euro CDs                             1.75
- ----------------------------------------------------------
- ----------------------------------------------------------
 Finland                              4
- ----------------------------------------------------------
- ----------------------------------------------------------
 France                               2.15
- ----------------------------------------------------------
- ----------------------------------------------------------
 Germany                              1.5
- ----------------------------------------------------------
- ----------------------------------------------------------
 Ghana                                40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Greece                               40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Hong Kong                            2.85
- ----------------------------------------------------------
- ----------------------------------------------------------
 Hungary                              15
- ----------------------------------------------------------
- ----------------------------------------------------------
 India                                16
- ----------------------------------------------------------
- ----------------------------------------------------------
 Indonesia                            12
- ----------------------------------------------------------
- ----------------------------------------------------------
 Ireland                              6
- ----------------------------------------------------------
- ----------------------------------------------------------
 Israel                               30
- ----------------------------------------------------------
- ----------------------------------------------------------
 Italy                                5
- ----------------------------------------------------------
- ----------------------------------------------------------
 Ivory Coast                          50
- ----------------------------------------------------------
- ----------------------------------------------------------
 Jamaica                              50
- ----------------------------------------------------------
 Japan                                1.75
- ----------------------------------------------------------
- ----------------------------------------------------------
 Jordan                               35
- ----------------------------------------------------------
- ----------------------------------------------------------
 Kenya                                40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Korea                                7
- ----------------------------------------------------------
- ----------------------------------------------------------
 Latvia                               45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Lebanon                              40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Lithuania                            45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Luxembourg                           6
- ----------------------------------------------------------
- ----------------------------------------------------------
 Malaysia                             5.4
- ----------------------------------------------------------
- ----------------------------------------------------------
 Mauritius                            35
- ----------------------------------------------------------
- ----------------------------------------------------------
 Mexico                               7
- ----------------------------------------------------------
- ----------------------------------------------------------
 Morocco                              40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Namibia                              45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Netherlands                          3.25
- ----------------------------------------------------------
- ----------------------------------------------------------
 New Zealand                          3.5
- ----------------------------------------------------------
- ----------------------------------------------------------
 Norway                               6
- ----------------------------------------------------------
- ----------------------------------------------------------
 Oman                                 45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Pakistan                             28
- ----------------------------------------------------------
- ----------------------------------------------------------
 Peru                                 28
- ----------------------------------------------------------
- ----------------------------------------------------------
 Philippines                          30
- ----------------------------------------------------------
- ----------------------------------------------------------
 Poland                               30
- ----------------------------------------------------------
- ----------------------------------------------------------
 Portugal                             20
- ----------------------------------------------------------
- ----------------------------------------------------------
 Romania                              45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Russia                               45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Singapore                            3.8
- ----------------------------------------------------------
- ----------------------------------------------------------
 Slovak Republic                      40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Slovenia                             45
- ----------------------------------------------------------
- ----------------------------------------------------------
 South Africa                         5
- ----------------------------------------------------------
- ----------------------------------------------------------
 Spain                                6
- ----------------------------------------------------------
- ----------------------------------------------------------
 Sri Lanka                            35
- ----------------------------------------------------------
- ----------------------------------------------------------
 Swaziland                            45
- ----------------------------------------------------------
- ----------------------------------------------------------
 Sweden                               6
- ----------------------------------------------------------
- ----------------------------------------------------------
 Switzerland                          2.5
- ----------------------------------------------------------
- ----------------------------------------------------------
 Taiwan                               20
- ----------------------------------------------------------
- ----------------------------------------------------------
 Thailand                             15
- ----------------------------------------------------------
- ----------------------------------------------------------
 Tunisia                              35
- ----------------------------------------------------------
- ----------------------------------------------------------
 Turkey                               30
- ----------------------------------------------------------
- ----------------------------------------------------------
 United Kingdom                       1.5
- ----------------------------------------------------------
- ----------------------------------------------------------
 Uruguay                              40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Venezuela                            25
- ----------------------------------------------------------
- ----------------------------------------------------------
 Zambia                               40
- ----------------------------------------------------------
- ----------------------------------------------------------
 Zimbabwe                             40
- ----------------------------------------------------------

Note:  The minimum Russian asset based fee per relationship is $100,000.

                              Out of Pocket Fees
The OppenheimerFunds will reimburse JPMorgan for reasonable out-of-pocket
expenses incurred on its behalf.

              Earnings Credits for Balances on Domestic Accounts
Earnings credits will be reflected on the monthly custody bills as an offset
to fees.  The rates applied will be the Fed Funds Rate less 10 basis points.
The earnings credits are earned at the Fund level and are carried forward on
a monthly basis throughout a one-year period.

                   Overdraft Balances on Domestic Accounts
Overdraft amounts will be reflected on the monthly custody bills at the Fund
level.  The rates applied will be the Fed Funds Rate plus 50 basis points.







