OPPENHEIMER LIMITED TERM GOVERNMENT FUND, 485APOS, 1997-11-21

OPPENHEIMER LIMITED TERM GOVERNMENT FUND
485APOS, 1997-11-21

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Registration No. 33-02769
File No. 811-4563

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. 23 / X /
--

and/or

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

AMENDMENT NO. 22 / X /

OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
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(Exact Name of Registrant as Specified in Charter)

6803 South Tucson Way, Englewood, Colorado 80112

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(Address of Principal Executive Offices)

1-303-671-3200
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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)

/ X / 60 days after filing pursuant to paragraph (a)(1)

/ / On ------- pursuant to paragraph (a)(1)

/ / 75 days after filing pursuant to paragraph (a)(2)

/ / On ------- pursuant to paragraph (a)(2) of rule 485.

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A Rule 24f-2 Notice for the Registrant's fiscal year ended September 30, 1997,
will be filed on _________________, 1997.

<PAGE>

OPPENHEIMER LIMITED-TERM GOVERNMENT FUND

FORM N-1A

Cross Reference Sheet

Part A of
Form N-1A
Item No. Prospectus Heading

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

1 Front Cover Page
2 Expenses
3 Financial Highlights; Performance of the Fund
4 Cover Page; Investment Objective and Policies
5 Expenses; How the Fund is Managed
5A Performance of the Fund
6 Dividends, Capital Gains and Taxes
7 How to Buy Shares; How to Exchange Shares; Special Investor
Services; Service Plan for Class A Shares;
Distribution and Service Plan for Class B Shares;
Distribution and Service Plan for Class C shares; How
to Sell Shares
8 How to Sell Shares; How to Exchange Shares; Special Investor
Services
9 *

Part B of
Form N-1A
Item No. Statement of Additional Information Heading

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

10 Cover Page
11 Cover Page
12 *
13 Investment Objective and Policies; Other Investment Restrictions
14 Trustees and Officers of the Fund; How the Fund is Managed
15 Trustees and Officers of the Fund - Major Shareholders; How the
Fund is Managed
16 How the Fund is Managed; Distribution and Service Plans;
Additional Information about the Fund; Back
Cover
17 How the Fund is Managed; Brokerage Policies of the Fund
18 Additional Information about the Fund
19 About Your Account - How to Buy Shares, How to Sell Shares, How
to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 Distribution and Service Plans; How the Fund is Managed;
Additional Information about the Fund;
Financial Statements
22 Dividends, Capital Gains and Taxes
23 Financial Statements

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

*Not applicable or negative answer.

<PAGE>

Oppenheimer
Limited-Term Government Fund

Prospectus dated January 20, 1998

Oppenheimer Limited-Term Government Fund is a mutual fund with the investment
objective of seeking high current return and safety of principal. The Fund
invests principally in obligations issued or guaranteed by the U.S. Government
or its agencies or instrumentalities, including mortgage-backed securities
issued by Government National Mortgage Association. The Fund also uses "hedging"
instruments to seek to reduce the risks of market and interest rate fluctuations
that affect the value of the securities the Fund holds.

While payments of principal and interest on certain U.S. Government
securities are guaranteed by the U.S. Government or its agencies or
instrumentalities, the net asset values of shares of the Fund and the Fund's
dividends are not guaranteed, and will fluctuate.

Under normal circumstances, the Fund seeks to maintain an average
effective portfolio duration (measured on a dollar-weighted basis) of not more
than three years. Please refer to "Investment Policies and Strategies" for more
information about the types of securities the Fund invests in and the risks of
investing in the Fund.

This Prospectus explains concisely what you should know before investing
in the Fund. Please read this Prospectus carefully and keep it for future
reference. You can find more detailed information about the Fund in the January
20, 1998 Statement of Additional Information. For a free copy, call
OppenheimerFunds Services, the Fund's Transfer Agent, at 1-800-525-7048, or
write to the Transfer Agent at the address on the back cover. The Statement of
Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference (which means
that it is legally part of this Prospectus).

(logo) OppenheimerFunds

Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other agency, and
involve investment risks, including the possible loss of the principal amount
invested.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY

REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

Contents

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

Expenses

A Brief Overview of the Fund

Financial Highlights

Investment Objective and Policies

Investment Techniques and Strategies

Investment Risks

How the Fund is Managed

Performance of the Fund

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

How to Buy Shares

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

Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans

By Mail
By Telephone
By Checkwriting

How to Exchange Shares

Shareholder Account Rules and Policies

Dividends, Capital Gains and Taxes

Appendix A: Special Sales Charge Arrangements

<PAGE>

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

Expenses

The Fund pays a variety of expenses directly for management of its assets,
administration, distribution of its shares and other services and those expenses
are subtracted from the Fund's assets to calculate the Fund's net asset value
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
your direct expenses of investing in the Fund and your share of the Fund's
business operating expenses that you will bear indirectly.

o Shareholder Transaction Expenses are charges you pay when you buy or
sell shares of the Fund. Please refer to "About Your Account" starting on page
__ for an explanation of how and when these charges apply.

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

- ------------------------------------------------------------------------------
Maximum Sales 3.50% None None
Charge on
Purchases (as a %
of offering price)
- ------------------------------------------------------------------------------
Maximum Sales Charge None None None
on Reinvested
Dividends
- ------------------------------------------------------------------------------

Maximum Deferred None(1) 4% in the 1% if
Sales Charge (as a first year, shares are
% of the lower declining redeemed
of the original to 1% in within 12
offering price the fifth months of
or redemption year and purchase(2)
proceeds) eliminated

thereafter(2)
- ------------------------------------------------------------------------------
Exchange Fee None None None

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

Redemption Fee None(3) None(3) None(3)

(1) If you invest $1 million or more ($500,000 or more for purchases by
"Retirement Plans" as defined in "Class A Contingent Deferred Sales Charge" on
page __) in Class A shares, you may have to pay a sales charge of up to 1% if
you sell your shares within 12 calendar months (18 months for shares purchased
prior to May 1, 1997) from the end of the calendar month during which you
purchased those shares. See "How to Buy Shares -- Buying Class A Shares," below.
(2) See "How to Buy Shares -- Buying Class B Shares," and "How to Buy Shares --
Buying Class C Shares" below, for more information on the contingent deferred
sales charges.
(3) There is a $10 transaction fee for redemption proceeds paid by Federal Funds
wire, but not for redemptions paid by check or ACH transfer through AccountLink,
or, with respect to Class A shares only for which checkwriting privileges are
used. See "How to Sell Shares".

o Annual Fund Operating Expenses are paid out of the Fund's assets and
represent the Fund's expenses in operating its business. For example, the Fund
pays management fees to its investment advisor, OppenheimerFunds, Inc. (which is
referred to in this Prospectus as the "Manager"). The rates of the Manager's
fees are set forth in "How the Fund is Managed," below. The Fund has other
regular expenses for services, such as transfer agent fees, custodial fees paid
to the bank that holds the Fund's portfolio securities, audit fees and legal
expenses. Those expenses are detailed in the Fund's Financial Statements in the
Statement of Additional Information.

Annual Fund Operating Expenses
(as a percentage of average net assets)

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

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

Management Fees % % % %

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

12b-1 Plan Fees % % % %

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

Other Expenses % % % %

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

Total Fund Operating % % % %
Expenses

The numbers in the chart above with respect to Class A, Class B and Class
C shares are based upon the Fund's expenses in its fiscal year ended September
30, 1997. These amounts are shown as a percentage of the average net assets of
each class of the Fund's shares for that year. The "12b-1 Plan Fees" for Class A
shares are the service plan fees (which can be up to a maximum of 0.25% of
average annual net assets of that class), and for Class B and Class C shares,
are the service plan fees (which can be up to a maximum of 0.25%) and the
asset-based sales charges of 0.75%. These plans are described in greater detail
in "How to Buy Shares."

The actual expenses for each class of shares in future years may be more
or less than the numbers in the chart, depending on a number of factors,
including changes in the actual amount of the Fund's assets represented by each
class of shares. Class Y shares were not available during the fiscal year ended
September 30, 1997. Therefore, the Annual Fund Operating Expenses shown for
Class Y shares are based on the amount that would have been payable in that
period assuming Y shares were outstanding during such fiscal year.

o Examples. To try to show the effect of these expenses on an investment
over time, we have created the hypothetical examples shown below. Assume that
you make a $1,000 investment in each class of shares of the Fund, and the Fund's
annual return is 5%, and that its operating expenses for each class are the ones
shown in the Annual Fund Operating Expenses table above. If you were to redeem
your shares at the end of each period shown below, your investment would incur
the following expenses by the end of 1, 3, 5 and 10 years:

1 year 3 years 5 years 10 years*
- ---------------------------------------------------------------------

Class A Shares $ $ $ $

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

Class B Shares $ $ $ $

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

Class C Shares $ $ $ $
- ---------------------------------------------------------------------
Class Y Shares

If you did not redeem your investment, it would incur the following
expenses:

Class A Shares $ $ $ $

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

Class B Shares $ $ $ $

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

Class C Shares $ $ $ $
- --------------------------------------------------------------------
Class Y Shares $ $ $ $

* In the first example, expenses include the Class A initial sales charge
and the applicable Class B or Class C contingent deferred sales charge. In the
second example, Class A expenses include the initial sales charge, but Class B
and Class C expenses do not include contingent deferred sales charges. The Class
B expenses in years 7 through 10 are based on the Class A expenses shown above,
because the Fund automatically converts your Class B shares into Class A shares
after 6 years. Because of the effect of the asset-based sales charge and the
contingent deferred sales charge on Class B and Class C shares, long-term Class
B and Class C shareholders could pay the economic equivalent of more than the
maximum front-end sales charge allowed under applicable regulations. For Class B
shareholders, the automatic conversion of Class B shares into Class A shares is
designed to minimize the likelihood that this will occur. Please refer to "How
to Buy Shares" for more information.

These examples show the effect of expenses on an investment, but are not
meant to state or predict actual or expected costs or investment returns of the
Fund, all of which may be more or less than those shown.

A Brief Overview of the Fund

Some of the important facts about the Fund are summarized below, with references
to the section of this Prospectus where more complete information can be found.
You should carefully read the entire Prospectus before making a decision about
investing in the Fund. Keep the Prospectus for reference after you invest,
particularly for information about your account, such as how to sell or exchange
shares.

o What is the Fund's Investment Objective? The Fund's investment objective
is to seek high current return and safety of principal.

o What Does the Fund Invest In? The Fund invests only in obligations
issued or guaranteed by the U.S. Government or its agencies or instrumentalities
(these are called "U.S. Government Securities"), and repurchase agreements on
such securities. The Fund may also use hedging instruments approved by its Board
of Trustees to try to manage its investment risks. The Fund's investments in
U.S. Government Securities may include collateralized mortgage obligations
("CMO's"). The Fund may also invest in "stripped" CMO's or mortgage-backed
securities. These investments are more fully explained in "Investment Objectives
and Policies," starting on page __. The Fund anticipates that under normal
circumstances (when the financial markets are not in an unstable or volatile
period), it will maintain an average effective portfolio duration (measured on a
dollar-weighted basis) of not more than three years. Portfolio "duration" is
explained in "Investment Policies and Strategies."

o Who Manages the Fund? The Fund's investment advisor is OppenheimerFunds,
Inc., which (including subsidiaries) manages investment company portfolios
having over $__ billion in assets at December 31, 1997. The Manager is paid an
advisory fee by the Fund, based on its net assets. The Fund's portfolio manager,
who is primarily responsible for the selection of the Fund's securities, is
Jerry A. Webman. The Fund's Board of Trustees, elected by shareholders, oversees
the investment advisor and the portfolio manager. Please refer to "How the Fund
is Managed," starting on page __ for more information about the Manager and its
fees.

o How Risky is the Fund? Although U.S. Government Securities involve
little credit risk, their values will fluctuate (until maturity) depending on
prevailing interest rates. The magnitude of these fluctuations will often be
greater for longer-term debt securities than shorter-term securities. While the
Manager tries

to reduce that risk by seeking to limit the average portfolio duration, by
diversifying investments, by carefully researching securities before they are
purchased for the portfolio, and in some cases, by using hedging techniques,
there is no guarantee of success in achieving the Fund's objective and your
shares may be worth more or less than their original cost when you redeem them.
Please refer to "Investment Policies and Strategies" starting on page __ for a
more complete discussion of the Fund's investment risks.

o How Can I Buy Shares? You can buy shares through your broker, dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic Investment
Plan under AccountLink. Please refer to "How To Buy Shares" beginning on page __
for more details.

o Will I Pay a Sales Charge to Buy Shares? The Fund has four classes of
shares. Each class of shares has the same investment portfolio, but different
expenses. Class A shares are offered with a front-end sales charge, starting at
3.5% and reduced for larger purchases. Class B and Class C shares are offered
without front- end sales charges, but may be subject to a contingent deferred
sales charge if redeemed within 5 years or 12 months, respectively, of purchase.
There is also an annual asset-based sales charge on Class B and Class C shares.
Please review "How To Buy Shares" starting on page __ for more details,
including a discussion about factors you and your financial advisor should
consider in determining which class may be appropriate for you. The Fund also
offers Class Y shares to certain institutional investors. Such shares are not
available for sale to individual investors.

o How Can I Sell My Shares? Shares can be redeemed by mail or by telephone
call to the Transfer Agent on any business day, or through your dealer, or by
writing a check against your current account (available for Class A shares only
that are not subject to a contingent deferred sales charge). Please refer to
"How To Sell Shares" on page __. The Fund also offers exchange privileges to
other Oppenheimer funds, described in "How to Exchange Shares" on starting on
page __.

o How Has the Fund Performed? The Fund measures its performance by quoting
a yield, dividend yield, average annual total return and cumulative total
return, which measure historical performance. Those returns can be compared to
the yields and total returns (over similar periods) of other mutual funds. Of
course, other funds may have different objectives, investments, and levels of
risk. The Fund's performance can also be compared to U.S. Government bond
indices, which we have done starting on page __. Please remember that past
performance does not guarantee future results.

Financial Highlights

The table on the following pages presents selected financial information about
the Fund, including per share data and expense ratios and other data based on
the Fund's average net assets. The information has been audited by Deloitte &
Touche LLP, the Fund's independent auditors, whose report on the Fund's
financial statements for the fiscal year ended September 30, 1997 is included in
the Statement of Additional Information. Y shares were not publicly offered
during any of the periods shown. Therefore, information on Y shares is not
included in the tables below or in the Fund's other financial statements.

-3-

<PAGE>

Investment Objective and Policies

Objective. The Fund seeks high current return and safety of principal.

Investment Policies and Strategies. As a matter of fundamental policy the Fund
seeks its objective by investing only in obligations issued or guaranteed by the
U.S. Government or its agencies or instrumentalities ("U.S. Government
Securities"), repurchase agreements on such securities, and hedging instruments
approved by its Board of Trustees.

o Can the Fund's Investment Objective and Policies Change? The Fund has an
investment objective, described above, as well as investment policies it follows
to try to achieve its objective. Additionally, the Fund uses certain investment
techniques and strategies in carrying out those investment policies. The Fund's
investment policies and practices are not "fundamental" unless this Prospectus
or the Statement of Additional Information says that a particular policy is
"fundamental." The Fund's investment objective is a fundamental policy.

Fundamental policies are those that cannot be changed without the approval
of a "majority" of the Fund's outstanding voting shares. The term "majority" is
defined in the Investment Company Act to be a particular percentage of
outstanding voting shares (and this term is explained in the Statement of
Additional Information). The Fund's Board of Trustees may change non-fundamental
policies without shareholder approval, although significant changes will be
described in amendments to this Prospectus.

o 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%. Portfolio turnover affects brokerage costs the Fund
pays. Most of the Fund's portfolio transactions are principal transactions and
the Fund incurs little brokerage commissions. The Fund may sell U.S. Government
Securities without regard to the length of time the Fund has held them. The
Manager may take advantage of short-term differentials in yields when short-term
trading is consistent with the objective of seeking high current return and
safety of principal. The Financial Highlights table above shows the Fund's
portfolio turnover rates during prior fiscal years.

U.S. Government Securities include the following types of securities:

o U.S. Treasury Obligations. These include Treasury Bills (which have
maturities of one year or less when issued), Treasury Notes (which have
maturities of one to ten years when issued) and Treasury Bonds (which have
maturities generally greater than ten years when issued). The payment of
interest and repayment of principal at the maturity of U.S. Treasury obligations
are backed by the full faith and credit of the United States. That means that
the taxing power of the U.S. government is pledged to the payment of interest
and principal on those securities.

o Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. Debt securities issued or guaranteed by U.S. Government
agencies or instrumentalities have different levels of credit protection. Some
are supported by (a) the full faith and credit of the U.S. Government, such as
Government National Mortgage Association ("Ginnie Mae") modified pass-through
certificates (b) the right of the issuer to borrow an amount, limited to a
specific line of credit, from the U.S. Government, such as bonds issued by
Federal National Mortgage Association ("Fannie Mae") (c) the discretionary
authority of the U.S. Government to purchase the obligations of the agency or
instrumentality or (d) the credit of the instrumentality, such as obligations of
Federal Home Loan Mortgage Corporation ("Freddie Mac"). Securities of U.S.
Government agencies and instrumentalities that are supported by the
discretionary authority of the U.S. Government to purchase such securities which
the Fund may purchase under (c) above include: Federal Land Banks, Farmers Home
Administration, Central Bank for Cooperatives, and Federal Intermediate Credit
Banks, Freddie Mac and Fannie Mae.

o Mortgage-Backed Securities. The Fund will invest in Ginnie Mae
certificates only of the "fully-modified pass-through" type. These are
guaranteed as to timely payment of principal and interest by the full faith and
credit of the United States Government. Ginnie Mae certificates are debt
securities that represent an interest in a pool of mortgages that are insured by
the Federal Housing Administration or the Farmers Home Administration, or are
guaranteed by the Veterans Administration. The Fund may also invest in other
mortgage-backed securities that are issued or guaranteed by agencies or
instrumentalities of the U.S. Government, such as Freddie Mac and Fannie Mae.

The Statement of Additional Information contains additional information on
U.S. Government securities. The effective maturity of a mortgage-backed security
may be shortened by unscheduled or early payment of principal and interest on
the underlying mortgages, which may affect the effective yield of these
securities. If principal is returned, it may be invested in instruments having a
higher or lower yield than the prepaid instruments, depending on then-current
market conditions. These securities therefore may not be completely effective as
a means of "locking in" attractive long-term interest rates. They may also have
less potential for appreciation during periods of declining interest rates than
conventional bonds with comparable stated maturities. If the Fund buys
mortgage-backed securities at a premium, prepayments of principal and
foreclosures of mortgages may result in some loss of the Fund's principal
investment to the extent of the premium paid.

Maturity differs from effective duration, which is a volatility measure.
Please refer to "What Does the Duration of the Fund's Portfolio Mean? on page 13
for an explanation of duration.

o Collateralized Mortgage Obligations. The Fund may invest in
collateralized mortgage obligations ("CMOs") that are issued or guaranteed by
the U.S. Government or its agencies or instrumentalities, or that are
collateralized by a portfolio of mortgages or mortgage-related securities
guaranteed by such an agency or instrumentality. Payment of the interest and
principal generated by the pool of mortgages is passed through to the holders as
the payments are received by the issuer of the CMO.

CMOs may be issued in a variety of classes or series ("tranches") that
have different maturities. The principal value of certain CMO tranches may be
more volatile than other types of mortgage-related securities because of the
possibility that the principal value of the CMO may be prepaid earlier than the
maturity of the CMO as a result of prepayments of the underlying mortgage loans
by the borrowers.

The Fund may invest in "stripped" mortgage-backed securities, CMOs or other
securities issued by agencies or instrumentalities of the U.S. Government.
Stripped mortgage-backed securities usually have two classes. The classes
receive different proportions of the interest and principal distributions
on the pool of mortgage assets that act as collateral for the security. In
certain cases, one class will receive all of the interest payments (and is
known as an "I/O"), while the other class will receive all of the principal
value on maturity (and is known as a "P/O").

The yield to maturity on the class that receives only interest is
extremely sensitive to the rate of payment of the principal on the underlying
mortgages. Principal prepayments increase that sensitivity. Stripped securities
that pay "interest-only" are therefore subject to greater price volatility when
interest rates change. They have the additional risk that if the underlying
mortgages are prepaid, the Fund will lose the anticipated cash flow from the
interest on the prepaid mortgages and the value of the I/O strip will decline.
That risk is increased when general interest rates fall, and in times of rapidly
falling interest rates, the Fund might receive back less than its investment.

The value of "principal-only" securities generally increases as interest
rates decline and prepayment rates rise. The price of these securities is
typically more volatile than that of traditional bonds of the same maturity that
pay interest and principal at a fixed rate.

Stripped securities are generally purchased and sold by institutional
investors through investment banking firms. At present, established trading
markets have not yet developed for these securities. Therefore, some stripped
securities may be deemed "illiquid." The amount of illiquid stripped securities
the Fund can hold will be subject to the Fund's fundamental investment policy
limiting investments in illiquid securities to 5% of the Fund's assets,
described below.

The value of mortgage-backed securities may be affected by changes in the
market's perception of the creditworthiness of the entity issuing or
guaranteeing them or by changes in government regulations and tax policies, as
well as by interest rate risks, described below. Because the yields on U.S.
Government Securities are generally lower than on corporate debt securities, the
Fund may attempt to increase the income it can earn from U.S. Government
Securities by writing covered call options against them. Writing covered call
options is explained below, under "Investment Techniques and Strategies."

Investment Risks

All investments carry risks to some degree, whether they are risks that market
prices of the investment will fluctuate (this is known as "market risk") or that
the underlying issuer will experience financial difficulties and may default on
its obligation under a fixed-income investment to pay interest and repay
principal (this is referred to as "credit risk"). These general investment risks
and the special risks of certain types of investments that the Fund may hold are
described below. They affect the value of the Fund's investments, its investment
performance and the prices of its shares. These risks collectively form the risk
profile of the Fund.

Because of the types of securities the Fund invests in and the investment
techniques the Fund uses, the Fund is designed for investors who seek high
current income and safety of principal. Although U.S. Government Securities
involve little credit risk, their market values will fluctuate until they
mature, depending upon prevailing interest rates. When prevailing interest rates
go up, they market value of already issued debt securities tends to go down. The
magnitude of those fluctuations generally will be greater when the average
maturity of the Fund's portfolio securities is longer. The Fund has adopted a
policy which seeks to limit its portfolio duration. See "What Does the Duration
of the Fund's Portfolio Mean?" The Fund's investments include mortgage-backed
securities such as Interest Only and Principal Only Strips which are used to
manage the Fund's portfolio duration. These securities may have greater price
sensitivity to changes in interest rates than Treasury bonds and may be subject
to greater price fluctuations. The Fund's share price may decline and there is
no assurance that the Fund will achieve its investment objective. When you
redeem your shares, they may be worth more or less than what you paid for them.

o What Does the "Duration" of the Fund's Portfolio Mean? The Fund
anticipates that under normal market conditions, it will maintain an average
effective portfolio duration of not more than three years. The Fund measures its
portfolio duration on a "dollar-weighted" basis. "Effective portfolio duration"
refers to the expected percentage change in the value of a bond resulting from a
change in general interest rates (measured by each 1% change in the rates on
U.S. Treasury securities). For example, if a bond has an effective duration of
three years, a 1% increase in general interest rates would be expected to cause
the bond to decline in value by about 3%. It is a measure of portfolio
volatility, and is one of the basic tools used by the Manager in selecting
securities for the Fund's portfolio.

However, the calculation of a bond's duration (or the duration of the
entire portfolio of bonds, in the case of the Fund) cannot be relied on as an
exact prediction of future volatility. Duration is calculated by using a number
of variables and assumptions based on the historical performance of similar
bonds, and duration can be affected by unexpected economic changes or other
events affecting a security. For example, in the case of CMOs, duration
calculations are based on historical rates of prepayments of underlying
mortgages, and if these mortgages are prepaid more rapidly than expected, the
calculation of duration for a particular CMO may not be correct.

Because unanticipated events may change the effective duration of
securities after the Fund buys them, there can be no assurance that the Fund
will achieve its targeted effective duration at all times. Even though the Fund
intends that its dollar-weighted average effective portfolio duration will
generally not exceed three years, certain market conditions may temporarily
increase the Fund's duration beyond its target. Additionally, the Fund may
invest in individual debt obligations of any maturity. "Investment Objective and
Policies" in the Statement of Additional Information contains more information
on the Fund's calculation of effective portfolio duration.

o Interest Rate Risks. Although U.S. Government Securities involve little
credit risk, their market values will fluctuate until they mature, depending on
prevailing interest rates. When

prevailing interest rates go up, the market value of already issued debt
securities tends to go down. When interest rates go down, the market value of
already issued debt securities tends to go up. The magnitude of those
fluctuations generally will be greater when the average maturity of the Fund's
portfolio securities is longer. Certain of the Fund's investments, such as I/Os
and P/Os, can be very sensitive to interest rate changes and their values can be
quite volatile. Because of this factor, the Fund's share value and yield are not
guaranteed and will fluctuate, and there can be no assurance that the Fund's
objective of seeking high current income and conservation of principal will be
achieved.

o Special Risks of Derivative Investments. One risk of investing in
derivative investments is that the company issuing the instrument might not pay
the amount due on the maturity of the instrument. There is also the risk that
the underlying investment or security on which the derivative is based, and the
derivative itself, may not perform the way the Manager expected it to perform.
The performance of derivative investments may also be influenced by interest
rate changes in the U.S. and abroad. All of these risks can mean that the Fund
will realize less income than expected from its investments, or that it can lose
part of the value of its investments, which will affect the Fund's share price.
Certain derivative investments held by the Fund may trade in the
over-the-counter markets and may be illiquid. If that is the case, the Fund's
investment in them will be limited as discussed in "Illiquid and Restricted
Securities".

o Special Risks of Hedging Instruments. The use of hedging instruments
requires special skills and knowledge of investment techniques that are
different from 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 or if it could not close out a
position because of an illiquid market for the future or option.

Investment Techniques and Strategies

The Fund may also use the investment techniques and strategies described below,
which involve certain risks. The Statement of Additional Information contains
more detailed information about these practices, including limitations on their
use that may help to reduce some of the risks.

o "When-Issued" and Delayed Delivery Transactions. The Fund may purchase
securities on a "when-issued" basis and may purchase or sell securities on a
"delayed delivery" basis. These terms refer to securities that have been created
and for which a market exists, but which are not available for immediate
delivery. There may be a risk of loss to the Fund if the value of the security
declines prior to the settlement date. As a matter of fundamental policy, the
Fund will not enter into when-issued or delayed delivery transactions unless the
acceptance and delivery of the security to the Fund is mandatory, occurs within
120 days of the trade date, and is settled in cash on the settlement date. As a
matter of non-fundamental policy, when-issued securities may be sold prior to
the settlement date if the Fund determines that the sale is desirable for
investment reasons.

The Fund may also enter into "forward roll" transactions with banks or
other buyers that provide for future delivery of mortgage-backed securities in
which the Fund may invest. The Fund would be required to identify liquid
securities, either debt or equity, with its custodian bank in an amount equal to
its obligation under the roll.

o Repurchase Agreements. The Fund may enter into repurchase agreements. In
a repurchase transaction, the Fund buys a security and simultaneously sells it
to the vendor for delivery at a future date. As a matter of fundamental policy,
the Fund will not enter into repurchase transactions that will cause more than
25% of the Fund's net assets to be subject to repurchase agreements having a
maturity of seven days or less, or that will cause more than 5% of the Fund's
net assets to be subject to repurchase agreements having a maturity beyond seven
days. Also as a matter of fundamental policy, the Fund will not enter into
repurchase agreements unless ownership and control of the securities subject to
the agreement are transferred to the Fund. Repurchase agreements must be fully
collateralized. However, if the vendor fails to pay the resale price on the
delivery date, the Fund may experience costs in disposing of the collateral and
may experience losses if there is any delay in doing so.

o Reverse Repurchase Agreements. Although the Fund currently does not do
so, it may enter into reverse repurchase agreements under which the Fund sells
securities and agrees to repurchase them at an agreed upon time and at an agreed
upon price. The difference between the amount the Fund receives for the
securities and the amount it pays on repurchase is deemed to be a payment of
interest.

o Illiquid and Restricted Securities. Under the policies established by the
Fund's Board of Trustees, the Manager determines the liquidity of certain of the
Fund's investments. Investments may be illiquid because of the absence of an
active trading market, making it difficult to value them or dispose of them
promptly at an acceptable price. A restricted security is one that has a
contractual restriction on its resale or which cannot be sold publicly until it
is registered under the Securities Act of 1933. As a fundamental policy, the
Fund will not invest more than 5% of

its total assets in illiquid or restricted securities. The Manager monitors
holdings of illiquid securities on an ongoing basis and at times the Fund may be
required to sell some holdings to maintain adequate liquidity. Illiquid
securities include repurchase agreements maturing in more than seven days, or
certain participation interests other than those with puts exercisable within
seven days.

o Hedging. As described below, the Fund may purchase and sell certain
kinds of futures contracts, put and call options, and options on futures, or
enter into interest rate swap agreements.
These are all referred to as "hedging instruments." The Fund does not use
hedging instruments for speculative purposes, and has limits on the use of them,
described below. The hedging instruments the Fund may use are described below
and in greater detail in "Other Investment Techniques and Strategies" in the
Statement of Additional Information.

The Fund may buy and sell options and futures for a number of purposes. It
may do so to try to manage its exposure to the possibility that the prices of
its portfolio securities may decline, or to establish a position in the
securities market as a temporary substitute for purchasing individual
securities. It may do so to try to manage its exposure to changing interest
rates. Some of these strategies, such as selling futures, buying puts and
writing covered calls, hedge the Fund's portfolio against price fluctuations.

Other hedging strategies, such as buying futures and call options and
writing put options, tend to increase the Fund's exposure to the securities
market as a temporary substitute for purchasing securities. However, the Fund
may purchase futures contracts as a hedge with respect to certain assets, such
as I/O strips, whose values decline as interest rates decline. Writing put
options or covered call options may also provide income to the Fund for
liquidity purposes or raise cash for the Fund to distribute to shareholders.
Because the yields on U.S. Government Securities are generally lower than on
corporate debt securities, the Fund may attempt to increase the income it can
earn from U.S. Government Securities by writing covered call options against
them.

o Futures. The Fund may buy and sell futures contracts that relate to
interest rates (these are referred to as Interest Rate Futures) and commodities
(these are referred to as Commodity Futures). Interest Rate Futures are
described in "Hedging" in the Statement of Additional Information.

o Put and Call Options. The Fund may buy and sell certain kinds of put
options (puts) and call options (calls). Calls the Fund buys or sells must be
listed on a securities or commodities exchange, or quoted on the Automated
Quotation System ("NASDAQ") of the Nasdaq Stock Market, Inc., or traded in the
over-the-counter market. A call or put option may not be purchased if the value
of all of the Fund's put and call options would exceed 5% of the Fund's total
assets.

The Fund may buy calls only on securities or Interest Rate Futures, or to
terminate its obligation on a call the Fund previously wrote. The Fund may write
(that is, sell) covered call options.

When the Fund writes a call, it receives cash (called a premium). The call
gives the buyer the ability to buy the investment on which the call was written
from the Fund at the call price during the period in which the call may be
exercised. If the value of the investment does not rise above the call price, it
is likely that the call will lapse without being exercised, while the Fund keeps
the cash premium (and the investment). After the Fund writes a call, not more
than 25% of the Fund's total assets may be subject to calls. Each call the Fund
writes must be "covered" while it is outstanding. That means the Fund owns the
investment on which the call was written or securities that are acceptable for
the escrow requirements. The Fund may write calls on Futures contracts it owns,
but these calls must be covered by securities or other liquid assets the Fund
owns and segregates to enable it to satisfy its obligations if the call is
exercised.

The Fund may purchase put options. Buying a put on an investment gives the
Fund the right to sell the investment at a set price to a seller of a put on
that investment. The Fund can buy puts (whether or not it holds such securities
in its portfolio) or Interest Rate Futures. The Fund can buy a put on an
Interest Rate Future whether or not the Fund owns the particular Future in its
portfolio. The Fund may write puts on securities or Interest Rate Futures in an
amount up to 50% of its total assets only if such puts are covered by segregated
liquid assets. In writing puts, there is a risk that the Fund may be required to
buy the underlying security at a disadvantageous price.

o Interest Rate Swaps. In an interest rate swap, the Fund and another party
exchange their right to receive or their obligation to pay interest on a
security. For example, they may swap a right to receive floating rate payments
for fixed rate payments. The Fund enters into swaps only on securities it owns.
The Fund may not enter into swaps with respect to more than 25% of its total
assets. Also, the Fund will segregate liquid assets (such as cash or U.S.
Government securities) to cover any amounts it could owe under swaps that exceed
the amounts it is entitled to receive, and it will adjust that amount daily, as
needed. Income from interest rate swaps may be taxable.

Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. If a covered call written by the Fund is exercised on an investment
that has increased in value, the Fund will be required to sell the investment at
the call price and will not be able to realize any profit if the investment has
increased in value above the call price. In writing puts, there is a risk that
the Fund may be required to buy the underlying security at a disadvantageous
price. Interest rate swaps are subject to credit risks (if the other party fails
to meet its obligations) and also to interest rate risks. The Fund could be
obligated to pay more under its swap agreements than it receives under them, as
a result of interest rate changes. These risks are described in greater detail
in the Statement of Additional Information.

o Derivative Investments. The Fund can invest in a number of different
kinds of "derivative investments." The Fund may use some types of derivatives
for hedging purposes and may invest in others because they offer the potential
for increased income and principal value. In general, a "derivative investment"
is a specially- designed investment whose performance is linked to the
performance of another investment or security, such as an option, future or
index. In the broadest sense, derivative investments include exchange-traded
options and futures contracts (please refer to "Hedging," above). CMO's,
interest rate swaps, and "interest-only" and "principal-only" securities may
also be considered derivative investments.

Other Investment Restrictions. The Fund has other investment restrictions which
are "fundamental" policies. Under these fundamental policies, the Fund cannot do
any of the following:

o borrow money, except from banks for temporary purposes in amounts not in
excess of 5% of the value of its assets. No assets of the Fund may be pledged,
mortgaged or hypothecated other than to secure a borrowing, and then in amounts
not exceeding 7.5% of the Fund's total assets. Borrowings may not be made for
leverage, but only for liquidity purposes to satisfy redemption requests when
liquidation of portfolio securities is considered inconvenient or
disadvantageous. However, the Fund may enter into reverse repurchase agreements
and when-issued and delayed delivery transactions. The prohibition against
pledging, mortgaging or hypothecating assets does not bar the Fund from escrow
arrangements for options trading or collateral or margin arrangements in
connection with hedging instruments approved by the Fund's Board of Trustees.

o enter into a repurchase transaction that will cause more than 25% of the
Fund's total assets to be subject to such agreements.

o make loans, except that the Fund may purchase or hold debt obligations
and enter into repurchase transactions and may lend its portfolio securities in
amounts not exceeding 25% of the total assets of the Fund. Such loans must be
collateralized by cash or U.S. Government Securities in amounts equal at all
times to at least 100% of the value of the securities loaned, including accrued
interest.

o purchase restricted or illiquid securities (including repurchase
agreements of more than seven days' maturity and other securities that are not
readily marketable) if more than 5% of the Fund's total assets would be invested
in such securities.

o purchase any securities (other than U.S. Government Securities) that
would cause more than 5% of the Fund's total assets to be invested in securities
of a single issuer, or purchase more than 10% of the outstanding voting
securities of an issuer.

o deviate from its other fundamental policies described in "Investment
Objective and Policies" and "Other Investment Techniques and Strategies" in the
Statement of Additional Information.

Unless the Prospectus states that a percentage restriction applies on an
ongoing basis, it applies only at the time the Fund makes the investment, and
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. Other investment
restrictions are listed in "Other Investment Restrictions" in the Statement of
Additional Information.

How the Fund is Managed

Organization and History. The Fund was organized in 1986 as a Massachusetts
business trust. The Fund is an open-end diversified management investment
company with an unlimited number of authorized shares of beneficial interest.
Organized as a series fund, the Fund presently has only one series.

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

The Board of Trustees has 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 four classes of shares, Class A, Class B, Class C
and Class Y. All classes invest in the same investment portfolio. Each class has
its own dividends and distributions, and pays certain expenses which may be
different for the different classes. Each class may have a different net asset
value. Each share has one vote at shareholder meetings, with fractional shares
voting proportionally on matters submitted to the vote of shareholders. Shares
of each class may have separate voting rights on matters in which interests of
one class are different from interests of another class, and shares of a
particular class vote as a class on matters that affect that class alone. Shares
are freely transferrable. Please refer to "How the Fund is Managed" in the
Statement of Additional Information on voting of shares.

The Manager and Its Affiliates. The Fund is managed by the Manager,
OppenheimerFunds, Inc., which is responsible for selecting the Fund's
investments and handles its day-to-day business. The Manager carries out its
duties, subject to the policies established by the Board of Trustees, under an
Investment Advisory Agreement which states the Manager's responsibilities and
its fees. The Agreement sets forth the fees paid by the Fund 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 advisor since 1959.

The Manager (including subsidiaries) currently manages investment companies,
including other Oppenheimer funds, with assets of more than $__ billion as of
December 31, 1997, and with more than 3 million shareholder accounts. The
Manager is owned by Oppenheimer Acquisition Corp., a holding company that is
owned in part by senior officers of the Manager and controlled by Massachusetts
Mutual Life Insurance Company.

o Portfolio Manager. The Portfolio Manager of the Fund is Jerry A. Webman.
He is a Vice President of the Fund and a Senior Vice President of the Manager
and has been the person principally responsible for the day-to-day management of
the Fund's portfolio since July 15, 1997. Mr. Webman also serves as an officer
and a portfolio manager of other Oppenheimer funds. Previously he was an officer
and analyst with Prudential Mutual Fund - Investment Management, Inc.

o Fees and Expenses. Under the Investment Advisory Agreement, the Fund
pays the Manager the following annual fees, which decline on additional assets
as the Fund grows: 0.500% of the first $100 million of the Fund's average annual
net assets, 0.450% of the next $150 million, 0.425% of the next $250 million and
0.400% of average annual net assets in excess of $500 million. The Fund's
management fee for its fiscal year ended September 30, 1997, was 0.__% of
average annual net assets for Class A, Class B and Class C shares.

The Fund pays expenses related to its daily operations, such as custodian
fees, certain Trustees' fees, transfer agency fees, legal 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. More
information about the Investment Advisory Agreement and the other expenses paid
by the Fund is contained in the Statement of Additional Information.

There is also information about the Fund's brokerage policies and practices
in "Brokerage Policies of the Fund" in the Statement of Additional Information.
That section discusses how brokers and dealers are selected for the Fund's
portfolio transactions. Because the Fund purchases most of its portfolio
securities directly from the sellers and not through brokers, it therefore
incurs relatively little expenses for brokerage. From time to time it may use
brokers when buying portfolio securities. When deciding which brokers to use,
the Manager is permitted by the Investment Advisory Agreement to consider
whether brokers have sold shares of the Fund or any other funds for which the
Manager serves as investment advisor.

o 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 the shares of the other
Oppenheimer funds and is sub-distributor for funds managed by a subsidiary of
the Manager.

o The Transfer Agent. The Fund's transfer agent is OppenheimerFunds
Services, a division of the Manager, which acts as the shareholder servicing
agent for the Fund on an "at-cost" basis. It also acts as the shareholder
servicing agent for other Oppenheimer funds. Shareholders should direct
inquiries about their accounts, to the Transfer Agent at the address and
toll-free number shown below in this Prospectus and on the back cover.

Performance of the Fund

Explanation of Performance Terminology. The Fund uses the terms "total return"
and "yield" to illustrate its performance. The performance of each class of
shares is shown separately, because the performance of each class of shares will
usually be different as a result of the different kinds of expenses each class
bears. These 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 (which will vary if dividends are received in cash, or shares are sold
or purchased). The Fund's performance data may help you see how well your
investment has done over time and to compare it to other mutual funds or market
indices, as we have done below.

It is important to understand that the Fund's yields and total returns
represent past performance and should not be considered to be predictions of
future returns or performance. This performance data is described below, but
more detailed information about how total returns and yields are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's performance. The
Fund's investment performance will vary over time, depending on market
conditions, the composition of the portfolio, expenses and which class of shares
you purchase.

o Total Returns. There are different types of "total returns" used 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.
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
the Fund's actual year-by- year performance.

When total returns are quoted for Class A shares, normally the current
maximum initial sales charge has been deducted. When total returns are shown for
Class B or Class C shares, normally the contingent deferred sales charge that
applies to the period for which total return is shown has been deducted.
However, total returns may also be quoted at "net asset value," without
including the effect of the sales charge and those returns would be less if
sales charges were deducted.

o Yield. Different types of yields may be quoted to show performance. Each
class of shares calculates its standardized yield by dividing the annualized net
investment income per share on the portfolio during a 30-day period by the
maximum offering price on the last day of the period. The yield of each class
will differ because of the different expenses of each class of shares. The yield
data represents a hypothetical investment return on the portfolio, and does not
measure an investment return based on dividends actually paid to shareholders.
To show that return, a dividend yield may be calculated. Dividend yield is
calculated by dividing the dividends of a class paid for a stated period by the
maximum offering price on the last day of the period and annualizing the result.
Yields for Class A shares normally reflect the deduction of the maximum initial
sales charge, but may also be shown without deducting sales charge. Yields for
Class B shares and Class C shares do not reflect the deduction of the contingent
deferred sales charge.

How Has the Fund Performed? Below is a discussion by the Manager of the Fund's
performance during its last fiscal year ended September 30, 1997, followed by a
graphical comparison of the Fund's performance to appropriate broad-based market
indices.

o Management's Discussion of Performance. [to be provided]

The Fund's portfolio holdings, allocations and its portfolio manager's
strategies are subject to change.

o Comparing the Fund's Performance to the Market. The charts below show
the performance of hypothetical $10,000 investment in Class A, Class B and Class
C shares of the Fund held until September 30, 1997 in the case of Class A
shares, since March 10, 1986 (inception of Fund), in the case of Class B shares,
from the inception of the class on May 3, 1993 and in the case of Class C
shares, from the inception of the Class on February 1, 1995. In all cases all
dividends and capital gains distributions were reinvested in additional shares.
Since the Class Y shares are new as of the date of this Prospectus, there are no
comparisons shown for that class.

The Fund had a different investment advisor prior to April 7, 1990. The
Fund's maximum initial sales charge for Class A shares and contingent deferred
sales charges for Class B shares were reduced effective April 1, 1994, so that
actual results for those share classes for prior periods would have been less.
The graph reflects the deduction of the 3.50% current maximum initial sales
charge on Class A shares, the maximum contingent deferred sales charge of 4% on
Class B shares and the 1% contingent deferred sales charge on Class C shares
during the first year.

The graphs on the following pages compare the Fund's performance against
the Lehman Brothers U.S. Government Bond Index, a broad-based unmanaged index of
U.S. Treasury issues, publicly- issued debt of U.S. Government agencies and
quasi-public corporations and corporate debt guaranteed by the U.S. Government.
That index is widely used to measure the performance of the U.S. Government
securities market. The graphs below also compare the Fund's performance against
the Lehman Brothers 1 - 3 Year Government Bond Index, an unmanaged sector index
of U.S. Treasury issues, publicly-issued debt of U.S. Government agencies and
quasi-public corporations and corporate debt guaranteed by the U.S. Government
with maturities of one to three years. This secondary index comparison is
included to reflect the adoption by the Fund, effective May 1, 1994, of the
investment policy that the Fund will, under normal circumstances, seek to
maintain a dollar-weighted average portfolio effective duration of not more than
three years.

Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
below shows the effect of taxes. Also, the Fund's performance reflects the
effect of Fund business and operating expenses. While index comparisons may be
useful to provide a benchmark for the Fund's performance, it must be noted that
the Fund's investments are not limited to the securities in any one index and
the index data does not reflect any assessment of the risk of the investments
included in the index.

Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments
In:
Oppenheimer Limited-Term Government Fund, Lehman Bros. U.S.
Government Bond Index and Lehman Bros. 1-3 Year Government Bond
Index

[Graph]

Average Annual Total Returns of Class A Shares of the Fund at 9/30/97(1):

1 Year 5 Year Life
- ------ ------ ----

% % %

Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments
In:
Oppenheimer Limited-Term Government Fund, Lehman Bros. U.S.
Government Bond Index and Lehman Bros. 1-3 Year Government Bond
Index

[Graph]

Average Annual Total Returns of Class B Shares of the Fund at 9/30/97(2):

1 Year Life
- ------ -----

% %

Total returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains distributions.

(1) The inception date of the Fund (Class A shares) was 3/10/86. The average
annual total returns and the ending account value are shown net of the current
3.50% maximum initial sales charge.
(2) Class B shares of the Fund were first publicly offered on 5/3/93. The
average annual total returns reflect reinvestment of all dividends and capital
gains distributions and are shown net of the applicable 4% and 1% contingent
deferred sales charges, respectively, for the one year period and life of the
class. The ending account value for Class B shares in the graph is net of the
applicable 1% contingent deferred sales charge.

Past performance is not predictive of future performance. Graphs are not drawn
to same scale.

Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments In:
Oppenheimer Limited-Term Government Fund, Lehman Bros. U.S.
Government Bond Index and Lehman Bros. 1-3 Year Government Bond
Index

[Graph]

Average Annual Total Returns of Class C Shares of the Fund at 9/30/97(3):

1 Year Life
- ------ -----

% %

Total returns and ending account values in the graphs show change in share value
and include reinvestment of all dividends and capital gains distributions. (3)
Class C shares of the Fund were first publicly offered on 2/1/95. The cumulative
total return and the ending account value in the graph reflect reinvestment of
all dividends and capital gains distributions and are shown net of the 1%
contingent deferred sales charge for the period.

Past performance is not predictive of future performance.

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

How to Buy Shares

Classes of Shares. The Fund offers investors four different classes of shares.
The different classes of shares represent investments in the same portfolio of
securities but are subject to different expenses and will likely have different
share prices.

o Class A Shares. If you buy Class A shares, you pay an initial sales
charge on investments up to $1 million (up to $500,000 for purchases by
"Retirement Plans" as defined in "Class A Contingent Deferred Sales Charge" on
page __. If you purchase Class A shares as part of an investment of at least $1
million ($500,000 for Retirement Plans) in shares of one or more Oppenheimer
funds, you will not pay an initial sales charge, but if you sell any of those
shares within 12 months of buying them (18 months if the shares were purchased
prior to May 1, 1997), you may pay a contingent deferred sales charge. The
amount of that sales charge will vary depending on the amount you invested.
Sales charge rates are described in "Buying Class A Shares," below.

o Class B Shares. If you buy Class B shares, you pay no sales charge at
the time of purchase, but if you sell your shares within five years of buying
them, you will normally pay a contingent deferred sales charge. That sales
charge varies depending on how long you owned your shares as described in
"Buying Class B Shares" below.

o Class C Shares. If you buy Class C shares, you pay no sales charge at
the time of purchase, but if you sell your shares within 12 months of buying
them, you will normally pay a contingent deferred sales charge of 1%, as
discussed in "Buying Class C Shares," below.

o Class Y Shares. Class Y shares are offered only to certain institutional
investors that have special agreements with the Distributor. See "Buying Class Y
Shares" below.

Which Class of Shares Should You Choose? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
better suited to your needs depends on a number of factors which you should
discuss with your financial advisor. 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 most important
factors 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.

In the following discussion, to help provide you and your

financial advisor with a framework in which to choose a class, we have made some
assumptions using a hypothetical investment in the Fund. We assumed you are an
individual investor, and therefore ineligible to purchase Class Y shares. We
used the sales charge rates that apply to each class, and considered the effect
of the asset-based sales charge on Class B and Class C expenses (which, like all
expenses, will affect your investment return). For the sake of comparison, we
have assumed that there is a 10% rate of appreciation in your investment each
year. Of course, the actual performance of your investment cannot be predicted
and will vary, based on the Fund's actual investment returns, and the operating
expenses borne by each class of shares, and which class of shares you invest in.

The factors discussed below are not intended to be investment advice,
guidelines or recommendations, because each investor's financial considerations
are different. The discussion below of the factors to consider in purchasing a
particular class of shares assumes that you will purchase only one class of
shares and not a combination of shares of different classes.

o 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 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 (which reduces the amount of your
investment dollars used to buy shares for your account), compared to the effect
over time or higher class-based expenses on the shares of Class B or Class C for
which no initial sales charge is paid.

o Investing for the Short Term. If you have a short term investment
horizon (that is, you plan to hold your shares for not more than five years),
you should probably consider purchasing Class A or Class C shares rather Class B
shares. Because of the effect of the Class B contingent deferred sales charge if
you redeem in less than seven 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 the more you invest and the more your investment horizon increases toward
five 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 economic impact on your account over the longer term than the reduced
front-end sales charge available for larger purchases of Class A shares. For
example, Class A might be more advantageous than Class C (as well as Class B)
for investments of more than $100,000 expected to be held for 5 or 6 years (or
more), Class A shares may become more advantageous than class C (and B). If
investing $500,000 or more, Class A may be more advantageous as your investment
horizon approaches 3 years or more.

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 for the longer term,
for example, for retirement, and do not expect to need access to your money for
six years or more, Class B shares may be an appropriate consideration if you
plan to invest less than $100,000. If you plan to invest more than $100,000 over
the long term, Class A shares will likely be more advantageous than Class B
shares or Class C shares, as discussed above, because of the effect of the
expected lower expenses for Class A shares and the reduced initial sales charge
available for larger investments in Class A shares under the Fund's Right of
Accumulation.

Of course all of these examples are based on approximations of the effect
of current sales charges and expenses on a hypothetical investment over time,
using the assumed annual performance return stated above, and therefore you
should analyze your options carefully.

o Are There Differences in Account Features That Matter To You? Because
some features (such as checkwriting) may not be available to Class B or C
shareholders, or other features (such as Automatic Withdrawal Plans) may not be
advisable (because of the effect of the contingent deferred sales charge in
non-retirement accounts) for Class B or Class C shareholders, you should
carefully review how you plan to use your investment account before deciding
which class of shares to buy. For example, share certificates are not available
for Class B or Class C shares and if you are considering using your shares as
collateral for a loan, this may be a factor to consider. Additionally, 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, such as the Class
B and Class C asset-based sales charges described below and in the Statement of
Additional Information.

o How Does It Affect Payments to My Broker? A salesperson, such as a
broker, or any other person who is entitled to receive compensation for selling
Fund shares, may receive different compensation for selling one class than for
selling another class. It is important that investors understand that the
purpose of the Class B and Class C contingent deferred sales charges and
asset-based sales charges are the same as the purpose of the front-end sales
charge on sales of Class A shares: to compensate the Distributor for commissions
it pays to dealers and financial institutions for selling shares. The
Distributor may pay additional periodic 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.

How Much Must You Invest? You can open a Fund account with a minimum initial
investment of $1,000 and make additional investments at any time with as little
as $25. There are reduced minimum investments under special investment plans:

o With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7) custodial
plans and military allotment plans, you can make initial and subsequent
investments for as little as $25; and subsequent purchases of at least $25 can
be made by telephone through AccountLink.

o Under pension and profit-sharing plans, 401(k)plans and Individual
Retirement Accounts (IRAs), you can make an initial investment of as little as
$250 (if your IRA is established under an Asset Builder Plan, the $25 minimum
applies), and subsequent investments may be as little as $25.

o There is no minimum investment requirement if you are buying shares by
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 by reinvesting distributions from unit
investment trusts that have made arrangements with the Distributor.

o How Are Shares Purchased? You can buy shares several ways -- through any
dealer, broker or financial institution that has a sales agreement with the
Distributor, directly through the Distributor, or automatically from your bank
account through an Asset Builder Plan under the OppenheimerFunds AccountLink
service. The Distributor may appoint certain servicing agents as the
Distributor's agent to accept purchase and redemption orders. When you buy
shares, be sure to specify Class A, Class B or Class C shares. If you do not
choose, your investment will be made in Class A shares.

o Buying Shares Through Your Dealer. Your dealer will place your order with
the Distributor on your behalf.

o Buying Shares Through the Distributor. Complete an OppenheimerFunds New
Account Application and return it with a check payable to "OppenheimerFunds
Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If you
don't list a dealer on the application, the Distributor will act as your agent
in buying the shares. However, we recommend that you discuss your investment
first with a financial advisor, to be sure it is appropriate for you.

Shares may be purchased by Federal Funds Wire. The minimum investment is
$2,500. You must first call the Distributor's Wire Department at 1-800-525-7041
to notify the Distributor of the wire and receive further instructions.

o Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or other
financial institution that is an Automated Clearing House (ACH) member to
transmit funds electronically to purchase shares, to have the Transfer Agent
send redemption proceeds, or to transmit dividends and distributions.

Shares are purchased for your account on AccountLink on the regular
business day the Distributor is instructed by you to initiate the ACH transfer
to buy shares. You can provide those instructions automatically, under an Asset
Builder Plan, described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. You should request AccountLink
privileges on the application or dealer settlement instructions used to
establish your account. Please refer to "AccountLink," below for more details.

o 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 Statement of Additional Information.

o At What Prices Are Shares Sold? Shares are sold at the public offering
price based on the net asset value (and any initial sales charge that applies)
that is next determined after the Distributor receives the purchase order in
Denver, Colorado. In most cases, to enable you to receive that day's offering
price, the Distributor or its designated agent must receive your order by the
time of day The New York Stock Exchange closes, which is normally 4:00 P.M., New
York time, but may be earlier on some days (all references to time in this
Prospectus mean "New York time"). The net asset value of each class of shares is
determined as of that time on each day The New York Stock Exchange is open
(which is a "regular business day").

If you buy shares through a dealer, the dealer must receive your order by
the close of The New York Stock Exchange on a regular business day and transmit
it to the Distributor so that it is received before the Distributor's close of
business that day, which is normally 5:00 P.M. The Distributor, in its sole
discretion, may reject any purchase order for the Fund's shares.

Special Sales Charge Arrangements for Certain Persons. Appendix A to this
Prospectus sets forth conditions for the waiver of, or exemption from, sales
charges or the special sales charge rates that apply to purchases of shares of
the Fund (including purchases by exchange) by a person who was a shareholder of
one of the Former Quest for Value Funds (as defined in that Appendix).

Buying Class A Shares. Class A shares are sold at their offering price, which is
normally the net asset value plus an initial sales charge. However, in some
cases, described below, where purchases are not subject to an initial sales
charge, the offering price may be net asset value. In some cases, reduced sales
charges may be available, as described below. 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 and allocated to your dealer as commission.
Different sales charge rates and commissions applied to sales of Class A shares
prior to April 1, 1994. The current sales charge rates and commissions paid to
dealers and brokers are as follows:

Front-End Front-End
Sales Charge Sales Charge Commission as
As Percentage of As Percentage of As Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ----------------------------------------------------------------------
Less than $100,000 3.50% 3.63% 3.00%
- ----------------------------------------------------------------------
$100,000 or more but
less than $250,000 3.00% 3.09% 2.50%
- ----------------------------------------------------------------------
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%

- ----------------------------------------------------------------------
$500,000 or more but
less than $1 million 2.00% 2.04% 1.50%

The Distributor reserves the right to reallow the entire commission to
dealers. If that occurs, the dealer may be considered an "underwriter" under
Federal securities laws.

o 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 in the following cases:

o purchases aggregating $1 million or more.

o purchases by a retirement plan qualified under sections 401(a) or 401(k)
of the Internal Revenue Code, by a non-qualified deferred compensation plan,
employee benefit plan, group retirement plan, an employee's 403(b)(7) custodial
plan, SEP IRA, SARSEP, or SIMPLE plan (all of these plans are collectively
referred to as "Retirement Plans"), that: (1) buys shares costing $500,000 or
more or (2) has, at the time of purchase, 100 or more eligible participants, or
(3) certifies that it projects to have annual plan purchases of $200,000 or
more.

o purchases by an OppenheimerFunds Rollover IRA if the purchases are made
(1) through a broker, dealer, bank or registered investment advisor that has
made special arrangements with the Distributor for these 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.

o purchases by a retirement plan qualified under Section 401(a) if the
retirement plan has total assets of $500,000 or more.

The Distributor pays dealers of record commissions on those purchases in
an amount equal to (1) 1.0% for non-Retirement Plan accounts; and (ii) for
Retirement Plan accounts, 1.0% of the first $2.5 million, plus 0.50% of the next
$2.5 million, plus 0.25% of purchases over $5 million calculated on a calendar
year basis. That commission will be paid only on those purchases that were not
previously subject to a front-end sales charge and dealer commission. No sales
commission will be paid to the dealer, broker or financial institution on sales
of Class A shares purchased with the redemption proceeds of shares of a 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 addition of
the Oppenheimer funds as an investment option to the Retirement Plan.

If you redeem any of those shares purchased prior to May 1, 1997 within 18
months of 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. A Class A contingent deferred sales
charge may be deducted from the redemption proceeds of any of those shares
purchased on or after May 1, 1997 that are redeemed within 12 months of the end
of the calendar month of their purchase. That sales charge may be equal to 1.0%
of the lesser of (1) the aggregate net asset value of the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gain
distributions) or (2) the original offering price(which is the original net
asset value) of the redeemed shares. However, the Class A contingent deferred
sales charge will not exceed the aggregate commissions the Distributor paid to
your dealer on all Class A shares of all Oppenheimer funds you purchased subject
to the Class A contingent deferred sales charge.

In determining whether a contingent deferred sales charge is payable, the
Fund will first redeem shares that are not subject to the sales charge,
including shares purchased by reinvestment of dividends and capital gains, and
then will redeem other shares in the order that you purchased them. The Class A
contingent deferred sales charge is waived in certain cases described in
"Waivers of Class A Sales Charges" below.

No Class A contingent deferred sales charge is charged on exchanges of
shares under the Fund's Exchange Privilege (described below). However, if the
shares acquired by exchange are redeemed within 12 calendar months (18 months
for shares purchased prior to May 1, 1997) of the end of the calendar month of
the purchase of the exchanged shares, the contingent deferred sales charge will
apply.

o Special Arrangements With Dealers. The Distributor may advance up to 13
months' commissions to dealers that have established special arrangements with
the Distributor for Asset Builder Plans for their clients.

Reduced Sales Charges for Class A Share Purchases. You may be eligible to buy
Class A shares at reduced sales charge rates in one or more of the following
ways:

o 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 jointly, or for trust or custodial accounts on behalf of your children who
are minors. 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.

Additionally, you can add together current purchases of Class A and Class
B shares of the Fund and other Oppenheimer funds to reduce the sales charge rate
for current purchases of Class A shares. You can also include 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. 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
Oppenheimer funds are listed in "Reduced Sales Charges" in the Statement of
Additional Information, or a list can be obtained from

the Distributor. The reduced sales charge will apply only to current purchases
and must be requested when you buy your shares.

o Letter 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. More information is contained
in the Application and in "Reduced Sales Charges" in the Statement of Additional
Information.

o Waivers of Class A Sales Charges. The Class A sales charges are not
imposed in the circumstances described below. There is an explanation of this
policy in "Reduced Sales Charges" in the Statement of Additional Information. In
order to receive a waiver of the Class A contingent deferred sales charge, you
must notify the Transfer Agent which conditions apply.

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:

o the Manager or its affiliates;

o present or former officers, directors, trustees and employees (and their
"immediate families" as defined in "Reduced Sales Charges" in the Statement of
Additional Information) of the Fund, the Manager and its affiliates, and
retirement plans established by them for their employees;

o registered management investment companies, or separate accounts of
insurance companies having an agreement with the Manager or the Distributor for
that purpose;

o 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;

o 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 are identified 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);

o dealers, brokers 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 or employee benefit plans
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);

o (1) 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, (2) Retirement Plans and deferred compensation
plans and trusts used to fund those Plans (including, for example, plans
qualified or created under sections 401(a), 403(b) or 457 of the Internal
Revenue Code), and "rabbi trusts" that buy shares for their own accounts, in
each case if those purchases are made through a broker or agent or other
financial intermediary that has made special arrangements with the Distributor
for those purchases; and (3) clients of investment advisors or financial
planners (who 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);

o 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;

o accounts for which Oppenheimer Capital 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;

o any unit investment trust that has entered into an appropriate agreement
with the Distributor;

o 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 A
shares of that Fund due to the termination of the Class B and TRAC-2000 program
on November 24, 1995; or

o qualified retirement plans 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, provided that such arrangements were
consummated and share purchases commenced by December 31, 1996.

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 Class A sales charges:

o shares issued in plans of reorganization, such as mergers, asset
acquisitions and exchange offers, to which the Fund is a party;

o shares purchased by the reinvestment of loan repayments by a participant
in a retirement plan for which the Manager or one of its affiliates acts as
sponsor;

o 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;

o shares purchased and paid for with 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 your shares of the Fund, and the Distributor may require
evidence of your qualification for this waiver; or

o shares purchased with the proceeds of maturing principal of units of any
Qualified Unit Investment Liquid Trust Series.

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:

o to make Automatic Withdrawal Plan payments that are limited annually to
no more than 12% of the original account value;

o involuntary redemptions of shares by operation of law or involuntary
redemptions of small accounts (see "Shareholder Account Rules and Policies,"
below);

o if, at the time a purchase of shares (prior to May 1, 1997) the dealer
agreed in writing to accept the dealer's portion of the sales commission in
installments of 1/18th of the commission per month (and no further commission
will be payable if the shares are redeemed within 18 months of purchase);

o if at the time of purchase of shares (on or after May 1, 1997) the
dealer agrees in writing to accept the dealer's portion of the sales commission
in installments of 1/12th of the commission per month ( and no further
commission will be payable if the shares are redeemed within 12 months of
purchase);

o for distributions from TRAC-2000 401(k) plan sponsored by the Distributor
due to the termination of the TRAC-2000 program;

o 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; (5) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (6) to meet the minimum distribution
requirements of the Internal Revenue Code; (7) to establish "substantially equal
periodic payments" as described in Section 72(t) of the Internal Revenue Code;
(8) for retirement distributions or loans to participants or beneficiaries; (9)
separation from service; (10) participant-directed redemptions to purchase
shares of a mutual fund (other than a fund managed by the Manger or its
subsidiary) 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; or (11) plan termination or "in-service
distributions", if the redemption proceeds are rolled over directly to an
OppenheimerFunds IRA;

o for distributions from Retirement Plans having 500 or more eligible
participants, except distributions due to termination of all of the Oppenheimer
funds as an investment option under the Plan; and

o for distribution from 401(k) plans sponsored by broker-dealers that have
entered into a special agreement with the Distributor allowing this waiver.

o Service Plan for Class A Shares. The Fund has adopted a Service Plan for
Class A shares to reimburse the Distributor for a portion of its costs incurred
in connection with the personal service and maintenance of accounts that hold
Class A shares. Reimbursement is made quarterly at an annual rate that may not
exceed 0.25% of the average annual net assets of Class A shares of the Fund. The
Distributor 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 and to
reimburse itself (if the Fund's Board of Trustees authorizes such
reimbursements, which it has not yet done) for its other expenditures under the
Plan.

Services to be provided 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. Payments are made by the
Distributor quarterly at an annual rate not to exceed 0.25% of the average
annual net assets of Class A shares held in accounts of the dealer or its
customers. The payments under the Plan increase the annual expenses of Class A
shares. For more details, please refer to "Distribution and Service Plans" in
the Statement of Additional Information.

Buying 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
five years of their purchase, a contingent deferred sales charge will be
deducted from the redemption proceeds. That sales charge will not apply to
shares purchased by the reinvestment of dividends or capital gains
distributions. The 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 offering price which is the original net asset value). The contingent
deferred sales charge is not imposed on the amount of your account value
represented by the increase in net asset value over the initial purchase price.
The Class B contingent deferred sales charge is paid to the Distributor to
compensate it for providing distribution-related services to the Fund in
connection with the sale of Class B shares.

To determine whether the 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 over 5 years, and (3) shares held the longest during the 5-year period. The
contingent deferred sales charge is not imposed in the circumstances described
in "Waivers of Class B and Class C Sales Charges," below.

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:

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

In the table, a "year" is a 12-month period. All purchases are considered
to have been made on the first regular business day of the month in which the
purchase was made. Different contingent deferred sales charges applied to
redemptions of Class B shares prior to April 1, 1994.

o Automatic Conversion of Class B Shares. 72 months after you purchase
Class B shares, those shares will automatically convert to Class A shares. 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 Class B shares
convert, any other Class B shares that were acquired by the reinvestment of
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 "Alternative Sales Arrangements - Class A, Class B and Class
C Shares" in the Statement of Additional Information.

Buying 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
12 months of their purchase, a contingent deferred sales charge of 1.00% will be
deducted from the redemption proceeds. That sales charge will not apply to
shares purchased by the reinvestment of dividends or capital gains
distributions. The 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 offering price (which is the original net asset value). The contingent
deferred sales charge is not imposed on the amount of your account value
represented by the increase in net asset value over the initial purchase price.
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.

