OPPENHEIMER DISCOVERY FUND
485APOS, 2000-11-14
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                                                       Registration No. 33-371
                                                               File No. 811-4410

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933                    /X/

      PRE-EFFECTIVE AMENDMENT NO. __                                     /   /


      POST-EFFECTIVE AMENDMENT NO. 25                                      /X/


                                     and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
      ACT OF 1940                                                          /X/


      AMENDMENT NO. 27                                                     /X/



                           OPPENHEIMER DISCOVERY FUND
------------------------------------------------------------------------------
              (Exact Name of Registrant as Specified in Charter)

            Two World Trade Center, New York, New York 10048-0203
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                   (Address of Principal Executive Offices)

                                  212-323-0200
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                         (Registrant's Telephone Number)

                           ANDREW J. DONOHUE, ESQ.
                            OppenheimerFunds, Inc.
            Two World Trade Center, New York, New York 10048-0203
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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) / / on _______,
      pursuant to paragraph  (b) / / 60 days after filing  pursuant to paragraph
      (a)(1) /X/ on January 16, 2001,  pursuant to paragraph  (a)(1) / / 75 days
      after  filing,  pursuant to paragraph  (a)(2) / / on _______,  pursuant to
      paragraph (a)(2) of Rule 485


If appropriate, check the following box:

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


                                                                     Oppenheimer
                                                                  Discovery Fund




Prospectus dated January 16, 2001



                                          Oppenheimer Discovery Fund is a mutual
                                          fund that seeks  capital  appreciation
                                          to  make  your  investment   grow.  It
                                          emphasizes   investments   in   common
                                          stocks of U.S. growth companies having
                                          a small market capitalization.
                                             This Prospectus  contains important
                                          information     about    the    Fund's
                                          objective,  its  investment  policies,
                                          strategies and risks. It also contains
                                          important information about how to buy
                                          and sell  shares of the Fund and other
                                          account  features.  Please  read  this
                                          Prospectus carefully before you invest
                                          and keep
As with all mutual funds, the             it for future reference about your
Securities and Exchange Commission        account.
has not approved or disapproved the
Fund's securities nor has it
determined that this Prospectus is
accurate or complete. It is a
criminal offense to represent
otherwise.




                                                       1234



<PAGE>


                                                CONTENTS




                    ABOUT THE FUND

                    The Fund's Investment Objective and Strategies
                    Main Risks of Investing in the Fund
                    The Fund's Performance
                    Fees and Expenses of the Fund
                    About the Fund's Investments
                    How the Fund is Managed


                    ABOUT YOUR ACCOUNT

                    How to Buy Shares
                    Class A Shares
                    Class B Shares
                    Class C Shares
                    Class N Shares
                    Class Y Shares

                    Special Investor Services
                    AccountLink
                    PhoneLink
                       OppenheimerFunds Internet Web Site
                    Retirement Plans

                    How to Sell Shares
                    By Mail
                    By Telephone

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





<PAGE>


ABOUT THE FUND

The Fund's Investment Objective and Strategies
WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks capital appreciation.

WHAT DOES THE FUND INVEST IN? The Fund invests  mainly in common  stocks of U.S.
companies that the portfolio  manager believes have favorable growth  prospects.
The  Fund   currently   emphasizes   stocks  of  issuers   that  have  a  market
capitalization   of  less  than  $3  billion  when  the  Fund  buys  them.  That
capitalization  range may change over time.  While these stocks may be traded on
stock exchanges, in many cases the Fund buys over-the-counter  securities. These
investments are more fully explained in "About the Fund's Investments," below.

HOW DOES  THE  PORTFOLIO  MANAGER  DECIDE  WHAT  SECURITIES  TO BUY OR SELL?  In
selecting  securities  for the Fund,  the  Fund's  portfolio  manager  looks for
companies with high growth potential using  fundamental  analysis of a company's
financial  statements,  interviews with management and analysis of the company's
operations and product development,  as well as the industry of which the issuer
is part. The manager also evaluates  research on particular  industries,  market
trends and general economic conditions.  In seeking broad diversification of the
Fund's portfolio,  the portfolio manager currently searches primarily for stocks
of companies  having the following  characteristics  (although these factors may
change over time and may vary in different cases):
      o Companies  with small  capitalizations,  primarily  under $3 billion,  o
      Companies  with  management  that has a proven  ability  to  handle  rapid
      growth, o Companies with innovative products or services, o Companies that
      self-finance expansion rather than adding to their
         debt,
      o  Companies  with rapidly  accelerating  earnings and what the  portfolio
         manager believes are sustainable growth rates.

WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors seeking capital
growth  over the long term from  small-cap  stocks.  Those  investors  should be
willing to assume the greater risks of short-term share price  fluctuations that
are  typical  for  an  aggressive   growth  fund  focusing  on  small-cap  stock
investments.  The Fund does not seek  current  income  and the  income  from its
investments  will likely be small,  so it is not designed for investors  needing
current  income.  Because  of its  focus on  long-term  growth,  the Fund may be
appropriate  for a portion of a retirement  plan  investment.  The Fund is not a
complete investment program.

Main Risks of Investing in the Fund

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

RISKS OF INVESTING IN STOCKS.  Stocks  fluctuate in price,  and their short-term
volatility at times may be great.  Because the Fund invests  primarily in common
stocks of U.S. companies,  the value of the Fund's portfolio will be affected by
changes in the U.S.  stock  markets and the special  economic and other  factors
that might  primarily  affect the prices of small cap  stocks.  Market risk will
affect the Fund's net asset value per share,  which will fluctuate as the values
of the Fund's portfolio  securities  change. A variety of factors can affect the
price of a particular stock and the prices of individual  stocks do not all move
in the same direction uniformly or at the same time. Different stock markets may
behave differently from each other.

      Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer,  loss of major customers,  major  litigation  against the
issuer,  or  changes  in  government  regulations  affecting  the  issuer or its
industry.

Industry and Sector Focus. At times the Fund may increase the relative  emphasis
      of its  investments  in a  particular  industry  or sector.  The prices of
      stocks of issuers in a particular industry or sector may go up and down in
      response  to  changes  in  economic  conditions,  government  regulations,
      availability of basic  resources or supplies,  or other events that affect
      that  industry  or sector  more than  others.  To the extent that the Fund
      increases  the  relative  emphasis  of  its  investments  in a  particular
      industry or sector,  its share values may  fluctuate in response to events
      affecting that industry or sector.

Risks of  Growth  Stocks.   Stocks  of  growth  companies,   particularly  newer
      companies,   may  offer   opportunities   for  greater  long-term  capital
      appreciation  but  may be  more  volatile  than  stocks  of  larger,  more
      established  companies.  They have greater risks if the company's earnings
      growth or stock price fails to increase as expected.

SPECIAL RISKS OF SMALL-CAP  STOCKS.  In many cases  small-cap  issuers are newer
companies.  While they may offer greater  opportunities for capital appreciation
than larger,  more established  companies,  they involve  substantially  greater
risks of loss and price  fluctuations than larger issuers.  Small-cap  companies
may have limited product lines or markets for their products,  limited access to
financial  resources  and less  depth in  management  skill  than  larger,  more
established companies.

      The  volatility of the stock prices of small cap companies is likely to be
greater than for larger issuers,  in part because these  securities trade mostly
in the over-the-counter  market,  where there may be less liquidity.  That could
make it harder for the Fund to dispose  of a stock at an  acceptable  price when
the  portfolio  manager  wants to sell  it,  especially  in  periods  of  market
volatility. That factor increases the potential for losses to the Fund. Also, it
may take a  substantial  period of time  before  the Fund  realizes a gain on an
investment in a small-cap company, if it realizes any gain at all.

RISKS OF FOREIGN  INVESTING.  While foreign  securities offer special investment
opportunities,  there are also special  risks.  The change in value of a foreign
currency  against the U.S.  dollar  will  result in a change in the U.S.  dollar
value  of  foreign  securities.  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.  Securities in
underdeveloped  countries may be more  difficult to sell and their prices may be
more volatile.

HOW RISKY IS THE FUND OVERALL?  The risks described above  collectively form the
risk  overall  profile  of the Fund,  and can  affect  the  value of the  Fund's
investments,  its investment  performance  and its prices per share.  Particular
investments and investment strategies also have risks. These risks mean that you
can lose money by investing in the Fund.  When you redeem your shares,  they may
be worth more or less than what you paid for them.  There is no  assurance  that
the Fund will achieve its investment objective.

In the short term,  the markets for  small-cap  stocks can be volatile,  and the
prices of the Fund's shares can go up and down substantially. The Fund generally
does not seek current income nor use income-oriented investments to help cushion
the Fund's total return from changes in stock  prices.  Small-cap  stocks do not
tend to pay dividends and so the Fund's  dividend  income is likely to be small.
In the  OppenheimerFunds  spectrum,  the  Fund is  generally  a very  aggressive
investment  vehicle,  designed for investors  willing to assume greater risks in
the hope of  greater  long-term  returns.  It is likely to be subject to greater
fluctuations in its share prices than funds that emphasize large  capitalization
stocks, or funds that focus on both stocks and bonds.

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


The Fund's Performance

The bar chart and table below show one measure of the risks of  investing in the
Fund, by showing changes in the Fund's performance (for its Class A shares) from
year to year for the last ten  calendar  years and by  showing  how the  average
annual total returns of the Fund's shares compare to those of a broad-based  and
a  capitalization-weighted  market index.  The Fund's past  performance does not
necessarily indicate 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 would be less than those shown.
During the period shown in the bar chart,  the highest  return (not  annualized)
for a calendar  quarter  was 59.36%  (4th  Q,'99)  and the  lowest  return  (not
annualized) for a calendar quarter was -21.41% (3rd Q,'98).

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

                                                    5 Years        10 Years
---------------------------------                 (or life of    (or life of
Average Annual Total Returns          1 Year         class,         class,
for the periods ended December                      if less)       if less)
31, 2000

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

Class A Shares (inception
9/11/86)

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

Russell 2000 Index

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

S&P 500 Index

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

Class B Shares (inception 4/4/94)

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

Class C Shares (inception
10/2/95)

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Class Y Shares (inception 6/1/94)

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

1. From 12/31/89.
The Fund's average annual total returns include the applicable sales charge: for
Class A, the current  maximum  initial  sales charge of 5.75%;  for Class B, the
contingent  deferred sales charges of 5% (1-year),  2% (5 years) and 1% (life of
class); and for Class C, the 1% contingent  deferred sales charge for the 1-year
period.  There is no sales charge for Class Y shares. The Fund's returns measure
the  performance  of a  hypothetical  account and assume that all  dividends and
capital gains  distributions  have been  reinvested in  additional  shares.  The
Fund's  performance  is compared  to the S&P 500 index,  an  unmanaged  index of
equity  securities,  and  the  Russell  2000  Index,  a  capitalization-weighted
unmanaged index of 2000 issuers of mid-cap size. The index performance  reflects
the  reinvestment  of income but does not consider the effects of or transaction
costs. The Fund's investments vary from the securities in the indices.

Fees and Expenses of the Fund


The Fund pays a variety of  expenses  directly  for  management  of its  assets,
administration,  distribution of its shares and other  services.  Those expenses
are  subtracted  from the Fund's assets to calculate the Fund's net asset values
per  share.   All   shareholders   therefore  pay  those  expenses   indirectly.
Shareholders  pay other  expenses  directly,  such as sales  charges and account
transaction  charges.  The following  tables are provided to help you understand
the fees and  expenses  you may pay if you buy and hold shares of the Fund.  The
numbers  below are based on the Fund's  expenses  during  its fiscal  year ended
September 30, 2000,  except that the numbers for Class N shares,  which is a new
class of shares, are based on the Fund's anticipated expenses for Class N shares
during the upcoming year.


Shareholder Fees (charges paid directly from your investment):



<PAGE>


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

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

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

Maximum Sales Charge
(Load) on purchases
(as % of offering price)    5.75%         None         None     None       None

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

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

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

1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more  ($500,000 for  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  retirement  plan's first
purchase.


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

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

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

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

 Management Fees

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

 Distribution      and/or
 Service
 (12b-1)  Fees

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

 Other Expenses

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

 Total Annual Operating
 Expenses

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


Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial expenses, and accounting and legal expenses the Fund pays.


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

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

 -------------------------
 If shares are redeemed:     1 Year       3 Years       5 Years     10 Years1
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------

 Class A Shares

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

 Class B Shares

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

 Class C Shares

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

 Class N Shares

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

 Class Y Shares

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

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

 Class A Shares

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

 Class B Shares

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

 Class C Shares

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

 Class N Shares

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

 Class Y Shares

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


In the first example,  expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N 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. There are
no sales charges on Class Y shares.

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  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. The Statement
of Additional  Information  contains more detailed  information about the Fund's
investment policies and risks.

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

Small-Cap Stock Investments. The Fund currently emphasizes investments in common
      stocks of small-cap U.S. growth companies.  While small-cap companies tend
      to be newer businesses,  they can also be more established businesses that
      are entering a growth phase.

      The Fund  measures the market  capitalization  of an issuer at the time of
      investment to determine if it fits within the Fund's small-cap definition.
      Because  the  relative  sizes of  companies  change over time as the stock
      market changes, the fund's definition of what is a "small-cap" company may
      change over time as well. Also, as individual  companies grow, they may no
      longer fit within the Fund's definition of a "small-cap"  issuer after the
      Fund buys their  stock.  While the Fund is not  required to sell stocks of
      companies whose market  capitalizations  grow beyond the Fund's  small-cap
      definition,  the Manager might sell some of those holdings to try to lower
      the median  capitalization of its portfolio (measured on a dollar-weighted
      basis).  This  could  cause  the  Fund to  realize  capital  gains  on its
      investments,  which could increase taxable  distributions to shareholders.
      Of course, there is no assurance that small-cap stocks will grow in value.

Foreign  Investing.   The  Fund  can  buy  securities  issued  by  companies  or
      governments  in any country,  including  developed  countries and emerging
      markets,  but only if they  are  listed  on  securities  exchanges  or are
      represented by ADRs in the U.S. That  limitation is a fundamental  policy.
      The Fund has no limits on the amount of its assets that can be invested in
      foreign  securities  but has  adopted an  operating  policy  limiting  its
      investments  in foreign  securities to 25% of its total assets.  Currently
      the Manager does not expect to invest that much in foreign stocks.

CAN THE FUND'S  INVESTMENT  OBJECTIVE AND POLICIES  CHANGE?  The Fund's Board of
Trustees can change  non-fundamental  investment  policies  without  shareholder
approval,  although  significant changes will be described in amendments to this
Prospectus.  Fundamental  policies  cannot be changed  without the approval of a
majority of the Fund's  outstanding  voting  shares.  The Fund's  objective is a
fundamental policy. Other investment  restrictions that are fundamental policies
are listed in the Statement of Additional  Information.  An investment policy is
not   fundamental   unless  this  Prospectus  or  the  Statement  of  Additional
Information says that it is.

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

Other Equity  Securities.  The  Fund's  investments  are  not  limited  only  to
      small-cap  issuers,  and the Fund can  invest a portion  of its  assets in
      issuers of mid- and large  capitalizations,  if the Manager  believes they
      offer opportunities for growth.  While the Fund mainly buys common stocks,
      it can also buy preferred stocks, warrants and securities convertible into
      common stock.  The Manager  considers  some  convertible  securities to be
      "equity  equivalents"  because of the conversion  feature and in that case
      their credit rating has less impact on the Manager's  investment  decision
      than in the case of other debt  securities.  The Fund can buy  convertible
      securities that are investment grade or below investment grade (which have
      greater risks of default).

Investing in  Small,  Unseasoned  Companies.  The  Fund  can  invest  in  small,
      unseasoned companies. These are companies that have been in operation less
      than three years,  including  the  operations of any  predecessors.  These
      securities may have limited liquidity, which means that the Fund might not
      be able to sell them quickly at an acceptable  price.  Their prices may be
      very  volatile,  especially in the short term. The Fund currently does not
      intend to invest  more than 10% of its assets in these  securities.  Under
      its fundamental policies it can increase that amount to as much as 20%.

Illiquid and Restricted Securities.  Investments may be illiquid because they do
      not have an active  trading  market,  making it difficult to value them or
      dispose of them promptly at an acceptable price. Restricted securities may
      have terms that  limit  their  resale to other  investors  or may  require
      registration  under  federal  securities  laws before they can be publicly
      sold. 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.

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

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

   o  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 does not currently use hedging  extensively nor for
      speculative  purposes. It has limits on its use of hedging instruments and
      is not required to use them in seeking its objective.

      Some of these strategies  would hedge the Fund's  portfolio  against price
      fluctuations.  Other hedging  strategies,  such as buying futures and call
      options,  would tend to increase  the Fund's  exposure  to the  securities
      market.

      There are also special risks in  particular  hedging  strategies.  Options
      trading  involves  the  payment of  premiums  and can  increase  portfolio
      turnover.  If the Manager used a hedging  instrument  at the wrong time or
      judged  market  conditions  incorrectly,  the  hedge  might  fail  and the
      strategy could reduce the Fund's return.

Portfolio Turnover.  The Fund can engage in short-term trading to try to achieve
      its objective.  Portfolio  turnover affects brokerage costs the Fund pays.
      If the Fund  realizes  capital gains when it sells  portfolio  investments
      generally it must pay out those gains to  shareholders,  increasing  their
      taxable  distributors.  The Financial Highlights tables at the end of this
      Prospectus show the Fund's  portfolio  turnover rates during recent fiscal
      years.

Temporary  Defensive  Investments.  In times of  unstable  or adverse  market or
      economic  conditions,  the Fund can  invest  up to 100% of its  assets  in
      temporary defensive investments.  Generally they would be cash equivalents
      (such as commercial  paper),  money market  instruments,  short-term  debt
      securities, U.S. government securities, 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 in
      these securities, it might not achieve its investment objective of capital
      appreciation.

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 operated as an investment  adviser since January 1960. The
Manager (including  subsidiaries and affiliates)  managed more than $___ billion
in assets as of December 31, 2000,  including other  Oppenheimer funds with more
than 5 million shareholder  accounts.  The Manager is located at Two World Trade
Center, 34th Floor, New York, New York 10048-0203.


Portfolio Manager. The portfolio manager of the Fund is Jayne Stevlingson,
      who is principally responsible for the day-to-day management of the
      Fund's portfolio.

      Ms.  Stevlingson has been the Fund's portfolio  manager since 8/9/99,  and
      she is a Vice  President of the Fund and of the Manager.  Prior to joining
      the  Manager in August  1999,  she was a small-cap  growth fund  portfolio
      manager with Morgan Stanley Dean Witter Advisors,  Inc.,  before which she
      was a senior equity analyst with Bankers Trust Corporation.

Advisory Fees.  Under  the  investment  advisory  agreement,  the Fund  pays the
      Manager an  advisory  fee at an annual  rate that  declines  as the Fund's
      assets grow: 0.75% of the first $200 million of average annual net assets,
      0.72% of the next $200 million,  0.69% of the next $200 million,  0.66% of
      the next  $200  million,  0.60% of the next  $700  million,  and  0.58% of
      average annual net assets in excess of $1.5 billion. The Fund's management
      fee for its last fiscal year ended September 30, 1999 was 0.67% of average
      annual net assets for each class of shares.