OppenheimerFunds, Inc.                          JPMorgan Chase Bank

on behalf of each investment

company named in Exhibit A

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

Signature                                       Signature



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

Print Name                                      Print Name



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

Title                                           Title









Schedule 1

Information Regarding Country Risk
- ----------------------------------


      1. To aid Customer in its  determinations  regarding  Country Risk, Bank
shall furnish  annually and upon the initial  placing of Financial  Assets and
cash into a country the following information (check items applicable):

      A     Opinions of local counsel concerning:

_X_   i.    Whether  applicable foreign law would restrict the access afforded
            Customer's  independent  public  accountants  to books and records
            kept by an eligible foreign custodian located in that country.

_X__  ii.   Whether applicable  foreign law would restrict  Customer's ability
            to  recover  its  Financial  Assets  and cash in the  event of the
            bankruptcy  of an  Eligible  Foreign  Custodian  located  in  that
            country.

_X__  iii.  Whether applicable  foreign law would restrict  Customer's ability
            to recover  Financial Assets that are lost while under the control
            of an Eligible Foreign Custodian located in the country.

      B.    Written information concerning:

_X__  i.    The foreseeability of expropriation,  nationalization, freezes, or
            confiscation of Customer's Financial Assets.

_X__  ii.   Whether  difficulties  in  converting  Customer's  cash  and  cash
            equivalents to U.S. dollars are reasonably foreseeable.

      C.    A market report with respect to the following topics:

      (i)   securities   regulatory   environment,   (ii)  foreign   ownership
      restrictions,  (iii) foreign  exchange,  (iv) securities  settlement and
      registration,  (v) taxation, and (vi) depositories (including depository
      evaluation), if any.

      2. To aid  Customer  in  monitoring  Country  Risk,  Bank shall  furnish
board the following additional information:

      Market flashes,  including with respect to changes in the information in
market reports.








Schedule 2
- ----------

LIST OF COUNTRIES and SUBCUSTODIANS
- ------------------------------------


JPMORGAN INVESTOR SERVICES

AGENT AND CASH NETWORK

- -----------------------------------------------------------------------------------
COUNTRY          SUB-CUSTODIAN                    CASH CORRESPONDENT BANK
- -----------------------------------------------------------------------------------
ARGENTINA        JPMorgan Chase Bank              JPMorgan Chase Bank
                 Arenales 707, 5th Floor          Buenos Aires
                 1061 Buenos Aires