To determine whether the 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 over 12 months, and (3) shares held the longest during the 12-month period.
All purchases are considered to have been made on the first regular business day
of the month in which the purchase was made.

o Distribution and Service Plans for Class B and Class C Shares. The Fund
has adopted Distribution and Service Plans for Class B and Class C shares to
compensate the Distributor for distributing Class B and C 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 that are outstanding for 6
years or less and on Class C shares. The Distributor also receives a service fee
of 0.25% per year under each plan.

Under each Plan, both 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 asset-based sales charge and service
fees increase Class B and Class C expenses by up to 1.00% of the net assets per
year of the respective class.

The Distributor uses the service fees to compensate dealers for providing
personal services for accounts that hold Class B or C shares. Those services are
similar to those provided under the Class A Service Plan, described above. The
Distributor pays the 0.25% service fees to dealers in advance for the first year
after Class B or Class C shares have been sold by the dealer and retains the
service fee paid by the Fund in that year. After the shares have been held for a
year, the Distributor pays the service fees to dealers on a quarterly basis.

The asset-based sales charge allows investors to buy Class B or C 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 and Class C
shares. Those payments are at a fixed rate that is not related to the
Distributor's expenses. The services rendered by the Distributor include paying
and financing the payment of sales commissions, service fees and other costs of
distributing and selling Class B and Class C shares.

The Distributor currently pays sales commissions of 2.75% 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 3.00% of the
purchase price. The Distributor retains the Class B asset-based sales charge.
The Distributor may also pay the Class B service fee and the asset-based sales
charge to the dealer quarterly in lieu of paying the sales commission and
service fee advance at the time of purchase.

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 may also pay the Class C service fee and asset-based
sales charge to the dealer quarterly in lieu of paying the sales commission and
service fee advance at the time of purchase. The Distributor plans to pay 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's actual expenses in selling Class B and C shares may be
more than the payments it receives from contingent deferred sales charges
collected on redeemed shares and from the Fund under the Distribution and
Service Plans for Class B and C shares. Therefore, those expenses may be carried
over and paid in future years. At September 30, 1997, the end of the Class B and
Class C Plan year, the Distributor had incurred unreimbursed expenses under the
Class B Plan of $_____ (equal to ____% of the Fund's net assets represented by
Class B shares on that date), and unreimbursed expenses under the Class C Plan
of $_____ (equal to ____% of the Fund's net assets represented by Class C shares
on that date) which have been carried over into the present Plan year. If either
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.

o Waivers of Class B and Class C Sales Charges. The Class B and Class C
contingent deferred sales charges will not be applied to shares purchased in
certain types of transactions nor will they apply to Class B and Class C shares
redeemed in certain circumstances as described below. The reasons for this
policy are in "Reduced Sales Charges" in the Statement of Additional
Information. In order to receive a waiver of the Class B or Class C contingent
deferred sales charge, you must notify the Transfer Agent which conditions
apply.

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:

o distributions to participants or beneficiaries from Retirement Plans, if
the distributions are made (a) under an Automatic Withdrawal Plan after the
participant reaches age 59-1/2, as long as the payments are no more than 10% of
the account value annually (measured from the date the Transfer Agent receives
the request), or (b) following the death or disability (as defined in the
Internal Revenue Code) of the participant or beneficiary (the death or
disability must have occurred after the account was established);

o 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);

o returns of excess contributions to Retirement Plans;

o distributions from retirement plans to make "substantially equal
periodic payments" as permitted in Section 72(t) of the Internal Revenue Code
that do not exceed 10% of the account value annually, measured from the date the
Transfer Agent receives the request; or

o distributions from OppenheimerFunds prototype 401(k) plans and from
certain Massachusetts Mutual Life Insurance Company prototype 401(k) plans (1)
for hardship withdrawals; (2) under a Qualified Domestic Relations Order, as
defined in the Internal Revenue Code; (3) to meet minimum distribution
requirements as defined in the Internal Revenue Code; (4) to make "substantially
equal periodic payments" as described in Section 72(t) of the Internal Revenue
Code; (5) for separation from service; or (6) for loans to participants of
beneficiaries.

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:

o shares sold to the Manager or its affiliates;

o 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;

o shares issued in plans of reorganization to which the Fund is a party;

o shares redeemed involuntarily, as described in "Shareholder Account Rules
and Policies," below; or

o Distributions from 401(k) plans sponsored by broker-dealers that have
entered into a special agreement with the Distributor allowing this waiver.

Buying Class Y Shares. Class Y shares are sold at net asset value per share
without sales charge directly to certain institutional investors, such as
insurance companies, registered investment companies and employee benefit plans
that have special agreements with the Distributor for this purpose. These
include Massachusetts Mutual Life Insurance Company, an affiliate of the
Manager, which may purchase Class Y shares of the Fund and other Oppenheimer
funds for asset allocation programs, investment companies or separate investment
accounts it sponsors and offers to its customers. Individual investors are not
able to invest in Class Y shares directly.

While Class Y shares are not subject to initial or contingent deferred
sales charges or asset-based sales charges, an institutional investor buying the
shares for its customers' accounts may impose charges on those accounts . The
procedures for purchasing, redeeming, exchanging, or transferring the Fund's
other classes of shares and the special account features that apply to those
shares described elsewhere in this Prospectus (other that provisions as to the
timing of the Fund's receipt of purchase, redemption and exchange orders) in
general do not apply to class Y shares.

Special Investor Services

AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send money
electronically between those accounts to perform a number of types of account
transactions. These include purchases of shares by telephone (either through a
service representative or by PhoneLink, described below), automatic investments
under Asset Builder Plans, and sending dividends and distributions or Automatic
Withdrawal Plan payments directly to your bank account. Please call the Transfer
Agent for more information.

AccountLink privileges should be requested or on your dealer's settlement
instructions if you buy your shares through your 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.

o Using AccountLink to Buy Shares. Purchases may be made 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.

o 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.

o 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.

o Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your Fund
account to another Oppenheimer funds account you have already established by
calling the special PhoneLink number. Please refer to "How to Exchange Shares,"
below, for details.

o 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.

Shareholder Transactions by Fax. Requests for certain account transactions may
be sent to the Transfer Agent by fax (telecopier). Please call 1-800-525-7048
for information about which transactions are included. Transaction requests
submitted by fax are subject to the same rules and restrictions as written and
telephone requests described in this Prospectus.

Automatic Withdrawal and Exchange Plans. The Fund has several plans that enable
you to sell shares automatically or exchange them to another Oppenheimer funds
account on a regular basis:

o Automatic Withdrawal Plans. If your Fund account is worth $5,000 or
more, you can establish an Automatic Withdrawal Plan to receive payments of at
least $50 on a monthly, quarterly, semi-annual or annual basis. The checks may
be sent to you or sent automatically to your bank account on AccountLink. You
may even set up certain types of withdrawals of up to $1,500 per month by
telephone. You should consult the Statement of Additional Information for more
details.

o Automatic Exchange Plans. You can authorize the Transfer Agent to
exchange an amount you establish in advance automatically for shares of up to
five other Oppenheimer funds on a monthly, quarterly, semi-annual or annual
basis under an Automatic Exchange Plan. The minimum purchase for each other
Oppenheimer funds account is $25. These exchanges are subject to the terms of
the Exchange Privilege, described below.

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 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 shares. You must be sure to ask the
Distributor for this privilege when you send your payment. Please consult the
Statement of Additional Information for more details.

Retirement Plans. Fund shares are available as an investment for your retirement
plans. If you participate in a plan sponsored by your employer, the plan trustee
or administrator must make the purchase of shares for your retirement plan
account. The Distributor offers a number of different retirement plans that can
be used by individuals and employers:

o Individual Retirement Accounts including rollover IRAs, for individuals
and their spouses

o 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations

o SEP-IRAs (Simplified Employee Pension Plans) for small business owners
or people with income from self-employment

o Pension and Profit-Sharing Plans for self-employed persons and other
employers

o 401(k) prototype retirement plans for businesses

Please call the Distributor for the OppenheimerFunds plan documents, which
contain important information and applications.

How to Sell Shares

You can arrange to take money out of your account by selling (redeeming) 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 and accepted by the
Transfer Agent. The Fund offers you a number of ways to sell your shares: in
writing, or by using the Fund's checkwriting privilege, or by telephone. You can
also set up Automatic Withdrawal Plans to

redeem shares on a regular basis, as described above. 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, please call the Transfer Agent first, at 1-800-525-7048, for assistance.

o Retirement Accounts. To sell shares in an OppenheimerFunds retirement
account in your name, call the Transfer Agent for a distribution request form.
There are special income tax withholding requirements for distributions from
retirement plans and you must submit a withholding form with your request to
avoid delay. If your retirement plan account is held for you by your employer,
you must arrange for the distribution request to be sent by the plan
administrator or trustee. There are additional details in the Statement of
Additional Information.

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

o You wish to redeem more than $50,000 worth of shares 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 redeemed by someone other than the owners (such as an
Executor)

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

Selling 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 requirements or documents requested by the Transfer Agent to
assure proper authorization of the person asking to sell shares.

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

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

Selling Shares by Telephone. You and your dealer representative of record may
also sell your shares by telephone. To receive the redemption price on a regular
business day, your call must be received by the Transfer Agent by the close of
The New York Stock Exchange that day, which is normally 4:00 P.M., but may be
earlier on some days. You may not redeem shares held in an OppenheimerFunds
retirement plan 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 wired to that bank account.

o Telephone Redemptions Paid by Check. Up to $50,000 may be redeemed by
telephone, once 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.

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

Shareholders may also have the Transfer Agent send redemption proceeds of
$2,500 or more by Federal Funds wire to a designated commercial bank account if
the bank is a member of the Federal Reserve wire system. There is a $10 fee for
each Federal Funds wire. To place a wire redemption request, call the Transfer
Agent at 1-800-852-8457. The wire will normally be transmitted on the next bank
business day after the shares are redeemed. There is a possibility that the wire
may be delayed up to seven days to enable the Fund to sell securities to pay the
redemption proceeds. No dividends are accrued or paid on the proceeds of shares
that have been redeemed and are awaiting transmittal by wire. To establish wire
redemption privileges on an account that is already established, please contact
the Transfer Agent for instructions.

Checkwriting. To be able to write checks against your Fund account, you may
request that privilege on your account Application or you can contact the
Transfer Agent for signature cards, which must be signed (with a signature
guarantee) by all owners of the account and returned to the Transfer Agent so
that checks can be sent to you to use. Shareholders with joint accounts can
elect in writing to have checks paid over the signature of one owner.

o Checks can be written to the order of whomever you wish, but may not be
cashed at the Fund's bank or custodian.

o Checkwriting privileges are not available for accounts holding Class B
shares or Class C shares, or Class A shares that are subject to a contingent
deferred sales charge.

o Checks must be written for at least $100.

o Checks cannot be paid if they are written for more than your account
value. Remember: your shares fluctuate in value and you should not write a check
close to the total account value.

o You may not write a check that would require the Fund to redeem shares
that were purchased by check or Asset Builder Plan payments within the prior 10
days.

o Don't use your checks if you changed your Fund account number.

Selling 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. Please call your dealer for more
information about this procedure and refer to "Special Arrangements for
Repurchase of Shares from Dealers and Brokers" in the Statement of Additional
Information for more details.

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. 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 this Fund and the fund whose shares you want to buy
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 you
purchase by exchange.

o Before exchanging into a fund, you should 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. At present,
Oppenheimer Money Market Fund, Inc. offers only one class of shares, which are
considered to be Class A shares for this purpose. In some cases, sales charges
may be imposed on exchange transactions. Please refer to "How to Exchange
Shares" in the Statement of Additional Information for more details.

Exchanges may be requested in writing or by telephone:

o Written Exchange Requests. Submit an OppenheimerFunds Exchange Request
form, signed by all owners of the account. Send it to the Transfer Agent at the
addresses listed in "How to Sell Shares."

o 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
names and address. Shares held under certificates may not be exchanged by
telephone.

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.

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 is in proper form 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 7 days if it determines it would be
disadvantaged by a same-day transfer of the proceeds to buy shares. For example,
the receipt of multiple exchange requests from a dealer in a "market-timing"
strategy might require the disposition of securities at a time or price
disadvantageous to the Fund.

o Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request that
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. Although the Fund will attempt to provide you notice whenever it is
reasonably able to do so, it may impose these changes at any time.

o For tax purposes, exchanges of shares involve a redemption 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. For more information about taxes affecting
exchanges, please refer to "How to Exchange Shares" in the Statement of
Additional Information.

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

o Net asset value per share is determined for each class of shares as of
the close of The New York Stock Exchange which is normally 4:00 P.M., but may be
earlier on some days, on each day the Exchange is open 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 Fund's Board of Trustees has established
procedures to value the Fund's securities to determine net asset value. In
general, securities values are based on market value. There are special
procedures for valuing illiquid and restricted securities and obligations for
which market values cannot be readily obtained. These procedures are described
more completely in the Statement of Additional Information.

o 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.

o 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 and until
the Transfer Agent receives cancellation instructions from an owner of the
account.

o 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. If the Transfer Agent does not use
reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise neither the Transfer Agent nor the Fund will be
liable for losses or expenses arising out of telephone instructions reasonably
believed to be genuine. If you are unable to reach the Transfer Agent during
periods of unusual market activity, you may not be able to complete a telephone
transaction and should consider placing your order by mail.

o 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.

o 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.

o The redemption price for shares will vary from day to day because the
value of the securities in the Fund's portfolio fluctuates, and the redemption
price, which is the net asset value per share, will normally be different for
Class A, Class B, Class C and Class Y shares. Therefore, the redemption value of
your shares may be more or less than their original cost.

o Payment for redeemed shares is made ordinarily in cash and forwarded by
check or through AccountLink (as elected by the shareholder under the redemption
procedures described above) within 7 days after the Transfer Agent receives
redemption instructions in proper form, except under unusual circumstances
determined by the Securities and Exchange Commission delaying or suspending such
payments. For accounts registered in the name of a broker-dealer, payment will
be forwarded within 3 business days. 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, certified check or arrange with your bank
to provide telephone or written assurance to the Transfer Agent that your
purchase payment has cleared.

o Involuntary redemptions of small accounts may be made by the Fund if the
account value has fallen below $200 for any reason other than the market value
of shares has dropped, and in some cases involuntary redemptions may be made to
repay the Distributor for losses from the cancellation of share purchase orders.

o Under unusual circumstances, shares of the Fund may be redeemed "in
kind," which means that the redemption proceeds will be paid with securities
from the Fund's portfolio. Please refer to "How to Sell Shares" in the Statement
of Additional Information for more details.

o "Backup Withholding" of Federal income tax may be applied at the rate of
31% from dividends, distributions and redemption proceeds (including exchanges)
if you fail to furnish the Fund a correct and properly certified Social Security
or Employer Identification Number when you sign your application, or if you
underreport your income to the Internal Revenue Service regulations on tax
reporting of income.

o The Fund does not charge a redemption fee, but if your dealer or broker
handles your redemption, they may charge a fee. That fee can be avoided by
redeeming your Fund shares directly through the Transfer Agent. Under the
circumstances described in "How to Buy Shares," you may be subject to a
contingent deferred sales charges when redeeming certain Class A, Class B and
Class C shares.

o 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 declares dividends separately for Class A, Class B, Class C
and Class Y shares from net investment income each regular business day and pays
those dividends to shareholders monthly. Normally, dividends are paid on the
last business day every month, but the Board of Trustees can change that date.
Distributions may be made monthly from any net short-term capital gains the Fund
realizes in selling securities. Dividends paid on Class A and Class Y shares
generally are expected to be higher than for Class B and Class C shares because
expenses allocable to Class B and Class C shares will generally be higher.

Commencing with the Fund's fiscal quarter beginning July 1, 1994, the Fund
adopted the practice, to the extent consistent with the amount of the Fund's net
investment income and other distributable income, of attempting to pay dividends
on Class A shares at a constant level, although the amount of such dividends
are subject to change 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 that Class.

The practice of attempting to pay dividends on Class A shares at a
constant level requires the Manager, consistent with the Fund's investment
objective and investment restrictions, to monitor the Fund's portfolio and
select higher yielding securities when deemed appropriate to maintain necessary
net investment income levels. The Fund anticipates paying dividends at the
targeted dividend level from net investment income and other distributable
income without any impact on the Fund's net asset value per share.

The Board of Trustees may change the Fund's targeted dividend level at any
time, without prior notice to shareholders. The Fund does not otherwise have a
fixed dividend rate and there can be no assurance as to the payment of any
dividends or the realization of any capital gains.

Capital Gains. The Fund may make distributions annually in December out of any
net short-term or long-term capital gains, and the Fund may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year, which is September 30th. Long-term capital gains will be separately
identified in the tax information the Fund sends you after the end of the year.
Short- term capital gains are treated as dividends for tax purposes. There can
be no assurance that the Fund will pay any capital gains distributions in a
particular year.

Distribution Options. When you open your account, specify on your application
how you want to receive your distributions. For OppenheimerFunds retirement
accounts, all distributions are reinvested. For other accounts, you have four
options:

o Reinvest All Distributions In The Fund. You can elect to reinvest all
dividends and long-term capital gains distributions in additional shares of the
Fund.

o Reinvest Capital Gains Only. You can elect to reinvest long- term capital
gains in the Fund while receiving dividends by check or sent to your bank
account on AccountLink.

o Receive All Distributions In Cash. You can elect to receive a check for
all dividends and long-term capital gains distributions or have them sent to
your bank on AccountLink.

o Reinvest Your Distributions In Another Oppenheimer Fund Account. You can
reinvest all distributions in the same class of shares of another Oppenheimer
fund account you have established.

Taxes. If your account is not a tax-deferred retirement account, you should be
aware of the following tax implications of investing in the Fund. Long-term
capital gains are taxable as long-term capital gains when distributed to
shareholders. It does not matter how long you held your shares. Dividends paid
from short-term capital gains and net investment income are taxable as ordinary
income. Distributions are subject to Federal income tax and may be subject to
state or local taxes. Your distributions are taxable when paid, whether you
reinvest them in additional shares or take them in cash. Every year the Fund
will send you and the IRS a statement showing the amount of each taxable
distribution you received in the previous year. So that the Fund will not have
to pay taxes on the amounts it distributes to shareholders as dividends and
capital gains, the Fund intends to manage its investments so that it will
qualify as a "regulated investment company" under the Internal Revenue Code,
although it reserves the right not to qualify in a particular year.

o "Buying a Distribution." If you buy shares just before the Fund declares
a capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital gain.

o Taxes on Transactions. Share redemptions, including redemptions for
exchanges, are subject to capital gains tax. 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.

o Returns of Capital. 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. A non-taxable return of
capital may reduce your tax basis in your Fund shares.

This information is only a summary of certain federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax advisor
about the effect of an investment in the Fund on your particular tax situation.

APPENDIX A

Special Sales Charge Arrangements for Shareholders of the Fund
Who Were Shareholders of the Former Quest for Value Funds

The initial and contingent sales charge rates and waivers for Class A,
Class B and Class C shares of the Fund described elsewhere in this Prospectus
are modified as described below for those shareholders of (i) Oppenheimer Quest
Value Fund, Inc., Oppenheimer Quest Growth and Income Fund, Oppenheimer Quest
Opportunity Value Fund, Oppenheimer Quest Small Cap Fund and Oppenheimer Quest
Global Value Fund, Inc. on November 24, 1995, when OppenheimerFunds, Inc. became
the investment advisor to those funds, and (ii) Quest for Value U.S. Government
Income Fund, Quest for Value Investment Quality Income Fund, Quest for Value
Global Income Fund, Quest for Value New York Tax-Exempt Fund, Quest for Value
National Tax-Exempt Fund and Quest for Value California Tax-Exempt Fund when
those funds merged into various Oppenheimer funds on November 24, 1995. The
funds listed above are referred to in this Prospectus as the "Former Quest for
Value Funds." The waivers of initial and contingent deferred sales charges
described in this Appendix apply to shares of the Fund (i) acquired by such
shareholder pursuant to an exchange of shares of one of the Oppenheimer funds
that was one of the Former Quest for Value Funds or (ii) purchased by such
shareholder by exchange of shares of other Oppenheimer fund that were acquired
pursuant to the merger of any of the Former Quest for Value Funds into an
Oppenheimer fund on November 24, 1995.

Class A Sales Charges

o Reduced Class A Initial Sales Charge Rates for Certain Former Quest
Shareholders

o Purchases by Groups, Associations and Certain Qualified Retirement
Plans. The following table sets forth the initial sales charge rates for Class A
shares purchased by a "Qualified Retirement Plan" through a single broker,
dealer or financial institution, or by members of "Associations" formed for any
purpose other than the purchase of securities if that Qualified Retirement Plan
or 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. For this purpose only, a "Qualified Retirement Plan" includes
any 401(k) plan, 403(b) plan, and SEP/IRA or IRA plan for employees of a single
employer.

Front-End Front-End
Sales Sales Commission
Charge Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible Employees of Offering of Amount Offering
or Members Price Invested Price
- -------------------------------------------------------------------------
9 or fewer 2.50% 2.56% 2.00%
- -------------------------------------------------------------------------
At least 10 but not
more than 49 2.00% 2.04% 1.60%

For purchases by Qualified Retirement plans and 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 on pages __ to __ of this Prospectus.

Purchases made under this arrangement qualify for the lower of the sales
charge rate in the table based on the number of eligible employees in a
Qualified Retirement Plan or members of an Association or the sales charge rate
that applies under the Rights of Accumulation described above in the Prospectus.
In addition, purchases by 401(k) plans that are Qualified Retirement Plans
qualify for the waiver of the Class A initial sales charge if they qualified to
purchase shares of any of the Former Quest For Value Funds by virtue of
projected contributions or investments of $1 million or more each year.
Individuals who qualify under this arrangement for reduced sales charge rates as
members of Associations, or as eligible employees in Qualified Retirement Plans
also may purchase shares for their individual or custodial accounts at these
reduced sales charge rates, upon request to the Fund's Distributor.

o Waiver of Class A Sales Charges for Certain Shareholders. Class A shares
of the Fund purchased by the following investors are not subject to any Class A
initial or contingent deferred sales charges:

o Shareholders of the Fund who were shareholders of the AMA Family of
Funds on February 28, 1991 and who acquired shares of any of the Former Quest
for Value Funds by merger of a portfolio of the AMA Family of Funds.

o Shareholders of the Fund who acquired shares of any Former Quest for
Value Fund by merger of any of the portfolios of the Unified Funds.

o 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 of the Fund purchased by the following investors
who were shareholders of any Former Quest for Value Fund:

o 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.

o Participants in Qualified Retirement Plans that purchased shares of any
of the Former Quest For Value Funds pursuant to a special "strategic alliance"
with the distributor of those funds.
The Fund's Distributor will pay a commission to the dealer for purchases of Fund
shares as described above in "Class A Contingent Deferred Sales Charge."

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

o 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, B or C shares of the Fund acquired by 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, if those
shares were purchased prior to March 6, 1995: in connection with (i)
distributions to participants or beneficiaries of plans qualified under Section
401(a) of the Internal Revenue Code or from custodial accounts under Section
403(b)(7) of the Code, Individual Retirement Accounts, deferred compensation
plans under Section 457 of the Code, and other employee benefit plans, and
returns of excess contributions made to each type of plan, (ii) withdrawals
under an automatic withdrawal plan holding only either Class B or C shares if
the annual withdrawal does not exceed 10% of the initial value of the account,
and (iii) liquidation of a shareholder's account if the aggregate net asset
value of shares held in the account is less than the required minimum value of
such accounts.

o 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, B or C shares of the
Fund acquired by 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, if those shares were purchased on or after March 6,
1995, but prior to November 24, 1995: (1) distributions to participants or
beneficiaries from Individual Retirement Accounts under Section 408(a) of the
Internal Revenue Code or retirement plans under Section 401(a), 401(k), 403(b)
and 457 of the Code, if those distributions are made either (a) to an individual
participant as a result of separation from service or (b) following the death or
disability (as defined in the Code) of the participant or beneficiary; (2)
returns of excess contributions to such retirement plans; (3) redemptions other
than from retirement plans following the death or disability of the
shareholder(s) (as evidenced by a determination of total disability by the U.S.
Social Security Administration); (4) withdrawals under an automatic withdrawal
plan (but only for Class B or C shares) where the annual withdrawals do not
exceed 10% of the initial value of the account; and (5) 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, B or C shares of the Fund described in this
section if within 90 days after that redemption, the proceeds are invested in
the same Class of shares in this Fund or another Oppenheimer fund.

A-1

<PAGE>

Oppenheimer Limited-Term Government Fund

6803 South Tucson Way
Englewood, Colorado 80112

1-800-525-7048

Investment Advisor
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 and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048

Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043

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

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

No dealer, broker, salesperson or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus or the Statement of Additional Information, and if given or
made, such information and representations must not be relied upon as having
been authorized by the Fund, OppenheimerFunds, Inc., OppenheimerFunds
Distributor, Inc. or any affiliate thereof. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of the securities
offered hereby in any state to any person to whom it is unlawful to make such an
offer in such state.

*Printed on recycled paper

A-2

<PAGE>

Oppenheimer Limited-Term Government Fund

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

Statement of Additional Information dated January 20, 1998

This Statement of Additional Information of Oppenheimer Limited-Term
Government Fund is not a Prospectus. This document contains additional
information about the Fund and supplements information in the Prospectus dated
January 20, 1998. It should be read together with the Prospectus which may be
obtained 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.

Contents Page

About the Fund
Investment Objective and Policies.............................................
Other Investment Techniques and Strategies.................................
Other Investment Restrictions..............................................
How the Fund is Managed.......................................................
Organization and History...................................................
Trustees and Officers of the Fund..........................................
The Manager and Its Affiliates.............................................
Brokerage Policies of the Fund................................................
Performance of the Fund.......................................................
Distribution and Service Plans................................................

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

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

Appendix
Industry Classifications...................................................A-1

<PAGE>

ABOUT THE FUND

Investment Objective And Policies

Investment Policies and Strategies. The investment objective and policies of the
Fund are described in the Prospectus. Set forth below is supplemental
information about those policies and the types of securities in which the Fund
may invest, as well as the strategies the Fund may use to try to achieve its
objective. Certain capitalized terms used in this Statement of Additional
Information have the same meaning as those terms have in the Prospectus.

o U.S. Government Securities. The obligations of U.S. Government agencies
or instrumentalities in which the Fund may invest may or may not be guaranteed
or supported by the "full faith and credit" of the United States. Some are
backed by the right of the issuer to borrow from the U.S. Treasury; others, by
discretionary authority of the U.S. Government to purchase the agencies'
obligations; while others are supported only by the credit of the
instrumentality. All U.S. Treasury obligations are backed by the full faith and
credit of the United States. If the securities are not backed by the full faith
and credit of the United States, the owner of the securities must look
principally to the agency issuing the obligation for repayment and may not be
able to assert a claim against the United States in the event that the agency or
instrumentality does not meet its commitment. The Fund will invest in U.S.
Government Securities of such agencies and instrumentalities only when the
Fund's investment manager, OppenheimerFunds, Inc. (the "Manager") is satisfied
that the credit risk with respect to such instrumentality is minimal.

General changes in prevailing interest rates will affect the values of the
Fund's portfolio securities. The value will vary inversely to changes in such
rates. For example, if such rates go up after a security is purchased, the value
of the security will generally decline. A decrease in interest rates may affect
the maturity and duration, and yield of mortgage-backed securities by increasing
unscheduled prepayments of the underlying mortgages. With its objective of
seeking high current return and safety of principal, the Fund may purchase or
sell securities without regard to the length of time the security has been held,
to take advantage of short-term differentials in yields. While short-term
trading increases the portfolio turnover, the execution cost for U.S. Government
Securities is substantially less than for equivalent dollar values of equity
securities (see "Brokerage Provisions of the Investment Advisory Agreement,"
below).

Under normal circumstances, the Fund anticipates that it will maintain a
dollar-weighted average portfolio effective duration of not more than three
years. However, because unanticipated events may change the effective duration
of securities after the Fund purchases them, there can be no assurance that the
Fund will achieve its targeted duration at all times. Additionally, the Fund may
invest in individual debt obligations of any maturity or duration The Manager
will in good faith determine the effective duration of debt obligations
purchased by the Fund and will consider various factors applicable to each type
of debt obligation, including those set forth below. Duration incorporates a
bond's yield, coupon interest payments, final maturity and call features into
one measure. For generic fixed-income securities, duration is calculated as the
average time of present- value-weighted cash flows divided by a small adjustment
factor, pursuant to a calculation known as modified Macaulay duration. Thus, for
any generic fixed-income security with interest payments occurring prior to the
payment of principal, duration is also less than maturity. Also, all other
factors being equal, the lower the stated or coupon rate of interest of a
fixed-income security, the longer the duration of the security; conversely, the
higher the stated or coupon rate of interest of a fixed-income security, the
shorter the duration of the security.

Futures, options and options on futures have durations which, in general,
are closely related to the duration of the securities which underlie them.
Holding long futures or call option positions (backed by segregated liquid
assets) will lengthen the portfolio's duration. There are some situations,
however, where the standard modified Macaulay duration calculation does not
properly reflect the interest rate exposure of a security. For example, the
interest rate exposure is not properly captured by modified Macaulay duration in
the case of mortgage pass-though securities. The stated final maturity of such
securities is generally 30 years, but changes in prepayment rates are more
critical in determining the securities' price exposure to interest rates.
Indeed, the modified Macaulay calculation even falls short in calculating the
price sensitivity of callable bonds to interest rates. In these and other
similar situations, the Manager will use more sophisticated analytical
techniques that incorporate the economic life of a security as well as relevant
macroeconomic factors (e.g., mortgage prepayment rates) into the determination
of the Fund's effective duration.

The U.S. Government Securities in which the Fund may invest include the
following:

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

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

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

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

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

Monthly payments of principal will be made, and additional prepayments of
principal may be made, to the Fund with respect to the mortgages underlying the
Ginnie Mae Certificates held by the Fund. All of the mortgages in the pools
relating to the Ginnie Mae Certificates in the Fund are subject to prepayment
without any significant premium or penalty, at the option of the mortgagors.
While the mortgages on 1-to-4-family dwellings underlying certain Ginnie Mae
Certificates have a stated maturity of up to 30 years, it has been the
experience of the mortgage industry that the average life of comparable
mortgages, as a result of prepayments, refinancing and payments from
foreclosures, is considerably less. Periods of dropping interest rates may spur
refinancing of existing mortgages, accelerating the rate of prepayments.
Prepayments on such mortgages received by the Fund will be reinvested in
additional Ginnie Mae Certificates or other U.S. Government Securities. The
yields on such additional securities may not necessarily be the same as (and may
be lower than) the yields on the prepaid securities, which will affect the
income the Fund receives and pays to its shareholders.

o Federal Home Loan Mortgage Corporation ("Freddie Mac") Certificates.
Freddie Mac, a corporate instrumentality of the United States, issues Freddie
Mac Certificates representing interests in mortgage loans. Freddie Mac
guarantees to each registered holder of a Freddie Mac Certificate timely payment
of the amounts representing a holder's proportionate share in (i) interest
payments less servicing and guarantee fees, (ii) principal prepayments and (iii)
the ultimate collection of amounts representing such holder's proportionate
interest in principal payments on the mortgage loans in the pool represented by
such Freddie Mac Certificate, in each case whether or not such amounts are
actually received. The obligations of Freddie Mac under its guarantees are
obligations solely of Freddie Mac and are not backed by the full faith and
credit of the United States.