ABOUT YOUR ACCOUNT

How to Buy Shares
HOW DO YOU BUY SHARES? You can buy shares several ways, as described below.
The Fund's Distributor, OppenheimerFunds Distributor, Inc., may appoint
certain servicing agents to accept purchase (and redemption) orders. The
Distributor, in its sole discretion, may reject any purchase order for the
Fund's shares.

BuyingShares 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.

BuyingShares 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
      1.800.525.7048  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 transfer from your bank account. Shares
      are  purchased  for your  account  by a  transfer  of money from your bank
      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 (and up to four other  Oppenheimer  funds)  automatically  each month
      from your account at a bank or other financial  institution under an Asset
      Builder  Plan  with   AccountLink.   Details  are  in  the  Asset  Builder
      Application and the Statement of Additional Information.

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

   o  With Asset Builder  Plans,  403(b)  plans,  Automatic  Exchange  Plans and
      military allotment plans, you can make initial and subsequent  investments
      for as little as $25.  You can make  additional  purchases of at least $25
      through AccountLink.
   o  Under retirement plans, such as IRAs, pension and profit-sharing plans and
      401(k)  plans,  you can start your account with as little as $250. If your
      IRA is started  under an Asset  Builder  Plan,  the $25  minimum  applies.
      Additional purchases may be as little as $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 and sends it to the Distributor.

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

      The net asset value per share is  determined  by dividing the value of the
      Fund's net assets  attributable to a class by the number of shares of that
      class that are outstanding. To determine net asset value, the Fund's Board
      of Trustees has established procedures to value the Fund's securities,  in
      general based on market value.  The Board has adopted  special  procedures
      for valuing  illiquid  securities and  obligations for which market values
      cannot be readily  obtained.  Because  some  foreign  securities  trade in
      markets and  exchanges  that operate on U.S.  holidays and  weekends,  the
      value of some of the Fund's foreign investments might change significantly
      on days when investors cannot buy or redeem Fund shares.
The   Offering  Price.  To receive the offering  price for a particular  day, in
      most cases the Distributor or its designated agent must receive your order
      by the time of day The New York Stock  Exchange  closes  that day. If your
      order is  received  on a day when the  Exchange  is closed or after it has
      closed,  the order will receive the next offering price that is determined
      after your order is received.


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


WHAT  CLASSES OF SHARES DOES THE FUND  OFFER?  The Fund  offers  investors  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 $500,000 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 six 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%, as described in "How Can You Buy
      Class C Shares?" below.

Class N Shares.  Class N shares are offered only through  retirement  plans that
      purchase  $500,000  or more of Class N shares  of one or more  Oppenheimer
      funds or that have assets of $500.000 or more or 100 or more eligible plan
      participants.  Non-retirement  plan  investors  cannot  buy Class N shares
      directly.

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

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

      The  discussion  below  is  not  intended  to be  investment  advice  or a
recommendation,  because each investor's financial considerations are different.
The  discussion  below  assumes that you will purchase only one class of shares,
and not a combination of shares of different classes. Of course,  these examples
are based on  approximations of the effect 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 or Class C.

   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  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 or Class C  shareholders.  Other
      features  may not be  advisable  (because of the effect of the  contingent
      deferred sales charge) for Class B or Class C 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 and Class C  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 and Class C  asset-based
      sales  charge   described   below  and  in  the  Statement  of  Additional
      Information.  Share certificates are not available for Class B and Class C
      shares,  and if you are considering  using your shares as collateral for a
      loan, that may be a factor to consider.


How   Does It 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 commissions 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 B to the Statement of
Additional  Information  details the  conditions for the waiver of sales charges
that apply in certain  cases,  and the special  sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified retirement
plan arrangements or in other special types of transactions. To receive a waiver
or special charge rate, you must advise the Distributor  when purchasing  shares
or the Transfer Agent when redeeming shares that the special conditions apply.

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

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

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

 Less than $25,000                  5.75%           6.10%           4.75%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------

 $25,000 or more but less           5.50%           5.82%           4.75%
 than  $50,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------

 $50,000 or more but less than      4.75%           4.99%           4.00%
 $100,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------

 $100,000 or more but less          3.75%           3.90%           3.00%
 than $250,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------

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

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

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  described  in Appendix B to the  Statement of
      Additional Information. The Distributor pays dealers of record commissions
      in an amount  equal to 1.0% of  purchases of $1 million or more other than
      by those  retirement  accounts.  For those  retirement plan accounts,  the
      commission is 1.0% of the first $2.5 million,  plus 0.50% of the next $2.5
      million, plus 0.25% of purchases over $5 million,  based on the cumulative
      purchases during the prior 12 months ending with the current purchase.  In
      either case, the  commission  will be paid only on purchases that were not
      previously  subject to a front-end  sales  charge and dealer  commission.1
      That  commission  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.

      If you redeem any of those  shares  within an  18-month  "holding  period"
      measured  from  the  end  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 (1) 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
      (2) the  original  net asset value of the redeemed  shares.  However,  the
      Class A contingent  deferred  sales  charge will not exceed the  aggregate
      amount  of the  commissions  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.

Can   You  Reduce  Class A Share  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.

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 6 years of the end of the  calendar  month 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:

 ---------------------------------------
                                        Contingent Deferred Sales Charge on
 Years Since Beginning of Month in]     Redemptions in That Year
 Which Purchase Order was Accepted      (As % of Amount Subject to Charge)
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 0 - 1                                  5.0%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 1 - 2                                  4.0%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 2 - 3                                  3.0%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 3 - 4                                  3.0%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 4 - 5                                  2.0%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 5 - 6                                  1.0%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 6 and following                        None
 ---------------------------------------

In the table, a "year" is a 12-month period.  In applying the 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  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.  The  conversion  feature is
      subject to the  continued  availability  of a tax ruling  described 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 end 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?  As discussed above,  Class N shares are offered
only  through  retirement  plans  that  purchase  Class N shares  of one or more
Oppenheimer  funds totaling $500,000 or more, or that have assets of $500,000 or
more, or 100 or more eligible plan participants.  Non-retirement  plan investors
cannot buy Class N shares directly.  A contingent deferred sales charge of 1.00%
will be imposed if the  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.


WHO CAN BUY CLASS Y SHARES? Class Y shares are sold at net asset value per share
without  sales  charge  directly to certain  institutional  investors  that have
special  agreements  with the  Distributor  for this  purpose.  They may include
insurance companies, registered investment companies and employee benefit plans.
For example,  Massachusetts  Mutual Life Insurance Company,  an affiliate of the
Manager,  may purchase Class Y shares of the Fund and other  Oppenheimer funds (
as well as Class Y shares of funds advised by MassMutual)  for asset  allocation
programs,  investment  companies or separate investment accounts it sponsors and
offers  to its  customers.  Individual  investors  cannot  buy  Class  Y  shares
directly.

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

DISTRIBUTION AND SERVICE (12b-1) PLANS.
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
      shares.  It reimburses the Distributor for a portion of its costs incurred
      for services provided to accounts that hold Class A shares.  Reimbursement
      is made  quarterly at an annual rate of up to 0.25% of the average  annual
      net assets of Class A shares of the Fund. The  Distributor  currently uses
      all of  those  fees  to  compensate  dealers,  brokers,  banks  and  other
      financial  institutions  quarterly  for  providing  personal  service  and
      maintenance of accounts of their customers that hold Class A shares.


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

      The asset-based sales charge and service fees increase Class B and Class C
      expenses  by 1.00% and the  asset-based  sales  charge  increases  Class N
      expense  by 0.25% 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  currently pays sales  commission 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 sales of Class B shares is
      therefore 4.00% of the purchase price. The Distributor retains the Class B
      asset-based sales charge.

      The Distributor  currently pays sales commissions 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  1.00%  of  the  purchase  price.   The  Distributor   pays  the
      asset-based sales charge as an ongoing commission to the dealer on Class C
      shares that have been outstanding for a year or more.


      The Distributor  currently pays sales commissions of 1.00% of the purchase
      price of Class N shares to dealers  from its own  resources at the time of
      sale.  The  Distributor  retains the  asset-based  sales charge on Class N
      shares.



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

      You may  purchase  shares by  telephone  only after your  account has been
established.  To purchase  shares in amounts up to $250,000  through a telephone
representative,  call the Distributor at  1.800.852.8457.  The purchase  payment
will be debited from your bank account.

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

PHONELINK.  PhoneLink is the  OppenheimerFunds  automated  telephone system that
enables shareholders to perform a number of account  transactions  automatically
using a touch-tone  phone.  PhoneLink  may be used on  already-established  Fund
accounts after you obtain a Personal Identification Number (PIN), by calling the
special PhoneLink number, 1.800.533.3310.

Purchasing Shares.  You may purchase  shares in amounts up to $100,000 by phone,
      by  calling   1.800.533.3310.   You  must  have  established   AccountLink
      privileges  to link  your  bank  account  with the  Fund to pay for  these
      purchases.
Exchanging  Shares.  With the  OppenheimerFunds  Exchange  Privilege,  described
      below,  you can  exchange  shares  automatically  by phone  from your Fund
      account to another  OppenheimerFunds  account you have already established
      by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone  automatically by calling the
      PhoneLink  number  and the Fund will send the  proceeds  directly  to your
      AccountLink bank account.  Please refer to "How to Sell Shares," below for
      details.

CAN YOU SUBMIT  TRANSACTION  REQUESTS BY FAX? You may send  requests for certain
types of account transactions to the Transfer Agent by fax (telecopier).  Please
call 1.800.525.7048 for information about which transactions may be handled this
way.  Transaction  requests  submitted  by fax are subject to the same rules and
restrictions as written and telephone requests described in this Prospectus.

OPPENHEIMERFUNDS  INTERNET WEB SITE. You can obtain  information about the Fund,
as well as your account balance, on the  OppenheimerFunds  Internet web site, at
www.oppenheimer  funds.com.  Additionally,  shareholders  listed in the  account
registration (and the dealer of record) may request certain account transactions
through a special section of that web site. To perform account transactions, you
must first obtain a personal identification number (PIN) by calling the Transfer
Agent at 1.800.533.3310. If you do not want to have Internet account transaction
capability for your account, please call the Transfer Agent at 1.800.525.7048.

At times,  the website may be inaccessible  or its  transaction  features may be
unavailable.



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


REINVESTMENT  PRIVILEGE.  If you  redeem  some or all of your Class A or Class B
shares  of the  Fund,  you have up to 6 months  to  reinvest  all or part of the
redemption  proceeds  in Class A shares of the Fund or other  Oppenheimer  funds
without  paying a sales charge.  This  privilege  applies only to Class A shares
that you purchased  subject to an initial sales charge and to Class A or Class B
shares on which you paid a  contingent  deferred  sales charge when you redeemed
them.  This privilege does not apply to Class C, Class N or Class Y shares.  You
must be sure to ask the  Distributor  for this  privilege  when  you  send  your
payment.


RETIREMENT  PLANS.  You may buy  shares  of the Fund for  your  retirement  plan
account.  If you  participate  in a plan  sponsored by your  employer,  the plan
trustee  or  administrator  must buy the  shares  for  your  plan  account.  The
Distributor also offers a number of different  retirement plans that individuals
and employers can use:
Individual Retirement  Accounts  (IRAs).  These include regular IRAs, Roth IRAs,
      SIMPLE IRAs, rollover IRAs and Education IRAs.
SEP-IRAs. These are  Simplified  Employee  Pensions 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 or by  telephone.  You can also set up Automatic
Withdrawal  Plans to redeem  shares on a regular  basis.  If you have  questions
about any of these  procedures,  and especially if you are redeeming shares in a
special  situation,  such as due to the death of the owner or from a  retirement
plan  account,  please call the Transfer  Agent first,  at  1.800.525.7048,  for
assistance.

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

   o You wish to redeem  $100,000 or more and  receive a check o The  redemption
   check is not payable to all shareholders listed on the
      account statement
   o  The redemption check is not sent to the address of record on your
      account statement
   o  Shares are being transferred to a Fund account with a different owner
      or name
   o  Shares are being redeemed by someone (such as an Executor) other than
      the owners

Where Can You Have Your Signature  Guaranteed?  The Transfer Agent will accept a
      guarantee  of  your  signature  by a  number  of  financial  institutions,
      including:

   o  a U.S. bank, trust company, credit union or savings association,
   o  a foreign bank that has a U.S. correspondent bank,
   o  a U.S. registered dealer or broker in securities, municipal securities
      or government securities, or
   o  a U.S. national securities exchange, a registered  securities  association
      or a  clearing  agency.  If you are  signing  on behalf of a  corporation,
      partnership  or other  business or as a  fiduciary,  you must also include
      your title in the signature.

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

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

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

HOW DO YOU SELL  SHARES BY  TELEPHONE?  You and your  dealer  representative  of
record may also sell your shares by telephone.  To receive the redemption  price
calculated  on a  particular  business  day,  your call must be  received by the
Transfer  Agent by the close of The New York Stock  Exchange that day,  which is
normally 4:00 P.M.,  but may be earlier on some days.  You may not redeem shares
held in an OppenheimerFunds retirement plan account or under a share certificate
by telephone.
   o To redeem shares through a service representative, call 1.800.852.8457 o To
   redeem shares automatically on PhoneLink, call 1.800.533.3310

      Whichever  method you use, you may have a check sent to the address on the
account statement, or, if you have linked your Fund account to your bank account
on AccountLink, you may have the proceeds sent to that bank account.


Are There Limits On Amounts Redeemed By Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by

      telephone in any 7-day period.  The check must be payable to all owners of
      record  of the  shares  and  must be sent to the  address  on the  account
      statement.  This service is not  available  within 30 days of changing the
      address on an account.
Telephone  Redemptions  Through  AccountLink.  There  are no  dollar  limits  on
      telephone  redemption  proceeds sent to a bank account designated when you
      establish AccountLink. Normally the ACH transfer to your bank is initiated
      on the business day after the redemption.  You do not receive dividends on
      the  proceeds  of the shares  you  redeemed  while they are  waiting to be
      transferred.

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


HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase shares
subject to a Class A, Class B or Class C  contingent  deferred  sales charge and
redeem any of those shares during the applicable holding period for the class of
shares you own, the  contingent  deferred sales charge will be deducted from the
redemption  proceeds  (unless you are eligible for a waiver of that sales charge
based on the  categories  listed in Appendix B to the  Statement  of  Additional
Information and you advise the Transfer Agent of your eligibility for the waiver
when you place your redemption request).  With respect to Class N shares, if you
redeem your shares within 18 calendar months of the end of the calendar month in
which the retirement plan first  purchased  shares of the Fund or the retirement
plan is terminated or eliminates  Class N shares of all Oppenheimer  funds as an
investment  option within 18 calendar months of the end of the calendar month in
which the Fund was selected  and you redeem your shares  within 18 months of the
plan's first purchase of the Fund, a 1% contingent deferred sales charge will be
imposed.



      A contingent  deferred sales charge will be based on the lesser of the net
asset value of the redeemed shares at the time of redemption or the original net
asset value. A contingent deferred sales charge is not imposed on:
   o  the amount of your account value represented by an increase in net
      asset value over the initial purchase price,
   o  shares purchased by the reinvestment of dividends or capital gains
      distributions, or
   o  shares  redeemed in the special  circumstances  described in Appendix B to
      the Statement of Additional Information.

      To determine  whether a  contingent  deferred  sales  charge  applies to a
      redemption, the Fund redeems shares in the following order:
   1. shares acquired by reinvestment of dividends and capital gains
   distributions,
   2. shares held for the holding period that applies to the class, and
   3. shares held the longest during the holding period.

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


How to Exchange Shares

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 7 days  before you can  exchange  them.  After the account is open 7
      days, you can exchange shares every regular business day.
   o  You must meet the minimum purchase  requirements for the fund whose shares
      you purchase by exchange.
   o Before exchanging into a fund, you must obtain and read its prospectus.

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

      You can find a list of Oppenheimer funds currently available for exchanges
in the  Statement of Additional  Information  or obtain one by calling a service
representative at 1.800.525.7048. That list can change from time to time.

HOW DO YOU SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing or
by telephone:
Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
      signed by all owners of the account.  Send it to the Transfer Agent at the
      address on the Back Cover.  Exchanges  of shares  held under  certificates
      cannot be processed  unless the Transfer Agent  receives the  certificates
      with the request.
Telephone Exchange  Requests.  Telephone exchange requests may be made either by
      calling a service representative at 1.800.852.8457,  or by using PhoneLink
      for automated exchanges by calling 1.800.533.3310. Telephone exchanges may
      be made only between  accounts that are  registered  with the same name(s)
      and  address.  Shares  held under  certificates  may not be  exchanged  by
      telephone.

ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
   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 a same-day exchange. For example, the receipt of multiple
      exchange  requests  from a "market  timer" might  require the Fund to sell
      securities at a disadvantageous time or price.
   o  Because excessive trading can hurt fund performance and harm shareholders,
      the Fund  reserves  the  right to  refuse  any  exchange  request  that it
      believes will  disadvantage  it, or to refuse multiple  exchange  requests
      submitted by a shareholder or dealer.
   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 these changes at any time.
   o  If the Transfer Agent cannot  exchange all the shares you request  because
      of a restriction  cited above,  only the shares eligible for exchange will
      be exchanged.

Shareholder Account Rules and Policies

More  information  about the Fund's policies and procedures for buying,  selling
and exchanging  shares is contained in the Statement of Additional  Information.
The offering of shares may be suspended during any period in which the
      determination  of net asset value is  suspended,  and the  offering may be
      suspended by the Board of Trustees at any time the Board believes it is in
      the Fund's best interest to do so.
Telephone transaction privileges for purchases,  redemptions or exchanges may be
      modified,  suspended or  terminated by the Fund at any time. 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 can perform account transactions for their clients by participating
      in NETWORKING  through the National  Securities  Clearing  Corporation are
      responsible  for  obtaining  their  clients'  permission  to perform those
      transactions, and are responsible to their clients who are shareholders of
      the Fund if the dealer performs any transaction erroneously or improperly.
The   redemption price for shares will vary from day to day because the value of
      the securities in the Fund's portfolio  fluctuates.  The redemption price,
      which is the net asset  value per  share,  will  normally  differ for each
      class of shares.  The redemption  value of your shares may be more or less
      than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by check
      or through  AccountLink (as elected by the shareholder)  within seven days
      after the Transfer Agent receives redemption  instructions in proper form.
      However,  under unusual  circumstances  determined by the  Securities  and
      Exchange  Commission,  payment may be delayed or  suspended.  For accounts
      registered  in the  name of a  broker-dealer,  payment  will  normally  be
      forwarded within three business days after redemption.
The   Transfer  Agent may delay  forwarding a check or  processing a payment via
      AccountLink  for recently  purchased  shares,  but only until the purchase
      payment  has  cleared.  That delay may be as much as 10 days from the date
      the shares  were  purchased.  That  delay may be  avoided if you  purchase
      shares by Federal Funds wire or certified check, or arrange with your bank
      to provide  telephone or written assurance to the Transfer Agent that your
      purchase payment has cleared.
Sharesmay 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 annual and  semi-annual  report to shareholders
      having the same last name and address on the Fund's records. However, each
      shareholder  may call the  Transfer  Agent at  1.800.525.7048  to ask that
      copies of those materials be sent personally to that shareholder.