                 ARGENTINA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
AUSTRALIA        JPMorgan Chase Bank              Australia and New Zealand
                 Level 37                         Banking Group Ltd.
                 AAP Center 259, George Street    Melbourne
                 Sydney NSW 2000
                 AUSTRALIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
AUSTRIA          Bank Austria Creditanstalt AG    J.P. Morgan AG
                 Julius Tandler Platz - 3         Frankfurt
                 A-1090 Vienna
                 AUSTRIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BAHRAIN          HSBC Bank Middle East            National Bank of Bahrain
                 PO Box 57                        Manama
                 Manama, 304
                 BAHRAIN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BANGLADESH       Standard Chartered Bank          Standard Chartered Bank
                 18-20 Motijheel C.A              Dhaka
                 Box 536
                 Dhaka-1000
                 BANGLADESH
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BELGIUM          Fortis Bank N.V.                 J.P. Morgan AG
                 3 Montagne Du Parc               Frankfurt
                 1000 Brussels
                 BELGIUM
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BERMUDA          The Bank of Bermuda Limited      The Bank of Bermuda Limited
                 6 Front Street                   Hamilton
                 Hamilton HMDX
                 BERMUDA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BOTSWANA         Barclays Bank of Botswana        Barclays Bank of Botswana
                 Limited                          Limited
                 Barclays House, Khama Crescent   Gaborone
                 Gaborone
                 BOTSWANA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BRAZIL           Citibank, N.A.                   Citibank, N.A..
                 Avenida Paulista, 1111           Sao Paulo
                 Sao Paulo, SP 01311-920
                 BRAZIL
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BULGARIA         ING Bank N.V.                    ING Bank N.V.
                 Sofia Branch                     Sofia
                 12 Emil Bersinski Street
                 Ivan Vazov Region
                 1408 Sofia
                 BULGARIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CANADA           Royal Bank of Canada             Royal Bank of Canada
                 200 Bay Street, Suite 1500       Toronto
                 15th Floor
                 Royal Bank Plaza, North Tower
                 Toronto Ontario M5J 2J5
                 CANADA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CHILE            Citibank, N.A.                   Citibank, N.A
                 Avda. Andres Bello 2687          Santiago.
                 3rd and 5th Floors
                 Santiago
                 CHILE
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CHINA - SHANGHAI The Hongkong and Shanghai        Citibank, N.A.
                 Banking                          New York
                 Corporation Limited
                 34/F, Shanghai Senmao
                 International Building
                 101 Yin Cheng East Road
                 Pudong
                 Shanghai 200120
                 THE PEOPLE'S REPUBLIC OF CHINA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CHINA - SHENZHEN The Hongkong and Shanghai        JPMorgan Chase Bank
                 Banking                          Hong Kong
                 Corporation Limited
                 1st Floor
                 Century Plaza Hotel
                 No.1 Chun Feng Lu
                 Shenzhen
                 THE PEOPLE'S REPUBLIC OF CHINA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
COLOMBIA         Cititrust Colombia S.A.          Cititrust Colombia S.A.
                 Sociedad Fiduciaria              Sociedad Fiduciaria
                 Carrera 9a No 99-02              Santa Fe de Bogota
                 First Floor
                 Santa Fe de Bogota, D.C.
                 COLOMBIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CROATIA          Privredna banka Zagreb d.d.      Privredna banka Zagreb d.d.
                 Savska c.28                      Zagreb
                 10000 Zagreb
                 CROATIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CYPRUS           The Cyprus Popular Bank Ltd.     The Cyprus Popular Bank Ltd.
                 154 Limassol Avenue              Nicosia
                 P.O. Box 22032
                 CY-1598 Nicosia
                 CYPRUS
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CZECH REPUBLIC   Ceskoslovenska obchodni banka,   Ceskoslovenska obchodni banka,
                 a.s.                             a.s.
                 Na Porici 24                     Prague
                 110 00 Prague 1
                 CZECH REPUBLIC
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
DENMARK          Danske Bank A/S                  Nordea Bank Danmark A/S
                 2-12 Holmens Kanal               Copenhagen
                 DK 1092 Copenhagen K
                 DENMARK
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ECUADOR          Citibank, N.A.                   Citibank, N.A.
                 Av. Republica de El Salvador y   Quito
                 Naciones Unidas (Esquina)
                 Quito
                 ECUADOR
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
EGYPT            Citibank, N.A.                   Citibank, N.A.
                 4 Ahmed Pasha Street             Cairo
                 Garden City
                 Cairo
                 EGYPT
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ESTONIA          Hansabank                        Esti Uhispank
                 Liivalaia 8                      Tallinn
                 EE0001 Tallinn
                 ESTONIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
FINLAND          Nordea Bank Finland Plc          J.P. Morgan AG
                 2598 Custody Services            Frankfurt
                 Aleksis Kiven Katu 3-5
                 FIN-00020 MERITA, Helsinki
                 FINLAND
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
FRANCE           BNP Paribas Securities Services  J.P. Morgan AG
                 S.A.                             Frankfurt
                 Ref 256
                 BP 141
                 3, Rue D'Antin
                 75078 Paris
                 Cedex 02
                 FRANCE
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
GERMANY          Dresdner Bank AG                 J.P. Morgan AG
                 Juergen-Ponto-Platz 1            Frankfurt
                 60284 Frankfurt/Main
                 GERMANY
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
GHANA            Barclays Bank of Ghana Limited   Barclays Bank of Ghana Limited
                 Barclays House, High Street      Accra
                 Accra
                 GHANA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
GREECE           HSBC Bank plc                    J.P. Morgan AG
                 Messogion 109-111                Frankfurt
                 11526 Athens
                 GREECE
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
HONG KONG        The Hongkong and Shanghai        JPMorgan Chase Bank
                 Banking                          Hong Kong
                 Corporation Limited
                 36th Floor, Sun Hung Kai Centre
                 30 Harbour Road
                 Wan Chai
                 HONG KONG
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
HUNGARY          Citibank Rt.                     ING Bank Rt.
                 Szabadsag ter 7-9                Budapest
                 H-1051 Budapest V
                 HUNGARY
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ICELAND          Islandsbanki-FBA                 Islandsbanki-FBA
                 Kirkjusandur 2                   Reykjavik
                 155 Reykjavik
                 ICELAND
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
INDIA            Standard Chartered Bank          Standard Chartered Bank
                 Phoenix Centre, Phoenix Mills    Mumbai
                 Compound
                 Senapati Bapat Marg, Lower