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

Other Investment Techniques And Strategies

o Repurchase Agreements. The Fund may acquire securities that are subject
to repurchase agreements, in order to generate income while providing liquidity.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor for delivery on an agreed-upon
future date. An "approved vendor" is a U.S. commercial bank, the U.S. branch of
a foreign bank or a broker-dealer which has been designated a primary dealer in
government securities, which must meet the credit requirements set by the Fund's
Board of Trustees from time to time. The sale 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. The majority of these
transactions run from day to day, and delivery pursuant to resale typically will
occur within one to five days of the purchase. Repurchase agreements are
considered "loans" under the Investment Company Act of 1940 (the "Investment
Company Act"), collateralized by the underlying security. The Fund's repurchase
agreements will require that at all times while the repurchase agreement is in
effect, the collateral's value must equal or exceed the repurchase price to
fully collateralize the repayment obligation. Additionally, the Manager will
impose creditworthiness requirements to confirm that the vendor is financially
sound and will continuously monitor the collateral's value. If the vendor of a
repurchase agreement fails to pay the agreed-upon resale price on the delivery
date, the Fund's risks in such event may include any costs of disposing of the
collateral, and any loss from any delay in foreclosing on the collateral.

o Reverse Repurchase Agreements. The Fund does not intend to invest in
Reverse Repurchase Agreements. If it does, the Fund will identify to its
Custodian, cash, Treasury bills or other U.S. Government Securities having an
aggregate value equal to the amount of such commitment to repurchase, including
accrued interest, until payment is made. The Fund may use reverse repurchase
agreements as a source of funds on a short-term basis (and not for leverage). As
a fundamental policy, the Fund will not enter into reverse repurchase agreements
in amounts exceeding 25% of the total assets of the Fund. In determining whether
to enter into a reverse repurchase agreement with a bank or broker-dealer, the
Fund will take into account the creditworthiness of such party. As a matter of
fundamental policy, the Fund will not enter into a reverse repurchase
transaction unless the securities collateralizing the transaction have a
maturity date not later than the settlement date for the transaction.

o Restricted and Illiquid Securities. To enable the Fund to sell
restricted securities not registered under the Securities Act of 1933, the Fund
may have to cause those securities to be registered. The expenses of
registration of restricted securities may be negotiated by the Fund with the
issuer at the time such securities are purchased by the Fund, if such
registration is required before such securities may be sold publicly. When
registration must be arranged because the Fund wishes to sell the security, a
considerable period may elapse between the time the decision is made to sell the
securities and the time the Fund would be permitted to sell them. The Fund would
bear the risks of any downward price fluctuation during that period. The Fund
may also acquire, through private placements, securities having contractual
restrictions on their resale, which might limit the Fund's ability to dispose of
such securities and might lower the amount realizable upon the sale of such
securities.

o Loans of Portfolio Securities. The Fund may lend its portfolio securities
(other than in repurchase transactions) to brokers, dealers and other financial
institutions. These loans are limited to not more than 25% of the Fund's total
assets. Under applicable regulatory requirements (which are subject to change),
the loan collateral must, on each business day, at least equal the market value
of the loaned securities and must consist of cash, bank letters of credit, U.S.
Government Securities, 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. Such terms and the issuing bank must be satisfactory to the Fund. In a
portfolio securities lending transaction, the Fund receives from the borrower an
amount equal to the interest paid or the dividends declared on the loaned
securities during the term of the loan as well as the interest on the collateral
securities, less any finders', administrative or other fees the Fund pays in
connection with the loan. The Fund may share the interest it receives on the
collateral securities with the borrower as long as it realizes at least a
minimum amount of interest required by the lending guidelines established by its
Board of Trustees. In connection with securities lending, the Fund might
experience risks of delay in receiving additional collateral, or risks of delay
in recovery of the securities, or loss of rights in the collateral should the
borrower fail financially. The Fund will not lend its portfolio securities to
any officer, trustee, employee or affiliate of the Fund or its Manager. The
terms of the Fund's loans must meet certain tests under the Internal Revenue
Code and permit the Fund to reacquire loaned securities on five business days'
notice or in time to vote on any important matter. The value of the securities
loaned is not expected to exceed 5% of the Fund's total assets in the coming
year.

o Mortgage-Backed Security Rolls. The Fund may enter into "forward roll"
transactions with respect to mortgage-backed securities in which it can invest.
In a forward roll transaction, which is considered to be a borrowing by the
Fund, the Fund will sell a mortgage security to selected banks or other entities
and simultaneously agree to repurchase a similar security (same type, coupon and
maturity) from the institution at a specified later date at an agreed upon
price. The mortgage securities that are repurchased will bear the same interest
rate as those sold, but generally will be collateralized by different pools of
mortgages with different prepayment histories than those sold. Risks of
mortgage-backed security rolls include: (1) the risk of prepayment prior to
maturity, (ii) the possibility that the Fund may not be entitled to receive
interest and principal payments on the securities sold and that the proceeds of
the sale may have to be invested in money market instruments (typically
repurchase agreements) maturing not later than the expiration of the roll, and
(iii) the possibility that the market value of the securities sold by the Fund
may decline below the price at which the Fund is obligated to purchase
securities. The Fund will enter into only "covered" rolls. Upon entering into a
mortgage-backed security roll, the Fund will be required to identify liquid
securities, either debt or equity, with its Custodian in amount equal to its
obligation under the roll.

o "When-Issued" and Delayed Delivery Transactions. The Fund may purchase
securities on a "when-issued" basis, and may purchase or sell such securities on
a "delayed delivery"

basis. Although the Fund will enter into such transactions for the purpose of
acquiring securities for its portfolio or for delivery pursuant to options
contracts it has entered into, the Fund may dispose of a commitment prior to
settlement. "When-issued" or "delayed delivery" refers to securities whose terms
and indenture are available and for which a market exists, but which are not
available for immediate delivery. When such transactions are negotiated, the
price (which is generally expressed in yield terms) is fixed at the time the
commitment is made, but delivery and payment for the securities take place at a
later date. The Fund does not intend to make such purchases for speculative
purposes. Such securities may bear interest at a lower rate than longer-term
securities. The commitment to purchase a security for which payment will be made
on a future date may be deemed a separate security and involve a risk of loss if
the value of the security declines prior to the settlement date. During the
period between commitment by the Fund and settlement (generally within 120
days), no payment is made for the securities purchased by the purchaser, and no
interest accrues to the purchaser from the transaction. Such securities are
subject to market fluctuation; the value at delivery may be less than the
purchase price. The Fund will a segregate or identify with its Custodian liquid
assets consisting of cash, U.S. Government securities or other high grade debt
obligations at least equal to the value of purchase commitments until payment is
made.

The Fund will engage in when-issued transactions in order to secure what
is considered to be an advantageous price and yield at the time of entering into
the obligation. When the Fund engages in when-issued or delayed delivery
transactions, it relies on the buyer or seller, as the case may be, to
consummate the transaction. Failure of the buyer or seller to do so may result
in the Fund losing the opportunity to obtain a price and yield considered to be
advantageous. At the time the Fund makes a commitment to purchase or sell a
security on a when-issued or forward commitment basis, it records the
transaction and reflects the value of the security purchased, or if a sale, the
proceeds to be received, in determining its net asset value. If the Fund chooses
to (i) dispose of the right to acquire a when-issued security prior to its
acquisition or (ii) dispose of its right to deliver or receive against a forward
commitment, it may incur a gain or loss.

To the extent the Fund engages in when-issued and delayed delivery
transactions, it will do so for the purpose of acquiring or selling securities
consistent with its investment objective and policies and not for the purposes
of investment leverage. Although the Fund enters into such transactions with the
intention of actually receiving or delivering the securities, when-issued
securities and forward commitments may be sold prior to settlement date. In
addition, changes in interest rates before settlement in a direction other than
that expected by the Manager will affect the value of such securities and may
cause a loss to the Fund.

When-issued transactions and forward commitments allow the Fund a
technique to use against anticipated changes in interest rates and prices. For
instance, in periods of rising interest rates and falling prices, the Fund might
sell securities in its portfolio on a forward commitment basis to attempt to
limit its exposure to anticipated falling prices. In periods of falling interest
rates and rising prices, the Fund might sell portfolio securities and purchase
the same or similar securities on a when-issued or forward commitment basis,
thereby obtaining the benefit of currently higher cash yields.

o Hedging. As described in the Prospectus, the Fund may employ one or more
types of Hedging Instruments to manage its exposure to changing interest rates
and securities prices. 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. Puts and covered calls may also be written on U.S. Government Securities
to attempt to increase the Fund's income. For hedging purposes, the Fund may use
Interest Rate Futures and call and put options on debt securities and Interest
Rate Futures (all of the foregoing are referred to as "Hedging Instruments").
Hedging Instruments may be used to attempt to do the following: (i) protect
against possible declines in the market value of the Fund's portfolio resulting
from downward trends in the debt securities markets (generally due to a rise in
interest rates), (ii) protect unrealized gains in the value of the Fund's debt
securities which have appreciated, (iii) facilitate selling debt securities for
investment reasons, (iv) establish a position in the debt securities markets as
a temporary substitute for purchasing particular debt securities, or (v) reduce
the risk of adverse currency fluctuations. A call or put may be purchased only
if, after such purchase, the value of the premiums on all call and put options
held by the Fund would not exceed 5% of the Fund's total assets. The Fund will
not use Futures and options on Futures for speculation. The Hedging Instruments
the Fund may use are described below.

The Fund may use hedging 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. To do so the Fund may: (i)
sell Interest Rate Futures, (ii) purchase puts on such Futures or U.S.
Government Securities, or (iii) write covered calls on securities held by it or
on Futures. When hedging to attempt to protect against the possibility that
portfolio securities are not fully included in a rise in value of the debt
securities market, or to protect the value of certain assets in the Fund, such
as Interest Only strips, whose values decline as interest rates decline, the
Fund may: (i) purchase Futures, or (ii) purchase calls on such Futures or on
U.S. Government Securities. Covered calls and puts may also be written on debt
securities to attempt to increase the Fund's income.

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. Additional
Information about the Hedging Instruments the Fund may use is provided below. At
present, the Fund does not intend to enter into Futures and options on Futures
if, after any such purchase, the sum of margin deposits on Futures and premiums
paid on Futures options exceeds 5% of the value of the Fund's total assets. In
the future, the Fund may employ Hedging Instruments and strategies that are not
presently contemplated but which may be developed, to the extent such investment
methods are consistent with the Fund's investment objective, legally permissible
and adequately disclosed.

o Writing Covered Calls. The Fund may write (i.e. sell) call options
("calls") on U.S. Government Securities to enhance income through the receipt of
premiums from expired calls and any net profits from closing purchase
transactions, subject to the limitations stated in the Prospectus. All such
calls written by the Fund must be "covered" while the call is outstanding (i.e.
the Fund must own the securities subject to the call or other securities
acceptable for applicable escrow requirements). Calls on Futures (discussed
below) must be covered by deliverable securities or by liquid assets segregated
to satisfy the Futures contract. When the Fund writes a call on a security, it
receives a premium and agrees to sell the callable investment to a purchaser of
a corresponding call on the same security during the call period at a fixed
exercise price (which may differ from the market price of the underlying
security), regardless of market price changes during the call period. The Fund
has retained the risk of loss should the price of the underlying security
decline during the call period, which may be offset to some extent by the
premium.

To terminate its obligation on a call it has written, the Fund may
purchase a corresponding call in a "closing purchase transaction." A profit or
loss will be realized, depending upon whether the net of the amount of the
option transaction costs and the premium received on the call written was more
or less than the price of the call subsequently purchased. A profit may also be
realized if the call expires unexercised, because the Fund retains the
underlying investment and the premium received. Any such profits are considered
short-term capital gains for Federal income tax purposes, and when distributed
by the Fund are taxable as ordinary income. If the Fund could not effect a
closing purchase transaction due to lack of a market, it would have to hold the
callable investments until the call lapsed or was exercised.

The Fund may also write calls on Futures without owning a futures contract
or a deliverable bond, provided that at the time the call is written, the Fund
covers the call by segregating in escrow an equivalent dollar amount of liquid
assets. The Fund will segregate additional liquid assets if the value of the
escrowed assets drops below 100% of the current value of the Future. In no
circumstances would an exercise notice require the Fund to deliver a futures
contract; it would simply put the Fund in a short futures position, which is
permitted by the Fund's hedging policies.

o Writing Put Options. The Fund may write put options on U.S. Government
securities or Interest Rate Futures but only if such puts are covered by
segregated liquid assets. The Fund will not write puts if, as a result, more
than 50% of the Fund's net assets would be required to be segregated to cover
such put obligations. In writing puts, there is the risk that the Fund may be
required to buy the underlying security at a disadvantageous price. A put option
on securities gives the purchaser the right to sell, and the writer the
obligation to buy, the underlying investment at the exercise price during the
option period. Similar to writing covered calls where the Fund must own the
security subject to the call or other securities acceptable for applicable for
escrow requirements, puts must be covered by segregated liquid assets equal to
exercise price of the put. The premium the Fund receives from writing a put
option represents a profit, as long as the price of the underlying investment
remains above the exercise price. However, the Fund has also assumed the
obligation during the option period to buy the underlying investment from the
buyer of the put at the exercise price, even though the value of the investment
may fall below the exercise price. If the put expires unexercised, the Fund (as
the writer of the put) realizes a gain in the amount of the premium less
transaction costs. If the put is exercised, the Fund must fulfill its obligation
to purchase the underlying investment at the exercise price, which will usually
exceed the market value of the investment at that time. In that case, the Fund
may incur a loss, equal to the sum of the current market value of the underlying
investment and the premium received minus the sum of the exercise price and any
transaction costs incurred.

When writing put options on securities, to secure its obligation to pay for
the underlying security, the Fund will deposit in escrow liquid assets with a
value equal to or greater than the exercise price of the put option. The Fund
therefore foregoes the opportunity of investing the segregated assets or writing
calls against those assets. As long as the obligation of the Fund as the put
writer continues, it may be assigned an exercise notice by the broker-dealer
through whom such option was sold, requiring the Fund to take delivery of the
underlying security against payment of the exercise price. The Fund has no
control over when it may be required to purchase the underlying security, since
it may be assigned an exercise notice at any time prior to the termination of
its obligation as the writer of the put. This obligation terminates upon
expiration of the put, or such earlier time at which the Fund effects a closing
purchase transaction by purchasing a put of the same series as that previously
sold. Once the Fund has been assigned an exercise notice, it is thereafter not
allowed to effect a closing purchase transaction.

The Fund may effect a closing purchase transaction to realize a profit on
an outstanding put option it has written or to prevent an underlying security
from being put. Furthermore, effecting such a closing purchase transaction will
permit the Fund to write another put option to the extent that the exercise
price thereof is secured by the deposited assets, or to utilize the proceeds
from the sale of such assets for other investments by the Fund. The Fund will
realize a profit or loss from a closing purchase transaction if the cost of the
transaction is less or more than the premium received from writing the option.
As above for writing covered calls, any and all such profits described herein
from writing puts are considered short-term gains for Federal tax purposes, and
when distributed by the Fund, are taxable as ordinary income.

o Purchasing Calls and Puts. The Fund may purchase calls on U.S.
Government Securities or on Interest Rate Futures, in order to protect against
the possibility that the Fund's portfolio will not fully participate in an
anticipated rise in value of the long-term debt securities market. The value of
U.S. Government Securities underlying calls purchased by the Fund will not
exceed the value of the portion of the Fund's portfolio invested in cash or cash
equivalents (i.e. securities with maturities of no more than 13 months). When
the Fund purchases a call (other than in a closing purchase transaction), it
pays a premium and, except as to calls on indices or Futures, 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. When the Fund
purchases a call on a Future, it pays a premium, but settlement is in cash
rather than by delivery of the underlying investment to the Fund. In purchasing
a call, the Fund benefits only if the call is sold at a profit or if, during the
call period, the market price of the underlying investment is above the sum of
the exercise price, transaction costs and the premium paid, and the call is
exercised. If the call is not exercised or sold (whether or not at a profit), it
will become worthless at its expiration date and the Fund will lose its premium
payment and the right to purchase the underlying investment.

The Fund may purchase put options ("puts") which relate to U.S. Government
Securities (whether or not it holds such securities in its portfolio) or
Futures. 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
corresponding put on the same investment during the put period at a fixed
exercise price. Buying a put on an investment the Fund owns enables the Fund to
protect itself during the put period against a decline in the value of the
underlying investment below the exercise price by selling such 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, and the Fund will lose its premium payment and
the right to sell the underlying investment. The put may, however, be sold prior
to expiration (whether or not at a profit.)

Buying a put on Interest Rate Futures or U.S. Government Securities
permits the Fund either to resell the put or buy the underlying investment and
sell it at the exercise price. The resale price of the put will vary inversely
with the price of the underlying investment. If the market price of the
underlying investment is above the exercise price and as a result the put is not
exercised, the put will become worthless on its expiration date. In the event of
a decline in the bond market, the Fund could exercise or sell the put at a
profit to attempt to offset some or all of its loss on its portfolio securities.
When the Fund purchases a put on Interest Rate Futures or U.S. Government
Securities not held by it, the put protects the Fund to the extent that the
prices of the underlying Future or U.S. Government Security move in a similar
pattern to the prices of the U.S. Government Securities in the Fund's portfolio.

An option position may be closed out only on a market which 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's
option activities may affect its turnover rate and brokerage commissions. The
exercise by the Fund of puts on securities will cause the sale of related
investments, increasing portfolio turnover. Although such exercise is within the
Fund's control, holding a put might cause the Fund to sell the related
investments for reasons which would not exist in the absence of the put. The
Fund may pay a brokerage commission each time it buys a put or call, sells a
call, or buys or sells an underlying investment in connection with the exercise
of a put or call. Such commissions may be higher than those which would apply to
direct purchases or sales of such underlying investments. Premiums paid for
options are small in relation to the market value of the related investments,
and 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
investments.

o Interest Rate Futures. The Fund may buy and sell Interest Rate Futures.
No price is paid or received upon the purchase or sale of an Interest Rate
Future. An Interest Rate Future obligates the seller to deliver and the
purchaser to take a specific type of debt security at a specific future date for
a fixed price. That obligation may be satisfied by actual delivery of the debt
security or by entering into an offsetting contract.

Upon entering into a Futures transaction, the Fund will be required to
deposit an initial margin payment in cash or U.S. Treasury bills with the
futures commission merchant (the "futures broker"). The initial margin will be
deposited with the Fund's Custodian 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 to reflect changes
in its market value, subsequent margin payments, called variation margin, will
be made to or by the futures broker on a daily basis. Prior to expiration of the
Future, if the Fund elects to close out its position by taking an opposite
position, a final determination of variation margin is made, additional cash is
required to be paid by or released to the Fund, and any loss or gain is realized
for tax purposes. Although Interest Rate Futures by their terms call for
settlement by delivery or acquisition of debt securities, in most cases the
obligation is fulfilled by entering into an offsetting position. All futures
transactions are effected through a clearinghouse associated with the exchange
on which the contracts are traded.

o Interest Rate Swap Transactions. Swap agreements entail both interest
rate risk and credit risk. There is a risk that, based on movements of interest
rates in the future, the payments made by the Fund under a swap agreement will
have been greater than those received by it. Credit risk arises from the
possibility that the counterparty will default. If the counterparty to an
interest rate swap defaults, the Fund's loss will consist of the net amount of
contractual interest payments that the Fund has not yet received. The Manager
will monitor the creditworthiness of counterparties to the Fund's interest rate
swap transactions on an ongoing basis. The Fund may engage in interest rate
swaps only with respect to securities it holds, and not in excess of 25% of its
total assets.

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

o Additional Information About Hedging Instruments and Their Use. 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 options
traded on exchanges or as to other acceptable escrow securities, so that no
margin will be required for such transactions. OCC will release the securities
covering a call on the expiration of the option or upon the Fund entering into a
closing purchase transaction. An option position may be closed out only on a
market which 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.

When the Fund writes an over-the-counter ("OTC") option, it will enter
into an arrangement with a primary U.S. Government securities dealer, which
would establish a formula price at which the Fund would have the absolute right
to repurchase that OTC option. That formula price would generally be based on a
multiple of the premium received for the option, plus the amount by which the
option is exercisable below the market price of the underlying security (that
is, the extent to which the option "is in-the-money"). When the Fund writes an
OTC option, it will treat as illiquid (for purposes of the limit on its assets
that may be invested in illiquid securities, stated in the Prospectus) the
mark-to-market value of any OTC option held by it unless the option is subject
to a buy-back agreement by the executing broker. The Securities and Exchange
Commission ("SEC") is evaluating whether OTC options should be considered liquid
securities, and the procedure described above could be affected by the outcome
of that evaluation.

o Regulatory Aspects of Hedging Instruments. The Fund is required to
operate within certain guidelines and restrictions with respect to its use of
futures and options thereon as established by the Commodities Futures Trading
Commission ("CFTC"). In particular, the Fund is excluded from registration as a
"commodity pool operator" if it 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 option premiums to no more than 5% of the
Fund's net assets for hedging strategies that are not considered bona fide
hedging strategies. Under the Rule, the Fund also must use short futures and
options on futures positions 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 each of the exchanges governing the maximum number of options which may be
written or held by a single investor or group of investors acting in concert,
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 through one or more or brokers. Thus, the number of options
which the Fund may write or hold may be affected by options written or held by
other entities, including other investment companies having the same or an
affiliated investment advisor. Position limits also apply to Futures. An
exchange may order the liquidation of positions found to be in violation of
those limits and may impose certain other sanctions. Due to requirements under
the Investment Company Act, when the Fund purchases a Future, the Fund will
maintain, in a segregated account or accounts with its Custodian, cash or
readily-marketable, short-term (maturing in one year or less) debt instruments
in an amount equal to the market value of the securities underlying such Future,
less the margin deposit applicable to it.

o Tax Aspects of Covered Calls and Hedging Instruments. 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 the Fund having to pay tax on them. This avoids a "double tax" on that
income and capital gains, since shareholders 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)

o Risks Of Hedging With Options and Futures. In addition to the risks with
respect to hedging discussed in the Prospectus and above, there is a risk in
using short hedging by selling Futures to attempt to protect against decline in
value of the Fund's portfolio securities (due to an increase in interest rates)
that the prices of such Futures will correlate imperfectly with the behavior of
the cash (i.e., market value) prices of the Fund's securities. The ordinary
spreads between prices in the cash and futures markets are subject to
distortions due to differences in the natures of those markets. First, all
participants in the futures markets are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures markets 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 markets could be reduced, thus producing distortion. Third, from
the point of view of speculators, the deposit requirements in the futures
markets are less onerous than margin requirements in the securities markets.
Therefore, increased participation by speculators in the futures markets may
cause temporary price distortions.

If the Fund uses Hedging Instruments to establish a position in the U.S.
Government Securities markets as a temporary substitute for the purchase of
individual U.S. Government Securities (long hedging) by buying Interest Rate
Futures and/or calls on such Futures or on U.S. Government Securities, it is
possible that the market may decline; if the Fund then concludes not to invest
in such securities at that time because of concerns as to possible further
market decline 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 U.S.
Government Securities purchased.

Other Investment Restrictions

The Fund's most significant investment restrictions are set forth in the
Prospectus. There are additional investment restrictions that the Fund must
follow that are also fundamental policies. Fundamental policies and the Fund's
investment objective, cannot be changed without the vote of a "majority" of the
Fund's outstanding voting securities. Under the Investment Company Act, such a
"majority" vote is defined as the vote of the holders of the lesser of (i) 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 (ii)
more than 50% of the outstanding shares.

Under these additional restrictions, the Fund cannot:

(1) purchase or sell real estate, commodities or commodity contracts;
however, the Fund may use hedging instruments approved by its Board whether or
not such hedging instruments are considered commodities or commodity contracts;

(2) invest in interests in oil, gas, or other mineral exploration or
development programs;

(3) purchase securities on margin or make short sales of securities;
however the Fund may make margin deposits in connection with its use of hedging
instruments approved by its Board;

(4) underwrite securities except to the extent the Fund may be deemed to
be an underwriter in connection with the sale of securities held in its
portfolio;

(5) invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation or other acquisition;

(6) enter into reverse repurchase agreements that will cause more than 25%
of the Fund's total assets to be subject to such agreements;

(7) make investments for the purpose of exercising control of management;

(8) purchase or retain securities of any company if, to the knowledge of
the Fund, its officers and trustees and officers and directors of the Manager
who individually own more than 0.5% of the securities of such company together
own beneficially more than 5% of such securities;

(9) purchase or retain securities of issuers having a record of less than
three years' continuous operation (such period may include the operation of
predecessor companies or enterprises if the issuer came into existence as a
result of a merger, consolidation or reorganization, or the purchase of
substantially all of the assets of the predecessor companies or enterprises);

(10) purchase or sell standby commitments; or

(11) invest more than 25% of its assets in a single industry (neither the
U.S. Government nor any of its agencies or instrumentalities are considered an
industry for the purposes of this restriction).

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

The percentage restrictions described above and in the Prospectus are
applicable only at the time of investment and require no action by the Fund as a
result of subsequent changes in value of the investments or the size of the
Fund.

How the Fund is Managed

Organization and History. The Fund was established in 1986 as First Trust
Fund-U.S. Government Series and changed its name to Oppenheimer Government
Securities Fund on July 10, 1992, and on May 1, 1994 to Oppenheimer Limited-Term
Government Fund.

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, or 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 at least 10% of its outstanding shares. In addition, if the Trustees receive
a request from at least 10 shareholders (who have been shareholders for at least
six months) holding shares of the Fund valued at $25,000 or more or holding at
least 1% of the Fund's outstanding shares, whichever is less, 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, or the Trustees may take such other
action as set forth under Section 16(c) of the Investment Company Act.

Shares of the Fund represent an interest in the Fund proportionately equal
to the interest of each other share of the same class and entitle the holder to
one vote per share (and a fractional vote for a fractional share) on matters
submitted to their vote at shareholders' meetings. Shareholders of the Fund vote
together in the aggregate on certain matters at shareholders' meetings, such as
the election of Trustees and ratification of appointment of auditors for the
Trust. Shareholders of a particular class vote separately on proposals which
affect that class, and shareholders of a class which is not affected by that
matter are not entitled to vote on the proposal. Shareholders of a class vote on
certain amendments to the Distribution and/or Service Plans if the amendments
affect that class.

The Trustees are authorized to create new series and classes of series.
The Trustees may reclassify unissued shares of the Trust or its series or
classes into additional series or classes of shares. The Trustees may also
divide or combine the shares of a class into a greater or lesser number of
shares provided that the proportionate beneficial interest of a shareholder in
the Fund is not changed. Shares do not have cumulative voting rights or
preemptive or subscription rights. Shares may be voted in person or by proxy.

The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides for
indemnification and reimbursement of expenses out of its property for any
shareholder held personally liable for its obligations. The Declaration of Trust
also provides that the Fund shall, upon request, assume the defense of any claim
made against any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon. Thus, while Massachusetts law permits a shareholder of a
business trust (such as the Fund) to be held personally liable as a "partner"
under certain circumstances, the risk of a Fund shareholder incurring financial
loss on account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Fund, and any shareholder of
the Fund, agrees under the Fund's Declaration of Trust to look solely to the
assets of the Fund for satisfaction of any claim or demand which may arise out
of any dealings with the Fund, and 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 during the past five years are
set forth below. Sam Freedman became a Trustee on June 27, 1996. All Trustees
are also trustees, directors, or managing general partners of Centennial America
Fund, L.P., Centennial California Tax Exempt Trust, Centennial New York Tax
Exempt Trust, Centennial Government Trust, Centennial Tax Exempt Trust,
Centennial Money Market Trust, Daily Cash Accumulation Fund, Inc., Oppenheimer
Champion Income Fund, Oppenheimer Equity Income Fund, Oppenheimer High Yield
Fund, Oppenheimer Integrity Funds, Oppenheimer International Bond Fund,
Oppenheimer Limited-Term Government Fund, Oppenheimer Main Street Funds, Inc.,
Oppenheimer Municipal Fund, Oppenheimer Real Asset Fund, Oppenheimer Strategic
Income Fund, Oppenheimer Total Return Fund, Inc., Oppenheimer Variable Account
Funds, Panorama Series Fund, Inc. and The New York Tax Exempt Income Fund, Inc.
(all of the foregoing funds are collectively referred to as the "Denver
Oppenheimer funds") except for Ms. Macaskill, who is a Trustee, Director or
Managing Partner of all the Denver-based Oppenheimer funds except Oppenheimer
Integrity Funds, Oppenheimer Strategic Income Fund, Oppenheimer Variable Account
Funds and Panorama Series Fund Inc. and Mr. Fossel who is a trustee, director
and managing partner of all Denver-based funds except Centennial New York Tax
Exempt Trust and Centennial America Fund, L.P. Ms. Macaskill is President and
Mr. Swain is Chairman and Chief Executive Officer of the Denver Oppenheimer
funds. All of the officers except Ms. Warmack hold similar positions with each
of the Denver Oppenheimer funds. As of January 1, 1998, the Trustees and
Officers of the Fund as a group owned less than 1% of the Fund's issued and
outstanding shares. The foregoing statement does not reflect ownership of shares
held of record by an employee benefit plan for employees of the Manager (for
which plan two of the Trustees and officers listed below, Ms. Macaskill and Mr.
Donohue, are trustees), other than the shares beneficially owned under that plan
by the officers of the Fund listed below.

ROBERT G. AVIS, Trustee* Age 66
One North Jefferson Ave., St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G. Edwards,
Inc. (its parent holding company); Chairman of A.G.E. Asset Management and A.G.
Edwards Trust Company (its affiliated investment adviser and trust company,
respectively).

WILLIAM A. BAKER, Trustee, Age 82

197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.

CHARLES CONRAD, JR., Trustee, Age 67
1501 Quail Street, Newport Beach, CA 92660
Chairman and CEO of Universal Space Lines, Inc. (a space services management
company); formerly Vice President of McDonnell Douglas Space Systems Co. and
associated with the National Aeronautics and Space Administration.

JON S. FOSSEL, Trustee, Age 55
P.O. Box 44, Mead Street, Waccabuc, New York 10597
Member of the Board of Governors of the Investment Company Institute (a national
trade association of investment companies), Chairman of the Investment Company
Institute Education Foundation; formerly Chairman and a director of the Manager,
President and a director of Oppenheimer Acquisition Corp. ("OAC"), the Manager's
parent holding company, and Shareholder Services, Inc. ("SSI") and Shareholder
Financial Services, Inc. ("SFSI"), transfer agent subsidiaries of the Manager.

SAM FREEDMAN, Trustee, Age 57
4975 Lakeshore Drive, Littleton, Colorado 80123
Formerly Chairman and Chief Executive Officer of OppenheimerFunds Services,
Chairman, Chief Executive Officer and a director of SSI, Chairman, Chief
Executive and Officer and director of SFSI, Vice President and director of OAC
and a director of OppenheimerFunds, Inc.

RAYMOND J. KALINOWSKI, Trustee, Age 68
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc. (a computer products training
company).

C. HOWARD KAST, Trustee, Age 76
2552 East Alameda, Denver, Colorado 80209

Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).

ROBERT M. KIRCHNER, Trustee, Age 76
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).

BRIDGET A. MACASKILL, President and Trustee*, Age 49
Two World Trade Center, New York, New York 10048-0203
President (since June 1991), Chief Executive Officer (since September 1995) and
a Director (since December 1994) of the Manager and Chief Executive Officer
(since September 1995); President and director (since June 1991) of HarbourView;
Chairman and a director of SSI (since August 1994), and SFSI (September 1995);
President (since September 1995) and a director (since October 1990) of OAC;
President (since September 1995) and a director (since November 1989) of
Oppenheimer Partnership Holdings, Inc., a holding company subsidiary of the
Manager; a director of Oppenheimer Real Asset Management, Inc. (since July 1996)
; President and a director (since October 1997) of OppenheimerFunds
International Ltd., an offshore fund manager subsidiary of the Manager ("OFIL")
and Oppenheimer Millennium Funds plc (since October 1997); President and a
director of other Oppenheimer funds; a director of the NASDAQ Stock Market, Inc.
and of Hillsdown Holdings plc (a U.K. food company); formerly an Executive Vice
President of the Manager.

NED M. STEEL, Trustee, Age 82
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; a director of Visiting Nurse
Corporation of Colorado.

JAMES C. SWAIN, Chairman, Chief Executive Officer and Trustee*, Age 64
6803 South Tucson Way, Englewood, Colorado 80112
Vice Chairman of the Manager (since September 1988); formerly President and a
director of Centennial Asset Management Corporation, an investment adviser
subsidiary of the Manager ("Centennial"), and Chairman of the Board of SSI.

ANDREW J. DONOHUE, Vice President and Secretary, Age 47
Two World Trade Center, New York, New York 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 (since September 1993), and a director (since January 1992) of the
Distributor; Executive Vice President, General Counsel and a director of
HarbourView, SSI, SFSI and Oppenheimer Partnership Holdings, Inc. since
(September 1995) and MultiSource Services, Inc. (a broker-dealer) (since
December 1995); President and a director of Centennial (since September 1995);
President and a director of Oppenheimer Real Asset Management, Inc. (since July
1996); General Counsel (since May 1996) and Secretary (since April 1997) of OAC;
Vice President of OFIL and Oppenheimer Millennium Funds plc (since October
1997); an officer of other Oppenheimer funds.

GEORGE C. BOWEN, Vice President, Treasurer, and Assistant Secretary, Age 61
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President (since September 1987) and Treasurer (since March 1985) of
the Manager; Vice President (since June 1983) and Treasurer (since March 1985)
of the Distributor; Vice President (since October 1989) and Treasurer (since
April 1986) of HarbourView; Senior Vice President (since February 1992),
Treasurer (since July 1991)and a director (since December 1991) of Centennial;
President, Treasurer and a director of Centennial Capital Corporation (since
June 1989); Vice President and Treasurer (since August 1978) and Secretary
(since April 1981) of SSI; Vice President, Treasurer and Secretary of SFSI
(since November 1989); Treasurer of OAC (since June 1990); Treasurer of
Oppenheimer Partnership Holdings, Inc. (since November 1989); Vice President and
Treasurer of Oppenheimer Real Asset Management, Inc. (since July 1996); Chief
Executive Officer, Treasurer and a director of MultiSource Services, Inc., a
broker-dealer (since December 1995); an officer of other Oppenheimer funds.