Dividends, Capital Gains and Taxes
DIVIDENDS.  The Fund intends to declare  dividends  separately for each class of
shares from net investment  income annually and to pay dividends to shareholders
in  December  on a date  selected  by  the  Board  of  Trustees.  Dividends  and
distributions  paid on Class A and Class Y shares will  generally be higher than
dividends for Class B and Class C shares,  which  normally have higher  expenses
than  Class A and  Class  Y. 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 ARE YOUR CHOICES 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  other  types  of
      distributions  by check or having them sent to your bank  account  through
      AccountLink.
Receive All  Distributions  in Cash.  You can  elect to  receive a check for all
      dividends and capital gains  distributions  or have them sent to your bank
      through AccountLink.
Reinvest  Your  Distributions  in  Another  OppenheimerFunds  Account.  You  can
      reinvest  all  distributions  in the  same  class  of  shares  of  another
      OppenheimerFunds account you have established.

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

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

Avoid "Buying a Dividend".  If you buy shares on or just before the  ex-dividend
      date or just before the Fund  declares a capital  gain  distribution,  you
      will pay the full price for the  shares and then  receive a portion of the
      price back as a taxable dividend or capital gain.

Remember,  There May be Taxes on  Transactions.  Because the Fund's  share price
      fluctuates,  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 adviser
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 5 fiscal years. Certain information reflects
financial  results  for a single  Fund  share.  The total  returns  in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (assuming  reinvestment  of all dividends and  distributions).  This
information has been audited by KPMG LLP, the Fund's independent auditors, whose
report, along with the Fund's financial statements, is included in the Statement
of Additional Information, which is available on request.




<PAGE>


                                       76

INFORMATION AND SERVICES

For More Information  on Oppenheimer Discovery 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, and other information about the Fund or your account:

-------------------------------------------------------------------------------
By Telephone:                         Call OppenheimerFunds Services
                                      toll-free:
                                      1-800-525-7048
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
By Mail:                              Write to:
                                      OppenheimerFunds Services
                                      P.O. Box 5270
                                      Denver, Colorado 80217-5270
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
On the Internet:                      You can send us a request by e-mail
                                      or read or down-load documents on the
                                      OppenheimerFunds web site:
                                      http://www.oppenheimerfunds.com
-------------------------------------------------------------------------------

You can also obtain copies of the Statement of Additional  Information and other
Fund  documents  and  reports by visiting  the SEC's  Public  Reference  Room in
Washington,  D.C.  (Phone  1.202.942.8090)  or the EDGAR  database  on the SEC's
Internet web site at http://www.sec.gov.  Copies may be obtained upon 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.

SEC File No. 811-4410               The Fund's shares are distributed by:
PR0500.001.0100               (logo)      OppenheimerFunds(R)
Printed on recycled paper.                Distributor, Inc.



Oppenheimer Discovery Fund


6803 South Tucson Way, Englewood, Colorado  80113

1-800-525-7048


Statement of Additional Information dated January 16, 2001


      This  Statement  of  Additional  Information  is  not a  Prospectus.  This
document  contains  additional   information  about  the  Fund  and  supplements
information in the Prospectus dated January 28, 2000. It should be read together
with the  Prospectus.  You can  obtain the  Prospectus  by writing to the Fund's
Transfer Agent,  OppenheimerFunds  Services, at P.O. Box 5270, Denver,  Colorado
80217, or by calling the Transfer Agent at the toll-free  number shown above, or
by   downloading   it  from   the   OppenheimerFunds   Internet   web   site  at
www.oppenheimerfunds.com.

Contents
                                                                            Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks.. 2
    The Fund's Investment Policies..................................... 2
    Other Investment Techniques and Strategies......................... 5
    Investment Restrictions............................................ 16
How the Fund is Managed ............................................... 18
    Organization and History........................................... 18
    Trustees and Officers.............................................. 20
    The Manager........................................................ 25
Brokerage Policies of the Fund......................................... 26
Distribution and Service Plans......................................... 28
Performance of the Fund................................................ 31

About Your Account
How To Buy Shares...................................................... 35
How To Sell Shares..................................................... 43
How To Exchange Shares................................................. 47
Dividends, Capital Gains and Taxes..................................... 50
Additional Information About the Fund.................................. 51
Financial Information About the Fund
Independent Auditors' Report...........................................
Financial Statements...................................................

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



<PAGE>


ABOUT THE FUND

         Additional Information About the Fund's Investment Policies and Risks

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

The Fund's Investment Policies.

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

      |X| Cyclical Opportunities.  The Fund might also seek to take advantage of
changes in the business  cycle by investing in companies  that are  sensitive to
those changes if the Manager believes they have growth  potential.  For example,
when the economy is expanding, companies in the consumer durables and technology
sectors might benefit and offer long-term growth  opportunities.  Other cyclical
industries  include insurance,  for example.  The fund focuses on seeking growth
over the long term,  but could seek to take  tactical  advantage  of  short-term
market movements or events affecting particular issuers or industries.

      |X| Investments in Equity Securities.  The Fund focuses its investments in
equity  securities of small growth companies.  Equity securities  include common
stocks,  preferred stocks, rights and warrants,  and securities convertible into
common stock. The Fund's  investments will primarily include stocks of companies
having a market  capitalization of up to $3 billion,  generally  measured at the
time  of the  Fund's  investment.  However,  the  Fund is not  required  to sell
securities  it holds of an  issuer if the  issuer's  capitalization  exceeds  $3
billion.

      The Fund can also invest a portion of its assets in  securities of issuers
having a  market  capitalization  greater  than $3  billion.  At  times,  in the
Manager's  view,  the market may favor or  disfavor  securities  of issuers of a
particular capitalization range. Therefore the Fund may change relative emphasis
on its equity  investments in securities of one or more  capitalization  ranges,
based upon the Manager's judgment of where the best market  opportunities are to
seek the Fund's objective.

      Growth  companies  might be providing  new products or services that could
enable them to capture a dominant or important market position.  They may have a
special  area of  expertise or the  capability  to take  advantage of changes in
demographic  factors in a more  profitable  way than  larger,  more  established
companies.

      Growth  companies  tend to  retain  a large  part of  their  earnings  for
research,  development or investment in capital assets.  Therefore,  they do not
tend to emphasize paying dividends, and may not pay any dividends for some time.
They are  selected  for the Fund's  portfolio  because the Manager  believes the
price of the stock will increase over the long term.

      Current  income is not a criterion  used to select  portfolio  securities.
However,  certain debt  securities may be selected for the Fund's  portfolio for
defensive  purposes  (including debt  securities  that the Manager  believes may
offer some opportunities for capital appreciation when stocks are disfavored).

      In  general,  securities  of  small-cap  issuers may be subject to greater
price volatility in general than securities of large-cap and mid-cap  companies.
Therefore, to the degree that the Fund has investments in smaller capitalization
companies at times of market  volatility,  the Fund's share price may  fluctuate
more. As noted below,  the Fund limits such  investments in unseasoned small cap
issuers.

            |_| Over-the-Counter Securities. Small-cap growth companies that are
newer companies may offer greater  opportunities  for capital  appreciation than
securities  of  large,  more  established  companies.   However,  securities  of
small-cap  companies  also  involve  greater  risks  than  securities  of larger
companies.   Securities  of  small  capitalization  issuers  may  be  traded  on
securities  exchanges or in the  over-the-counter  market. The  over-the-counter
markets,  both in the U.S. and abroad,  may have less liquidity than  securities
exchanges.  That  lack of  liquidity  can  affect  the price the Fund is able to
obtain when it wants to sell a security,  because if there are fewer  buyers and
less demand for a particular security,  the Fund might not be able to sell it at
an  acceptable  price or might  have to reduce the price in writing to accept in
order to dispose of the security.

      In the U.S.,  the  principal  over-the-counter  market is the NASDAQ Stock
Market,  Inc.,  which is  regulated by the National  Association  of  Securities
Dealers,  Inc.  It  consists  of an  electronic  quotation  system  for  certain
securities,  and a security  must have at least two market makers to be included
in NASDAQ.  There are other  over-the-counter  markets  in the U.S.,  as well as
those  abroad,  as long as a dealer is willing to make a market in a  particular
security.

            |_| Convertible Securities.  While some convertible securities are a
form  of debt  security,  in  many  cases  their  conversion  feature  (allowing
conversion  into equity  securities)  causes them to be regarded more as "equity
equivalents."  As a result,  the rating assigned to the security has less impact
on the Manager's investment decision with respect to convertible securities than
in the case of  non-convertible  debt  fixed  income  securities.  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 can invest up to 5% of its total
assets in warrants or rights.  That 5% limit is a fundamental  policy,  but 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. 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| Foreign Securities.  The Fund can purchase equity securities issued or
guaranteed  by  foreign   companies  or  debt   securities   issued  by  foreign
governments.   "Foreign  securities"  include  equity  and  debt  securities  of
companies  organized  under the laws of countries  other than the United States.
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.  That is because they are not subject to
many of the special  considerations  and risks,  discussed below,  that apply to
foreign securities traded and held abroad.

      Investing in foreign  securities  offers potential  benefits not available
from  investing  solely in  securities  of domestic  issuers.  They  include the
opportunity to invest in foreign issuers that appear to offer 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.

      |_| 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,
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.

      |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  although  the  Fund  does  not  expect  to have a
portfolio turnover rate of more than 100% 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 long-term capital gains to shareholders, since the Fund
will normally  distribute  all of its capital gains realized each year, to avoid
excise taxes under the Internal Revenue Code.

Other Investment Techniques and Strategies.  In seeking its objective,  the Fund
from time to time can 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|  Investing  in Small,  Unseasoned  Companies.  The Fund can  invest in
securities of small, unseasoned companies. These are companies that have been in
operation  for  less  than  three  years,   including  the   operations  of  any
predecessors. Securities of these companies are subject to greater volatility in
their prices. They may have a limited trading market, which may adversely affect
the Fund's ability to dispose of them and can reduce the price the Fund might be
able to obtain for them.  Other investors that own a security issued by a small,
unseasoned  issuer for which there is limited liquidity might trade the security
when the Fund is attempting to dispose of its holdings of that security. In that
case the Fund might receive a lower price for its holdings than might  otherwise
be obtained.  The Fund currently  intends to invest not more than 10% of its net
assets in those securities,  but as a matter of fundamental  policy can increase
that limit to 20%. The Manager  might  increase that limit,  for example,  if it
believes that these securities offer better capital  appreciation  possibilities
than those of more established  small-cap companies.  These are more speculative
securities and can increase the Fund's overall portfolio risks.

      |X|  Repurchase  Agreements.  The Fund can acquire  securities  subject to
repurchase agreements. It might do so for liquidity purposes to meet anticipated
redemptions of Fund shares, or pending the investment of the proceeds from sales
of Fund shares, or pending the settlement of portfolio securities  transactions,
or for temporary defensive purposes, as described below.

      In  a  repurchase  transaction,   the  Fund  buys  a  security  from,  and
simultaneously  resells it to, an approved vendor for delivery on an agreed-upon
future  date.  The resale  price  exceeds the  purchase  price by an amount that
reflects an agreed-upon  interest rate effective for the period during which the
repurchase  agreement is in effect.  Approved  vendors  include U.S.  commercial
banks,  U.S.  branches  of  foreign  banks,  or  broker-dealers  that  have been
designated as primary  dealers in government  securities.  They must meet credit
requirements set by the Fund's Board of Trustees 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. That limit is a
fundamental  policy.  There is no limit on the  amount of the  Fund's net assets
that may be subject to repurchase  agreements having maturities of seven days or
less.

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

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

      The  Fund  can  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 are not fundamental
policies and do not limit  purchases of restricted  securities that are eligible
for sale to qualified institutional purchasers under Rule 144A of the Securities
Act of 1933,  if those  securities  have  been  determined  to be  liquid by the
Manager under Board-approved guidelines.  Those guidelines take into account the
trading  activity for such securities and the  availability of reliable  pricing
information,  among other factors.  If there is a lack of trading  interest in a
particular  Rule 144A  security,  the Fund's  holdings of that  security  may be
considered to be illiquid.  Illiquid  securities include  repurchase  agreements
maturing in more than seven days and  participation  interests  that do not have
puts exercisable within seven days.

      |X| Loans of Portfolio  Securities.  To raise cash for liquidity purposes,
the Fund can lend its portfolio  securities to brokers,  dealers and other types
of  financial  institutions  approved  by the  Fund's  Board of  Trustees.  As a
fundamental policy, these loans are limited to not more than 25% of the value of
the Fund's total assets.  The Fund  currently does not intend to engage in loans
of securities 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 has the ability to borrow from banks
on an unsecured basis to invest the borrowed funds in portfolio securities. This
speculative  technique  is known as  "leverage."  The Fund may borrow  only from
banks. Under current regulatory requirements, borrowings can be made only to the
extent  that the value of the Fund's  assets,  less its  liabilities  other than
borrowings,  is equal to at least 300% of all borrowings (including the proposed
borrowing).  If the value of the  Fund's  assets  fails to meet this 300%  asset
coverage  requirement,  the Fund will reduce its bank debt within  three days to
meet the  requirement.  To do so,  the Fund  might have to sell a portion of its
investments at a disadvantageous time.

      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 value per share might fluctuate
more  than  that of funds  that do not  borrow.  Currently,  the  Fund  does not
contemplate using this technique,  but if it does so, it will not likely be to a
substantial degree.

      |X|  Derivatives.   The  Fund  can  invest  in  a  variety  of  derivative
investments  to seek income for liquidity  needs or for hedging  purposes.  Some
derivative  investments the Fund can use are the hedging  instruments  described
below in this Statement of Additional  Information.  However,  the Fund does not
use,  and  does  not  currently   contemplate  using,   derivatives  or  hedging
instruments to a significant degree.

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

      |X| Hedging.  Although the Fund does not  anticipate  the extensive use of
hedging instruments, the Fund can use hedging instruments. 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:
      |_|   sell futures contracts,
      |_|   buy puts on such futures or on securities, or
      |_|write covered  calls on  securities or futures.  Covered calls may also
         be used to increase the Fund's income,  but the Manager does not expect
         to engage extensively in that practice.

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

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

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

      A  broadly-based  stock index is used as the basis for trading stock index
futures.  They may in some cases be based on stocks of  issuers in a  particular
industry or group of industries.  A stock index assigns  relative  values to the
common stocks included in the index and its value  fluctuates in response to the
changes in value of the underlying  stocks. A stock index cannot be purchased or
sold directly. Financial 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 payment is paid or  received  by the Fund on the  purchase or sale of a
future. Upon entering into a futures  transaction,  the Fund will be required to
deposit an initial  margin  payment with the futures  commission  merchant  (the
"futures  broker").  Initial  margin  payments will be deposited with the Fund's
Custodian bank in an account  registered in the futures broker's name.  However,
the  futures  broker  can gain  access  to that  account  only  under  specified
conditions.  As the future is marked to market (that is, its value on the Fund's
books is  changed) to reflect  changes in its market  value,  subsequent  margin
payments,  called  variation  margin,  will be paid to or by the futures  broker
daily.

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

      |_| Put and Call  Options.  The Fund can buy and sell certain kinds of put
options ("puts") and call options ("calls").  As a fundamental  policy, the Fund
can buy and sell only certain  types of calls and can buy only certain  types of
puts, but cannot sell puts.

            |_| Writing Covered Call Options. The Fund can write (that is, sell)
covered calls. As a fundamental policy, if the Fund sells a call option, it must
be covered and it must be listed either on a domestic  securities or commodities
exchange or on NASDAQ.  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  segregating  liquid  assets to enable  the Fund to  satisfy  its
obligations if the call is exercised.  The Fund has adopted an operating  policy
(that is not  fundamental)  to the  effect  that not more than 25% 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.

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

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

      |_|  Purchasing  Calls and Puts.  The Fund can  purchase  calls to protect
against the  possibility  that the Fund's  portfolio will not  participate in an
anticipated rise in the securities market. When the Fund buys a call (other than
in a closing  purchase  transaction),  it pays a premium.  The Fund then has the
right to buy the underlying  investment from a seller of a corresponding call on
the same investment  during the call period at a fixed exercise price.  The Fund
benefits  only if it sells the call at a profit or if,  during the call  period,
the market price of the underlying investment is above the sum of the call price
plus  the  transaction  costs  and the  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.

      As a  fundamental  policy  the Fund  cannot buy calls  unless  they are on
securities,  broadly-based  stock indices or stock index futures.  However,  the
Fund is permitted also to buy calls in closing transactions as described above.

      As a fundamental  policy,  the Fund can buy puts on securities  only if it
holds the  underlying  security in its  portfolio,  and the Fund can buy puts on
stock index futures and broadly-based  stock indices.  When the Fund purchases a
put, it pays a premium and, except as to puts on indices,  has the right to sell
the  underlying  investment to a seller of a put on a  corresponding  investment
during the put period at a fixed exercise  price.  Buying a put on securities or
futures the Fund owns enables the Fund to attempt to protect  itself  during the
put period against a decline in the value of the underlying investment below the
exercise price by selling the  underlying  investment at the exercise price to a
seller of a corresponding put. If the market price of the underlying  investment
is equal  to or above  the  exercise  price  and,  as a  result,  the put is not
exercised or resold,  the put will become  worthless at its expiration  date. In
that case the Fund will  have  paid the  premium  but lost the right to sell the
underlying  investment.  However,  the  Fund  may  sell  the  put  prior  to its
expiration. That sale may or may not be at a profit.

      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 can 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. That limit is a fundamental policy.

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

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

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

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

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

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

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

      |_| Forward  Contracts.  Forward  contracts are foreign currency  exchange
contracts.  They are used to buy or sell foreign currency for future delivery at
a fixed  price.  The Fund  uses  them to "lock  in" the U.S.  dollar  price of a
security  denominated in a foreign currency that the Fund has bought or sold, or
to protect  against  possible  losses from changes in the relative values of the
U.S.  dollar and a foreign  currency.  The Fund  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  could  enter  into a  forward  contract  for the
purchase or sale of the amount of foreign  currency  involved in the  underlying
transaction, in a fixed amount of U.S. dollars per unit of the foreign currency.
This is called a  "transaction  hedge." The  transaction  hedge will protect the
Fund against a loss from an adverse change in the currency exchange rates during
the period  between the date on which the  security is  purchased  or sold or on
which the payment is  declared,  and the date on which the  payments are made or
received.

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

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

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

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

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

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

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

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

      |_|  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.  As a  fundamental  policy,  the Fund  limits  the sum of all  margin
deposits on futures  and  premiums  paid on related  options to 5% of the Fund's
total assets.  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  adviser as the Fund (or an adviser  that is an affiliate of the Fund's
adviser). The exchanges also impose position limits on futures transactions.  An
exchange  may order the  liquidation  of  positions  found to be in violation of
those limits and may impose certain other sanctions.