                 Parel
                 Mumbai 400 013
                 INDIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
INDONESIA        The Hongkong and Shanghai        The Hongkong and Shanghai
                 Banking                          Banking
                 Corporation Limited              Corporation Limited
                 World Trade Center 4th Floor     Jakarta
                 Jalan Jendral Sudirman Kav.
                 29-31
                 Jakarta 12920
                 INDONESIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
IRELAND          Bank of Ireland                  J.P. Morgan AG
                 International Financial          Frankfurt
                 Services Centre
                 1 Harbourmaster Place
                 Dublin 1
                 IRELAND
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                 Allied Irish Banks, p.l.c.       J.P. Morgan AG
                 P.O. Box 518                     Frankfurt
                 International Financial
                 Services Centre
                 Dublin 1
                 IRELAND
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ISRAEL           Bank Leumi le-Israel B.M         Bank Leumi le-Israel B.M.
                 35, Yehuda Halevi Street         Tel Aviv
                 61000 Tel Aviv
                 ISRAEL
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ITALY            BNP Paribas Securities Services  J.P. Morgan AG
                 S.A.                             Frankfurt
                 2 Piazza San Fedele
                 20121 Milan
                 ITALY
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
IVORY COAST      Societe Generale de Banques en   Societe Generale
                 Cote d'Ivoire                    Paris
                 5 et 7, Avenue J. Anoma - 01
                 B.P. 1355
                 Abidjan 01
                 IVORY COAST
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
JAMAICA          CIBC Trust and Merchant Bank     CIBC Trust and Merchant Bank
                 Jamaica Limited                  Jamaica Limited
                 23-27 Knutsford Blvd.            Kingston
                 Kingston 10
                 JAMAICA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
JAPAN            Mizuho Corporate Bank, Limited   JPMorgan Chase Bank
                 6-7 Nihonbashi-Kabutocho         Tokyo
                 Chuo-Ku
                 Tokyo 103
                 JAPAN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
JORDAN           Arab Bank Plc                    Arab Bank Plc
                 P O Box 950544-5                 Amman
                 Amman
                 Shmeisani
                 JORDAN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
KAZAKHSTAN       ABN AMRO Bank Kazakhstan         ABN AMRO Bank Kazakhstan
                 45, Khadzhi Mukana Street        Almaty
                 480099 Almaty
                 KAZAKHSTAN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
KENYA            Barclays Bank of Kenya Limited   Barclays Bank of Kenya Limited
                 c/o Barclaytrust Investment      Nairobi
                 Services & Limited
                 Mezzanine 3, Barclays Plaza,
                 Loita Street
                 Nairobi
                 KENYA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LATVIA           Hansabanka                       Hansabanka
                 Kalku iela 26                    Riga
                 Riga, LV 1050
                 LATVIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LEBANON          HSBC Bank Middle East            JPMorgan Chase Bank
                 Ras-Beirut Branch                New York
                 P.O. Box 11-1380
                 Abdel Aziz
                 Ras-Beirut
                 LEBANON
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LITHUANIA        Vilniaus Bankas AB               Vilniaus Bankas AB
                 12 Gedimino pr.                  Vilnius
                 LT 2600 Vilnius
                 LITHUANIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LUXEMBOURG       Banque Generale du Luxembourg    J.P. Morgan AG
                 S.A.                             Frankfurt
                 50 Avenue J.F. Kennedy
                 L-2951
                 LUXEMBOURG
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
MALAYSIA         HSBC Bank Malaysia Berhad        HSBC Bank Malaysia Berhad
                 2 Leboh Ampang                   Kuala Lumpur
                 50100 Kuala Lumpur
                 MALAYSIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
MAURITIUS        The Hongkong and Shanghai        The Hongkong and Shanghai
                 Banking                          Banking
                 Corporation Limited              Corporation Limited
                 5/F Les Cascades Building        Port Louis
                 Edith Cavell Street
                 Port Louis
                 MAURITIUS
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
MEXICO           Banco J.P. Morgan, S.A.          Banco J.P. Morgan, S.A.
                 Torre Optima                     Mexico, D.F
                 Paseo de las Palmas #405 Piso
                 15
                 Lomas de Chapultepec
                 11000 Mexico, D. F.
                 MEXICO
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
MOROCCO          Banque Commerciale du Maroc      Banque Commerciale du Maroc
                 S.A.                             S.A.
                 2 Boulevard Moulay Youssef       Casablanca
                 Casablanca 20000
                 MOROCCO
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
NAMIBIA          Standard Bank Namibia Limited    Standard Bank of Namibia Limited
                 Mutual Platz                     Windhoek
                 Cnr. Stroebel and Post Streets
                 P.O.Box 3327
                 Windhoek
                 NAMIBIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
NETHERLANDS      ABN AMRO Bank N.V.               J.P. Morgan AG
                 Kemelstede 2                     Frankfurt
                 P. O. Box 3200
                 4800 De Breda
                 NETHERLANDS
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
NEW ZEALAND      National Nominees Limited        National Bank of New Zealand
                 Level 2 BNZ Tower                Wellington
                 125 Queen Street
                 Auckland
                 NEW ZEALAND
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
*NIGERIA*        Stanbic Bank Nigeria Limited     The Standard Bank of South
                 188 Awolowo Road                 Africa Limited
                 P.O. Box 54746                   Johannesburg
                 Falomo, Ikoyi
                 Lagos
                 NIGERIA
- -----------------------------------------------------------------------------------
*RESTRICTED SERVICE ONLY.  PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER
INFORMATION.*
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
NORWAY           Den norske Bank ASA              Den norske Bank ASA
                 Stranden 21                      Oslo
                 PO Box 1171 Sentrum
                 N-0107 Oslo
                 NORWAY
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
OMAN             HSBC Bank Middle East            Oman Arab Bank
                 Bait Al Falaj Main Office        Muscat
                 Ruwi, Muscat PC 112
                 OMAN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PAKISTAN         Standard Chartered Bank          Standard Chartered Bank
                 Box 4896                         Karachi
                 Ismail Ibrahim Chundrigar Road
                 Karachi 74000
                 PAKISTAN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PERU             Citibank, N.A.                   Banco de Credito del Peru
                 Camino Real 457                  Lima
                 Torre Real - 5th Floor
                 San Isidro, Lima 27
                 PERU
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PHILIPPINES      The Hongkong and Shanghai        The Hongkong and Shanghai
                 Banking                          Banking