JERRY A. WEBMAN, Vice President and Portfolio Manager, Age 49
Senior Vice President of the Manager (since February, 1996); an officer of other
Oppenheimer funds; previously an officer and analyst with Prudential Mutual Fund
- - Investment Management, Inc.

ROBERT J. BISHOP, Assistant Treasurer, age 39
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 33
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
Treasurer of 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.

ROBERT G. ZACK, Assistant Secretary, Age 49
Senior Vice President (since May 1985) and Associate General Counsel (since May
1981) of the Manager, Assistant Secretary of SSI (since May 1985), and SFSI
(since November 1989); Assistant Secretary of Oppenheimer Millennium Funds plc
(since October 1997); an officer of other Oppenheimer funds.

- ---------------------
*A Trustee who is an "interested person" of the Fund as defined in the
Investment Company Act.

o Remuneration of Trustees. The officers of the Fund and two Trustees of
the Fund (Ms. Macaskill and Mr. Swain) who are affiliated with the Manager
receive no salary or fee from the Fund. Mr. Fossel did not receive any salary or
fees from the Fund prior to January 1, 1997. The remaining Trustees of the Fund
received the compensation shown below. The compensation from the Fund was paid
during fiscal year ended September 30, 1997. The compensation from all of the
other Denver-based Oppenheimer funds includes the Fund and is compensation
received as a director, trustee, managing general partner or member of a
committee of the Board during the calendar year 1997.

Total Compensation
Aggregate From All
Compensation Denver-based
Name and Position from the Fund Oppenheimer funds(1)

Robert G. Avis $ $
Trustee

William A. Baker $ $
Audit and Review
Committee Ex-Officio
Member(2) and Trustee

Charles Conrad, Jr. $ $
Trustee(3)

Jon S. Fossel $ $
Trustee

Sam Freedman $ $
Audit and Review
Committee Member(2)
and Trustee

Raymond J. Kalinowski $ $
Audit and Review
Committee Member(2)
and Trustee

C. Howard Kast $ $
Audit and Review
Committee Chairman(2)
and Trustee

Robert M. Kirchner $ $
Trustee(3)

Ned M. Steel $ $
Trustee

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

(1) For the 1997 calendar year.
(2) Committee positions effective July 1, 1997
(3) Prior to July 1, 1997, Messrs. Conrad and Kirchner were also members of the
Audit and Review Committee.

Deferred Compensation Plan. 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 this 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 this plan will not materially
affect the Fund's assets, liabilities and net income per share. This 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 Trustees' deferred fee accounts.

Major Shareholders. As January 1, 1998, 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.

The Manager and Its Affiliates. The Manager is wholly-owned by Oppenheimer
Acquisition Corporation ("OAC"), a holding company controlled by Massachusetts
Mutual Life Insurance Company. OAC is also owned in part by certain of the
Manager's directors and officers, some of whom also serve as officers of the
Fund, and two of whom (Ms. Macaskill and Mr. Swain) serve as Trustees of the
Fund.

The Manager and the Fund 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. Compliance with the Code of Ethics is carefully monitored and
strictly enforced by the Manager.

o The Investment Advisory Agreement. The Investment Advisory Agreement
between the Manager and the Fund requires the Manager, at its expense, to
provide the Fund with adequate office space, facilities and equipment, and to
provide and supervise the activities of all administrative and clerical
personnel required to provide effective corporate administration for the Fund,
including 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.

Expenses not expressly assumed by the Manager under the Investment
Advisory Agreement or by the Distributor under the Distribution Agreement are
paid by the Fund. The Investment Advisory Agreement lists examples of expenses
paid by the Fund, the major categories of which 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. For the
Fund's fiscal years ended September 30,

1995, 1996, and 1997 the management fees paid by the Fund to the Manager were
$1,599,989, $2,529,645 and $____, respectively.

The Investment Advisory Agreement contains no expense limitation. However,
because of state regulations limiting the fund expenses that previously applied,
the Manager had voluntarily undertaken that the Fund's total expenses in any
fiscal year (including the investment advisory fee but exclusive of taxes,
interest, brokerage commissions, distribution plan payments and any
extraordinary non-recurring expenses, including litigation) would not exceed the
most stringent state regulatory limitation applicable to the Fund. Due to
changes in federal securities laws, such state regulations no longer apply and
the Manager's undertaking is therefore inapplicable and has been withdrawn.
During the Fund's last fiscal year, the Fund's expenses did not exceed the most
stringent state regulatory limit and the voluntary undertaking was not invoked.

The Investment Advisory Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties, or
reckless disregard of its obligations and duties under the Investment Advisory
Agreement, the Manager is not liable for any loss resulting from any good faith
errors or omissions in connection with any matters to which the Agreement
relates. The Investment Advisory Agreement permits the Manager to act as
investment advisor to any other person, firm or corporation.

o The Distributor. Under its Distribution Agreement with the Fund, the
Distributor acts as the Fund's principal underwriter in the continuous public
offering of the Fund's Class A, Class B, Class C and Class Y shares but is not
obligated to sell a specific number of shares. Expenses normally attributable to
sales (other than those paid under the Distribution and Service Plans, but
including advertising and the cost of printing and mailing prospectuses other
than those furnished to existing shareholders), are borne by the Distributor.
For the fiscal years ended September 30, 1995, 1996, and 1997, the aggregate
amount of sales charges on sales of the Fund's Class A shares were $2,605,966,
$2,342,696 and $________, respectively, of which $681,961, $631,567 and $ ____
was retained by the Distributor and an affiliated broker-dealer during each of
those respective years. Contingent deferred sales charge collected by the
Distributor on the Fund's Class B shares for fiscal years ended September 30,
1995, September 30, 1996 and September 30, 1997, totaled $170,089, $395,003 and
$_____, respectively. Contingent deferred sales charge collected by the
Distributor on the Fund's Class C shares for the period February 1, 1995
(commencement of the offering of those shares) through September 30, 1995 and
for fiscal years ended September 30, 1996 and September 30, 1997, totaled
$6,307, $49,546 and $_____, respectively. During fiscal year ended September 30,
1997, commissions paid to broker-dealers by the Distributor on sales of the
Fund's Class B shares totaled $_____ of which $_____ was paid to an affiliated
broker-dealer. During fiscal year ended September 30, 1997, commissions paid to
broker-dealers by the Distributor on sales of the Fund's Class C shares totaled
$_______ of which $_____ was paid to an affiliated broker-dealer. For additional
information about distribution of the Fund's shares and the expenses connected
with such activities, please refer to "Distribution and Service Plans," below.

o The Transfer Agent. OppenheimerFunds Services, the Fund's transfer agent,
is responsible for maintaining the Fund's shareholder registry and shareholder
accounting records, and for shareholder servicing and administrative functions.

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 Investment Advisory Agreement contains provisions
relating to the employment of broker-dealers ("brokers") to effect the Fund's
portfolio transactions. In doing so, the Manager is authorized by the Investment
Advisory Agreement to employ such broker-dealers, including "affiliated"
brokers, as that term is defined in the Investment Company Act, as may, in its
best judgment based on all relevant factors, implement the policy of the Fund to
obtain, at reasonable expense, the "best execution" (prompt and reliable
execution at the most favorable price obtainable) of such transactions. The
Manager need not seek competitive commission bidding, but is expected to
minimize the commissions paid to the extent consistent with the interest and
policies of the Fund as established by its Board of Trustees.

Under the Investment Advisory Agreement, the Manager is authorized to
select brokers 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 have charged, if a good faith determination is
made by the Manager and the commission is fair and reasonable in relation to the
services provided. Subject to the foregoing considerations, the Manager may also
consider sales of shares of the Fund and other investment companies managed by
the Manager or its affiliates as a factor in the selection of brokers for the
Fund's portfolio transactions.

Description of Brokerage Practices Followed by the Manager. Most purchases made
by the Fund are principal transactions at net prices, and the Fund incurs little
or no brokerage costs. Subject to the provisions of the Advisory Agreement, the
procedures and rules described above, allocations of brokerage are generally
made by the Manager's portfolio traders based upon recommendations from the
Manager's portfolio manager. In certain instances, portfolio managers may
directly place trades and allocate brokerage, also subject to the provisions of
the Investment Advisory Agreement and the procedures and rules described above.
In either case, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those for which an
exchange is the primary market are generally done with principals or market
makers. Brokerage commissions are paid primarily for effecting transactions in
listed securities or for certain fixed income agency transactions in the
secondary market and otherwise only if it appears likely that a better price or
execution can be obtained.

When the Fund engages in an option transaction, ordinarily the same broker
will be used for the purchase or sale of the option and any transaction in the
securities to which the option relates. When possible, concurrent orders to
purchase or sell the same security by more than one of the accounts managed by
the Manager and its affiliates are combined. The transactions effected pursuant
to such combined orders are averaged as to price and allocated in accordance
with the purchase or sale orders actually placed for each account.

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, and
investment research received for the commissions of those other accounts may be
useful both to the Fund and one or more of such other accounts. Such research,
which may be supplied by a third party at the instance of a broker, includes
information and analyses on particular companies and industries as well as
market or economic trends and portfolio strategy, receipt of 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 concessions on fixed price
offerings to obtain research, in the same manner as is permitted for agency
transactions. The Board also permits the Manager to use stated commissions on
secondary fixed-income trades to obtain research where the broker has
represented to the Manager that (i) the trade is not from 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 research services provided by brokers broaden the scope and supplement
the research activities of the Manager, by making available additional views for
consideration and comparisons, and enabling the Manager to obtain market
information for the valuation of securities held in the Fund's portfolio or
being considered for purchase. The Manager provides information as to the
commissions paid to brokers furnishing such services together with the Manager's
representation that the amount of such commissions was reasonably related to the
value or benefit of such services.

During the Fund's fiscal year ended September 30, 1997 the total brokerage
commissions paid by the Fund (not including any spreads or concessions on
principal transactions on a net trade basis) was $____. Of that amount, during
the same period, $____ was paid to brokers as commissions in return for research
services. The aggregate dollar amount of these transactions was $____. The
transactions giving rise to those commissions were allocated in accordance with
the Manager's internal allocation procedures.

Performance of the Fund

Yield and Total Return Information. From time to time the "standardized yield,"
"dividend yield," "average annual total return", "total return," and "total
return at net asset value" of an investment in a class of the Fund may be
advertised. An explanation of how yields and total returns are calculated for
each class and the components of those calculations is set forth below. The
Fund's maximum sales charge rate on Class A shares was higher prior to April 1,
1994, and actual investment performance would be affected by that change. No
performance information is presented below for Class Y shares since no Class Y
shares were publicly offered during fiscal year ended September 30, 1997.

The Fund's advertisement of its performance must, under applicable rules
of the Securities and Exchange Commission, include the average annual total
returns for each advertised class of shares of the Fund for the 1, 5 and 10-year
periods (or the life of the class, if less) as of the most recently ended
calendar quarter prior to the publication of the advertisement. This 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
such information as a basis for comparison with other investments. An investment
in the Fund is not insured; its yields and total returns and share prices are
not guaranteed and normally will fluctuate on a daily basis. When redeemed, an
investor's shares may be worth more or less than their original cost. Yields and
total returns for any given past period are not a prediction or representation
by the Fund of future yields or rates of return on its shares. The yields and
total returns of Class A, Class B and Class C shares of the Fund are affected by
portfolio quality, the type of investments the Fund holds and its operating
expenses allocated to a particular class.

o Yields

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

forth in rules adopted by the Securities and Exchange Commission designed to
assure uniformity in the way that all funds calculate their yields:

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

The symbols above represent the following factors:

a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense reimbursements)
c = the average daily number of shares of that class outstanding during the
30-day period that were entitled to receive dividends.
d = the maximum offering price per share of the class on the last day of
the period, using the current maximum sales charge rate adjusted for
undistributed net investment income.

The standardized yield for a 30-day period may differ from the yield for
other periods. The SEC formula assumes that the standardized yield for a 30-day
period occurs at a constant rate for a six-month period and is annualized at the
end of the six-month period. Additionally, because each class of shares is
subject to different expenses, it is likely that the standardized yields of the
Fund's classes of shares will differ for any 30-day period. For the 30-day
period ended September 30, 1997, the standardized yields for the Fund's Class A,
Class B and Class C shares were as follows:

Without Deducting With Sales
Sales Charge Charge Deducted
Class A % %
Class B % %
Class C % %

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

Dividend Yield = Dividends paid x 12
---------------------------------------------
Maximum Offering Price (payment date)

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

The dividend yields for the 30-day dividend period ended September 30,
1997, were as follows:

Without Deducting With Sales
Sales Charge Charge Deducted
Class A % %
Class B % N/A
Class C % N/A

o Total Return Information

o Average Annual Total Returns. 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") to achieve an Ending Redeemable Value ("ERV") of
that investment according to the following formula:

( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )

o Cumulative Total Returns. 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

-2-

<PAGE>

In calculating total returns for Class A shares, the current maximum sales
charge of 3.50% (as a percentage of the offering price) is deducted from the
initial investment ("P") (unless the return is shown at net asset value, as
discussed below). For Class B shares, the payment of the current contingent
deferred sales charge (4.0% for the first year, 3.0% for the second year, 2.0%
for the third and fourth years, 1.0% in the fifth year and none thereafter) is
applied to the investment result for the time period shown (unless the total
return is shown at net asset value, as described below). For Class C shares, the
1.0% contingent deferred sales charge is applied to the investment result for
the one-year period (or less). Total returns also assume that all dividends and
capital gains distributions during the period are reinvested to buy additional
shares at net asset value per share, and that the investment is redeemed at the
end of the period.

The "average annual total returns" on an investment in Class A shares of
the Fund for the one year, five year and ten year periods ended September 30,
1996 were 5.54%, 6.31% and 7.92%, respectively.. The cumulative "total return"
on Class A shares for the period from March 10, 1986 (inception of the Fund)
through September 30, 1996 was 114.28%. For the fiscal year ended September 30,
1996 and the period from May 3, 1993 (the date Class B shares were first
publicly offered) through September 30, 1996, the average annual total returns
on an investment in Class B shares of the Fund were 4.74% and 4.25%,
respectively. The cumulative total return on an investment in Class B shares of
the Fund for the period from May 3, 1993 through September 30, 1996 was 15.23%.
For the fiscal year ended September 30, 1996 and the period from February 1,
1995 (the date Class C shares were first publicly offered), the average annual
total returns on an investment in Class C shares of the Fund were 4.71% and
6.15%, respectively. The cumulative total return on an investment in Class C
shares of the Fund for the period from February 1, 1995 to September 30, 1996
was 10.44%.

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

The average annual total returns at net asset value on an investment in
Class A shares of the Fund for the one and five-year periods ended September 30,
1997 and for the period from March 10, 1986 to September 30, 1997 were ___%,
___% and ___%, respectively. The average annual total returns at net asset value
on an investment in Class B shares of the Fund for the fiscal year ended
September 30, 1997 and for the period from May 3, 1993 to September 30, 1997
were ____% and ____%, respectively. The cumulative "total returns at net asset
value" on the Fund's Class A shares for the period from March 10, 1986 to
September 30, 1997, was _____%. The cumulative total return at net asset value
on the Fund's Class B shares for the period from May 3, 1993 through September
30, 1997 was _____%. The cumulative total return at net asset value on the
Fund's Class C shares for the period from February 1, 1995 through September 30,
1997 was ____%.

Total return information may be useful to investors in reviewing the
performance of the

Fund's Class A, Class B, Class C or Class Y shares. However, when comparing
total return of an investment in each class of shares of the Fund with that of
other alternatives, investors should understand that as the Fund invests in
collateralized mortgage obligations, its shares are subject to greater market
risks than shares of funds having more conservative investment policies and that
the Fund is designed for investors who are willing to accept a degree of risk of
loss in hopes of realizing greater gains.

Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A, Class B, Class C or Class Y shares by Lipper Analytical
Services, Inc. ("Lipper"), 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
based on categories relating to investment objectives. The performance of the
Fund's classes are ranked against (i) all other funds, excluding money market
funds, (ii) all other short-term U.S. Government funds, and (iii) all other U.S.
Government funds in a specific size category. The Lipper performance rankings
are based on total returns that include the reinvestment of capital gains
distributions and income dividends but does not take sales charges or taxes into
consideration.

From time to time the Fund may publish the star ranking of the performance
of its Class A, Class B, Class C or Class Y 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, municipal bond funds, based on risk-adjusted total
investment returns. The Fund is ranked among taxable bond funds. 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%), 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 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.

The total return on an investment made in Class A, Class B, Class C or
Class Y shares of the Fund may also be compared with the performance for the
same period of: (1) the Lehman Brothers

U.S. Government Bond Index, an unmanaged index including all U.S. Treasury
issues, publicly-issued debt of U.S. Government agencies and quasi-public
corporations and U.S. Government- guaranteed corporate debt that is widely
regarded as a measure of the performance of the U.S.

Government bond market, (2) the Lehman Brothers 1-3 Year Government Bond Index,
an unmanaged sector index of U.S. Treasury issues, publicly-issued debt of U.S.
Government agencies and quasi-public corporations and U.S. Government-guaranteed
corporate debt with maturities of one to three years, and (3) the Consumer Price
Index, which is generally considered to be a measure of inflation. The foregoing
bond indices include a factor for the reinvestment of interest but do not
reflect expenses or taxes. Other indices may provide useful comparisons. The
performance of the Fund's Class A, Class B, Class C or Class Y shares may also
be compared in publications to (i) the performance of various market indices or
other investments for which reliable performance data is available, and (ii) to
averages, performance rankings or other benchmarks prepared by recognized mutual
fund statistical services.

From time to time the Fund may also include in its advertisements and
sales literature performance information about the Fund or rankings of the
Fund's performance cited in newspapers
or periodicals, such as The New York Times. These articles may include
quotations of performance from other sources, such as Lipper or Morningstar.

From time to time, the Fund's Manager may publish rankings or ratings of
the Manager (or the Transfer Agent), by independent third-parties, on the
investor services provided by them to shareholders of the Oppenheimer funds,
other than the performance rankings of the Oppenheimer funds themselves. These
ratings or rankings of shareholder/investor services by third parties may
compare the Oppenheimer funds services to those of other mutual fund families
selected by the rating or ranking services, and may be based upon the opinions
of the rating or ranking service itself, using its own research or judgment, or
based upon surveys of investors, brokers, shareholders or others. in relation to
other equity funds.

When comparing yield, total return and investment risk of an investment in
Class A, Class B or Class C shares of the Fund with other investments, investors
should understand that certain other investments have different risk
characteristics than an investment in shares of the Fund. For example,
certificates of deposit may have fixed rates of return and may be insured as to
principal and interest by the FDIC, while the Fund's returns will fluctuate and
its share values and returns are not guaranteed. U.S. Treasury securities are
guaranteed as to principal and interest by the full faith and credit of the U.S.
government.

Distribution and Service Plans

The Fund has adopted a Service Plan for Class A Shares and Distribution and
Service Plans for Class B and Class C shares of the Fund under Rule 12b-1 of the
Investment Company Act, pursuant to which the Fund will compensate the
Distributor in connection with the distribution and/or servicing of the shares
of that class, as described in the Prospectus. No such Plan has been adopted for
Class Y shares. Each Plan has been approved by a vote of (i) the Board of
Trustees of the Fund, including a majority of the Independent Trustees, cast in
person at a meeting called for the purpose of voting on that Plan, and (ii) the
holders of a "majority" (as defined in the Investment Company Act) of the shares
of each class.

In addition, under the Plans, the Manager and the Distributor, in their
sole discretion, from time to time may use their own resources (which, in the
case of the Manager, may include profits from the advisory fee it receives from
the Fund) to make payments to brokers, dealers or other financial institutions
(each is referred to as a "Recipient" under the Plans) for distribution and
administrative services they perform, and those payments are at no cost to the
Fund. The Distributor and the Manager may, in their sole discretion increase or
decrease the amount of payments they make to Recipients from their own
resources.

Unless terminated as described below, each Plan continues in effect from
year to year but only as long as such continuance is specifically approved at
least annually by the Fund's Board of Trustees including its Independent
Trustees by a vote cast in person at a meeting called for the purpose of voting
on such continuance. Each 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. No Plan may be amended to increase materially the amount of
payments to be made unless such amendment is approved by shareholders of the
class affected by the amendment. In addition, because Class B shares of the Fund
automatically convert into Class A shares after six years, the Fund is required
by a Securities and Exchange Commission rule to obtain the approval of Class B
as well as Class A shareholders for a proposed amendment to the Class A Plan
that would materially increase payments under the Class A Plan. Such approval
must be by a "majority" of the Class A and Class B shares (as defined in the
Investment Company Act), voting separately by class. All material amendments
must be approved by the Board and the Independent Trustees.

While the Plans are in effect, the Treasurer of the Fund is to provide
separate written reports to the Fund's Board of Trustees at least quarterly for
its review, detailing the amount of all payments made pursuant to each Plan, the
purpose for which the payments were made and the identity of each Recipient that
received any such payment and the purpose of the payments. Those reports,
including the allocations on which they are based, will be subject to the review
and approval of the Independent Trustees in the exercise of their fiduciary
duty. Each Plan further provides 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 such selection and nomination if the final
decision on any such selection or nomination is approved by a majority of the
Independent Trustees.

Under the Plans, no payment will be made to any Recipient in any quarter
if the aggregate net asset value of all Fund shares held by the Recipient for
itself and its customers did not exceed a minimum amount, if any, that may be
determined from time to time by a majority of the Fund's Independent Trustees.
Initially, the Board of Trustees has set the fee at the maximum rate and set no
minimum amount. Any unreimbursed expenses incurred by the Distributor with
respect to Class A shares for any fiscal quarter by the Distributor may not be
recovered under the Class A Plan in subsequent fiscal quarters. Payments
received by the Distributor under the Plan for Class A shares will not be used
to pay any interest expense, carrying charges, or other financial costs, or
allocation of overhead by the Distributor.

For the fiscal year ended September 30, 1997, payments under the Class A
Plan totaled $_____, all of which was paid by the Distributor to Recipients,
including $_____ paid to an affiliate of the Distributor.

The Class B and Class C Plans allow the service fee payments to be paid by
the Distributor to Recipients in advance for the first year Class B and Class C
shares are outstanding, and thereafter on a quarterly basis, as described in the
Prospectus. The advance payment is based on the net asset value of the Class B
and Class C shares sold. An exchange of shares does not entitle the Recipient to
an advance payment of the service fee. In the event Class B or Class C shares
are redeemed during the first year such shares are outstanding, the Recipient
will be obligated to repay a pro rata portion of the advance of the service fee
payment to the Distributor.

Although the Class B and the Class C Plans permit the Distributor to
retain both the asset-based sales charges and the service fee, or to pay
Recipients the service fee on a quarterly basis, without payment in advance, the
Distributor presently intends to pay the service fee to Recipients in the manner
described above. A minimum holding period may be established from time to time
under the Class B Plan and the Class C Plan by the Board. Initially, the Board
has set no minimum holding period. All payments under the Class B Plan and the
Class C Plan are subject to the limitations imposed by the Conduct Rules of the
National Association of Securities Dealers, Inc. The Distributor anticipates
that it will take a number of years for it to recoup (from the Fund's payments
to the Distributor under the Class B or Class C Plan and from contingent
deferred sales charges collected on redeemed Class B or Class C shares) the
sales commissions paid to authorized brokers or dealers. Payments under the
Class B Plan during the fiscal year ended September 30, 1997 totaled $______ of
which the Distributor paid $_____ to an affiliated broker-dealer and retained
$______ as reimbursement for Class B sales commissions and service fee advances,
as well as financing costs. Payments made under the Class C Plan for fiscal year
ended September 30, 1997 totaled $______ of which the Distributor paid $______
to an affiliated broker-dealer and retained $_____ as reimbursement for Class C
sales commissions and service fee advances, as well as financing costs.

Asset-based sales charge payments are designed to permit an investor to
purchase shares of the Fund without the assessment of a front-end sales load and
at the same time permit the Distributor to compensate brokers and dealers in
connection with the sale of Class B and Class C shares of the Fund. The Class B
and Class C Plans provide for the Distributor to be compensated at a flat rate
whether the Distributor's distribution expenses are more or less than the
amounts paid by the Fund during that period. Such payments are made in
recognition that the Distributor (i) pays sales commissions to authorized
brokers and dealers at the time of sale, (ii) may finance such commissions
and/or the advance of the service fee payment to Recipients under those Plans or
provide such financing from its own resources, or from an affiliate, (iii)
employs personnel to support distribution of shares, and (iv) 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.

ABOUT YOUR ACCOUNT

How To Buy Shares

Alternative Sales Arrangements - Class A, Class B and Class C Shares. The
availability of three classes of shares permits an investor to choose the method
of purchasing shares that is more beneficial to the investor depending on the
amount of the purchase, the length of time the investor expects to hold shares
and other relevant circumstances. Investors should understand that the purpose
and function of the deferred sales charge and asset-based sales charge with
respect to Class B and Class C shares are the same as those of the initial sales
charge with respect to Class A shares. Any salesperson or other person entitled
to receive compensation for selling Fund shares may receive different
compensation with respect to one class of shares than the other. The Distributor
will not accept any order for $500,000 or $1 million or more of Class B or Class
C shares, respectively, on behalf of a single investor (not including dealer
"street name" or omnibus accounts) because generally it will be more
advantageous for that investor to purchase Class A shares of the Fund instead. A
fourth Class of shares may be purchased only by certain institutional investors
at net asset value per share (the "Class Y shares").

The four classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different shareholder
privileges and features. The net income attributable to Class B and Class C
shares and the dividends payable on Class B and Class C shares will be reduced
by incremental expenses borne solely by that class, including the asset-based
sales charge to which Class B and Class C shares are subject.

The conversion of Class B shares to Class A shares after six years is
subject to the continuing availability of a private letter ruling from the
Internal Revenue Service, or an opinion of counsel or tax advisor, to the effect
that the conversion of Class B shares does not constitute a taxable event for
the holder under Federal income tax law. If such a revenue ruling or opinion is
no longer available, the automatic conversion feature may be suspended, in which
event no further conversions of Class B shares would occur while such 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 holder, and absent such exchange, Class B shares might continue to
be subject to the asset-based sales charge for longer than six years.

The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B, Class C and Class Y shares
recognizes two types of expenses. General expenses that do not pertain
specifically to any class are allocated pro rata to the shares of each class,
based on the percentage of the net assets of such class to the Fund's total net
assets, and then equally to each outstanding share within a given class. Such
general expenses include (i) management fees, (ii) legal, bookkeeping and audit
fees, (iii) printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current
shareholders, (iv) fees to unaffiliated Trustees, (v) custodian expenses, (vi)
share issuance costs, (vii) organization and start-up costs, (viii) interest,
taxes and brokerage commissions, and (ix) non-recurring expenses, such as
litigation costs. Other expenses that are directly attributable to a class are
allocated equally to each outstanding share within that class. Such expenses
include (i) Distribution and/or Service Plan fees, (ii) incremental transfer and
shareholder servicing agent fees and expenses, (iii) registration fees and (iv)
shareholder meeting expenses, to the extent that such expenses pertain to a
specific class rather than to the Fund as a whole. Determination of Net Asset
Values Per Share. The net asset values per share of Class A, Class B, Class C
and Class Y shares of the Fund are determined as of the close of business of The
New York Stock Exchange on each day the Exchange is open by dividing the value
of the Fund's net assets attributable to that class by the number of shares of
that class outstanding. The Exchange normally closes at 4:00 P.M., New York
time, but may close earlier on some days (for example, in case of weather
emergencies or on days falling before a holiday). The Exchange's most recent
annual holiday schedule (which is subject to change) states that it will close
New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day;
it may also close on other days. Trading may occur in U.S. Government Securities
at times when the Exchange is closed (including weekends and holidays or after
4:00 P.M., on a regular business day). Because the net asset values of the Fund
will not be calculated at such times, if securities held in the Fund's portfolio
are traded at such times, the net asset values per share of Class A, Class B and
Class C shares of the Fund may be significantly affected on such days when
shareholders do not have the ability to purchase or redeem shares.

The Fund's Board of Trustees has established procedures for the valuation
of the Fund's securities, generally as follows: (i) equity securities traded on
a U.S. securities exchange or on NASDAQ for which last sale information is
regularly reported are valued at the last reported sale price on their primary
exchange or NASDAQ that day (or, in the absence of sales that day, at values
based on the last sale prices of the preceding trading day or closing "bid"
prices that day); (ii) securities traded on a foreign securities exchange are
valued generally at the last sales price available to the pricing service
approved by the Fund's Board of Trustees or to the Manager as reported by the
principal exchange on which the security is traded at its last trading session
on or immediately preceding the valuation date, or at the mean between "bid" and
"asked" prices obtained from the principal exchange or two active market makers
in the security on the basis of reasonable inquiry; (iii) long-term debt
securities having a remaining maturity in excess of 60 days are valued based on
the mean between the "bid" and "ask" 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;
(iv) debt instruments having a maturity of more than 397 days when issued, and
non-money market type instruments having a maturity of 397 days or less when
issued, which have a remaining maturity of 60 days or less are valued at the
mean between the "bid" and "ask" 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; (v) money
market-type 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 debt instruments held by a money market fund that have a remaining
maturity of 397 days or less, shall be valued at cost, adjusted for amortization
of premiums and accretion of discounts; and (vi) 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 (see (ii), (iii) and (iv)
above), the security may be priced at the mean between the "bid" and "ask"
prices provided by a single active market maker (which in certain cases may be
the "bid" price if no "ask" price is available).

In the case of U.S. Government Securities and mortgage-backed securities,
where last sale

information is not generally available, such pricing procedures may include
"matrix" comparisons to the prices for comparable instruments on the basis of
quality, yield, maturity and other special factors involved. The Manager may use
pricing services approved by the Board of Trustees to price U.S. Government
Securities or mortgage-backed securities for which last sale information is not
generally available. The Manager will monitor the accuracy of such pricing
services, which may include comparing prices used for portfolio evaluation to
actual sales prices of selected securities.

Puts, calls and Futures are valued at the last sales 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, value shall be the last sale price on
the preceding trading day if it is within the spread of the closing "bid" and
"ask" prices on the principal exchange or on NASDAQ on the valuation date, or,
if not, 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 at the mean between "bid" and "ask"
prices obtained by the Manager from two active market makers (which in certain
cases may be the "bid" price if no "ask" price is available).

AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $25.00. Shares will be purchased on the regular business day the
Distributor is instructed to initiate the Automated Clearing House transfer to
buy the shares. Dividends will begin to accrue on shares purchased by the
proceeds of ACH transfers on the business day the Fund receives Federal Funds
for such purchase through the ACH system before the close of The New York Stock
Exchange. The Exchange normally closes at 4:00 P.M., but may close earlier on
certain days. If the Federal Funds are received on a business day after the
close of the Exchange, the shares will be purchased and dividends will begin to
accrue on the next regular business day. The proceeds of ACH transfers are
normally received by the Fund three days after the transfers are initiated. 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 the Prospectus
because the Distributor or broker-dealer incurs little or no selling expenses.
The term "immediate family" refers to one's spouse, children, grandchildren,
grandparents, parents, parents-in- law, siblings, sons- and daughters-in-law, a
sibling's spouse, a spouse's siblings, aunts, uncles, nieces and nephews.
Relations by virtue of a remarriage (step-children, step-parents, etc.) are
included.

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

Limited Term New York Municipal Fund
Oppenheimer Bond Fund
Oppenheimer Bond Fund for Growth
Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Champion Income Fund
Oppenheimer Developing Markets Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer Disciplined Value Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer Equity Income Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Global Securities Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer Growth & Income Fund
Oppenheimer High Income Fund
Oppenheimer High Yield Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer International Bond Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Main Street Income & Growth Fund
Oppenheimer MidCap Fund
Oppenheimer Money Fund
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer New York Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Real Asset Fund
Oppenheimer Strategic Bond Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer U.S. Government Trust
Oppenheimer World Bond Fund
Panorama Series Fund Inc.
Rochester Fund Municipals
The New York Tax-Exempt Income Fund, Inc.

the following "Money Market Funds":

There is an initial sales charge on the purchase of Class A shares of each
of the Oppenheimer funds except Money Market Funds (under certain circumstances
described herein, redemption proceeds of Money Market Fund shares may be subject
to a CDSC).

o Letters of Intent. A Letter of Intent (referred to as a "Letter") is an
investor's statement in writing to the Distributor of the intention to purchase
Class A shares of the Fund or Class A and Class B shares of the Fund and other
Oppenheimer funds during a 13-month period (the "Letter of Intent period"),
which may, at the investor's request, 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 public offering price applicable to a single lump-sum
purchase of shares in the intended purchase amount as described in the
Prospectus.