      Under 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 Certain Hedging  Instruments.  Certain foreign currency
exchange  contracts  in which the Fund may invest are treated as  "Section  1256
contracts" under the Internal Revenue Code. In general, gains or losses relating
to Section 1256 contracts are  characterized as 60% long-term and 40% short-term
capital  gains or losses  under the Code.  However,  foreign  currency  gains or
losses arising from Section 1256 contracts that are forward contracts  generally
are treated as ordinary income or loss. In addition, Section 1256 contracts held
by the  Fund  at the  end of  each  taxable  year  are  "marked-to-market,"  and
unrealized  gains or losses are  treated  as though  they were  realized.  These
contracts also may be  marked-to-market  for purposes of determining  the excise
tax applicable to investment company  distributions and for other purposes under
rules prescribed  pursuant to the Internal Revenue Code. An election can be made
by the Fund to exempt those transactions from this marked-to-market treatment.

      Certain  forward  contracts the Fund enters into may result in "straddles"
for Federal income tax purposes. The straddle rules may affect the character and
timing  of gains  (or  losses)  recognized  by the Fund on  straddle  positions.
Generally,  a loss  sustained  on the  disposition  of a  position  making  up a
straddle is allowed  only to the extent that the loss  exceeds any  unrecognized
gain in the  offsetting  positions  making up the straddle.  Disallowed  loss is
generally  allowed  at the  point  where  there is no  unrecognized  gain in the
offsetting  positions  making up the  straddle,  or the  offsetting  position is
disposed of.

      Under the Internal Revenue Code, the following gains or losses are treated
as ordinary income or loss: (1) gains or losses  attributable to fluctuations in
exchange rates that
         occur between the time the Fund accrues  interest or other  receivables
         or  accrues  expenses  or other  liabilities  denominated  in a foreign
         currency and the time the Fund actually  collects such  receivables  or
         pays such liabilities, and
(2)      gains or losses  attributable to fluctuations in the value of a foreign
         currency between the date of acquisition of a debt security denominated
         in a foreign  currency or foreign  currency  forward  contracts and the
         date of disposition.

      Currency  gains and losses are offset  against  market gains and losses on
each  trade  before  determining  a net  "Section  988"  gain or loss  under the
Internal Revenue Code for that trade,  which may increase or decrease the amount
of the Fund's  investment  company  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 for liquidity purposes to
meet cash needs due to the  redemption of Fund shares,  or to hold while waiting
reinvest cash received from the sale of other portfolio securities. The Fund can
buy:
      |_|   high-quality    (rated   in   the   top   rating   categories   of
         nationally-recognized  rating  organizations or deemed by the Manager
         to be of comparable  quality),  short-term money market  instruments,
         including  those  issued by the U. S.  Treasury  or other  government
         agencies,
      |_|commercial paper (short-term,  unsecured,  promissory notes of domestic
         or foreign  companies) rated in the top rating category of a nationally
         recognized rating organization,
      |_|debt  obligations of corporate  issuers,  rated investment grade (rated
         at least Baa by  Moody's  Investors  Service,  Inc.  or at least BBB by
         Standard & Poor's Corporation, or a comparable rating by another rating
         organization),  or unrated  securities  judged by the Manager to have a
         comparable quality to rated securities in those categories,
      |_|   referred stocks,
      |_|   certificates  of deposit and bankers'  acceptances of domestic and
         foreign banks and savings and loan associations, and
      |_|   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.

                             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:
      |_|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
      |_|         more than 50% of the outstanding shares.

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

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

      |_|The Fund  cannot  buy  securities  of any one issuer if more than 5% of
         its total assets would be invested in  securities  of that issuer or if
         it would then own more than 10% of that issuer's voting securities. The
         limit does not apply to securities issued by the U.S. government or any
         of its agencies or instrumentalities.
      |_|The Fund cannot  make short sales of  securities  except  "short  sales
         against-the-box."
      |_|The  Fund  cannot  deviate  from  the  percentage  limitations  for its
         investment  policies  described  as  "fundamental   policies"  in  this
         Statement of Additional Information or in the Prospectus.
      |_|The Fund  cannot  write  calls  other than  covered  calls  listed on a
         securities  or  commodities  exchange or quoted on NASDAQ,  or calls on
         futures  contracts  that are  covered  by other  futures  contracts  or
         segregated liquid assets.
      |_|The Fund can purchase  foreign  securities only if they are traded on a
         domestic  or foreign  securities  exchange or  represented  by American
         Depository  Receipts listed on a domestic securities exchange or traded
         in the U.S. over-the-counter market.
      |_|The Fund cannot  invest in  commodities  or commodity  contracts  other
         than  the  hedging  instruments  permitted  by  its  other  fundamental
         policies,  even if a hedging instrument is considered to be a commodity
         or a commodity contract.
      |_|The Fund cannot buy calls unless (1) the  investment to which the calls
         relate are  securities,  broadly-based  stock  indices  or stock  index
         futures on broadly-based  stock indices, or (2) the calls are purchased
         to effect closing  transactions to terminate an obligation the Fund has
         under a call the Fund previously wrote.
      |_| The Fund cannot write puts.
      |_|The Fund  cannot buy puts other  than (1) puts on  securities  it owns,
         (2) stock index futures, or (3) broadly-based  stock indices.  Puts may
         be purchase only to protect  against the decline in value of the Fund's
         entire portfolio or a specific  security or stock index future the Fund
         owns. After buying a put, the value of all put and call options held by
         the Fund must not exceed 5% of the Fund's total assets (measured at the
         time of purchase).
      |_|The   Fund   cannot   lend   money.   However,   it   can   invest   in
         publicly-distributed   debt  securities  that  the  Fund's   investment
         policies and restrictions permit it to purchase. The Fund may also lend
         its portfolio securities and enter into repurchase agreements.
      |_|The Fund cannot  concentrate  investments.  That means it cannot invest
         25% or more of its total assets in companies in any one industry.
      |_|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.
      |_|The Fund cannot purchase  securities on margin.  However,  the Fund may
         make margin deposits in connection with any of the hedging  instruments
         permitted by any of its other fundamental policies.
      |_|The Fund cannot invest in or hold  securities of any issuer if officers
         and Trustees of the Fund or the Manager  individually  beneficially own
         more than 1/2 of 1% of the  securities  of that issuer and together own
         more than 5% of the securities of that issuer.
      |_|The Fund  cannot  invest  in other  open-end  investment  companies  or
         invest  more  than  5% of  its  net  assets  in  closed-end  investment
         companies,  including  small business  investment  companies.  The Fund
         cannot make any such investment at commission rates in excess of normal
         brokerage commissions.
      |_|The Fund  cannot  invest in  companies  for the  purpose  of  acquiring
         control or management of them.
      |_|The Fund cannot  invest in real estate or in  interests in real estate.
         However,  the  Fund  can  purchase  readily-marketable   securities  of
         companies holding real estate or interests in real estate.
      |_|The Fund  cannot  invest  in  interests  in oil,  gas or other  mineral
         exploration or development programs.
|_|      The Fund  cannot  pledge,  mortgage or  hypothecate  any of its assets.
         However, this does not prohibit the escrow arrangements contemplated by
         the put and call  activities of the Fund or other  collateral or margin
         arrangements  in  connection  with  any  of  the  hedging   instruments
         permitted by any of its other policies.
|_|   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.

      With respect to the Fund's  fundamental  policy  limiting  investments  in
other  investment  companies,  as a  non-fundamental  policy,  the Fund  further
restricts these  investments to open-market  purchases of closed-end  investment
companies,  except if shares are acquired in connection  with mergers.  The Fund
will not engage in  arbitrage  transactions.  To the extent  that the Fund makes
investments  in  another  investment  company,  the Fund's  shareholders  may be
subject  indirectly to the  management  fees and costs of that other  investment
company.

      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 as
described above, the Fund has adopted the industry  classifications set forth in
Appendix  A  to  this  Statement  of  Additional  Information.  This  is  not  a
fundamental policy.

                                                       How the Fund is Managed

Organization  and  History.  The  Fund is an  open-end,  diversified  management
investment  company with an unlimited number of authorized  shares of beneficial
interest. The Fund was organized as a Massachusetts business trust in 1985.

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


      |X|  Classes  of Shares.  The Board of  Trustees  has the  power,  without
shareholder  approval,  to divide  unissued  shares of the Fund into two or more
classes.  The Board has done so,  and the Fund  currently  has five  classes  of
shares:  Class A, Class B, Class C, Class N and Class Y. All  classes  invest in
the same investment portfolio. 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.

      The  Trustees are  authorized  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.

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

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

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

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

Trustees  and Officers of the Fund.  The Fund's  Trustees and officers and their
principal  occupations and business affiliations and occupations during the past
five years are listed  below.  Trustees  denoted  with an asterisk (*) below are
deemed to be "interested  persons" of the Fund under the Investment Company Act.
All of the Trustees are Trustees or Directors of the  following  New  York-based
Oppenheimer funds2:


                                               Oppenheimer  International  Small
Oppenheimer California Municipal Fund          Company Fund
Oppenheimer Capital Appreciation Fund          Oppenheimer Large Cap Growth Fund
                                               Oppenheimer  Money  Market  Fund,
Oppenheimer Capital Preservation Fund          Inc.
                                               Oppenheimer  Multiple  Strategies
Oppenheimer Developing Markets Fund            Fund
                                               Oppenheimer  Multi-Sector  Income
Oppenheimer Discovery Fund                     Trust
                                               Oppenheimer           Multi-State
Oppenheimer Emerging Growth Fund               Municipal Trust
Oppenheimer Emerging Technologies Fund         Oppenheimer Municipal Bond Fund
                                               Oppenheimer  New  York  Municipal
Oppenheimer Enterprise Fund                    Fund
Oppenheimer Europe Fund                        Oppenheimer Series Fund, Inc.
                                               Oppenheimer    U.S.    Government
Oppenheimer Global Fund                        Trust
Oppenheimer Global Growth & Income Fund        Oppenheimer Trinity Core Fund
Oppenheimer Gold & Special Minerals Fund       Oppenheimer Trinity Growth Fund
Oppenheimer Growth Fund                        Oppenheimer Trinity Value Fund
Oppenheimer International Growth Fund          Oppenheimer World Bond Fund

      Ms. Macaskill and Messrs. Spiro, Donohue,  Wixted, Zack, Bishop and Farrar
respectively  hold the same  offices with the other New  York-based  Oppenheimer
funds as with the Fund.  As of January ___,  2001,  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 of the Fund held of record by an employee  benefit plan for  employees of
the  Manager,  other than the shares  beneficially  owned  under the plan by the
officers of the Fund listed above. Ms. Macaskill and Mr. Donohue are trustees of
that plan.


Leon Levy, Chairman of the Board of Trustees, Age: 75
280 Park Avenue, New York,  NY  10017
General Partner of Odyssey  Partners,  L.P.  (investment  partnership)  (since
1982) and Chairman of Avatar Holdings, Inc. (real estate development).

Robert G. Galli, Trustee, Age: 66
19750 Beach Road, Jupiter Island, FL 33469
A Trustee or Director of other Oppenheimer funds. Formerly he held the following
positions: Vice Chairman of the Manager, OppenheimerFunds,  Inc. (October 1995 -
December 1997); Executive Vice President of the Manager (December 1977 - October
1995);  Executive  Vice  President  and director  (April 1986 - October 1995) of
HarbourView Asset Management  Corporation,  an investment  advisor subsidiary of
the Manager.

Benjamin Lipstein, Trustee, Age: 76
591 Breezy Hill Road, Hillsdale, N.Y. 12529
Professor   Emeritus  of  Marketing,   Stern   Graduate   School  of  Business
Administration, New York University.

Bridget A. Macaskill, President and Trustee*, Age: 51
Two World Trade Center, 34th Floor, New York, NY 10048-0203
President (since June 1991),  Chief Executive Officer (since September 1995) and
a Director (since  December 1994) of the Manager;  President and director (since
June  1991)  of  HarbourView  Asset  Management  Corp.,  an  investment  advisor
subsidiary of the Manager; Chairman and a director of Shareholder Services, Inc.
(since August 1994) and Shareholder  Financial  Services,  Inc. (since September
1995),  transfer agent  subsidiaries of the Manager;  President (since September
1995) and a director (since October 1990) of Oppenheimer  Acquisition Corp., the
Manager's  parent  holding  company;  President  (since  September  1995)  and a
director  (since  November 1989) of Oppenheimer  Partnership  Holdings,  Inc., a
holding  company  subsidiary  of the  Manager;  a director  (since July 1996) of
Oppenheimer Real Asset Management, Inc.; President and a director (since October
1997) of  OppenheimerFunds  International  Ltd.,  an  offshore  fund  management
subsidiary of the Manager,  and of Oppenheimer  Millennium Funds plc;  President
and a director or trustee of other  Oppenheimer  funds; a director of Prudential
Corporation plc (a U.K. financial service company).

Elizabeth B. Moynihan, Trustee, Age: 70
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Author  and  architectural  historian;  a trustee  of the Freer  Gallery  of Art
(Smithsonian  Institution);  Executive  Committee  of Board of  Trustees  of the
National Building Museum; a member of the Trustees Council,  Preservation League
of New York State.

Kenneth A. Randall, Trustee, Age: 72
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion  Resources,  Inc.  (electric  utility holding company),
Dominion  Energy,  Inc.  (electric power and oil and gas producer),  and Prime
Retail,  Inc. (real estate  investment  trust);  formerly  President and Chief
Executive Officer of The Conference Board,  Inc.  (international  economic and
business  research)  and a director of  Lumbermens  Mutual  Casualty  Company,
American  Motorists  Insurance  Company  and  American   Manufacturers  Mutual
Insurance Company.

Edward V. Regan, Trustee, Age: 69
40 Park Avenue, New York, New York 10016
Chairman of Municipal  Assistance  Corporation for the City of New York;  Senior
Fellow of Jerome Levy  Economics  Institute,  Bard College;  a director of Offit
Bank; a director of River Bank America (real estate manager); Trustee, Financial
Accounting  Foundation (FASB and GASB);  formerly New York State Comptroller and
trustee, New York State and Local Retirement Fund.

Russell S. Reynolds, Jr., Trustee, Age: 67
8 Sound Shore Drive, Greenwich, Connecticut 06830
Chairman of The Directorship Group Inc. (corporate  governance  consulting and
executive  recruiting);   a  director  of  Professional  Staff  Limited  (U.K.
temporary   staffing   company);   a  life  trustee  of  International   House
(non-profit educational  organization);  and a trustee of Greenwich Historical
Society.

Donald W. Spiro, Vice Chairman and Trustee, Age: 73
Two World Trade Center, 34th Floor, New York, NY 10048-0203
A Trustee of other Oppenheimer Funds.  Formerly he held the following positions:
Chairman Emeritus (August 1991 - August 1999), Chairman (November 1987 - January
1991) and a director (January 1969 - August 1999) of the Manager;  President and
Director of the Distributor (July 1978 - January 1992).

Clayton K. Yeutter, Trustee, Age: 68
10475 E. Laurel Lane, Scottsdale, Arizona 85259
Of  Counsel,  Hogan & Hartson (a law firm);  a  director  of Zurich  Financial
Services  (financial  services),  Zurich  Allied AG and Allied  Zurich  p.l.c.
(insurance investment  management);  Caterpillar,  Inc. (machinery),  ConAgra,
Inc. (food and agricultural products),  Farmers Insurance Company (insurance),
FMC   Corp.   (chemicals   and   machinery)   and  Texas   Instruments,   Inc.
(electronics);  formerly (in descending  chronological  order),  Counsellor to
the President (Bush) for Domestic Policy,  Chairman of the Republican National
Committee,  Secretary of the U.S.  Department of  Agriculture,  and U.S. Trade
Representative.

Jayne M. Stevlingson,  Vice President and Portfolio Manager;  Age: 39. Two World
Trade Center, New York, New York 10048-0203 Vice President of the Manager (since
August 9, 1999);  formerly a small-cap growth fund portfolio manager with Morgan
Stanley Dean Witter Advisors, Inc. (October 1992- July 1999); prior to which she
was a senior equity  analyst with Bankers  Trust  Corporation  (December  1989 -
September 1992).

Andrew J. Donohue, Secretary, Age: 49
Two World Trade Center, 34th Floor, New York, NY 10048-0203
Executive Vice President (since January 1993),  General Counsel (since October
1991) and a Director  (since  September  1995) of the Manager;  Executive Vice
President and General  Counsel (since  September  1993) and a director  (since
January 1992) of the  Distributor;  Executive Vice President,  General Counsel
and a director of HarbourView  Asset Management Corp.,  Shareholder  Services,
Inc.,  Shareholder  Financial  Services,   Inc.  and  Oppenheimer  Partnership
Holdings,  Inc. (since September 1995); President and a director of Centennial
Asset Management Corp. (since September 1995); President,  General Counsel and
a director  of  Oppenheimer  Real Asset  Management,  Inc.  (since July 1996);
General  Counsel  (since  May  1996)  and  Secretary  (since  April  1997)  of
Oppenheimer   Acquisition   Corp.;   Vice   President   and  a   director   of
OppenheimerFunds  International  Ltd.  and  Oppenheimer  Millennium  Funds plc
(since October 1997); an officer of other Oppenheimer funds.

Brian W. Wixted, Treasurer; Age: 40
6803 South Tucson Way, Englewood, Colorado 80112
Senior  Vice  President  and  Treasurer  (since  April  1999) of the  Manager;
Treasurer of HarbourView Asset Management Corp.,  Shareholder Services,  Inc.,
Shareholder  Financial Services,  Inc. and Oppenheimer  Partnership  Holdings,
Inc. (since April 1999); Assistant Treasurer of Oppenheimer  Acquisition Corp.
(since April 1999);  Assistant  Secretary of Centennial Asset Management Corp.
(since April 1999);  formerly President and Chief Operating  Officer,  Bankers
Trust Company - Mutual Fund Services  Division (March 1995 - March 1999); Vice
President  and  Chief  Financial   Officer  of  CS  First  Boston   Investment
Management  Corp.  (September  1991 - March  1995);  and  Vice  President  and
Accounting Manager,  Merrill Lynch Asset Management (November 1987 - September
1991).

Robert G. Zack, Assistant Secretary, Age: 51
Two World Trade Center, 34th Floor, New York, NY 10048-0203
Senior Vice President  (since May 1985) and Associate  General  Counsel (since
May 1981) of the Manager;  Assistant Secretary of Shareholder  Services,  Inc.
(since May 1985) and  Shareholder  Financial  Services,  Inc.  (since November
1989);   Assistant  Secretary  of  OppenheimerFunds   International  Ltd.  and
Oppenheimer  Millennium  Funds plc (since October  1997);  an officer of other
Oppenheimer funds.

Robert J. Bishop, Assistant Treasurer, Age: 40
6803 South Tucson Way, Englewood, Colorado 80112
Vice  President  of the  Manager/Mutual  Fund  Accounting  (since May 1996);  an
officer of other Oppenheimer funds;  formerly an Assistant Vice President of the
Manager/Mutual  Fund Accounting (April 1994-May 1996), and a Fund Controller for
the Manager.