                 Corporation Limited              Corporation Limited
                 30/F Discovery Suites            Manila
                 25 ADB Avenue
                 Ortigas Center
                 Pasig City, Manila
                 PHILIPPINES
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
POLAND           Bank Handlowy w. Warszawie S.A.  Bank Rozwoju Eksportu S.A.
                 ul. Senatorska 16                Warsaw
                 00-923 Warsaw 55
                 POLAND
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PORTUGAL         Banco Espirito Santo, S.A        J.P. Morgan AG
                 7th floor                        Frankfurt
                 Rua Castilho, 26
                 1250-069 Lisbon
                 PORTUGAL
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ROMANIA          ING Bank N.V.                    ING Bank N.V.
                 13-15 Kiseleff Blvd              Bucharest
                 Bucharest 1
                 ROMANIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
*RUSSIA*         J.P. Morgan Bank International   JPMorgan Chase Bank
                 (Limited Liability Company)      New York
                 Building 2/1, 8th floor          A/C JPMorgan Chase Bank London
                 Paveletskaya Square              (USD NOSTRO Account)
                 113054 Moscow
                 RUSSIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
*RESTRICTED SERVICE ONLY.  PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER
INFORMATION.*
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SINGAPORE        Standard Chartered Bank          Oversea-Chinese Banking
                 3/F, 6 Battery Road              Corporation
                 049909                           Singapore
                 SINGAPORE
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SLOVAK REPUBLIC  Ceskoslovenska obchodni banka,   Vseobecno Uverova Banka S.A.
                 a.s.                             Bratislava
                 pobocka zahranicnej banky v SR
                 Michalska 18
                 815 63 Bratislava
                 SLOVAK REPUBLIC
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SLOVENIA         Bank Austria Creditanstalt d.d.  Bank Austria Creditanstalt d.d.
                 Ljubljana                        Ljubljana
                 Wolfova 1                        Ljubljana
                 SI-1000 Ljubljana
                 SLOVENIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SOUTH AFRICA     The Standard Bank of South       The Standard Bank of South
                 Africa Limited                   Africa Limited
                 Standard Bank Centre             Johannesburg
                 1st Floor
                 5 Simmonds Street
                 Johannesburg 2001
                 SOUTH AFRICA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SOUTH KOREA      The Hongkong and Shanghai        The Hongkong and Shanghai
                 Banking                          Banking
                 Corporation Limited              Corporation Limited
                 5/F HSBC Building                Seoul
                 #25, Bongrae-dong 1-ga
                 Seoul
                 SOUTH KOREA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SPAIN            J.P. Morgan Bank, S.A.           J.P. Morgan AG
                 Paseo de la Castellana, 51       Frankfurt
                 28046 Madrid
                 SPAIN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SRI LANKA        The Hongkong and Shanghai        The Hongkong and Shanghai
                 Banking                          Banking
                 Corporation Limited              Corporation Limited
                 24 Sir Baron Jayatillaka         Colombo
                 Mawatha
                 Colombo 1
                 SRI LANKA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SWEDEN           Skandinaviska Enskilda Banken    Svenska Handelsbanken
                 Sergels Torg 2                   Stockholm
                 SE-106 40 Stockholm
                 SWEDEN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SWITZERLAND      UBS AG                           UBS AG
                 45 Bahnhofstrasse                Zurich
                 8021 Zurich
                 SWITZERLAND
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
TAIWAN           JPMorgan Chase Bank              JPMorgan Chase Bank
                 14th Floor                       Taipei
                 2, Tun Hwa S. Road Sec. 1
                 Taipei
                 TAIWAN
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
THAILAND         Standard Chartered Bank          Standard Chartered Bank
                 14th Floor, Zone B               Bangkok
                 Sathorn Nakorn Tower
                 100 North Sathorn Road Bangrak
                 Bangkok 10500
                 THAILAND
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
TUNISIA          Banque Internationale Arabe de   Banque Internationale Arabe de
                 Tunisie, S.A.                    Tunisie, S.A.
                 70-72 Avenue Habib Bourguiba     Tunis
                 P.O. Box 520
                 1080 Tunis Cedex
                 TUNISIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
TURKEY           JPMorgan Chase Bank              JPMorgan Chase Bank
                 Emirhan Cad. No: 145             Istanbul
                 Atakule, A Blok Kat:11
                 80700-Dikilitas/Besiktas
                 Istanbul
                 TURKEY
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
*UKRAINE*        ING Bank Ukraine                 ING Bank Ukraine
                 28 Kominterna Street             Kiev
                 5th Floor
                 Kiev, 252032
                 UKRAINE
- -----------------------------------------------------------------------------------
*RESTRICTED SERVICE ONLY.  PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR FURTHER
INFORMATION.*
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
U.A.E.           HSBC Bank Middle East            The National Bank of Abu Dhabi
                 P.O. Box 66                      Abu Dhabi
                 Dubai
                 UNITED ARAB EMIRATES
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
U.K.             JPMorgan Chase Bank              National Westminster Bank
                 Crosby Court                     London
                 Ground Floor
                 38 Bishopsgate
                 London EC2N 4AJ
                 UNITED KINGDOM
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
URUGUAY          BankBoston, N.A.                 BankBoston, N.A
                 Zabala 1463                      Montevideo.
                 Montevideo
                 URUGUAY
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
U.S.A.           JPMorgan Chase Bank              JPMorgan Chase Bank
                 4 New York Plaza                 New York
                 New York
                 NY 10004
                 U.S.A.
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
VENEZUELA        Citibank, N.A.                   Citibank, N.A.
                 Carmelitas a Altagracia          Caracas
                 Edificio Citibank
                 Caracas 1010
                 VENEZUELA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
VIETNAM          The Hongkong and Shanghai        The Hongkong and Shanghai
                 Banking                          Banking
                 Corporation Limited              Corporation Limited
                 75 Pham Hong Thai, District 1    Ho Chi Minh City
                 Ho Chi Minh City
                 VIETNAM
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ZAMBIA           Barclays Bank of Zambia Limited  Barclays Bank of Zambia Limited
                 Kafue House, Cairo Road          Lusaka
                 Lusaka
                 ZAMBIA
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ZIMBABWE         Barclays Bank of Zimbabwe        Barclays Bank of Zimbabwe
                 Limited                          Limited
                 2nd Floor, 3 Anchor House        Harare
                 Jason Mayo Avenue
                 Harare
                 ZIMBABWE
- -----------------------------------------------------------------------------------