In submitting a Letter, the investor makes no commitment to purchase
shares, but 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, as set forth in "Terms of Escrow," below
(as those terms may be amended 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 such Letter of Intent, and if such
terms are amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.

For purchases of shares of the Fund and other Oppenheimer funds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the Transfer
Agent will not hold shares in escrow. If the intended purchase amount under the
Letter 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.

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 amount and exceed the amount needed to qualify for the next
sales charge rate reduction set forth in the applicable prospectus, the sales
charges paid will be adjusted to the lower rate, but 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.

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.

o 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 to 5% of the
intended purchase amount specified in the Letter shall be held in escrow by the
Transfer Agent. For example, if the intended purchase amount is $50,000, the
escrow shall be shares valued in the amount of $2,500 (computed at the public
offering price adjusted for a $50,000 purchase). Any dividends and capital gains
distributions on the escrowed shares will be credited to the investor's account.

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

(3) If, at the end of the thirteen-month Letter of Intent period the total
purchases pursuant to the Letter are less than the intended 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. Such sales charge adjustment will apply to any
shares redeemed prior to the completion of the Letter. If such 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 acquired subject to a contingent deferred sales
charge, and (c) Class A shares or Class B shares acquired in exchange for either
(i) 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 (ii) 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 from a bank account, a
check (minimum $25) for the initial purchase must accompany the application.
Shares purchased by Asset Builder Plan payments from bank accounts are subject
to the redemption restrictions for recent purchases described in "How To Sell
Shares," in the Prospectus. Asset Builder Plans also enable shareholders of
Oppenheimer Cash Reserves to use those accounts for monthly automatic purchases
of shares of up to four other Oppenheimer funds. If you make payments from your
bank account to purchase shares of the Fund, your bank account will be
automatically debited normally four to five business days prior to the
investment dates selected in the Account Application. Neither the Distributor,
the Transfer Agent nor the Fund shall be responsible for any delays in
purchasing shares resulting from delays in ACH transmission

There is a front-end sales charge on the purchase of Class A shares of
certain Oppenheimer funds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be obtained
from the Transfer Agent, completed and returned, and a prospectus of the
selected fund(s) should be obtained from the Distributor or your financial
advisor before initiating Asset Builder payments. The amount of the Asset
Builder investment may be changed or the automatic investments may be terminated
at any time by writing to the Transfer Agent. A reasonable period (approximately
15 days) is required after the Transfer Agent's receipt of such instructions to
implement them. The Fund reserves the right to amend, suspend, or discontinue
offering such plans at any time without prior notice.

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.

Retirement Plans. In describing certain types of employee benefit plans that may
purchase Class A shares without being subject to the Class A contingent deferred
sales charge, the term "employee benefit plan" means any plan or arrangement,
whether or not "qualified" under the Internal Revenue Code, including, medical
savings accounts, payroll deduction plans or similar plans in which Class A
shares are purchased by a fiduciary or other person for the account of
participants who are employees of a single employer or of affiliated employers,
if the Fund account is registered in the name of the fiduciary or other person
for the benefit of participants in the plan.

The term "group retirement plan" means any qualified or non-qualified
retirement plan (including 457 plans, SEPs, SARSEPs, 403(b) plans, and SIMPLE
plans) for employees of a corporation or a 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
the plan purchase Class A shares of the Fund through a single investment dealer,
broker or other financial institution designated by the group.

How to Sell Shares

Information on how to sell shares of the Fund is stated in the Prospectus. The
information below supplements the terms and conditions for redemptions set forth
in the Prospectus.

o Check Writing. When a check is presented to the Bank for clearance, the
Bank will ask the Fund to redeem a sufficient number of full and fractional
shares in the shareholder's account to cover the amount of the check. This
enables the shareholder to continue receiving dividends on those shares until
the check is presented to the Fund. Checks may not be presented for payment at
the offices of the Bank or the Fund's Custodian. This limitation does not affect
the use of checks for the payment of bills or to obtain cash at other banks. The
Fund reserves the right to amend, suspend or discontinue offering check writing
privileges at any time without prior notice.

By choosing the Checkwriting privilege, whether you do so by signing the
Account Application or by completing a Checkwriting card, the individuals
signing (1) represent that they are either the registered owner(s) of the shares
of the Fund, or are an officer, general partner, trustee or other fiduciary or
agent, as applicable, duly authorized to act on behalf of such registered
owner(s); (2) authorize the Fund, its Transfer Agent and any bank through which
the Fund's drafts ("checks") are payable (the"Bank"), to pay all checks drawn on
the Fund account of such person(s) and to effect a redemption of sufficient
shares in that account to cover payment of such checks; (3) specifically
acknowledge(s) that if you choose to permit a single signature on checks drawn
against joint accounts, or accounts for corporations, partnerships, trusts or
other entities, the signature of any one signatory on a check will be sufficient
to authorize payment of that check and redemption from an account even if that
account is registered in the names of more than one person or even if more than
one authorized signature appears on the Checkwriting card or the Application, as
applicable; and (4) understand(s) that Checkwriting privilege may be terminated
or amended at any time by the Fund and/or the Bank and neither shall incur any
liability for such amendment or termination or for effecting redemptions to pay
checks reasonably believed to be genuine, or for returning or not paying checks
which have not been accepted for any reason.

o Involuntary Redemptions. The Fund's Board of Trustees has the right to
cause the involuntary redemption of the shares held in any account if the
aggregate net asset value of those shares is less than $200 or such lesser
amount as the Board may fix. The Board of Trustees will not cause the
involuntary redemption of shares in an account if the aggregate net asset value
of the shares has fallen below the stated minimum solely as a result of market
fluctuations. Should the Board elect to exercise this right, it may also fix, in
accordance with the Investment Company Act, the requirements for any notice to
be given to the shareholders in question (not less than 30 days), or the Board
may set requirements for granting permission to the shareholder to increase the
investment, and set other terms and conditions so that the shares would not be
involuntarily redeemed.

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

o Payments "In Kind." The Prospectus states that payment for shares
tendered for redemption is ordinarily made in cash. However, if the Board of
Trustees of the Fund determines 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, the Fund may pay the redemption
proceeds in whole or in part by a distribution "in kind" of securities from the
portfolio of the Fund, in lieu of cash, in conformity with applicable rules of
the Securities and Exchange Commission. The Fund has elected to be governed by
Rule 18f-1 under the Investment Company Act, pursuant to which 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 method of valuing securities
used to make redemptions in kind will be the same as the method the Fund uses to
value its portfolio securities described above under "Determination of Net Asset
Values Per Share" and such valuation will be made as of the time the redemption
price is determined.

Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of (i) Class A shares that you
purchased subject to an initial sales charge, or (ii) Class B shares on which
you paid a contingent deferred sales charge when you redeemed them, without
sales charge. This privilege does not apply to Class C shares or Class Y shares.
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 below, at the net asset value next computed after the
Transfer Agent receives the reinvestment order. The shareholder must ask the
Distributor for that privilege at the time of reinvestment. 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. 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.

Transfers of Shares. Shares are not subject to the payment of a contingent
deferred sales charge of either class at the time of transfer to the name of
another person or entity (whether the transfer occurs by absolute assignment,
gift or bequest, not involving, directly or indirectly, a public sale).
The transferred shares will remain subject to the contingent deferred sales
charge, 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 and Class C
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: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if the
distribution is premature; and (iii) conform to the requirements of the plan and
the Fund's other redemption requirements. Participants (other than self-employed
persons maintaining a plan account in their own name) in
OppenheimerFunds-sponsored prototype pension or profit-sharing or 401(k) plans
may not directly redeem or exchange shares held for their account under those
plans. The employer or plan administrator 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 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, the
Trustee 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. The shareholder should contact the
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
the order placed by the dealer or broker, except that 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
customer prior to the time the Exchange closes (normally, that is 4:00 P.M., but
may be earlier on some days) and the order was 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, with the signature(s) of the registered owners guaranteed on the
redemption document 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
(minimum $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 and sent
to the address of record for the account (and if the address has not 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 OppenheimerFunds
New Account Application or signature-guaranteed instructions. Shares are
normally redeemed pursuant to an Automatic Withdrawal Plan three business days
before the date you select in the Account Application. IF a contingent deferred
sales charge applies to the redemptions, the amount of the check or payment will
be reduces accordingly. The Fund cannot guarantee receipt of the payment on the
date requested and reserves the right to amend, suspend or discontinue offering
such 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 Class B and Class C
contingent deferred sales charges on such withdrawals (except where the Class B
and Class C contingent deferred sales charge is waived as described in the
Prospectus under "Class B Contingent Deferred Sales Charge" or in "Class C
Contingent Deferred Sales Charge").

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

o Automatic Exchange Plans. Shareholders can authorize the Transfer Agent
(on the OppenheimerFunds Application or signature-guaranteed instructions) 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. 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.

o Automatic Withdrawal Plans. Fund shares will be redeemed as necessary to
meet withdrawal payments. Shares acquired without a sales charge will be
redeemed first and thereafter 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 withdrawal plans should not be considered as a yield or
income on your investment.

The Transfer Agent will administer the investor's Automatic Withdrawal
Plan (the "Plan") as agent for the investor (the "Planholder") who executed the
Plan authorization and application submitted to the Transfer Agent. The Transfer
Agent and the Fund shall incur no liability to the Planholder for any action
taken or omitted by the Transfer Agent and the Fund in good faith to administer
the Plan. 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.

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

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 in 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 (in proper form in accordance with
the requirements of the then-current Prospectus of the Fund) to redeem all, or
any part of, the shares held under the Plan. In that case, the Transfer Agent
will redeem the number of shares requested at the net asset value per share in
effect in accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.

The Plan may be terminated at any time by the Planholder by writing to the
Transfer Agent. A Plan may also be terminated at any time by the Transfer Agent
upon receiving directions to that effect from the Fund. The Transfer Agent will
also terminate a Plan upon receipt of evidence satisfactory to it of the death
or legal incapacity of the Planholder. Upon termination of a Plan by the
Transfer Agent or the Fund, shares that have not been redeemed from the account
will be held in uncertificated form in the name of the Planholder, and the
account will continue as a dividend- reinvestment, uncertificated account unless
and until proper instructions are received from the Planholder or his or her
executor or guardian, or other 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 because of exhaustion of uncertificated shares needed
to continue payments. 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 the Oppenheimer funds that have
a single class without a class designation are deemed "Class A" shares for this
purpose. All of the Oppenheimer funds offer Class A, B and C shares except
Oppenheimer Money Market Fund, Inc., Centennial Tax Exempt Trust, Centennial
Government Trust, Centennial New York Tax Exempt Trust, Centennial California
Tax Exempt Trust, Centennial America Fund, L.P. and Daily Cash Accumulation Fund
Inc., which only offer Class A shares and Oppenheimer Main Street California Tax
Exempt Fund which only offers 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). A current list showing which funds
offer which class can be obtained by calling the Distributor at 1-800-525-7048.

For accounts established on or before March 8, 1996 holding Class M shares
of Oppenheimer Bond Fund for Growth, Class M shares can be exchanged only for
Class A shares of other Oppenheimer funds. Exchanges to Class M shares of
Oppenheimer Bond Fund for Growth are permitted from Class A shares of
Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves that were
acquired by exchange from Class M shares. Otherwise no exchanges of any class of
any Oppenheimer fund into Class M shares are permitted.

Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any Money Market Fund. 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 (or, if applicable, may be
used to purchase shares of Oppenheimer funds subject to a contingent deferred
sales charge).

Shares of this Fund acquired by reinvestment of dividends or distributions
from any other of the Oppenheimer funds (except Oppenheimer Cash Reserves) 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.

No contingent deferred sales charge is imposed on exchanges of shares of
any class purchased subject to a contingent deferred sales charge. However,
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 12 months 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,
whichever is applicable. 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,
and, if requested, must supply proof of entitlement to this privilege. 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 and Class C contingent deferred sales charge will be followed in
determining the order in which the shares are exchanged. Shareholders should
take into account the effect of any exchange on the applicability and rate of
any contingent deferred sales charge that might be imposed in the subsequent
redemption of remaining shares. Shareholders owning shares of more than one
class must specify whether they intend to exchange Class A, Class B or Class C
shares.

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. 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.

When exchanging shares by telephone, the shareholder must either have an
existing account in, or obtain and acknowledge receipt of a prospectus of, the
fund to which the exchange is to be made. For full or partial exchanges of an
account made by telephone, any special account features such as Asset Builder
Plans, Automatic Withdrawal Plans and retirement plan contributions will be
switched to the new account unless the Transfer Agent is instructed otherwise.
If all telephone lines are busy (which might occur, for example, during periods
of substantial market fluctuations), shareholders might not be able to request
exchanges by telephone and would have to submit written exchange requests.

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

Dividends, Capital Gains and Taxes

Dividends and Distributions. Dividends will be payable on shares held of record
at the time of the previous determination of net asset value, or as otherwise
described in "How to Buy Shares." Daily dividends on newly purchased shares will
not be declared or paid until such time as Federal Funds (funds credited to a
member bank's account at the Federal Reserve Bank) are available from the
purchase payment for such shares. Normally, purchase checks received from
investors are converted to Federal Funds on the next business day. Dividends
will be declared on shares repurchased by a dealer or broker for three business
days following the trade date (i.e., to and including the day prior to
settlement of the repurchase). If all shares in an account are redeemed, all
dividends accrued on shares of the same class in the account will be paid
together with the redemption proceeds.

Dividends, distributions and the 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.,
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.

The amount of a class' distributions may 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, as described in "Alternative
Sales Arrangements -- Class A, Class B, Class C and Class Y Shares" above.
Dividends are calculated in the same manner, at the same time and on the same
day for shares of each class. However, dividends on Class B and Class C shares
are expected to be lower than dividends on Class A and Class Y shares as a
result of the asset-based sales charges on Class B and Class C shares, and will
also differ in amount as a consequence of any difference in net asset value
between the classes.

If prior distributions must be re-characterized at the end of the fiscal
year as a result of the effect of the Fund's investment policies, shareholders
may have a non-taxable return of capital, which will be identified in notices to
shareholders. A return of capital is a return of a shareholder's original
investment and is therefore not to be considered a taxable distribution. There
is no fixed dividend rate and there can be no assurance as to the payment of any
dividends or the realization of any capital gains.

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 and intends to qualify in future
years, but reserves the right not to qualify. The Internal Revenue Code contains
a number of complex tests to determine whether the Fund will qualify, and the
Fund might not meet those tests in a particular year. If it does not qualify,
the Fund will be treated for tax purposes as an ordinary corporation and will
receive no tax deduction for payments of dividends and distributions made to
shareholders.

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, or
else the Fund must pay an excise tax on the amounts not distributed. While it is
presently anticipated that the Fund will meet those requirements, the Fund's
Board and the Manager might determine in a particular year that it would be in
the best interest 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.

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 in "Reduced Sales Charges"
above, at net asset value without sales charge. To elect this option, the
shareholder must notify the Transfer Agent in writing and either have an
existing account in the fund selected for reinvestment or must obtain a
prospectus for that fund and an application from the Transfer Agent to establish
an account. The investment will be made at net asset value per share in effect
at the close of business on the payable date of the dividend or distribution.
Dividends and/or distributions from certain of the Oppenheimer funds may be
invested in shares of this Fund on the same basis.

Additional Information About The Fund

The Custodian. Citibank, N.A. is the Custodian of the Fund's assets. The
Custodian's responsibilities include safeguarding and controlling the Fund's
portfolio securities, collecting income on the portfolio securities and handling
the delivery of such securities to and from the Fund. The Manager has
represented to the Fund that the banking relationships between the Manager and
with the Custodian have been and will continue to be unrelated to and unaffected
by the relationship between the Fund and the Custodian. 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. The independent auditors of the Fund 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.

-3-

<PAGE>

Appendix A

Industry Classifications

Corporate Industry Classifications

Aerospace/Defense
Air Transportation
Auto Parts
Distribution
Automotive
Bank Holding Companies
Banks Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental

Food
Gas Utilities
Gold

Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Information Technology
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
Wireless Services

A-1

<PAGE>

Investment Advisor
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 and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048

Custodian of Portfolio Securities
Citibank, N.A.
399 Park Avenue
New York, New York 10043

Independent Auditors

Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202

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

PXO855.001.0198

A-2

<PAGE>

OPPENHEIMER LIMITED-TERM GOVERNMENT FUND

FORM N-1A

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

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

(a) Financial Statements

(1) Financial Highlights (see Parts A and B): To be
filed by amendment

(2) Independent Auditors' Report (see Part B): To be
filed by amendment

(3) Statement of Investments (see Part B): To be filed by
amendment

(4) Statement of Assets and Liabilities (see Part B): To
be filed by amendment

(5) Statement of Operations (see Part B): To be filed by
amendment

(6) Statements of Changes in Net Assets (see Part B): To
be filed by amendment

(7) Notes to Financial Statements (see Part B): To be filed by
amendment

(b) Exhibits

(1) Amended and Restated Agreement and Declaration of Trust dated
August 26, 1997 and filed with the Commonwealth of
Massachuestts on September 23, 1997:

Filed herewith.

(2) Amended By-Laws as of April 18, 1995: Filed with
Post-Effective Amendment No. 22 to Registrant's
Registration Statement, 1/8/97 and incorporated
herein by reference.

(3) Not applicable.

(4) (i) Class A Specimen Share Certificate: Filed
with Post-Effective Amendment No. 22 to Registrant's
Registration Statement, 1/8/97 and incorporated
herein by reference.

(ii) Class B Specimen Share Certificate: Filed
with Post-Effective Amendment No. 22 to Registrant's
Registration Statement, 1/8/97 and incorporated
herein by reference.

(iii) Class C Specimen Share Certificate: Filed
with Post-Effective Amendment No. 22 to Registrant's
Registration Statement, 1/8/97 and incorporated
herein by reference.

(5) Investment Advisory Agreement dated October 22, 1990: Filed
with Post-Effective Amendment No. 7 to Registrant's
Registration Statement, 12/3/90, refiled with Registrant's
Post-Effective Amendment No. 19, 12/2/94, pursuant to Item 102
of Regulation S-T, and incorporated herein by reference.

(6) (i) General Distributor's Agreement dated
October 13, 1992, with Oppenheimer Fund Management,
Inc.: Filed with Post-Effective Amendment No. 12 of
the Registrant's Registration Statement, 12/2/92,
and refiled with Registrant's Post-Effective
Amendment No. 19, 12/2/94, pursuant to Item 102 of
Regulation S-T, and incorporated herein by
reference.

(ii) Form of Dealer Agreement of Oppenheimer Funds
Distributor, Inc.: Filed with Post-Effective
Amendment No. 14 Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850), 9/30/94, and incorporated
herein by reference.

(iii) Form of Oppenheimer Funds Distributor,
Inc. Broker Agreement: Filed with Post-Effective
Amendment No. 14 Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850), 9/30/94, and incorporated
herein by reference.

(iv) Form of Oppenheimer Funds Distributor, Inc.
Agency Agreement: Filed with Post-Effective
Amendment No. 14 Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850), 9/30/94, and incorporated
herein by reference.

(v) Broker Agreement between Oppenheimer Fund
Management, Inc. and Newbridge Securities, dated
10/1/86: Previously filed with Post-Effective
Amendment No. 25 of Oppenheimer Growth Fund (Reg.
No. 2-45272), 11/1/86, refiled with Post-Effective
Amendment No. 47 of Oppenheimer Growth Fund (Reg.
No. 2-45272), 10/21/94, pursuant to Item 102 of
Regulation S-T, and incorporated herein by
reference.

(7) Not applicable.

(8) Custodian Agreement dated 6/1/90 with Citibank, N.A.: Filed
with Registrant's Post-Effective Amendment No. 8, 2/1/91,
refiled with Registrant's Post-Effective Amendment No. 19,
12/2/94 pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.

(9) Not applicable.

(10) Opinion and Consent of Counsel dated February 20, 1986:
Previously filed with Registrant's Registration Statement, and
refiled with Post- Effective Amendment No. 20, 2/1/95, and
incorporated herein by reference.

(11) Independent Auditors' Consent: To be filed by
amendment

(12) Not applicable.

(13) Subscription Agreement and Investment letter: Previously filed
with Registrant's Registration Statement, and incorporated
herein by reference.

(14) (i) Form of Individual Retirement Account (IRA) Plan:
Previously filed with Post-Effective Amendment No. 21 to the
Registration Statement of Oppenheimer U.S. Government Trust
(File No. 2-76645), 8/25/93, and incorporated herein by
reference.

(ii) Form of Prototype Standardized and Non-
Standardized Profit Sharing and Money Purchase
Pension Plan for self-employed persons in
corporations: Filed with Post-Effective Amendment
No. 15 to the Registration Statement of Oppenheimer
Mortgage Income Fund (Reg. No. 33-6614), 1/19/95,
and incorporated herein by reference.

(iii) Form of Tax Sheltered Retirement Plan and Custody
Agreement for employees of public schools and tax-exempt
organizations: Previously filed with Post-Effective Amendment
No. 47 to the Registration Statement of Oppenheimer Growth
Fund (File No. 2-45272), 10/21/94, and incorporated herein by
reference.

(iv) Form of Simplified Employee Pension IRA:
Previously filed with Post-Effective Amendment No.
42 to the Registration Statement of Oppenheimer
Equity Income Fund (Reg. No. 2-33043), 10/28/94, and
incorporated herein by reference.

(v) Form of Prototype 401(k) Plan: Previously filed
with Post-Effective Amendment No. 7 to the
Registration Statement of Oppenheimer Strategic
Income Fund (Reg. No. 33-47378), 9/28/95, and
incorporated herein by reference.

(15) (i) Service Plan and Agreement for Class A shares dated
6/22/93 pursuant to Rule 12b-1: Previously filed with
Registrant's Post-Effective Amendment No. 16, 1/27/94, and
incorporated herein by reference.

(ii) Distribution and Service Plan and Agreement for Class B
shares dated 6/29/95 pursuant to Rule 12b-1: Filed with
Registrant's Post-Effective Amendment No.
21, 1/26/96, and incorporated hererin by reference.

(iii) Distribution and Service Plan and Agreement for Class C
shares dated 6/29/95 pursuant to Rule 12b-1: Filed with
Registrant's Post-Effective Amendment No. 21, 1/26/96, and
incorporated hererin
by reference.

(16) Performance Data Computation Schedule: To be filed
by amendment

(17) (i) Financial Data Schedule for Class A shares: To
be filed by amendment

(ii) Financial Data Schedule for Class B shares: To
be filed by amendment

(iii) Financial Data Schedule for Class C shares: To be filed
by amendment

(iv) Financial Data Schedule for Class Y shares: To be filed
by amendment

(18) OppenheimerFunds Multiple Class Plan under Rule 18f-
3 dated 10/24/95: Previously filed with Post-
Effective Amendment No. 12 to the Registration
Statement of Oppenheimer California Tax-Exempt Fund
(Reg. No. 33-23566), 11/1/95 and incorporated herein
by reference.

-- Powers of Attorney (including certified Board
resolutions): Power of Attorney for Sam Freedman
filed with Post-Effective Amendment No. 22 to
Registrant's Registration Statement,1/8/97; Power of
Attorney for Bridget A. Macaskill previously filed
with Post-Effective Amendment No. 21 to Registrant's
Registration Statement, 1/26/96, and incorporated
hererin by reference; all other Trustees filed with
Post-Effective Amendment No. 15 to Registrant's
Registration Statement, 12/3/93, and incorporated
herein by reference.

Item 25. Persons Controlled by or under Common Control with

- -------- ---------------------------------------------------
Registrant
----------

None

Item 26. Number of Holders of Securities

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

Number of
Record Holders as

Title of Class of January 1, 1998
-------------- -------------------

Shares of Beneficial Interest
of Class A Shares
Shares of Beneficial Interest
of Class B Shares
Shares of Beneficial Interest
of Class C Shares

Shares of Beneficial Interest
of Class Y Shares

Item 27. Indemnification

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

Reference is made to Article VIII of Registrant's Agreement and
Declaration of Trust filed as Exhibit 24(b)(1) 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 28. Business and Other Connections of 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
registered investment companies as described in Parts A and B hereof and listed
in Item 28(b) below.

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

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

<S> <C>

Mark J.P. Anson,
Vice President Vice President of Oppenheimer Real
Asset Management, Inc. ("ORAMI");
formerly Vice President of Equity
Derivatives at
Salomon Brothers, Inc.

Peter M. Antos,

Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; Senior Vice President
of HarbourView Asset Management
Corporation ("HarbourView"); prior to
March, 1996 he was the senior equity
portfolio manager for the Panorama
Series Fund, Inc. (the "Company") and
other mutual funds and pension funds
managed by G.R. Phelps & Co. Inc. ("G.R.
Phelps"), the Company's former
investment adviser, which was a
subsidiary of Connecticut Mutual Life
Insurance Company; was also responsible
for managing the common stock department
and common stock investments of
Connecticut Mutual Life Insurance Co.

Lawrence Apolito,
Vice President None.

Victor Babin,
Senior Vice President None.

Bruce Bartlett,

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

Vice President and Senior Portfolio
Manager at First of America Investment
Corp.

Beichert, Kathleen None.

Rajeev Bhaman,
Assistant Vice President Formerly Vice President (January 1992
-February, 1996) of Asian Equities for
Barclays de Zoete Wedd, Inc.

Robert J. Bishop,

Vice President Vice President of Mutual Fund Accounting
(since May 1996); an officer of other
Oppenheimer funds; formerly an
Assistant Vice President of OFI/Mutual
Fund Accounting (April 1994-May 1996),
and a Fund Controller for OFI.

George C. Bowen,
Senior Vice President
& Treasurer Vice President (since June 1983) and
Treasurer (since March 1985) of
OppenheimerFunds Distributor, Inc. (the
"Distributor"); Vice President (since
October 1989) and Treasurer (since April
1986) of HarbourView; Senior Vice
President (since February 1992),
Treasurer (since July 1991)and a
director (since December 1991) of
Centennial; President, Treasurer and a
director of Centennial Capital
Corporation (since June 1989); Vice
President and Treasurer (since August
1978) and Secretary (since April 1981)
of Shareholder Services, Inc. ("SSI");
Vice President, Treasurer and Secretary
of Shareholder Financial Services, Inc.
("SFSI") (since November 1989);
Treasurer of Oppenheimer Acquisition Corp.
("OAC") (since June 1990);
Treasurer of Oppenheimer Partnership
Holdings, Inc. (since November 1989);
Vice President and Treasurer of ORAMI
(since July 1996); Chief Executive
Officer, Treasurer and a director of
MultiSource Services, Inc., a broker-
dealer (since December 1995); an officer
of other Oppenheimer funds.

Scott Brooks,
Vice President None.

Susan Burton,

Assistant Vice President None.

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

Michael Carbuto,

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

Ruxandra Chivu,
Assistant Vice President None.

H.D. Digby Clements,
Assistant Vice President:
Rochester Division None.

O. Leonard Darling,

Executive Vice President Trustee (1993 - present) of Awhtolia
College - Greece.

Robert A. Densen,
Senior Vice President None.

Sheri Devereux,
Assistant Vice President None.

Robert Doll,
Executive Vice President

& Director An officer and/or portfolio manager
of certain Oppenheimer funds.

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 and a director of HarbourView,
SSI, SFSI and Oppenheimer Partnership
Holdings, Inc. since (September 1995)
and MultiSource Services, Inc. (a
broker-dealer) (since December 1995);
President and a director of Centennial
(since September 1995); President and
a director of ORAMI (since July 1996);
General Counsel (since May 1996) and
Secretary (since April 1997) of OAC;
Vice President of OppenheimerFunds
International, Ltd. ("OFIL") and
Oppenheimer Millennium Funds plc
(since October 1997); an officer of
other Oppenheimer funds.

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

Edward Everett,
Assistant Vice President None.

Scott Farrar,

Vice President Assistant Treasurer of
Oppenheimer Millennium Funds plc
(since October 1997); an officer of
other Oppenheimer funds; formerly an
Assistant Vice President of OFI/Mutual
Fund Accounting (April 1994-May 1996),
and a Fund Controller for OFI.

Leslie A. Falconio,
Assistant Vice President None.

Katherine P. Feld,

Vice President and Secretary Vice President and Secretary of the
Distributor; Secretary of HarbourView,
MultiSource and Centennial; Secretary,
Vice President and Director of
Centennial Capital Corporation; Vice

President and Secretary of ORAMI.

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; Director (since
1986) of GeVa Theatre. Formerly he held
the following positions: formerly,
Chairman of the Board and Director of
Rochester Fund Distributors, Inc.
("RFD"); President and Director of
Fielding Management Company, Inc.
("FMC"); President and Director of
Rochester Capital Advisors, Inc.
("RCAI"); Managing Partner of Rochester
Capital Advisors, L.P., President and
Director of Rochester Fund Services,
Inc. ("RFS"); President and Director of
Rochester Tax Managed Fund, Inc.;
Director (1993 - 1997) of VehiCare
Corp.; Director (1993 - 1996) of
VoiceMode.

John Fortuna,
Vice President None.

Patricia Foster,

Vice President Formerly she held the following
positions: An officer of certain
Oppenheimer funds (May, 1993 - January,
1996); Secretary of Rochester Capital
Advisors, Inc. and General Counsel
(June, 1993 - January 1996) of Rochester
Capital Advisors, L.P.

Jennifer Foxson,
Assistant Vice President None.

Paula C. Gabriele,
Executive Vice President Formerly, Managing Director (1990-
1996) for Bankers Trust Co.

Robert G. Galli,

Vice Chairman Trustee of the New York-based
Oppenheimer Funds. Formerly Vice
President and General Counsel of
Oppenheimer Acquisition Corp.

Linda Gardner,
Vice President None.

Jill Glazerman,

Assistant Vice President None.

Robert Grill,
Vice President Formerly Marketing Vice
President for Bankers Trust Company
(1993-1996); Steering Committee
Member, Subcommittee Chairman for
American Savings Education Council
(1995-1996).

Caryn Halbrecht,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly Vice President of Fixed
Income Portfolio
Management at Bankers Trust.

Elaine T. Hamann,
Vice President Formerly Vice President (September,
1989 - January, 1997) of Bankers Trust
Company.
Glenna Hale,
Director of
Investor Marketing Formerly, Vice President (1994-1997) of
Retirement Plans Services for
OppenheimerFunds Services.

Thomas B. Hayes,
Assistant Vice President None.

Barbara Hennigar,
Executive Vice President and
Chief Executive Officer of
OppenheimerFunds Services,

a division of the Manager President and Director of SFSI; President
and Chief executive Officer of
SSI.

Dorothy Hirshman, None.
Assistant Vice President

Alan Hoden,
Vice President None.

Merryl Hoffman,
Vice President None.

Scott T. Huebl,
Assistant Vice President None.

Richard Hymes,
Assistant Vice President None.

Jane Ingalls,

Vice President None.

Byron Ingram,
Assistant Vice President None.

Ronald Jamison,
Vice President Formerly Vice President and Associate
General Counsel at Prudential
Securities, Inc.

Frank Jennings,

Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; formerly, a

Managing Director of Global Equities at
Paine Webber's Mitchell Hutchins
division.

Thomas W. Keffer,

Senior Vice President Formerly Senior Managing Director (1994
- 1996) of Van Eck Global.
Avram Kornberg,
Vice President None.

Joseph Krist,
Assistant Vice President None.

Paul LaRocco,

Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly, a Securities Analyst for
Columbus Circle

Investors.

Michael Levine,
Assistant Vice President None.

Shanquan Li,
Assistant Vice President Director of Board
(since 2/96), Chinese Finance Society;
formerly, Chairman (11/94-2/96),
Chinese Finance Society; and Director
(6/94-6/95), Greater China Business
Networks.

Stephen F. Libera,

Vice President An officer and/or portfolio manager for
certain Oppenheimer funds; a Chartered
Financial Analyst; a Vice President of
HarbourView; prior to March 1996, the
senior bond portfolio manager for
Panorama Series Fund Inc., other mutual
funds and pension accounts managed by
G.R. Phelps; also responsible for
managing the public fixed-income
securities department at Connecticut
Mutual Life Insurance Co.

Mitchell J. Lindauer,
Vice President None.

David Mabry,
Assistant Vice President None.

Steve Macchia,
Assistant Vice President None.