Scott T. Farrar, Assistant Treasurer, Age: 34
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of  OppenheimerFunds  International  Ltd. and  Oppenheimer  Millennium
Funds plc (since October 1997); an officer of other Oppenheimer funds;  formerly
an  Assistant  Vice  President  of the  Manager/Mutual  Fund  Accounting  (April
1994-May 1996), and a Fund Controller for the Manager.


      |X|  Remuneration  of  Trustees.  The  officers  of the Fund  and  certain
Trustees of the Fund (Ms.  Macaskill and prior to July 31, 1999,  Mr. Spiro) who
are  affiliated  with the  Manager  receive no salary or fee from the Fund.  The
remaining  Trustees of the Fund  received  the  compensation  shown  below.  The
compensation  from the Fund was paid during its fiscal year ended  September 30,
2000.  The  compensation  from  all  of the  New  York-based  Oppenheimer  funds
(including  the  Fund)  was  received  as a  director,  trustee  or  member of a
committee of the boards of those funds during the calendar year 2000.




<PAGE>


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

                                                                           Total
 -----------------------                   Retirement       Compensation
                                           Benefits         from all
                         Aggregate         Accrued as Part  New York based
                         Compensation      of Fund          Oppenheimer
 Trustee's Name          From Fund1        Expenses         Funds (30 Funds)2
 and Other Positions

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

               Leon Levy
 Chairman

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

         Robert G. Galli
 Study Committee Member2

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

       Benjamin Lipstein
 Study Committee
 Chairman
 Audit Committee Member

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

   Elizabeth B. Moynihan
 Study Committee Member

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

      Kenneth A. Randall
 Audit Committee
 Chairman

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

         Edward V. Regan
 Proxy Committee
 Chairman Audit
 Committee Member

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

 Russell S. Reynolds,
 Jr.
 Proxy Committee Member

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

 Donald W. Spiro4

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

      Clayton K. Yeutter
 Proxy Committee Member

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

 1Aaggregate  compensation includes fees, deferred compensation,  if any, and
 retirement plan benefits accrued for a Trust or Director.
 2For the 2000 calendar year.


      |X| Retirement  Plan for Trustees.  The Fund has adopted a retirement plan
that  provides for payments to retired  Trustees.  Payments are up to 80% of the
average  compensation paid during a Trustee's five years of service in which the
highest  compensation  was received.  A Trustee must serve as trustee for any of
the New  York-based  Oppenheimer  funds for at least 15 years to be eligible for
the maximum  payment.  Each  Trustee's  retirement  benefits  will depend on the
amount of the Trustee's future compensation and length of service. Therefore the
amount of those benefits  cannot be determined at this time, nor can we estimate
the number of years of credited  service  that will be used to  determine  those
benefits.

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


      |X| Major Shareholders. As of January ___, 2001, no person owned of record
or  was  known  by the  Fund  to  own  beneficially  5% or  more  of the  Fund's
outstanding Class A, Class B, Class C or Class Y shares except the following:


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

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

      The Code of Ethics is an  exhibit  to the  Fund's  registration  statement
filed with the Securities and Exchange Commission and can be reviewed and copied
at  the  SEC's  Public  Reference  Room  in  Washington,  D.C.  You  can  obtain
information about the hours of operation of the Public Reference Room by calling
the SEC at 1-202-942-8090.  The Code of Ethics can also be viewed as part of the
Fund's registration  statement on the SEC's EDGAR database at the SEC's Internet
web  site  at  http://www.sec.gov.  Copies  may  be  obtained,  after  paying  a
duplicating  fee,  by  electronic  request  at  the  following  E-mail  address:
[email protected].,  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  Equity  Portfolio  Team provide the  portfolio  managers with
counsel and support in managing the Fund's portfolio.

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

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

          ---------------------------------------------------------
                                        Management Fees Paid to
           Fiscal Year ended 9/30:      OppenheimerFunds, Inc.
          ---------------------------------------------------------
          ---------------------------------------------------------
                     1998                     $10,540,204
          ---------------------------------------------------------
          ---------------------------------------------------------
                     1999                     $8,072,902
          ---------------------------------------------------------
          ---------------------------------------------------------

                     2000                          $

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

The  investment  advisory  agreement  states  that  in the  absence  of  willful
misfeasance,  bad faith,  gross  negligence in the  performance of its duties or
reckless  disregard of its obligations and duties under the investment  advisory
agreement,  the  Manager is not liable  for any loss the Fund  sustains  for any
investment,  adoption  of any  investment  policy,  or  the  purchase,  sale  or
retention of any security.

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

                                                Brokerage Policies of the Fund

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

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

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 of those other
accounts may be useful both to the Fund and one or more of the  Manager's  other
accounts. Investment research may be supplied to the Manager by a third party at
the instance of a broker through which trades are placed.

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

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

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

    ------------------------------------------------------------------------
     Fiscal Year Ended 9/30:     Total Brokerage Commissions Paid by the
                                                  Fund1
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------
               1998                            $1,598,284
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------
               1999                           $1,843,5092
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------

               2000

    ------------------------------------------------------------------------
1.    Amounts do not include spreads or concessions on principal  transactions
      on a net trade basis.

2.    In the fiscal year ended 9/30/00,  the amount of  transactions  directed
      to brokers for research  services was  $__________and  the amount of
      the  commissions  paid to  broker-dealers  for  those  services  was
      $------.


                                                Distribution and Service Plans

The Distributor.  Under its General  Distributor's  Agreement with the Fund, the
Distributor  acts as the Fund's principal  underwriter in the continuous  public
offering of the Fund's  classes of shares.  The  Distributor is not obligated to
sell a specific number of shares.  Expenses  normally  attributable to sales are
borne by the Distributor.

The  compensation  paid to (or  retained  by) the  Distributor  from the sale of
shares or on the redemption of shares during the Fund's three most recent fiscal
years is shown in the table below.

 ------------------------------------------------------------------------------
           Aggregate      Class A     Commissions   Commissions   Commissions
  Fiscal   Front-End     Front-End     on Class A    on Class B   On Class C
   Year      Sales     Sales Charges     Shares        Shares       Shares
  Ended     Charges     Retained by   Advanced by   Advanced by   Advanced by
  9/30:    on Class A   Distributor   Distributor1  Distributor1 Distributor1
             Shares
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
   1998    $3,039,736   $1,011,310     $213,129      $2,695,452    $142,404
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
   1999    $1,781,549     $559,019     $200,364      $1,403,981     $73,994
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------

   2000

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

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

    2000

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


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.


      Under  the  plans,  the  Manager  and  the  Distributor,   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,
the purpose for which the payments were made and the identity of each  recipient
of a  payment.  The  reports  on the  Class B Plan and Class C Plan  shall  also
include the Distributor's distribution costs for that quarter and in the case of
the Class B Plan the amount of those costs for previous fiscal periods that have
been carried  forward.  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 acquired.


      For the fiscal year ended  September 30, 2000  payments  under the Class A
Plan totaled $__________ all of which was paid by the Distributor to recipients.
That included $______ 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 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.  The Class B plan  allows the
Distributor to be reimbursed for its services and costs in distributing  Class B
shares and servicing  accounts.  The Class C and Class N plans  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.

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

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

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

o     pays sales commissions to authorized  brokers and dealers at the time of
         sale and pays service fees as described above,
o        may  finance  payment of sales  commissions  and/or the  advance of the
         service fee payment to recipients  under the plans, or may provide such
         financing from its own resources or from the resources of an affiliate,

o     employs personnel to support  distribution of Class B, Class C and Class
         N shares, and

o        bears  the  costs of sales  literature,  advertising  and  prospectuses
         (other than those  furnished to current  shareholders)  and state "blue
         sky" registration fees and certain other distribution expenses.


      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.  The  Class B plan  allows  for the  carry-forward  of  distribution
expenses,  to be recovered  from asset based sales charges in subsequent  fiscal
periods.


-------------------------------------------------------------------------------
  Distribution Fees Paid to the Distributor in the Fiscal Year Ended 9/30/99
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
                                                 Distributor's  Distributor's
                                                   Aggregate     Unreimbursed
                      Total          Amount      Unreimbursed   Expenses as %
                    Payments      Retained by      Expenses     of Net Assets
     Class         Under Plan     Distributor     Under Plan       of Class
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class B Plan       $2,569,116     $2,051,837     $7,175,368         3.19%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Class C Plan         $319,889       $154,804       $482,959         1.76%
-------------------------------------------------------------------------------


All payments under the Class B, Class C and the 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 investment  performance.  Those terms include  "cumulative  total
return,"  "average  annual total  return,"  "average  annual total return at net
asset value" and "total return at net asset value." An  explanation of how total
returns are  calculated  is set forth  below.  The charts  below show the Fund's
performance as of the Fund's most recent fiscal year end. You can obtain current
performance  information by calling the Fund's Transfer Agent at  1-800-525-7048
or    by    visiting    the    OppenheimerFunds    Internet    web    site    at
http://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).

      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:

      |_| Total returns measure the performance of a hypothetical account in the
Fund over various periods and do not show the performance of each  shareholder's
account. Your account's performance will vary from the model performance data if
your  dividends  are  received  in cash,  or you buy or sell  shares  during the
period,  or you bought your shares at a different time and price than the shares
used in the model.
      |_| The Fund's  performance  returns do no reflect  the effect of taxes on
dividends and capital gains distributions.
      |_| An  investment  in the Fund is not  insured  by the FDIC or any  other
government agency.
      |_| The  principal  value of the Fund's  shares and total  returns are not
guaranteed and normally will fluctuate on a daily basis.
      |_| When an investor's shares are redeemed, they may be worth more or less
than their original cost.
      |_|  Total  returns  for  any  given  past  period  represent   historical
performance information and are not, and should not be considered,  a prediction
of future returns.

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

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

      In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a  percentage  of the offering  price) is deducted  from the
initial  investment  ("P") (unless the return is shown without sales charge,  as
described  below).  For Class B shares,  payment  of the  applicable  contingent
deferred  sales charge is applied,  depending on the period for which the return
is shown: 5.0% in the first year, 4.0% in the second year, 3.0% in the third and
fourth  years,  2.0%  in the  fifth  year,  1.0%  in the  sixth  year  and  none
thereafter.  For Class C shares,  the 1%  contingent  deferred  sales  charge is
deducted for returns for the 1-year period. There is no sales charge for Class Y
shares.

            |_| 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:


                  1/n
            (ERV)
            (---)   -1 = Average Annual Total Return
            ( 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 9/30/00

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
          Cumulative                  Average Annual Total Returns
Class of  Total Returns
Shares    (10 years or
          Life of Class)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
                                                  5-Year           10-Year
                                1-Year              (or              (or
                                              life-of-class)   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

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

Class B

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

Class C

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

Class Y

-------------------------------------------------------------------------------
 1. Inception of Class A:     9/11/86
 2. Inception of Class B:     4/4/94
 3. Inception of Class C:     10/2/95
 4. Inception of Class Y:     6/1/94

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  Analytical  Services,  Inc.
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 Rankings.  From time to time the Fund may publish the star
ranking of the  performance  of its classes of shares by  Morningstar,  Inc., an
independent  mutual fund monitoring  service.  Morningstar ranks mutual funds in
broad investment  categories:  domestic stock funds,  international stock funds,
taxable bond funds and municipal  bond funds.  The Fund is ranked among domestic
stock funds.

      Morningstar  star  rankings are based on  risk-adjusted  total  investment
return. Investment return measures a fund's (or class's) one-, three-, five- and
ten-year average annual total returns (depending on the inception of the fund or
class) in excess of 90-day U.S.  Treasury  bill returns  after  considering  the
fund's  sales  charges  and  expenses.  Risk  measures  a  fund's  (or  class's)
performance below 90-day U.S. Treasury bill returns.  Risk and investment return
are combined to produce star  rankings  reflecting  performance  relative to the
average fund in a fund's category.  Five stars is the "highest" ranking (top 10%
of funds in a category), four stars is "above average" (next 22.5%), three stars
is "average"  (next 35%), two stars is "below average" (next 22.5%) and one star
is "lowest"  (bottom  10%).  The current star ranking is the fund's (or class's)
3-year  ranking  or  its  combined  3-  and  5-year  ranking  (weighted  60%/40%
respectively),  or its combined 3-, 5-, and 10-year  ranking  (weighted 40%, 30%
and 30%, respectively),  depending on the inception date of the fund (or class).
Rankings are subject to change monthly.

      The Fund may also  compare its  performance  to that of other funds in its
Morningstar  category.  In  addition  to its  star  rankings,  Morningstar  also
categorizes  and compares a fund's  3-year  performance  based on  Morningstar's
classification of the fund's investments and investment style, rather than how a
fund  defines its  investment  objective.  Morningstar's  four broad  categories
(domestic  equity,  international  equity,  municipal bond and taxable bond) are
each  further  subdivided  into  categories  based on types of  investments  and
investment  styles.  Those comparisons by Morningstar are based on the same risk
and return  measurements  as its star rankings but do not consider the effect of
sales charges..

      |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.


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  $25.  Shares  will  be  purchased  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 received Federal
funds from 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. The proceeds of ACH transfers are normally received by the Fund
3 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:
         |_|Class  A and  Class  B  shares  you  purchase  for  your  individual
           accounts,  or for your  joint  accounts,  or for  trust or  custodial
           accounts on behalf of your children who are minors, and
|_|        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
           purchased  subject to an initial or contingent  deferred sales charge
           to reduce the sales  charge  rate for  current  purchases  of Class A
           shares,  provided  that you still hold your  investment in one of the
           Oppenheimer funds.

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

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

                                         Oppenheimer   Main  Street   California
Oppenheimer Bond Fund                    Municipal Fund
                                         Oppenheimer   Main   Street   Growth  &
Oppenheimer Capital Appreciation Fund    Income Fund

                                         Oppenheimer  Main  Street   Opportunity
Oppenheimer Capital Income Fund          Fund
Oppenheimer  Capital  Preservation  Fund  Oppenheimer Main Street Small Cap Fund
Oppenheimer  California  Municipal  Fund  Oppenheimer  MidCap  Fund  Oppenheimer
Champion  Income  Fund   Oppenheimer   Multiple   Strategies  Fund   Oppenheimer
Convertible   Securities  Fund  Oppenheimer   Municipal  Bond  Fund  Oppenheimer
Developing   Markets  Fund  Oppenheimer  New  York  Municipal  Fund  Oppenheimer
Disciplined  Allocation Fund  Oppenheimer New Jersey  Municipal Fund Oppenheimer
Disciplined  Value Fund  Oppenheimer  Pennsylvania  Municipal  Fund  Oppenheimer
Discovery Fund Oppenheimer Quest Balanced Value Fund
                                         Oppenheimer  Quest  Capital Value Fund,
Oppenheimer Emerging Growth Fund         Inc.
                                         Oppenheimer  Quest  Global  Value Fund,
Oppenheimer Emerging Technologies Fund   Inc.
                                         Oppenheimer   Quest  Opportunity  Value
Oppenheimer Enterprise Fund              Fund
Oppenheimer  Europe  Fund  Oppenheimer  Quest  Small Cap Value Fund  Oppenheimer
Florida  Municipal Fund Oppenheimer  Quest Value Fund, Inc.  Oppenheimer  Global
Fund  Oppenheimer  Real  Asset  Fund  Oppenheimer  Global  Growth & Income  Fund
Oppenheimer  Senior Floating Rate Fund  Oppenheimer Gold & Special Minerals Fund
Oppenheimer  Strategic  Income Fund Oppenheimer  Growth Fund  Oppenheimer  Total
Return Fund,  Inc.  Oppenheimer  High Yield Fund  Oppenheimer  Trinity Core Fund
Oppenheimer  Insured Municipal Fund Oppenheimer  Trinity Growth Fund Oppenheimer
Intermediate   Municipal  Fund   Oppenheimer   Trinity  Value  Fund  Oppenheimer
International   Bond  Fund   Oppenheimer  U.S.   Government  Trust   Oppenheimer
International Growth Fund Oppenheimer World Bond Fund Oppenheimer  International
Small Company Fund  Limited-Term New York Municipal Fund  Oppenheimer  Large Cap
Growth Fund Rochester Fund Municipals Oppenheimer Limited-Term Government Fund


And the following money market funds:

Centennial America Fund, L.P.            Centennial New York Tax Exempt Fund
Centennial California Tax Exempt Trust   Centennial Tax Exempt Trust
Centennial Government Trust              Oppenheimer Cash Reserves
Centennial Money Market Trust            Oppenheimer Money Market Fund, Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Asset Builder Plans.  To establish an Asset Builder Plan to buy shares  directly
from a bank  account,  you must  enclose a check  (the  minimum  is $25) for the
initial purchase with your  application.  Shares purchased by Asset Builder Plan
payments  from bank  accounts  are subject to the  redemption  restrictions  for
recent purchases described in the Prospectus.  Asset Builder Plans are available
only if your bank is an ACH member.  Asset  Builder Plans may not be used to buy
shares for  OppenheimerFunds  employer-sponsored  qualified retirement accounts.
Asset Builder Plans also enable shareholders of Oppenheimer Cash Reserves to use
their account in that fund to make monthly  automatic  purchases of shares of up
to four other Oppenheimer funds.

      To make  automatic  payments  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 your 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 B to this  Statement of  Additional  Information.  Certain
special sales charge arrangements described in that Appendix apply to retirement
plans whose records are maintained on a daily  valuation  basis by Merrill Lynch
Pierce Fenner & Smith, Inc. or an independent  record keeper that has a contract
or special  arrangement  with  Merrill  Lynch.  If on the date the plan  sponsor
signed the Merrill Lynch record keeping service agreement the plan has less than
$3 million in assets (other than assets invested in money market funds) invested
in applicable  investments,  then the retirement  plan may purchase only Class B
shares of the  Oppenheimer  funds.  Any  retirement  plans in that category that
currently  invest in Class B shares of the Fund will have  their  Class B shares
converted to Class A shares of the Fund when the plan's  applicable  investments
reach $5 million.

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


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


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

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

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

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

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

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

      Changes in the values of securities traded on foreign exchanges or markets
as a result of  events  that  occur  after the  prices of those  securities  are
determined,  but before the close of The New York  Stock  Exchange,  will not be
reflected in the Fund's  calculation of its net asset values that day unless the
Board of  Trustees  determines  that the event is  likely  to effect a  material
change in the value of the  security.  The Manager may make that  determination,
under procedures established by the Board.

      |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:

      |_| Equity securities traded on a U.S.  securities exchange or on NASDAQ
are valued as follows:
(1)   if last sale information is regularly  reported,  they are valued at the
            last reported  sale price on the principal  exchange on which they
            are traded or on NASDAQ, as applicable, on that day, or
(2)         if last sale  information is not available on a valuation date, they
            are valued at the last reported  sale price  preceding the valuation
            date if it is within the  spread of the  closing  "bid" and  "asked"
            prices on the valuation  date or, if not, at the closing "bid" price
            on the valuation date.
      |_| 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.
      |_| The following  securities are valued at the mean between the "bid" and
"asked" prices  determined by a pricing service  approved by the Fund's Board of
Trustees  or  obtained  by the  Manager  from two  active  market  makers in the
security on the basis of reasonable inquiry:
(1)   debt  instruments  that  have a  maturity  of more  than 397  days  when
         issued,
(2)      debt  instruments  that had a maturity  of 397 days or less when issued
         and have a remaining maturity of more than 60 days, and
(3)      non-money  market debt  instruments  that had a maturity of 397 days or
         less when  issued and which  have a  remaining  maturity  of 60 days or
         less.
      |_| 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.
      |_|   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

      Information on how to sell shares of the Fund is stated in the Prospectus.
The information below provides  additional  information about the procedures and
conditions for redeeming shares.