Schedule 3
- ----------

ELIGIBLE SECURITIES DEPOSITORIES
- --------------------------------

JPMORGAN INVESTOR SERVICES

SECURITIES DEPOSITORIES

- -----------------------------------------------------------------------------------
COUNTRY           DEPOSITORY                       INSTRUMENTS
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ARGENTINA         CVSA                             Equity, Corporate Debt,
                  (Caja de Valores S.A.)           Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CRYL                             Government Debt
                  (Central de Registration y
                  Liquidacion de Instrumentos de
                  Endeudamiento Publico)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
AUSTRALIA         Austraclear Limited              Corporate Debt, Money Market,
                                                   Government Debt and
                                                   Semi-Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CHESS                            Equity
                  (Clearing House Electronic
                  Sub-register System)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
AUSTRIA           OeKB                             Equity, Corporate Debt,
                  (Oesterreichische Kontrollbank   Government Debt
                  AG)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BELGIUM           CIK                              Equity, Corporate Debt
                  (Caisse Interprofessionnelle de
                  Depots et de Virements de
                  Titres S.A.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  NBB                              Corporate Debt, Government Debt
                  (National Bank of Belgium)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BRAZIL            CBLC                             Equity
                  (Companhia Brasileira de
                  Liquidacao e Custodia)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CETIP                            Corporate Debt
                  (Central de Custodia e
                  Liquidacao Financiera de
                  Titulos Privados)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  SELIC                            Government Debt
                  (Sistema Especial de Liquidacao
                  e Custodia)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
BULGARIA          BNB                              Government Debt
                  (Bulgaria National Bank)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CDAD                             Equity, Corporate Debt
                  (Central Depository A.D.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CANADA            CDS                              Equity, Corporate, Government
                  (The Canadian Depository for     Debt
                  Securities Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CHILE             DCV                              Equity, Corporate Debt,
                  (Deposito Central de Valores     Government Debt
                  S.A.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CHINA, SHANGHAI   CSDCC, Shanghai Branch           Equity
                  (China Securities Depository
                  and Clearing Corporation
                  Limited, Shanghai Branch)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CHINA, SHENZHEN   CSDCC, Shenzhen Branch           Equity
                  (China Securities Depository
                  and Clearing Corporation Ltd,
                  Shenzhen Branch)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
COLOMBIA          DCV                              Government Debt
                  (Deposito Central de Valores)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  DECEVAL                          Equity, Corporate Debt,
                  (Deposito Centralizado de        Government Debt
                  Valores de Colombia S.A.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CROATIA           SDA                              Equity, Government Debt
                  (Central Depository Agency Inc.
                  - Stredisnja depozitarna
                  agencija d.d.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  MOF                              Short-term debt issued by the
                  (Ministry of Finance of the      Ministry of Finance.
                  Republic of Croatia)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CNB                              Short-term debt issued by the
                  (Croatian National Bank)         National Bank of Croatia.
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
CZECH REPUBLIC    SCP                              Equity, Corporate Debt,
                  (Stredisko cennych papiru -      Government Debt
                  Ceska republica)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CNB                              Government Debt
                  (Czech National Bank)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
DENMARK           VP                               Equity, Corporate Debt,
                  (Vaerdipapircentralen A/S)       Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
EGYPT             MCSD                             Equity, Corporate Debt
                  (Misr for Clearing, Settlement
                  and Depository)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ESTONIA           ECDS                             Equity, Corporate Debt,
                  (Estonian Central Depository     Government Debt
                  for Securities Limited - Eesti
                  Vaatpaberite Keskdepositoorium)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
EUROMARKET        DCC                              Euro-CDs
                  (The Depository and Clearing
                  Centre)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CBL                              Internationally Traded Debt,
                  (Clearstream Banking, S.A.)      Equity
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  Euroclear Bank                   Internationally Traded Debt,
                                                   Equity
- -----------------------------------------------------------------------------------