Bridget Macaskill,
President, Chief Executive
Officer and Director Chief Executive Officer (since September
1995); President and director (since
June 1991) of HarbourView; Chairman and
a director of SSI (since August 1994),
and SFSI (September 1995); President
(since September 1995) and a director
(since October 1990) of OAC; President
(since September 1995) and a director
(since November 1989) of Oppenheimer
Partnership Holdings, Inc., a holding
company subsidiary of OFI; a director
of ORAMI (since July 1996) ; President
and a director (since October 1997) of
OFIL, an offshore fund manager
subsidiary of OFI and Oppenheimer
Millennium Funds plc (since October
1997); President and a a director of
other Oppenheimer funds; a director of
the NASDAQ Stock Market, Inc. and of
Hillsdown Holdings plc (a U.K. food
company); formerly an Executive Vice
President of OFI.

Wesley Mayer,
Vice President Formerly Vice President (January, 1995
- June, 1996) of Manufacturers Life
Insurance Company.

Loretta McCarthy,
Executive Vice President None.

Kevin McNeil,
Vice President Treasurer (September, 1994 - present)
for the Martin Luther King Multi-Purpose
Center (non-profit community
organization); Formerly Vice President
(January, 1995 - April, 1996) for
Lockheed Martin IMS.

Tanya Mrva,
Assistant Vice President None.

Lisa Migan,
Assistant Vice President None.

Robert J. Milnamow,

Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly a Portfolio Manager (August,
1989 -August, 1995) with Phoenix
Securities

Group.

Denis R. Molleur,
Vice President None.

Linda Moore,
Vice President Formerly, Marketing Manager (July 1995-
November 1996) for Chase Investment
Services Corp.

Tanya Mrva,
Assistant Vice President None.

Kenneth Nadler,
Vice President None.

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

Barbara Niederbrach,
Assistant Vice President None.

Robert A. Nowaczyk,
Vice President None.

Richard M. O'Shaugnessy,
Assistant Vice President:
Rochester Division None.
Gina M. Palmieri,
Assistant Vice President None.

Robert E. Patterson,

Senior Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.
John Pirie,
Assistant Vice President Formerly, a Vice President with Cohane

Rafferty Securities, Inc.

Tilghman G. Pitts III,
Executive Vice President

and Director Chairman and Director of the Distributor.

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

Russell Read,
Senior Vice President Formerly a consultant for Prudential
Insurance on behalf of the General
Motors Pension Plan.

Thomas Reedy,

Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly, a Securities Analyst for the
Manager.

David Robertson,
Vice President None.

Adam Rochlin,

Vice President None.

Michael S. Rosen
Vice President; President,
Rochester Division An officer and/or portfolio manager of
certain Oppenheimer funds; Formerly,
Vice President (June, 1983 - January,
1996) of RFS, President and Director of
RFD; Vice President and Director of FMC;
Vice President and director of RCAI;
General Partner of RCA; Vice President
and Director of Rochester Tax Managed Fund Inc.

Richard H. Rubinstein,
Senior Vice President An officer and/or
portfolio manager of certain
Oppenheimer funds; formerly Vice
President and Portfolio
Manager/Security
Analyst for Oppenheimer Capital Corp.,
an investment adviser.

Lawrence Rudnick,

Assistant Vice President None.

James Ruff,
Executive Vice President None.

Valerie Sanders,
Vice President None.

Ellen Schoenfeld,
Assistant Vice President None.

Stephanie Seminara,

Vice President Formerly, Vice President of Citicorp
Investment Services

Richard Soper,
Vice President None.

Nancy Sperte,
Executive Vice President None.

Donald W. Spiro,

Chairman Emeritus and Director Vice Chairman and Trustee of the New
York-based Oppenheimer Funds; formerly
Chairman of the Manager and the

Distributor.

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.

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

John Stoma,
Senior Vice President,
Director Retirement Plans Formerly Vice President of U.S. Group
Pension Strategy and Marketing for
Manulife Financial.

Michael C. Strathearn,

Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; a Vice President of
HarbourView; prior to March 1996, an
equity portfolio manager for Panorama
Series Fund, Inc. and other mutual funds
and pension accounts managed by G.R.

Phelps.

James C. Swain,
Vice Chairman of the Board Chairman, CEO and Trustee, Director or
Managing Partner of the Denver-based
Oppenheimer Funds; President and a
Director of Centennial; formerly
President and Director of OAMC, and
Chairman of the Board of SSI.

James Tobin,
Vice President None.

Jay Tracey,

Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
formerly Managing Director of
Buckingham Capital

Management.

Gary Tyc,
Vice President, Assistant
Secretary and Assistant
Treasurer Assistant Treasurer of the Distributor and SFSI.

Ashwin Vasan,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.

Dorothy Warmack,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds.

Jerry Webman,

Senior Vice President Director of New York-based tax-exempt
fixed income Oppenheimer funds;
Formerly, Managing Director and Chief
Fixed Income Strategist at Prudential

Mutual Funds.

Christine Wells,
Vice President None.

Joseph Welsh,
Assistant Vice President None.

Kenneth B.White,
Vice President An officer and/or portfolio manager of
certain Oppenheimer funds; a Chartered
Financial Analyst; Vice President of
HarbourView; prior to March 1996, an
equity portfolio manager for Panorama
Series Fund, Inc. and other mutual funds
and pension funds managed by G.R.

Phelps.

William L. Wilby,
Senior Vice President An officer and/or
portfolio manager of certain
Oppenheimer funds; Vice President of
HarbourView.

Carol Wolf,
Vice President An officer and/or portfolio
manager of certain Oppenheimer funds;
Vice President of Centennial; Vice
President, Finance and Accounting and
member of the Board of Directors of
the Junior League

of Denver, Inc.; Point of Contact:
Finance Supporters of Children; Member
of the Oncology Advisory Board of the
Childrens Hospital; Member of the Board
of Directors of the Colorado Museum of
Contemporary Art.

Caleb Wong,
Assistant Vice President None.

Robert G. Zack,
Senior Vice President and
Assistant Secretary,
Associate General Counsel Assistant Secretary of SSI (since May
1985), and SFSI (since November 1989);
Assistant Secretary of Oppenheimer
Millennium Funds plc (since October
1997); an officer of other Oppenheimer
funds.

Jill Zachman,
Assistant Vice President:
Rochester Division None.

Arthur J. Zimmer,

Senior Vice President An officer and/or
portfolio manager of certain
Oppenheimer funds; Vice President of
Centennial.
</TABLE>

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 Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Enterprise Fund
Oppenheimer 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 MidCap 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 U.S.Government Trust
Oppenheimer World Bond Fund

Quest/Rochester Funds
- ---------------------
Limited Term New York Municipal Fund
Oppenheimer Bond Fund For Growth
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
Daily Cash Accumulation Fund, Inc.
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Equity Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Municipal Fund Oppenheimer Real Asset Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.
The New York Tax-Exempt Income Fund, Inc.

The address of OppenheimerFunds, Inc., the New York-based Oppenheimer Funds, the
Quest Funds, OppenheimerFunds Distributor, Inc., HarbourView Asset Management
Corp., Oppenheimer Partnership Holdings, Inc., and Oppenheimer Acquisition Corp.
is Two World Trade Center, New York, New York 10048-0203.

The address of 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 80012.

The address of MultiSource Services, Inc. is 1700 Lincoln Street, Denver,
Colorado 80203.

The address of the Rochester-based funds is 350 Linden Oaks, Rochester, New York
14625-2807.

Item 29. 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 28(b) above.

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

Name & Principal Positions & Offices Positions & Offices
Business Address with Underwriter with Registrant
- ---------------- ------------------- -------------------
<S> <C> <C>

George C. Bowen(1) Vice President and Vice President and
Treasurer Treasurer of the
Oppenheimer funds.

Julie Bowers Vice President None
21 Dreamwold Road
Scituate, MA 02066

Peter W. Brennan Vice President None
1940 Cotswold Drive
Orlando, FL 32825

Maryann Bruce(2) Senior Vice President; None
Director: Financial
Institution Division

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

Ronald T. Collins Vice President None
710-3 E. Ponce de Leon Ave.

Decatur, GA 30030

William Coughlin Vice President None
542 West Surf - #2N
Chicago, IL 60657

Mary Crooks(1)

E. Drew Devereaux(3) Assistant Vice President None

Rhonda Dixon-Gunner(1) Assistant Vice President None

Andrew John Donohue(2) Executive Vice Secretary of
President & Director the Oppenheimer
funds.

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

Kent Elwell Vice President None
41 Craig Place
Cranford, NJ 07016

Todd Ermenio Vice President None
11011 South Darlington
Tulsa, OK 74137

John Ewalt Vice President None
2301 Overview Dr. NE
Tacoma, WA 98422

George Fahey Vice President None
201 E. Rund Grove Rd.
#26-22
Lewisville, TX 75067

Katherine P. Feld(2) Vice President None
& Secretary

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

Ronald H. Fielding(3) Vice President None

Reed F. Finley Vice President None
1657 Graefield

Birmingham, MI 48009

Wendy Fishler(2) Vice President None

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

Patricia Gadecki Vice President None
950 First St., S.
Suite 204
Winter Haven, FL 33880

Luiggino Galleto Vice President None
10239 Rougemont Lane

Charlotte, NC 28277

Mark Giles Vice President None
5506 Bryn Mawr
Dallas, TX 75209

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

Sharon Hamilton Vice President None
720 N. Juanita Ave.,#1

Redondo Beach, CA 90277

Byron Ingram(2) Assistant Vice President None

Mark D. Johnson Vice President None
129 Girard Place
Kirkwood, MO 63105

Michael Keogh(2) Vice President None

Richard Klein Vice President None
4820 Fremont Avenue So.
Minneapolis, MN 55409

Daniel Krause Vice President None
13416 Larchmere Square
Shaker Heights, OH 44120

Ilene Kutno(2) Assistant Vice President None

Todd Lawson Vice President None
3333 E. Bayaud Avenue
Unit 714
Denver, CO 80209

Wayne A. LeBlang Senior Vice President None
23 Fox Trail
Lincolnshire, IL 60069

Dawn Lind Vice President None
7 Maize Court
Melville, NY 11747

James Loehle Vice President None
30 John Street
Cranford, NJ 07016

Todd Marion Vice President None
21 N. Passaic Avenue
Chatham,N.J. 07928

Marie Masters Vice President None
520 E. 76th Street
New York, NY 10021

John McDonough Vice President None
P.O. Box 760
50 Riverview Road
New Castle, NH 03854

Tanya Mrva(2) Assistant Vice President None

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

Chad V. Noel Vice President None
3238 W. Taro Lane
Phoenix, AZ 85027

Joseph Norton Vice President None
2518 Fillmore Street
San Francisco, CA 94115

Patrick Palmer Vice President None
958 Blue Mountain Cr.
West Lake Village, CA 91362

Kevin Parchinski Vice President None
1105 Harney St., #310
Omaha, NE 68102

Randall Payne Vice President None
3530 Providence Plantation Way
Charlotte, NC 28270

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

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

Bill Presutti Vice President None
1777 Larimer St. #807
Denver, CO 80202

Tilghman G. Pitts, III(2) Chairman & Director None

Elaine Puleo(2) Vice President None

Minnie Ra Vice President None
895 Thirty-First Ave.

San Francisco, CA 94121

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

John C. Reinhardt(3) Vice President None

Douglas Rentschler Vice President None
867 Pemberton
Grosse Pointe Park, MI
48230

Ian Robertson Vice President None
4204 Summit Wa

Marietta, GA 30066

Michael S. Rosen(3) Vice President None

Kenneth Rosenson Vice President None
3802 Knickerbocker Place

Apt. #3D
Indianapolis, IN 46240

James Ruff(2) President None

Timothy Schoeffler Vice President None
1717 Fox Hall Road

Washington, DC 77479

Michael Sciortino Vice President None
785 Beau Chene Drive
Mandeville, LA 70471

Robert Shore Vice President None
26 Baroness Lane

Laguna Niguel, CA 92677

George Sweeney Vice President None
1855 O'Hara Lane
Middletown, PA 17057

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

Scott McGregor Tatum Vice President None
7123 Cornelia Lane
Dallas, TX 75214

David G. Thomas Vice President None
8116 Arlingon Blvd.
#123
Falls Church, VA 22042

Philip St. John Trimble Vice President None
2213 West Homer

Chicago, IL 60647

Sarah Turpin Vice President None
2735 Dover Road
Atlanta,GA 30327

Gary Paul Tyc(1) Assistant Treasurer None

Mark Stephen Vandehey(1) Vice President None

Marjorie Williams Vice President None
6930 East Ranch Road
Cave Creek, AZ 85331
</TABLE>

(1) 6803 South Tucson Way, Englewood, Colorado 80112
(2) Two World Trade Center, New York, NY 10048-0203
(3) 350 Linden Oaks, Rochester, NY 14625-2807

Item 30. 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 30. 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, CO 80112.

Item 31. Management Services

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

Not applicable.

Item 32. Undertakings

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

(a) Not applicable.
(b) Not applicable.
(c) Not applicable.

C-1

<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
County of Arapahoe and State of Colorado on the 21st day of November, 1997.

OPPENHEIMER LIMITED-TERM GOVERNMENT FUND

By: /s/ James C. Swain*
----------------------------------------
James C. Swain, Chairman

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:
<TABLE>
<CAPTION>

Signatures Title Date
- ---------- ----- ----
<S> <C> <C>

/s/ James C. Swain* Chairman of the
- --------------------- Board of Trustees, November 21, 1997
James C. Swain Principal Executive

Officer

/s/ George C. Bowen* Chief Financial

- --------------------- and Accounting November 21, 1997
George C. Bowen Officer, Treasurer,

Vice President

/s/ Robert G. Avis* Trustee November 21, 1997

- ---------------------
Robert G. Avis

/s/ Willaim A. Baker* Trustee November 21, 1997

- ----------------------
William A. Baker

/s/ Charles Conrad, Jr.* Trustee November 21, 1997

- ------------------------
Charles Conrad, Jr.

/s/ Jon S. Fossel* Trustee November 21, 1997

- -----------------------
Jon S. Fossel

/s/ Sam Freedman* Trustee November 21, 1997

- ------------------------
Sam Freedman

/s/ Raymond J. Kalinowski* Trustee November 21, 1997

- -------------------------
Raymond J. Kalinowski

/s/ C. Howard Kast* Trustee November 21, 1997

- -------------------------
C. Howard Kast

/s/ Robert M. Kirchner* Trustee November 21, 1997

- -------------------------
Robert M. Kirchner

/s/ Bridget A. Macaskill* President and
- ------------------------- Trustee November 21, 1997
Bridget A. Macaskill

/s/ Ned M. Steel* Trustee November 21, 1997

- -------------------------
Ned M. Steel

*By: /s/ Robert G. Zack

--------------------------------
Robert G. Zack, Attorney-in-Fact

</TABLE>

C-2

<PAGE>

OPPENHEIMER LIMITED-TERM GOVERNMENT FUND

Index to Exhibits

Exhibit No. Description

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

24(b)(1) Amended and Restated Declaration of Trust dated
August 26, 1997

C-3

Exhibit 24(b)(1)
AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND

AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST made this
23rd day of June, 1995, by the Trustees whose signatures are set forth below
(together with all other persons from time to time duly elected, qualified and
serving as Trustees in accordance with the provision of Article IV hereof, the
"Trustees"), and by the holders of shares of beneficial interest heretofore
issued or to be issued hereunder as hereinafter provided.

WITNESSETH

WHEREAS, the Trustees previously formed a trust for the purposes of
carrying on the business of a management investment company under an Agreement
and Declaration of Trust dated January 16, 1986 as amended February 14, 1986,
June 26, 1992, April 29, 1993, May 1, 1994 and January 16, 1995; and in
furtherance of such purposes, the Trustees have acquired and may hereafter
acquire assets and properties, to hold and manage as trustees of a Massachusetts
voluntary association with transferable shares in accordance with the provisions
hereinafter set forth; and

WHEREAS, the Trustees of the Trust have changed the quorum
requirements set forth in Section 3 of Article V; and

WHEREAS, the Trustees desire to make permitted changes to said
Declaration of Trust pursuant to Section 4 of Article IX.

NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets and properties, which they may from time to
time acquire in any manner as Trustees hereunder IN TRUST pursuant to this
Amended and Restated Agreement and Declaration of Trust to manage and dispose of
the same upon the following terms and conditions for the pro rata benefit of the
holders from time to time of Shares in the Trust as hereinafter set forth.

ARTICLE I

Name and Definitions

Name and Registered Agent

Section 1. This Trust shall be known as "Oppenheimer Limited-Term
Government Fund" and the Trustees shall conduct the business of the Trust under
that name or any other name as they may

-1-

<PAGE>

from time to time determine. The address of the Trust is 3410 South Galena
Street, Denver, Colorado 80231. The registered agent for the Trust in
Massachusetts shall be Massachusetts Mutual Life Insurance Company, 1295 State
Street, Springfield, Massachusetts 01111, Attention: Stephen Kuhn, Esq., or such
other person as the Trustees may from time to time designate.

Definitions

Section 2. Whenever used herein, unless otherwise required by the
context or specifically provided:

(a) The "Trust" refers to the Massachusetts voluntary association
established by this Agreement and Declaration of Trust, as it may be amended
from time to time, pursuant to Massachusetts General Laws, Chapter 182;

(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV and then in office;

(c) "Shares" mean the transferable units of interest into which the
beneficial interest in the Trust or any Series or Class of the Trust shall be
divided from time to time, and includes fractions of Shares as well as whole
Shares;

(d) "Shareholder" means a record owner of Shares;

(e) The "1940 Act" refers to the Investment Company Act of 1940 (and
any successor statute) and the Rules and Regulations thereunder, all as amended
from time to time;

(f) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Principal Underwriter" and "vote of a majority of the
outstanding voting securities" and other terms which are defined in the 1940 Act
shall have the meanings given them in the 1940 Act;

(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time;

(h) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time;

(i) "Net asset value" shall have the meaning set forth in Section 5
of Article VI hereof;

(j) "Class" means a class of a Series of Shares established and
designated in accordance with the provisions of this Declaration

-2-

<PAGE>

of Trust; and

(k) "Series" means the Series of Shares established and designated
in accordance with the provisions of this Declaration of Trust.

ARTICLE II

Nature and Purpose

The Trust is a voluntary association (commonly known as a business
trust) of the type referred to in Chapter 182 of the General Laws of the
Commonwealth of Massachusetts. The Trust is not intended to be, shall not be
deemed to be, and shall not be treated as, a general or a limited partnership,
joint venture, corporation or joint stock company, nor shall the Trustees or
Shareholders or any of them for any purpose be deemed to be, or be treated in
any way whatsoever as though they were, liable or responsible hereunder as
partners or joint venturers. The purpose of the Trust is to engage in, operate
and carry on the business of an open-end management investment company and to do
any and all acts or other things as are necessary, convenient, appropriate,
incidental or customary in connection therewith.

ARTICLE III

Division of Beneficial Interest

Section 1. The beneficial interest in the Trust shall be divided
into Shares, all without par value, but the Trustees shall have the authority
from time to time, without obtaining Shareholder approval, to create one or more
Series of Shares in addition to the Series specifically established and
designated in Section 3 of this Article III, and to divide the shares of any
Series into two or more Classes pursuant to Section 2 of this Article III, all
as they deem necessary or desirable, to establish and designate such Series and
Classes, and to fix and determine the relative rights and preferences as between
the different Series or Classes of Shares as to right of redemption and the
price, terms and manner of redemption, liabilities and expenses to be borne by
any Series or Class, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion on liquidation, conversion rights, and conditions under which the
several Series or Classes shall have individual voting rights or no voting
rights. Except as aforesaid, all Shares of the different Series shall be
identical.

-3-

<PAGE>

(a) The number of authorized Shares and the number of Shares of each
Series and each Class of a Series that may be issued is unlimited, and the
Trustees may issue Shares of any Series or Class of any Series for such
consideration and on such terms as they may determine (or for no consideration
if pursuant to a Share dividend or split-up), all without action or approval of
the Shareholders. All Shares when so issued on the terms determined by the
Trustees shall be fully paid and non-assessable. The Trustees may classify or
reclassify any unissued Shares or any Shares previously issued and reacquired of
any Series into one or more Series or Classes of Series that may be established
and designated from time to time; and the Trustees may from time to time divide
or combine the Shares of any Series or Class into a greater or lesser number
without thereby changing the proportionate beneficial interests in the Series or
Class. The Trustees may hold as treasury Shares (of the same or some other
Series), reissue for such consideration and on such terms as they may determine,
or cancel, at their discretion from time to time, any Shares of any Series
reacquired by the Trust.

(b) The establishment and designation of any Series or any Class of
any Series in addition to that established and designated in Section 3 of this
Article III shall be effective upon the execution by a majority of the Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences of such Series or such Class of such Series or
as otherwise provided in such instrument. At any time that there are no Shares
outstanding of any particular Series previously established and designated, and
as provided in Article IX, Section 1, the Trustees may by an instrument executed
by a majority of their number abolish that Series and the establishment and
designation thereof. Each instrument referred to in this paragraph shall be an
amendment to this Declaration of Trust, and the Trustees may make any such
amendment without shareholder approval.

Section 2. The Trustees shall have the authority from time to time
to divide the Shares of any Series into two or more Classes as they deem
necessary or desirable, and to establish and designate such Classes. In such
event, each Class of a Series shall represent interests in the designated Series
of the Trust and have such voting, dividend, liquidation and other rights as may
be established and designated by the Trustees. Expenses and liabilities related
directly or indirectly to the Shares of a Class of a Series may be borne solely
by such Class (as shall be determined by the Trustees) and, as provided in
Article V, a Class of a Series may have exclusive voting rights with respect to
matters relating solely to such Class. The bearing of expenses and liabilities
solely by a Class of Shares of a Series shall be appropriately reflected (in the
manner determined by the Trustees) in the net asset value, dividend and
liquidation rights of the Shares of such Class of a Series. The division of the
Shares

-4-

<PAGE>

of a Series into Classes and the terms and conditions pursuant to which the
Shares of the Classes of a Series will be issued must be made in compliance with
the 1940 Act. No division of Shares of a Series into Classes shall result in the
creation of a Class of Shares having a preference as to dividends or
distributions or a preference in the event of any liquidation, termination or
winding up of the Trust, to the extent such a preference is prohibited by
Section 18 of the 1940 Act as to the Trust.

The relative rights and preferences of Shares of different Classes
shall be the same in all respects except that, unless and until the Board of
Trustees shall determine otherwise: (i) when a vote of Shareholders is required
under this Declaration of Trust or when a meeting of Shareholders is called by
the Board of Trustees, the Shares of a Class shall vote exclusively on matters
that affect that Class only, (ii) the expenses related to a Class shall be borne
solely by such Class (as determined and allocated to such Class by the Trustees
from time to time in a manner consistent with Sections 2 and 3 of this Article
III); and (iii) pursuant to Section 10 of Article III, the Shares of each Class
shall have such other rights and preferences as are set forth from time to time
in the then-effective Prospectus and/or Statement of Additional Information
relating to the Shares. Dividends and distributions on one class may differ from
the dividends and distributions on another Class, and the net asset value of the
Shares of one Class may differ from the net asset value of the Shares of another
Class.

Section 3. Without limiting the authority of the Trustees set forth
in Section 1 of this Article III to establish and designate any further Series,
the Trustees hereby divide the single Series of shares of the Trust having the
same name as the Trust into three Classes designated Class A, Class B and Class
C. The Shares of that Series and any Shares of any further Series or Classes
that may from time to time be established and designated by the Trustees shall
(unless the Trustees otherwise determine with respect to some further Series or
Classes at the time of establishing and designating the same) have the following
relative rights and preferences:

(a) Assets Belonging to Series. All consideration received by the
Trust for the issue or sale of Shares of a particular Series, together with all
assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors, and shall be so recorded upon the books of account of the

-5-

<PAGE>

Trust. Such consideration, assets, income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any General Items
allocated to that Series as provided in the following sentence, are herein
referred to as "assets belonging to" that Series. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds or payments
which are not readily identifiable as belonging to any particular Series
(collectively "General Items"), the Trustees shall allocate such General Items
to and among any one or more of the Series established and designated from time
to time in such manner and on such basis as they, in their sole discretion, deem
fair and equitable; and any General Items so allocated to a particular Series
shall belong to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the shareholders of all Series for all purposes.

(b) (1) Liabilities Belonging to the Series. The liabilities,
expenses, costs, charges and reserves attributable to each Series shall be
charged and allocated to the assets belonging to each particular Series. Any
general liabilities, expenses, costs, charges and reserves of the Trust which
are not identifiable as belong to any particular Series shall be allocated and
charged by the Trustees to and among any one or more of the Series established
and designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The liabilities,
expenses, costs, charges and reserves allocated and so charged to each Series
are herein referred to as "liabilities belonging to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the shareholders of all Series for all
purposes.

(2) Liabilities Belonging to a Class. If a Series is divided
into more than one Class, the liabilities, expenses, costs, charges and reserves
attributable to a Class shall be charged and allocated to the Class to which
such liabilities, expenses, costs, charges or reserves are attributable. Any
general liabilities, expenses, costs, charges or reserves belonging to the
Series which are not identifiable as belonging to any particular Class shall be
allocated and charged by the Trustees to and among any one or more of the
Classes established and designated from time to time in such manner and on such
basis as the Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges and reserves allocated and so charged to
each Class are herein referred to as "liabilities belonging to" that Class. Each
allocation of liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the holders of all Classes for all

-6-

<PAGE>

purposes.

(c) Dividends. Dividends and distributions on Shares of a particular
Series or Class may be paid to the holders of Shares of that Series or Class,
with such frequency as the Trustees may determine, which may be daily or
otherwise pursuant to a standing resolution or resolutions adopted only once or
with such frequency as the Trustees may determine, from such of the income,
capital gains accrued or realized, and capital and surplus, from the assets
belonging to that Series, as the Trustees may determine, after providing for
actual and accrued liabilities belonging to such Series or Class. All dividends
and distributions on Shares of a particular Series or Class shall be distributed
pro rata to the holders of such Series or Class in proportion to the number of
Shares of such Series or Class held by such holders at the date and time of
record established for the payment of such dividends or distributions, except
that in connection with any dividend or distribution program or procedure the
Trustees may determine that the Shareholder's purchase order and/or payment have
not been received by the time or times established by the Trustees under such
program or procedure. Such dividends and distributions may be made in cash or
Shares or a combination thereof as determined by the Trustees or pursuant to any
program that the Trustees may have in effect at the time for the election by
each Shareholder of the mode of the making of such dividend or distribution to
that Shareholder. Any such dividend or distribution paid in Shares will be paid
at the net asset value thereof as determined in accordance with Section 5 of
Article VI.

(d) Liquidation. In the event of the liquidation or dissolution of
the Trust, the Shareholders of all Classes of each Series that have been
established and designated shall be entitled to receive, as a Series or Class,
when and as declared by the Trustees the excess of the assets belonging to that
Series over the liabilities belonging to that Series or Class. The assets so
distributable to the Shareholders of any particular Class and Series shall be
distributed among such Shareholders in proportion to the number of Shares of
such Class of that Series held by them and recorded on the books of the Trust.

(e) Transfer. All Shares of each particular Series shall be
transferable, but transfers of Shares of a particular Class or Series will be
recorded on the Share transfer records of the Trust applicable to such Class of
that Series only at such times as Shareholders shall have the right to require
the Trust to redeem Shares of such Series or Class of that Series and at such
other times as may be permitted by the Trustees.

-7-

<PAGE>

(f) Equality. Each Share of a Series shall represent an equal
proportionate interest in the assets belonging to that Series (subject to the
liabilities belonging to such Class of that Series), and each Share of any
particular Series shall be equal to each other Share of that Series; but the
provisions of this sentence shall not restrict any distinctions permissible
under this Article III that may exist with respect to Shares of the different
Classes of a Series. The Trustees may from time to time divide or combine the
Shares of any particular Class or Series into a greater or lesser number of
Shares of that Class or Series without thereby changing the proportionate
beneficial interest in the assets belonging to the Class or Series or in any way
affecting the rights of Shares of any other Class or Series.

(g) Fractions. Any fractional Share of any Class and Series, if any
such fractional Share is outstanding, shall carry proportionately all the rights
and obligations of a whole Share of that Class and Series, including those
rights and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.

(h) Conversion Rights. Subject to compliance with the requirements
of the 1940 Act, the Trustees shall have the authority to provide that (i)
holders of Shares of any Series shall have the right to exchange said Shares
into Shares of one or more other Series of Shares, (ii) holders of Shares of any
Class shall have the right to exchange said Shares into Shares of one or more
other Classes of the same or a different Series, and/or (iii) the Trust shall
have the right to carry out the aforesaid exchanges, in each case in accordance
with such requirement and procedures as may be established by the Trustees.
Except as otherwise determined by the Trustees in their sole discretion,
Shareholders shall have no exchange or conversion right with respect to their
Shares.

(i) Preemptive Rights. Shareholders shall have no preemptive or
other rights to receive, purchase or subscribe for any additional Shares or
other securities issued by the Trust. The Shareholders shall have no appraisal
rights with respect to their Shares.

Ownership of Shares

Section 4. The ownership and transfer of Shares shall be recorded on
the books of the Trust or its transfer agent or similar agent, which books shall
be maintained separately for the Shares of each Class and Series. No
certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider

-8-

<PAGE>

appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent of the Trust, as the
case may be, shall be conclusive as to who are the Shareholders of each Series
or Class and as to the number of Shares of each Series and Class held from time
to time by each Shareholder.

Investments in the Trust

Section 5. The Trustees may issues Shares of the Trust to such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from to time to time authorize.

Right to Refuse Orders

Section 6. The Trust by action of its Trustees shall have the right
to refuse to accept any subscription for its Shares at any time without any
cause or reason therefor whatsoever. Without limiting the foregoing, the Trust
shall have the right not to accept subscriptions under circumstances or in
amounts as the Trustees in their sole discretion consider to be disadvantageous
to existing Shareholders, and the Trustees may from time to time set minimum
and/or maximum amounts which may be invested in Shares by a subscriber. The
Trustees may authorize any distributor, principal underwriter, custodian,
transfer agent or other person to accept orders for the purchase or sale of
Shares that conform to such authorized terms and to reject any purchase or sale
orders for Shares whether or not conforming to such authorized terms.

Time for Determining Sales Price

Section 7. The time or times as of which the net asset value shall
be determined for the purpose of determining the sales price for Shares issued
pursuant to this Article III shall be at such times as the Trustees may
establish from time to time in accordance with applicable provisions of the 1940
Act.

Order in Proper Form

Section 8. The criteria for determining what constitutes an order in
proper form and the time of receipt of such an order by the Trust shall be
prescribed by resolution of the Trustees and such criteria may be established in
the Trust's then current prospectus or established by the Trust's distributor or
transfer agent, subject to approval of the Trustees.

-9-

<PAGE>

When Shares Become Outstanding

Section 9. Shares subscribed for and for which an order in proper
form has been received shall be deemed to be outstanding as of the time of
acceptance of the order therefor and the determination of the net price thereof,
which price shall be then deemed to be an asset of the Trust.

Merger or Consolidation

Section 10. In connection with the acquisition of all or
substantially all the assets or stock of another investment company, investment
trust, or of a company classified as a personal holding company under Federal
Income Tax laws, the Trustees may issue or cause to be issued Shares of a Series
or Class and accept in payment therefor, in lieu of cash, such assets at their
market value, or such stock at the market value of the assets held by such
investment company or investment trust, either with or without adjustment for
contingent costs or liabilities.

Status of Shares and Limitation of Personal Liability

Section 11. Shares shall be deemed to be personal property giving
only the rights provided in this instrument. Every Shareholder by virtue of
having become a Shareholder shall be held to have expressly assented and agreed
to the terms of the Declaration of Trust and to have become a party thereto. The
death of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to succeed to the rights of said decedent under this
Trust. Ownership of Shares shall not entitle the Shareholder to any title in or
to the whole or any part of the Trust property or right to call for a partition
or division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor except as specifically provided herein to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.

Shareholder Inspection Rights

Section 12. Any Shareholder or his or her agent may inspect and copy
during normal business hours any of the following documents of the Trust:
By-Laws, minutes of the proceedings of the Shareholders and annual financial
statements of the Trust, including a balance sheet

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and financial statements of operations. The foregoing rights of inspection of
Shareholders of the Trust are the exclusive and sole rights of the Shareholders
with respect thereto and no Shareholder of the Trust shall have, as a
Shareholder, the right to inspect or copy any of the books, records or other
documents of the Trust except as specifically provided in this Section 12 of
this Article III or except as otherwise determined by the Trustees.

ARTICLE IV

The Trustees

Number, Designation, Election, Term, Etc.

Section 1.