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

      |_|Class A shares purchased  subject to an initial sales charge or Class A
         shares on which a contingent deferred sales charge was paid, or
      |_|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
or  Class Y  shares.  The  Fund  may  amend,  suspend  or  cease  offering  this
reinvestment  privilege at any time as to shares redeemed after the date of such
amendment, suspension or cessation.

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

Payments "In Kind".  The Prospectus  states that payment for shares tendered for
redemption is  ordinarily  made in cash.  However,  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.

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


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


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

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

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

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

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

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

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

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

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

      |X|  Automatic  Exchange  Plans.  Shareholders  can authorize the Transfer
Agent to exchange a  pre-determined  amount of shares of the Fund for shares (of
the  same  class)  of  other  Oppenheimer  funds  automatically  on  a  monthly,
quarterly,  semi-annual  or annual basis under an Automatic  Exchange  Plan. The
minimum  amount  that  may be  exchanged  to each  other  fund  account  is $25.
Instructions  should  be  provided  on  the   OppenheimerFunds   Application  or
signature-guaranteed instructions.  Exchanges made under these plans are subject
to the  restrictions  that apply to  exchanges  as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional Information.

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

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

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

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

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

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

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

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

How to Exchange Shares

      As stated in the Prospectus,  shares of a particular  class of Oppenheimer
funds having more than one class of shares may be  exchanged  only for shares of
the same class of other Oppenheimer funds. Shares of Oppenheimer funds that have
a single class without a class  designation are deemed "Class A" shares for this
purpose.  You can obtain a current list showing  which funds offer which classes
by calling the Distributor at 1-800-525-7048.
      |_| All of the  Oppenheimer  funds currently offer Class A, B and C shares
except  Oppenheimer  Money Market Fund,  Inc.,  Centennial  Money Market  Trust,
Centennial Tax Exempt Trust,  Centennial  Government Trust,  Centennial New York
Tax Exempt Trust, Centennial California Tax Exempt Trust, and Centennial America
Fund, L.P., which only offer Class A shares.
      |_| Oppenheimer  Main Street  California  Municipal Fund currently  offers
only Class A and Class B shares.
      |_| Class B and Class C shares of Oppenheimer  Cash Reserves are generally
available  only by exchange  from the same class of shares of other  Oppenheimer
funds or through OppenheimerFunds-sponsored 401 (k) plans.

      |_| Only certain Oppenheimer funds currently offer Class Y shares. Class Y
shares of  Oppenheimer  Real Asset Fund may not be  exchanged  for shares of any
other fund.

      |_|  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.

      |_| Class A shares  of Senior  Floating  Rate  Fund are not  available  by
exchange of Class A shares of other Oppenheimer  funds. Class A shares of Senior
Floating Rate Fund that are exchanged for shares of the other  Oppenheimer funds
may not be exchanged back for Class A shares of Senior Floating Rate Fund.

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

      |_| 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.

      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
a contingent deferred sales charge.

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

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

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

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


      When Class B or Class C 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 or the Class C 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.  With respect to Class N shares,  if you redeem
your shares  within 18 months of the  retirement  plan's  first  purchase or the
retirement plan eliminates the Fund as a plan investment option within 18 months
of selecting the Fund, a 1% contingent  deferred sales charge will be imposed on
the plan.


      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 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.

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

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

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

                                            Dividends, Capital Gains and Taxes


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


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

Tax Status of the Fund's Dividends and Distributions.  The Federal tax treatment
of the Fund's dividends and capital gains  distributions is briefly  highlighted
in the Prospectus.

          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.

      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.  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.

      The Fund intends to qualify as a "regulated  investment company" under the
Internal  Revenue Code  (although  it reserves  the right not to qualify).  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 the Fund's
shares are held in a retirement  account or the shareholder is otherwise  exempt
from tax). If the Fund qualifies as a "regulated  investment  company" under the
Internal Revenue Code, it will not be liable for Federal income taxes on amounts
paid by it as dividends  and  distributions.  The Fund  qualified as a regulated
investment company in its last fiscal year. The Internal Revenue Code contains a
number of complex tests relating to qualification  which the Fund might not meet
in any particular year. If it did not so qualify,  the Fund would be treated for
tax  purposes  as an  ordinary  corporation  and  receive no tax  deduction  for
payments made to shareholders.

      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.

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 acts on an "at-cost" basis. It also
acts  as  shareholder   servicing  agent  for  the  other   Oppenheimer   funds.
Shareholders  should direct inquiries about their accounts to the Transfer Agent
at the address and toll-free numbers shown on the back cover.

The Custodian.  The Bank of New York is the Custodian of the Fund's assets.  The
Custodian's  responsibilities  include  safeguarding  and controlling the Fund's
portfolio  securities  and handling the delivery of such  securities to and from
the Fund.  It will be the  practice of the Fund to deal with the  Custodian 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.  KPMG 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 certain other funds advised by the Manager and its
affiliates.




<PAGE>


                                       A-1
                                   Appendix A

                            Industry Classifications

Aerospace/Defense                       Food and Drug Retailers
Air Transportation                      Gas Utilities
Asset-Backed                            Health Care/Drugs
Auto Parts and Equipment                Health Care/Supplies & Services
Automotive                              Homebuilders/Real Estate
Bank Holding Companies                  Hotel/Gaming
Banks                                   Industrial Services
Beverages                               Information Technology
Broadcasting                            Insurance
Broker-Dealers                          Leasing & Factoring
Building Materials                      Leisure
Cable Television                        Manufacturing
Chemicals                               Metals/Mining
Commercial Finance                      Nondurable Household Goods
Communication Equipment                 Office Equipment
Computer Hardware                       Oil - Domestic
Computer Software                       Oil - International
Conglomerates                           Paper
Consumer Finance                        Photography
Consumer Services                       Publishing
Containers                              Railroads & Truckers
Convenience Stores                      Restaurants
Department Stores                       Savings & Loans
Diversified Financial                   Shipping
Diversified Media                       Special Purpose Financial
Drug Wholesalers                        Specialty Printing
Durable Household Goods                 Specialty Retailing
Education                               Steel
Electric Utilities                      Telecommunications - Long Distance
Electrical Equipment                    Telephone - Utility
Electronics                             Textile, Apparel & Home Furnishings
Energy Services                         Tobacco
Entertainment/Film                      Trucks and Parts
Environmental                           Wireless Services
Food





<PAGE>


                                      B-11
                                   Appendix B

        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.
--------------
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 A 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  Class A 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  Class A 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
   enabling  those  plans to  purchase  Class A shares  at net  asset  value but
   subject to the Class A contingent deferred sales charge.
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 of the end 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  commission  described  in the  Prospectus  under  "Class  A
Contingent Deferred Sales Charge."3 This waiver provision applies to:
|_| Purchases of Class A shares aggregating $1 million or more. |_| Purchases by
a Retirement Plan (other than an IRA or 403(b)(7)
         custodial plan) that:
(1)   buys shares costing $500,000 or more, or
(2)   has, at the time of purchase,  100 or more  eligible  employees or total
              plan assets of $500,000 or more, or
(3)           certifies 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 Asset Management,  L.P. ("MLAM"),  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 MLAM (the funds  described  in (a) and (b)
              are referred to as "Applicable Investments").
(2)   The record  keeping  for the  Retirement  Plan is  performed  on a daily
              valuation  basis by a record keeper whose  services are provided
              under a contract or arrangement  between the Retirement Plan and
              Merrill  Lynch.  On the date the plan  sponsor  signs the record
              keeping  service  agreement  with Merrill  Lynch,  the Plan must
              have  $3  million  or  more  of  its  assets  (excluding  assets
              invested  in  money  market   funds)   invested  in   Applicable
              Investments.
(3)           The  record  keeping  for a  Retirement  Plan is  handled  under a
              service  agreement  with  Merrill  Lynch  and on the date the plan
              sponsor  signs that  agreement,  the Plan has 500 or more eligible
              employees  (as  determined  by the Merrill  Lynch plan  conversion
              manager).
|_|      Purchases   by  a   Retirement   Plan   whose   record   keeper  had  a
         cost-allocation  agreement  with the Transfer Agent on or before May 1,
         1999.


<PAGE>


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  commissions  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.
|-|

<PAGE>


      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  commissions  are  paid by the  Distributor  on such
purchases):
|_|      Shares  issued  in  plans of  reorganization,  such as  mergers,  asset
         acquisitions and exchange offers, to which the Fund is a party.
|_|      Shares   purchased   by  the   reinvestment   of   dividends  or  other
         distributions  reinvested  from  the Fund or  other  Oppenheimer  funds
         (other than  Oppenheimer  Cash Reserves) or unit investment  trusts for
         which reinvestment arrangements have been made with the Distributor.
|_|   Shares  purchased  through  a  broker-dealer  that  has  entered  into a
         special   agreement  with  the  Distributor  to  allow  the  broker's
         customers to purchase and pay for shares of  Oppenheimer  funds using
         the  proceeds  of shares  redeemed in the prior 30 days from a mutual
         fund  (other  than  a  fund  managed  by  the  Manager  or any of its
         subsidiaries)   on  which  an  initial  sales  charge  or  contingent
         deferred  sales  charge was paid.  This waiver also applies to shares
         purchased  by exchange of shares of  Oppenheimer  Money  Market Fund,
         Inc.  that were  purchased  and paid for in this manner.  This waiver
         must be  requested  when the  purchase  order is placed for shares of
         the Fund, and the Distributor may require  evidence of  qualification
         for this waiver.
|_|      Shares  purchased with the proceeds of maturing  principal units of any
         Qualified Unit Investment Liquid Trust Series.
|_|      Shares   purchased  by  the   reinvestment  of  loan  repayments  by  a
         participant in a Retirement  Plan for which the Manager or an affiliate
         acts as sponsor.

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

The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
|_|      To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|      Involuntary  redemptions  of shares by operation of law or  involuntary
         redemptions of small  accounts  (please refer to  "Shareholder  Account
         Rules and Policies," in the applicable fund Prospectus).
|_|      For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
(1)           Following  the death or  disability  (as  defined in the  Internal
              Revenue  Code) of the  participant  or  beneficiary.  The death or
              disability  must  occur  after  the   participant's   account  was
              established.
(2)   To return excess contributions.
(3)   To return contributions made due to a mistake of fact.
(4)   Hardship withdrawals, as defined in the plan.4
(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.5
         (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  Retirement  Plans having 500 or more eligible
         employees,  except  distributions  due  to  termination  of  all of the
         Oppenheimer funds as an investment option under the Plan.
|_|      For distributions  from 401(k) plans sponsored by  broker-dealers  that
         have entered into a special  agreement  with the  Distributor  allowing
         this waiver.

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

The Class B and Class C 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 and Class C  contingent  deferred  sales  charges will be waived for
redemptions of shares in the following cases: |_| Shares redeemed involuntarily,
as described in "Shareholder Account
         Rules and Policies," in the applicable Prospectus.
|_|   Redemptions  from accounts  other than  Retirement  Plans  following the
         death or  disability  of the last  surviving  shareholder,  including a
         trustee  of a grantor  trust or  revocable  living  trust for which the
         trustee is also the sole beneficiary. The death or disability must have
         occurred after the account was established, and for disability you must
         provide  evidence  of a  determination  of  disability  by  the  Social
         Security Administration.
|_|      Distributions  from accounts for which the  broker-dealer of record has
         entered into a special  agreement  with the  Distributor  allowing this
         waiver.
|_|      Redemptions  of Class B shares held by  Retirement  Plans whose records
         are  maintained  on a daily  valuation  basis  by  Merrill  Lynch or an
         independent record keeper under a contract with Merrill Lynch.
|_|      Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
         accounts of clients of financial  institutions that have entered into a
         special arrangement with the Distributor for this purpose.
|_|      Redemptions  requested in writing by a Retirement Plan sponsor of Class
         C shares of an  Oppenheimer  fund in amounts of $1 million or more held
         by the  Retirement  Plan for  more  than one  year,  if the  redemption
         proceeds  are  invested  in Class A shares  of one or more  Oppenheimer
         funds.
|_|      Distributions 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.6
(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.7  (9)  On  account  of the
participant's separation from service.8 (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)          Distributions  from  Retirement  Plans having 500 or more eligible
              employees,  but excluding distributions made because of the Plan's
              elimination  as  investment  options  under the Plan of all of the
              Oppenheimer funds that had been offered.
(13)          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.
(14)          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.
      |_|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:



<PAGE>


  Oppenheimer Quest Value Fund, Inc.    Oppenheimer   Quest   Small   Cap
                                        Value Fund
  Oppenheimer Quest Balanced Value Fund Oppenheimer  Quest  Global  Value
                                        Fund
  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 Quest for  Value  New York  Tax-Exempt
Income Fund                              Fund
  Quest  for  Value  Investment  Quality Quest  for Value  National  Tax-Exempt
Income Fund                              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
Number of                      Charge             Charge          Commission
Eligible Employees           as a % of           as a % of          as % of
or Members                 Offering Price   Net Amount Invested Offering Price
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
9 or Fewer                     2.50%               2.56%             2.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
At least 10 but not more       2.00%               2.04%             1.60%
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:
|_|         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.
|_|         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:
|_|         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
|_|         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: |_|  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);
|_|         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
|_|         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):
o     Oppenheimer U. S. Government Trust,
o     Oppenheimer Bond Fund,
o     Oppenheimer Disciplined Value Fund and
o     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 CMIA LifeSpan  Capital  Appreciation
Account                                     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.

      |_| 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;
(4)   as  tax-free  returns  of excess  contributions  to such  retirement  or
           employee benefit plans;
(5)        in whole or in part,  in  connection  with  shares sold to any state,
           county, or city, or any instrumentality,  department,  authority,  or
           agency thereof, that is prohibited by applicable investment laws from
           paying a sales charge or commission  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 Equity 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.




<PAGE>


                                      C-45
------------------------------------------------------------------------------
Oppenheimer Discovery Fund
------------------------------------------------------------------------------

Internet Web Site:
      www.oppenheimerfunds.com

Investment Adviser
      OppenheimerFunds, Inc.
      Two World Trade Center
      New York, New York 10048-0203

Distributor
      OppenheimerFunds Distributor, Inc.
      Two World Trade Center
      New York, New York 10048-0203

Transfer Agent
      OppenheimerFunds Services
      P.O. Box 5270
      Denver, Colorado 80217
      1-800-525-7048

Custodian Bank
      The Bank of New York
      One Wall Street
      New York, New York 10015

Independent Auditors
      KPMG LLP
      707 Seventeenth Street
      Denver, Colorado 80202

Legal Counsel
      Mayer, Brown, & Platt
      1675 Broadway
      New York, New York 10019


1234




PX500.0100

--------
1 No  commission  will be paid 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.
2 Ms.  Macaskill is not a Director of  Oppenheimer  Money  Market  Fund,  Inc. 3
However,  that  commission 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.
4 This provision does not apply to IRAs.
5 This provision does not apply to 403(b)(7) custodial plans if the
participant is less than age 55, nor to IRAs.
6 This provision does not apply to IRAs.
7 This provision does not apply to loans from 403(b)(7)  custodial plans. 8 This
provision does not apply to 403(b)(7) custodial plans if the participant is less
than age 55, nor to IRAs.



                           OPPENHEIMER DISCOVERY FUND

                                    FORM N-1A

                                     PART C

                                OTHER INFORMATION


Item 23.  Exhibits

(a)   Amended  and  Restated  Declaration  of Trust made as of July 14,  1995:
Previously filed with Registrant's  Post-Effective  Amendment No. 17, 7/21/95,
and incorporated herein by reference .

(b)   Amended  and  Restated  By-Laws  dated  6/4/98:  Previously  filed  with
Registrant's  Post-Effective  Amendment  No.  23,  1/28/99,  and  incorporated
herein by reference.


(c)   (i)   Specimen  Class  A  Share   Certificate:   Previously  filed  with
      Registrant's  Post-Effective Amendment No. 24, 1/28/00, and incorporated
      herein by reference.

      (ii)  Specimen  Class  B  Share   Certificate:   Previously  filed  with
      Registrant's  Post-Effective Amendment No. 24, 1/28/00, and incorporated
      herein by reference.

      Specimen Class C Share  Certificate:  Previously filed with Registrant's
      Post-Effective  Amendment No. 24, 1/28/00,  and  incorporated  herein by
      reference

(iv)  Specimen Class N Share Certificate: Filed herewith

      (v)   Specimen  Class  Y  Share   Certificate:   Previously  filed  with
      Registrant's  Post-Effective Amendment No. 24, 1/28/00, and incorporated
      herein by reference.


(d)   (i)   Investment Advisory Agreement dated 6/1/92:  Previously filed with
Registrant's   Post-Effective   Amendment  No.  10,   12/3/92,   refiled  with
Registrant's  Post-Effective Amendment No. 16, 1/3/95, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.

      (ii)  Amendment  dated  as  of  12/14/95  to  the  Investment   Advisory
Agreement  dated 6/1/92:  Previously  filed with  Registrant's  Post-Effective
Amendment No. 20, 1/15/97, and incorporated herein by reference.

(e)   (i)   General   Distributor's   Agreement   dated   December  10,  1992:
Previously filed with Registrant's  Post-Effective  Amendment No. 11, 1/28/93,
refiled with Registrant's  Post-Effective Amendment No. 16, 1/13/95,  pursuant
to Item 102 of Regulation S-T, and incorporated herein by reference.

      (ii) Form of Dealer  Agreement of  OppenheimerFunds  Distributor,  Inc.:
Filed with  Post-Effective  Amendment No. 2 of Oppenheimer  Trinity Value Fund
(Reg. No. 333-79707), 8/25/99, and incorporated herein by reference.

         (iii) Form of  OppenheimerFunds  Distributor,  Inc. Broker Agreement:
Filed with  Post-Effective  Amendment No. 2 of Oppenheimer  Trinity Value Fund
(Reg. No. 333-79707), 8/25/99, and incorporated herein by reference.

         (iv) Form of  OppenheimerFunds  Distributor,  Inc. Agency  Agreement:
Filed with  Post-Effective  Amendment No. 2 of Oppenheimer  Trinity Value Fund
(Reg. No. 333-79707), 8/25/99, and incorporated herein by reference.

(f)   (i)   Retirement  Plan for  Non-Interested  Trustees or Directors  dated
6/7/90:  Previously filed with Post-Effective  Amendment No. 97 of Oppenheimer
Fund (Reg. No. 2-14586),  8/30/90,  refiled with Post-Effective  Amendment No.
45 of Oppenheimer  Growth Fund (Reg. No. 2-45272),  8/22/94,  pursuant to Item
102 of Regulation S-T, and incorporated herein by reference.

      (ii)  Form  of  Deferred   Compensation   Agreement  for   Disinterested
Trustees:  Filed  with  Post-Effective  Amendment  No.26  to the  Registration
Statement of  Oppenheimer  Gold & Special  Minerals Fund (Reg.  No.  2-82590),
10/28/98, and incorporated by reference.