- -----------------------------------------------------------------------------------
FINLAND           APK                              Equity, Corporate Debt,
                  (Finnish Central Securities      Government Debt
                  Depository Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
FRANCE            Euroclear France                 Equity, Corporate Debt,
                                                   Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
GERMANY           CBF                              Equity, Corporate Debt,
                  (Clearstream Banking AG)         Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
GREECE            CSD                              Equity, Corporate Debt
                  (Central Securities Depository
                  S.A.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  BoG                              Government Debt
                  (Bank of Greece)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
HONG KONG         HKSCC                            Equity
                  (Hong Kong Securities Clearing
                  Company Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CMU                              Corporate Debt, Government Debt
                  (Central Moneymarkets Unit)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
HUNGARY           KELER                            Equity, Corporate Debt,
                  (Central Clearing House and      Government Debt
                  Depository (Budapest) Ltd. -
                  Kozponti Elszamolohaz es
                  Ertektar (Budapest) Rt.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ICELAND           ISD                              Equity, Corporate Debt,
                  (The Islandic Securities         Government Debt
                  Depository)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
INDIA             NSDL                             Equity, Corporate Debt,
                  (National Securities Depository  Government Debt
                  Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CDSL                             Equity
                  (Central Depository Services
                  (India) Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  RBI                              Government Debt
                  (Reserve Bank of India)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
INDONESIA         KSEI                             Equity, Corporate Debt
                  (PT Kustodian Sentral Efek
                  Indonesia)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
IRELAND           CREST                            Equity, Corporate Debt
                  (CRESTCo Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ISRAEL            TECH                             Equity, Corporate Debt,
                  (Tel Aviv Stock Exchange         Government Debt
                  Clearing House Ltd.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ITALY             Monte Titoli S.p.A.              Equity, Corporate Debt,
                                                   Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
IVORY COAST       DC/BR                            Equity
                  (Le Depositaire Central /
                  Banque de Reglement)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
JAMAICA           JCSD                             Equity, Corporate Debt,
                  (Jamaica Central Securities      Government Debt
                  Depository)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
JAPAN             JASDEC                           Equity, Convertible Debt
                  (Japan Securities Depository
                  Center, Incorporated)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  BoJ                              Registered Government Debt
                  (Bank of Japan)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
KAZAHKSTAN        CSD                              Equity
                  (Central Securities Depository
                  CJSC)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
KENYA             CBCD                             Government Debt
                  (Central Bank Central
                  Depository)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LATVIA            LCD                              Equity, Corporate Debt,
                  (Latvian Central Depository)     Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LEBANON           Midclear S.A.L.                  Equity
                  (Custodian and Clearing Center
                  of Financial Instruments for
                  Lebanon and the Middle East
                  S.A.L.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LITHUANIA         CSDL                             Equity, Corporate Debt,
                  (Central Securities Depository   Government Debt
                  of Lithuania)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LUXEMBOURG        CBL                              Equity
                  (Clearstream Banking S.A.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
MALAYSIA          MCD                              Equity, Corporate Debt
                  (Malaysian Central Depository
                  Sdn. Bhd.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  BNM                              Government Debt
                  (Bank Negara Malaysia)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
MAURITIUS         CDS                              Equity, Corporate Debt
                  (Central Depository and
                  Settlement Company Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
MEXICO            INDEVAL                          Equity, Corporate Debt,
                  (S.D. INDEVAL S.A. de C.V.)      Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
MOROCCO           Maroclear                        Equity, Corporate Debt,
                                                   Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
NETHERLANDS       NECIGEF                          Equity, Corporate Debt,
                  (Nederlands Centraal Insituut    Government Debt
                  voor Giraal Effectenverkeer
                  B.V.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
NEW ZEALAND       NZCSD                            Equity, Corporate Debt,
                  (New Zealand Central Securities  Government Debt
                  Depository)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
NIGERIA           CSCS                             Equity, Corporate Debt,
                  (Central Securities Clearing     Government Debt
                  System Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
NORWAY            VPS                              Equity, Corporate Debt,
                  (Verdipapirsentralen)            Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
OMAN              MDSRC                            Equity, Corporate Debt
                  (The Muscat Depository and
                  Securities Registration
                  Company, S.A.O.C.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PAKISTAN          CDC                              Equity, Corporate Debt
                  (Central Depository Company of
                  Pakistan Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  SBP                              Government Debt
                  (State Bank of Pakistan)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PERU              CAVALI                           Equity, Corporate Debt,
                  (CAVALI ICLV S.A.)               Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PHILIPPINES       PCD                              Equity
                  (Philippine Central Depository,
                  Inc.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  ROSS                             Government Debt
                  (Bangko Sentral ng Pilipinas /
                  Register of Scripless
                  Securities)
- -----------------------------------------------------------------------------------