(a) Number. The Trustees who have executed this Amended and Restated
Declaration of Trust may increase or decrease the number of Trustees to a number
other than the number theretofore determined which number shall not be less than
three nor more than fifteen. No decrease in the number of Trustees shall have
the effect of removing any Trustee from office prior to the expiration of his or
her term, but the number of Trustees may be decreased in conjunction with the
removal of a Trustee pursuant to subsection (d) of this Section 1.

(b) Term. Each Trustee, whether now incumbent or hereafter becoming
a Trustees, shall serve as a Trustee until the next meeting of Shareholders, if
any, called for the purpose of considering the election or re-election of such
Trustee or of a successor to such Trustee, and until the election and
qualification of his successor, if any, elected at such meeting, or until such
Trustee sooner dies, resigns, retires or is removed. Upon the election and
qualification of a new Trustee, the Trust estate shall vest in the new Trustee
(together with the continuing or other new Trustees) without any further act or
conveyance.

(c) Resignation and Retirement. Any Trustee may resign his or her
trust or retire as a Trustee, by written instrument signed by him or her and
delivered to the other Trustees or to any officer of the Trust, and such
resignation or retirement shall take effect upon such delivery or upon such
later date as is specified in such instrument.

(d) Removal. Any Trustee may be removed for cause at any time by
written instrument, signed by at least a majority of the number of Trustees
prior to such removal, specifying the date upon which such removal shall become
effective. Any Trustee may be removed with or without cause (i) by the vote of
the Shareholders entitled to be cast on the matter voting together without
regard to Series or Class at any

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meeting called for such purpose, or (ii) by a written consent filed with the
custodian of the Trust's portfolio securities and executed by the Shareholders
entitled to vote more than fifty percent (50%) of the votes entitled to be cast
on the matter voting together without regard to Series or Class.

Whenever ten or more Shareholders of record who have been such for
at least six months preceding the date of application, and who hold in the
aggregate Shares constituting at least one percent of the outstanding Shares of
the Trust, shall apply to the Trustees in writing, stating that they wish to
communicate with other Shareholders with a view to obtaining signatures to a
request for a meeting to consider removal of a Trustee and accompanied by a form
of communication and request that they wish to transmit, the Trustees shall
within five business days after receipt of such application inform such
applicants as to the approximate cost of mailing to the Shareholders of record
the proposed communication and form of request. Upon the written request of such
applicants, accompanied by a tender of the material to be mailed and of the
reasonable expenses of mailing, the Trustees shall, within reasonable
promptness, mail such material to all Shareholders of record at their addresses
as recorded on the books of the Trust. Notwithstanding the foregoing, the
Trustees may refuse to mail such material on the basis and in accordance with
the procedures set forth in the last two paragraphs of Section 16(c) of the 1940
Act.

(e) Vacancies. Any vacancy or anticipated vacancy resulting from any
reason, including without limitation the death, resignation, retirement, removal
or incapacity of any of the Trustees, or resulting from an increase in the
number of Trustees by the other Trustees may (but so long as there are at least
three remaining Trustees, need not unless required by the 1940 Act) be filled
either by a majority of the remaining Trustees, even if less than a quorum,
through the appointment in writing of such other person as such remaining
Trustees in their discretion shall determine or, whenever deemed appropriate by
the remaining Trustees, by the election by the Shareholders, at a meeting called
for such purpose, of a person to fill such vacancy, and such appointment or
election shall be effective upon the written acceptance of the person named
therein to serve as a Trustee and agreement by such person to be bound by the
provisions of this Declaration of Trust, except that any such appointment or
election in anticipation of a vacancy to occur by reason of retirement,
resignation, or increase in number of Trustees to be effective at a later date
shall become effective only at or after the effective date of said retirement,
resignation, or increase in number of Trustees. As soon as any Trustee so
appointed or elected shall have accepted such appointment or election and shall
have agreed in writing to be bound by this Declaration of Trust and the
appointment or election is

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effective, the Trust estate shall vest in the new Trustee, together with the
continuing Trustees, without any further act or conveyance.

(f) Mandatory Election by Shareholders. Notwithstanding the
foregoing provisions of this Section 1, the Trustees shall call a meeting of the
Shareholders for the election of one or more Trustees at such time or times as
may be required in order that the provisions of the 1940 Act may be complied
with, and the authority hereinabove provided for the Trustees to appoint any
successor Trustee or Trustees shall be restricted if such appointment would
result in failure of the Trust to comply with any provision of the 1940 Act.

(g) Effect of Death, Resignation, Etc. The death, resignation,
retirement, removal or incapacity of the Trustees, or any one of them, shall not
operate to annul or terminate the Trust or to revoke or terminate any existing
agency or contract created or entered into pursuant to the terms of this
Declaration of Trust.

(h) No Accounting. Except under circumstances which would justify
his or her removal for cause, no person ceasing to be a Trustee as a result of
his or her death, resignation, retirement, removal or incapacity (nor the estate
of any such person) shall be required to make an accounting to the Shareholders
or remaining Trustees upon such cessation.

Powers

Section 2. The Trustees, subject only to the specific limitations
contained in this Declaration of Trust or otherwise imposed by the 1940 Act or
other applicable law, shall have, without further or other authorization and
free from any power or control of the Shareholders, full, absolute and exclusive
power, control and authority over the Trust assets and the business and affairs
of the Trust to the same extent as if the Trustees were the sole and absolute
owners thereof in their own right and to do all such acts and things as in their
sole judgment and discretion are necessary and incidental to, or desirable for,
the carrying out of any of the purposes of the Trust or conducting the business
of the Trust. Any determination made in good faith by the Trustees of the
purposes of the Trust or the existence of any power or authority hereunder shall
be conclusive. In construing the provisions of this Declaration of Trust, there
shall be a presumption in favor of the grant of power and authority to the
Trustees. Without limiting the foregoing, the Trustees may adopt ByLaws not
inconsistent with this Declaration of Trust containing provisions relating to
the business of the Trust, the conduct of its affairs, its rights or powers and
the rights or powers of its Shareholders, Trustees, officers, employees and
other agents and may amend and repeal them to the extent that such By-Laws do
not reserve

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that right to the Shareholders; fill vacancies in their number, including
vacancies resulting from increases in their number, unless a vote of the Trust's
Shareholders is required to fill such vacancies pursuant to the 1940 Act; elect
and remove such officers and appoint and terminate such agents as they consider
appropriate; appoint from their own number, and terminate, any one or more
committees consisting of two or more Trustees, including an executive committee
which may, when the Trustees are not in session, exercise some or all of the
powers and authority of the Trustees as the Trustees may determine; appoint an
advisory board, the members of which shall not be Trustees and need not be
Shareholders; employ one or more investment advisers or managers as provided in
Section 6 of this Article IV; employ one or more custodians of the assets of the
Trust and authorize such custodians to employ subcustodians and to deposit all
or any part of such assets in a system or systems for the central handling of
securities; retain a transfer agent or a Shareholder services agent, or both,
provide for the distribution of Shares by the Trust, through one or more
principal underwriters or otherwise; set record dates for the determination of
Shareholders with respect to various matters; and in general delegate such
authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian or underwriter.

In furtherance of and not in limitation of the foregoing, the
Trustees shall have power and authority:

(a) To invest and reinvest in, to buy or otherwise acquire, to hold,
for investment or otherwise, to sell or otherwise dispose of, to lend or to
pledge, to trade in or deal in securities or interests of all kinds, however
evidenced, or obligations of all kinds, however evidenced, or rights, warrants,
or contracts to acquire such securities, interests, or obligations, of any
private or public company, corporation, association, general or limited
partnership, trust or other enterprise or organization, foreign or domestic, or
issued or guaranteed by any national or state government, foreign or domestic,
or their agencies, instrumentalities or subdivisions (including but not limited
to, bonds, debentures, bills, time notes and all other evidences of
indebtedness); negotiable or non-negotiable instruments; any and all futures
contracts; government securities and money market instruments (including but not
limited to, bank certificates of deposit, finance paper, commercial paper,
bankers acceptances, and all kinds of repurchase agreements);

(b) To invest and reinvest in, to buy or otherwise acquire, to hold,
for investment or otherwise, to sell or otherwise dispose of foreign currencies,
and funds and exchanges, and make deposits in banks, savings banks, trust
companies, and savings and loan associations, foreign or domestic;

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(c) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop, and dispose of (by sale or otherwise) any property, real or
personal, and any interest therein;

(d) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;

(e) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the Trustees
shall deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper;

(f) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;

(g) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in the name
of the Trustees or of the Trust or in the name of a custodian, subcustodian or
other depository or a nominee or nominees or otherwise;

(h) To consent or to participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or property
of which is or was held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer, and to pay
calls or subscriptions with respect to any security held in the Trust;

(i) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;

(j) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not limited to
claims for taxes;

(k) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;

(l) To borrow funds;

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(m) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust property or any part thereof to secure any of or all such obligations;

(n) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the agents
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or manager, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability; and

(o) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust.

The Trustees shall not in any way be bound or limited by any present
future law or custom in regard to investments by trustees of common law trusts.
Except as otherwise provided herein or from time to time in the By-Laws, any
action to be taken by the Trustees may be taken by a majority of the Trustees
present at a meeting of Trustees (if a quorum be present), within or without
Massachusetts, including any meeting held by means of a conference telephone or
other communications equipment by means of which all persons participating in
the meeting can communicate with each other simultaneously and participation by
such means shall constitute presence in person at a meeting, or by written
consents of a majority of the Trustees then in office.

Payment of Expenses

Section 3. Consistent with the provisions of Section 3 of

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Article III, the Trustees are authorized to pay or to cause to be paid out of
the principal or income of the Trust or of its respective Series and Classes, or
partly out of principal and partly out of income, as they deem fair, all
expenses, fees, charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser or manager,
principal underwriter, auditor, counsel, custodian, transfer agent, shareholder
servicing agent, and such other agents or independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.

Section 4. The Trustees shall have the power, as frequently as they
may determine, to cause each Shareholder to pay directly, in advance or arrears,
for charges of the Trust's custodian or transfer or shareholder service or
similar agent, an amount fixed from time to time by the Trustees, by setting off
such charges due from such Shareholder from declared but unpaid dividends owed
such Shareholder and/or by reducing the number of Shares in the account of such
Shareholder by that number of full and/or fractional Shares which represents the
outstanding amount of such charges due from such Shareholder.

Ownership of Assets of the Trust

Section 5. Title to all of the assets of each Series of the Trust
and of the Trust shall at all times be considered as vested in the Trustees.

Advisory, Management and Distribution

Section 6. Subject to a favorable vote of a majority of the
outstanding voting securities of a Series of the Trust, the Trustees may on
behalf of such Series, at any time and from time to time, contract for exclusive
or nonexclusive advisory and/or management services with a corporation, trust,
association or other organization, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
such Series shall be held uninvested and to make changes in such Series'
investments. The Trustees may also, at any time and from time to time, contract
with a corporation, trust association or other organization, appointing it
exclusive or nonexclusive distributor or principal underwriter for the Shares,
every

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such contract to comply with such requirements and restrictions as may be set
forth in the By-Laws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and restrictions as the
Trustees may determine.

The fact that:

(a) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager, advisor,
principal underwriter, or distributor or agent of or for any corporation, trust,
association, or other organization, or of or for any parent or affiliate of any
organization, with which an advisory or management or principal underwriter's or
distributor's contract, or transfer, Shareholder services or other agency
contract may have been or may hereafter be made, or that any such organization,
or any parent or affiliate thereof, is a Shareholder or has interest in the
Trust, or that

(b) any corporation, trust, association or other organization with
which an advisory or management or principal underwriter's or distributor's
contract, or transfer, Shareholder services or other agency contract may have
been or may hereafter be made also has an advisory or management contract, or
principal underwriter's or distributor's contract, or transfer, Shareholder
services or other agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other businesses or interests,

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.

ARTICLE V

Shareholders' Voting Powers and Meetings

Voting Powers

Section 1. The Shareholders shall have power to vote only: (a) for
the election or removal of Trustees as provided in Article IV, Section 1; (b)
with respect to any investment advisor or manager as provided in Article IV,
Section 6; (c) with respect to any termination or reorganization of the Trust or
any series thereof to the extent and as provided in Article IX, Section 1; (d)
with respect to any amendment of this Declaration of Trust to the extent and as
provided in Article IX, Section 4; (e) to the same extent as the stockholders of
a Massachusetts business corporation as to whether or not a court action,

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proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders; and (f) with
respect to such additional matters relating to the Trust as may be required by
law, the 1940 Act, this Declaration of Trust, the By-Laws or any then-effective
registration of the Trust filed with the Securities and Exchange Commission (or
any successor agency) or any state, or as the Trustees may consider necessary or
desirable.

Each whole share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provision of the
Declaration of Trust, on any matter submitted to a vote of Shareholders all
Shares of the Trust then entitled to vote shall be voted by individual Series
and not in the aggregate, except (a) when required by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (b) when the
Trustees have determined that the matter affects only the interests of one or
more Series or Class of Series, then only Shareholders of such Series or Class
shall be entitled to vote thereon. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy.

A proxy with respect to Shares held in the name of two or more
persons shall be valid if executed by any one of them unless at or prior to the
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. A proxy purporting to be executed by or on behalf
of a Shareholder shall be deemed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall rest on the challenger.

Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the By-Laws to be taken by Shareholders.

Shareholder Meetings

Section 2. Meetings of Shareholders (including meetings involving
only one or more but less than all Series or Classes) may be called and held
from time to time for the purpose of taking action upon any matter requiring the
vote or authority of the Shareholders as herein provided or upon any other
matter deemed by the Trustees to be necessary or desirable. Such meetings shall
be held at the principal office of the Trust as set forth in the By-Laws of the
Trust, or at any such other place within the United States as may be designated
in the call thereof, which call shall be made by the Trustees or the Chairman of
the Trust. Meetings of Shareholders may be called by the Trustees or such other
person or persons as may be specified in the By-Laws and

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shall be called by the Trustees or such other person or persons as may be
specified in the By-Laws upon written application by Shareholders holding at
least 25% (or ten percent (10%) if the purpose of the meeting is to determine if
a Trustee is to be removed from office) of the Shares then outstanding
requesting a meeting be called for a purpose requiring action by the
Shareholders as provided herein or in the By-Laws which purpose shall be
specified in any such written application.

Shareholders shall be entitled to at least seven days' written
notice of any meeting of the Shareholders.

Quorum and Required Vote

Section 3. The presence at a meeting of Shareholders in person or by
proxy of Shareholders entitled to vote at least thirty percent (30%) of all
votes entitled to be cast at the meeting of each Series or Class entitled to
vote as a Series or Class shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of this
Declaration of Trust permits or requires that the holders of Shares shall vote
in the aggregate and not as a Series or Class, then the presence in person or by
proxy of Shareholders entitled to vote at least thirty percent (30%) of all
votes entitled to be cast at the meeting (without regard to Series or Class)
shall constitute a quorum. Any lesser number, however, shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a reasonable
time after the date set for the original meeting without the necessity of
further notice. Notwithstanding the foregoing, if any action to be taken by the
Shareholders or by a Series or Class at a meeting requires the affirmative vote
of more than 50% of all the votes entitled to be cast on the matter or requires
a majority of the outstanding voting securities (as defined in the 1940 Act),
then in such event the presence in person or by proxy of the holders of a
majority of the shares outstanding and entitled to vote at such a meeting shall
be a quorum for all purposes.

Except when a larger vote is required by any provisions of the 1940
Act, this Declaration of Trust or the By-Laws, and except for amendments to this
Declaration of Trust pursuant to Section 4 of Article IX hereof, a majority of
the Shares of each Series or Class voted on any matter shall decide such matter
insofar as that Series or Class is concerned, provided that where any provision
of law or of this Declaration of Trust permits or requires that the holders of
Shares vote in the aggregate and not as a Series or Class, then a majority of
the Shares voted on the matter (without regard to Series or Class) shall decide
such matter and a plurality shall elect a Trustee.

Action by Written Consent

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Section 4. Any action taken by Shareholders may be taken without a
meeting if Shareholders entitled to vote more than fifty percent (50%) of the
votes entitled to be cast on the matter of each Series or Class or, where any
provision of law or of this Declaration of Trust permits or requires that the
holders of Shares vote in the aggregate and not as a Series or Class, if
Shareholders entitled to vote more than fifty percent (50%) of the votes
entitled to be cast thereon (without regard to Series or Class) (or in either
case such larger vote as shall be required by any provision of this Declaration
of Trust or the By-Laws) consent to the action in writing and such written
consents are filed with the records of the meetings of Shareholders. Such
consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.

Additional Provisions

Section 5. The By-Laws may include further provisions for
Shareholders' votes and meetings and related matters not inconsistent with the
provisions hereof.

ARTICLE VI

Redemptions and Repurchases, and
Determination of Net Asset Value

Redemptions and Repurchases

Section 1. Any holder of Shares of the Trust may by presentation of
a request in proper form, together with his or her certificates, if any, for
such Shares, in proper form, for transfer to the Trust or duly authorized agent
of the Trust, request redemption of his or her shares for the net asset value
thereof determined and computed in accordance with the provisions of this
Section 1 and the provisions of Section 5 of this Article VI.

Upon receipt by the Trust or its duly authorized agent, as the case
may be, of such a request for redemption of Shares in proper form, such Shares
shall be redeemed at the net asset value per share of the particular Series or
Class next determined after such request is received or determined as of such
other time fixed by the Trustees as may be permitted or required by the 1940
Act. The criteria for determining what constitutes a proper request for
redemption and the time of receipt of such request shall be fixed by the
Trustees, and such criteria may be established in the Trust's then current
prospectus or established by the Trust's distributor or transfer agent, subject
to approval by the Trustees.

This obligation of the Trust to redeem its Shares of each

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Series or Class as set forth above in this Section 1 shall be subject to the
condition that such obligation may be suspended by the Trust by or under
authority of the Trustees during any period or periods when and to the extent
permissible under the 1940 Act. If there is such a suspension, any Shareholder
may withdraw any request for redemption which has been received by the Trust
during any such period and the applicable net asset value with respect to which
would but for such suspension be calculated as of a time during such period.
Upon such withdrawal, the Trust shall return to the Shareholder the certificates
therefor, if any.

The Trust may also purchase, repurchase or redeem Shares in accordance
with such other methods, upon such other terms and subject to such other
conditions as the Trustees may from time to time authorize at a price not
exceeding the net asset value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made. Shares of any
Series or Class redeemed or repurchased by the Trust hereunder shall be canceled
upon such redemption or repurchase without further action by the Trust or the
Trustees and the number of issued and outstanding Shares of such Series shall
thereupon be reduced by such amount, or Shares redeemed or repurchased may be
held by the Trust for resale.

Payment for Shares Redeemed

Section 2. Payment of the redemption price for Shares redeemed pursuant to
this Article VI shall be made by the Trust or its duly authorized agent after
receipt by the Trust or its duly authorized agent of a request for redemption in
proper for (together with any certificates for such Shares as provided in
Section 1 above) in accordance with procedures and subject to conditions
prescribed by the Trustees; provided, however, that payment may be postponed
during the period in which the redemption of Shares is suspended under Section 1
above. Subject to any generally applicable limitation imposed by the Trustees,
any payment on redemption, purchase or repurchase by the Trust of Shares may, if
authorized by the Trustees, be made wholly or partly in kind, instead of cash.
Such payment in kind shall be made by distributing securities or other property,
constituting, in the opinion of the Trustees, a fair representation of the
various types of securities and other property then held by the Series of Shares
being redeemed, purchased or repurchased (but not necessarily involving a
portion of each of the Series' holdings) and taken at their value used in
determining the net asset value of the Shares in respect of which payment is
made.

Redemptions at the Option of the Trust

Section 3. The Trust shall have the right at its option and at

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any time and from time to time to redeem Shares of any Shareholder at the net
asset value thereof as determined in accordance with Section 5 of this Article
VI, if at such time such Shareholder owns fewer Shares of a Series or Class
than, or Shares of a Series or Class having an aggregate net asset value of less
than, an amount determined from time to time by the Trustees. Any such
redemption at the option of the Trust shall be made in accordance with such
other criteria and procedures for determining the Shares to be redeemed, the
redemption date and the means of effecting such redemptions as the Trustees may
from time to time authorize.

Additional Provisions Relating to Redemptions and Repurchases

Section 4. The completion of redemption, purchase or repurchase of Shares
shall constitute a full discharge of the Trust and the Trustees with respect to
such Shares. No dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any Series or Class) with
respect to, nor any redemption or repurchase of, the Shares of any Series or
Class shall be effected by the Trust other than from the assets of such Series.

Determination of Net Asset Value

Section 5. The term "net asset value" of each Share of a Series or Class
as of any particular time shall be the quotient, rounded to such extent as the
Trustees shall determine from time to time in a manner consistent with the 1940
Act, obtained by dividing the value of the net assets of such Series or the net
assets allocated to such Class less the liabilities chargeable or allocated to
such Series or Class pursuant to the provisions of Article III, by the total
number of Shares of such Series or Class outstanding at such time, all
determined and computed in accordance with the Trust's current prospectus and
statement of additional information. The net asset value of each said share may
be calculated in such other manner which may be approved by the Trustees and is
consistent with the 1940 Act.

The Trustees, or any officer, or officers or agent of the Trust designated
for the purpose by the Trustees shall determine the net asset value of the
Shares of each Series or Class, and the Trustees shall fix the time or times as
of which the net asset value of the Shares of each Series or Class shall be
determined and shall fix the periods during which any such net asset value shall
be effective as to sales, redemptions and repurchases of, and other transactions
in, the Shares of such Series or Class, except as such time and periods for any
such transaction may be fixed by other provision of this Declaration of Trust or
by the By-Laws.

Determinations in accordance with this Section 5 made in good

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faith shall be binding on all parties concerned.

How Long Shares are Outstanding

Section 6. Shares of the Trust surrendered to the Trust for redemption by
it pursuant to the provisions of Section 1 of this Article VI shall be deemed to
be outstanding until the redemption price thereof is determined pursuant to this
Article VI and, thereupon and until paid, the redemption price thereof shall be
deemed to be a liability of the Trust. Shares of the Trust purchased by the
Trust in the open market shall be deemed to be outstanding until confirmation of
purchase thereof by the Trust and, thereupon and until paid, the purchase price
thereof shall be deemed to be a liability of the Trust. Shares of the Trust
redeemed by the Trust pursuant to Section 3 of this Article VI shall be deemed
to be outstanding until said Shares are deemed to be redeemed in accordance with
procedures adopted by the Trustees pursuant to said Section 3.

ARTICLE VII

Compensation and Limitation of Liability of Trustees

Compensation

Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust if the rate thereof is prescribed in advance by such
Trustees. Nothing herein shall in any way prevent the employment of any Trustee
for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust, it being recognized that such
employment may result in such Trustee being considered an Affiliated Person or
an Interested Person.

Limitation of Liability

Section 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, investment
advisor or manager, principal underwriter or custodian, nor shall any Trustee be
responsible for the act or omission of any other Trustee. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.

Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been

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executed or done only in or with respect to their or his or her capacity as
Trustees or Trustee and neither such Trustees or Trustee nor the Shareholders
shall be personally liable thereon.

Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust by them as Trustees or Trustee or as officers or officer and
not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust or a particular Series of Shares, and may
contain such further recital as he or she or they may deem appropriate, but the
omission thereof shall not operate to bind any Trustees or Trustee or officers
or officer of Shareholders or Shareholder individually.

All persons extending credit to, contracting with or having any claim
against the Trust or a particular Series of Shares shall look only to the assets
of the Trust or the assets of that particular Series of Shares, as the case may
be, for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers, employees or
agents, whether past present or future, shall be personally liable therefor.

Trustees' Good Faith Action, Expert Advice, No Bond or Surety

Section 3. The exercise by the Trustees of their powers and discretion
hereunder shall be binding upon everyone interested. A Trustee shall be liable
only for or her his own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee, and for nothing else, and shall not be liable for errors of judgment or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
and their duties as Trustees hereunder, and shall be under no liability for any
act or omission in accordance with such advice of for failing to follow such
advice. In discharging their duties, the Trustees, when acting in good faith,
shall be entitled to rely upon the books of account of the Trust and upon
written reports made to the Trustees by any officer appointed by them, any
independent public accountant and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of any other
party to any contract entered into pursuant to Section 2 of Article IV. The
Trustees shall not be required to give any bond as such, nor any surety if a
bond is required.

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Liability of Third Persons Dealing with Trustees

Section 4. No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.

ARTICLE VIII

Indemnification

Subject to the exceptions and limitations contained in this Article, every
person who is, or has been, a Trustee or officer of the Trust (including persons
who serve at the request of the Trust as directors, officers or trustees of
another organization in which the Trust has an interest as a shareholder,
creditor or otherwise) hereinafter referred to as a "Covered Person," shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him or her in
connection with any claim, action, suit or proceedings in which he or she
becomes involved as a party or otherwise by virtue of his or her being or having
been such a Trustee, director or officer and against amounts paid or incurred by
him or her in settlement thereof.

No indemnification shall be provided to a Covered Person:

(a) against any liability to the Trust or its Shareholders by reason
of a final adjudication by the court of other body before which the proceeding
was brought that he or she engaged in willful misfeasance bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office;

(b) with respect to any matter as to which he or she shall have been
finally adjudicated not to have acted in good faith in the reasonable belief
that his or her action was in the best interests of the Trust; or

(c) in the event of a settlement or other disposition not involving
a final adjudication (as provided in paragraph (a) or (b)) and resulting in a
payment by a Covered Person, unless there has been either a determination that
such Covered Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office by the court of other body approving the settlement or other
disposition or a reasonable determination, based on a review of readily
available facts (as opposed to a full trial-type inquiry) that he or she did not
engage in such conduct:

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(i) by a vote of a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in office
act on the matter); or

(ii) by written opinion of independent legal counsel.

The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Covered Person may now or hereafter be entitled, shall
continue as to a person who has ceased to be such a Covered Person and shall
inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which the Trust personnel other than Covered Persons may be entitled by contract
or otherwise under law.

Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding subject to a claim for indemnification under this
Article shall be advanced by the Trust prior to final disposition thereof upon
receipt of an undertaking by or on behalf of the recipient to repay such amount
if it is ultimately determined that he or she is not entitled to indemnification
under this Article, provided that either:

(1) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising out of
any such advances; or

(2) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office act on
the matter) or independent legal counsel in a written opinion shall determine,
based upon a review of the readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.

As used in this Article, a "Disinterested Trustee" is one (a) who is not
an "interested person" of the Trust (as defined by the 1940 Act including anyone
who has been exempted from being an "interested person" by any rule, regulation
or order of the Securities and Exchange Commission), and (b) against whom none
of such actions, suits or other proceedings or another action, suit or other
proceeding on the same or similar grounds is then or has been pending.

As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without

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limitation attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.

In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled out of
the assets of the particular Series of Shares of which he or she is or was a
Shareholder to be held harmless from and indemnified against all loss and
expense arising from such liability; provided, however, there shall be no
liability or obligation of the Trust arising hereunder to reimburse any
Shareholder for taxes paid by reason of such Shareholder's ownership of Shares
or for losses suffered by reason of any changes in value of any trust assets.

Article IX

Miscellaneous

Duration, Termination and Reorganization of Trust

Section 1. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by the
Trustees by written notice to the Shareholders without a vote of the
Shareholders of the Trust or by the vote of the Shareholders entitled to vote
more than fifty percent (50%) of the votes of each Series entitled to be cast on
the matter. Any Series or Class of Shares may be terminated at any time by the
Trustees by written notice to the Shareholders of such Series or Class without a
vote of the Shareholders of such Series or Class or by the vote of the
Shareholders of such Series or Class entitled to vote more than fifty percent
(50%) of the votes entitled to be cast on the matter.

Upon termination of the Trust or of any one or more Series or Classes of
Shares, after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the particular Series or
Class as may be determined by the Trustees, the Trust shall in accordance with
such procedures as the Trustees consider appropriate reduce the remaining assets
of the particular Series to distributable form in cash or other securities, or
any combination thereof, and distribute the proceeds to the Shareholders of the
Series involved, ratably according to the number of Shares of such Series held
by the several Shareholders of such Series on the date of termination.

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At any time by the affirmative vote of the Shareholders of the affected
Series entitled to vote more than fifty percent (50%) of all the votes entitled
to be cast on the matter, the Trustees may sell, convey and transfer the assets
of the Trust, or the assets belonging to any one or more Series, to another
trust, partnership, association or corporation organized under the laws of any
state of the United States, or to the Trust to be held as assets belonging to
another Series of the Trust, in exchange for cash, shares or other securities
(including, in the case of a transfer to another Series of the Trust, in
exchange for cash, shares or other securities (including, in the case of a
transfer to another Series of the Trust, Shares of such other Series)) with such
transfer being made subject to, or with the assumption by the transferee of, the
liabilities belonging to each Series the assets of which are so distributed.
Following such transfer, the Trustees shall distribute such cash, shares or
other securities (giving due effect to the assets and liabilities belonging to
and any other differences among the various Series the assets belonging to which
have so been transferred) among the Shareholders of the Series the assets
belonging to which have been so transferred; and if all of the assets of the
Trust have been so transferred, the Trust shall be terminated.

Filing of Copies, References, Headings

Section 2. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of The Commonwealth of Massachusetts and
with the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may rely
on a certificate by an officer of the Trust as to whether or not any such
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such amendments. In this instrument and in any such amendment, references to
this instrument, and all expressions like "herein," "hereof," and "hereunder,"
shall be deemed to refer to this instrument as amended from time to time.
Headings are placed herein for convenience of reference only and shall not be
taken as a part hereof or control or affect the meaning, construction or effect
of this instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.

Applicable Law

Section 3. This Declaration of Trust is created under and is to be governed
by and construed and administered according to the laws of

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the Commonwealth of Massachusetts. The Trust shall be of the type commonly
called a Massachusetts business trust, and without limiting the provisions
hereof, the Trust may exercise all powers which are ordinarily exercised by such
a trust.

Amendments

Section 4. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
so to do by vote of the lesser of (i) 67% or more of the Shares present or
represented by proxy at a Shareholders' meeting, if the holders of more than 50%
of the outstanding Shares are present or represented by proxy, or (ii) more than
50% of the outstanding Shares (the "required vote"), provided, however, if an
amendment shall affect the holders of one or more Series or Classes of Shares
but not the holders of Shares of all outstanding Series and Classes, such
amendment shall be authorized if approved by the required vote of the
Shareholders of each Series or Class affected and no vote of Shareholders of a
Series or Class not affected shall be required. Amendments having the purpose of
changing the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any provision which is
defective or inconsistent with the 1940 Act or with the requirements of the
Internal Revenue Code and the regulations thereunder for the Trust's obtaining
the most favorable treatment thereunder available to regulated investment
companies or of establishing and designating or abolishing any Series or Class
of Shares in accordance with Section 1 of Article III hereof shall not require
authorization by Shareholder vote.

Use of the Name

Section 5. The use of the name of the Trust and of any Series or Class of
shares of the Trust is granted pursuant to a royalty-free, non-exclusive license
from Oppenheimer Management Corporation ("OMC"), and such license shall allow
OMC to inspect and, subject to the control of the Trustees, to control the
nature and quality of services offered by the Trust under such name. The license
may be terminated by OMC upon termination of any advisory, management or
supervisory contact between OMC and the Trust or without cause upon 60 days'
written notice to the Trust by OMC in which case neither the Trust nor any
Series or class of the Trust shall have any further right to use the name
"Oppenheimer" in its name or otherwise, and the Trust, its Shareholders, and its
officers and Trustees shall promptly take whatever action may be necessary to
change its name accordingly.

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IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the 23rd day of June, 1995.

/s/ William A. Baker /s/ Charles Conrad, Jr.
William A. Baker, Trustee Charles Conrad, Jr., Trustee
197 Desert Lakes Drive 19411 Merion Court
Palm Springs, California 92264 Huntington Beach, California
92648

/s/ Ned M. Steel /s/ Robert M.Kirchner
Ned M. Steel, Trustee Robert M. Kirchner, Trustee
3236 S. Steele Street 2800 S. University Boulevard
Denver, Colorado Denver, Colorado 80210

/s/ Raymond J. Kalinowski /s/ C. Howard Kast
Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee
44 Portland Drive 2552 East Alameda
St. Louis, Missouri Denver, Colorado 80209

/s/ James C. Swain /s/ Jon S. Fossel
James C. Swain, Trustee Jon S. Fossel, Trustee
Box 44 - Mead Street Box 44 - Mead Street
Waccabuc, New York 10597 Waccabuc, New York 10597

/s/ Robert G. Avis
Robert G. Avis, Trustee
1706 Warson Estates Drive
St. Louis, MO 63124

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