(g)   (i)   Custody   Agreement   dated   6/10/92:   Previously   filed   with
Registrant's   Post-Effective   Amendment  No.  10,   12/3/92,   refiled  with
Registrant's  Post-Effective  Amendment No. 16, 1/13/95,  pursuant to Item 102
of Regulation S-T and incorporated herein by reference.


      (ii) Foreign Custody Manager Agreement  between  Registrant and The Bank
of New  York:  Previously  filed  with  Pre-Effective  Amendment  No. 2 to the
Registration  Statement  of  Oppenheimer  World  Bond Fund  (Reg.  333-48973),
4/23/98, and incorporated herein by reference.


(h)   Inapplicable.

(i)   Opinion  and  Consent of Counsel  dated  8/1/86:  Previously  filed with
Registrant's   Post-Effective   Amendment   No.  3,   1/27/88,   refiled  with
Registrant's  Post-Effective  Amendment No. 16, 1/13/95,  pursuant to Item 102
of Regulation S-T, and incorporated herein by reference.


(j)   Independent Auditor's Consent: To be filed by amendment.


(k)   Inapplicable.

(l)   Investment  Letter  from  OppenheimerFunds,  Inc.  to  Registrant  dated
8/15/86:  Previously filed with Registrant's  Post-Effective  Amendment No. 5,
12/1/89,  and  refiled  with  Registrant's  Post-Effective  Amendment  No. 16,
1/13/95,  pursuant to Item 102 of Regulation S-T, and  incorporated  herein by
reference.

(m)   (i)   Service Plan and  Agreement for Class A shares dated 6/10/93 under
Rule  12b-1 of the  Investment  Company  Act of 1940:  Previously  filed  with
Registrant's  Post-Effective  Amendment  No.  13,  1/19/94,  and  incorporated
herein by reference.

      (ii)  Distribution and Service Plan and Agreement for Class B shares dated
4/1/94  under  Rule  12b-1 of the  Investment  Company  Act of 1940 for  Class B
Shares:  Previously  filed with  Registrant's  Post-Effective  Amendment No. 15,
3/31/94, and incorporated herein by reference.

      Distribution  and  Service  Plan and  Agreement  for Class C shares  dated
7/21/95  under Rule 12b-1:  Previously  filed with  Registrant's  Post-Effective
Amendment No. 18, 9/27/95, and incorporated herein by reference.


      (iv) Form of  Distribution  and  Service  Plan and  Agreement  for Class N
shares; Filed herewith.


(n)   Oppenheimer  Funds  Multiple  Class  Plan  under  Rule  18f-3 as updated
through 8/24/99:  Previously filed with  Pre-Effective  Amendment No. 1 to the
Registration  Statement of  Oppenheimer  Senior  Floating Rate Fund (Reg.  No.
333-82579), 8/27/99, and incorporated herein by reference.


      ---  Powers  of  Attorney  for  all   Trustees/Directors   and  Officers
(including  Certified Board Resolutions):  Previously filed with Pre-Effective
Amendment No. 1 to the Registration  Statement of Oppenheimer  Emerging Growth
Fund (Reg. No. 333-44176), 10/5/00, and incorporated herein by reference.


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



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

None.

Item 25.  Indemnification

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

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

Item 26.  Business and Other Connections of the Investment Adviser

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

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

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


Amy Adamshick,
Vice President


 Charles E. Albers,

Senior Vice President An officer and/or portfolio manager of certain Oppenheimer
funds (since April 1989), a Chartered Financial Analyst.


Edward Amberger,

Assistant Vice President            None.

Janette Aprilante,
Assistant Vice President            None.


Victor Babin,
Senior Vice President               None.


Bruce L. Bartlett,

Senior                              Vice President An officer  and/or  portfolio
                                    manager of certain Oppenheimer funds.


George Batejan,
Executive Vice President/
Chief Information Officer           Formerly Senior Vice President  (until May

                                     1998).

Connie Bechtolt,
Assistant Vice President            None.

Kathleen Beichert,
Vice President                      None.

Rajeev Bhaman,

Vice President                      None.

Mark Binning
Assistant Vice President            None.


Robert J. Bishop,
Vice                                President  Vice  President  of  Mutual  Fund
                                    Accounting  (since May 1996);  an officer of
                                    other Oppenheimer funds.


John R. Blomfield,
Vice President                      None.


Chad Boll,
Assistant Vice President            None

Scott Brooks,
Vice President                      None.


Jeffrey Burns,
Vice                                President, Assistant Counsel Stradley, Ronen
                                    Stevens    and    Young,    LLP    (February
                                    1998-September 1999).

Bruce Burroughs,
Vice President


Adele Campbell,
Assistant Vice President & Assistant
Treasurer: Rochester Division       Formerly,   Assistant  Vice  President  of
                                    Rochester Fund Services, Inc.


Michael A. Carbuto,

Vice President                      An  officer  and/or  portfolio  manager of
                                    certain  Oppenheimer funds; Vice President
                                    of     Centennial     Asset     Management
                                    Corporation.

John Cardillo,
Assistant Vice President            None.


Elisa Chrysanthis

Assistant Vice President            None.

H.C. Digby Clements,

Vice President: Rochester Division  None.

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

John Davis
Assistant Vice President            EAB Financial (April 1998-February 1999).


Robert A. Densen,
Senior Vice President               None.


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


Sheri Devereux,
Vice President                      None.


Max Dietshe
Vice President                      Deloitte & Touche LLP (1989-1999).


Craig P. Dinsell

Executive Vice President            None.


John Doney,
Vice                                President   An  officer   and/or   portfolio
                                    manager of certain Oppenheimer funds.

Andrew J. Donohue,
Executive Vice President,

General Counsel and Director        Executive Vice President  (since September
                                    1993) and a director  (since January 1992)
                                    of   the   Distributor;   Executive   Vice
                                    President,    General    Counsel    (since
                                    September  1995)  and  a  director  (since
                                    August   1994)   of   HarbourView    Asset
                                    Management    Corporation,     Shareholder
                                    Services,   Inc.,   Shareholder  Financial
                                    Services,     Inc.     and     Oppenheimer
                                    Partnership   Holdings,   Inc.,   of   OFI
                                    Private  Investments,  Inc.  (since  March
                                    2000),  and of PIMCO Trust Company  (since
                                    May 2000);  President  and a  director  of
                                    Centennial  Asset  Management  Corporation
                                    (since  September 1995) and of Oppenheimer
                                    Real Asset  Management,  Inc.  (since July
                                    1996);   Vice  President  and  a  director
                                    (since       September       1997)      of
                                    OppenheimerFunds  International  Ltd.  and
                                    Oppenheimer   Millennium   Funds   plc;  a
                                    director    (since    April    2000)    of
                                    OppenheimerFunds    Legacy   Program,    a
                                    charitable  trust program  established  by
                                    the Manager;  General  Counsel  (since May
                                    1996) and Secretary  (since April 1997) of
                                    Oppenheimer  Acquisition Corp.; an officer
                                    of other Oppenheimer funds.

Bruce Dunbar,
Vice President                      None.


Daniel Engstrom,
Assistant Vice President            None.


Armond Erpf
Assistant Vice President            None.


George Evans,
Vice                                President   An  officer   and/or   portfolio
                                    manager of certain Oppenheimer funds.


Edward N. Everett,

Assistant Vice President            None.

George Fahey,
Vice President                      None.


Leslie A. Falconio,
Vice                                President   An  officer   and/or   portfolio
                                    manager of certain  Oppenheimer funds (since
                                    6/99).


Scott Farrar,

Vice                                President Assistant Treasurer of Oppenheimer
                                    Millennium  Funds plc (since  October 1997);
                                    an officer of other Oppenheimer funds.

Katherine P. Feld,
Vice President, Senior Counsel
and Secretary                       Vice   President   and  Secretary  of  the
                                    Distributor;  Secretary  and  Director  of
                                    Centennial Asset  Management  Corporation;
                                    Vice    President    and    Secretary   of
                                    Oppenheimer Real Asset  Management,  Inc.;
                                    Secretary of HarbourView  Asset Management
                                    Corporation,    Oppenheimer    Partnership
                                    Holdings,   Inc.,   Shareholder  Financial
                                    Services,  Inc. and Shareholder  Services,
                                    Inc.


Ronald H. Fielding,
Senior Vice President; Chairman:
Rochester Division                  An  officer,   Director  and/or  portfolio
                                    manager  of  certain   Oppenheimer  funds;
                                    presently  he holds  the  following  other
                                    positions:  Director  (since  1995) of ICI
                                    Mutual Insurance Company;  Governor (since
                                    1994)  of  St.  John's  College;  Director
                                    (since  1994 - present)  of  International
                                    Museum of  Photography  at George  Eastman
                                    House..

David Foxhoven,
Assistant Vice President            Formerly   Manager,   Banking   Operations
                                    Department (July 1996 - November 1998).

Colleen Franca,
Assistant Vice President            None.

Crystal French
Vice President                      None.

Dan Gangemi,
Vice President                      None.

Subrata Ghose
Assistant Vice President            Formerly,   Equity   Analyst  at  Fidelity
                                    Investments (1995 - March 2000).

Charles Gilbert,
Assistant Vice President            None.

Alan Gilston,
Vice President                      None.

Jill Glazerman,
Vice President                      None.

Paul Goldenberg,
Vice President

Mikhail Goldverg
Assistant Vice President            None.

Laura Granger,
Vice President

Jeremy Griffiths,
Executive Vice President,
Chief Financial Officer and
Director                            Chief  Financial  Officer,  Treasurer  and
                                    director   of   Oppenheimer    Acquisition
                                    Corp.;   Executive   Vice   President   of
                                    HarbourView Asset Management  Corporation;
                                    President.  Chief  Executive  Officer  and
                                    director of PIMCO Trust Company;  director
                                    of   OppenheimerFunds,    Legacy   Program
                                    (charitable    trust    program);     Vice
                                    President  of  OFI  Private   Investments,
                                    Inc.  and  a  Member  and  Fellow  of  the
                                    Institute of Chartered Accountants.

Robert Grill,
Senior Vice President               None.

Robert Guy,
Senior Vice President               None.

Robert Haley,
Assistant Vice President            None.

Kelly Haney,
Assistant Vice President

Thomas B. Hayes,
Vice President                      None.

Dorothy Hirshman,
Assistant Vice President            None

Merryl Hoffman,
Vice President and
Senior Counsel                      None

Merrell Hora,
Assistant Vice President            None.

Scott T. Huebl,
Vice President                      None.

James Hyland,
Assistant                           Vice President  Formerly Manager of Customer
                                    Research    for    Prudential    Investments
                                    (February 1998 - July 1999).

David Hyun,
Vice                                President    Formerly   portfolio   manager,
                                    technology analyst and research associate at
                                    Fred Alger  Management,  Inc. (August 1993 -
                                    June 2000).

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

Kathleen T. Ives,
Vice President                      None.

William Jaume,
Vice President                      Senior Vice  President  (since April 2000)
                                    of    HarbourView     Asset     Management
                                    Corporation.

Frank Jennings,
Vice                                President   An  officer   and/or   portfolio
                                    manager of certain Oppenheimer funds.

Andrew Jordan,
Assistant Vice President            None.

Deborah Kaback,
Vice President and
Senior Counsel                      Senior Vice President and Deputy General
                                    Counsel of Oppenheimer Capital (April
                                    1989-November 1999).

Lewis Kamman
Vice President                      Senior   Consultant   for  Bell   Atlantic
                                    Network     Integration,     Inc.    (June
                                    1997-December 1998).

Jennifer Kane
Assistant Vice President            None.

Lynn Oberist Keeshan
Senior                              Vice President  Formerly  (until March 1999)
                                    Vice  President,  Business  Development  and
                                    Treasury at Liz Claiborne, Inc.

Thomas W. Keffer,
Senior Vice President               None.

Erica Klein,
Assistant Vice President            None.

Walter Konops,
Assistant Vice President            None.

Avram Kornberg,
Senior Vice President               None.

Jimmy Kourkoulakos,
Assistant Vice President.           None.

John Kowalik,
Senior                              Vice President An officer  and/or  portfolio
                                    manager for certain OppenheimerFunds.

Joseph Krist,
Assistant Vice President            None.

Christopher Leavy
Senior                              Vice  President Vice President and Portfolio
                                    Manager   at   Morgan   Stanley   Investment
                                    Management   (1997-September  2000)  and  an
                                    Analyst  and  Portfolio  Manager  at Crestar
                                    Asset Management (1995-1997).

Michael Levine,
Vice President                      None.

Shanquan Li,
Vice President                      None.

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

Malissa Lischin
Assistant Vice President            Formerly  Associate  Manager,   Investment
                                    Management  Analyst at Prudential  (1996 -
                                    March 2000).

David Mabry,
Vice President                      None.

Bridget Macaskill,
Chairman, Chief Executive Officer
and Director                        President,  Chief Executive  Officer and a
                                    director   (since   March   2000)  of  OFI
                                    Private  Investments,  Inc., an investment
                                    adviser   subsidiary   of   the   Manager;
                                    Chairman  and a  director  of  Shareholder
                                    Services,  Inc.  (since  August  1994) and
                                    Shareholder   Financial   Services,   Inc.
                                    (since  September  1995),  transfer  agent
                                    subsidiaries  of  the  Manager;  President
                                    (since  September  1995)  and  a  director
                                    (since   October   1990)  of   Oppenheimer
                                    Acquisition  Corp.,  the Manager's  parent
                                    holding    company;    President    (since
                                    September  1995)  and  a  director  (since
                                    November 1989) of Oppenheimer  Partnership
                                    Holdings,    Inc.,   a   holding   company
                                    subsidiary  of the Manager;  President and
                                    a  director   (since   October   1997)  of
                                    OppenheimerFunds  International  Ltd.,  an
                                    offshore  fund  management  subsidiary  of
                                    the Manager and of Oppenheimer  Millennium
                                    Funds  plc;  a  director  of   HarbourView
                                    Asset Management  Corporation  (since July
                                    1991)  and  of   Oppenheimer   Real  Asset
                                    Management,   Inc.   (since   July  1996),
                                    investment  adviser  subsidiaries  of  the
                                    Manager;  a director (since April 2000) of
                                    OppenheimerFunds    Legacy   Program,    a
                                    charitable  trust program  established  by
                                    the  Manager;  a  director  of  Prudential
                                    Corporation plc (a U.K.  financial service
                                    company);   President  and  a  trustee  of
                                    other    Oppenheimer    funds;    formerly
                                    President  of  the  Manager  (June  1991 -
                                    August 2000).

Steve Macchia,
Vice President                      None.

Marianne Manzolillo,
Assistant Vice President

Philip T. Masterson,
Vice President                      None.

Loretta McCarthy,
Executive Vice President            None.

Lisa Migan,
Assistant Vice President            None.

Andrew J. Mika
Senior                              Vice   President   Formerly  a  Second  Vice
                                    President  for  Guardian  Investments  (June
                                    1990 - October 1999).

Joy Milan
Assistant Vice President            None.

Denis R. Molleur,
Vice President and
Senior Counsel                      None.

Nikolaos Monoyios,
Vice                                President A Vice President  and/or portfolio
                                    manager of certain Oppenheimer funds.

Margaret Mudd
Assistant                           Vice  President  Formerly  Vice  President -
                                    Syndications   of  Sanwa   Bank   California
                                    (January 1998 - September 1999).

John Murphy,
President, Chief Operating
Officer                             and   Director   President   of   MassMutual
                                    Institutional Funds and the MML Series Funds
                                    until September 2000.

Kenneth Nadler,
Vice President                      None.

David Negri,
Senior                              Vice President An officer  and/or  portfolio
                                    manager of certain Oppenheimer funds.

Barbara Niederbrach,
Assistant Vice President            None.

Robert A. Nowaczyk,
Vice President                      None.

Ray Olson,
Assistant Vice President            None.

Gina M. Palmieri,
Vice                                President   An  officer   and/or   portfolio
                                    manager of certain  Oppenheimer funds (since
                                    June 1999).

Frank Pavlak,
Vice President                      Formerly.   Branch  Chief  of   Investment
                                    Company  Examinations  at U.S.  Securities
                                    and Exchange  Commission  (January  1981 -
                                    December 1998).

James Phillips
Assistant Vice President            None.

David Pellegrino
Vice President                      None.

Jane Putnam,
Vice                                President   An  officer   and/or   portfolio
                                    manager of certain Oppenheimer funds.

Michael Quinn,
Assistant Vice President            None.

Julie Radtke,
Vice President                      None.

Thomas Reedy,
Vice                                President Vice President  (since April 1999)
                                    of HarbourView Asset Management Corporation;
                                    an  officer  and/or  portfolio   manager  of
                                    certain Oppenheimer funds.

John Reinhardt,
Vice President: Rochester Division  None

David Robertson,
Senior Vice President

Jeffrey Rosen,
Vice President                      None.

Marci Rossell,
Vice President and                  Corporate Economist     Economist     with
                                    Federal  Reserve  Bank  of  Dallas  (April
                                    1996 - March 1999).

Richard H. Rubinstein,
Senior                              Vice President An officer  and/or  portfolio
                                    manager of certain Oppenheimer funds.

Lawrence Rudnick,
Assistant Vice President            None.

James Ruff,
Executive Vice President            President     and    director    of    the
                                    Distributor;  Vice President  (since March
                                    2000) of OFI Private Investments, Inc.

Andrew Ruotolo
Executive Vice President            President  and  director  of   Shareholder
                                    Services,  Inc.; formerly Chief Operations
                                    Officer for American  International  Group
                                    (August 1997-September 1999).

Rohit Sah,
Assistant Vice President            None.

Valerie Sanders,
Vice President                      None.

Kenneth Schlupp
Assistant Vice President            Assistant  Vice  President   (since  March
                                    2000) of OFI Private Investments, Inc.

Jeff Schneider,
Vice President                      Formerly   (until   May  1999)   Director,
                                    Personal Decisions International.

Ellen Schoenfeld,
Vice President                      None.

Allan Sedmak
Assistant Vice President            None.

Jennifer Sexton,
Vice President                      None.

Martha Shapiro,
Assistant Vice President            None.

Connie Song,
Assistant Vice President            None.

Richard Soper,
Vice President                      None.

Keith Spencer,
Vice President                      None.

Cathleen Stahl,
Vice President                      Assistant  Vice  President  &  Manager  of
                                    Women & Investing Program

Richard A. Stein,
Vice President: Rochester Division  Assistant Vice  President  (since 1995) of
                                    Rochester Capitol Advisors, L.P.

Arthur Steinmetz,
Senior                              Vice President An officer  and/or  portfolio
                                    manager of certain Oppenheimer funds.

Jayne Stevlingson,
Vice President                      None.

Gregg Stitt,
Assistant Vice President            None.

John Stoma,
Senior Vice President               None.

Deborah Sullivan,
Assistant Vice President,
Assistant Counsel

Kevin Surrett,
Assistant Vice President            Assistant   Vice   President   of  Product
Development
                                    At  Evergreen  Investor   Services,   Inc.
(June 1995 -
                                    May 1999).

James C. Swain,
Vice Chairman of the Board          Chairman,  CEO and  Trustee,  Director  or
                                    Managing   Partner  of  the   Denver-based
                                    Oppenheimer  Funds;  formerly,   President
                                    and   Director   of    Centennial    Asset
                                    Management  Corporation  and  Chairman  of
                                    the Board of Shareholder Services, Inc.