- -----------------------------------------------------------------------------------
POLAND            NDS                              Equity, Long-Term Government
                  (National Depository for         Debt
                  Securities S.A.)
- -----------------------------------------------------------------------------------






- -----------------------------------------------------------------------------------
                  CRT                              Short-Term Government Debt
                  (Central Registry of
                  Treasury-Bills)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
PORTUGAL          INTERBOLSA                       Equity, Corporate Debt,
                  (Sociedade Gestora de Sistemas   Government Debt
                  de Liquidacao e de Sistemas
                  Centralizados de Valores
                  Mobiliarios, S.A.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ROMANIA           SNCDD                            Equity
                  (National Company for Clearing,
                  Settlement and Depository for
                  Securities)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  BSE                              Equity
                  (Bucharest Stock Exchange)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
RUSSIA            VTB                              Equity, Corporate Debt,
                  (Vneshtorgbank)                  Government Debt (Ministry of
                                                   Finance Bonds)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  NDC                              Equity, Corporate Debt,
                  (National Depository Centre)     Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SINGAPORE         CDP                              Equity, Corporate Debt
                  (The Central Depository (Pte)
                  Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  MAS                              Government Debt
                  (Monetary Authority of
                  Singapore)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SLOVAK REPUBLIC   SCP                              Equity, Corporate Debt,
                  (Stredisko cennych papierov SR,  Government Debt
                  a.s.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  NBS                              Government Debt
                  (National Bank of Slovakia)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SLOVENIA          KDD                              Equity, Corporate Debt,
                  (Centralna klirinsko depotna     Government Debt
                  druzba d.d.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SOUTH AFRICA      CD                               Corporate Debt, Government Debt
                  (The Central Depository Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  STRATE                           Equity
                  (Share Transactions Totally
                  Electronic)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SOUTH KOREA       KSD                              Equity, Corporate Debt,
                  (Korea Securities Depository)    Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SPAIN             SCLV                             Equity, Corporate Debt
                  (Servicio de Compensacion y
                  Liquidacion de Valores, S.A.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  Bank of Spain                    Corporate Debt, Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SRI LANKA         CDS                              Equity, Corporate Debt
                  (Central Depository System
                  (Private) Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SWEDEN            VPC                              Equity, Corporate Debt,
                  (Vardepapperscentralen AB)       Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
SWITZERLAND       SIS                              Equity, Corporate Debt,
                  (SIS SegaInterSettle AG)         Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
TAIWAN            TSCD                             Equity, Government Debt
                  (Taiwan Securities Central
                  Depository Co., Ltd.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
THAILAND          TSD                              Equity, Corporate Debt,
                  (Thailand Securities Depository  Government Debt
                  Company Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
TUNISIA           STICODEVAM                       Equity, Corporate Debt,
                  (Societe Tunisienne              Government Debt
                  Interprofessionnelle pour la
                  Compensation et le Depot des
                  Valeurs Mobilieres)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
TURKEY            TAKASBANK                        Equity, Corporate Debt,
                  (IMKB Takas ve Saklama Bankasi   Government Debt
                  A.S.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
UNITED ARAB       DFM                              Equity, Corporate Debt,
EMIRATES          (Dubai Financial Market          Government Debt
                  Clearing House)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
UNITED KINGDOM    CREST                            Equity, Corporate Debt,
                  (CRESTCo Limited)                Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CMO                              Sterling & Euro CDs,
                  (Central Moneymarkets Office)    Commercial Paper
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
UNITED STATES     DTC                              Equity, Corporate Debt
                  (Depository Trust Company)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  FED                              Government Debt, Mortgage Back
                  (The Federal Reserve Book-Entry  Debt
                  System)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
VENEZUELA         BCV                              Government Debt
                  (Banco Central de Venezuela)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  CVV                              Equity, Corporate Debt, Money
                  (Caja Venezolana de Valores,     Market
                  S.A.)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
VIETNAM           SCC                              Equity, Corporate Debt,
                  (Securities Custody Centre)      Government Debt
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
ZAMBIA            CSD                              Equity, Government Debt
                  (LuSE Central Shares Depository
                  Limited)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
                  BoZ                              Government Debt
                  (Bank of Zambia)
- -----------------------------------------------------------------------------------

EX-23

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 10 to Registration
Statement No. 33-58383 of Oppenheimer International Bond Fund on Form N-1A of
our report dated October 25, 2002, appearing in the Statement of Additional
Information, which is part of such Registration Statement, and to the
reference to us under the headings "Independent Auditors" in the Statement of
Additional Information and "Financial Highlights" in the Prospectus, which is
also part of such Registration Statement.


Deloitte & Touche LLP

Denver, Colorado
November 21, 2002