Susan Switzer,
Assistant Vice President            None.

Anthony A. Tanner,
Vice President: Rochester Division  None.

Paul Temple,
Vice President                      Formerly  (until  May  2000)  Director  of
                                    Product Development at Prudential.

Angela Uttaro,
Assistant Vice President            None.

Mark Vandehey,
Vice President                      None.

Maureen VanNorstrand,
Assistant Vice President            None.

Annette Von Brandis,
Assistant Vice President            None.

Phillip Vottiero,
Vice President                      Chief  Financial  officer  for the Sovlink
                                    Group (April 1996 - June 1999).

Sloan Walker
Vice President

Teresa Ward,
Vice President                      None.

Jerry Webman,
Senior Vice President               Senior  Investment  Officer,  Director  of
                                    Fixed Income.

Barry Weiss,
Assistant Vice President            Fitch IBCA (1996 - January 2000)

Christine Wells,
Vice President                      None.

Joseph Welsh,
Assistant Vice President            None.

Catherine White,
Assistant Vice President

William L. Wilby,
Senior                              Vice President  Senior  Investment  Officer,
                                    Director of International  Equities;  Senior
                                    Vice   President   of   HarbourView    Asset
                                    Management Corporation.

Donna Winn,
Senior Vice President               Vice  President  (since March 2000) of OFI
                                    Private Investments, Inc.

Brian W. Wixted,
Senior Vice President and
Treasurer               Treasurer  (since March 1999) of HarbourView  Asset
Management  Corporation,   Shareholder  Services,  Inc.,  Oppenheimer  Real
Asset Management  Corporation,  Shareholder  Financial  Services,  Inc. and
Oppenheimer  Partnership Holdings,  Inc., of OFI Private Investments,  Inc.
(since  March  2000)  and  of   OppenheimerFunds   International  Ltd.  and
Oppenheimer  Millennium  Funds plc (since May  2000);  Treasurer  and Chief
Financial  Officer  (since  May  2000) of PIMCO  Trust  Company;  Assistant
Treasurer  (since  March  1999) of  Oppenheimer  Acquisition  Corp.  and of
Centennial Asset Management  Corporation;  an officer of other  Oppenheimer
funds;  formerly  Principal  and Chief  Operating  Officer,  Bankers  Trust
Company - Mutual Fund Services Division (March 1995 - March 1999).

Carol Wolf,
Senior Vice President An officer and/or portfolio manager of certain Oppenheimer
funds;  serves on the Board of Chinese Children Adoption  International  Parents
Council,  Supporters of Children,  and the Advisory  Board of Denver  Children's
Hospital Oncology Department.

Kurt Wolfgruber
Senior Vice President               Senior  Investment  Officer,  Director  of
                                    Domestic    Equities;    member   of   the
                                    Investment  Product  Review  Committee and
                                    the  Executive  Committee  of  HarbourView
                                    Asset  Management  Corporation;   formerly
                                    (until  April  2000) a  Managing  Director
                                    and  Portfolio   Manager  at  J.P.  Morgan
                                    Investment Management, Inc.

Caleb Wong,
Vice President                      An  officer  and/or  portfolio  manager of
                                    certain   Oppenheimer  funds  (since  June
                                    1999) .

Robert G. Zack,
Senior Vice President and
Assistant Secretary, Associate
General Counsel                     Assistant    Secretary   of    Shareholder
                                    Services,    Inc.    (since   May   1985),
                                    Shareholder   Financial   Services,   Inc.
                                    (since  November  1989),  OppenheimerFunds
                                    International    Ltd.   and    Oppenheimer
                                    Millennium   Funds  plc   (since   October
                                    1997);  an  officer  of other  Oppenheimer
                                    funds.

Jill Zachman,
Assistant Vice President:
Rochester Division                  None.

Neal Zamore,
Vice President                      Director  e-Commerce;  formerly (until May
                                    2000) Vice President at GE Capital.

Mark Zavanelli,
Assistant Vice President            None.

Arthur J. Zimmer,
Senior Vice President               Senior Vice  President  (since April 1999)
                                    of    HarbourView     Asset     Management
                                    Corporation;  Vice President of Centennial
                                    Asset Management  Corporation;  an officer
                                    and/or   portfolio   manager   of  certain
                                    Oppenheimer funds.

Susan Zimmerman,
Vice President                      None.

The  Oppenheimer  Funds  include  the  New  York-based  Oppenheimer  Funds,  the
Denver-based  Oppenheimer  Funds and the Oppenheimer  Quest /Rochester Funds, as
set forth below:

            New York-based Oppenheimer Funds

            Oppenheimer    California   Municipal   Fund   Oppenheimer   Capital
            Appreciation Fund Oppenheimer Capital  Preservation Fund Oppenheimer
            Developing  Markets  Fund  Oppenheimer  Discovery  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   International  Growth  Fund  Oppenheimer
            International  Small Company Fund Oppenheimer  Large Cap Growth Fund
            Oppenheimer Money Market Fund, Inc. Oppenheimer  Multi-Sector Income
            Trust Oppenheimer  Multi-State  Municipal Trust Oppenheimer Multiple
            Strategies Fund Oppenheimer Municipal Bond Fund Oppenheimer New York
            Municipal Fund  Oppenheimer  Series Fund, Inc.  Oppenheimer  Trinity
            Core Fund Oppenheimer  Trinity Growth Fund Oppenheimer Trinity Value
            Fund Oppenheimer U.S. Government Trust Oppenheimer World Bond Fund

            Quest/Rochester Funds

            Limited Term New York Municipal Fund
            Oppenheimer Convertible Securities Fund
            Oppenheimer MidCap Fund
            Oppenheimer Quest Capital Value Fund, Inc.
            Oppenheimer Quest For Value Funds
            Oppenheimer Quest Global Value Fund, Inc.
            Oppenheimer Quest Value Fund, Inc.
            Rochester Fund Municipals

            Denver-based Oppenheimer Funds

            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  Oppenheimer
            Cash Reserves  Oppenheimer  Champion Income Fund Oppenheimer Capital
            Income Fund Oppenheimer High Yield Fund Oppenheimer  Integrity Funds
            Oppenheimer   International   Bond  Fund  Oppenheimer   Limited-Term
            Government Fund Oppenheimer Main Street Opportunity Fund Oppenheimer
            Main  Street  Small Cap Fund  Oppenheimer  Main Street  Funds,  Inc.
            Oppenheimer  Municipal Fund  Oppenheimer Real Asset Fund Oppenheimer
            Senior  Floating  Rate  Fund   Oppenheimer   Strategic  Income  Fund
            Oppenheimer  Total Return Fund, Inc.  Oppenheimer  Variable  Account
            Funds Panorama Series Fund, Inc.

The address of OppenheimerFunds,  Inc.,  OppenheimerFunds  Distributor,  Inc.,
HarbourView Asset Management Corp.,  Oppenheimer  Partnership Holdings,  Inc.,
Oppenheimer  Acquisition Corp. and OFI Private Investments,  Inc. is Two World
Trade Center, New York, New York 10048-0203.

The address of the New  York-based  Oppenheimer  Funds,  the Quest Funds,  the
Rochester-based  funds,  the  Denver-based   Oppenheimer  Funds,   Shareholder
Financial  Services,  Inc.,  Shareholder  Services,   Inc.,   OppenheimerFunds
Services,  Centennial Asset Management Corporation,  Centennial Capital Corp.,
and  Oppenheimer  Real  Asset  Management,  Inc.  is 6803  South  Tucson  Way,
Englewood, Colorado 80112.

Item 27. Principal Underwriter

(a)   OppenheimerFunds   Distributor,   Inc.   is  the   Distributor   of  the
Registrant's  shares.  It is  also  the  Distributor  of  each  of  the  other
registered open-end investment companies for which  OppenheimerFunds,  Inc. is
the  investment  adviser,  as described  in Part A and B of this  Registration
Statement  and listed in Item 26(b)  above  (except  Oppenheimer  Multi-Sector
Income Trust and Panorama Series Fund, Inc.) and for MassMutual  Institutional
Funds.

(b)   The directors  and officers of the  Registrant's  principal  underwriter
are:

Name & Principal                 Positions & Offices        Positions        &
Offices
Business Address                 with Underwriter           with Registrant

Jason Bach                       Vice President             None
31 Raquel Drive
Marietta, GA 30064

William Beardsley (2)            Vice President             None

Peter Beebe                      Vice President             None
876 Foxdale Avenue
Winnetka, IL  60093

Douglas S. Blankenship           Vice President             None
17011 Woodbank
Spring, TX  77379

Kevin Brosmith                   Senior Vice President      None.
856 West Fullerton
Chicago, IL  60614

Susan Burton(2)                  Vice President             None

Robert Coli                      Vice President             None
12 White Tail Lane
Bedminster, NJ 07921


William Coughlin                 Vice President             None
1730 N. Clark Street
#3203
Chicago, IL 60614

Jeff Damia(2)                    Vice President             None

Stephen Demetrovits(2)           Vice President             None

Christopher DeSimone             Vice President             None
5105 Aldrich Avenue South
Minneapolis, MN 55419

Michael Dickson                  Vice President             None
21 Trinity Avenue
Glastonburg, CT 06033

Joseph DiMauro                   Vice President             None
244 McKinley Avenue
Grosse Pointe Farms, MI 48236

Steven Dombrowser                Vice President             None

Andrew John Donohue(2)           Executive Vice President   Secretary
                                  and Director

G. Patrick Dougherty (2)         Vice President             None

Cliff Dunteman                   Vice President             None
940 Wedgewood Drive
Crystal Lake, IL 60014

Wendy H. Ehrlich                 Vice President             None
4 Craig Street
Jericho, NY 11753

Kent Elwell                      Vice President             None
35 Crown Terrace
Yardley, PA  19067

George Fahey                     Vice President             None
9 Townview Ct.
Flemington, NJ 08822

Eric Fallon                      Vice President             None
10 Worth Circle
Newton, MA  02158

Katherine P. Feld(2)             Vice President and         None
                                 Corporate Secretary

Mark Ferro                       Vice President             None
43 Market Street
Breezy Point, NY 11697

Ronald H. Fielding(3)            Vice President             None

Brian Flahive                    Assistant Vice President   None

John ("J") Fortuna(2)            Vice President             None

Ronald R. Foster                 Senior Vice President      None
11339 Avant Lane
Cincinnati, OH 45249

Victoria Friece(1)               Assistant Vice President   None

Luiggino Galleto                 Vice President             None
10302 Riesling Court
Charlotte, NC 28277

Michelle Gans                    Vice President             None
18771 The Pines
Eden Prairie, MN 55347

L. Daniel Garrity                Vice President             None
27 Covington Road
Avondale Estates, GA 30002

Lucio Giliberti                  Vice President             None
6 Cyndi Court
Flemington, NJ 08822

Ralph Grant(2)                   Senior Vice President/     None
                                 National Sales Manager

Michael Guman                    Vice President             None
3913 Pleasent Avenue
Allentown, PA 18103

Webb Heidinger                   Vice President             None
90 Gates Street
Portsmouth, NH 03801

Phillip Hemery                   Vice President             None
184 Park Avenue
Rochester, NY 14607

Brian Husch(2)                   Vice President             None

Edward Hrybenko (2)              Vice President             None

Richard L. Hymes(2)              Assistant Vice President   None

Byron Ingram(1)                  Assistant Vice President   None

Kathleen T. Ives(1)              Vice President             None

Eric K. Johnson                  Vice President             None
28 Oxford Avenue
Mill Valley, CA 94941

Mark D. Johnson                  Vice President             None
409 Sundowner Ridge Court
Wildwood, MO  63011

Elyse Jurman                     Vice President             None
1194 Hillsboro Mile, #51
Hillsboro Beach, FL  33062

John Kavanaugh                   Vice President             None
2 Cervantes Blvd., Apt. #301
San Francisco, CA 94123

Brian G. ly                      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

Brent Krantz                     Vice President             None
2609 SW 149th Place
Seattle, WA 98166

Oren Lane                        Vice President             None
5286 Timber Bend Drive
Brighton, MI  48116

Dawn Lind                        Vice President             None
21 Meadow Lane
Rockville Centre, NY 11570

James Loehle                     Vice President             None
30 Wesley Hill Lane
Warwick, NY 10990

John Lynch (2)                   Vice President             None

Michael Magee(2)                 Vice President             None

Steve Manns                      Vice President             None
1941 W. Wolfram Street
Chicago, IL  60657

Todd Marion                      Vice President             None
3 St. Marks Place
Cold Spring Harbor, NY 11724

LuAnn Mascia(2)                  Assistant Vice President   None

Theresa-Marie Maynier            Vice President             None
2421 Charlotte Drive
Charlotte, NC  28203

Anthony Mazzariello              Vice President             None
704 Beaver Road
Leetsdale, PA 15056

John McDonough                   Vice President             None
3812 Leland Street
Chevy Chase, MD  20815

Kent McGowan                     Vice President             None
18424 12th Avenue West
Lynnwood, WA 98037

Laura Mulhall(2)                 Senior Vice President      None

Charles Murray                   Vice President             None
18 Spring Lake Drive
Far Hills, NJ 07931

Wendy Murray                     Vice President             None
32 Carolin Road
Upper Montclair, NJ 07043

Denise-Marie Nakamura            Vice President             None
4111 Colony Plaza
Newport Beach, CA 92660

John Nesnay                      Vice President             None
9511 S. Hackberry Street
Highlands Ranch, CO 80126

Kevin Neznek(2)                  Vice President             None

Chad V. Noel                     Vice President             None
2408 Eagleridge Drive
Henderson, NV  89014

Raymond Olson(1)                 Assistant Vice President   None
                                   & Treasurer

Alan Panzer                      Assistant Vice President   None
925 Canterbury Road, Apt. #848
Atlanta, GA 30324

Kevin Parchinski                 Vice President             None
8409 West 116th Terrace
Overland Park, KS 66210

Gayle Pereira                    Vice President             None
2707 Via Arboleda
San Clemente, CA 92672

Brian Perkes                     Vice President             None
8734 Shady Shore Drive
Frisco, TX 75034

Charles K. Pettit                Vice President             None
22 Fall Meadow Drive
Pittsford, NY  14534

Bill Presutti(2)                 Vice President             None

Steve Puckett                    Vice President             None
5297 Soledad Mountain Road
San Diego, CA  92109

Elaine Puleo(2)                  Senior Vice President      None

Minnie Ra                        Vice President             None
100 Dolores Street, #203
Carmel, CA 93923

Dustin Raring                    Vice President             None
184 South Ulster
Denver, CO 80220

Michael Raso                     Vice President             None
16 N. Chatsworth Ave.
Apt. 301
Larchmont, NY  10538

Douglas Rentschler               Vice President             None
677 Middlesex Road
Grosse Pointe Park, MI 48230

Michelle Simone - Ricter(2)      Assistant Vice President   None

Ruxandra Risko(2)                Vice President             None

David Robertson(2)               Senior Vice President,     None
                                 Director of Variable
                                    Accounts

Kenneth Rosenson                 Vice President             None
26966 W. Malibu
Cove Colony Drive
Malibu, CA 90265

James Ruff(2)                    President & Director       None

William Rylander (2)             Vice President             None

Alfredo Scalzo                   Vice President             None
9616 Lale 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

Kristen Sims (2)                 Vice President             None

Douglas Smith                    Vice President             None
808 South 194th Street
Seattle,WA 98148

David Sturgis                    Vice President             None
81 Surrey Lane
Boxford, MA 01921

Brian Summe                      Vice President             None
239 N. Colony Drive
Edgewood, KY 41017

Michael Sussman(2)               Vice President             None

Andrew Sweeny                    Vice President             None
5967 Bayberry Drive
Cincinnati, OH 45242

George Sweeney                   Senior Vice President      None
5 Smokehouse Lane
Hummelstown, PA  17036

Scott McGregor Tatum             Vice President             None
704 Inwood
Southlake, TX  76092

Martin Telles(2)                 Senior Vice President      None

David G. Thomas                  Vice President             None
2200 North Wilson Blvd.
Suite 102-176
Arlington, VA 22201

Tanya Valency (2)                Assistant Vice President   None

Mark Vandehey(1)                 Vice President             None

Brian Villec (2)                 Vice President             None

Andrea Walsh(1)                  Vice President             None

Suzanne Walters(1)               Assistant Vice President   None

Michael Weigner                  Vice President             None
5722 Harborside Drive
Tampa, FL 33615

Donn Weise                       Vice President             None
3249 Earlmar Drive
Los Angeles, CA  90064

Marjorie Williams                Vice President             None
6930 East Ranch Road
Cave Creek, AZ  85331

Cary Wozniak                     Vice President             None
18808 Bravata Court
San Diego, CA 92128

Gregor Yuska(2)                  Vice President             None

(1)6803 South Tucson Way, Englewood, CO 80112
(2)Two World Trade Center, New York, NY 10048
(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, Englewood, Colorado 80112.

Item 29. Management Services

Not applicable

Item 30. Undertakings

Not applicable.






<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant 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 14th day of November, 2000.

                           OPPENHEIMER DISCOVERY FUND

                        By:  /s/  Bridget A. Macaskill*
                               ---------------------------------------
                               Bridget A. Macaskill, President

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/ Leon Levy*                Chairman of the
----------------------------------                          Board of Trustees
November 14, 2000
Leon Levy

/s/ Donald W. Spiro*          Vice Chairman of the          November 14, 2000
----------------------------------                          Board and Trustee
Donald W. Spiro

/s/ Bridget A. Macaskill*     President and                 November 14, 2000
---------------------------------                           Chief Executive
Bridget A. Macaskill          Officer and Trustee

/s/ Brian W. Wixted*          Treasurer and Chief           November 14, 2000
---------------------------------                           Financial and
Brian W. Wixted               Accounting Officer

/s/ Robert G. Galli*          Trustee                       November 14, 2000
----------------------------------
Robert G. Galli

/s/ Phillip A. Griffiths      Trustee                       November 14, 2000
---------------------------------
Phillip A. Griffiths

/s/ Benjamin Lipstein*        Trustee                       November 14, 2000
---------------------------------
Benjamin Lipstein

/s/ Elizabeth B. Moynihan*    Trustee                       November 14, 2000
---------------------------------
Elizabeth B. Moynihan

/s/ Kenneth A. Randall*       Trustee                       November 14, 2000
---------------------------------
Kenneth A. Randall

/s/ Edward V. Regan*          Trustee                       November 14, 2000
---------------------------------
Edward V. Regan

/s/ Russell S. Reynolds, Jr.* Trustee                       November 14, 2000
---------------------------------
Russell S. Reynolds, Jr.

/s/ Clayton K. Yeutter*       Trustee                       November 14, 2000
---------------------------------
Clayton K. Yeutter


*By: /s/ Robert G. Zack
-----------------------------------------
Robert G. Zack, Attorney-in-Fact


<PAGE>




                           OPPENHEIMER DISCOVERY FUND

                         Post-Effective Amendment No. 25

                                                        Registration No 33-371


                                  EXHIBIT INDEX


Exhibit No.      Description


23(c) (iv)        Specimen Class N Share Certificate

23(m)(iv)        Form of Distribution and Service Plan and Agreement for
                        Class N Shares



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